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How Equifax's Data Breech Will Cost Ratechasers And DA Users Especially

senda
  |     |   126 posts since 2015

Because of the data breech at Equifax, it's highly recommended for everyone to FREEZE their credit at all 3 agencies (maddening as it is that us consumers are being forced to pay fees to the agencies that caused the problem in the first place. Don't even get me started.) Doing so costs a fee (varies by state; in California, $10 for each agency = $30, though Equifax alone is waiving the fee for the next 30 days) and then whenever you need a credit check done, you have to pay another fee to unfreeze your credit temporarily (in California, the same $10 for each agency = $30 total).

However this will especially affect ratechasers and the type of people who frequent DA. Why? Because everytime you join a new credit union to get that CD special you've seen here on DA, most credit unions do either a hard or soft pull -- and require your credit score, simply just to become a member. Translation: everytime you want to join a new credit union to get that latest CD deal, you'll have to pay up to $30 total (depending on the state) to the credit agencies to unfreeze your credit so you can first become a member of that credit union.

Technically, if the credit union can tell you which of the 3 services they use for memberships (Equifax, TransUnion, Experion) then you only need to unfreeze that one of them ($10 instead of $30 for California) each time. I called Alliant Credit Union's loan dept today to ask, and they were on the ball enough to tell me which of the 3 companies they use for each product (it varies, depending on whether you're asking for a credit card, loan, or membership). But my guess is, most smaller credit unions won't have this information handy, and if there's a great CD deal at XYZ Credit Union, unless by luck you can find someone there who knows which of the 3 companies they use to do a pull for your membership, you'll have to unfreeze all 3 (up to $30 total then) just to become a member.

(This on top of the fees to unfreeze it anytime you want to switch to a new credit card or get a loan).

I still think it's worth doing the freeze, but just be aware that whenever there's a new credit union you want to join, it'll cost you some fees to temporariliy unfreeze your credit...

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16


Bozo
  |     |   1,375 posts since 2011
Senda, a larger issue is why a financial institution needs a credit report for "us" to lend "them" money in the first place. I understand the concept of the driver's license and local address to show you're a US citizen. I understand the need for a SSN, for tax purposes. But explain to me, in words a fifth-grader might understand, why a bank or credit union needs MY credit report to lend THEM money. Heck, it's backwards. I've asked several bankers this question, where I currently have accounts, and have never received a cogent response.
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gbtexas
  |     |   78 posts since 2013
Bozo, I'm just as confused are you about the necessity of doing a credit report, especially for someone who has a good history with the bank. Example: One of the banks I use on an ongoing basis is Chase (great for not having to wait several days on a deposit from a foreign bank). They recently offier a $300 bonus for opening a business checking account. Even though we have several accounts and credit cards with them, a credit report was accessed. Explain the rational. Another example is Mountain America Credit Union. I have a good history of CDs with them. Yet, when I decided to have one of my IRAs put in using trustee to trustee, the rep was going to get a credit report. After asking why since I have several CDs with them, she thought for a while and finally decided it wouldn't be necessary. So, if someone can offer a reasonable, rational explaination, I would certainly like to hear it (or read it).
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Bozo
  |     |   1,375 posts since 2011
gbtexas, as to a reasonable explanation for the requirement, don't hold your breath. Even with respect to new deposit accounts at new financial institutions, it makes no sense. If I walk in with a check to open a new deposit account, and it bounces, the account is closed. Or (more likely) never even opened, since most banks and CUs wait until the check clears to officially make funds available. The notion of a "hard pull" to be able to lend "you" money has always been hard for me to fathom.

Mind you, my wife and I no longer have a "dog in the fight", as we no longer worry about "hard pulls" and FICO scores. The days of us borrowing money are well over. But, I do worry about the slow "drip, drip, drip" of our financial information to the credit bureaus, since we now know they basically post our information on the refrigerator in the company cafeteria, for anyone to swipe. Mother's maiden name, anyone? Just don't take my lunch bag. That will get you fired.
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kiwi
  |     |   135 posts since 2013
Like myself, you are still in the fight. They just won't let us walk away. Somebody can still open accounts in our names. Unless, supposedly, we freeze our credit reports. They will find a way around that too.... I only see it getting worse. The big thing I see about the SSN is that they will file tax returns to get our refunds. I'm always going to owe a little for that reason. I have applied for an IRS PIN number anyway. Maybe, that will at least help tell my return from the fraud. It is hard to remove myself from this mess. My husband has always called me paranoid until now. I was right. They are out to get us. Gone are the days when I only had to care if I had a straight or (high tech) cross cut paper shredder and if the wrong person grabbed my fax.
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kiwi
  |     |   135 posts since 2013
Also, we are thinking about changing our driver's license numbers. Somebody used a fake license to take possession of fraudulently obtained merchandise in my husband's name.
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dep
  |     |   12 posts since 2011
Yes, the vetting process for deposits certainly appears to be backwards.

We might view this particular practice as just another in a long sequence of seemingly systemic attacks on individuals by corporate and government sources. In earlier times, this type of irrational treatment of individuals by business might probably have been quickly terminated as un-American nonsense. But today, individuals have been conditioned to accept it as just another oddball hoop through which we all must now jump.

It may have its roots in the sad loss of the concept of probable cause. I.e. instead of being suspicious of a small faction of citizens because of their explicit past and/or current bad behavior, nowadays all citizens are viewed without specific cause as suspicious. The fallout from that fallacy is then that all citizens need to be constantly monitored, tracked, and spied upon (financially as well as other aspects of life), with resulting dramatic loss of privacy, and with an associated loss of a rational and efficient approach to business.

In addition to a credit check on the depositor being required for the privilege of handing over money to a financial institution so that the institution can profit from that wealth, other examples of this type of increasingly ingrained groveling of decent individuals needing to constantly prove that we're not bad guys is now common in our everyday lives. E.g.

Requirements to carry and show special id ("papers please"), as well as removing clothing and agreeing to body irradiation and/or pat-downs in order to hand over large sums of funds to travel on commercial airplanes.

Traffic and pedestrian cameras, with license plate readers and facial recognition software keeping track of the comings and goings of citizens.

Cell phone and laptop data content examination when US citizens re-enter the US after travel abroad.

Increasingly sophisticated methods employed by corporate websites to track individuals on the Internet.

Increasing demands by business providers to know customers' social security numbers before customers are allowed to purchase services. (E.g Internet Service Providers, gas and electric companies, non-loan automobile sales, apartment renting, ...) This practice continues despite fairly explicit directives from the Social Security Admin as to the appropriate limited use of SS numbers.

The culprits driving this on-going attack on individual privacy and dignity are of both corporate and government origins. Part of the problem is probably due to the increasing capabilities of technology. The infatuation with collecting, storing, analyzing, and manipulating info about citizens keeps expanding because it is increasingly doable as technology moves forward. I.e. they do it in part because it's possible, as well as the perception that there is advantage and self-protection to the business or government entity by doing it.

Rolling back these undesirable affronts to individuals is apparently increasingly difficult. The fear of that tiny subset of humanity who are criminals and terrorists keeps the list of new constraints and humiliations on decent individuals growing. Of the two classes of culprits implementing these constraints and intrusions, government in countries such as the US should theoretically be more on the side of protecting individuals from the natural predator nature of business. But many in our culture have been conditioned to fear government regulation that could possibly prevent many of the corporate abuses, and thus vote for gov't reps who generally oppose regulation. On the other hand, big government has often shown itself to be abusive in its increasingly impersonally intrusive behavior.

And so a question that perhaps naturally arises when we see irrational practices such as credit checks on depositors is, can this type of problem be fixed? And who do we champion to fix it? With most if not all banks and credit unions apparently mindlessly employing this procedure, it would appear that the free market is not functioning to deliver a fix. (I.e. we don't see any banks reaching out to potential depositors with ads to please deposit with us because we don't do unwarranted credit checks on depositors.) And with the present anti-regulation sentiment at the national level and some state levels of our government, the solution does not currently appear to be with elected representatives. A rather depressing conundrum for anyone who grew up with a firm commitment to the dignity and power of individuals, plus that business and gov't exist to serve the needs of individuals and not the other way around.
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Bozo
  |     |   1,375 posts since 2011
Poster "dep" (re your comment of 9/13), your comment in the last paragraph of your post about the lack of a free-market incentive is spot-on. Unless or until financial institutions once again need our "retail money" in order to make profitable loans, there is no incentive. It seems that all "retail money" in "new accounts" is good for these days is to cross-market. And, of course, if you have a poor FICO score, you are not exactly the cross-marketer's dream. The real money is made, it would appear, not by taking in deposits at X and lending at X+Y, but by taking in new money accounts and cross-marketing credit cards, car loans, home loans, etc. With such a cynical (but perhaps realistic) worldview, the requirement of a credit report to open a deposit account makes sense. They really don't want your money. It could be $500 or $500,000. They want "you".

I just received my first "cross-market" in my e-mail inbox today on a new CD my wife and I opened last week. It didn't take the cross-marketers long to latch onto our new account.
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