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Credit bureaus should be illegal. You can’t opt out of them and they take no responsibility in protecting you. How is it that every tech company has to abide by

Credit bureaus should be illegal. You can’t opt out of them and they take no responsibility in protecting you. How is it that every tech company has to abide by all kinds of rules re: PII, but they get to do whatever they like?

lotsofpulp 3y ago
It is a public subsidy to lenders so they can profit from lower costs of not having to do proper due diligence. If a lender claims you borrowed money, and they cannot conclusively prove it was you, it should be their problem and their problem alone. The fact that you have to prove you did not borrow money because a lender says your social security number was inputted into a form is a travesty.
- mattnewton 3y ago
  ”identity theft” is the biggest pr win since “jaywalking”. Nothing has been stolen from me, I am still me. Someone claiming to have my credit history took money from a lender and they believed them.
  - bombcar 3y ago
    And somehow it's your problem.
  - darth_avocado 3y ago
    Identity theft is private companies not doing their jobs. Pretty much no other country has this problem because in order to get credit, you need to prove who you are by providing supporting documentation which is not easy to forge and it is the responsibility of the lender to verify the documentation. And if they don’t, it’s their problem, not yours.
    - nottorp 3y ago
      Also, in most other countries the government provides identity verification. In the form of government issued IDs and lately some governments even provide something digital. The US government doesn't provide that.
      - pc86 3y ago
        I'm sorry? Every single state in the US has government-provided identification.
        nottorp 3y ago
        Why doesn't anyone check it then?
        alistairSH 3y ago
        Even with RealID, state-issued IDs aren't intended to be general proof of ID. It's pretty weird - they're ok for domestic travel and entering federal facilities, so you'd think they were a good general purpose ID, but they explicitly aren't that.
        landemva 3y ago
        > they're ok for domestic travel No ID is required for domestic travel, even at big airports. Just be pleasant and explain that you misplaced it. I have misplaced ID several times, and only once I signed a piece of paper which roughly said that I am I because I say so.
        NoZebra120vClip 3y ago
        Heh heh heh, I take it that you've never been through a Border Patrol checkpoint which wasn't at the border. They checkpoint all the thoroughfares near Mexico and I reminded my Spanish fiancée to carry her passport as we traveled domestically, and I was completely correct.
  - xahrepap 3y ago
    Right. The fact that they've somehow managed to make me the victim when I wasn't even involved is maddening. The bank/lender/etc is the victim here. But somehow I have to take the fall. Well, next time they should ask me before lending money to "me".
    - FFP999 3y ago
      [dead]
    - Mordisquitos 3y ago
      > The fact that they've somehow managed to make me the victim when I wasn't even involved is maddening. > The bank/lender/etc is the victim here. Actually you are the victim: you are a victim of the bank/lender/etc and they should be liable to compensate you with punitive damages for your any negative consequences to you. If the bank or lender considers this unfair, let them try to recoup the cost of compensating you by suing the alleged fraudster who they claim "stole your identity" — but not before they compensate you first.
  - SAI_Peregrinus 3y ago
    And then the lender sent a statement to a the credit agencies stating that you'd taken money from them (libel), and those agencies believed the libel and re-published it (more libel), causing financial damage to you (inability to borrow money). You are the victim of libel by the banks & credit agencies. They're the victims of fraud by the person(s) they lent the money to. There's no need (other than to protect the banks & credit agencies) to bundle both crimes together, call them "identity theft", and blame it on the individual victim!
- janalsncm 3y ago
  Identity theft is a crime meant to reframe lack of due diligence as a problem of an unrelated third party. https://youtu.be/CS9ptA3Ya9E?si=2bpxWKWXDM4vn0iz https://youtu.be/CS9ptA3Ya9E?si=2bpxWKWXDM4vn0iz
- tptacek 3y ago
  The credit bureaus replaced a much simpler system of "denying most Black families credit at all".
  - decremental 3y ago
    [dead]
  - lotsofpulp 3y ago
    Yes, there is nothing wrong with keeping a record of how well people pay their debts, as long as they are also doing proper due diligence to ensure their record keeping is accurate instead of laying the responsibility at the feet of the public.
  - mindslight 3y ago
    Yes, business interests are adept at using any sort of progress as an opportunity for instituting authoritarian frameworks to increase their centralized power. We could have had a world where racial discrimination was prohibited and financial surveillance bureaus were illegal. Instead they're just slowly remaking a stratified society in formal terms of information processing rather than ad hoc by skin color.
    - tptacek 3y ago
      You said "yes" and then a series of words that were more reasonably related to what Neil Peart says in Rush lyrics than anything I said.
      - mindslight 3y ago
        Well I can't play the drums. And even if I could, HN doesn't support MIDI.
rrrrrrrrrrrryan 3y ago
I always thought they were pseudo-government entities, or at the very least a heavily regulated, government-anointed big three. But after a quick Google right now, it looks like they're just random private companies that get to do whatever they want because they have such strong established relationships with our major financial institutions.
- kamarg 3y ago
  Oh there's way more than just the big three too. For instance, many online payday lending companies run a credit check through alternative credit bureaus. There's quite a few of these types of niche credit tracking companies that most people never run across.
runjake 3y ago
Lobbying. https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2023&id=D000063760 https://www.opensecrets.org/federal-lobbying/clients/summary...
theptip 3y ago
We need to strengthen consumer data protection. GDPR has some good ideas; no collecting PII without permission, consumers have the right to revoke/delete, and the key piece for this thread is the requirement for the Controller to have a contract with any Subprocessors to enforce the right to deletion transitively (and inform data subjects of the list of Subprocessors with which their data is being shared). CCPA was in the right direction, but AFAICT it explicitly carved out exemptions for credit bureaus. We need to tighten the screws on these businesses; the only way we’ll see improvement here is if we hold them liable for damages and breaches. Right now they have very little incentive to care for this data, and all the incentive to try and monetize it as much as possible.
hn_throwaway_99 3y ago
I know it's popular to hate on credit bureaus. And I totally agree they've been horrible stewards of personal data, and they have some messed up incentives (e.g. pushing all their "credit monitoring" products - it's like making money off the problem you created), and I think there is a fair debate whether they should be public entities. Still, people rarely consider the very valuable service they provide: without them, credit would be much more expensive in this country, or not offered at all. Want to see what a world without credit bureaus looks like? Go to a 3rd world country where everything is paid for in cash. This is not a good thing - it doesn't mean that everyone in these 3rd world countries are great savers while those in the first world live beyond their means. In means these 3rd world countries don't have institutions that can help to ensure trust between lenders and borrowers. As distasteful as it may feel sometimes, credit bureaus help ensure that trust by giving histories of the likelihood of someone's ability to repay a loan. Again, to emphasize, this is not to say there are myriad problems with the way credit bureaus are currently run. It is saying the the primary service they provide (credit histories for individuals) is a good thing for society.
- Mordisquitos 3y ago
  You would be surprised how many 1st world countries operate just fine while having no such thing as individual credit ratings by credit bureaus.
  - staringback 3y ago
    You still have a credit rating, it just isn't being shown to you.
    - Mordisquitos 3y ago
      If you count "there is no record of this person making a late payment or defaulting on a debt" as a credit rating then sure, I do have one. Other than that, the only other information a lender will use to decide whether to grant me a loan and under which conditions will be information that they will ask me to provide, such as age, proof of employment situation, and my last 3 payslips.

lotsofpulp 3y ago

It is a public subsidy to lenders so they can profit from lower costs of not having to do proper due diligence. If a lender claims you borrowed money, and they cannot conclusively prove it was you, it should be their problem and their problem alone. The fact that you have to prove you did not borrow money because a lender says your social security number was inputted into a form is a travesty.

mattnewton 3y ago
”identity theft” is the biggest pr win since “jaywalking”. Nothing has been stolen from me, I am still me. Someone claiming to have my credit history took money from a lender and they believed them.
- bombcar 3y ago
  And somehow it's your problem.
- darth_avocado 3y ago
  Identity theft is private companies not doing their jobs. Pretty much no other country has this problem because in order to get credit, you need to prove who you are by providing supporting documentation which is not easy to forge and it is the responsibility of the lender to verify the documentation. And if they don’t, it’s their problem, not yours.
  - nottorp 3y ago
    Also, in most other countries the government provides identity verification. In the form of government issued IDs and lately some governments even provide something digital. The US government doesn't provide that.
    - pc86 3y ago
      I'm sorry? Every single state in the US has government-provided identification.
      - nottorp 3y ago
        Why doesn't anyone check it then?
        alistairSH 3y ago
        Even with RealID, state-issued IDs aren't intended to be general proof of ID. It's pretty weird - they're ok for domestic travel and entering federal facilities, so you'd think they were a good general purpose ID, but they explicitly aren't that.
        landemva 3y ago
        > they're ok for domestic travel No ID is required for domestic travel, even at big airports. Just be pleasant and explain that you misplaced it. I have misplaced ID several times, and only once I signed a piece of paper which roughly said that I am I because I say so.
        NoZebra120vClip 3y ago
        Heh heh heh, I take it that you've never been through a Border Patrol checkpoint which wasn't at the border. They checkpoint all the thoroughfares near Mexico and I reminded my Spanish fiancée to carry her passport as we traveled domestically, and I was completely correct.
- xahrepap 3y ago
  Right. The fact that they've somehow managed to make me the victim when I wasn't even involved is maddening. The bank/lender/etc is the victim here. But somehow I have to take the fall. Well, next time they should ask me before lending money to "me".
  - FFP999 3y ago
    [dead]
  - Mordisquitos 3y ago
    > The fact that they've somehow managed to make me the victim when I wasn't even involved is maddening. > The bank/lender/etc is the victim here. Actually you are the victim: you are a victim of the bank/lender/etc and they should be liable to compensate you with punitive damages for your any negative consequences to you. If the bank or lender considers this unfair, let them try to recoup the cost of compensating you by suing the alleged fraudster who they claim "stole your identity" — but not before they compensate you first.
- SAI_Peregrinus 3y ago
  And then the lender sent a statement to a the credit agencies stating that you'd taken money from them (libel), and those agencies believed the libel and re-published it (more libel), causing financial damage to you (inability to borrow money). You are the victim of libel by the banks & credit agencies. They're the victims of fraud by the person(s) they lent the money to. There's no need (other than to protect the banks & credit agencies) to bundle both crimes together, call them "identity theft", and blame it on the individual victim!
janalsncm 3y ago
Identity theft is a crime meant to reframe lack of due diligence as a problem of an unrelated third party. https://youtu.be/CS9ptA3Ya9E?si=2bpxWKWXDM4vn0iz https://youtu.be/CS9ptA3Ya9E?si=2bpxWKWXDM4vn0iz
tptacek 3y ago
The credit bureaus replaced a much simpler system of "denying most Black families credit at all".
- decremental 3y ago
  [dead]
- lotsofpulp 3y ago
  Yes, there is nothing wrong with keeping a record of how well people pay their debts, as long as they are also doing proper due diligence to ensure their record keeping is accurate instead of laying the responsibility at the feet of the public.
- mindslight 3y ago
  Yes, business interests are adept at using any sort of progress as an opportunity for instituting authoritarian frameworks to increase their centralized power. We could have had a world where racial discrimination was prohibited and financial surveillance bureaus were illegal. Instead they're just slowly remaking a stratified society in formal terms of information processing rather than ad hoc by skin color.
  - tptacek 3y ago
    You said "yes" and then a series of words that were more reasonably related to what Neil Peart says in Rush lyrics than anything I said.
    - mindslight 3y ago
      Well I can't play the drums. And even if I could, HN doesn't support MIDI.

rrrrrrrrrrrryan 3y ago

I always thought they were pseudo-government entities, or at the very least a heavily regulated, government-anointed big three. But after a quick Google right now, it looks like they're just random private companies that get to do whatever they want because they have such strong established relationships with our major financial institutions.

kamarg 3y ago
Oh there's way more than just the big three too. For instance, many online payday lending companies run a credit check through alternative credit bureaus. There's quite a few of these types of niche credit tracking companies that most people never run across.

runjake 3y ago

Lobbying. https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2023&id=D000063760 https://www.opensecrets.org/federal-lobbying/clients/summary...

theptip 3y ago

We need to strengthen consumer data protection. GDPR has some good ideas; no collecting PII without permission, consumers have the right to revoke/delete, and the key piece for this thread is the requirement for the Controller to have a contract with any Subprocessors to enforce the right to deletion transitively (and inform data subjects of the list of Subprocessors with which their data is being shared). CCPA was in the right direction, but AFAICT it explicitly carved out exemptions for credit bureaus. We need to tighten the screws on these businesses; the only way we’ll see improvement here is if we hold them liable for damages and breaches. Right now they have very little incentive to care for this data, and all the incentive to try and monetize it as much as possible.

hn_throwaway_99 3y ago

I know it's popular to hate on credit bureaus. And I totally agree they've been horrible stewards of personal data, and they have some messed up incentives (e.g. pushing all their "credit monitoring" products - it's like making money off the problem you created), and I think there is a fair debate whether they should be public entities. Still, people rarely consider the very valuable service they provide: without them, credit would be much more expensive in this country, or not offered at all. Want to see what a world without credit bureaus looks like? Go to a 3rd world country where everything is paid for in cash. This is not a good thing - it doesn't mean that everyone in these 3rd world countries are great savers while those in the first world live beyond their means. In means these 3rd world countries don't have institutions that can help to ensure trust between lenders and borrowers. As distasteful as it may feel sometimes, credit bureaus help ensure that trust by giving histories of the likelihood of someone's ability to repay a loan. Again, to emphasize, this is not to say there are myriad problems with the way credit bureaus are currently run. It is saying the the primary service they provide (credit histories for individuals) is a good thing for society.

Mordisquitos 3y ago
You would be surprised how many 1st world countries operate just fine while having no such thing as individual credit ratings by credit bureaus.
- staringback 3y ago
  You still have a credit rating, it just isn't being shown to you.
  - Mordisquitos 3y ago
    If you count "there is no record of this person making a late payment or defaulting on a debt" as a credit rating then sure, I do have one. Other than that, the only other information a lender will use to decide whether to grant me a loan and under which conditions will be information that they will ask me to provide, such as age, proof of employment situation, and my last 3 payslips.