Fergie's Tech Blog

FTC Under Fire as Credit Bureaus Sell Consumers' Data

Byron Acohido and Jon Swartz write in USA Today:

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.

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.

More here.

Note: Looks like Majoras has a lot on her hands now, given the fact that she also refuses to recuse herself from Google-DoubleClick oversight, too. -ferg

posted by Fergie @ 12/18/2007 08:30:00 PM