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The entire identify-theft problem can be solved by a very simple mechanism. If I apply for a loan for a car, the dealer takes my info and tries to run my credit

by chime 16y ago

The entire identify-theft problem can be solved by a very simple mechanism. If I apply for a loan for a car, the dealer takes my info and tries to run my credit online. Immediately I get an automated phone call that says "Dealer ABC is trying to sign you up for service: AUTOLOAN. To allow this service, enter your 4 digit pin." If I do not have my cellphone, I can directly call a 1-800 number, enter my SSN + PIN and confirm the sign up. I do NOT have to provide any vendor with my PIN. Who manages/offers this service? Experian/TransUnion etc. could do this for a very small fee. Sure, there would be the issue of lost PINs, unavailability of Internet access, not having your cell on you etc. but I think it could work very well. Right now, it is possible for someone to find out my SSN# from a piece of paper from a trashcan and immediately buy a phone in my name. At least I can change my pin if someone finds out.

keltex 16y ago
Read my comment below. A similar service already exists with all the credit bureaus. It's called a "credit freeze". How it works is when you're about to apply for credit somewhere, you ask them "what bureau are you checking?" Then you go online to that bureau and temporarily "thaw" your credit just for that inquiry. And there's a nominal charge for this service.
- mos1 16y ago
  I have this on my account, and you don't need to go online to "thaw" it. The bureau calls you and asks "did you just apply for an auto loan at a Hyundai dealership in Florida?" and you reply "no, no I didn't", they say "okay, have a nice day", and that's that. At least that's what happened when somebody tried to use my identity to buy a Hyundai in Florida.
  - zaatar 16y ago
    What you described was not the 'thaw' scenario, but rather, what credit freeze is supposed to do, by design. The 'thaw' scenario would kick in if you were to legitimately apply yourself for an auto loan at a Hyundai dealership in Florida, and have that loan not be rejected.
    - mos1 16y ago
      When I've applied for credit, I got the same phone call but said "yes, that's me", and everything went through.
ShabbyDoo 16y ago
This proposal allows a seller to avoid being a victim of buyer identity theft, but it provides nothing for a consumer who must prove that he did not sign for an auto loan.
- Silhouette 16y ago
  Surely in that case the solution is simple: if he didn't sign for an auto loan, then his signature will not be on file with the auto loan company, and the burden of proof should fall on them to demonstrate that he is who he says he is (by checking suitable ID during the loan application, if necessary).
recampbell 16y ago
Heh. There was such a product provided by Debix (http://debix.com http://debix.com). It relied upon a law called the Fair Credit Reporting Act which allowed consumers to place a fraud alert on their credit file, which the creditor was supposed to call. Debix placed the fraud alert on behalf of consumers, but directed the creditor to call Debix which delivered the credit request using exactly such an authentication mechanism that you describe. This was 2003. Lifelock used the same mechanism (though without the phone authentication, IIRC). Experian sued Lifelock saying that the FCRA did not allow for companies to set fraud alerts on behalf of consumers, only consumers were allowed to set them. In May of last year, a judge agreed with Experian, and Lifelock later settled and stopped using fraud alerts. http://www.finextra.com/news/fullstory.aspx?newsitemid=20078 http://www.finextra.com/news/fullstory.aspx?newsitemid=20078 Unfortunately, this ruling also meant that Debix could no longer set fraud alerts, so they had to cancel this product. The truth is such a product creates friction in the instant credit market, which is a huge source of income for credit bureaus. So they have very little incentive to slow that process down and would rather just catch any exceptions using monitoring. The credit bureaus are an industry crying out for disruption. These guys are dinosaurs and are living it large because there is no real alternative. Unfortunately, they also seem to have plenty of political capital to prevent any real legislative reform in this area. Disclosure: I used to work for Debix and have ownership in the company.
- Oxryly 16y ago
  Would you recommend Debix's OnCall service? How does it work?

by chime 16y ago

keltex 16y ago

Read my comment below. A similar service already exists with all the credit bureaus. It's called a "credit freeze". How it works is when you're about to apply for credit somewhere, you ask them "what bureau are you checking?" Then you go online to that bureau and temporarily "thaw" your credit just for that inquiry. And there's a nominal charge for this service.

mos1 16y ago
I have this on my account, and you don't need to go online to "thaw" it. The bureau calls you and asks "did you just apply for an auto loan at a Hyundai dealership in Florida?" and you reply "no, no I didn't", they say "okay, have a nice day", and that's that. At least that's what happened when somebody tried to use my identity to buy a Hyundai in Florida.
- zaatar 16y ago
  What you described was not the 'thaw' scenario, but rather, what credit freeze is supposed to do, by design. The 'thaw' scenario would kick in if you were to legitimately apply yourself for an auto loan at a Hyundai dealership in Florida, and have that loan not be rejected.
  - mos1 16y ago
    When I've applied for credit, I got the same phone call but said "yes, that's me", and everything went through.

ShabbyDoo 16y ago

This proposal allows a seller to avoid being a victim of buyer identity theft, but it provides nothing for a consumer who must prove that he did not sign for an auto loan.

Silhouette 16y ago
Surely in that case the solution is simple: if he didn't sign for an auto loan, then his signature will not be on file with the auto loan company, and the burden of proof should fall on them to demonstrate that he is who he says he is (by checking suitable ID during the loan application, if necessary).

recampbell 16y ago

Heh. There was such a product provided by Debix (http://debix.com http://debix.com). It relied upon a law called the Fair Credit Reporting Act which allowed consumers to place a fraud alert on their credit file, which the creditor was supposed to call. Debix placed the fraud alert on behalf of consumers, but directed the creditor to call Debix which delivered the credit request using exactly such an authentication mechanism that you describe. This was 2003. Lifelock used the same mechanism (though without the phone authentication, IIRC). Experian sued Lifelock saying that the FCRA did not allow for companies to set fraud alerts on behalf of consumers, only consumers were allowed to set them. In May of last year, a judge agreed with Experian, and Lifelock later settled and stopped using fraud alerts. http://www.finextra.com/news/fullstory.aspx?newsitemid=20078 http://www.finextra.com/news/fullstory.aspx?newsitemid=20078 Unfortunately, this ruling also meant that Debix could no longer set fraud alerts, so they had to cancel this product. The truth is such a product creates friction in the instant credit market, which is a huge source of income for credit bureaus. So they have very little incentive to slow that process down and would rather just catch any exceptions using monitoring. The credit bureaus are an industry crying out for disruption. These guys are dinosaurs and are living it large because there is no real alternative. Unfortunately, they also seem to have plenty of political capital to prevent any real legislative reform in this area. Disclosure: I used to work for Debix and have ownership in the company.

Oxryly 16y ago
Would you recommend Debix's OnCall service? How does it work?