Equifax does it again

Investment Analysis Clubs Macro Economic Trends and Risks
1

https://www.cbsnews.com/news/equifax-wrong-credit-score/

The nation’s consumer faced lenders - credit cards, car financers, mortgage lenders, etc. - depend on three credit agencies to advise them as to the credit worthiness off their clients (we, the consumer) and adjust credit limits and interest rates according to their ratings.

In the past, Equifax (one of the Big Three) was hacked and the data dump helped credit card fraudsters and others to bilk consumers and vendors of a pile of money.

The Journal reported that millions of Americans were affected by Equifax’s error, with some scores changing by as much as 20 points in either direction — enough for some prospective borrowers to be rejected for a loan. According to the paper, a small number of people went from having no credit score to having a score in the 700s, or vice-versa. The incorrect scores were sent to Ally Financial, JPMorgan Change and Wells Fargo, among other lenders, the Journal reported, citing unnamed sources.

This time, due to a “programming error” an unspecified, but large, number of consumers had erroneous credit ratings given when their vendors requested, resulting in higher interest being charged.

The company said. “For those consumers that did experience a score shift, initial analysis indicates that only a small number of them may have received a different credit decision.”

Equifax has corrected the error, but apparently, as in the case when their poor data security cost millions of people to be vulnerable, they are not responsible for any consequential financial costs.

My first credit card, issued in 1972, had my photograph on it. It took decades of attempted credit card fraud for me to get a current one (from Costco) with my photo on it and the “freezing” of my credit information (one of the best financial moves I’ve made) to stop the continual blatant attempts to compromise my credit cards.

Jeff

15 Likes
2

I agree that keeping one’s credit frozen is the best protection against credit fraud that is available. When you realize how few times it needs to be available to a creditor, I don’t understand why that isn’t the default mode for everyone. I think in the last decade we have lifted the freeze twice.

3 Likes
3

…to stop the continual blatant attempts to compromise my credit cards.

We froze our credit about 15 years ago and had to unfreeze maybe 3 times since which is only a slight hassle.

Any security is only as strong as its weakest link. DW has had her Visa card compromised 3 times in the past 6 months. She even went so far as to kept the card frozen/locked until she walked into the store. The last straw was about 6 weeks ago, walks into a Kroger, gets groceries, comes home, checks card about 20 minutes later, and there were 3 attempted charges with 1 local, another in a nearby city, and the 3rd in another state. This was not unique to Kroger. One time happened after visit to dentist office. So somewhere in Visa’s processing line has to be the common denominator.

She ditched her Visa and has been using my Discover since with no issues. In the 30+ years of using Discover I only had 1 issue about 20 years ago.

JLC

4 Likes
4

JLC writes checks card about 20 minutes later, and there were 3 attempted charges with 1 local, another in a nearby city, and the 3rd in another state.

I changed the “alerts” setting on all my Visa and MC to “send alert for any transaction in which a card is NOT present”.
I assume this provides a similar function as “checking the card transactions”?

I didn’t put a lower limit on the alert.
So far, it’s been very acceptable.

:alien:
ralph

1 Like
5

Before freezing my accounts a number of years ago, I would have two or three cards compromised each year (Visa, AMEX and MC). Since then, I have not had a single incident. I use primarily Visa and have made use of both Visa and MC abroad numerous times. Nowadays all my cards have “chips” and I have an alert set up to email me if a charge of any size is made (some have a lower limit of $1, some of $.01).

If you are having issues at Kroger with your Visa card, it’s likely a Kroger issue (or the specific bank they are using for their card) rather than a general Visa thing.

Jeff

1 Like
6

Before freezing my accounts a number of years ago, I would have two or three cards compromised each year (Visa, AMEX and MC). Since then, I have not had a single incident.

Please do not confuse freezing your reports with credit card compromises. The first, in theory, blocks lenders from querying your report for the intent of opening any new credit line (credit cards, mortgages, HELOCs, car financing, etc.), while the second is purely a function of some vendor or payment processor screwing up their security protocols (point-of-sale terminals are a favorite target for malware) and letting slip the information necessary to generate fake transactions (card number, expiration date, possibly CVV).

8 Likes
7

Please do not confuse freezing your reports with credit card compromises.

Absolutely true.

I highly recommend getting on the free subscription list for “Cryptogram”, a monthly presentation of IT security issues - including, on occasion, credit card information:

https://www.schneier.com/crypto-gram/

Jeff