Comments:

16 April 2004

TO: The Federal Trade Commission

FR: Ed Mierzwinski, Consumer Program Director, National Association of State PIRGs (U.S. PIRG) 202-546-9707x314 [ed@pirg.org] 218 D St SE, Washington, DC 2004

Via Internet

Comments Regarding FACTA Free File Disclosures Proposed Rule, Matter No. R411005

This file contains the comments of over two thousand PIRG members from around the country. We collected the comments by email, but have deleted the email addresses and regular mail addresses of the citizens to protect them from spam or junk mail if the comments are posted on the FTC site. We can provide the comments in different formats if needed, but those formats would include the postal addresses, and so we would ask in that circumstance that the comments not be posted publicly.

The comments are from 44 states and the District of Columbia-- Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington State, Washington, DC, Wisconsin, Wyoming.

The basic message that the citizens send you to is the following:

I urge you to make annual free credit reports available more quickly to all Americans, rather than delaying access to most of the country at the unjustified request of the credit bureaus.

Also, the rule should make clear that information is only collected to verify identity. Many consumers, including me, don't think it is fair to give up personal information to take advantage of an important new federal right to a free credit report.

However, many of the consumers have also added their own additional ideas and thoughts. Here are excerpts from the over 2,000 comments below.

Excerpts from over 2000 PIRG Member Comments

I live in Indiana and shouldn't have to wait till summer to get my report when the law goes into effect December 1st.

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Many Americans have big problems being financially responsible. Letting all Americans review a free copy of their credit report in a timely manner will have the dual effect of informing consumers where their credit problems originate and motivate the credit reporting industry to develop guidelines and rules that they should all follow in order to make things fair and easier to understand. I am a real estate financing professional and I frequently see people baffled by their credit reports.

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Recently I tried to obtain a "free" credit report on-line and after initially signing up for an on-line report (or so I thought) I received nothing for three weeks. The bottom line is, after finally receiving my access code by tracking someone down via telephone, I acessed the "free" report on-line (which was a piece of crap, totally useless) and within 5 days of this my credit card was charged $79.95 for the service I had supposedly cancelled before receiving my access code. When I called back to complain, they basically explained that you had to sign up for their service first (the $79.95 thing) and THEN cancel it - there was no way to receive the "free" credit report without first signing up for the service. This is not "free" and of course, they rely upon people not cancelling because it is not obvious from the website that you sign up for anything when you request the "free" credit report, and it certainily does not tell you that it is an $80 service you are agreeing to. Free is free. And these reports should not be coming from private entities who finagle all sorts of ways of enticing you, often deceptively, into buying their products. Why not step to the plate and help consumers for once, instead of always helping big businesses? C'mon, FTC, do the right thing here. Release the reports early, and make them really free.

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As someone with relatives who have been the victims of identity theft, an increasingly common crime, I know that free and quickly available credit reports are very important. This service should be restricted to being a service to the consumer, rather than being co-opted by requiring consumers to give extra information or having agencies use the information they collect for other purposes.

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 As a victim of identity theft, I have experienced first hand the outrage of having my good name and reputation sullied by clever and ruthless criminals. One of the enabling factors of identity theft is the ease with which imposters can obtain credit cards from banks, retailers and other companies. One of the defenses against identity theft is to periodically check one's credit record maintained by the three major credit bureaus. I now do this once a year myself, although I must say that one of the bureaus, Equifax, has a convoluted touchtone system that makes it difficult to order my report each year.

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Also, the rule should prohibit credit bureaus from responding to requests for free credit report with ads marketing credit report subscriptions or other services. Georgia, the state where I live, already requires the bureaus to provide free credit reports on an annual basis. When I applied for mine last year, the material on the company's website confused me, causing me to sign up for an expensive service I didn't need.

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We live in Colorado where this is already law. It has been extremely helpful to have this access over the last few years as we have found numerous errors in EVERY ONE of their reports during periods when we have been applying for loans for a new car and to buy our new home. We are people with stellar credit - I can't imagine what must happen to folks with less ideal circumstances.

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 While I look forward to obtaining my credit report annually, I do not relish being bombarded with marketing ploys through the process.

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Free annual credit reports should be available more quickly to all Americans. Please don't let the credit bureaus persuade you to string it out until almost the end of 2005. Also, the rule should make clear that when I want my see my credit report, the bureaus should collect information from me only to verify my identity. I should not be bombarded with advertising from the bureaus just because I am being responsible to make sure their information about me is correct. Too many people get taken in by their misleading advertsing. I believe that your job is to protect consumers, not create an unfair marketing opportunity for big business.

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I was taught that you gave NO ONE your social security number. I would assume the bureaus already have a lot of information on consumers, and would be able to acquire what they need form what they already have. I also would like to see a restraint on bureaus selling additional services with an annual request. Again, thank you for the creation for the opportunity for an annual credit report.

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Also make it mandatory if a mistake is found it has to be corrected immediately not 30 to 90 days later. Loan processors don't accept that.

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Stop delaying access to free annual credit reports. You are knuckling under to corporate interests, as usual. The request of the credit bureaus is underhanded. There is a truly "liberal bias" in this country...in favor of corporations!

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Also, please REQUIRE the three major credit reporting agencies and Fair Isaacs to release credit SCORING FORMULAS in detail in order to permit consumers the right and ability to prove the accuracy of the computation of the credit score AND to permit analysis of the score FORMULAS in order to insure that they represent credit risk in reality rather than a means to increase risk score and lender profits on good credit risk citizens.

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 I understand that credit bureaus are businesses and should have some opportunities to peddle their products, but I don't think it is fair to delay access to an important new right in order to do so. The rule should make clear that information is only collected to verify identity. Ordinary consumers should not have to give up -- or be led to believe they have to give up -- personal information to take advantage of an important new federal right.

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Also, the rule should make clear that information is only collected to verify identity. Professionals such as myself understand the marketing aims of these tactics. They're not in the consumers’ best interests.

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I also think a limit should be set on how much extra advertising the credit bureaus can bombard us with when we try to take advantage of this new right. Wading through their misleading ads and propaganda will compromise the ability of some, especially the elderly, to access their report without being taken advantage of by marketing ploys they find confusing and hard to understand.

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I get sick of all the extra junk mail!!

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I habitually request a copy of my credit reports from all CRAs. In one year they had 3 errors, one error was in all 3 major reports. It took 4 months to get their errors corrected. These errors would have prevented the purchase of a home for my family. These companies make a tremendous profit on the information they gather. There is little incentive for them to collect correct information, or to purge their files of errors.

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In particular, I ask for very specific wording that will absolutely prohibit the credit bureaus from using this information for marketing purposes, and specifically not allow them to share this information with anyone else. In fact, I believe that they should be required to destroy all access to this information, for everyone--themselves included--once identity has been established and the requested credit report sent out.

U.S. PIRG is also submitting detailed comments on the free report rule under separate cover, in coalition with several consumer and privacy advocacy organizations. Those comments will also arrive today.

Please contact me at 202-546-9707 (x314) or at ed@pirg.org if you have any questions.

Very truly yours,

Edmund Mierzwinski

Consumer Program Director

U.S. Public Interest Research Group, 218 D St SE, Washington, DC 20003