4 ms·

This is already the law. You are not responsible to pay debts incurred by another person. The problem is when the bank or company that gave credit to someone el

This is already the law. You are not responsible to pay debts incurred by another person. The problem is when the bank or company that gave credit to someone else that used your identity information is allowed to lie to a credit bureau about the fact that it was you who defaulted on the debt. Otherwise you could just tell the bank, "Pound sand stranger, I never borrowed any money from you. Stop bugging me or I'll get a restraining order.", and never have worry about how someone has pretended to be you to a bank. Large fines for banks and companies that libel people by telling information brokers lies is the way to stop this problem. The idea that when this happens it is "identity theft" and the person whose identity was stolen is responsible for the problem is ridiculous. This problem should be called libel and the perpetrators (the entity reporting false info that hurts you) punished.

jessaustin 9y ago
These proposed "large fines" would still require regular people to deal with putative creditors and occasionally to defend themselves in court. Structural changes are required to make the system as it actually functions more equitable to humans. What are structural changes? For instance, prior to enforcing a debt the law could require the production of an authenticated video recording of the debtor clearly stating, "I am John Doe and I agree that I owe EvilCo $1,000 on May 9, 2018." This requirement would make it more difficult to lend money, so it would be opposed by some very deep pockets. I suspect that any actual solution to the inequity in this area would make it more difficult to lend money, so progress is likely to be slow.
- njarboe 9y ago
  I agree. First, it could be made a criminal offense for a company or bank to lie to credit agencies and then public prosecutors could pursue these companies for big PR wins. Second, making giving and getting credit harder to do is probably a good thing for society. Do people really need to take out a half million dollar home loan from their phone a la Rocket Mortgage? Many cultures had/have very strict rules about charging interest on loans. Debt jubilees were common in past civilizations and seem necessary to prevent the masses from creating their own via revolution. Making personal loans illegal and bringing back the loan shark is not the way to go, but making going into debt to buy consumptive goods much harder would be big positive for most people in the US. Like you said, there is a huge amount of money and power behind easy lending, so change seems unlikely. On the other hand, change seems to be in the air these days, so maybe one can afford a bit of hope.
- cesarb 9y ago
  > These proposed "large fines" would still require regular people to deal with putative creditors and occasionally to defend themselves in court. Wouldn't it be the opposite? It would be the creditors which would have to defend themselves in court. In my country, moral damages are nearly guaranteed in these cases, and the burden of proof is on the creditors to prove the debt is valid.
twoodfin 9y ago
I wish this framing would gain more currency, since it seems to me to accurately capture the problem: Creditors are (presumably unknowingly, but also largely uncaringly) lying when they report defaults against the wrong debtors. When Equifax repeats those lies to other potential creditors, they're also failing, but at root the misinformation originates with the creditor who failed to properly authenticate their customer.
- pishpash 9y ago
  There are laws against such "lying" but the burden of proof is on the victim as a practical matter [+], so of course creditors don't care when they make mistakes. [+] Technically the burden of proof is on the creditor but victim has to continue to reach out to insist on such proof. If they do not expend extraordinary efforts to do so the record is against them.
  - njarboe 9y ago
    I believe the "lying" in this case is civil not criminal matter. As much as I dislike making civil matters criminal (like in copyright cases), I would support that here.
ThrustVectoring 9y ago
I'd be happy with making small-claims-court cases against banks that let someone borrow money in your name. Because of their negligence you've had to spend time and money clearing things up with credit bureaus etc.

jessaustin 9y ago

These proposed "large fines" would still require regular people to deal with putative creditors and occasionally to defend themselves in court. Structural changes are required to make the system as it actually functions more equitable to humans. What are structural changes? For instance, prior to enforcing a debt the law could require the production of an authenticated video recording of the debtor clearly stating, "I am John Doe and I agree that I owe EvilCo $1,000 on May 9, 2018." This requirement would make it more difficult to lend money, so it would be opposed by some very deep pockets. I suspect that any actual solution to the inequity in this area would make it more difficult to lend money, so progress is likely to be slow.

njarboe 9y ago
I agree. First, it could be made a criminal offense for a company or bank to lie to credit agencies and then public prosecutors could pursue these companies for big PR wins. Second, making giving and getting credit harder to do is probably a good thing for society. Do people really need to take out a half million dollar home loan from their phone a la Rocket Mortgage? Many cultures had/have very strict rules about charging interest on loans. Debt jubilees were common in past civilizations and seem necessary to prevent the masses from creating their own via revolution. Making personal loans illegal and bringing back the loan shark is not the way to go, but making going into debt to buy consumptive goods much harder would be big positive for most people in the US. Like you said, there is a huge amount of money and power behind easy lending, so change seems unlikely. On the other hand, change seems to be in the air these days, so maybe one can afford a bit of hope.
cesarb 9y ago
> These proposed "large fines" would still require regular people to deal with putative creditors and occasionally to defend themselves in court. Wouldn't it be the opposite? It would be the creditors which would have to defend themselves in court. In my country, moral damages are nearly guaranteed in these cases, and the burden of proof is on the creditors to prove the debt is valid.

twoodfin 9y ago

I wish this framing would gain more currency, since it seems to me to accurately capture the problem: Creditors are (presumably unknowingly, but also largely uncaringly) lying when they report defaults against the wrong debtors. When Equifax repeats those lies to other potential creditors, they're also failing, but at root the misinformation originates with the creditor who failed to properly authenticate their customer.

pishpash 9y ago
There are laws against such "lying" but the burden of proof is on the victim as a practical matter [+], so of course creditors don't care when they make mistakes. [+] Technically the burden of proof is on the creditor but victim has to continue to reach out to insist on such proof. If they do not expend extraordinary efforts to do so the record is against them.
- njarboe 9y ago
  I believe the "lying" in this case is civil not criminal matter. As much as I dislike making civil matters criminal (like in copyright cases), I would support that here.

ThrustVectoring 9y ago

I'd be happy with making small-claims-court cases against banks that let someone borrow money in your name. Because of their negligence you've had to spend time and money clearing things up with credit bureaus etc.