How Credit Inquiries Lead to Competitor Marketing Calls

Written By: Stacey Sprain

This week I thought I’d take a break from the ongoing condominium articles that summarize HUD’s recently issued 95 page condominium processing guide and cover another topic that came up this week. I had a situation come up this week from a loan officer that I feel is relevant for many in out industry because it’s something that can commonly occur. By providing a bit of information, it will help to better prepare many of you to handle these situations going forward.

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What came up: I was forwarded an email from a loan officer who had an angry customer on her hands. Within the first few hours of the loan officer pulling the borrower’s tri-merge credit report from our credit provider, the borrower received seven phone calls from other mortgage company marketers. The borrower was obviously concerned that we or our credit provider was selling the customer’s private and personal information to marketers. We know that this is definitely not the case. However, it is a fact that marketers pay for access to lists of information that are generated by credit inquiries. My understanding is that the information sharing occurs from the inquiries generated at the high bureau level- Equifax, Experian, TransUnion. Marketing companies pay to access lists of information from the generation of inquiries and then use the information within the list to solicit offers for products and services.

Example- Joe Blow applies for a mortgage with ABC Lender so ABC lender’s loan officer proceeds with pulling a tri-merge credit report from ABC Lender’s credit provider who obtains the credit information from Equifax, Experian and TransUnion. Then there’s DEF Mortgage Company who pays to receive a list of consumers who generate mortgage credit inquiries so they receive a list that includes Joe Blow’s information. This allows DEF Mortgage Company to make a marketing call to Joe Blow to market a competing offer so DEF Mortgage Company can try to steal the deal from ABC Lender.

Need FHA Training? CLICK HERE: http://www.FHA-Classes.org

As ridiculous as it sounds, unfortunately it’s completely legal and it happens all the time. Frustrating right?

Well here’s what we can do. We need to do our part to educate our mortgage borrowers about how they can reduce the chances of this happening to them. Here’s what I suggest:

Take advantage of the following FTC Consumer Brochures:

• Shopping for a Mortgage? Your Application May Trigger Competing Offers http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt171.pdf

• Privacy Choices for Your Personal Information
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre29.pdf

These two brochures explain to consumers that credit bureaus may sell information about them to other lenders and insurers who use the information to solicit competing offers for credit or insurance. This is known as prescreening. Consumers can opt out of receiving these prescreened offers by doing the following:

1. Call 1-888-5-OPTOUT (1-888-567-8688) or visithttps://www.optoutprescreen.com/?rf=t When the consumer calls this toll-free number or visits the website, they will be asked to provide certain personal information, including their home telephone number, name, Social Security number, and date of birth. The information they provide is confidential, and will be used only to process their request to opt out.

Opting out of prescreened offers does not affect their ability to apply for credit or to get it. Their opt out request will be processed within five days, but it may take up to 60 days before the prescreened offers stop coming. If they have a joint mortgage, both parties need to opt out to stop the prescreened offers. If or when they want to opt back in, they would need to use the same telephone number or website.
2. The consumer should register their phone number on the federal government’s National Do Not Call Registry to reduce the telemarketing calls they get at home. They can register their phone number or get information about the registry by visiting https://www.donotcall.gov/ or can call 1-888-382-1222 from the phone number they want to register. They will get fewer telemarketing calls within 31 days of registering their number. Their registered number stays on the registry for five years, until it is disconnected, or until they request that it be taken off the registry.

Need FHA Training? CLICK HERE: http://www.FHA-Classes.org

For loan officers, I’d highly recommend providing this information to business partners such as realtors and builders so that potential borrowers are counseled to register for the Opt out and Do Not Call lists well in advance of applying for their mortgage. This will assure that they are not overwhelmed with competing lender calls and offers when their credit is pulled when they apply.


About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at: contact@mortgageprocessor.org.


Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.