How to keep credit companies from selling my information?

November 2, 2006 3:32 PM

Can I get apply for a credit card without credit companies selling my information?

Asking this for a friend. Is there a way to get a credit card and NOT have the credit companies sell my information to others? There's probably a way to opt out of that, but is that even effective?

posted by nakedsushi to work & money (8 comments total)

It isn't the bank you have to worry about. The bank will report your friend's payment history with the credit reporting agency. Other businesses will buy names of people matching certain criteria. You can opt out of this by contacting the credit reporting agencies.

The bank itself will try to sell you stuff from its portfolio of companies unless you specifically opt out of those offers.
posted by birdherder at 3:53 PM on November 2, 2006

I think that's what my friend meant: preventing credit reporting agencies from selling his information. How easy is it to opt out of that?
posted by nakedsushi at 4:00 PM on November 2, 2006

Very easy. "Call (888) 5-OPTOUT or [phone] to opt out of pre-approved offers of credit or go online to www.optoutprescreen.com."
posted by raf at 4:10 PM on November 2, 2006

While you can put yourself on a list of people who do not want to receive pre-approved credit card offers, there is nothing you can do to prevent a) your credit card issuer from selling your credit info to the credit reporting agencies or b) the credit reporting agencies from selling your info to anyone in the world that they please.

Sorry.

Except lobby for financial privacy laws in the United States, of course.
posted by jellicle at 5:43 PM on November 2, 2006

jellicle, your claim (b) is simply untrue. The opt-out procedure is mandated by the Fair Credit Reporting Act. As for part (a), credit providers do not sell your info to the credit reporting agencies; they provide it for free (and it is lawful for them to do so).
posted by raf at 7:15 PM on November 2, 2006

Wow it sure is easy! I just went it and opted myself out. Goodbye credit card offers (I hope!).

As far as providing info: as I understand it, credit reporting agencies *exist* in order to let other companies know whether or not an individual has good or bad credit. If someone were able to prevent them from sharing their data, then anyone would be able to take out a 30k loan or a mortgage on a house. And credit card companies are going to provide these agencies with information about their customers so that they'll have a good credit database themselves.

If his/her main concern is privacy, your friend should either open a Swiss Banking Account (and even those aren't really private anymore) or keep everything in a shoebox under his/her bed. If you're using checking or credit cards in this country, everything you do is being recorded and can be made available.

If your friend is worried about corporate conspiracies and private information being sold back and forth between companies, s/he might want to consider using a credit card issued by a Community Credit Union or some similar community bank, see this article on non-megabank credit cards.
posted by Deathalicious at 8:34 PM on November 2, 2006

I'm sorry, but I've actually read the Fair Credit Reporting Act.

While the law allows you to opt out of receiving solicitations, it does not allow you to opt out of having your information sold. (It's quite specific: you can opt-out of receiving solicitations by phone, for example, while NOT opting out of receiving solicitations by mail.) Financial companies can and will still purchase your credit information from the credit bureaus, they are just prohibited from sending you pre-approved credit card offers based on that information. (In practice the credit companies might not buy your info since you've indicated you don't want the solicitations, but that doesn't mean they COULDN'T buy your info.)

So your information will continue to be bought and sold behind your back, you just won't know about it since no one will be sending you credit card offers based on your credit history.

Interestingly, the latest version of the FCRA (it's revised every few years) contains some nice anti-terrorism clauses - the government can request your credit report and the credit bureaus are forbidden by law from telling you that it was requested by the government. You can't opt-out of that, either.
posted by jellicle at 7:05 AM on November 4, 2006

jellicle: You may have read the FCRA, but your understanding is incompatible with my read of the statute.

15 U.S.C. § 1681c governs "Permissible purposes of consumer reports." Section 1681c(c) governs "Furnishing reports in connection with credit or insurance transactions that are not initiated by consumer." It states, in part:

(1) ... A consumer reporting agency may furnish a consumer report relating to any consumer pursuant to subparagraph (A) or (C) of subsection (a)(3) of this section in connection with any credit or insurance transaction that is not initiated by the consumer only if—

(B)
(i) the transaction consists of a firm offer of credit or insurance;
(ii) the consumer reporting agency has complied with subsection (e) of this section; and
(iii) there is not in effect an election by the consumer, made in accordance with subsection (e) of this section, to have the consumer’s name and address excluded from lists of names provided by the agency pursuant to this paragraph.

Subsection (e) establishes the opt-out procedure that is invoked by, among other things, the OptOutPreScreen web site.

Accordingly, the text of the statute makes quite clear that it is not simply the solicitation of people who have opted out that is prohibited; the credit reporting agency may not "furnish a consumer report" for such an unsolicited offer if the consumer is on the opt-out list. This understanding is also consistent with the language on the opt-out web site, which states:

Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make firm offers of credit or insurance that are not initiated by you ("Firm Offers"). The FCRA also provides you the right to "Opt-Out", which prevents Consumer Credit Reporting Companies from providing your credit file information for Firm Offers.

I would be curious what provisions of the statute you are referring to, since, as I said above, my read of the statute is significantly different from yours and I can't find anything similar to what you are describing.

(I am a lawyer, but I am probably not licensed in your jurisdiction, and this is not legal advice. In any event, I an not presently practicing law. Consult competent counsel.)
posted by raf at 7:40 PM on November 4, 2006