Sept. 13, 2017
The credit reporting industry stands to extract a fortune from you and me due to their own lax security.
Equifax's data breach that released the highly personal information of 143 million Americans (announced Sept. 7, two months after Equifax executives became aware of it) into the dark web, makes all those affected vulnerable to identity theft. Armed with the information Equifax failed to protect, others can apply for credit cards and loans in your name, running you into serious, potentially crushing debt, without your knowledge or consent.
The way "experts," including the credit reporting agencies are recommending you protect yourself is to place a credit freeze on your identity with each of the three credit reporting services: Equifax, Experian, and TransUnion. And herein lies the opportunity for these self-appointed captors of every American's financial security to get richer quicker. In most states these services will each charge you $10 to place a freeze. Their potential revenue, if all affected victims freeze their credit (as they should) is therefore over $1.1 billion... each! More than $3.4 billion altogether.
But wait! There's more.
The $3.4 billion in potential revenue courtesy of you and me is only for the initial freeze. If you have to unfreeze your credit because you need to legitimately apply for, say, a student loan, a car loan, a credit card, a home equity line of credit, a mortgage, or a security clearance (which requires a credit check and will also allow the Office of Personnel Management to collect and lose even more highly personal information), then you will have to pay these services another $10 each time you un-freeze and, again, each time you re-freeze your credit. Through the outcome of their own negligence forcing us to feel as suddenly insecure as perhaps we always should have about their collection and dissemination of data we never willingly entrusted to them, they stand to collect billions in new profit.
Is there anything more consistent with the definition of extortion than this?
Basically Equifax, Experian, and TransUnion have told us all, "We're going to collect information on you that, if shared with the wrong individuals, can ruin your financial future and plunge you into a life of debt, bankruptcy, and general misery. We're then going to demonstrate by wonton negligence that we leave this information accessible to the wrong people. And then, we're going to charge you repeatedly to protect you from the predators to whom we created your vulnerability."
It gets even better! If you don't want to pay for a lifetime of $10 freeze and re-freeze actions, Equifax and TransUnion are offering additional "free" services that will let you lock and unlock your credit at will using their websites. To get this "benefit," you must accept their click-through use agreements, which include that you "authorize and instruct" them to collect additional information on you and sell it to others, and also that you waive the right to sue them in a court of law for any breach of responsibility or trust they may commit.
Blockchain technology will eventually enable "trustless" credit scoring and identity protection services to rise up and put these criminals out of business, assuming government doesn't move to further protect them -- it's unconscionable that the majority of states allow them to collect the $10 credit freeze/thaw fees (a few state legislatures have had the temerity to stand up for their citizens and disallow the fee).
However, I don't think we can or should wait for competitive economic and technological forces to remedy this clear and present injustice. It's time for each and every one of us to contact our state legislators, and to complain to our states' attorneys general, that these practices are not just tantamount to extortion, they are extortion.
This activity must be investigated for the criminality it represents, and must be explicitly outlawed by the creation of new legislation in all the states that currently lack adequate consumer protections, which is most of them.
Transcend Engineering and Technology, LLC was founded by Stephen Farrington, P.E., who is the company's Chief Executive and an owner. Stephen is a graduate-degreed engineer with over 20 years experience in R&D of sensors and data acquisition systems related to environmental, hydrological, and geotechnical, subsurface investigation and monitoring. For over 15 years, he conducted and managed R&D activity at a science and engineering firm with a strong record of innovation and transition to commercial products. He is inventor of two fully commercialized patented systems for subsurface geo-environmental characterization and has authored an ASTM standard and contributed to a standard handbook of subsurface field investigation.