Did you Know your Personal Financial Information Can Be Sold by Credit Reporting Agencies?
Most consumers have no idea that the major credit reporting agencies, Equifax, Experian, Innvois and Transunion, are selling and sharing their private financial information. Each of the major credit bureaus has over 200 million files. Credit reporting agencies can sell your personal information (including unlisted phone number, credit score, current debt, debt history, property information, age, gender and estimated income) to debt collectors and financial services companies. This make it easier for them to find out more about you, your spending habits and credit worthiness. This is known as “prescreening” and all three credit agencies are allowed to do so under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §1681.
Your next question may be, “Is this really legal?” It is all perfectly legal if done for a permissible purpose. The FCRA mandates that credit reports can only be used for a “permissible purpose,” meaning credit, insurance or employment. Protecting consumers from improper use of credit reports is an underlying policy of the FCRA. The courts have held that credit card solicitations must make a “firm offer” of credit, not a mere advertisement. However, often time the line is blurred.
You might ask yourself next, “How does this happen?” The credit agencies obtain sensitive financial information from businesses about you then feed it to their subsidiaries that resell your information and put it on what is known as a “Trigger List”. Lenders and others can subscribe to a trigger service or just buy certain trigger lists with one or more of the credit bureaus. There are dozens of parameters to choose from which will give instant notification of any credit profile changes of current customers. These triggers maybe used for risk alerts, collection assistance and even marketing opportunities. For example, a triggering event may be taking on substantial debt or late payments which may trigger a reduction or closing of a line credit. Another example is when you receive letters stating “you have been pre-approved for a line of credit ”. A credit bureau has sold your personal information and you may have been identified as someone shopping around for credit.t
We realize that this information is disturbing and scary. Someone is taking information about you, your behavior and is selling it for a profit. But, you do not have to allow this to happen. You have a right to “opt-out”. This is similar to the do-not-call list. You can go to the Opt Out List at www.optoutprescreen.com. The opt-out form is also on our Doan website. This will prevent the credit reporting companies from selling your credit information to other companies. It will have no impact on your credit score or your ability to apply for insurance or credit. Now that you are off to a fresh start, make sure you take steps to protect your financial privacy and opt-out!
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