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02/07/2003 Archived Entry: "Can't give them credit for customer service"

Okay, so credit reporting agencies aren't the first thing anyone thinks of when you mention "customer service." There are two ways that the credit reporting agencies are demonstrating customer disservice... and even poor business sense: not using the information they request to protect consumers, and not using their websites to save themselves money. Read on...

I discovered a few years ago that the consumer credit reporting agencies -- Equifax, Experian, and Trans Union -- do not actually verify that the social security number on a negative credit report matches the SSN on a consumer credit history by default. They apparently sort the information based on name and address in the normal course of business.

This is a major problem if you happen to be a "junior" or "senior" or otherwise have a relative with the same first and last name. It's especially a problem if you have recently lived at the same address or even in the same town. You may find that your credit histories have become intertwined. That can cause major problems.

If you call or write to the credit reporting agencies, they can add a note to your account that you are "confusable" with another person with a similar name and address, and that special care should be taken to verify that information goes in the right file. This "special care" apparently consists primarily of actually checking the Social Security Number on reported credit data to make sure it matches.

Every time I've requested credit, I've been asked to provide my Social Security Number. I've been told that it's essential to obtaining my credit history. It boggles my mind that I'm required to provide this information, but it is apparently routinely ignored in a fashion that could have severe negative consequences.

My second beef is with two of the three agencies: Equifax and Experian. All three agencies let you request a credit report through their website and view it online. However, Equifax and Experian require that you pay for the report, even if you qualify for a free report. They require you to call them (Equifax) or send a written request (Equifax and Experian) in order to get a free report. Note that the free reports are mandated by Federal law for people in certain situations -- this isn't an act of charity on the part of the credit agencies.

Only Trans Union seems to understand that it's in their best interests to make these free reports available online. Not only is this better for the consumer, but it saves them money. What sense is there in spending money on clerical staff, paper, printing, folding, envelope stuffing, and postage to handle credit reports that won't bring in one cent of revenue... when there's an alternative that has essentially no incremental cost?

The answer, I suspect, is that it makes a certain twisted sort of sense. Information about obtaining a free report is mentioned in small type in an obscure corner of their web sites. I'm sure that most people find the far more prominent links for the basic credit report (about $9) or the super-duper "check all three agencies with one click!" option, which costs about $40. (Some offer it free as part of a "trial" of a subscription service.

This last option has a bit of a catch-22, I suspect. Although I have not verified it with the credit agencies, I notice that the agencies that offer it display a small notice that the three-agency check is provided through a "partner." If this partner is pulling the three reports as if they were a normal business -- that is, as a commercial credit check -- then the request for your report is going to be added to your report. That doesn't happen if you request your report directly from the credit reporting agency. Since your credit score -- the number that most creditors use to determine whether or not they will give you credit -- is lowered every time your credit report is requested by a company and not used to give you credit, that means that the "quick and easy" paid three-agencies-for-one-fee credit report option might end up damaging your credit rating. And you'd pay for that privelige.

The twisted sense of it is, if you are concerned about your credit history, you have to check all three reports. They are very rarely identical. So, most people who know this will tend to gravitate toward the easy option, not realizing that it might be harmful to their credit history... and that they probably will wind up paying for reports that are owed to them free of charge.

Tricking your customers is never good customer service.

Note: The information in this posting was accurate as of the date it was written. The websites and business plans of the businesses mentioned may have altered since then. This posting should not be taken as a statement of current fact.

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