Monday, June 20, 2005

Credit Reports ... Today's USA Today has a frontpage story that weighs the pros and cons of granting consumers the right to freeze their credit reports.

It's not hard to see why the piece largely sides with consumers. Here's the argument for why consumers shouldn't have the right to control their credit reports:

Lenders, credit bureaus and businesses argue that the inconvenience created by a credit freeze outweighs potential benefits. Credit-freeze laws allow consumers to "unfreeze" their reports, but that typically takes about three days.

In the meantime, a consumer could miss out on a low mortgage rate or one-time credit card offer, says Nessa Feddis, senior federal counsel for the American Bankers Association. "It sounds good, but people don't realize how often they request their credit reports be pulled for a good deal," she says.

Opponents also argue that existing laws protect consumers from identity theft without the hassles of a credit freeze.

Yep, that's right: years of financial and legal hassling clearly do not outweigh my need to have instant access to a credit report.

Please. A three day wait? Are they kidding me? If it means eliminating the risk that someone can take out a major loan using my credit report, I will gladly wait three days on the paperwork to go through for a new car or house or even, hypothetically, consumer electronics. After all, a built-in delay would only extend the deliberation I already go through whenever I purchase something substantial enough to require a loan in the first place.

Yet what really gets me is the presumption that businesses know better than consumers when they would want to use their credit reports. This represents commercial condescension of the most egregious kind, and as such grates against the fundamental premise of modern capitalism -- namely, that each individual is best suited, as a rational agent, to make their own financial decisions.


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