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News of the Target stores security breach has caused many people to ask what they can do to protect themselves from misuse of their stolen identification information. When a criminal steals your account number and security code, they often are planning to use that account to make purchases. Your credit report is not consulted for purchase transactions. So, in such cases, you should consider contacting your card issuer and request a new account number. At minimum, you should check your account online to see if there has been any activity which you do not recognize. The system of fraud alerts that has been in place for decades in the credit reporting systems was designed specifically to help people who are identity theft victims, or have reason to believe they may be, to stop credit fraud resulting from that identity theft. In the Target incident and similar data breaches, neither a temporary security alert nor a fraud victim statement on your credit report will stop the thief from using your credit card account. But the alerts may help protect affected consumers from new credit fraud if the identity thief attempts to open new credit accounts using their stolen information. These services are available at no charge to anyone who is a victim of identity theft, or who has reason to believe they may be a victim: Temporary Security Alert (90 days) You can add a temporary, initial security alert to your credit report. You can do so at experian.com/fraud. The alert is free and lasts for 90 days. That gives you time to get a copy of your credit report, which is also free, and ensure there is no credit fraud appearing on your report. The alert is sent every time a lender or other business requests a copy of your credit report. The alert says: Fraudulent applications may be submitted in my name or my identity may have been used without my consent to fraudulently obtain goods or services. Do not extend credit without first verifying the identity of the applicant. I can be reached at XXX-XXX-XXXXEXTXXXXX. This Security Alert will be maintained for 90 days beginning MM-DD-YY. Initial security alerts are intended for people who know or have reason to believe they are at increased risk of credit fraud. For example, they may have lost their wallet or purse, or they may have received a notice that their identifying information was compromised as the result of a computer data breach. For those individuals a temporary security alert may be all that is needed. If they find their wallet or purse, or the data is recovered and has not been accessed, they have no need to continue the alert because the threat no longer exists. Extended Fraud Alert Also known as a victim statement, the extended alert statement says: Fraudulent applications may be submitted in my name or my identity may have been used without my consent to fraudulently obtain goods or services. Do not extend credit without first contacting me personally and verifying all application information at DAY XXX-XXX-XXXXEXTXXXXX or EVENING XXX-XXX-XXXXEXTXXXXX . This victim alert will be maintained for seven years beginning MM-DD-YY. In order to add a victim statement you must first file a police report or valid identity theft report. A victim statement lasts seven years, and like an initial security alert, is provided to every business that requests your credit report. Experian and the other national credit reporting companies share initial security alerts and fraud victim statements when they are requested by a consumer. When one of the credit reporting companies is contacted, it will automatically notify the others to add the alert, as well. The credit reporting companies implemented the one-call process a number of years ago. They recognized the importance of making it as easy as possible for people at high risk of identity theft or who already were victimized to add the alerts so that they could begin the recovery process.
As Senior Vice President of Government Affairs and Public Policy at Experian, I had the opportunity to testify today before the Senate Committee on Commerce, Science and Transportation. As always, we continue to welcome the Committee’s interest in the marketing data industry. In the spirit of cooperation, our goal is to help the Committee understand the role our data services play in the economy and in the lives of consumers. Specifically, here are some key points we have shared to help inform the Committee’s work and interest in better understanding the marketplace: Experian believes responsible information sharing enhances economic productivity in the United States and provides many benefits to consumers. Economists have stated the manner in which US companies collect and share consumer information among affiliated entities and third parties is the key ingredient to our nation’s productivity, innovation and ability to compete in the global marketplace. As we discuss this topic, it is vitally important for everyone to understand that there is a clear difference between data that is used to assess eligibility for credit and data that is used to deliver relevant advertising to consumers. These differences are already well recognized under existing law. The data used for marketing purposes is maintained in entirely separate databases that are regulated under various sector-specific privacy laws. Experian marketing data is not used to determine eligibility relating to credit, insurance, employment, housing or other decisions covered by the Fair Credit Reporting Act. Experian has strict policies, as well as technological and procedural controls that ensure this complete separation. Experian has been forthcoming and cooperative throughout this inquiry launched by the Committee over a year ago. We have spent considerable time and resources to ensure that the information and documents we have provided are helpful to the Committee’s work in understanding the marketplace. To date, Experian has provided the Committee with eight submissions totaling over three thousand pages, which we believe provide a full description of our products, services and consumer protections. We have also met with the offices of the Senators on the Committee to describe our practices and respond to any questions about our company, products and services. We have consistently been assured that this inquiry aims to build a general understanding within the Committee of the marketing data ecosystem, and we view this as another good opportunity to educate policy-makers about the benefits of the appropriate use of consumer data. Read the full testimony here.
With less than a month left in the year, what does your to-do list look like? Finish holiday shopping? Jotting down your resolutions for the new year? Or perhaps you plan on heading down to the car dealership to take advantage of the great end of year sale offers. If it’s the latter of the three, you might just be in luck, because it’s a very good time to purchase a new vehicle. According to Experian Automotive’s Q3 State of Automotive Finance Market report, the average interest rate for a new vehicle loan hit 4.27 percent, down from 4.53 percent a year ago. This marks the lowest rate we have seen, since Experian began publicly reporting the data in 2008. The good news doesn’t stop there. Lower interest rates have also given car shoppers the ability to keep payments down when taking out a larger loan. Just as interest rates for new vehicles have hit the lowest point since 2008, the average amount financed has reached its highest point. In Q3, consumers purchasing a new vehicle took out an average loan of $26,719, approximately $750 more than the previous year. Another way we have seen consumers keeping those monthly payments low is by taking out slightly longer loans. The average loan term for a new vehicle was 65 months in Q3, up one month from Q3 2012. This coupled with low interest rates have kept the average monthly payment for a new vehicle relatively flat, only up $6 from last year. Other findings from the report include: • Leasing accounted for 27.22 percent of all new vehicle financing in Q3, up 24.40 percent last year • The average monthly lease payment was $404 in Q3, down from $409 in Q3 2012 • The average credit score for a new vehicle loan dropped to 753 in Q3 2013 from 755 in Q3 2012 • The average credit score for a used vehicle remained flat year-over-year at 668 • Average monthly payments for used vehicles remained flat at $350 For more information on this report, or to attend a webinar discussing additional findings, please visit www.experian.com/automotive.
Today, we stand at the forefront of a digital revolution that is reshaping the financial services industry. And, against this backdrop, financial institutions are at vastly different levels of maturity; the world’s biggest banks are managing large-scale infrastructure migrations and making significant investments in AI while regional banks and credit unions are putting plans in place for modernization strategies, and fintechs are purpose-built and cloud native. To explore this more, I recently had the privilege of attending the annual Reuters NEXT live event in New York City. The event gathers globally recognized leaders across business, finance, technology, and government to tackle some of today’s most pressing issues. On the World Stage, I joined Del Irani, a talented anchor and broadcast journalist, to discuss the future of lending and the pivotal role of data and AI in building a more inclusive financial system. Improving financial access Our discussion highlighted the lack of access to traditional financial systems, and the impact it has on nearly 100 million people in North America alone. Globally, the problem affects over one billion people. These people, who are credit invisible, unscoreable, or have subprime credit scores, are unable to secure everyday financial products that many of us take for granted. What many don’t realize is, this is not a fringe subset of the population. Most of us, myself included, know someone who has faced the challenges of financial exclusion. Everyday Americans, including young people who are just starting out, new immigrants and people from diverse communities, often lack access to mainstream financial products. We discussed how traditional lending has a limited view of a consumer. Like looking through a keyhole, the lender’s understanding of the person in view is often incomplete and obstructed. However, with expanded data, technology, and advanced analytics, there is an opportunity to better understand the whole person, and as a result have a more inclusive financial system. At Experian, we have a unique ability to connect the power of traditional credit with alternative data, bringing a more holistic understanding of consumers and their behaviors. We are dedicated to leveraging our rich history in data and our expertise in technology to create the future of credit and ultimately bring financial power to everyone. The future of lending After spending two days with over 700 industry leaders from around the world, one thing is abundantly clear: much like the early days of the internet, today, we are at the cutting-edge of a technical revolution. Reflecting on my time at Reuters NEXT, I am particularly excited by the collective commitment to drive innovative, and smarter ways of working. We are only beginning to scratch the surface of how data and technology can transform financial services, and Experian is positioned to play a significant role. As we look to the future, I am excited about the ways we will create new opportunities for businesses and consumers alike.
We believe that financial literacy leads to empowerment. That is why Experian supports initiatives and partners with community organizations to deliver financial education. We also develop products and services that give more control to consumers over their credit profile and financial health. As part of advancing our mission of Financial Power to All®, we are proud to announce we are helping more than 5,000 Hispanic individuals nationwide by relieving $10 million dollars of consumer debt. To provide families with this boost, we joined forces with ForgiveCo, a Public Benefit Corporation (PBC), to administer the acquisition and cancellation of qualifying consumer debt for the selected recipients. Beneficiaries will also receive a one-year premium Experian membership for free that offers access to their Experian credit report in English and Spanish[i], FICO® Score[ii], bilingual educational content, and other financial resources. We hope this effort helps raise awareness of the importance of financial literacy for everyone, and that Experian has resources to help individuals reach their financial dreams. To amplify the message, we collaborated with multi-platinum, award-winning singer and songwriter Prince Royce and you can see his video here. In fact, we have been making a concerted effort the last several years to evolve our educational resources and products to better support all underserved communities. Some of our other activities include the creation of the B.A.L.L. for Life initiative that connects African American and Hispanic youth with financial education, supporting scholarships for Asian Americans through the Ascend organization, providing custom resources for Out & Equal and Born This Way Foundation for the LGBTQ+ community, supporting the NextGen Innovation Lab for Disability:IN, and sponsoring credit counseling for the military community with Operation HOPE. For resources in Spanish, Experian offers a credit e-book and consumers can access a full suite of articles at the Ask Experian blog here. [i] Only Experian credit reports are available in Spanish. All other services associated with an Experian membership are available in English only. English fluency is required for full access to Experian’s products. [ii] Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.
Amid some of the financial challenges that underserved communities experience, members across the financial services community remain committed to championing initiatives and programs that drive greater financial inclusion. In fact, collaboration has led to the inclusion of non-debt related payment information on consumers’ credit profiles, as well as digital services that make it easier to manage money. These efforts have helped to broaden access to fair and affordable financial resources for more individuals. While significant progress has been made, there is still more work to do. However, some of the misconceptions and myths about the financial services community are hindering further advancement. Debunking these myths will accelerate progress by building trust between the financial services community and consumers. Person withdrawing money from ATM contactless Myth #1: “Financial institutions have no interest in underserved consumers or credit invisibles.” The truth is, banks and credit unions want to say “yes” to more prospective borrowers, including individuals and families from underserved communities. Beyond being the right thing to do, it’s an opportunity to potentially build lifelong relationships with a relatively untapped market. A show of good faith to communities who have largely been ignored by the financial system could lead to customer loyalty that may extend to their family and friends. That’s why participants across the financial ecosystem have been proponents of including expanded data sources—such as on-time telecom, utility and video streaming service payments—on to consumer credit reports, as well as exploring other Fair Credit Reporting Act (FCRA)-regulated data sources, including payment data on short-term small dollar loans and expanded public records data. Making this data more accessible to lenders provides a more comprehensive view of a consumer’s ability and willingness to repay outstanding debt—an actionable solution to extending credit to consumers without lenders taking on additional risk. Myth #2: “There is a lack of trustworthy financial education resources.” The financial services community and affiliated organizations recognize that empowering people with financial knowledge and skillset are critical to consumers’ financial success. In fact, banks and credit unions are partnering with nonprofits and non-governmental organizations to better understand the unique challenges and opportunities within specific communities and provide relevant tools and resources. For example, Experian’s B.A.L.L. for Life (Be A Legacy Leader) program, launched in partnership with the National Urban League, serves as a catalyst for engaging with Black communities and low-income youth through live events and digital financial education. Subject matter experts, professional athletes, celebrities, and other influencers share their experiences and expertise, covering topics such as banking, credit, financial management and investing. In addition, to help people improve their financial management, Experian partners with the National Foundation for Credit Counseling (NFCC). The NFCC connects consumers with certified financial counselors to help them address various pain points, including debt management, homeownership, student loans or small business cash flow issues. Myth #3: “Underserved communities have few opportunities to build credit and enter the mainstream financial system.” People from underserved communities, as well as younger consumers and recent immigrants are often excluded from the mainstream financial system because they lack an extensive credit history. Historically, it’s created a vicious cycle; in order to get credit, you have to have credit. Fortunately, there has been a sea change in innovative solutions to address the specific needs of these populations. These include new credit scoring models and microfinancing which provide financial services to individuals who may have been excluded from traditional banking systems. In addition, by incorporating expanded data sources, such as telecom, utility and residential rental payments onto credit reports, lenders have more visibility into consumers who may have been excluded by traditional credit scoring methods.These programs help individuals and families from underserved communities establish and build a credit history that could enable loans, or the ability to rent an apartment or open their dream business. An example is Experian Boost®, a free feature that allows Experian members to contribute their history of making utility, cellphone, insurance, residential rent and video streaming service payments directly into their Experian credit profile. By incorporating nontraditional credit data like paying utility bills on time, online banking transactions, rental payments and verified income data, more people can establish a credit profile that can potentially qualify them for a loan. More Inclusion, Fewer Myths It’s encouraging that community organizations and banks are beginning to see the economic and social benefits of aligning on financial literacy and inclusion. As more initiatives come online, underserved populations will be able to establish a better financial foundation. Then, we can declare the myths to be history.