Ask Andy: Credit Bureaus Selling Your Information - Action News 5 - Memphis, Tennessee

Ask Andy: Credit Bureaus Selling Your Information

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MEMPHIS, TN -

(WMC-TV) - A Memphis lender's unsolicited credit offer has one loan officer venting his frustration at the three major credit bureaus.

"What the public doesn't know is the three major bureaus -- Experian, TransUnion & Equifax -- sell (consumers' credit information) to anyone who wants to pay them for it," said Sam Goff, loan officer for Evolve Bank & Trust in Cordova, TN (www.getevolved.com). 

The Action News 5 Investigators confirmed at least one of the credit bureaus sold an untold number of Mid-South homeowners' credit scores and loan information to a third-party processor and marketer for Eagle Mortgage & Funding, 6260 Poplar Ave. in East Memphis (BBB rating=A+, licensed in Tennessee & Arkansas).

Eagle's branch manager Randy Almand said he paid processor Mailer Leads, LLC, of Fairhaven, OH, to use the information to build a pool of potential re-financing candidates. On Almand's behalf, Mailer Leads mailed each of the candidates an unsolicited letter -- what the loan industry calls a pre-screened offer of credit -- informing them they may qualify for a lower interest rate.

"I paid Mailer Leads a flat fee to customize the letter and send it to borrowers with a 660 credit score or higher and a loan balance of more than $100,000," said Almand.

A Mailer Leads, LLC, spokesperson who would only identify himself as 'Kevin' told The Action News 5 Investigators, "The law allows the credit bureaus to share a certain amount of information, including credit score ranges, to determine whether a consumer is a likely candidate for a particular loan service."

'Kevin' is right.

The federal Fair Credit Reporting Act states that "...a user of a mortgage prescreening product (e.g., a credit union, community banker or other lender) must: (a) certify to the consumer reporting agency that it has a permissible purpose to request a credit report; (b) actually make a "firm offer of credit" as defined under the FCRA; (c) actually have the means to honor the offer (i.e. mortgage brokers must have a contract that binds a lender to honor the offer); and (d) provide notice of the consumer's right to opt-out when making written solicitations to consumers."

"What this means is the consumer gets a bona fide loan offer that he/she can compare to (his/her current loan)," said Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association in Washington, D.C. (http://www.cdiaonline.org/). "These mortgage offers save consumers time and money."

As a licensed lender, Eagle Mortgage & Funding qualifies under the law as having a "permissible purpose" for obtaining consumers' credit information, and Mailer Leads, LLC, may use that information as Eagle's processing agent.

Goff argued it may be legal, but he said it stinks to high heaven.

"Before I can pull your credit report, I have to have your expressed permission to do so," said Goff. "How can (the credit bureaus) share your personal information without your permission? That's my beef with it, and I think it is highly unethical."

With a touch of irony Almand, who declined Action News 5's request for an on-camera interview, said the pre-screened offer hasn't coughed up a single customer for Eagle Mortgage & Funding.

"To this day, I have not closed a loan through the help of that letter at all," Almand said. "I was just the sucker who said I would buy the leads."

Magnuson said even though pre-screened offers based on the sale of consumers' information by the credit bureaus are legal, consumers may opt out of those types of solicitations.

He said consumers may opt out by calling 1-888-5-OPT-OUT or by logging on to www.optoutprescreen.com

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