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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
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!
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?
MasterCard and most banks spend a lot of money each year on preventing and detecting fraud. I used to work for MasterCard and can tell you they do see profit in preventing credit card fraud, and to a lesser extent id theft. If consumers lose trust in the brand name they'll hurt very bad. They track their own reported fraud rate very carefully and set a performance threshold for the department to maintain. MasterCard works closely with all of their member banks to aggregate fraud statistics and raise flags when any banks see a spike.
Developers: We can use your help.
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
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.
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'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