Consumer, Civil Rights Groups: FTC Credit Score Report is Biased

July 24, 2007

  • July 24, 2007 at 12:51 pm
    Nobody Important says:
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    Every study done by anyone without an axe to grind shows significant correlation between credit scoring and claims filing. I would just like them to prove their allegations with numbers rather than their “feelings” about this method. Let’s also make it illegal to charge higher rates for credit cards when the score is too high. This discriminates against low income people. These credit scoring procedures have been filed and accepted by the various state insurance departments because they are statistically provable. In the end, how are we supposed to do business? Are we to clear all of our procedures with the great Robert Hunter?

  • July 24, 2007 at 1:57 am
    Peter Polstein says:
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    They’re all missing the point. Today, approximately 45% of Americans fall into the scoring band range of 550 to 639 which is sub-prime. In fact, there are some executives who believe because of economic anomolies that this scording band range is their “sweet spot” so say the CEO of AmeriCredit. There is no corrulation between FICO scoring bands and claims, as FICO scoring bands can change in a heart beat by a borrower simply missing a payment while on vacation; a divorce and any number of other potential situations.

    This is simply a scam by the industry to find ways to prop up their underwriting or lack thereof, by use of a basis which has none.

  • July 24, 2007 at 2:05 am
    Not fair? says:
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    Credit histories and scores have been used by industries other than insurance and it’s been acceptable. The scores don’t discriminate – as a matter of fact, most companies have procedures in place to take into account sudden life-changing events like illness or divorce. The basic premise behind the validity of using the scores is a person’s behavioral actions – in other words, if they’re sloppy and careless with their finances, overspend and don’t pay their bills, the studies have shown that they are more likely to file claims, inflate expenses and basically defraud the insurance company. The scores are accurate predictors of their behavior – most folks that get into a minor fender-bender or have a small HO claim that falls below their deductible will pay to have the repairs done. Those that don’t manage their personal life well will not, and then the NEXT TIME they have a claim, it’s for a much BIGGER amount because they didn’t do any preventive work. If you want to look at an industry that didn’t examine credit scores all that well recently, turn your eye towards the mortgage industry. They lost their underwriting discipline and now they’re getting spanked.

  • July 24, 2007 at 2:16 am
    Pat Beranger says:
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    Since the industry does not collect data on race and they are using a subjective method that applies exactly the same for all insureds, I don’t see how the term “discriminatory” could apply. If there is a disparate impact, that is a different matter. If so, going after insurance companies for using credit doesn’t fix the root cause.

  • July 24, 2007 at 2:45 am
    LLCJ says:
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    Polstein, with what authority do you claim that there is no correlation? Please present your actuarial studies with credible insurance data.

  • July 24, 2007 at 2:53 am
    Nobody Important says:
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    PP doesn’t need facts, he has “feelings.”

  • July 24, 2007 at 2:54 am
    Really says:
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    When are people just going to accept the truth that race and genetics make a difference. People are so blind to things they don’t want to believe.

  • July 24, 2007 at 3:00 am
    Nobody Important says:
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    ????????
    What the $%^&* does this have to do with anything in this line?

  • July 24, 2007 at 3:00 am
    Sarcasm says:
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    Hey- this country was founded on feelings!!! It was feelings, and not hard work, persistence, and perseverance that make this a great place to live. It was everyone feeling that it could be a great place to live, then a genie came out of a bottle and made it so.

    Without profits, the nation doesn’t profit. Nation doesn’t profit = nobody profits. I challange anyone to claim that our current standard of living is based off of anything other than people’s desire to make money.

    If it works, don’t fix it.

  • July 24, 2007 at 3:05 am
    Really says:
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    Uh, hmm, let’s see. The word “race” or “racial” appears 6 times in the article. In addition, here is a quote from the article: “The Missouri study concluded that a consumer’s race was the single most predictive factor determining a consumer’s insurance score”

    If you think it has nothing to do with the article, then I will not be able to have a logical intelligent conversation with you.



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