(This is the fifth in a series of blogs about the credit and credit reporting industry in the United States.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
What is the Alternative for the Subprime Credit Consumer?
What is the alternative for the subprime credit consumer? Take the more expensive money or opt out of the credit market and whatever it is the consumer seeks: apartment, home, car, business equipment or expense monies.
At this point, the concept of the "self-fulfilling prophecy" comes into play. The credit reporting errors and inaccuracies, never corrected, annotated, or deleted continue to increase the cost of the subprime consumer's credit. The subprime customer must pay higher finance charges or annual percentage rates (APRs) above the "best" credit customer rate to obtain credit.
Obviously, it is more difficult for the subprime customer to make larger and larger payments to pay the full balance on the credit card, mortgage, or other loan. It becomes more likely that the subprime consumer will at some point no longer be able to make payments. But the subprime consumer undoubtedly will continue to be billed with increasing finance charges and listed as an "asset" or "projected income" by a "bad paper" credit reporting based financial services company.
It would be more difficult for the "best" customer to pay the higher subprime interest and finance charges too. These larger finance charges likely would jeopardize the "best" customer's budget, lower the "best" customer's credit rating, and increase the "best" customer's interest and finance charges.
The subprime credit consumer has become the Subprime Investment Vehicle (SIV) of the consumer credit market. The subprime consumer actually finances the bank or lender by paying 5%, 10%, or whatever percentage above the "best" customer (APR). The subprime consumer takes less principal and pays more in interest and finance charges to make more money available to the lender to lend, particularly to the "best" consumer who receives more principal and pays less in interest and finance charges.
Despite the enormous contribution to the lending industry while still able to pay, the subprime customer is blamed for all the financial woes of the economy. This is particularly unfair to the subprime consumer in an economy sustaining itself with credit transactions in much weaker than hoped for financial and industrial sectors, in a significantly de-industrialized and increasingly "minimum-wage" retail and service based economy.
Of course like all financial vehicles, the subprime credit consumer can be grouped, combined, separated, re-grouped, bought, sold and traded. The subprime consumer becomes an item in yet another credit reporting related, credit-default, or other business at great cost to the financial present and future of the subprime credit consumer.
(See http://monthlynotes.blogspot.com/ on www.google.com for other blogs by the monthlynotesstaff.) Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.W
Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts
Monday, July 5, 2010
Sunday, July 4, 2010
4: Can Credit Consumers Survive the Credit Reporting Industry? Blog 4
(This is the fourth in a series of blogs about credit and credit reporting in the United States.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
What is Subprime Credit?
The credit reporting industry has grown enormously since Cator and Gary Woolford first published their "Merchants to Retailers in Atlanta, GA" in 1899. Computerization brought an alarming amplification of computer-linked data collection, collection letters, and files.
In 1901 the Woolford brothers extended their retail reporting business from reporting on local customers to Atlanta, GA retail stores to background check and reporting to insurance agencies. Did the Woolford brothers anticipate that the concept of "high risk" insurance, that is, higher dollar amount premium amounts required for negatively-reported "high risk" insureds would be intercalated into the credit reporting, banking, and lending industries?
Did the Woolford brothers project the collateral growth of numerous credit rating analyses and risk scale businesses? Or the phenomenal growth of what is now known as the "subprime" credit market?
By definition, subprime credit discriminates against a group of credit consumers. It allows lenders to feel justified charging the subprime consumer more for money than the "good" or "excellent" consumer. The reason for the negative credit rating relegating the consumer to the subprime category could be no previous credit, too much previous credit, too much used credit, or the constellation of other factors used to create "fair" or "poor" credit rating categories.
There are numerous credit rating scales for credit categories. "Bad credit" is what could happen with actual consumer credit bloopers. Or it could happen because of excessive and repetitive bill collecting, creating the illusion of unpaid but virtual or pretend accounts from virtual creditors from whom a consumer has never borrowed money or received merchandise or services.
The reason is less convincing to the subprime customer who already has been victimized by a credit reporting circuit which disseminates unannotated and uncorrected consumer-disputed or repetitive entries. The subprime consumer nonetheless must pay more interest and finance charges for credit money. Subprime credit subjects the subprime consumer to more expense and worry in efforts to pay the principal plus exorbitant amounts of finance charges.
From a psychological perspective, this is "blaming the victim" and subjects the credit consumer to more harm. This aggressive behavior is used by the credit reporting, rating, collecting, and lending complex to drive profit while making the subprime consumer feel guilty for his or her role in their own circumstances, and so less likely to complain or try to regulate or otherwise prevent this enormous industry from financially ruining the credit consumer.
(See http://monthlynotes.blogspot.com for the fifth in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
What is Subprime Credit?
The credit reporting industry has grown enormously since Cator and Gary Woolford first published their "Merchants to Retailers in Atlanta, GA" in 1899. Computerization brought an alarming amplification of computer-linked data collection, collection letters, and files.
In 1901 the Woolford brothers extended their retail reporting business from reporting on local customers to Atlanta, GA retail stores to background check and reporting to insurance agencies. Did the Woolford brothers anticipate that the concept of "high risk" insurance, that is, higher dollar amount premium amounts required for negatively-reported "high risk" insureds would be intercalated into the credit reporting, banking, and lending industries?
Did the Woolford brothers project the collateral growth of numerous credit rating analyses and risk scale businesses? Or the phenomenal growth of what is now known as the "subprime" credit market?
By definition, subprime credit discriminates against a group of credit consumers. It allows lenders to feel justified charging the subprime consumer more for money than the "good" or "excellent" consumer. The reason for the negative credit rating relegating the consumer to the subprime category could be no previous credit, too much previous credit, too much used credit, or the constellation of other factors used to create "fair" or "poor" credit rating categories.
There are numerous credit rating scales for credit categories. "Bad credit" is what could happen with actual consumer credit bloopers. Or it could happen because of excessive and repetitive bill collecting, creating the illusion of unpaid but virtual or pretend accounts from virtual creditors from whom a consumer has never borrowed money or received merchandise or services.
The reason is less convincing to the subprime customer who already has been victimized by a credit reporting circuit which disseminates unannotated and uncorrected consumer-disputed or repetitive entries. The subprime consumer nonetheless must pay more interest and finance charges for credit money. Subprime credit subjects the subprime consumer to more expense and worry in efforts to pay the principal plus exorbitant amounts of finance charges.
From a psychological perspective, this is "blaming the victim" and subjects the credit consumer to more harm. This aggressive behavior is used by the credit reporting, rating, collecting, and lending complex to drive profit while making the subprime consumer feel guilty for his or her role in their own circumstances, and so less likely to complain or try to regulate or otherwise prevent this enormous industry from financially ruining the credit consumer.
(See http://monthlynotes.blogspot.com for the fifth in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
Saturday, July 3, 2010
3: Can Credit Consumers Survive the Credit Reporting Industry? Blog 3
(This is the third in a series of blogs on credit and credit reporting in the United States.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
Consumer Stress and the Credit Reporting Industry
There is horrible psychological, visceral, and physical stress in swirling in a maelstrom of negativity with computerized credit reports. Studies of harm to consumer mental and physical health need to be done to document harm done by the credit reporting industry. The advantage the credit reporting companies have is the embarassment the consumer already suffers from being labelled a "debtor". Consumers may believe that calling attention to "financial problems" would further jeopardize their financial situation, for example, in qualifying for mental or physical health care insurance or funding.
The rather official look of computerized bill collection notices is worrisome. Use of the terms "bureau", "national", "federal", "affiliated agencies", and mock court-stamped and other legal style documents is frighteningly Orwellian. "Big Brother" bill collector is following every credit consumer, anonymously, without revealing his or her real identity. Even a mimeographed partially scribbled notice in a governmental "postage-paid" envelope can be intimidating. Accompanied by a letter referencing a purported government agency or a law office with a demand for "$750.00 (or another amount) to settle this matter", a threat of government or court action is almost enough to send the consumer scrambling for his or her checkbook. This is a very intimidating bill collecting strategy. It is worse when followed, for example, by attempted or successful garnishment through internal employer bill collecting associates, complete with imitation government or court papers.
Now more often than in the past, bill collectors send negative entries directly to the computerized clearinghouse companies. Many bill collectors do not even notify the consumer by regular mail. This is a very aggressive bill collecting strategy possibly done to save money on postage and lessen the risk of being held liable for stalking, menacing, or harassing a consumer.
Without notice, consumers can be and often are denied a job, apartment, home, car, or other credit cards, business, or other loans, without a hint of who originated the damaging financial information.
Many consumers must ask "How can this happen?" Why are government or postal inspectors not checking every "US government postage paid" envelope to trace stolen or fabricated meters or meter numbers to at least ensure such companies pay the current postage rate?
There also are intrusive events done by US officials. "The Washington Post" revealed a young Washington, DC police officer was caught using a special police investigation computer to find a PIN (personal identification number) to withdraw money from a bank ATM machine using a credit card number stolen from the residence of a recent robbery victim the officer was called to assist.
The consumer must ask why so many strangers, each with their own financial interests in mind, have access to the consumer's accounts or to systems which can so substantially harm the consumer's accounts, to begin to protect the consumer's privacy, financial present and future.
(See http://monthlynotes.blogspot.com for the fourth in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
Consumer Stress and the Credit Reporting Industry
There is horrible psychological, visceral, and physical stress in swirling in a maelstrom of negativity with computerized credit reports. Studies of harm to consumer mental and physical health need to be done to document harm done by the credit reporting industry. The advantage the credit reporting companies have is the embarassment the consumer already suffers from being labelled a "debtor". Consumers may believe that calling attention to "financial problems" would further jeopardize their financial situation, for example, in qualifying for mental or physical health care insurance or funding.
The rather official look of computerized bill collection notices is worrisome. Use of the terms "bureau", "national", "federal", "affiliated agencies", and mock court-stamped and other legal style documents is frighteningly Orwellian. "Big Brother" bill collector is following every credit consumer, anonymously, without revealing his or her real identity. Even a mimeographed partially scribbled notice in a governmental "postage-paid" envelope can be intimidating. Accompanied by a letter referencing a purported government agency or a law office with a demand for "$750.00 (or another amount) to settle this matter", a threat of government or court action is almost enough to send the consumer scrambling for his or her checkbook. This is a very intimidating bill collecting strategy. It is worse when followed, for example, by attempted or successful garnishment through internal employer bill collecting associates, complete with imitation government or court papers.
Now more often than in the past, bill collectors send negative entries directly to the computerized clearinghouse companies. Many bill collectors do not even notify the consumer by regular mail. This is a very aggressive bill collecting strategy possibly done to save money on postage and lessen the risk of being held liable for stalking, menacing, or harassing a consumer.
Without notice, consumers can be and often are denied a job, apartment, home, car, or other credit cards, business, or other loans, without a hint of who originated the damaging financial information.
Many consumers must ask "How can this happen?" Why are government or postal inspectors not checking every "US government postage paid" envelope to trace stolen or fabricated meters or meter numbers to at least ensure such companies pay the current postage rate?
There also are intrusive events done by US officials. "The Washington Post" revealed a young Washington, DC police officer was caught using a special police investigation computer to find a PIN (personal identification number) to withdraw money from a bank ATM machine using a credit card number stolen from the residence of a recent robbery victim the officer was called to assist.
The consumer must ask why so many strangers, each with their own financial interests in mind, have access to the consumer's accounts or to systems which can so substantially harm the consumer's accounts, to begin to protect the consumer's privacy, financial present and future.
(See http://monthlynotes.blogspot.com for the fourth in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
Friday, July 2, 2010
2: Can Credit Consumers Survive the Credit Reporting Industry? Blog 2
(This is the second of a series of blogs on credit and credit reporting in the United States.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
Anonymous Automated Credit Reporting Prevents Credit Repair.
The vicious cycle of computer-linked data flow of bill collecting information is augmented by the privately-held Pritzker family, formerly of the Pritzker Bank, and Marmon TransUnion of Chicago, IL, and by yet a fourth major credit reporting company, Experian. Experian is the largest provider of consumer information. Unlike the publicly-traded Equifax, information about Experian is harder to find in standard U.S. business references.
These four credit reporting companies hold databases on 100 million Americans and several million international customers. In addition to the "Big 4" and their franchises and affiliates, there are thousands of smaller corporate and home-based business computer-linked streams of data from other bill collecting and financial services companies.
Is it possible to stop the vicious cycle of computer-linked data flow to repair and restore a consumer's credit reputation? To correct only one negative erroneous entry on any of the four major credit reporting bureaus is an enormous challenge for the average consumer.
The first problem a consumer encounters is terminology calculated to terminate the attempt to make a correction. A key word is "creditor". To the average consumer, a creditor is a person or business from whom the consumer actually borrowed money or purchased merchandise or a service. In the computer-linked credit bureau sector, a creditor may be a bill collector who purchases credit data for bill collecting or resale of data to other computer circuits of bill collectors, but from whom the supposed "debtor" has never borrowed money nor received a product or service. This type of creditor can severely damage the reputation of the credit consumer in a legal sense, for example, in bankruptcy court proceedings.
How does a consumer motivate the credit bureau to actually verify there was a bilateral or two-party agreement or real transaction between the purported "creditor"/negative credit reporter and the consumer reported? Despite shelves of books in the local libraries on how to correct wrong and harmful entries through protest or dispute forms, there is no incentive for the huge, mostly anonymous credit bureaus to delete wrong entries, add dispute forms to the credit file, or repair the consumer's credit reputation.
The concept of truth in or about credit report entry publishing and republishing is lost on the average credit bureau customer service representative (CSR). When there were more "live operators", the CSR usually would repeat endlessly that the disputed creditor is listed as a creditor on the credit bureau report. No documentation previously sent to the bureau could convince the credit bureau there was no such creditor to an original transaction with the consumer. No dispute note was added to the file.
Automated answering machine/voice mail messaging systems now have replaced most credit reporting bureau CSRs. Currently, automated telephone answering machine messages instruct the consumer who calls with a complaint or dispute to send $8.00 to obtain a credit report. No discussion is possible.
The credit reporting industry has become an enormous rumor mill, an automated libel machine relentlessly wreaking havoc in the life of an innocent credit consumer. An android programmed to investigate and verify any disputed entry could annotate, delete, or correct entries if the industry wanted to publish and disseminate correct information.
The human CSR appeared to be coached to retain negative credit report entries to be bought, sold, or traded to other companies in the credit reporting bureau network. The newer system eliminates the possibility of hearing complaints or disputes, or correcting wrong and damaging entries.
(See http://monthlynotes.blogspot.com for the next blog in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
Anonymous Automated Credit Reporting Prevents Credit Repair.
The vicious cycle of computer-linked data flow of bill collecting information is augmented by the privately-held Pritzker family, formerly of the Pritzker Bank, and Marmon TransUnion of Chicago, IL, and by yet a fourth major credit reporting company, Experian. Experian is the largest provider of consumer information. Unlike the publicly-traded Equifax, information about Experian is harder to find in standard U.S. business references.
These four credit reporting companies hold databases on 100 million Americans and several million international customers. In addition to the "Big 4" and their franchises and affiliates, there are thousands of smaller corporate and home-based business computer-linked streams of data from other bill collecting and financial services companies.
Is it possible to stop the vicious cycle of computer-linked data flow to repair and restore a consumer's credit reputation? To correct only one negative erroneous entry on any of the four major credit reporting bureaus is an enormous challenge for the average consumer.
The first problem a consumer encounters is terminology calculated to terminate the attempt to make a correction. A key word is "creditor". To the average consumer, a creditor is a person or business from whom the consumer actually borrowed money or purchased merchandise or a service. In the computer-linked credit bureau sector, a creditor may be a bill collector who purchases credit data for bill collecting or resale of data to other computer circuits of bill collectors, but from whom the supposed "debtor" has never borrowed money nor received a product or service. This type of creditor can severely damage the reputation of the credit consumer in a legal sense, for example, in bankruptcy court proceedings.
How does a consumer motivate the credit bureau to actually verify there was a bilateral or two-party agreement or real transaction between the purported "creditor"/negative credit reporter and the consumer reported? Despite shelves of books in the local libraries on how to correct wrong and harmful entries through protest or dispute forms, there is no incentive for the huge, mostly anonymous credit bureaus to delete wrong entries, add dispute forms to the credit file, or repair the consumer's credit reputation.
The concept of truth in or about credit report entry publishing and republishing is lost on the average credit bureau customer service representative (CSR). When there were more "live operators", the CSR usually would repeat endlessly that the disputed creditor is listed as a creditor on the credit bureau report. No documentation previously sent to the bureau could convince the credit bureau there was no such creditor to an original transaction with the consumer. No dispute note was added to the file.
Automated answering machine/voice mail messaging systems now have replaced most credit reporting bureau CSRs. Currently, automated telephone answering machine messages instruct the consumer who calls with a complaint or dispute to send $8.00 to obtain a credit report. No discussion is possible.
The credit reporting industry has become an enormous rumor mill, an automated libel machine relentlessly wreaking havoc in the life of an innocent credit consumer. An android programmed to investigate and verify any disputed entry could annotate, delete, or correct entries if the industry wanted to publish and disseminate correct information.
The human CSR appeared to be coached to retain negative credit report entries to be bought, sold, or traded to other companies in the credit reporting bureau network. The newer system eliminates the possibility of hearing complaints or disputes, or correcting wrong and damaging entries.
(See http://monthlynotes.blogspot.com for the next blog in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
Thursday, July 1, 2010
1: Can Credit Consumers Survive the Credit Reporting Industry? Blog 1
(This is the first part of a series of blogs on credit and credit reporting in the United States.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
Since 1899, Retail Credit Co. of Atlanta, GA has compiled credit files on consumers, and later background investigations of insurance applicants. After a 1973 Federal Trade Commission Anti-monopoly lawsuit and complaints about inaccuracies and insurance background checks, Retail Credit Co. became the familiar Equifax.
In the 1980s Equifax surpassed TRW, now part of Experian, as the largest database of consumer informtion on 100 million Americans. Later, Equifax acquired collections firms in southern states.
Equifax also is involved in credit card processing in the United States (US) and the United Kingdom(UK). It spun off its U.S. check processing Centegy unit in 2001. In 2005 Equifax acquired APPRO systems, an automated credit risk management and financial technologies system.
Equifax is a huge anonymous computer-linked network which not only collects financial, job, and insurance data, about which it has settled lawsuits for inaccuracies and intrusiveness. The company not only collects data but also bill collects, and uses consumer data to assess presumed risk of credit applicants, which it sells to lenders. The potential for creating vicious cycles wreaking havoc on the average credit customer is actual and actuarial.
To say this diversified credit complex is a setup for conflicts of interest is an understatement. It is hard to imagine consumer-fair transactions with a credit data clearinghouse which collects negative credit data, bill collects on this data, thus generating more negative credit data, then purports to develop financial analysis tools to assess negative risk based on this data. Simultaneously the complex seeks to profit from selling negative consumer information to other bill collectors, affiliated credit card processors, and credit card sales companies who sell higher finance charge credit cards and loans to the credit consumer on file.
Here is a simple scenario. A bill collector seeks to profit by demanding money from a credit consumer on the basis of a previous negative credit report entry. The consumer knows there is no such account, no "bad debt", no basis for the negative credit report entry. The credit consumer calls, then sends a protest or dispute form. What prevents the bill collector from throwing the regular or certified mail credit report protest or dispute form into the trash to punish the consumer for not paying on that virtual account the bill collector created to dunn the consumer with real billings and computerized negative reports? Then the bill collector restarts the vicious cycle by selling the consumer file to the bill collector in the next cubicle or next computer link, harming or ruining the credit consumer's financial reputation yet again.
See http://monthlynotes.blogspot.com/ for the next blog in the series "Can Credit Consumers Survive the Credit Reporting Industry?" Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)
Since 1899, Retail Credit Co. of Atlanta, GA has compiled credit files on consumers, and later background investigations of insurance applicants. After a 1973 Federal Trade Commission Anti-monopoly lawsuit and complaints about inaccuracies and insurance background checks, Retail Credit Co. became the familiar Equifax.
In the 1980s Equifax surpassed TRW, now part of Experian, as the largest database of consumer informtion on 100 million Americans. Later, Equifax acquired collections firms in southern states.
Equifax also is involved in credit card processing in the United States (US) and the United Kingdom(UK). It spun off its U.S. check processing Centegy unit in 2001. In 2005 Equifax acquired APPRO systems, an automated credit risk management and financial technologies system.
Equifax is a huge anonymous computer-linked network which not only collects financial, job, and insurance data, about which it has settled lawsuits for inaccuracies and intrusiveness. The company not only collects data but also bill collects, and uses consumer data to assess presumed risk of credit applicants, which it sells to lenders. The potential for creating vicious cycles wreaking havoc on the average credit customer is actual and actuarial.
To say this diversified credit complex is a setup for conflicts of interest is an understatement. It is hard to imagine consumer-fair transactions with a credit data clearinghouse which collects negative credit data, bill collects on this data, thus generating more negative credit data, then purports to develop financial analysis tools to assess negative risk based on this data. Simultaneously the complex seeks to profit from selling negative consumer information to other bill collectors, affiliated credit card processors, and credit card sales companies who sell higher finance charge credit cards and loans to the credit consumer on file.
Here is a simple scenario. A bill collector seeks to profit by demanding money from a credit consumer on the basis of a previous negative credit report entry. The consumer knows there is no such account, no "bad debt", no basis for the negative credit report entry. The credit consumer calls, then sends a protest or dispute form. What prevents the bill collector from throwing the regular or certified mail credit report protest or dispute form into the trash to punish the consumer for not paying on that virtual account the bill collector created to dunn the consumer with real billings and computerized negative reports? Then the bill collector restarts the vicious cycle by selling the consumer file to the bill collector in the next cubicle or next computer link, harming or ruining the credit consumer's financial reputation yet again.
See http://monthlynotes.blogspot.com/ for the next blog in the series "Can Credit Consumers Survive the Credit Reporting Industry?" Contact mkrause381@gmail.com or mkrause54@yahoo.com for an email or to comment.
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