I dont care about the models. They still dont address what I consider to be the question about the violation of my rights as a consumer. A number of factors are used to blackball/redline groups of people for all sorts of reasons all the time. So you can justify just about any misuse of power to discriminate. I dont believe that it should be legal to penalize me for applying for insurance. It would be different if pulling an inquiry result in a offer of credit, loan, etc. It does not. In addition, I might agree with the insurance industry if the positive payment history with insurance agencies was reported to the CRAs. It does not. I might even be ok with this if they pulled a soft inquiry and not a hard one. But because they pull hard inquiries, I loose points and look more like a credit risk for following the law. What type of mess is that? I would love to sign on as a member in a class action law suit on this matter. Any body interested/with the means to get this started? I think we would have better luck filing a suit against the cras for listing these pulls as hard pulls. Question: Has anyone had their report pulled for a job offer. Does this result in a hard or soft pull?
I fully agree with you goaldriven! I do not know how to start the class action, but count me in whether it is against the insurance companies or the cras or both.
Touchdown, 1. I agree with your statement about the fraction of the cost. Obviously the claims cost them most. However, I was referring the lost revenue by so many customers leaving, defecting, defaulting, short cutting their policies for any reason. This means they could not collect the revenue they could, not only for the duration of the rest of the policy, but they most likey lost the customer for policy renewal. Again, I do not know much about the industry, but I would assume that the insurance customers (with no cliams) eventually end up paying for the cliams from other customers. So insurance companies need more policies and more renewals. This would still be less than a liability claim for one policy in question, but when you compare the volume of policies the equation could be different. Just a thought. 2. Thank you for mentioning about your co-worker. I would wait for his thoughts as it will bring a new dimension to this whole discussion.
Now we can add getting insurance to the list. Just a couple of things that DOES happen when you have bad credit, regardless of the reason (like serious illness or job loss, for example): 1. You CAN and WILL be much more unemployeable as your credit history can eliminate you from consideration for many jobs, especially the better ones. 2. You CAN have problems renting a house or apartment, especially the decent ones. 3. Your insurance company can raise your rates or possibly even deny coverage for your automobile or home (if you own one). 4. You can be forced to defend yourself against legal action even if you have no money for a lawyer, or if you do not fall into legal aid's strict financial guidelines for assistance. If this occurs, legal aid will refer you to a "reduced rate" lawyer referral service, who will most likely turn you down saying they do not handle credit cases. Bottom line, you can find yourself defenseless against a multimillion dollar creditor who'll double your delinquent balance with interest and late charges in less than a year if it can. There are many factors affected by credit that are not listed, as just about anyone who chooses to can pull your report these days. If the financial industry had it their way, a person with damaged credit would be an UNEMPLOYED, HOMELESS, UNINSURABLE & LEGALLY DEFENSELESS individual. I'm sure they have a MODEL for this kind of situation too, which probably includes sending all have-nots with bad credit to Siberia to live in igloos. Insurance companies have no business pulling credit reports, regardless of anyone's model or any other justification they invent. Any "model" invented by a for-profit company has just one goal: to make more money at the expense of some of the customers. There are "models" for just about everything, with a vast majority of those "models" being totally worthless except to the individual or company using it to justify what they are doing. I don't need a model to tell me that pulling credit files for insurance is WRONG, just as using credit reports to judge people's character is also WRONG. I'll be that the executives of ENRON and WORLDCOM had excellent credit ratings...................need I go on? I guess it's okay to lose as long as you lose millions or billions. It's the poor folks who fall on hard times who receive no mercy.
I would also be interested in hearing the responses to our questions from someone on the "inside" of credit / risk scoring issue. One of the things that has hurt the insurance industry on this issue is the refusal to document their case. I'll even give a concrete example. My mother was given a high rate when she looked for insurance for her new car last year. This was very surprising considering she had driven for 40 years with no accidents and no claims. As far as I know, she never even had a speeding ticket. It turns out, however, that she did have an incorrect CA account on her credit report which was checked by the insurance company. After I disputed this tradeline, it was removed. Her score went from around 590 to over 700. I'd love to hear how that erroneous tradeline was more significant than 40 years of driving history in assessing risk of either future claims or defaults. Greg
Uh oh. I am due to renew in a few days. The rep told me that they will not pull another credit report, just a CLUE report and MVR. I sure hope she's right...
------------------=============------- They will no doubt raise your rate because oft this drop in score
The best way is don't buy their insurance. When they realize they are pulling reports for no sales they will stop doing it! Originally posted byTouchdown [/i]
1*You can't believe every thing agents tell you-you know it's sorta kike with the CAs! 2*If this is so you should have had a claim, so where is the correlation ? ? ? !!
I just dealt with USAA pulling a hard without informing me. They told me they would write me a letter so that I could get it taken off because I might be buying a house soon. Then they did a 180 and wrote me a letter that said they had both permissible purpose AND my authorization. From my understanding of the FTC opinion papers it is legal for an insurance company to pull for the extension of credit(don't need authorization) even though its bad policy. HOWEVER USAA in their letter stated that they pull to try to decide if they are going to require a downpayment which IS NOT an insurance decision, its a credit decision and so they don't have permissible purpose. I'm planning on taking them to small claims court for my $1000 check.
======================== 1*What they were looking for was a better way of milking us period. They found the perfect milking machine in the FICO and credit reports. 2*This may or may not lead you to the facts!
Getting information direct from the source, Remember this is still info.put forth by a rep of the insurance industry. lb59
Congratulations observer | You have just explained why FICO is a shell game and nothing more or nothing less. With Fico it's most of the customers not some of them.
You can't document what can't be proven Was the rate lowered once the error was corrected? Look if low scores are the cause of claims then all you have to do is assign everyone a high score and claims will go away. Can any one answer this question If everyones score remains the same during the next year will claims increase decrease or stay the same? lb
The insurance insustry has done a terrific snow job on the general public. How were & are they able to do it? Easy : By sending brainwashed missinformed agents loaded with dissinformation out into the masses.
This thread just hit home for me. Just saw that Nationwide pulled a hard inquiry on me for the first time everon Experian. Have had auto and home with them for ten years and they never did it. Read this thread casually and then last week an article in the local paper came out about insurance inquiries and credit ratings, etc. Then I see they pull a hard yesterday. Btw, I have not had hardly any claims with them in my history. I haven't made a claim for it or if it is just coincidence and don't know if it has to do with all the mold related claims here in Tx recently.
I promised a couple of weeks ago that I would have a conversation with a co-worker of mine who was one of the pioneers in insurance field for the credit based scoring model. Here's a recap of our "off the record conversation" First and foremost, he is oppossed to the use of Credit in determining auto insurance premiums. He developed a credit based scoring model for a very large insurance company in the homeowners line during the late 80's and 90's. He said they ran numerous studies that showed there was a direct correlation between high credit scores and low claim activity on the homeowners side. He also stated that they NEVER used a scoring model that only looked at the score and then assigned a rate. They would actually look at the report of each risk and evaluate it that way. I.E. A $60,000 collection was a lot more serious than a $350 medical collection. He was also amazed at what is happening right now with this being such a hot topic. He indicated that 10-15 years ago Fair Issacs was trying to sell this scoring model to numerous insurance companies and many of them wouldn't use it. Now tons of companies are using it and now Fair Issacs is selling it's services to consumers on how they can improve their scores. Very vissionery thinking on the part of Fair Issacs. First develop a model that can harm consumers, then develop a service that allows consumers to pass their models. He also stated that he felt the insurance industry is shooting themselvs in the foot. That credit scores can be a very valuable underwriting tool, when used with restraint and when taking the whole insurance risk into context. But when you focus on JUST credit the industry will fail. Consumers will complain to politicians, politicians will pass laws to disallow it and then the industry has lost a powerful underwriting tool. He felt the industry needs to do much more in educating consumers, publishing data on how they use the scores to come up with their rates. They need to take the high ground. Just a recap of a very interesting discussion
