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I didn't know what the difference between a freeze or a lock is, but the article mentions it about halfway down. >Equifax’s new app offers a lock instead of a

by moonka 9y ago

I didn't know what the difference between a freeze or a lock is, but the article mentions it about halfway down. >Equifax’s new app offers a lock instead of a freeze. Locks works similarly to freezes — both restrict access to your credit file — but it should be easier to unlock your credit file since you can do it from your phone with a swipe, and doesn’t require a 10-digit pin or a fee. >What is not clear, however, is what disadvantages may come with locks. Many state laws exist that govern freezes, offering consumers protection. By creating locks, the companies avoid them. Looks like it's a nice end run around existing laws. I don't understand why they are allowed to do things like this without any consequences.

sparky_z 9y ago
I hate the credit agencies as much as anyone (and the poor quality of the app is shameful), but the "skirting the law" angle smells like an unfair criticism to me. Surely the heavy amount of regulation around credit freezes prevents an app like that from being created in the first place. The simplicity and ease of switching it on and off probably conflicts with some regulation or another. (Anybody in the know want to fact check me on that?) And it's not like they did away with freezes. They just added a alternative alongside. I've never frozen my credit because I didn't want the pain of having to unfreeze it at an inopportune moment. The concept (if not the implementation) of having locks as an alternative might convince me to actually use them. I hope it catches on.
- moonka 9y ago
  I think it's fair to view anything they do with suspicion after their mishandling of the leaks. They haven't shown me any reason to give them the benefit of the doubt, and ample reason not to do so.
  - sparky_z 9y ago
    Okay, fair enough. If there's the slightest whiff of anctual wrongdoing related to the creation of credit locks, by all means, rake them over the coals. But, really, what should they have done instead? Do you think they shouldn't have implemented credit locks at all? Because I'm sure then you would get articles about how they weren't doing enough to help consumers secure their credit, just the same old inconvenient credit freezes (and I would agree). I think that, for a person's criticism to carry any weight, there has to be a course of action that that person wouldn't criticize.
    - rectang 9y ago
      > But, really, what should they have done instead? Let me opt out, dammit. Permanently delete my data. It's not like I'm alone in that thought: https://www.nytimes.com/2017/10/06/your-money/credit-scores/equifax-hack.html https://www.nytimes.com/2017/10/06/your-money/credit-scores/... "And though the words differ (and some are unprintable in this space), the messages all end with the same demand: I want out." Even better, require opt-in, thus driving the credit raters out of business. These enablers of identity theft cause more misery than they provide value, it's just inconvenient to sue them. They should not exist.
      - deleted 9y ago
        [deleted]
      - derekp7 9y ago
        Let play through some scenarios. If you opt out, then there is not credit for you, so there would be no chance of a loan. Which is probably ok for people that decide against credit, but not for those that don't have enough savings stashed away where they need credit (car loan, home mortgage, etc). Now if it is opt in, well then you have the issue of free speech. If someone takes out a loan and doesn't pay it back, why wouldn't the institution lending the money have a right to tell others about that (through a third party)? If this isn't the case, where we have opt in by default, and it destroys the credit industry, that may also not necessarily be a bad thing. Because a lot of necessary items (housing, car ownership [for certain geographical regions], college) would fall in price to be more affordable if people couldn't get loans for them. Of course, the real issue that most people have with credit reporting agencies is the fairness of a credit score or credit report, in that it may not actually reflect the risk of a given loan. This is an area where I feel they can and should do better. After all, if a lender is turning away customers that they shouldn't, then they are leaving quite a lot of business untapped. What would be better is if credit items were categorized based on credit type and circumstances. For example, if you fall behind on sudden medical bills, but keep up on your mortgage and car payment, well that shouldn't affect your ability to buy a house or car on credit. In fact, if I was a car dealer I'd be happy to extend someone credit that treated their car payment as more important. Or, if credit cards fell behind during an unemployment stretch. In that case if your credit report shows that payments pick up again as soon as you are back on your feet, then if I was a credit card issuer, I would lower interest rates during unemployment and only bring them back up a month or two after you got a job. And as long as the record shows that someone is employable (was only out of work during times of a down economy, but otherwise could hold down a job and make regular payments while working), I would think that they would be a good credit risk. Another situation -- lets say you are a cosigner on a loan, and the person you cosigned for fell behind on payments, and you refused to pick up the payments. Well, that should only affect your ability to cosign in the future, but not anything else (assuming all other lines of credit are showing good). So this is where I think that the market is ripe for disruption, in using extended information to bring in credit customers that are otherwise left behind by the current situation. But this requires much more tracking details
- user5994461 9y ago
  >>> Surely the heavy amount of regulation around credit freezes prevents an app like that from being created in the first place. No, the law says nothing specific. It would take a lawsuit to determine whether this is lawful. It's way too expensive for consumers to go against a big company with unlimited time and budget. It takes year to settle, during which Equifax can make a lot of money. They have nothing to lose really by playing on the edge.
nielsbot 9y ago
Because there's no law against it (yet.)
cmiles74 9y ago
This analysis sounds correct to me. A credit "freeze" is governed by law and clearly outlines who is responsible if credit information is provided to agencies while the account is "frozen": the credit agency. It is not an agreement between the account holder and the credit agency; it's a protection dictated by the law. Lastly, since it is not a contractual agreement, you may sue the credit agency if the freeze is violated. While it's not clear on Equifax's website, I would strongly suspect that any violation of a "lock" is subject to arbitration. Consumer Reports provides a sum-up of what they believe the differences actually are. I would say the very fact that Equifax is being so hazy on the differences is proof enough that the "freeze" is the way to go. https://www.consumerreports.org/credit-bureaus/why-credit-freeze-is-better-than-credit-lock/ https://www.consumerreports.org/credit-bureaus/why-credit-fr... This bit from the article strikes me as odd. They wonder if the credit agency will market more aggressively to people who opt for the credit lock, something that freezes do not allow. From the article: "However, Consumers Union doesn’t recommend paying for credit monitoring. “What it does, consumers can usually do for free,” Tetreault says. Plus, with a credit freeze you won’t be targeted by ads. “These services may allow the credit reporting agency to market to consumers more aggressively for products that they may not need and/or shouldn’t pay for,” Tetreault says.

by moonka 9y ago

sparky_z 9y ago

I hate the credit agencies as much as anyone (and the poor quality of the app is shameful), but the "skirting the law" angle smells like an unfair criticism to me. Surely the heavy amount of regulation around credit freezes prevents an app like that from being created in the first place. The simplicity and ease of switching it on and off probably conflicts with some regulation or another. (Anybody in the know want to fact check me on that?) And it's not like they did away with freezes. They just added a alternative alongside. I've never frozen my credit because I didn't want the pain of having to unfreeze it at an inopportune moment. The concept (if not the implementation) of having locks as an alternative might convince me to actually use them. I hope it catches on.

moonka 9y ago
I think it's fair to view anything they do with suspicion after their mishandling of the leaks. They haven't shown me any reason to give them the benefit of the doubt, and ample reason not to do so.
- sparky_z 9y ago
  Okay, fair enough. If there's the slightest whiff of anctual wrongdoing related to the creation of credit locks, by all means, rake them over the coals. But, really, what should they have done instead? Do you think they shouldn't have implemented credit locks at all? Because I'm sure then you would get articles about how they weren't doing enough to help consumers secure their credit, just the same old inconvenient credit freezes (and I would agree). I think that, for a person's criticism to carry any weight, there has to be a course of action that that person wouldn't criticize.
  - rectang 9y ago
    > But, really, what should they have done instead? Let me opt out, dammit. Permanently delete my data. It's not like I'm alone in that thought: https://www.nytimes.com/2017/10/06/your-money/credit-scores/equifax-hack.html https://www.nytimes.com/2017/10/06/your-money/credit-scores/... "And though the words differ (and some are unprintable in this space), the messages all end with the same demand: I want out." Even better, require opt-in, thus driving the credit raters out of business. These enablers of identity theft cause more misery than they provide value, it's just inconvenient to sue them. They should not exist.
    - deleted 9y ago
      [deleted]
    - derekp7 9y ago
      Let play through some scenarios. If you opt out, then there is not credit for you, so there would be no chance of a loan. Which is probably ok for people that decide against credit, but not for those that don't have enough savings stashed away where they need credit (car loan, home mortgage, etc). Now if it is opt in, well then you have the issue of free speech. If someone takes out a loan and doesn't pay it back, why wouldn't the institution lending the money have a right to tell others about that (through a third party)? If this isn't the case, where we have opt in by default, and it destroys the credit industry, that may also not necessarily be a bad thing. Because a lot of necessary items (housing, car ownership [for certain geographical regions], college) would fall in price to be more affordable if people couldn't get loans for them. Of course, the real issue that most people have with credit reporting agencies is the fairness of a credit score or credit report, in that it may not actually reflect the risk of a given loan. This is an area where I feel they can and should do better. After all, if a lender is turning away customers that they shouldn't, then they are leaving quite a lot of business untapped. What would be better is if credit items were categorized based on credit type and circumstances. For example, if you fall behind on sudden medical bills, but keep up on your mortgage and car payment, well that shouldn't affect your ability to buy a house or car on credit. In fact, if I was a car dealer I'd be happy to extend someone credit that treated their car payment as more important. Or, if credit cards fell behind during an unemployment stretch. In that case if your credit report shows that payments pick up again as soon as you are back on your feet, then if I was a credit card issuer, I would lower interest rates during unemployment and only bring them back up a month or two after you got a job. And as long as the record shows that someone is employable (was only out of work during times of a down economy, but otherwise could hold down a job and make regular payments while working), I would think that they would be a good credit risk. Another situation -- lets say you are a cosigner on a loan, and the person you cosigned for fell behind on payments, and you refused to pick up the payments. Well, that should only affect your ability to cosign in the future, but not anything else (assuming all other lines of credit are showing good). So this is where I think that the market is ripe for disruption, in using extended information to bring in credit customers that are otherwise left behind by the current situation. But this requires much more tracking details
user5994461 9y ago
>>> Surely the heavy amount of regulation around credit freezes prevents an app like that from being created in the first place. No, the law says nothing specific. It would take a lawsuit to determine whether this is lawful. It's way too expensive for consumers to go against a big company with unlimited time and budget. It takes year to settle, during which Equifax can make a lot of money. They have nothing to lose really by playing on the edge.

nielsbot 9y ago

Because there's no law against it (yet.)

cmiles74 9y ago

This analysis sounds correct to me. A credit "freeze" is governed by law and clearly outlines who is responsible if credit information is provided to agencies while the account is "frozen": the credit agency. It is not an agreement between the account holder and the credit agency; it's a protection dictated by the law. Lastly, since it is not a contractual agreement, you may sue the credit agency if the freeze is violated. While it's not clear on Equifax's website, I would strongly suspect that any violation of a "lock" is subject to arbitration. Consumer Reports provides a sum-up of what they believe the differences actually are. I would say the very fact that Equifax is being so hazy on the differences is proof enough that the "freeze" is the way to go. https://www.consumerreports.org/credit-bureaus/why-credit-freeze-is-better-than-credit-lock/ https://www.consumerreports.org/credit-bureaus/why-credit-fr... This bit from the article strikes me as odd. They wonder if the credit agency will market more aggressively to people who opt for the credit lock, something that freezes do not allow. From the article: "However, Consumers Union doesn’t recommend paying for credit monitoring. “What it does, consumers can usually do for free,” Tetreault says. Plus, with a credit freeze you won’t be targeted by ads. “These services may allow the credit reporting agency to market to consumers more aggressively for products that they may not need and/or shouldn’t pay for,” Tetreault says.