UnThreaded | Threaded | Whole Thread (52) | Ignore Thread Prev Thread | Next Thread
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308643  
Subject: Credit Bureaus sued! Date: 7/6/2006 9:16 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
Here is an article from the Washington Post about someone who is suing all 3 major credit bureaus for allowing Cap One and other credit card companies to not report credit limits (may require registration): http://www.washingtonpost.com/wp-dyn/content/article/2006/06/30/AR2006063000609.html?sub=AR

In a case with potentially far-reaching significance for mortgage applicants nationwide, a South Carolina consumer has filed class-action lawsuits against the three national credit bureaus, charging that they allow a practice that lowers the credit scores of millions of people.

Depressed scores raise the interest rates and fees that mortgage lenders offer. Sometimes the higher rates lead to monthly payments that are hundreds of dollars higher than they otherwise would be.

The three lawsuits charge that, under the federal Fair Credit Reporting Act, the national bureaus -- Equifax, Experian and TransUnion -- are required to follow "reasonable procedures to assume maximum possible accuracy of information in consumer [credit] reports."

Nonetheless, said William A. Harris Sr. in his complaints, each of the bureaus allows credit card giant Capital One to withhold the credit limits on its customers' card accounts -- knowing full well that such omissions frequently lower consumer credit score calculations.


It will be interesting to see if he wins!

AJ
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231234 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/7/2006 12:09 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I didn't read the article, but from your description, why are the credit agencies getting sued? Shouldn't the credit CARD companies be for not reporting credit limits?

WRJ

Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231242 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/7/2006 7:31 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I didn't read the article, but from your description, why are the credit agencies getting sued? Shouldn't the credit CARD companies be for not reporting credit limits?

There's a paragraph later in the article......

Capital One is not named as a defendant in the suits. Under the prevailing, voluntary credit system in this country, no federal law requires it, or any other lender, to report any client's data to any bureau. However, federal law does require the credit bureaus to strive to be accurate, and Harris's suits argue that Equifax, Experian and TransUnion are not in compliance.

AJ

Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231752 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 10:30 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
God I sure HOPE they don't win.

I get really agitated by crap like that.

xtn

Print the post Back To Top
Author: BklynBorn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231762 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 12:02 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0

I get really agitated by crap like that.


Uh oh. Go for a drive. And bring your family, willya?

BB

Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231767 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 2:10 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Uh oh. Go for a drive. And bring your family, willya?

BB


If you are suggesting that a short drive in the Lotus will disolve away my troubles, you are right. If you are suggesting that my family will fit in it with me, you are horribly, horribly wrong.

xtn

Print the post Back To Top
Author: SixFootSevenFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231768 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 2:38 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
As a friend of mine is always fond of saying..."you can live in your car but you can't drive your house"


Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231771 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 2:51 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 8
xtn,

You wrote, God I sure HOPE they don't win.

I get really agitated by crap like that.


I'm not so sure. The litigation has a very valid point. And people shouldn't NOT sue just because it pisses you off.

Specifically, Capital One and others are gaming the system. And they're doing it in a manner that's defensible, which really sucks.

The claim it's legally defensible from is Libel. That's because they're tell the truth. It's never illegal to tell the truth and you can't stop someone from doing so unless you have a contract or court order to that effect. Capital One is telling the FCRAs part of your credit history with them knowing that doing so is likely to hurt your credit standing with other creditors, even though you may have done nothing wrong.

The truth they tell is how much you've borrowed from them. The truth they don't tell is how much you could borrow from them. Capital One knows that Fair Isaac uses both of these numbers to calculate a score for other creditors to determine your credit worthiness. They also know that in the absence of the second number, they'll use the highest known first number. Usually the two are very close and therefore this assumption reduces your apparent creditworthiness.

Capital One may be proof against a Libel claim; but it's probably not proof against a claim of unfair or anticompetitive trade practices. In fact, Capital One's actions almost certainly are in direct violation of the Texas Fair Trade Practices Act. The problem with this type of claim is that it usually takes a government entity like the Texas Attorney General's Office or the U.S. Department of Justice to bring a claim against them ... which means you have to get past the politics first.

The reason the FCRAs may be liable is because they knowingly sell misinformation - and they process it in order to knowingly provide an incorrect conclusion for their customer / lenders! - to the detriment of the consumer. Not only does this probably violate the FCRA, it's also Libelous. The fact that the FCRAs know that the information is suspect makes their intentions malicious ... and that means the dissemination of a score based on a partial report from Capital One is probably tortuous libel. In other words the conclusion is a lie and they know it!

So while it really looks like Capital One is at fault here, it's the FCRA's knowing culpability that's more readily susceptible to litigation. And that's almost certainly why they're being sued ... and why I think they should be sued. They take both Capital One's money and their misinformation. If they can't use it responsibly, they shouldn't use it at all - or they should be sued for using it irresponsibly to defame innocent individuals.

- Joel

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231786 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 7:38 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
The reason the FCRAs may be liable is because they knowingly sell misinformation - and they process it in order to knowingly provide an incorrect conclusion for their customer / lenders! - to the detriment of the consumer.

With great respect for you my internet friend, this is where we disagree.

I do not believe providing incomplete data is detrimental to the consumer. I believe providing incomplete data is a hell of a lot better for the consumer than providing no data at all.

Thirty years ago a consumer could not walk into an automobile dealership, spend five minutes filling out a one-page form, and be approved for thousands of dollars worth of credit five minutes later.

I believe we are looking at a case of somebody doing you a big favor, repeatedly over time, and you (the consumer) taking it for granted and then complaining that it isn't good enough.

I believe if I were the CRA faced with this issue, I would answer, "Okay fine, we just won't provide a report on any individual who's file contains any revolving trade line missing an "available credit" value. That would answer this complaint quite nicely, wouldn't it?

Besides, I don't see how the CRAs can be logically responsible to force creditors to report anything. The logical interpretation of the "accuracy" requirements is that the CRAs make every reasonable effort to insure they accurately report whatever data they are given, and not mess it up carelessly.

xtn

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231790 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/13/2006 8:32 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
xtn,

You wrote, I believe if I were the CRA faced with this issue, I would answer, "Okay fine, we just won't provide a report on any individual who's file contains any revolving trade line missing an "available credit" value. That would answer this complaint quite nicely, wouldn't it?

Actually yes. This would be a perfectly reasonable solution. It would resolve the issue entirely. I have absolutely no problem with a creditor reporting nothing about me on my creditor report. Of course the CRAs would risk loosing Capital One - the nation's fourth largest issuer of revolving credit - as a customer. I'm sure that wouldn't influence their decision in the least...

I'd much prefer a lender say nothing about my payment history with them, if all they can do is say something that can be misconstrued as derogatory simply because they intentionally choose not to tell the entire truth. I'm sure most consumers would agree - if they even knew it were at issue.

Also, Besides, I don't see how the CRAs can be logically responsible to force creditors to report anything. The logical interpretation of the "accuracy" requirements is that the CRAs make every reasonable effort to insure they accurately report whatever data they are given, and not mess it up carelessly.

I don't see how the CRAs can be responsible to force the creditors to report anything either. Forcing the creditors to report complete information should only be an option they might have - it's not the only option available to them. And it certainly doesn't seem likely that a third party will be able to force this particular solution through litigation.

Even so, the CRAs can certainly force the issue with creditors through this or other means. They have the option to reject information they deem incomplete or inaccurate. They also have the option to discard inappropriate data from consideration in their scoring models. They also have the leverage to force the creditor to report information they require - they could do it by contract.

As for that last bit, and not mess it up carelessly I know of no such requirement. Besides, this isn't a matter of messing it up. It's a matter of discarding information from their creditor scores because it's incomplete and inappropriately skews the results.

Personally I wish someone would sue Capital One. Their policy is malicious and it's not properly disclosed in either the credit application or the contract. I say it's malicious because it's done intentionally to damage their customer's creditworthiness - something they essentially admit to. Of course they claim they do it to try to keep their customers from being pilfered by the competition; but those customers are hardly their property...

- Joel

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231815 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/14/2006 9:59 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I have absolutely no problem with a creditor reporting nothing about me on my creditor report. Of course the CRAs would risk loosing Capital One - the nation's fourth largest issuer of revolving credit - as a customer. I'm sure that wouldn't influence their decision in the least...

I'd much prefer a lender say nothing about my payment history with them, if all they can do is say something that can be misconstrued as derogatory simply because they intentionally choose not to tell the entire truth. I'm sure most consumers would agree - if they even knew it were at issue.


You might not have a problem with it, but I'll bet millions of people would. I'll bet they would complain a LOT louder if this free, beneficial service was taken away from them. I'll bet they would forget all about the little "detrimental" missing value. I do NOT think most consumers would feel as you do. I think they would beg to have their credit reports made available to lenders, even with a missing value.

I'll also bet that CapOne's primary needs as a customer are pulling credit reports of potential new accounts and of existing accounts to check for continued satisfactory credit scores (and of course to look for reasons to apply "universal default" status). I'll bet they would start reporting "available credit" values as soon as they realized they could no longer get a report on any of their existing card holders! They couldn't competativly operate in today's modern credit card universe if they stopped being a customer of the CRAs.

The LOGICAL way to deal with this issue, if a majority of our democratic society feels it must be delt with, is to legally define the required data values that must be reported by creditors.

Something like:

Available credit line,
High credit balance,
Current credit balance,

...along with everything else. And then, yes, if CapOne doesn't comply, start sueing them. If a creditor wants to report a trade line to a CRA at all, it should be a legal requirement that they accurately report all required values. Taking the CRAs to court is just annoyingly stupid in my opinion. What's the court going to do, order the CRAs to dictate and enforce another business' practices? Yes I know businesses do that all the time when they have enough buying power and market share, but I'd sooner eat cat guts than see a court ORDER it done.

What if a court ordered WalMart to staff more of its check-out isles? Not staffing them completely is an ommission detrimental to consumers, is it not? I know it's a silly sounding analogy, but isn't it the same thing really? WalMart provides whatever level of service it feels is best for itself, and consumers either accept the deal or search for greater service elsewhere, and that's how it should be.

I personally don't think there is any issue to deal with in the first place. I'm pretty strictly capitalist minded, and as such believe business ought to be allowed to practice without restriction so far as they do not cause net harm, and I think I have made a good arguement for the fact that this issue does not cause net harm. It's like I gave you ten doughnuts, and took back one, and you're sueing me because I took back one. Did you forget that you still got nine free doughnuts from me you ingrate? Just a small doughnut analogy to illustrate how this issue makes me feel. For some reason I'm thinking about doughnuts this morning.

xtn

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231913 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/15/2006 3:51 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I personally don't think there is any issue to deal with in the first place. I'm pretty strictly capitalist minded, and as such believe business ought to be allowed to practice without restriction so far as they do not cause net harm, and I think I have made a good arguement for the fact that this issue does not cause net harm. It's like I gave you ten doughnuts, and took back one, and you're sueing me because I took back one. Did you forget that you still got nine free doughnuts from me you ingrate? Just a small doughnut analogy to illustrate how this issue makes me feel. For some reason I'm thinking about doughnuts this morning.

xtn


Yeah, but if I paid you for ten donuts and you took one back, I'd get pretty pissed, and if it was your business model, I would probably sue you. Or throw rocks at your store, depending on whether or not you took the lemon jelly donut.

Or, if your sign said, "Fresh donuts!" and you sold me nine good donuts and one two-week old donut as hard as compressed carbon, well...I don't know if my irritation would rise to the level of a lawsuit, but I'd certainly feel deceived, and like you were cheating me out of one of my donuts. Do I not have the right to ten fresh donuts if that's what the sign says? Should I be so freakin' thrilled to get nine good donuts that I'll just feed the tenth one to the dog, and call it good?

Darn it, now I *really* want a Krispy Kreme. :-(


--Booa

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231967 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/16/2006 6:38 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Yeah, but if I paid you for ten donuts and you took one back, I'd get pretty pissed.... Or, if your sign said, "Fresh donuts!" and you sold me nine good donuts and one two-week old donut as hard as compressed carbon....

Okay, in keeping with the doughnut analogy...

You did not pay me for ten doughnuts, and I do not have a sign that says, "Fresh Doughnuts."

If you buy a credit report from me (wherein I am a CRA) I promise only to deliver an accurate report of everything reported TO me by my own suppliers.

My doughnut sign says, "Sealed box of doughnuts, we promise it's exactly as we received itmight make of me is if there has been tampering of the contents, or if you find any bad doughnuts more than 7 years old.

The CRAs make no claims either expressed or implied that your credit report will contain any information that was not reported. Any assumption that they will insure completeness in spite of a creditor failing to report everything is just silly.

xtn

Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231968 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/16/2006 6:41 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Dangit I messed up a paragraph.

My doughnut sign says, "Sealed box of doughnuts, we promise it's exactly as we received it." Now if you buy a box of doughnuts from me then the only complaints you might make of me is if there has been tampering of the contents, or if you find any bad doughnuts more than 7 years old.

Sorry for any confusion!

xtn

Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231971 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/16/2006 8:06 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Yeah, but if I paid you for ten donuts and you took one back, I'd get pretty pissed.... Or, if your sign said, "Fresh donuts!" and you sold me nine good donuts and one two-week old donut as hard as compressed carbon....

--------------------------------------

Okay, in keeping with the doughnut analogy...

You did not pay me for ten doughnuts, and I do not have a sign that says, "Fresh Doughnuts."


Yeah, but in your original analogy, you said you gave me ten donuts and took one back, and implied I should be so happy about the nine donuts that I should ignore the "taking back of the tenth donut." It's not an exact analogy, clearly, because there is some payment occurring when someone buys a credit report from a CRA. But I don't think that everyone must be satisfied with the net good from an action, particularly if the bad effect of the action (which the giver of the donuts is perfectly aware that one of the donuts is going to give me e. coli kind of bad, not took a donut back bad) is pretty bad.

So. I agree that the CRAs don't say anything about the accuracy of their information. They could, in theory, require CCs to tell them, to the best of the CCs knowledge, the actual credit limit. Since this costs them money, probably (maybe lose Cap 1 as a customer?) there must be some other incentive to do so, like a lawsuit. I am okay with that, it's part of the checks and balances of the system. But I can see where you'd find it annoying someone would sue over that. The thing is, that's the only recourse they have at that point, to get the CRAs to change their behavior. I would prefer that they had sued Cap 1, under libel or some such charge, and I personally deal with the situation by using my purchase checks to get Cap 1 to show my actual limit, but I am curious to know what other course of action you think appropriate to someone in that situation?

(Yes, there's "stop using Cap 1," but that solves the local problem, not the global one. ;-))


--Booa

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231972 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/16/2006 8:08 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Dangit I messed up a paragraph.

My doughnut sign says, "Sealed box of doughnuts, we promise it's exactly as we received it." Now if you buy a box of doughnuts from me then the only complaints you might make of me is if there has been tampering of the contents, or if you find any bad doughnuts more than 7 years old.

Sorry for any confusion!

xtn


LOL I thought you were trying to replicate CC/CRA legalese. :-)

I do agree that the CRAs are just fulfilling their mission statement, and wish Cap 1 had been sued.


--Booa (more than seven year old donuts, yuck)

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231980 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/16/2006 10:29 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I say it's malicious because it's done intentionally to damage their customer's creditworthiness - something they essentially admit to.

No, it isn't the purpose of the policy.

And the company has never said it is.

If a CRA said it, remember that they are not the policy makers and are not privy to corporate policy.

Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231995 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 8:18 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
So. I agree that the CRAs don't say anything about the accuracy of their information.

Yes, but federal law requires the CRAs to report accurate information. The point of the suit is that by not requiring credit card companies to report all of the information that can affect the credit score, if credit card companies send partial information, CRAs are allowing inaccuracies to be reported, which is against the law. That's why the credit card companies aren't a party to the suit.

If the CRAs told the credit card companies that if they report any information at all, they must report a minimum of the elements that could affect the score, then the credit card companies would have a choice - they could either report all of the information, or not report any at all. Then consumers would have a choice - either to go with the company that doesn't report information, or to go with the company that does. Of course, the credit card company that doesn't report information would have the potential to self-select into a pool of customers who don't want their information reported, like deadbeats, but it would be a business decision for the company as to if reporting all information is better or worse than reporting no information.

AJ

Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231997 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 8:35 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
I say it's malicious because it's done intentionally to damage their customer's creditworthiness - something they essentially admit to.

No, it isn't the purpose of the policy.

And the company has never said it is.


The company has admitted that when their customer's credit limits are not reported, their customers aren't as likely to leave them for other companies. That may not be an explicit admission, but it shows that they recognize the consequences. However, the credit card companies are not being sued, the CRAs are.

If a CRA said it, remember that they are not the policy makers and are not privy to corporate policy.

The CRAs are being sued for allowing credit card companies to report incomplete information, which leads to inaccurate credit scores. The CRAs don't and shouldn't have access to or set credit card company policy. However, under federal law, they have a requirement to report accurate information, and by not setting their own policy to require complete information, they are allowing incomplete, and therefore, inaccurate information to be reported.

AJ

Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231998 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 9:09 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Yes, but federal law requires the CRAs to report accurate information. The point of the suit is that by not requiring credit card companies to report all of the information that can affect the credit score, if credit card companies send partial information, CRAs are allowing inaccuracies to be reported, which is against the law. That's why the credit card companies aren't a party to the suit.


Yes Federal law required CRAs to report accurate information. The logical interpretation of that requirement is that all information they receive into their control must be reported accurately. It is NOT logical to think it means they are cast into the role of data enforcement for information they have not received.

You want business A (credit card company) to behave a certain way, you DO NOT make a law requiring business B to enforce business A's behaviour. You make a law requiring business A to behave the way you want.

xtn

Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232061 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 3:02 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
DBAVelvet74,

I wrote, I say it's malicious because it's done intentionally to damage their customer's creditworthiness - something they essentially admit to.

To which you replied, No, it isn't the purpose of the policy.

And the company has never said it is.


Really? And what have they said the purpose of the policy is?

I said "essentially" because they don't make an explicit admission; but they do make an implicit one. They have admitted that the omission can negatively impact your credit score. They have also admitted that the purpose of omitting this number is to increase customer retention.

How the heck do you think it would increase customer retention? The only way omitting this number would increase retention is if on average it reduces creditworthiness! Creditors compete less aggressively and with inferior terms for customers that are poor credit risks. The fact that they understand that omitting the number increases retention means they understand why it increases retention.

The issue is hardly new. In the Christmas, 2004 edition of the Washington Post, this same reporter (Kenneth R. Harney) claims they made a tact admission that the omission reduces some scores. ( http://www.washingtonpost.com/ac2/wp-dyn/A25109-2004Dec24?language=printer )

This is also not the only litigation outstanding on this issue. Capital One is currently in litigation with the State of West Virginia. ( http://statejournal.com/story.cfm?func=viewstory&storyid=4929 ) The question is whether or not Capital One has violated their Fair Trade Practices Act...

Another interesting lawsuit against Capital One and Target can be found here: http://mylitigation.net/pr/news/release/regulators_comments_about_credit_reporting_capital_one_not_reporting_limits/

That page points to another item on the FTC's website: http://www.ftc.gov/opa/2006/03/furnisher.htm

This page cites the recently enacted Fair and Accurate Credit Transactions Act (FACT Act). This Act apparently requires, ...Agencies to prescribe guidelines and regulations that persons must follow to ensure the accuracy and integrity of information they furnish to consumer reporting agencies. In other words, the FACT Act made the consistency of the data provided by to the CRAs, the CRA's problem.

The litigation filed against the CRAs by Mr. Harris appears to be a direct result of the FACT Act.

- Joel

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232064 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 3:11 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
xtn,

You wrote, Yes Federal law required CRAs to report accurate information. The logical interpretation of that requirement is that all information they receive into their control must be reported accurately. It is NOT logical to think it means they are cast into the role of data enforcement for information they have not received.

Your assumptions appear to be wrong. The Fair and Accurate Credit Transactions Act (FACT Act, signed in December 2003) appears to do exactly that... It requires CRAs to set and enforce data reporting standards. This lawsuit should help decide if allowing meaningful omissions from the creditor still meets FACT's requirements.

- Joel

Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232066 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 3:28 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
So. I agree that the CRAs don't say anything about the accuracy of their information.

------------------------------------------------------------

Yes, but federal law requires the CRAs to report accurate information. The point of the suit is that by not requiring credit card companies to report all of the information that can affect the credit score, if credit card companies send partial information, CRAs are allowing inaccuracies to be reported, which is against the law. That's why the credit card companies aren't a party to the suit.


(my bolding) I didn't realize that (I mean, I thought there was probably something about libel, but I wasn't sure how it applied to CRAs). There is no way the CRAs can claim to not be aware of Cap 1's policy of not reporting credit limit. Just from the number of fools who have complained about it here and mentioned it to the CRAs, there have to have been hundreds of complaints to the CRAs about Cap 1. Not to mention, when I look at my payment history on my credit report, it jumps all over the place--surely I'm not getting monthly credit limit adjustments, and why would they drop it, raise it, drop it, raise it, etc?

Hmm, now I think it's a good lawsuit. :-) Thanks, AJ.


--Booa

Print the post Back To Top
Author: eudaimon6 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232067 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 3:28 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
Joel,

For what it is worth, I could not possibly agree with you more. Capital One has to know that failing to report credit limits can lower the credit scores of their customers. I can't imagine any reason to do that other than to make it more difficult for their existing customers to qualify for better terms with other companies. I didn't like it years ago when I didn't know any better and was a Capital One customer. I don't like it now in my position as a dealership finance manager.

Generally, I hate lawsuits, especially class action lawsuits. I'm currently a participant in my fourth totally and utterly worthless class action lawsuit, but that's another subject. That having been said, I've thought for years that CapOne's policy here was a lawsuit waiting to happen, and I'm glad it finally has. Not being a lawyer I can't really comment on the strength of the legal theories being asserted here. But I can say that people have been harmed by CapOne's practice, because I know from my experience that I was one of them.

Take care,

Dean

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232069 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 3:42 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
The company has admitted that when their customer's credit limits are not reported, their customers aren't as likely to leave them for other companies. That may not be an explicit admission, but it shows that they recognize the consequences.

Please provide a source. I know that the company has never come out and said that.

If a CRA said it, remember that they are not the policy makers and are not privy to corporate policy.

My bad, I meant CSR not CRA here.

It may have been said by a CSR but they are not policy makers and are not even made privy to policy. They have not signed non-compete agreements that would allow them to learn those policies.


Print the post Back To Top
Author: eudaimon6 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232070 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:02 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Please provide a source. I know that the company has never come out and said that.

How can they not know that? Are you asserting that CapOne execs do not know how FICO works? If they do not realize that failing to report credit limits along with the other details of their customers accounts is likely to lower their customer's scores, then they are incompetent and should be replaced. It makes no difference to me whether they acknowledge something which I know to be fact. I expect a credit grantor to know such things. More importantly, I expect companies with which I do business to report "the truth, the whole truth, and nothing but the truth" to the credit reporting agencies. That is why I left CapOne years ago. I realized their practice, understood that it was affecting my credit score, and ended my relationship with CapOne.

It no more matters to me that CapOne "confess" than it matters that the tobacco companies admit when they figured out that cigarette smoking was harmful.

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232071 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:07 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Really? And what have they said the purpose of the policy is?

It was stated in the article you provided.

It says it does not report any customers' limits because "we consider [limits] proprietary" information

It doesn't take a super smart analyst to reverse engineer a credit policy from credit data if the limits are reported.

and the article says:
If you carry a Capital One credit card, you can be 100 percent certain that your credit limit is never reported because Capital One confirmed to me that its corporate policy is to withhold limits, whether it depresses some customers' scores or not.

It does not say because it lowers scores. This is just an unintended side effect of protecting the credit policy.

I read the article about WV and see nothing about credit limits at all.

And as for the article about COF and Target (which doesn't seem to mention Target at all), this statement makes me doubt it being unbiased:
Capital One is quick to report balance increases to the credit bureaus, but balance reductions are not reported immediately.

That is BS. Everyone's balance is reported on the same schedule. (About 1/30th of the portfolio is sent every day, so everyone gets reported every 30 days or so) There is no computer program sorting people based on if they are lowering balances or raising balances. This is a case of people seeing what they want to see.

I actually think the issue lies with Fair Issac. The data is clearly reported as being high credit and not a credit limit. The FICO scoring code should take that into account and adjust accordingly. Every statistician has to deal with missing data and data imputation.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232072 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:09 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Not to mention, when I look at my payment history on my credit report, it jumps all over the place--surely I'm not getting monthly credit limit adjustments, and why would they drop it, raise it, drop it, raise it, etc?


The monthly payment history will change because it is your current balance.

The high credit reported will never drop. I actually went over limit on my C1 card so the high credit reported actually exceeded my credit limit. (Made me look better as far as FICO was concerned.)

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232074 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:15 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
How can they not know that? Are you asserting that CapOne execs do not know how FICO works? If they do not realize that failing to report credit limits along with the other details of their customers accounts is likely to lower their customer's scores, then they are incompetent and should be replaced. It makes no difference to me whether they acknowledge something which I know to be fact.

I'm not saying that it isn't an unintended side effect, but it is not the purpose.

And actually, as in my case once, if you have gone over limit, that is reported as your high credit, and it makes you look better to a FICO model.

It is a business decision to protect credit policy. The pros and cons have been weighed, and for now, this is the decision that makes the most sense. If this lawsuit changes the way things are reported that decision will be looked at and reconsidered I'm sure.

I expect a credit grantor to know such things. More importantly, I expect companies with which I do business to report "the truth, the whole truth, and nothing but the truth" to the credit reporting agencies.

What about utilities, landlords, etc.? They are very well known for only bothering to report when you miss a payment or are late. They don't report the years of good payments, just the bad months. Do you refuse to do business with them?

Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232075 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:18 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Yes, but federal law requires the CRAs to report accurate information. The point of the suit is that by not requiring credit card companies to report all of the information that can affect the credit score, if credit card companies send partial information, CRAs are allowing inaccuracies to be reported, which is against the law. That's why the credit card companies aren't a party to the suit.

------------------------------------------------------------

Yes Federal law required CRAs to report accurate information. The logical interpretation of that requirement is that all information they receive into their control must be reported accurately. It is NOT logical to think it means they are cast into the role of data enforcement for information they have not received.


There is no way the CRAs don't know Cap 1 isn't giving them accurate credit limit information. It would require a naivete beyond belief to think they are not aware of it. I think they've deliberately turned a blind eye to this, using the logic you've proposed, so they are guilty of that. They could leave the credit limit blank on Cap 1 accounts, and if Cap 1 didn't like it, they could give Cap 1 the option of giving them accurate information.

But it would take a less than 100-line program to check if someone's reported credit limit was fluctuating wildly. They have to know what Cap 1 is up to. Certainly they can't force Cap 1 to do anything, but they can do some basic due diligence on what they report. Even if they didn't notice, somehow, all the people complaining about it should have clued them in.

Well, I guess y'all know how xtn, AJ and me would vote if we were sitting on the jury...:-)


--Booa

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: eudaimon6 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232076 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:24 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
What about utilities, landlords, etc.? They are very well known for only bothering to report when you miss a payment or are late. They don't report the years of good payments, just the bad months. Do you refuse to do business with them?


1. They're not extending me credit.
2. They don't report to the CRA's because they're not extending me credit.
3. The electric company which does sort of extend me credit does report to the credit bureau, and they report accurately and fully. I say they 'sort of' extend credit because the "level billing" plan I am on means my monthly bill is based on my average usage. In the summar when the ac runs, I pay less than is due and so I am a debtor, and in the winter I catch up and they pay me interest if I have a credit balance. It makes it easier to budget. They don't report a credit limit, though, because I don't have one. I have an open line of credit with them, somewhat like I would have if I had an american express card.

Print the post Back To Top
Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232078 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 4:31 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
It says it does not report any customers' limits because "we consider [limits] proprietary" information

It doesn't take a super smart analyst to reverse engineer a credit policy from credit data if the limits are reported.


It seems strange that only CapOne is afraid of having their credit policy reverse engineered, while Citibank, Chase, BOA, and all the rest are perfectly comfortable with the situation.

Nancy

Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232090 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/17/2006 5:40 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Not to mention, when I look at my payment history on my credit report, it jumps all over the place--surely I'm not getting monthly credit limit adjustments, and why would they drop it, raise it, drop it, raise it, etc?

-----------------------------------------------------

The monthly payment history will change because it is your current balance.

The high credit reported will never drop. I actually went over limit on my C1 card so the high credit reported actually exceeded my credit limit. (Made me look better as far as FICO was concerned.)


Ah, you're right. Sorry.


--Booa

Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232125 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 1:30 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
DBAVelvet74,

The referenced article said, If you carry a Capital One credit card, you can be 100 percent certain that your credit limit is never reported because Capital One confirmed to me that its corporate policy is to withhold limits, whether it depresses some customers' scores or not.

To which you responded, It does not say because it lowers scores. This is just an unintended side effect of protecting the credit policy.

Bull. You've made a logic error yourself. Actions don't protect policy. Policy ensures actions and protects (or impairs) people and corporations; but it doesn't protect the policy. Also, a policy exists to accomplish some objective. In this case, I think we can easily infer the policy's objective even if Capital One hasn't made an "official" statement...

The policy is obviously there to protect Capital One's business. It's business is milking money from its customers, among other things. They consider their customers proprietary - not their customer's records. This is a fallacious assumption as the customers have never signed anything guaranting or even allowing such exclusivity.

The unilateral actions taken by Capital One are intentionally designed to damage the reputations of their customers in such a way as to enforce exclusivity on a large portion of their customer base. I'm pretty sure I can find more than one legal premise being violated there. And I don't need an explicit statement to show this intent in civil court either...

As for the "Target" links, I have to agree to some extent. The person suing Target and Capital One was posting self-serving press releases issued in such a way as to try to pressure those two companies. I'm not entirely sure all of her claims were meritorious. However, I think there are some core issues she's stumbled across and it would be interesting if she manages to win any of her case.

- Joel

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: xtn Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232167 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 2:03 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Yes Federal law required CRAs to report accurate information. The logical interpretation of that requirement is that all information they receive into their control must be reported accurately. It is NOT logical to think it means they are cast into the role of data enforcement for information they have not received.

Your assumptions appear to be wrong. The Fair and Accurate Credit Transactions Act (FACT Act, signed in December 2003) appears to do exactly that... It requires CRAs to set and enforce data reporting standards. This lawsuit should help decide if allowing meaningful omissions from the creditor still meets FACT's requirements.

I made no assumption. Even if they ARE cast into the role of enforcement of other businesses' practices, it is still NOT logical to think the accuracy requirement of the FCRA should be interpreted to mean such.

If the FACT Act does require this third-party enforcement, then I humbly submit that it is the product of illogical problem solving. Why don't they just make a law requiring creditors to report everything the way it should be reported. Short, straight forward, doesn't step on anybody elses toes. The reason is because, as demonstrated by this thread, a lot of people blame the CRAs for something that, while they might be going along with it for convenience, is NOT their fault.

You can bet as soon as a CRA took that data field "available credit" that was reported to them by CapOne, and changed it, even if for the good of the consumer, SOMEBODY would sue them for "not reporting accurately."

xtn

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232197 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 6:50 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
There is no way the CRAs don't know Cap 1 isn't giving them accurate credit limit information.

Neither Cap 1 nor the CRAs pass it off as credit limit though. It is listed as high credit. FICO chooses to treat it as a credit limit.

But it would take a less than 100-line program to check if someone's reported credit limit was fluctuating wildly.

It doesn't fluctuate wildly. It only goes up, never down. What is reported is the highest balance that account ever has had, not the current balance.

I guess it is easier to complain than to get the facts straight.

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232198 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 6:54 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
1. They're not extending me credit.

Utilities that sell you goods and then collect after that use are extending credit in a way.

2. They don't report to the CRA's because they're not extending me credit.

Funny. Most do report if you miss a payment. I guess you only consider it extending credit at that time.

3. The electric company which does sort of extend me credit does report to the credit bureau, and they report accurately and fully.

This is rare. Most electric companies don't report anything, regardless of the payment set up, unless you miss payments.

Then they will nail you.

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232199 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 6:55 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
It seems strange that only CapOne is afraid of having their credit policy reverse engineered, while Citibank, Chase, BOA, and all the rest are perfectly comfortable with the situation.


Not all the others. Discover and some smaller lenders have similar policies. CapOne is just the largest with the policy.

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232200 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:01 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Actions don't protect policy. Policy ensures actions and protects (or impairs) people and corporations; but it doesn't protect the policy.

In this case 'credit policy' refers to the set of rules that say "if a credit report looks like this we will assign this product." That is the policy I was referring to protecting.

And yes, that is proprietary, and that is what the company is trying to protect.

You can conjecture all you want as to the nefarious reasons behind it, but that is the real reason.

Print the post Back To Top
Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232201 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Not all the others. Discover and some smaller lenders have similar policies. CapOne is just the largest with the policy.

Discover has changed their policy. My last credit report showed my Discover credit limit.

Debra

Print the post Back To Top
Author: Windowseat Big funky green star, 20000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232202 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Not all the others. Discover and some smaller lenders have similar policies. CapOne is just the largest with the policy.

I just checked. Discover lists High Credit and Credit Limit.

Nancy


Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232204 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:10 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
DBAVelvet74,

You wrote, Not all the others. Discover and some smaller lenders have similar policies. CapOne is just the largest with the policy.

Discover? I'll have to check my credit report again to be sure; but I'm 99% confident that Discover is reporting my actual credit limit. I've never used all of my credit limit with Discover, so it should be easy enough to tell. (I have a 0%BT out with them now; but I didn't use the entire line because they won't BT the money to my checking account ... unless they treat it as a cash advance.)

That's not to say I've not heard of others failing to report credit limits; but I was pretty sure none of my current lenders do that.

- Joel

Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232207 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:37 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
In this case 'credit policy' refers to the set of rules that say "if a credit report looks like this we will assign this product." That is the policy I was referring to protecting.

But other than the credit limit, the 'product' (i.e. affiliations, interest rate, late fees, overlimit fees, annual fees, cash advance fees, etc.) is not information that could be reported to the credit bureau. And even within the 'product,' the credit limit is variable - credit card companies increase (rarely in CapOne's case) and decrease credit limits for people based on a lot of things other than the 'product.'

And yes, that is proprietary, and that is what the company is trying to protect.

You can conjecture all you want as to the nefarious reasons behind it, but that is the real reason.


It may be the 'real reason,' but the 'unintended' consequence that lowers their customers' credit scores, thereby restricting their customers from seeking better opportunities is certainly not unwelcomed by CapOne. From CapOne's annual report (emphasis added): We build on information derived from our inital sources with continued integrated testing and model development to improve the quality, performance and profitability of our solicitation and account management initiatives. We use this approach in all areas of our business, including solicitations, account management, credit line management, pricing strategies, usage stimulation, collections, recoveries and account and balance retention.

For a company that says that they are a very data intensive company to claim that they are just trying to protect their proprietary information by not reporting credit limits, when they fully understand that they are likely to be depressing many of their customers' credit scores seems a bit disingenuous at best. With as many data models as CapOne is using, I am sure that somewhere, there was a model run that modeled what would occur to their customer retention if they began to report credit limits. If they haven't run one, they are doing a disservice to their stockholders.

Here is what the Washington Post says CapOne had to say: It says it does not report any customers' limits because "we consider [limits] proprietary" information, and "because we do not think it would be appropriate to impact the individual's Fair Isaac score -- positively or negatively -- by reporting them."

So tell me, how does CapOne explain that it is appropriate to 'positively or negatively' impact people's credit scores by reporting their high credit, payment history, age of their account or even that they have an account, but it's not appropriate to 'positively or negatively' impact people's scores by reporting their credit limits?

AJ

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232208 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:38 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I'll have to check my credit report again to be sure; but I'm 99% confident that Discover is reporting my actual credit limit.

You made me look.

On the credit reports I pulled in 2002 (Transunion) and 2003 (Equifax), Discover showed high balance instead of credit limit. It was clearly labeled as "high balance" or "most owed". They show a high balance of $2.7K. This represents my balance in June 2001.

On the credit reports I pulled in February 2006 (all 3), Discover showed both credit limit and high balance. Interestingly enough, the three reports disagreed as to my high balance on Discover. Two of them showed a high balance below $1000, which I know to be false. Experian showed a high balance of $3K and change, which is correct and dates from January, 1999.

So, Discover started reporting credit limits sometime between 2003 and 2006. I'm not sure whether Discover reports high balance, or the agencies track that from balance amounts reported over time. If I had to guess, I'd guess that Transunion and Equifax fill in the high balance field from the highest balance in their records, and old records fall off the report. Experian either keeps the records forever or uses high balance as reported by Discover.

I don't think it's worth my effort to complain about how the high balance is reported; it apparently has not damaged my ability to borrow money at favorable rates.

Patzer

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232210 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 7:41 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
There is no way the CRAs don't know Cap 1 isn't giving them accurate credit limit information.

-----------------------------------------------------------

Neither Cap 1 nor the CRAs pass it off as credit limit though. It is listed as high credit. FICO chooses to treat it as a credit limit.


You're right about that, though on one of my credit reports it says "credit limit/highest credit used." I suppose FICO is at fault for treating it as the credit limit, though I suppose they are doing their best to be fair to the individual for whom they're computing the credit score.

But it would take a less than 100-line program to check if someone's reported credit limit was fluctuating wildly.

------------------------------------------------------------------

It doesn't fluctuate wildly. It only goes up, never down. What is reported is the highest balance that account ever has had, not the current balance.


Yes, I was mistaken about that. I wonder how the information gets reported to the CRAs, and whether they are storing the previous highest credit used for each customer, and updating it if the new balance from Cap 1 exceeds that, or whether Cap 1 stores that information and reports it as "highest credit used."

I guess it is easier to complain than to get the facts straight.

Well, this thread is certainly supplying me with more facts. :-) But sure, it's easier to complain than get facts straight. Complaining is pretty much the easiest thing to do, other than snarking at someone. I'm not sure which is the easiest between those two.


--Booa

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232224 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 11:51 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
But other than the credit limit, the 'product' (i.e. affiliations, interest rate, late fees, overlimit fees, annual fees, cash advance fees, etc.) is not information that could be reported to the credit bureau. And even within the 'product,' the credit limit is variable - credit card companies increase (rarely in CapOne's case) and decrease credit limits for people based on a lot of things other than the 'product.'


Yes, and it is preferred not to reveal to the competition what credit limit gets assigned to a person with a certain credit profile.

Hence the credit limit isn't reported.



Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232226 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/18/2006 11:57 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I wonder how the information gets reported to the CRAs, and whether they are storing the previous highest credit used for each customer, and updating it if the new balance from Cap 1 exceeds that, or whether Cap 1 stores that information and reports it as "highest credit used."


I know the highest credit used is sent each month along with balance and whether or not a timely payment was made.

I don't know if the bureaus compare it back to old data or not.

I would assume the just use the data delivered and assume that if it is lower than previous data that the creditor is just correcting a past mistake.

Print the post Back To Top
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232227 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/19/2006 12:02 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
Yes, and it is preferred not to reveal to the competition what credit limit gets assigned to a person with a certain credit profile.

I don't really believe that for a second. Basically every other company does it. I have a hard time believing that Cap One has some extra secrets that no one else does. I find it much easier to believe that they're just sketchier.

Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232232 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/19/2006 12:44 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Yes, and it is preferred not to reveal to the competition what credit limit gets assigned to a person with a certain credit profile.

Hence the credit limit isn't reported.


Yes, but it's not the 'product' they're protecting....it is the credit limit. Implying that the impact from not reporting the credit limit is not unwelcome, and could be theorized to be the primary reason, althought it is reported publicly that the reason is to protect credit policy, by the cynics among us.

And no answer on why it's appropriate to impact customer's credit scores by reporting their payment history, their high credit, their current balance, the age of their account, etc. and why it's inappropriate to impact their score by reporting the credit limit?

AJ



Print the post Back To Top
Author: eudaimon6 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232246 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/19/2006 9:47 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
1. They're not extending me credit.
Utilities that sell you goods and then collect after that use are extending credit in a way.

I suppose the paper boy and the trash company should start reporting, too.

2. They don't report to the CRA's because they're not extending me credit.

Funny. Most do report if you miss a payment. I guess you only consider it extending credit at that time.

In my experience as a dealership F&I manager, having looked at a half-dozen or so credit reports a day for the last nine years, I have seen utility companies either report a complete payment history or nothing until an account is sent to collections. I've never seen a utility company report only late payments. There is, of course, a considerable difference between a thirty day late payment and an account which has been turned over to a collection agency. Many merchants who do not extend credit or who do not report to the CRA's use collection agencies, often just in pursuit of bad checks.

3. The electric company which does sort of extend me credit does report to the credit bureau, and they report accurately and fully.

This is rare. Most electric companies don't report anything, regardless of the payment set up, unless you miss payments.

Then they will nail you.


I don't really know how rare it is. My experience is limited generally to my work in central Illinois. Illinois power is, in fact, the only local utility company which reports that I have seen. Again, the other utilities in this area, the ones that do not report anything about monthly pay patterns, do not report late payments. They report accounts which have been sent to collections.

Things are different in different places. None of this has anything to do with CapOne's business practices, so all the issues you have raised are really nothing more than red herrings, in my opinion. I can only think of one reason CapOne would not report credit limits. I know it affected my personal credit score. I know that when I switched from CapOne to MBNA my credit score jumped 20 or so points, and that was with adding a new account. CapOne didn't report my credit limit, and MBNA did.

Your mileage, of course, may vary.


Dean


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232464 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/21/2006 12:26 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I can only think of one reason CapOne would not report credit limits.

I've posted the real reason. If you don't want to believe me, fine.

I'm a customer too and have no issues. Of course I did have an overlimit early on so my high limit that is reported actually exceeds my credit limit and makes me look better.

Print the post Back To Top
Author: DBAVelvet74 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232465 of 308643
Subject: Re: Credit Bureaus sued! Date: 7/21/2006 12:27 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I have a hard time believing that Cap One has some extra secrets that no one else does.

As a shareholder I do believe it.

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (52) | Ignore Thread Prev Thread | Next Thread
Advertisement