This week, state Chief Financial Officer (CFO) Jimmy Patronis cautioned Floridians to be aware that credit bureaus can sell their data to lenders without their consent.
Credit bureaus are selling “trigger leads,” whereby lenders purchase lists of data on consumers who have credit characteristics that the lender desires to target. When consumers apply for loans and their credit is run, their information can quickly be sold by credit bureaus to lenders looking to make unsolicited offers. Recent reports say some lenders are making unsolicited phone calls to consumers and are being misleading about who they are, which exposes consumers to identity theft.
“My top priority is protecting Florida consumers and I’m alarmed by a recent business model used by credit bureaus called “trigger leads” to sell consumer’s financial data to potential lenders without consent. Not only does this create a market for unwanted telemarketing calls, but it also puts consumers’ data in danger and exposes personal financial information to fraud and identity theft. Florida consumers should beware of this practice and learn tips to avoid having your data unwillingly sold to the highest bidder. Today, I issued a letter to the Consumer Financial Protection Bureau and all three major credit reporting agencies to express my serious concerns with this unscrupulous business tactic 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 should be protected at all costs. As your CFO, I’ll continue to fight to do just that,” Patronis said.
The CFO offered three consumer tips to protect your credit data:
1. Opt-out. Consumers can opt-out of having their data sold to lenders when the consumer has 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; companies 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 curb the number of solicitation phone calls received, sign up for the National Do Not Call Registry to stop receiving unwanted calls.
Also this week, Patronis wrote Rohit Chopra, the director of the Consumer Financial Protection Bureau (CFPB), on the matter. The letter is below.
Dear Director Chopra:
I am writing to express my growing concern regarding consumer reporting agencies selling sensitive consumer data to lenders through “trigger leads.” As Florida’s Chief Financial Officer, protecting Floridians from identity theft and other scams is incredibly important to me. Accordingly, I am urging the Consumer Financial Protection Bureau (CFPB) to implement stricter guardrails regarding trigger leads; including, giving the consumer the option to opt-out of having their data sold by a credit bureau at the time in which the consumer applies for a loan.
It has come to my attention that credit bureaus are selling trigger leads, where lenders purchase lists of data on consumers who have credit characteristics that the lender targets. When consumers apply for loans and their credit is run, their information can quickly be sold by credit bureaus to lenders looking to make unsolicited offers. While unfortunately this practice is currently legal, trigger leads can be harmful to consumers and even expose them to identity theft. A lender who purchases the consumer’s information could call the consumer and mislead the consumer as to who is calling and the reason for the call, which creates an opportunity for the caller to solicit sensitive personal and financial information from the consumer.
I am aware 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 go out of their way to notify the credit bureau that they do not want their information sold. At that point, it is likely that the consumer has already received an unsolicited communication from a lender. Rather than making consumers jump through hoops, they should be given the option to opt-out at the time of application for a loan. Merely providing a checkable box on a loan application would create a much easier path for consumers to opt-out than requiring them to call a credit bureau or go to an opt-out website.
While I am certain that the large credit bureaus, Equifax, Experian, and TransUnion, would likely oppose my suggestion as it would make it harder for them to profit off of data selling, these credit bureaus need to start prioritizing protecting consumer data over earning profits. Given the dangers associated with trigger leads and with scammers becoming increasingly sophisticated, there is no better time than now to empower consumers with more tools to protect their data.
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