The FACT Act of 2003:  Notice and Request For Public Comment On the Effects of Credit Scores and Credit-Based Insurance Scores on the Availability and Affordability of Financial Products #514719-00008

Submission Number:
Melody Millett
Initiative Name:
The FACT Act of 2003:  Notice and Request For Public Comment On the Effects of Credit Scores and Credit-Based Insurance Scores on the Availability and Affordability of Financial Products
Credit scores have no place in insurance rating and the practice of allowing insurance companies to use credit socres for the purposes of determining credit risk should be completly abolished. Credit Scoring should not be allowed to be used for what is in most states mandatory insurance purchases, nor should insurance companies be allowed to GENERATE inquiries lowering your credit score for the purpose of purchasing other financial services. Thereby then lowering your insurance score. Taking out a new mortgage or credit card which also can initially lower your score says nothing about insurance risk or risk in general. Therefore reliance on scores for insurance underwriting is arbitrary and punitive on the consumer. This also says nothing of the fact that the credit bureaus are allowed currently to sell multiple credit reports bearing the same social security number for completely different named individuals. While hiding this activity from the rightful social security number holder. We have been the victim of exactly this form of ID theft and it is currently affecting our insurance rates. Insurance companies are not following fraud alert procedures no insurance company currently using our scoring information (There are three of them) has ever contacted us to determine it is really us prior to issuing a renewal or policy to verify fraud alerts. They claim they don't have to since it is not a financial transaction. They also claim this is the reason they don't have to report payment history on said insurance policies. If it is not a financial transaction then they have no need for a credit score to determine insurance risk, if it is a financial transaction, they they should be required by law to report insurance payment history to the bureaus for the purposes of reporting a credit history back to the file they are collecting information from and that they be required by law to honor fraud alerts of victims of identity theft and to provide victims with the same disclosures under the FACTA act as other credit granting institutions. Do not allow the insurance industry to get away with not reporting good credit history while allowing them to use bad history to rig insurance rates in their favor. A bad credit score say nothing of a persons qualifications to operate a motor vehicle or their accident risk. It does allow the insurance industry to engage in selective insuring where by lower economic classes can be effectively discriminated against by insurers. They currently claim they are not required to comply with other laws under the FCRA since it is not a financial transaction. If by some odd reason you see it necessary to continue this practice of allowing them access to these scores then they should be held to the same compliance and other requirements of the FCRA as other creditors. This includes the honoring of fraud alerts and the turning over of identity theft related transactional data for fraudulent policies issued due to identity theft. Tell the insurance industry they cannot have it both ways. Currently they are exploiting the system. They contribute nothing positive to the report's score and they only create negative inquiries which lower your credit scores and they are surely reporting their judgements obtained from lawsuits from accident claims. Tell them they must report payment history or no scores for them. Thank you very much for the opportunity to comment on this very valuable consumer issue.