A New Challenge to Protecting Your Credit

Increasingly I’ve been hearing from more and more of you that, immediately after beginning the loan process with me, other lenders have been in a frenzy trying to contact you. Some were even posing as me. For example, I recently locked a rate for one of my clients on a Monday, he said that on Tuesday he received a Fed Ex package with an application and disclosures. He said that he was upset because the rate and loan amount didn’t match our agreement.

He was just about to call me when he realized that, although it contained a lot of his personal information, the packet wasn’t from me at all. He didn’t understand how they got his information. Another borrower said that after locking a rate, he received so many calls that he unplugged the home phone for a few days.

It doesn’t end there. One of the most interesting stories (and most outrageous) came from a borrower who said that he received a call from a man saying that he had been assigned the loan and needed to confirm the numbers. The borrower’s first reaction was “why did Kevin pass me onto someone who obviously doesn’t know what’s going on?” He told me that he eventually figured it out, but when he went to report the guy, he realized he didn’t get any contact information.

How are these people getting your information? Many of my clients have reasoned that the only one who could have provided this confidential information was me, but nothing could be further from the truth.

Neither I, nor Mortgage Master has ever sold any information to anyone. And further, we don’t hire anyone to contact you on our behalf!

So, what IS going on? There is a relatively new term in the lending market called “Triggers”. These days, when you have your credit checked for a mortgage, home equity line of credit, car loan or credit card application, the three credit bureaus, Experian, Transunion, and Equifax, instantly identify the source of the inquiry and sell all of the personal information that they can find to any company willing to pay for it. The buyers of your data can have it instantly emailed to their Trio or Blackberry just about anywhere and in any format they want. These buyers set parameters based on their ideal borrower, and the minute a borrower who fits those criteria is identified, it sets the transfer of their information in motion, which is why it’s called a “trigger.” To me, this isn’t an ethical way to gain business, so I never purchase these leads.

A number of states, including Massachusetts, Connecticut, Maine, and Wisconsin, are considering legislation to either ban or regulate trigger services. The bill under consideration in Massachusetts is thought to be the toughest in the country. At the time that this article was printed, the bill hadn’t passed, so we’ll keep you posted as to its progress.

The lawmakers are acting because people are complaining that they don’t want the misleading onslaught of companies racing to get in touch with them. They don’t like the fact that their personal information is being sent around without their direct permission. The other big issue is that mortgage companies and lenders are required to undertake the costly endeavor of safely handling the storage and disposal of all personal data received on an application, regardless if the prospective borrower closes on a loan or not. But no one enforces the proper handling of personal data received, without your permission, by a company hoping to do business with you! The bottom line is that the more people who have access to your social security number, current home address, work place, and account numbers, the greater risk of theft taking place.

If you haven’t done it already, I urge you to notify the credit bureaus that you don’t want them selling your information. There are three ways you can do that:

1. You could complete one of the enclosed cards for each of the three primary credit bureaus and address an envelope and mail it out.

*If you need more of these forms for yourself and your co-borrower, click on “Credit Bureau Optout Forms,” on this website, download, and print from there.

2. If you prefer phone, you can call 1-888-567-8688 and follow the prompts, they’ll eventually send you some forms to be completed and mailed back.

3. You could visit www.optoutprescreen.com and complete the form on line.

All three approaches will eventually require your social security number, which you shouldn’t worry about because, obviously, they already have that! You just want to make sure they don’t send it to just anyone who’s willing to pay for it.

The website and phone Optout systems were developed with the help of the three credit bureaus, and that will become abundantly clear to you, especially on the website. You’ll need to read past all of the reasons why you should allow them to sell your info, and why it’s good for you, before you get to the Optout instructions. The phone Optout works with less of a pitch, but by having to call then to request that they send you forms means another step that delays and complicates the task and many people forget to fill out the forms once they arrive, or they just give up. And that’s what these companies are counting on! Therefore I strongly suggest that you take the attached forms, fill them out, mail them, and put this issue to rest.

It’s important to note that by opting out you won’t limit any future credit applications, but you will be stopping your information from being sent to the far corners of the world.

Getting this done will save you work later and you’ll be taking a step to secure your good credit for future use and that’s money in the bank!