Credit Reporting Firms’ Dark Marketing and Information Gathering Tactics

David Lazarus, Los Angeles Times:

The ad opens with quick cuts of creepy-looking hackers in sinister surroundings. A serious male voice asks: “Is your personal information already being traded on the dark Web?”

Then the imagery brightens — a sunny kitchen, a family playing with a fluffy white dog. “Find out with Experian,” says a friendly female voice. “Act now to help keep your personal information safe.”

Consumers’ and lawmakers’ attention is rightly focused at the moment on the security breach involving Equifax, which left millions of people facing a very real possibility of fraud and identity theft.

But the recent ad from rival Experian highlights a more troublesome aspect of credit agencies — their use of questionable methods to spook people into buying services they may not need and, in so doing, giving the companies permission to share data with marketers and business partners.

Baiting practices like these are pretty gross in virtually every context, but particularly intolerable in an industry that is supposed to monitor your finances and handle your sensitive information delicately. If Experian — or any other company that uses similar tactics — were proud of the spam that you can expect to receive after giving them your email address, don’t you think they would point that out in a more obvious place that isn’t thousands of words deep inside a terms of service agreement?

Of course, similarly-buried agreements are exactly how Experian and Equifax get their data in the first place. A common misconception I’ve seen and heard is that we never agreed to their collection of information — Jimmy Kimmel was among many who claimed that. But that isn’t exactly true. Your credit card agreement probably contains something similar to the language in mine (PDF):

Credit Reporting Agencies and Other Lenders – For a credit card, line of credit, loan, mortgage or other credit facility, merchant services, or a deposit account with overdraft protection, hold and/or withdrawal or transaction limits, we will exchange Information and reports about you with credit reporting agencies and other lenders at the time of and during the application process, and on an ongoing basis to review and verify your creditworthiness, establish credit and hold limits, help us collect a debt or enforce an obligation owed to us by you, and/or manage and assess our risks.

So if you’ve ever applied for a car loan, or a mortgage, or have a cellphone or internet subscription, you probably agreed to allow the provider of that service to submit your information to Equifax, Experian, and TransUnion — the big three credit reporting firms. I don’t think that’s necessarily a good reason — as Lazarus notes, there’s a lot of text in most terms of service agreements, and it’s pretty unfair for us to be expected to interpret their language as a lawyer would.