Junking Junk Mail
Are you tired of receiving credit card applications and offers for home equity loans, "live check" loans, student loan consolidation, or car loans? Besides taking up your time in shredding and the waste of paper and energy, these offers are results of credit checks to your personal credit records. Supposedly, too many of these inquiries can affect your credit score (so I've heard). Basically, though, they are an annoyance.
Called "Pre-screening", a creditor or insurer (CI) establishes a set of specific credit criteria (such as a a minimum credit score) then requests data from Credit Reporting Agencies (CRA's, Equifax, Experian, Innovis and TransUnion). This data includes names, addresses, and other information of eligible consumers based on the criteria. From that list the mailings are sent forth.
This is information you did not request. Unsolicited is the correct term. Pre-screening is one of the primary methods CI's use to let you know about their products and services with the intent on making you a customer.
The Fair Credit Reporting Act (FCRA) permits CI's to use CRA data to send unsolicited firm offers to consumers. A "firm offer of credit or insurance" is defined as any offer of credit or insurance to a consumer that will be honored if, on the basis of information in the consumer's credit record, the consumer meets the specific criteria used to solicit him or her for the offer, except that the offer may be further conditioned in certain circumstances. Simply put, if you sign the application and return it, you're accepted by the CI as an eligible consumer and you've just bought yourself a loan.
The types of creditors that use pre-screening are: credit cards, home equity lines of credit, "live check" loans (where a fixed amount check is mailed to you and if desposited activates the loan terms), student loans, automobile credit. Insurance companies use pre-screening much less than creditors because acquisition of new accounts is primarily through independent agents who are responsible for their own marketing. One CRA reported that only 42 insurance companies requested data for pre-screening in 2003, a much smaller number than for creditors.
Section 604 of the Fair Credit Reporting Act (FCRA) establishes the rules regulating how CI's can use CRA records for sending unsolicited firm offers as well as providing consumers the ability to refuse to receive such offers. When you do receive a firm offer from a CI, Section 615(d) of the FCRA specifies that a clear and conspicuous statement must be present in a font and size easily readable that informs the consumer that they have the right to prohibit the use of their credit information in connection with any future pre-screening offers. The address and toll-free phone number of the appropriate notification system must also be provided.
Most of the time when we get these offers we just toss them in the trash or into the shredder. The shredder is the recommended form of destruction since a firm offer application can be filled out by someone else and could lead to some credit issues on your part.
You can opt out of the pre-screening process for 5 years or permanently by going to www.optoutprescreen.com and filling in the form.
While we're on the subject, you can also opt out of direct mail advertisement by going to www.dmaconsumers.org/offmailinglist.html.
For more information go to Unsolicited Credit Offers 2004 (PDF file)
Called "Pre-screening", a creditor or insurer (CI) establishes a set of specific credit criteria (such as a a minimum credit score) then requests data from Credit Reporting Agencies (CRA's, Equifax, Experian, Innovis and TransUnion). This data includes names, addresses, and other information of eligible consumers based on the criteria. From that list the mailings are sent forth.
This is information you did not request. Unsolicited is the correct term. Pre-screening is one of the primary methods CI's use to let you know about their products and services with the intent on making you a customer.
The Fair Credit Reporting Act (FCRA) permits CI's to use CRA data to send unsolicited firm offers to consumers. A "firm offer of credit or insurance" is defined as any offer of credit or insurance to a consumer that will be honored if, on the basis of information in the consumer's credit record, the consumer meets the specific criteria used to solicit him or her for the offer, except that the offer may be further conditioned in certain circumstances. Simply put, if you sign the application and return it, you're accepted by the CI as an eligible consumer and you've just bought yourself a loan.
The types of creditors that use pre-screening are: credit cards, home equity lines of credit, "live check" loans (where a fixed amount check is mailed to you and if desposited activates the loan terms), student loans, automobile credit. Insurance companies use pre-screening much less than creditors because acquisition of new accounts is primarily through independent agents who are responsible for their own marketing. One CRA reported that only 42 insurance companies requested data for pre-screening in 2003, a much smaller number than for creditors.
Section 604 of the Fair Credit Reporting Act (FCRA) establishes the rules regulating how CI's can use CRA records for sending unsolicited firm offers as well as providing consumers the ability to refuse to receive such offers. When you do receive a firm offer from a CI, Section 615(d) of the FCRA specifies that a clear and conspicuous statement must be present in a font and size easily readable that informs the consumer that they have the right to prohibit the use of their credit information in connection with any future pre-screening offers. The address and toll-free phone number of the appropriate notification system must also be provided.
Most of the time when we get these offers we just toss them in the trash or into the shredder. The shredder is the recommended form of destruction since a firm offer application can be filled out by someone else and could lead to some credit issues on your part.
You can opt out of the pre-screening process for 5 years or permanently by going to www.optoutprescreen.com and filling in the form.
While we're on the subject, you can also opt out of direct mail advertisement by going to www.dmaconsumers.org/offmailinglist.html.
For more information go to Unsolicited Credit Offers 2004 (PDF file)
posted by Mike Shipman | 2:03:00 PM
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