Florida CFO warns of credit bureaus selling data to lenders
This week, state Chief Financial Officer (CFO) Jimmy Patronis warned Floridians to be aware that credit bureaus can sell their data to lenders without their consent.
Credit bureaus sell “trigger leads,” whereby lenders buy lists of data on consumers who have credit characteristics that the lender wants to target. When consumers apply for loans and their credit runs out, their information can quickly be sold by credit bureaus to lenders looking to make unsolicited offers. Recent reports indicate that some lenders are making unsolicited phone calls to consumers and misleading who they are, exposing consumers to identity theft.
“My top priority is to protect Florida consumers and I am alarmed by a recent business model used by credit reporting agencies called ‘tripwires’ to sell consumers’ financial data to potential lenders without their consent. No not only does this create a market for unwanted telemarketing calls, but it also puts consumer data at risk and exposes personal financial information to fraud and identity theft.Florida consumers should beware of this practice and learn advice on how to prevent your data from being sold against their will to the highest bidder.Today I sent a letter to the Consumer Financial Protection Bureau and the three major credit reporting agencies expressing my serious concerns about this tactic commercial unscrupulousness and the potential it has to expose Florida consumers to fraud and scams. Identity theft and fraud can cripple your family’s finances for years, and as such, your data must be protected at all costs. As CFO, I will continue to fight to achieve this,” Patronis said.
The CFO offered three tips for consumers to protect your credit data:
1. Unsubscribe. Consumers can opt out of having their data sold to lenders when they have not initiated the transaction with the lender. To opt out, visit OptOutPrescreen.com or call 888-5-OPTOUT (888-567-8688).
2. Credit freeze. Consumers can freeze their credit; businesses that do not have a current relationship with the consumer will not be able to access the consumer’s credit data.
3. National Do Not Call Registry. To limit the number of solicitation phone calls you receive, sign up for the National Do Not Call Registry to stop receiving unwanted calls.
Also this week, Patronis wrote Rohit Choprathe director of the Consumer Financial Protection Bureau (CFPB), on this subject. The letter is below.
Dear Director Chopra:
I am writing to express my growing concern about consumer intelligence agencies selling sensitive consumer data to lenders through “triggers”. As Florida’s CFO, protecting Floridians from identity theft and other scams is extremely important to me. Accordingly, I urge the Consumer Financial Protection Bureau (CFPB) to put in place stricter safeguards regarding trigger leads; including, giving the consumer the ability to opt out of having their data sold by a credit bureau at the time the consumer applies for a loan.
It has come to my attention that credit bureaus sell trigger leads, where lenders buy lists of data on consumers who have credit characteristics that the lender is targeting. When consumers apply for loans and their credit runs out, their information can quickly be sold by credit bureaus to lenders looking to make unsolicited offers. Although unfortunately this practice is currently legal, the trigger leads can be detrimental to consumers and even expose them to identity theft. A lender purchasing the consumer’s information could call the consumer and mislead them as to the identity of the caller and the reason for the call, giving the caller an opportunity to solicit information sensitive personal and financial consumer.
I understand that current law allows consumers to opt out of having their information used by lenders in connection with certain transactions. But, the current opt-out process requires the consumer to make every effort to notify the credit bureau that they do not want their information sold. At this point, it is likely that the consumer has already received an unsolicited communication from a lender. Rather than forcing consumers to rush, they should be given the option to opt out when applying for a loan. Simply providing a checkbox on a loan application would create a much easier path for consumers to withdraw than requiring them to call a credit bureau or go to a withdrawal website.
While I’m sure the major credit bureaus Equifax, Experian and TransUnion would probably oppose my suggestion because it would be harder for them to profit from the sale of data, these credit bureaus need to start prioritizing protecting consumer data rather than making a profit. . With the dangers associated with trigger trails and increasingly sophisticated scammers, there’s no better time than now to give consumers more tools to protect their data.