You probably did opt in, many times. Pretty much every businesses that uses their data (like every credit card company) also agrees to send them data, and in turn require you to agree to allow them to send the data.

When you get a mortgage, you have to agree to send the data to equifax -- you can't get a mortgage without it.

So the only way we'll fix this is by getting all of those companies to agree not to send data to equifax, but they like sending data there, because they get even better data in return.

Counterpoint, if sending data to credit companies is handled even close to the same way that requesting data is, they may not always ask your permission. If you freeze your credit, you'll quickly discover just how often companies check it without telling you. It's kind of startling.

A few companies will tell you in advance that they're going to run a background check, but many will not. Then they'll come back very huffy and complain, "why couldn't we access your credit!"

Also for a fun game, the next time a representative from a company asks for consent to run a background check, tell them your credit is frozen and ask which company (Equifax, Experian, etc...) they're going to check with so you can unfreeze it. In my experience, 9 out of 10 times they won't know and there will be no way for them to find out in advance.

In the same way, even if you're consenting for a company to send data to partners, you don't always get to know who those partners are or who they'll be in the future. I try to pay attention to data consent forms now. Sometimes they do boil down to just "we're gonna share your info with... somebody. Possibly multiple of them."

I might be wrong, but I would bet that the person who you sit down with to sign your loan or your mortgage will not know who your data is going to be shared with, and they probably won't be able to look it up if you ask.

But hey, at least Geico can send me physical mail advertising on my birthday now, so I guess it's all worth it.

Opting in implies a choice.... often times the “choice” is “give up your personal information or you can’t get the service at all”, even if the service is, say, a water utility.

A large part of the problem is that companies can pretend to use the information as an ID when actually using it to just get credit history. I wish we could simply pass a law saying that identity verification cannot use SSN, and that one must separately opt in to credit checks than to id verification.

> service is, say, a water utility

If you need to pay using a credit card then it makes sense that you must get your credit checked.

But there are always alternative payment methods that don't involve credit (like pay by cash). If you truly do not want to consent to having a credit history, you can avoid it.

The way utilities work is equivalent to a credit card: you use the service over the course of a month/year, then at the end you pay for what you used. This is a form of debt. If you could pay at the atart, this would be alleviated, but you don't know how much you will use at the start. I'm sure there are various other solutions, but none as simple as verfiying credit history, then waiting to charge until the end of the period.

A solution that is as simple: Pay a deposit.

If you don't pay the bill, they use your deposit and terminate your service.

My current ISP didn't even ask for a deposit. I just visited one of their storefronts so they could check my ID to verify my name.

In the past I was with an ISP that didn’t allow overages, so monthly bills were predictable. They required 1 months payment as a deposit up front and ran a credit check. The only alternative was dial up.

Just because someone isn’t giving you credit and never will doesn’t mean they won’t want your credit details. Nor that you will have leverage to refuse.

Credit check and deposit? Since they had no competitor, I guess they could get away with it.

Yes, some companies are rotten, but some do provide just as simple ways to get service without a credit check.

> but none as simple as verfiying credit history

Yes, it’s not a default opt-in. In fact, many people are unbanked in the United States. You can also choose not to open a bank account as well.

If you have a bank account or credit card of any kind the sign up paperwork will include an opt in. Pretty much the only way to opt out would be to live a Unabomber lifestyle in a cabin in the forest of Montana.

More like coerced in as—like you say—it's required to get a mortgage or for that matter buy any financial product.

It's not coercion since it's well within your rights to not borrow money or buy financial products if you don't like the terms. Neither of the things you mentioned are life requirements. If you want them because you think you'd enjoy them then you need to agree to the other parties' stipulations, and if not you can continue to live without them. The fact that people have offered these products to the market doesn't mean you are entitled to have them under your own terms.

The terms benefit the coercive institutions more than the end user. They protect the institutions while reducing their accountability to zero. Credit monitoring companies are mafia like rackets and your blind support of them is extremely concerning.

The institutions give you cheap loans in exchange. This has opportunity costs. Giving you cheap loans is not free for these institutions. They could be investing their money elsewhere instead. They would do so if it wasn’t for the fact that having this information about you reduces the risk just enough that they prefer giving you the cheap loans to investing their money elsewhere. People who are offered these terms are offered a fair deal that is a win for both parties and that they are offered a fair deal is exactly the reason they accept it.

Yes, terms authored by an entity are often more beneficial to that entity. That doesn't make them "coercive". Don't do business with them and you'll be fine. Credit monitoring companies are nothing like the mafia. They won't come break your legs if you don't play ball with them.

Of course you're concerned. People that can't or won't manage to be responsible for themselves are always concerned that others don't agree with them. It threatens to hamper that carefree way of life.

This is a disingenuous stance to take. You could hardly be employed, pay rent, buy food, and live a modern life in any sort of comfortable way with this perspective.

Live a modern life, comfortable by modern standards? You’re right about that. But people in the past lived in worse conditions that were considered modern and comfortable then and credit ratings, by making the market for loans more efficient than it was before (however bad it may still be, it’s better than what it replaced), contributed to the improvements. You want to have your cake and eat it too, and it would be nice if that was possible but it is not because nobody is going to give you cheap loans if it comes with too much risk.

Lots of countries in Europe have nothing remotely resembling the US credit scoring system and people there obviously live comfortable, modern lives and have access to financial services.

So far, I have had a credit check done once. It was done by me voluntarily, to unlock additional functionality (receiving the purchase before the payment gets cleared), with my explicit consent ("checking your credit involves transmitting the following data to xyz") and had a link to a form I could use to request the data they had on me from the credit rating agency (via post). Very different experience from what it sounds like people in the US have.

> You want to have your cake and eat it too, and it would be nice if that was possible but it is not because nobody is going to give you cheap loans if it comes with too much risk.

OP is not saying that he doesn't want anyone performing credit checks. He's saying that he wants to be able to choose a company that values privacy. Currently, there's no option of choice for the consumer, and that's a problem.

If the bank loses too many customers because a competing bank is offering to use a better credit checking company, you can bet that they are gonna change.

Most people don't care enough, and only select on price. So the bank gets the cheapest option for nonvisible backends (like credit checks)

Yes, absolutely. Credit reporting is a pillar of contemporary standards of living.

Okay, so then don't "live a modern life in any sort of comfortable way". That's not some sort of requirement or need. You're free to not be employed and gather your own food if you don't want to come to agreements with other people.

What's disingenuous is trying to pass off "modern life" as some sort of necessity and pretending like you couldn't exist without demanding use of other peoples' works.

Not in the US. You can go off and try to start a hobby farm in state/national forests or a hidden corner of someone's 10,000 acre ranch, and you might even get away with it for a while, but you're not free to do it.

Correct, you're not allowed to trespass on other peoples' properties. If you want to farm or live off the land you need to first have value, then make money, then buy land. It's a pretty straightforward process. It does not require sending data to Equifax, so I'm not sure what your point is.

That's how it works in Economics for Kindergartners 101 or a world with about 100x fewer humans, yes.

Where's my 40 acres and a mule?

Only If you've never needed to borrow money or hold credit.

Nobody needs to do those things, they choose to do them.

That really shouldn't be how opting in works.

So you'd rather have to sign and opt in for every sentence in the mortgage contract individually? This is among the reasons you should read a contract before you sign it

Honestly I would, because that would make the masses object more. People (utterly subjectively derived) don't want to sign up with 30 marketing companies to save 5% on a car. That would shift the demand curve and make it cost a seller a portion of their expected revenue to demand people wave away so many rights, and (having worked in the mobile game industry) people take this seriously... Adding a barrier between a customer and your product costs you sales, so the more we materialize these externalities are real costs to sellers the more we'll see people actually respecting privacy rights.

There is no externality here because the costs fall entirely on the person who takes the decision. People, myself and quite possibly yourself included, really do want to sign up with 30 marketing companies to save 5% on a car.

If you don't want to read the contract, you can sign without reading.

They'd just sign off on every line and then later say they had no choice because they couldn't enjoy the thing they wanted otherwise. Just like every other ToS. Probably using arguments like "who should be expected to read each clause?!".

People _hate_ time share hard sells, some people still do them and some people still get suckered in but if you're trying to sell a product and you take the time share hard sell approach you'll scare off customers, even if the product is deserving of their attention. The approach I mentioned might not be the right way, but (for the sake of the free market, why won't anyone thing of the poor free market) we, as a society, need to start pinning the costs of externalities to their benefactors. I think burdening them by removing transferable rights might be a good step in that direction.

Yes, that's why key provisions of a contract are often mandated by law to have dedicated signatures or initials.

Honestly, I get the value of lower prices and rates because of this too. Because we have processes for detecting and excluding irresponsible people, I don't have to fund as many bankruptcies. Modern credit systems are great.

The thing is, they need that data in order to do their business. Lenders need some way of predicting whether or not you will be able to pay back your loan

If this sort of financial rating system is so crucial, we should probably nationalize the industry and make sure your score doesn't include things like adjustments due to biases (racial or whatever). Also Equifax et al. get things wrong all the time, legion are the horror stories about people's history being merged with others.

Equifax has an incentive not to get things wrong because their customers care about having accurate information. Nationalizing credit ratings would remove this incentive. That Equifax still gets things wrong does not imply that things would not be even more wrong if it was nationalized.

If their customers aren't checking accuracy and complaining to Equifax (and they aren't), then the incentive has no effect.

The banks are their customers. And you can bet you bottom dollars the banks do care for accuracy.

The banks don't actually eat the risk of inaccurately offered loans, this is why the housing market collapsed (simplified). Most of the logical incentives in financial sectors have become corrupted by perverse incentives with securities trading.

Turning away good borrowers and extending credit to bad ones are both terrible for business if you’re a lender. That’s the incentive.

Unfortunately, there's no business justification for any of them to do this. That is, the financial incentives just don't exist.

Until we decide we've had enough of this and pass a real law that holds CRAs liable for the data they collect and store, absolutely nothing will change. Equifax's competitors know that, with no such law on the books, they have enough money to withstand the very few lawsuits that could come their way as a result of a breach. They know the average person doesn't have the spare cash or time to pursue such a case.

Equifax should have been liquidated after demonstrating the degree of negligence they tolerated for years. They're still standing because we let them.

> Until we decide we've had enough of this and pass a real law that holds CRAs liable for the data they collect and store, absolutely nothing will change.

Correct. This is a problem caused by the market. Expecting market forces (a competitor with better offerings) to just fix it isn't productive.

Its not a free market if you cant opt-out of it.

A market's degree of freedom and your ability to not participate are orthogonal. There are plenty of markets you cannot pragmatically opt out of, e.g. food and real estate.

In the food and real estate market are there three companies that have formed an oligopoly on any transactions within the market?

I don't disagree that some goods are inelastic and still can have robust free markets (see bottled water) but the credit score market is not one of them.

I disagree with this interpretation. Nobody can force-feed you, and you have the capacity to make your own food given the extreme. Real estate you can divide in housing and land. Housing is a free market, you can make your own shelter if you wish. You would have a point for land, it is not a free market.

Does GDPR cover this?

Not that I have any love for Equifax, but to play devil's advocate -

Trust forms the basis of all financial transactions. Credit ratings companies increase trust, reducing the price of these transactions. Removing these companies would increase the price of loans/credit cards/etc.

(This ignores the fact that, for example, lenders in Australia mostly ignore credit ratings and instead focus on your earnings)

If a competitor like that existed, there’d be no incentive to use them. Car dealers, banks, employers don’t care about your security, they care about your credit worthiness.

That is assuming the market cares about opting in and security. Since their customer is a business that needs information on you and not you directly, I'd say it doesn't. The pressure to change will need to come from elsewhere.

Their core business is very legit and needed. Banks and lenders need to have a central system to see who pays back loans and who doesn't, so Equifax etc play a vital role. If you ask for a loan or a credit card, it's perfectly legitimate to ask you that your info in recorded somewhere (or else no loan).

The problem is that companies are as good as their last quarter, so over decades and tens of quarters they had to do a lot of shady stuff to increase their earnings.

EU doesn't have that kind of problem since those companies don't exist there. I'm not sure why NA is different...

I'm in the UK and we certainly do have Experian, Equifax, and other credit reporting companies here.

I think it's a UK thing, never heard of that in the rest of Europe?