Database profiling is the practice of capturing, recording, and classifying
the habits (not just spending habits) of individuals. Anytime you make
a purchase where your name is known to the seller, information providing
all the details about your purchase is uploaded into a database.
Many companies will sell their database listing of customer profiles
to marketing consolidators, who in turn create a larger database and resell
Just go on the Internet and see how easy it is to purchase access to a
database containing profiles of personal information. Think of your personal
safety and that of your family.
Anytime you give your name, address and phone number when making a purchase
or obtaining a service, you are at risk of having personal information
released to just about anyone! When it comes to database profiling, there
is no privacy, and this includes medical information as well.
Relocation and Change of Address
One of the biggest traps folks fall into is when they relocate. Most
figure that if you don't provide your new address to a given party, he
can't get it. Wrong. The United States Postal Service provides customers
with a Change-of-Address service. A customer fills out a card providing
the address where all mail should be forwarded, and it's easy as 1-2-3.
What you are not informed of is the fact that when you fill out this Change-of-Address
Form, indicating a permanent change of address, the Postal Office maintains
this information in a database, which is available to the general public
to purchase. To avoid this, indicate that the change of address is temporary,
giving a one-year expiration date, and your information will not be included
in this database.
Frequent Customer Cards
It has become a popular practice for certain retailers to offer customers
a form of frequent-user membership card. They are usually offered free
of charge with the attraction of earning points towards either cash-back,
discounts, or free gifts as rewards for a certain volume of business.
In order to obtain this card, a customer is required to fill out a detailed
application form. It has also become common practice to require a government
ID (translation: driver's license) in order to obtain such membership.
Now armed with all your personal information, every time you make a purchase
or use a service offered by that retailer, and hand in your membership
card, you provide that business with a roadmap of your spending habits.
Let's take a scenario where you are shopping in a supermarket and, as
a routine, pick up a carton of cigarettes for a friend, who reimburses
you for it later. You are handing in your customer card with each purchase,
so now you are in their database as someone who purchases cigarettes.
This translates into the assumption that you are a smoker. Now at some
point down the road, you are applying for medical insurance and you are
required to complete a form with numerous questions, one being "Do
you smoke?" Not being a smoker yourself, you check the "no"
box. At the end of the form there is a warning that if you make any false
statements, you could be fined, arrested, or at the very least denied
the medical insurance that you are requesting. Imagine if the insurance
company has access to the database with the information on your shopping
habits! Here you are purchasing cigarettes on a regular basis. What is
the insurance company going to assume? You may be thinking to yourself,
"this is far-fetched." I could sit here and come up with a dozen
more scenarios, but the fact is that a database exists with such information,
and anyone willing to pay a price (and usually a cheap one) can obtain
What many consumers do not realize is that they actually do not save
money by using such cards. The dangling-the-carrot effect of the potential
rewards actually induces many individuals into spending more money than
they normally would.
Product Warranty Cards
You just purchased a new refrigerator, are now going through the instruction
manual, and come across that ever-so-present warranty card. The perception
is that unless you complete the card and send it in to register the product,
your warranty will not be activated. Wrong! Read the card and ask questions
when making your purchase. In most cases, you are covered during the outlined
warranty period as long as you have the warranty card and receipt evidencing
the purchase. If, during the warranty period, something occurs that prompts
your exercising the warranty provisions, you present the card and receipt
to obtain the service to which you are entitled. If you routinely complete
and submit these warranty cards, you will find yourself in a multiplying
number of databases. At the end of the warranty period for which you are
covered, you can just throw the card away.
Credit Reporting Agencies
At the time of this writing, there are three major credit-reporting agencies,
Trans Union, Experian, and Equifax. Whenever you apply for a loan, line
of credit, or credit card, the lender to whom you are applying will contact
one or more of these agencies to obtain your credit profile. The information
that you provided in any such application, which has been submitted to
one of these agencies, is then used to update your existing profile in
their respective database. In addition to such applications for credit,
these agencies also obtain information from phone companies, utility companies,
real estate agencies, and insurance agencies. If you are applying for
credit and have been fortunate enough to have never had a profile to begin
with, you do now! Further to that, the fact that an inquiry was made on
your credit profile now becomes part of your profile. The number of inquiries
on your profile affects your overall credit score.
Here are a few tips to maintain control of your credit profile and ensure
the best sense of personal privacy possible:
- Contact each of the three credit-reporting agencies and request
that a "fraud alert" be placed on your profile. This is
something everyone should really consider, because it alerts lenders
that they should contact you, at a phone number provided, in the event
that they receive a request for credit. Considering how easy it has
become for someone to commit fraud and apply for credit under someone
else's name, this is one of the best preventive measures. Also, when
you request a fraud alert on your profile, you will receive a current
credit report, free of charge. In many cases, if you requested such
a report, you would be charged a fee. This is a way around such fees!
- When you receive your credit report from each of the three credit-reporting
agencies, carefully review them. Compare them to one another. First
and foremost, if you find an obligation recorded that does not apply
to you, report it immediately to the credit-reporting agency and the
lender listed. This could be a potential attempt at fraud against
your account. This is not something you should ignore, or put off.
Immediate action is necessary.
- You will frequently find on your credit report, items that are long
paid-off. There are a few schools of thought on this. First, for one
who plans to apply for credit, record of a satisfied lender is a good
thing. On the other hand, if you are looking to take measures to increase
your level of privacy, it is best to minimize any and all information
on your report. While most credit reporting agencies have a policy
to keep information on closed accounts recorded for 10 years, I have
found this policy is not strictly followed. If you send in a form
(provided with the report you receive) informing them of an "error"
due to such account's being closed, you have a chance of their removing
it. This doesn't always work, but what do you have to lose? In any
event, keep close tabs on items that are indeed over 10 years old,
and make sure they are promptly removed.
- If you've been delinquent in a payment due here and there, and find
it reported as such on your report, challenge it! This is especially
the case on an item a few years old. This is one instance where the
application of "innocent-till-proven-guilty" works well
for you as the consumer. If you report a potential error to the credit-reporting
agency, it is obligated to remove the derogatory report from your
record, investigate it, and only change it back upon receipt of confirmation
from the reporting lender. This is a strong move. Let's look at why.
The credit-reporting agency is sending an inquiry to a lender for
an item where an error may exist. You will find, at times, that some
lenders will: (a) not even respond to such inquiries; (b) not want
to bother investigating such a minor item and simply AGREE; or (c)
have been acquired by, or merged with, another company and not have
immediately available records. In any event, you have nothing to lose
by challenging such a report!
- If you've challenged a derogatory report, and the lender responded,
confirming the validity of such report, all is not lost. You can further
contact the actual lender directly, and challenge the report. After
exhausting all other means, the credit reporting agency permits you
to request a "comment," which will be included in your credit
profile. Your comment can be something challenging the report, indicating
a potential error on the part of the reporting lender. Remember the
most common statement "The check is in the mail?" Are you
telling a lie? In reality, yes! According to the letter of the law,
no! According to your records, you "believe" you submitted
the payment in a timely manner, and the receiving party "may
have" misplaced the payment, leading to a delay in his posting
it. Why should you be penalized? By taking this route, you are not
doing anything illegal. You are specifically using the system and
its rules to protect yourself. If, in the event, subsequent to this
writing, laws have changed, then it is advised to reconsider such
approach. Until then,
- Contact all three credit reporting agencies, and ensure you are
listed on their "opt-out" lists. The opt-out provision is
your right to request that the agencies do not sell your credit information
to companies for the purpose of marketing. There is a little deceptive
trick here though. Read how I wrote this. I indicated "your credit
information." This provision does not pertain to your basic information
(name, address, phone number, date-of-birth, and social security number).
Unfortunately, at the time of this writing, there is no protection
against these credit-reporting agencies' selling such basic information.
The opt-out provision does not prevent them from selling your basic
information. Keeping this in mind, let's consider the fact that you
have no intention of requesting credit anytime in the near future
and you are comfortable with all the credit information listed on
your report. If you find an error in your basic information (incorrect
spelling of your name, old address, etc.), do you care? Are you under
any legal obligation to inform the credit agencies of a correction?
My attitude is to let them do their own poking around.
Credit Reporting Agencies Contact Information
Post Office Box 2000
Chester, PA 19022
475 Anton Blvd.
Costa Mesa, CA 92626
Equifax Credit Information Services, Inc
P.O. Box 740241
Atlanta, GA 30374
To Opt-Out of Mailing Lists for all three credit reporting agencies:
1- 888- 5OPTOUT (1- 888- 567- 8688)