Can a company pull credit report when you reload a gift card?

April 22, 2014 21:49 by Consumer Ed

Dear Consumer Ed:

I attempted to reload a restaurant gift card. After providing my credit card number, expiration date and 3-digit code, I was then prompted with three questions: The street number of my residence on a street that I lived on several years ago, the type of residence I live in on my street, which was given by name, and what street I have lived on in the past out of 4 choices. The processor must have accessed my credit report. Is this legal? 

Consumer Ed Says:

Yes, this is likely legal under the Fair Credit Reporting Act, as well as the terms and conditions of the gift card that you used.

The Fair Credit Reporting Act (FCRA) limits the manner (and the reasons) in which a consumer's credit report may be accessed. The Act is designed to protect the privacy of consumers' information, and to guarantee that the information supplied by credit reporting agencies is as accurate as possible. Under the FCRA, there must be a permissible and legitimate purpose for a business to check your credit report. For example, a business may access your report if you are applying for credit and it needs to check your creditworthiness, or if you already hold an account with a business and it needs to determine if you continue to meet the terms of the account.

A business can also access your report if it has a legitimate need for the information in relation to a business transaction that you initiate. In your case, by using and then reloading the restaurant gift card, you can be said to have initiated a transaction with this business. The business may have obtained this information about you in order to verify your identity before completing the transaction. As long as the information is not misused or mishandled, identity verification of a consumer helps to stop fraud and identity theft, and may be deemed to be for a legitimate purpose. 

Additionally, the terms and conditions of the gift card you purchased may give the business the right to check your information. Often in those terms and conditions, a business will expressly retain the right to access information about you for identity verification and for fraud prevention. If your gift card is subject to such a provision, then when you began to use the gift card you may have given the business permission to check your personal information, and to verify your identity.

If you still have questions about how or why the business accessed your information, you could try the following:

 

  • Check the terms and conditions of the gift card you purchased to see whether you have authorized the business to check your information; or   
  • Ask the company directly how they obtained your information and what steps they take to ensure your private information is protected.

 

If you aren't satisfied with the business' response to your questions, or feel they are misusing your personal information, then you can always simply take your business elsewhere. 

If you enjoyed this post, make sure you subscribe to my RSS feed!

Rate This


How can I protect my children from identity theft?

March 6, 2014 20:43 by Consumer Ed

Dear Consumer Ed:

I really want to protect my children from identity theft.  At what age should I check to see if they have a credit report and whether it contains any suspicious information?

Consumer Ed Says:

Most parents apply for their children's Social Security numbers (SSN) very soon after their children are born, and a SSN is all that's required to open most credit accounts.  Therefore, it's never too early to take steps to protect your children from identity theft.  You should contact each of the three credit reporting companies, Experian, Equifax, and Transunion, to request your children's credit reports so that you can examine them for fraudulent activity.  When you contact each company, ask for a manual search of your children's files.  The companies may require copies of the children's birth certificates, Social Security cards, your government-issued identification cards, and proof of address.  You can contact the companies by visiting their websites:  www.experian.com, www.equifax.com, and www.transunion.com.

In addition to getting your children's credit reports from the three credit reporting agencies, there are additional steps that you can take to protect your children from identity theft:

 

  • Keep all documents that contain your children's personal information safely locked up. 
  • Avoid carrying your children's Social Security cards with you.
  • Do not share your children's SSNs unless you know and trust the other party.
  • If someone asks for your children's SSNs, ask why they want them, how they'll safeguard them, how long they'll keep them, and how they'll dispose of them. If you're not satisfied with the answers, do not share the numbers, and ask to use other identifiers.
  • Before you share personal information on the internet, make sure you have a secure connection.  A secure website has a lock icon in the address bar and a URL that begins with "https."
  • Also, use strong passwords, and keep them private.  If you use a password to sign into a website, log out of the site when you're finished.
  • Use a computer with updated antivirus and firewall protection. Don't send any personal or financial information through an unsecured wireless connection in a public place.
  • Limit the chances that your children's information will be stolen or misused at school by finding out who has access to your children's personal information.  Also, read the notices that schools are required to send explaining your rights under the Family Educational Rights and Privacy Act (FERPA).  That law protects the privacy of student education records, and gives you the right to opt out of the release of directory information to third parties, including other families.
  • Safely dispose of personal information.
  • Be alert to phishing scams, where criminals send an email, text, or pop-up message that looks like it's from a legitimate organization.  A phishing message asks the recipient to click on a link or call a phone number, and to share personal or financial information.
  • Share all of these safety tips with your children, especially if your children use the internet.

 

You should begin looking into the possibility that your children are victims of identity theft if you or your children have experienced any of the following warning signs:

 

  • You or your children were turned down for government benefits because the benefits are being paid to another account using one of your children's SSNs;
  • The Social Security Administration, Internal Revenue Service (IRS), or some other government agency asks you to confirm that your children are employed, even though your children have never had jobs;
  • You or your children received a notice from the IRS saying the children didn't pay income taxes, or that the children's SSNs were used on other tax returns; and/or
  • You or your children received collection calls or bills for products or services you didn't purchase or receive.

 

If you know or suspect your children have been victims of identity theft, contact each of the three credit reporting agencies.  Explain that your children are minors, and cannot legally enter into any type of contract.  To prove that your children are minors, send the credit reporting agencies a completed copy of the Uniform Minor's Status Declaration (make sure you ask each company for its mailing address).  Next, send a letter to each credit reporting company. Ask them to remove all accounts, account inquiries, and collection notices from the credit files associated with your children's names or personal information.  It won't be a quick process, but it shouldn't take more than 90 days from the date you get an acknowledgment of your request.

For more information, visit the Federal Trade Commission's website at www.consumer.ftc.gov/articles/0040-child-identity-theft.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Rate This


Car dealer pulling credit report multiple times

February 18, 2014 20:31 by Consumer Ed

Dear Consumer Ed:

I am shopping for a new car. I specifically told the sales rep at the dealership to only check my credit one time. After running my credit report, the sales rep came back with a deal that was not good, i.e. the interest rate was too high.  I declined the offer and left. I've since discovered that the dealership checked my credit 12 times and may be continuing to do so.  This has already hurt my credit rating. I feel this is deliberate retaliation for declining their offer. What can I do?

Consumer Ed Says:

It's very important to monitor requests for your credit report. These requests are recorded on your credit reporting file, and multiple creditor requests can negatively impact your credit score. You can easily check to see who has pulled your credit report by looking at the "Inquiries" section of your credit report.

Federal law strictly limits when and how a consumer's credit report can be released to others. Under the Fair Credit Reporting Act (FCRA), a consumer report can only be released to another person or entity for limited permissible purposes that are spelled out in the law. For example, a credit reporting agency can furnish your credit report if you give written approval for the report to be released to a business; a creditor can access your credit report when you apply for credit; a collection agency can check it when attempting to collect a debt; insurance companies can pull your report to underwrite your insurance; and employers may access your report if they have your permission.   In order to access your credit report, a business must certify to the credit reporting agency that it is obtaining and using the credit report for a permissible purpose under the FCRA. A person who knowingly accesses your credit report under false pretenses can be fined, imprisoned for up to two years, or both.

According to the Federal Trade Commission, a car dealer does not have a permissible purpose to get your credit report if you're simply asking for information about vehicles and prices, or if you just take a car out for a test drive--because at that point you haven't initiated any transaction.

In your case, it sounds like you gave the dealer verbal permission to pull your credit report. So to the extent you allowed it to check your report so that the salesperson could make you an offer, you initiated a transaction with the dealership, and the dealer had a legitimate reason to pull the report--one time. However, once you declined the dealer's offer and left the dealership, the dealer no longer had a permissible purpose to check your report - it didn't have your written approval to do so, and you were no longer considering purchasing a vehicle at that dealership.

If you become aware that your credit report has been obtained outside of the FCRA guidelines, you have several options. Specifically, you can do one or more of the following:

  • Contact the business pulling your report, notify them that you do not believe they have a permissible purpose for accessing your report and request that they stop.      
  • Contact the three major credit reporting agencies to notify them that a business has been accessing your credit file without a permissible purpose.
    • For Equifax, contact: Equifax Information Services LLC, P.O. Box 105069 Atlanta, Georgia 30348.
    • For TransUnion, you can request consumer support by visiting: www.transunion.com/personal-credit/customer-support/request-customer-support.page.
    • For Experian: Experian requests that you first obtain a copy of your Experian credit report by visiting Experian online or by calling 1-888-397-3742. Once you have your Experian personal credit report, contact the number displayed on the report for assistance.
  • File a complaint with the Federal Trade Commissionby going to www.ftccomplaintassistant.gov; or 
  • Submit a complaint to the Consumer Financial Protection Bureau by visiting www.consumerfinance.gov/complaint/, clicking on "Credit reporting" and following the instructions provided.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Rate This


Credit/Debt
nav_cap