Financial Protection

Congress finally may ban “trigger lists” used by credit bureaus to harass consumers

In 2023, relief from misguided “trigger lists” sold by credit bureaus may soon occur as Senators Jack Reed (D-RI) and Bill Hagerty (R-TN) propose a ban, S 3502. We and the National Consumer Law Center strongly support.

Background: Years ago in the run-up to the financial crisis that led to the Great Recession (2005-2006),  an older, weaker version of the Federal Trade Commission allowed the credit bureaus to create so-called “trigger lists.” (Fortunately, that description of the old FTC is now bygone as the FTC is a leading monopoly fighter as well as a fierce partner of the pro-consumer Consumer Financial Protection Bureau). But that old version of the FTC allowed the credit bureaus to weaponize “lead generation.” It said that “trigger lists” were an acceptable use of credit report “prescreening.

As I explained in an earlier piece called “credit bureaus let wrongdoers run amok, disrupt mortgage seekers,” it was a real problem when the slow, orderly process of “pre-screening” went out of control in 2005-2006. The late real estate expert Ken Harney of the Washington Post at the time raised an alarm nationally. As he later warned of their return:

‘They’re back. Trigger leads are created and sold super fast — often within 24 hours of your loan application. Out of the blue, your phone might ring and you’re the target of a new pitch from a competitor offering a deal that may be real, deceptive or no better than the one you’ve been quoted.”

So you were working with your agent, but the credit bureau sold your name to a new list–a trigger list. And the credit bureaus opened fire…at you!

We exposed trigger lists as abusive in a New York Times  story on the development of internet or E-scores, by privacy reporter Natasha Singer:

“Federal regulators and consumer advocates worry that these scores could eventually put some consumers at a disadvantage, particularly those under financial stress. In effect, they say, the scores could create a new subprime class: people who are bypassed by companies online without even knowing it. Financial institutions, in particular, might avoid people with low scores, reducing those people’s access to home loans, credit cards and insurance.”

That story previewed our 2013 Suffolk Law Review  article on the weaponization of the internet called “Selling Consumers, Not Lists: The New World of Digital Decision-making and the Role of the Fair Credit Reporting Act:” The long form piece  first explained the perversion of pre-screening under the Fair Credit Reporting Act and then, how things grew worse with E-scoring and other “innovations” in scoring on the Internet. Warning: like most law review articles, it’s TL;DR!

“Prescreening under the 1970s-1990s regime was a slow, orderly practice.[ …] With the development of trigger lists in the next decade, this process changed dramatically. During the run-up to the financial collapse of 2008, the credit bureaus accelerated that once-slow pre-screening business with the development of “trigger lists.” The Federal Trade Commission was sharply criticized by consumer advocates and mortgage brokers for allowing the sale of these “trigger lists” as pre-screened lists[…]”

In that Suffolk University Law Review article my co-author Jeff Chester of  the Center for Digital Democracy called the internet the “wild wild west,” Today with my USPIRG colleague R.J. Cross, he continues to warn of the dangers posed by new, unregulated privacy invasions on the the internet. Jeff and R.J. explain in this video story by CNBC:

But, remember,  it all started when the credit bureaus began a series of obnoxious ads that “let your fingers do the walking.” That was the name of a series of banner ads on lead targeting. And you were the target. Thanks to Senators Jack Reed (D-RI) and Bill Hagerty (R-TN) for proposing a ban, S 3502. We and the National Consumer Law Center strongly support. Relief from these weaponized  trigger lists is at hand!

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