Credit Freeze - Ontario Introduces Legislation to Improve .... Credit Reporting Fairness

If passed, this will be a welcome change for us Ontarians to have the capability to freeze our credit file, just like you can in the US.

A great step forward with regard to credit reporting agencies. You feel hostage when trying to correct any errors in your report and I don't feel that the credit reporting agencies do enough to verify the validity of requests. (Although I do know of a Mortgage Agent that has his credit report requests verified quite frequently by Equifax).

For those who wish to read the bill that has been introduced in the Ontario Legislature; it's posted at:

http://www.ontla.on.ca/bills/bills-file ... b199_e.pdf

Info about the Freeze....

Security freeze

12.4 (1) A consumer may, in accordance with this section and any prescribed requirements, require a prescribed consumer
reporting agency to place a security freeze on his or her file.
Identification

(2) A consumer who requires a security freeze under subsection (1) shall provide the consumer reporting agency with a copy
of any prescribed identification and a copy of any other identification the agency may reasonably require to verify the
consumer’s identity.

Placing of security freeze
(3) If the consumer has complied with the prescribed requirements and subsection (2), the consumer reporting agency shall
place a security freeze on the consumer’s file on or before the prescribed deadline.

Effect of security freeze
(4) During the period that a security freeze on a consumer’s file is in effect, the consumer reporting agency shall not disclose
any credit or personal information about the consumer maintained by the agency, including any consumer scores, to any
person.

Termination
(5) If the consumer, in accordance with any prescribed requirements, directs the consumer reporting agency to terminate the
freeze, the agency shall terminate the security freeze on or before the prescribed deadline.

Expiry
(6) A security freeze expires at the end of the prescribed period, if any

The credit freeze is the only thing new in this bill.
You can already access your score and report free from numerous third parties, and get your free disclosure as many times a year as you want.
All a consumer needs is yet another place to obtain a (probably) different score, to confuse the uneducated even more than they already are.

coolintheshade wrote: ↑ The credit freeze is the only thing new in this bill.
You can already access your score and report free from numerous third parties, and get your free disclosure as many times a year as you want.
All a consumer needs is yet another place to obtain a (probably) different score, to confuse the uneducated even more than they already are.

I think for some (especially those who have trouble with credit) - using CK or Borrowell may not be the optimum option since they are constantly pushed with borrowing ads.

For these folks (and for those who don't want to share their information with a third-party) - getting the info for free right from the credit bureau is a new option.

Also (the way I read the draft; and it may change when/if it's approved) there is a net new option to the consumer to obtain their disclosure electronically for free directly from the Credit Reporting Agency.

The wording around the score is unclear - it says in one place that the agencies are supposed to use the score they most commonly use and in another place that they need to provide details of any scores released in the last 12 months. I think a lot of this will be worked out in the regulations.

Overall though, as a citizen of Ontario - I think this is a good direction.

How many people ever bothered to send a fax to Transunion or Equifax annually to get a copy of their credit report? I've been doing it routinely for the last 7 or 8 years (not necessary now with CK, Borrowell, RBC, etc), but I am the only person that I know of in my social circle who bothered to do so. In fact, I would guess that 90%+ of my family, friends and colleagues do not have a clue what their current credit score is.

Since virtually nobody bothers to access their credit report once per year, legislation to give people the right to obtain two annual credit reports is little more than a solution in search of a problem.

hopetindall wrote: ↑ For those who wish to read the bill that has been introduced in the Ontario Legislature; it's posted at:

http://www.ontla.on.ca/bills/bills-file ... b199_e.pdf

Good link, thanks!
Being this is RFD, there are sections on fees. There appears to be limited freebies without giving your info to 3rd parties!

Fees
(12)
A consumer reporting agency shall not charge a fee for making a disclosure under this section unless the agency is permitted to do so by the regulations.
Same, exception for electronic disclosure
(13)
Despite subsection (12), if the consumer requests the electronic disclosure of a consumer report or a consumer score and consumer report and the consumer reporting agency has already made an electronic disclosure to the consumer two or more times during the calendar year in which the request is made, the agency may charge a fee for the disclosure, subject to any prescribed limitations.
Same, exception for disclosure under cl.(1) (b)
(14)
Despite subsection (12), if the consumer requests the disclosure, by any method, of a consumer score and consumer report under clause (1) (b) and the consumer reporting agency has already made a disclosure by any method under subsection (3) to the consumer two or more times during the calendar year in which the request is made, the agency may charge a fee for the disclosure, subject to any prescribed limitations.

ROYinTO wrote: ↑ Good link, thanks!
Being this is RFD, there are sections on fees. There appears to be limited freebies without giving your info to 3rd parties!

If you have any concerns or want to make submissions - write to your MPP or look for this legislation to go to committee at 2nd reading. Any one of us can arrange to go and address concerns or give recommendations to the committee.

kneevase wrote: ↑ How many people ever bothered to send a fax to Transunion or Equifax annually to get a copy of their credit report? I've been doing it routinely for the last 7 or 8 years (not necessary now with CK, Borrowell, RBC, etc), but I am the only person that I know of in my social circle who bothered to do so. In fact, I would guess that 90%+ of my family, friends and colleagues do not have a clue what their current credit score is.

Since virtually nobody bothers to access their credit report once per year, legislation to give people the right to obtain two annual credit reports is little more than a solution in search of a problem.

lol.

I request mine via the IVR (both EQ and the low-quality 8-bit "our digital assistant Terry" from TU) once a month and have it mailed.

The hardcopy TU report gives more info that is available from CK or even from TU's own for-sale product.

hopetindall wrote: ↑
The wording around the score is unclear - it says in one place that the agencies are supposed to use the score they most commonly use and in another place that they need to provide details of any scores released in the last 12 months. I think a lot of this will be worked out in the regulations.

The first item about scores is regarding WHAT score calculation is used, the 2nd item is regarding to WHOM the score has been released.

In some ways this makes things worse. Credit bureaus can now charge fees if you get your credit report more than twice per year.

Under current rules you can get your credit report as many times as you like, FOR FREE. (credit bureaus can charge for online access, and for credit scores)

Fees
(12) A consumer reporting agency shall not charge a fee for making a disclosure under this section unless the agency is
permitted to do so by the regulations.
Same, exception for electronic disclosure
(13) Despite subsection (12), if the consumer requests the electronic disclosure of a consumer report or a consumer score and
consumer report and the consumer reporting agency has already made an electronic disclosure to the consumer two or more
times during the calendar year in which the request is made, the agency may charge a fee for the disclosure, subject to any
prescribed limitations.
Same, exception for disclosure under cl. (1) (b)
(14) Despite subsection (12), if the consumer requests the disclosure, by any method, of a consumer score and consumer
report under clause (1) (b) and the consumer reporting agency has already made a disclosure by any method under subsection
(3) to the consumer two or more times during the calendar year in which the request is made, the agency may charge a fee for
the disclosure, subject to any prescribed limitations.

What I would like to see is liability for errors. At the moment credit bureaus don't care about their mistakes, because it isn't their problem and doesn't cost them any money. It's up to the consumer to fix errors by the credit bureaus.

I'd like a statutory minimum $50 penalty for any errors that aren't corrected within a reasonable time period.

Caution: any credit freeze may peg the consumer as a credit risk and may be subject to future denials of credit. This is already occurring in the US

mikeymike1 wrote: ↑ Caution: any credit freeze may peg the consumer as a credit risk and may be subject to future denials of credit. This is already occurring in the US

Hi @mikeymike1

I'm curious, on what rational basis?

I guess we have an opportunity to make a submission to the committee as this proposal progresses, it would seem that could be something outlawed in the regulations (to base adjudication/underwriting on whether someone has or previously used a freeze).

While I appreciate creditors use all sorts of tricks (as you likely know) including mechanisms to identify ghosts and flag aged/removed derogatory info by keeping a non-derog account reference on TU - there is at least a plausible (if not sanctioned) reason why.

If a creditor rejects in underwriting a client that used a freeze but was otherwise the victim of identity theft/privacy breach - this just seems to be making your potential customer base smaller (and much smaller as the number of such victims increase).

?

hopetindall wrote: ↑ Hi @mikeymike1

I'm curious, on what rational basis?

I guess we have an opportunity to make a submission to the committee as this proposal progresses, it would seem that could be something outlawed in the regulations (to base adjudication/underwriting on whether someone has or previously used a freeze).

While I appreciate creditors use all sorts of tricks (as you likely know) including mechanisms to identify ghosts and flag aged/removed derogatory info by keeping a non-derog account reference on TU - there is at least a plausible (if not sanctioned) reason why.

If a creditor rejects in underwriting a client that used a freeze but was otherwise the victim of identity theft/privacy breach - this just seems to be making your potential customer base smaller (and much smaller as the number of such victims increase).

?

It's a security risk flag plain and simple.

Any privacy/data breaches ie: Home Depot, EQ breach in the US, the recent Bell breach or Uber breach rarely justify a total freeze on any one's credit file. Real hard data entry to one's file would be the only reason for a complete freeze.
Ident theft and ident fraud are two very different things.
And if I remember right the total number of Canadian victims to real ident theft is less than 20,000 per year. a drop in the bucket when compared to the US.
Moreover, Equifax already has a number of identity theft alerts and solutions for consumers that act like watchdogs over ones file activity.
With a freeze you're already telling me that you are a risk

mikeymike1 wrote: ↑ It's a security risk flag plain and simple.

Any privacy/data breaches ie: Home Depot, EQ breach in the US, the recent Bell breach or Uber breach rarely justify a total freeze on any one's credit file. Real hard data entry to one's file would be the only reason for a complete freeze.
Ident theft and ident fraud are two very different things.
And if I remember right the total number of Canadian victims to real ident theft is less than 20,000 per year. a drop in the bucket when compared to the US.
Moreover, Equifax already has a number of identity theft alerts and solutions for consumers that act like watchdogs over ones file activity.
With a freeze you're already telling me that you are a risk

Thanks @mikeymike1

You may be right, folks likely over register alerts today (I speak to many who do on regular basis in my job) and will/may over register freezes if introduced. I agree with your observation. (People don't always have an objective and accurate assessment of risk).

But - getting back to my question - why would this influence an underwriting decision? Are you suggesting that someone who would request a security freeze (reasonable and proportional or not) is a bad credit risk?

thanks,

PHT

I like the idea of a credit freeze. But what are the chances of this becoming law given that Ontario goes to election in a few months?

hopetindall wrote: ↑ Thanks @mikeymike1

You may be right, folks likely over register alerts today (I speak to many who do on regular basis in my job) and will/may over register freezes if introduced. I agree with your observation. (People don't always have an objective and accurate assessment of risk).

But - getting back to my question - why would this influence an underwriting decision? Are you suggesting that someone who would request a security freeze (reasonable and proportional or not) is a bad credit risk?

thanks,

PHT

In the US, people abuse this "security feature" like there's no tomorrow.
There are three major credit bureaus in the US, and I've read on US forums, that if one bureau has negative information in it that the other two didn't have, that consumer would "freeze" that report so a potential lender couldn't access it, and see that negative information.
Or if one bureau was more favorable than the other (less inquiries, lower utilization due to some lenders not reporting an account on that particular bureau), you could freeze the other two bureaus, to force the lender to pull that more favorable bureau.
Having said all this, I would say yes, it does make one more of a potential risk, because they're trying to get credit that they otherwise may not be approved for.
The only way the freeze would make any sense, is if the two bureaus can find a way to work together, in that if one bureau is frozen, the other is frozen too, with no choice to the consumer.
Besides, if you are requesting a freeze for a legitimate reason (to protect yourself), why wouldn't you want both frozen?

bump any updates?

coolintheshade wrote: ↑ In the US, people abuse this "security feature" like there's no tomorrow.
There are three major credit bureaus in the US, and I've read on US forums, that if one bureau has negative information in it that the other two didn't have, that consumer would "freeze" that report so a potential lender couldn't access it, and see that negative information.
Or if one bureau was more favorable than the other (less inquiries, lower utilization due to some lenders not reporting an account on that particular bureau), you could freeze the other two bureaus, to force the lender to pull that more favorable bureau.
Having said all this, I would say yes, it does make one more of a potential risk, because they're trying to get credit that they otherwise may not be approved for.
The only way the freeze would make any sense, is if the two bureaus can find a way to work together, in that if one bureau is frozen, the other is frozen too, with no choice to the consumer.
Besides, if you are requesting a freeze for a legitimate reason (to protect yourself), why wouldn't you want both frozen?

Interesting.

However, the lender has the power just to deny the loan if they can't access a particular credit bureau, and I think it's a no brainer for the lender to walk away if any particular bureau is 'frozen.'