In psychology, “triggering” occurs when something causes a negative emotion or an undesirable mental reaction. It is no surprise that such an antagonistic word is being used in the “credit industry” to prey on people who are shopping for potential mortgage or auto financing. For a fee as low as $15, your name and certain specifics about your personal information credit report – including your address, phone number, mortgage history, and even your FICO score range – are sold as “Trigger Leads” by the credit bureaus to list brokers for resale.
While it’s an illegal breach of privacy for real estate agents or mortgage companies to share or sell your credit information, it is perfectly legal for credit companies to do so. In fact, it has been a booming business for years! For individuals who have recently applied for some type of credit, your information is aggressively sold resulting is an onslaught of unsolicited phone calls and junk mail as soon as you apply for a loan. If you ever noticed a spike in “spam” calls or mail solicitation, this is precisely why.
“The credit bureaus compile trigger lists daily and sell them to numerous buyers across the US, including so-called ‘lead generators,’ who then resell the list to even more companies,” said John G. Stevens, president of the National Association of Mortgage Brokers. This “business” not only exposes borrowers to identity theft – with the increased risk of compromising a consumer’s personal financial information, but it also exposes applicants to potentially unfair and deceptive solicitation by unscrupulous creditors looking to target an applicant seeking financing at an extremely vulnerable time.
While the NAMB is working hard to change policy, unfortunately, no legislation currently exists to prevent credit bureaus from profiting at your expense. As a “trigger lead,” you are simply at the mercy of any number of marketing campaigns designed specifically to discredit the mortgage professional you’ve begun to work with, and that you may have come to know and trust. “Unfortunately, some people use all kinds of unethical tactics to target borrowers who have initiated the process of obtaining a mortgage,” said Stevens. “This activity should be classified as an unfair and deceptive trade practice and banned … The only way to protect the consumer is to close this loophole immediately, and that’s what NAMB is seeking to accomplish.”
Before applying for any type of loan or financing, I suggest that you visit www.optoutprescreen.com to opt-out of future credit bureau solicitations and avoid this problem altogether. This website is the official Consumer Credit Reporting Industry portal to register and process requests from consumers to Opt-In or Opt-Out of firm offers of credit or insurance. Not only will you avoid the hassle of telemarketers, but by opting out, you could potentially add a few points to your credit score.
Additionally, if you still receive phone calls from solicitors, ask them to place your name and number on their Do Not Call list. All telemarketing companies have their own internal Do Not Call list that they must abide by. Be sure to take down the name of both the company and the individual who made the call, and to let the solicitor know that you’re doing so. This way, you will have grounds to seek action against them, should they call again.
As you embark on what is likely the most significant financial transaction of your life, you should place yourself in the hands of a professional – not some transactional loan officer who purchased your information from a list broker. It’s important to remember that if a loan officer is, in fact, buying such leads, they are apparently not getting enough referrals in the first place – which might be telling in of itself.
A very Happy Birthday shout-out to Ed Abramovitz, Aliza Clair, and Mandy Richman! Also, a special shout-out to Elana and Tamar Shayowitz for their impressive bravery in Pennsylvania.
By Shmuel Shayowitz
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker, and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as a certified mortgage underwriter, residential review appraiser, a licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]
