Wednesday, May 31, 2006

Who Sells Your Personal Credit Information?

The following article outlines just one of many offensive marketing practices by companies in the finance industry that compromises financial privacy without the knowledge or permission of consumers when they apply for loans, credit or mortgages. It is shocking that the practice of sale of personal financial information is allowed at all, since the data is so sensitive and subject to abuse by any individual who might "legitimately" come in contact with that information in the course of their job at any one of the agencies handling that financial data.

It just takes one dishonest employee at the mortgage company, escrow office, competing lenders or any other touchpoint for your financial data to compromise your financial privacy and put you at risk for identity theft.

While Jeanette's article looks at how the information is sold and traded legally, this practice should be stopped to protect the financial privacy of all credit consumers.

Copyright © Jeanette Joy Fisher

It's not well known, but if you have recently applied for mortgage credit, the information you shared was probably sold within twenty-four hours of your mortgage application. Credit reporting agencies commonly sell what they term "trigger lists" of folks who have recently contacted mortgage lenders for rates or loan preapproval and have given loan officers permission to check into their credit.

These leads are being bought by data marketing companies who then resell the information to lenders who are interested in trying to entice you to use their lending services. The information the data marketing companies provide is valuable, because it tells lenders everything about your creditworthiness before lenders pitch you their offers.

One such company is Mortgage Inquiry Data, which tells lenders that they can provide access to every potential borrower who applies for a mortgage loan within twenty-four hours of the original request, making them prime candidates for lending services in the immediate future. Another company, Intellidyn, offers what it calls IntelliAlert, which provides similar valuable information to prospective lenders.

The data is worth a great deal to lenders, and comes with a hefty price tag. For instance, Intellidyn charges $31,395/month for its "platinum" level information, for which Intellidyn promises to let lenders know about every mortgage inquiry or application in any designated area in the U.S.

Just what other sort of information is being sold?

Mortgage Inquiry Data also sells: credit scores open mortgage balances monthly payments loan-to-value rations revolving credit card balances personal credit information besides just marketing application information.

All this leads to ethics questions in the minds of many bankers, who generally have to pay to get the information, only to then see it sold to other lenders who may be in direct competition with them for home loans.

Of the three major credit reporting firms, Equifax and Experian have publicly confirmed that they sell trigger lists within twenty-four hours, but TransUnion has yet to comment. However, Equifax and Experian both state that such lists aren't in violation of any laws. Instead, they view them as simply fresher versions of preapproved credit lists they have routinely sold to lenders for many years.

One of the most disturbing things about this process is that even if you don't want your credit information shared, there's currently no option available for refusing to allow it to be sold. However, consumer protection agencies in several states are looking into the practice, and you can personally express your disapproval by contacting the Federal Trade Commission.

Copyright © 2006 Jeanette J. Fisher. No translations.

About The Author: Jeanette Fisher teaches first-time home buyers and real estate investors how to meet the 5 requirements beyond credit scores. Credit Information FREE Credit Help ebook

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