Trigger Lists-Your Credit Activity is Being Sold

Do You Know That Your Credit Activity is Being
Sold for Sales Leads?


They are called Trigger Lead Sales Lists, and they are marketed by Experian, TransUnion and Equifax. It's the same concept as the credit card offers that come in the mail so frequently, but there are some important distinctions when they are used for marketing home loans.

This is how it works:

A financial institution or lead generation company compiles a list of criteria for the credit bureaus. Let's say it's a bank or mortgage company that wants a chance to get their information in front of people who are currently interested in getting a new home loan. They could include categories such as minimum credit score, zip code of the borrower, and if the credit report was accessed in connection with a home loan.

Within 24 hours, the borrower may find that 5-10 companies, different from the one with whom they applied for their loan, have generated "offers" of competing mortgage proposals. In some cases, the borrowers may not even be aware that these are coming from sources that their lender has not contacted.

Once the borrower realizes that these are coming in from other lenders, they are rightfully concerned that their credit information has been compromised, may be susceptible to identity theft, and may think that their mortgage representative is responsible. The borrower's chosen lender does not know this is going to happen, and the borrower has no voice in the matter.

It is the credit bureaus that are using this to make more money from their information files, and to please their customers. Their customers are the subscribing companies that share the credit histories that form a consumer's credit report, not the consumers themselves. So if a subscribing company wants the credit bureau to provide targeted sales leads, the credit bureau is happy to do it.

Under the Fair Credit Reporting Act (FCRA), pre-screening is allowable as long as the creditor makes a "firm offer of credit", and meets other requirements. When a creditor is making an offer of a new credit card it is very easy for them to meet the "firm offer of credit" requirement, because the offer is primarily based on the credit score.

To use the Trigger Lead Sales Lists in the case of a mortgage, and to generate a proposal to a consumer differs widely from a "firm offer of credit" because the mortgage process is so much more complex. The credit score has become important, but not defining in and of itself. The borrower's income, the appraisal of the property, outstanding debt service, liquid assets, etc. all need to be analyzed in conjunction with the credit score to feel confident that a "firm offer of credit" can be proposed.

This opens the door to unscrupulous lending companies to insert themselves into the transaction. They rely upon another lending company to identify a borrower with a need and a desire, to take time to generate the loan application, to provide counseling and advice and to put the wheels in motion to satisfy that client. The company that purchases the lead by way of the credit reporting bureau knows that the borrower is taking action on an interest to obtain a new home loan, and they can make any offer to attract that borrower to them. The offer is not "firm" and it may be too good to be true, and it may be the beginning of a "bait and switch" operation.

How to Opt Out

Consumers can opt out by logging on to http://www.optoutprescreen.com/ or by calling 888-567-8688. It may take about 5 days to go into effect, and it won't eliminate any screening that is already in the works.

If you don't like your mailbox filled with credit offers, or if you are concerned about your confidential credit file being passed around without your knowledge to generate sales leads, I would encourage you to research what the Opt Out process can do for you.