FTC under fire as credit bureaus sell consumers' data

[flashl]

Federal Trade Commission Chairman Deborah Platt Majoras says her agency has done a credible job regulating the Big Three credit bureaus.

But the boom — and now bust — of subprime mortgages is fueling criticism that the FTC under Platt Majoras has given Experian, Equifax and TransUnion too much latitude to profit from the sale of credit data to lenders and consumers.

"Federal agencies that are supposed to be looking out for the consumer are really protecting the companies that do bad things the agencies were set up to prevent," says political commentator Robert Kuttner, author of The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity.

In February, the National Association of Mortgage Brokers lambasted the FTC for giving the credit bureaus tacit approval to keep selling listings — called "trigger lists" — containing personal and financial data of prospective borrowers. Some unscrupulous lenders used trigger lists to contact people who recently filled out a loan application, and then pitched them subprime mortgages, higher-priced loans aimed at people with spotty credit histories but also marketed to borrowers with good credit.

Most applicants never knew the bureaus were placing them on trigger lists and were surprised to be deluged by phone calls and e-mails for subprime loans. These too-good-to-be-true offers came from brokers who skirted rules requiring traditional lenders to make firm offers only in writing.

With the meltdown of subprime loans, such offers have declined. But now privacy and consumer advocates are calling for the FTC to do more to bring order to the profusion of websites selling credit scores and credit services derived from credit data sold exclusively by the Big Three.

Read Full Text

Awww. The mark, U.S. citizens, and the good ole free marketplace, let me count the many ways we can categorize, commoditize, bundle, and re-sell you?

[NC_Nurse]

1. I love this quote:

"Federal agencies that are supposed to be looking out for the consumer are really protecting the companies that do bad things the agencies were set up to prevent"

That just sums up the whole Bush Presidency, doesn't it? Sigh.

[SoCalDem]

2. Available data is always an asset..and assets are routinely boought/sold/traded

as soon as we left the "cash" society, we signed on for this..:cry:

[flashl]

3. Same story different agency

DU Post - GAO says SEC not using all its arsenal

The U.S. Securities and Exchange Commission is not using all of its available tools to police Wall Street, according to a U.S. government study.

The New York Times reported on Sunday that a study by the U.S. Government Accountability Office indicates that the SEC declines to use internal audits conducted by U.S. stock and options exchanges.

[riverdeep]

4. Private and public entities are selling your info all the time.

And they have been for some time now. Your town is selling your private data (of course, they will claim it's not private), and there is very little you can practically do about it.

"KANSAS CITY, Mo. -- County courthouses here and throughout the nation routinely sell what most people consider very private information. Not only does the government sell it, it offers subscriptions, KMBC's Micheal Mahoney reported."

http://www.kmbc.com/money/2867587/detail.html

This is what happens when people respond with apathy to intrusions to their privacy. Eventually, everyone suffers because privacy is no longer the default position.

[flashl]

5. 'privacy is no longer the default position'

So true.

[Gormy Cuss]

6. Tax assessments and property liens are public data.

They have been accessible for eons in most places. I have researched family histories using city directories from the early 20th century and in some cities there was a section listing all homeowners and assessed value of their properties. That part of the data isn't particularly sensitive.

What violates privacy is selling that info along with the owners' Social Security Numbers and age or DOB.

I agree with you that privacy should be presumed as the default but our laws don't make that explicit and businesses therefore will rent,share,and sell any data on us because they can.


on edit: I also note that the OP link demonstrates another way that the consumers were at a disadvantage in the mortgage market in recent years.