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Credit Industry Opposes Anti-ID Theft Method
athloi alerts us to an opinion piece running in USA Today on the backlash against an effective tool to fight identity theft. The big three credit bureaus don't like the numerous state laws that have been passed requiring them to give consumers a simple way to freeze their credit. Watch for a push at the federal level to get a watered-down statute that pre-empts state laws. "Lawmakers across the country — pushed by consumer advocacy groups — ... have passed laws that allow consumers to freeze their credit, a surefire way to prevent thieves from opening new accounts or obtaining a mortgage in a consumer's name. Under a freeze, a consumer cuts off all access to his credit report and score, even his own. All lenders require that information, so no one can borrow money in the consumer's name until he or she lifts the freeze. It's simple, and it works. So, of course, it's under threat from the Consumer Data Industry Association, which represents the Big Three credit bureaus. They make millions gathering and selling consumer data. Freezes cut into that business."
Another happy side-effect of freezing your credit: No snail-mail spam about preapproved credit offers. It's saved me much over the last year in time devoted to shredding.
More Twoson than Cupertino
since credit cards have absolutely no profit in preventing credit card fraud / id theft (remember, it's the merchants who get screwed), of course they're against this sort of thing.
If someone stole your identity, what is to stop them from pretending to be you in order to disable the freeze on your credit?
Three days from now?? Thats tomorrow!! ~Peter Griffin
I heard that it was actually just easier for them to pay off credit card fraud in general, than to prevent it.
Which is why they usually don't do anything to prevent it.
Remember the guy who tore up his credit card entry form like they said to, then taped it back together, put in an old address, and a different phone number, and still got a credit card in his name?
Yeah, the companies know how to prevent all this stuff, just it would cost more money than they lose by just eating the costs.
WARNING! This girl exceeds the MAXIMUM SAFE standards established by the FDA for BRATTINESS
How, exactly, do freezes legitimately cut into their business? No one is supposed to be able to get a credit report on you without your explicit authorization anyway. Any credit reports requested on you without your explicit authorization is a violation of federal law.
The bottom line is that the Big Three credit reporting agencies are sleezebags. If they had their way, they'd have it so that anyone can put anything in your credit file they like, and anyone can request any info they like any time. They don't want you to have any control over what's in your credit file, because ultimately that is the source of their power!
Screw this. I'm gonna go live off the grid somewhere.
My blog
I would be happy to have a credit freeze on all my accounts. Borrowing money is a horrible system. It works for starting a business or a mortage on a house but all the little scams like car loans and furniture store and such only encourage people to live beyond their means. Paying cash for those kinds of things is so much cheaper. Debt is a form of slavery, your no longer working for money your working so they won't take your things away. It makes it so the credit card company owns you. Sure you can be good with a credit card but they do everything in their power to make you fall in that trap so that they can milk as much money from you as possible.
I was the victim of identity theft several years ago and had a "credit lock" put on my accounts with all three credit reporting agencies. What this supposedly does is makes it so that the three agencies will contact me first before a line of credit is opened in my name. This is supposed to be in effect for seven years from the time I established it. However, since then, I have opened two lines of credit and never once been contacted them as they claimed they would. These guys feel no obligation to follow their own guidelines. Why would they follow someone else's?
This guy's the limit!
As the summary said, the Consumer Data Industry Association "represents the Big Three credit bureaus". According to their membership information, CDIA member companies are engaged in credit reporting, tenant screening, employment reporting, etc. Companies that are not eligible for membership include:
* Commercial Banks
* Retail Stores
* Bankcard Issuers
* Retail Credit Card Issuers
* Credit Unions
* Mortgage Brokers
* Real Estate Agencies
* Nonbank Banks [wtf?]
* Savings and Loan Institutions
So CDIA is the credit reporting agencies, plus (most likely) ChoicePoint and Axciom and other datamining privacy haters. But not credit card companies or lenders, or anyone who loses money when identities are stolen.
Perhaps I am misunderstanding the situation, but I have a question. Presumably, the idea behind the credit freeze is to stop those who have stolen your identity from doing naughty things with it. However, if the would-be thief has the wherewithal to abscond with thousands of dollars under your name, would this same thief not also have the ability to remove the freeze?
Thief: I would like to borrow $100,000 from Knave's account please.
Clueless Customer Rep: Sorry sir, Knave has put a freeze on the account.
Thief: I see...
(4 minutes later, with a different clueless customer rep)
Thief: Knave here, I would like to remove the freeze on my account, I'm buying myself a sweet car.
Clueless Customer Rep: Very good sir, freeze ovah.
Thief: Thanks!
What am I missing?
Expect these big three troublemakers to lobby for a weaker federal law that preempts all state regulation in the process. After all, that's the American way these days.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
If you can't get additional credit then you can't get yourself further into debt, which means that credit lenders and credit checking agencies can't make more money out of you for the duration of the freeze.
Helping people get more into debt is what these guys do. Why would they be remotely in favour of a measure that (along with helping to reduce the likelyhood of credit-related fraud) would allow you to stop yourself from spending money that you don't have and thus digging yourself further into the hole that they want you to live your life in.
Remember, when these guys say credit they mean debt.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
I thought information wants to be free?
Oh, not personal information, you say? Just the ones and zeroes that we want access to, not the ones and zeroes that they want access to?
The information age is a double-edged sword. Just as we can make better purchasing decisions based on easily aggregated information, companies can make better lending/purchasing decisions based on easily aggregated information. Is there a correlation between credit scores and suitabilty as borrowers or tenants? Sure. Why should we fault the companies that operate more efficiently because they take that into consideration? And FWIW, your credit history (aside from bankruptcies) can be rebuilt in less than seven years.
And no, it's not impossible to live without credit, you just need to make some sacrifices. It's a question of how much you value the privacy of information you choose to make public.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
I found this link that should answer your question.
e /003484indiv.html#AK
"State Security Freeze Laws"
http://www.consumersunion.org/campaigns/learn_mor
Bullshit. The states should be more powerful than they are. There's nothing worse than a federal government dictating one-size-fits-all laws that don't really work for 49% of the population.
Slashdot needs a "-1, Wrong" moderation option.
The Urban Hippie
True case in point: My sister worked for a bank that did mortgage and consumer lending. When they pulled an applicant's credit record, that record includes everyone else who has also accessed that credit record. Although it should be illegal, they would use any reason possible to turn down someone who had recent hits on their credit reports because they didn't want to deal with customers who might be "shopping around for the best credit deal." In this circumstance, totally irrelevant credit data -- i.e. who else had accessed your credit record recently -- was used against you.
These bastards have to go down!
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Obviously you've never had to deal with the fallout from a bad credit file. Yes, on the surface it appears that the law is written in the consumers favor. Go read some credit repair boards and see how well that works out in practice. See how the data providers(credit card companies) just "verify" any dispute that comes down without doing actual research. See how the credit reporting agencies outright refuse to follow the law (try getting them to do a proper procedures request).
The entire industry is set up in favor of their customers (the data providers and creditors), not the consumers whose lives they ruin. The existing laws are either too weak or are just ignored outright.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Credit reporting agencies, when functioning as intended, allow individual risk to be borne by the risky individual. Without them, the interest rate has to reflect the overall risk that banks must take by loaning to individuals.
In other words, if you have good credit, you really don't want to get rid of the idea entirely, if it can be made to function as it's supposed to.
Similarly, insurance companies must average over all of their customers. Evaluating the risk allows them to charge more appropriate rates to individuals. Without the ability to segregate based on risk, people who wisely build their homes well above a flood plain end up subsidising people who build right up on edge of the beach, who, ironically, are typically much better off financially than their inland-dwelling counterparts.
Can you be Even More Awesome?!
Now I'm not arguing right now for anything to be done to stop manipulative advertising...that gets into some murky free speech territory...so don't start that argument. However, you have to admit you are a bit shady if you use manipulative advertising and try your damndest to take money from stupid people by taking advantage of their stupidity. It may be the law of the jungle, and a sucker is born every minute, blah blah blah, but you certainly can't legitimately claim you are standing on any kind of moral ground when you do a thing like that, according to any socially accepted definition of the word 'moral.'
And here is where I go ad hominem as an expression of a personal hypothesis I can't prove: I think you are probably a really annoying asshole in real life, and I'm sorry for the people you work with, and who may be a client of yours (if you are in a position to have clients). (now, respond with an accusation of cowardice because I posted as AC, or pick on grammatical structure, because that's what people like you do)
The you must be reading the wrong credit boards, because the people that know what they are doing are just waiting on the edge of their seat for companies to not follow proper procedure for debt validation and verification. If proper procedures aren't followed, there's easy money to be had.
The problem isn't that consumers don't have appropriate protections and recourse, its that consumers aren't aware of the laws they are protected by, and then when everyone around them starts saying "your screwed...theres nothing you can do", they tend to just assume everyone is right and then they suck it up and live with the consequences.
I bet these 2.3 million people don't want the law weakened.
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
I'm an avid believer in minimizing my credit use. I think obtaining credit for certain things like buying a car or a house is fine, but I think credit cards give us a false sense of security. In that, it causes us to to devalue what things are worth. When you buy something with cash in hand you feel a sense of empowerment because you have the means to accomplish what you set out to do NOW. With credit you are operating at a deficiency (if you use credit cards to pay for things with money that you don't plan on having in the early future) You don't have worth to give you to the means to accomplish what you want, so you resort to sacrificing your financial future for a short term gain that isn't always quantifiable. This causes you to accumulate debt that you didn't think you would have. Now im not blaming people for this, its just the way it is and I understand that people feel like they need to obtain credit to buy in times of need, im just not sure how far you should go.
Secondly, I think that credit report system is flawed, having lenders use it for lending purposes are certainly understandable. The problem is I don't think its a good idea to use it as an end all solution to determine if someone is legit. People change, mistakes are made and are possibly corrected. Also the big thing i have a problem is with is that it is used by non-lenders. Paying bills such as utilities and rent should not even be factored into the use of credit reports. The largest problem of all, you don't have much control over what goes on your record. Basically you are putting someone else in power of determining your creditability and that is not something you want to do.
I'm interested in knowing if anyone would be interested in joining a grass roots effort to limit the scope of credit bureau influence.
I'm going to setup a website put something together, please email me if you are interested
trinsic@in-trinsic.net
Of course, the corollary to that is if the minimum set of laws that are provided aren't to your liking, there's proportionally less you can do about it. Which is the argument for the strongest governance being at the smallest level. If your city council screws you on whether you're allowed to put solar panels on your roof or a windmill in your back yard (because they're eyesores), you can directly agitate for rule change and represent an almost-significant number of votes. Failing that, you can move outside city limits, which will involve the turmoil of moving, but you can most likely keep the same job, the same social network, and the same pastimes.
If your county board screws you on whether you're allowed to put solar panels on your roof or a windmill in your back yard (because of zoning), you can try to run for office, or you can try to drum up a couple thousand other voters to lobby for change. Failing that, you can move outside the county. This will involve the turmoil of moving, it may be impractical to keep the same job, you can probably maintain largely the same social network and the same pastimes.
If your state legislature screws you on whether you're allowed to put solar panels on your roof or a windmill in your back yard (because the Dept. of Natural Resources is concerned it will ruin bird habitats), you can work to drum up a couple dozen thousand other voters to lobby for change. Failing that, you can move outside the state. Now you're moving, getting a new job, new friends, and a new pastime.
If the fed.gov screws you on whether you're allowed to put solar panels on your roof or a windmill in your back yard (because the National Coalition Of Power Companies lobbied to make it illegal), you can work to drum up a few million other voters to lobby for change. Failing that, you can move to Canada, where you won't have a job, your friends will speak French, and you'll have to take up hockey. (To Canadians: I kid, of course)
Besides, while it might be true that getting the asshat majority is easier with smaller voting populations, it's also true that it's much, much cheaper for lobbying groups to work at the federal level than it is for them to work at all the local levels. So you're far more likely to see a gross distortion of the "will of the people" in favor of the "will of the industry groups."
Reality has a conservative bias: it conserves mass, energy, momentum...
Actually deadbeats (the technical term) are some of the best prospects for banks and the credit industry. It's hard to make money off someone with a 820+ FICO (super prime) as they are unlikely to revolve (run a balance) or incur overlimit or late fees. Even if they do revolve, the interest rate will be Prime + 1.9 or a similarly low rate. In addition, high FICO customers generally have multiple bank relationships so the bank will usually waive an accidental late payment.
The real money is to be made in the sub-prime (FICO 620) segment where you can charge high interest rates (Prime + 15%) and get lots of fees. And the other hand, all the the credit risk (chance of not ever getting paid) is in the low FICO customers.
Thank you for promoting my journal. It's clear that I'm being swarmed by trolls... similar to this.
For all we know you're Pudge, you're posting AC, and you can't handle it when someone else posts the truth of matters which you profit from.
the NPG electrode was replaced with carbon blac
Hop on over to GreenDimes and sign up. For $36/yr (at least that's what it cost when I signed up a few months ago), they purge your name from all these mailing-lists AND plant one tree a month in your name. So you can reduce the flow of junk (which saves trees) and have trees planted. It gets you that much closer to carbon neutrality.
FWIW, before I signed up, I used to have my box stuffed with junk on a daily basis. Now only the occasional piece trickles in, and that's only from companies who haven't scrubbed their lists yet.
'He who has to break a thing to find out what it is, has left the path of wisdom.' -- Gandalf to Saruman
This is where your mental illness, or supreme inadequacy, is showing. Theory would be that international bankers are all philanthropic saints who are in business for the greater good of all humanity.
FACT would be that international bankers exist, they have held their businesses within their close circle of family and friends for centuries, and that they are shrewd businessmen who, through living in private communities with private security forces, have distanced themselves from the social problems created by their deliberate and cutthroat pursuit of profit margins.
But don't let the facts interrupt your rants and steady stream of daily hate which you direct towards me.
the NPG electrode was replaced with carbon blac
My significant other and I just bought our first furniture set this past weekend. We got approved from HSBC for the in store financing. We had to talk to the HSBC representative in the store over the phone to verify us. The questions surprised us. We were asked "what city does your brother live in?" and they gave us a list of four cities to choose from. The next one way, "At what company did your father work for last". Then she got questions about her step dad. I asked what my family members are doing on my credit report and was told "We compile information from a variety of public information stores". Keep in mind I haven't talked to my brother in years and had no idea where he was, but guessed based on where he went to college, and my S.O. hasn't spoken to her step dad in decades. So if you think the informaiton web is only for you, wrong. The web is growing and includes people you know too. Truly scary how interconnected these new data bases are. I figure they are using a service like LexisNexus or some such to group credit users. Much like the US Govt uses these databases to keep tabs on terrorists and their associates.
Sorry to inform you but the days where a creditor needed a social security number to put something deragatory on you credit report are LONG gone. It is actually one of the biggest myth's of credit reports. See this: See MYTH #8: http://www.fatwallet.com/t/52/225082/