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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
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.
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.
I do not think that is correct.
I got my credit report yesterday actually (from the real site: Annualcreditreport.com NOT the scam site: freecreditreport.com)
My credit report shows 12 promotional inquiries by businesses wishing to extend me pre-approved cards between january and may. I'm sure they paid a fee to the credit agency each time. Freezing my credit might turnoff that revenue stream.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
These guys feel no obligation to follow their own guidelines. Why would they follow someone else's?
I had a near miss with identity theft about six years ago. The mortgage broker that sold us our house (we knew it was him, just could find him or prove it) stole our file along with a bunch of files from other people. We would check out mail to find credit card bills that were torn open, rearranged, then haphazardly stuffed back into the envelopes. We finally figured out what was happening when we got a rejection letter for a small business loan for $18,000 that was declined for a technical reason. He put my birthday down as something like 1905 for some reason. All the other info was dead on. When I called the bank, they apologized for turning me down and asked me to come in and fix the problem to get the loan.
He must have been a novice because he made a number of other failed attempts. We ended up putting this fraud alert on our credit credit reports. Our experience has been hit or miss. For example, my wife walked into a target and spent several hundred dollars. The offered a 10% discount for applying for a credit card. She told them it would automatically deny us because if the fraud alert, but they told her she would get the discount anyway. The result: $10,000 limit on the spot with a little note that would allow her to max the card there in the store that day. Home depot gave me a little trouble though. The person behind the counter abruptly handed me the phone. The person on the phone said, "Do you know why I'm talking to you?" I told her about the fraud alert. Result: $5000 limit on the spot. At least it wasn't as bad as target. We bought a car no questions asked. Getting a cell phone contract from sprint was hell however. They kept canceling the order. The third attempt worked and they did as they should have.
Disconnect your television. Do your own research. Draw your own conclusions. They're probably lying. Don't be a sheep.