Sunday, June 27, 2009
Information about our credit behavior is provided to the credit bureaus by the various lenders from which we have borrowed money to buy merchandise and services, cars, houses, education, you name it. In turn, these credit bureaus – principally Equifax, Transunion and Experian –provide our credit histories to prospective lenders which we have approached to obtain additional or replacement credit – a new credit card, a car loan, mortgage refinancing, student loan, etc. Understandably, these credit bureaus provide this information subject to federal and state laws designed to protect us against its dissemination without our knowledge or authority.
This flow of information is carefully managed, and properly so. The more widely and more casually our credit histories are published, the greater the likelihood of identity theft. More to the point, the details of our financial lives should be nobody’s business unless we, personally, decide they should be. Credit reports are highly personal information that you and I need to protect. Not that big a deal, you’re thinking? Okay, who reading this would want to hand out copies of his or her credit report to your neighbors, family, friends, coworkers or random strangers you pass on the street? I didn’t think so.
Well, it turns out that the same credit bureaus which make a point of how trustworthy they are in virtuous compliance with every federal and state regulation – which they are – have been making more than a little money on the side in complete contradiction to the public trust.
Ever receive one of those advertisements in the mail from a lender offering you refinancing or debt consolidation? Of course you have. Some of them describe the services they offer by way of examples, unrelated to your specific situation, to describe the advantages of their programs, but others… Others actually show the precise amounts of your mortgage, credit card and other obligations to calculate how much they can save you. Wait a minute. You didn’t apply to these companies for credit. You didn’t authorize or know about the release of your financial data to these companies whose services you never solicited. And they have no right to your data because you don’t already owe them money. So how did they find out the amounts of your mortgage, credit card and other debt?
The simple answer is that the credit bureaus sold it to them, in bulk. They’re called “promotional inquiries” – detailed personal credit information, including basically everything on your credit report, which the credit bureaus sell to companies who want to make you unsolicited offers – and they don’t show up on your credit report. That they don’t show up on your credit report is good in that they have no effect on your credit score. The bad news is, because they don’t show up, you have no way of knowing that your credit history has been sold and who has it. It’s a secret, and not the good kind.
What’s the point? The point is that our federal government needs to do something, needs to do more to protect the privacy of our financial data to keep it out of the hands of marketing firms who, without our authority or knowledge, have no right to it.