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Identity Theft, Credit Reports, and You (kalzumeus.com)
1088 points by darwhy 99 days ago | hide | past | web | favorite | 276 comments

All very good advice.

The bit about calmly but methodically collecting a paper trail and then reading it back to them is excellent advice for any out of control bureaucracy. Such entities can handle angry irate people all day long, but a calm and collected person that posses ample evidence of documented screw ups and potential illegalities is a bureaucracy's worst nightmare.

This puts things in perspective.

I used to get angry when the other party used to screw up, have stopped getting angry seeing how futile getting angry at a random (and ever changing) customer rep is.

This puts calmness in a new perspective

I see the same thing with all my family and friends. Whenever they have to do something that involves bureaucracy, they give up and/or start shouting. Especially in Greece, where the public sector and the banks depend on you giving up.

Personally I always make sure to go fully prepared, with every legal paper ready before hand, and having ready answers/solution for every possible issue. And above all else I talk as polite as I possibly can, showing respect and making sure I am asking clear and direct questions. And I always double check their answers. As a result I always get my job done.

Funny story: I once needed a signature from the tax office director. While I was at her office and she was taking quite some time to check every thing, looking for something wrong to send me away, her phone rang. The house next to hers caught on fire. She started search for the fire departments phone number and she couldn't find it. Luckily I had my phone with me, googled it really fast and told her the number. Got the paper signed in a instant after that.

I feel sad every time I hear things like this. That we've to be happy that we got our job done even when all our documents are in the clear. Or that we've to hope get some favor from them by fawning (not alleging that you did that). It makes me feel like we're treated like dumb children by our governments.

> It makes me feel like we're treated like dumb children by our governments.


The kalzumeus.com article is informative and accessible, especially if your identity has been stolen.

If your identity has not yet been stolen, the NYTimes has an article titled "Equifax's Instructions Are Confusing. Here's What to Do Now." [0]

tl;dr: Freeze requests for your credit data at the big 3: Equifax [1], Experian [2], and Transunion [3].

(Note: these services may require multiple attempts, some persistence, a service fee, or a phone call to an automated system. YMMV.)

  [0] https://www.nytimes.com/2017/09/08/your-money/identity-theft/equifaxs-instructions-are-confusing-heres-what-to-do-now.html
  [1] https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp
  [2] https://www.experian.com/freeze/center.html
  [3] https://www.transunion.com/credit-freeze/place-credit-freeze
EDIT: missing word

Very useful links. Thanks.

I'd like to know how I can determine what services have such a hold in place for me.

This is all pretty absurd. Why should we have to pay to not have our credit history disclosed? We should pay when we want to have it disclosed.

Then I would have to pay THREE different companies to not disclose it. Or keep track of which ones won't disclose it.

The European model of you owning your own information is making more and more sense.

It sounds like extortion to me. I wouldn't be surprised if the data leak was an intentional move to provide incentive to people to sign up for their credit monitoring services or unfreeze fees.

When a company "pulls" your credit they are not given the report for free. Equifax and the like sell a credit reporting service to banks and other companies who would want to see your credit history. When you freeze your report, reporting agencies are not allowed to sell your report to anyone, at your request, meaning they are losing revenue. The freeze fee makes sense when you realize your report is the product they are selling. "You're not allowing us to make money? Fine, then you need to help make up the difference with a fee." Just like stockbrokers, they are intent on making money both coming and going.

Maybe what we need is an open source blockchain application that keeps track of every event in your credit history, with YOU authorizing every view.

Every time you use credit, you'd be authorizing that creditor to add events to the records for that use, until they mark it paid off. Otherwise, nothing else gets into your history. And you'd be able to comment on any of those events, of course.

Of course, it would also need to support multi factor authentication and keep all data related to that secure. Might be hard to do that, but seems pretty hard in the existing industry.

That doesn't justify it.

I'm not arguing the merits of a policy or defending the CRAs, I'm shedding light on some of the reasons why it exists.

It's not easy to believe, but it would be a quick billion for every credit reporting company if all Americans froze their credit.

TransUnion charges $5 to put a security freeze on the account. I cannot believe they are able to get away with this. How does this logic even work?

1. We'll collect all kinds of data on you without you knowing it. 2. Ooops, we've been hacked! 3. Pay us to freeze your account.

How .. what... in what world does this make any sense? How do we go about changing this nonsense?

I'm just going with the fraud alert (free) for now. Maybe it's moot, but it's really tough for me to justify giving all three companies money due to something like this.

United Lands of Extortion. FML

I am a shareholder in BigBank. I was therefore profoundly displeased when I learned...

This is amazing. It is also trivially true for anyone who holds an S&P 500 index fund or similar when dealing with American Express, Bank of America, Capital One, Citigroup, JPMorgan Chase, US Bancorp, and Wells Fargo among a few others.

I didn't understand how smart it was until I read your comment!

If I saw a new account opened in my name I would be pretty concerned and would probably come back to this post for advice. However, is it necessary to get be this thorough (going to the police, etc) for things like incorrect tradelines in your report?

When I first requested my free reports a few years ago all three had multiple tradelines that were not mine and two had a similar situation as Patrick's - namely an account older than me. I used the CRAs' online forms to request they fix them and they did within a few weeks. Didn't seem like that big of a deal.

It helps you in the worst case scenario. What would you have done had they never responded or taken any action? Or if they responded with incorrect information / misunderstanding the original claim like they did in the article thinking OP was talking about their child's birthdate, when OP was clearly talking about themselves?

It's a relatively small price and additional amount of effort to protect you in a situation that can be very important to you financially for a long time. What if 20 years from now those accounts are reopened in some credit report?

Also just anecdotally, but I bank with Chase and their customer service has always been so terrible, I'd expect all these to happen to me.

A paper trail is good, of course, but IIRC, I did receive amended reports from each of the CRAs with letters describing the actions taken.

I also suspect that I went through the process more recently than Patrick, I think it was about five years ago. In my case, I was able to select the problematic accounts, what the problems were, and the desired actions all via dropdown elements. There was an additional text box for any extra explanation. This is what made it seem routine and not a big deal.

The FTC has a site with a lot of helpful information on helping you resolve identity theft, and even will help generate the correct documentation and direct you through the maze. https://www.identitytheft.gov

Note the it is literally the business of credit agencies to blithely ruin lives so they will be very unhelpful if they can.

Huge differences in quality between your first and second paragraphs. It is the business of credit agencies to serve as proxies of your credit worthiness. They prosper when more people are in the credit pool and are able to take out loans.

> It is the business of credit agencies to serve as proxies of your credit worthiness.

Please, the dogma they preach they might as well be a religion. * Where you live affects your credit worthiness.

* How long you live there affects your credit worthiness.

* The title of your job affects your credit worthiness.

* Marital status affects your credit worthiness.

* The degree and school you attended affects your credit worthiness.

* How long you have a bank account affects your credit worthiness.

I haven't even touched on the credit part of credit worthiness, yet.

And I know this as these are the bullshit questions I had to answer while we're trying to purchase a home.

Do you live in the United States? In the United States:

Where you live affects your credit worthiness.

Illegal, and radioactively so. The practice was called redlining and a bank engaging in it would have hellfire rained upon it.

Marital status affects your credit worthiness.

Also illegal.

The degree and school you attended affects your credit worthiness.

Untrue; credit reports don't include this information. (It is available from specialized vendors for doing things like e.g. verifying resumes, but banks don't habitually employ them because your credit history is much, much more reliable.)

The title of your job affects your credit worthiness.

Untrue; titles are generally not reported to CRAs, difficult to get out of customers, and difficult to verify. If you wanted to use them in underwriting, for the same amount of effort you can just ask "What is your salary?" and verify it with the employer the same way you'd verify their title; this gets you everything you want in a more reliable fashion, since salary inflation is less common than title inflation.

> Do you live in the United States?

Yes, we moved here after 15 years of living abroad.

> Marital status affects your credit worthiness.

They asked for this information.

To paraphrase our mortgage broker, "having a 4 year degree makes you much more creditworthy." And I just confirmed it with a family member who works in Fannie Mae, says it's true.

Have you looked at a 1003/residentialloan application lately? You and I both agree they shouldn't be asking these questions but those questions are on the application.

What a credit agency retains on you and what a bank asks from you in a loan application are two different things.

To paraphrase our mortgage broker, "having a 4 year degree makes you much more creditworthy." And I just confirmed it with a family member who works in Fannie Mae, says it's true.

This is absolutely untrue, and I'd have to assume that your family member's role does not require an understanding of this.

Edit: It's also not on form 3001, so I'm not sure what your last sentence is trying to say.

Do employers routinely verify an employee's salary?

In the U.S., your credit score is overwhelmingly, if not exclusively, determined by the status of your credit accounts.

What, pray tell, do you think affects your credit worthiness?

statistics done by machines on past datasets can reveal a great deal about a population, regardless of how discriminatory, unfair or "bullshit", it may seem to a human.

Credit agencies don't prosper when more people are able to take out loans. They're not the agencies that actually provide credit and profit off interest. They prosper when their customers (credit-providing institutions) give them more business by running more credit checks, which is short-term correlated with the number of people who want to take out loans, regardless of result, and long-term correlated with them not providing false positives - not saying "Yes, this person is creditworthy" when they aren't and causing banks to go with another credit agency. The danger of false negatives is extremely long-term and tenuous: the only way that would be a problem is if they turn away so many people from credit that either people stop trying to get credit or that banks decide that credit is an unprofitable business and give up, neither of which seems likely to happen for the foreseeable future.

If credit agencies' business is just to serve as proxies of your credit worthiness, why is regulation of them necessary at all, since they'll always be consumer friendly?

Or maybe there's more to it than that?

That's a pretty weak argument. The existence of regulation - even heavy regulation - in an industry is not a barometer of their value to consumers.

But there are a lot of reasons why an industry who scores credit worthiness would be highly regulated, even if nothing had ever gone wrong (and plenty has). The main reason would be to ensure that score is applied in the same way to everyone, and that it isn't crafted in a way to create extreme disparities based on things like sex, race, religion, etc.

Who do you think the consumer is? Unless you're issuing credit, you're probably the product, not the consumer.

This is quite a useful write-up and I love the way it's written. Thank you.

If you are in the United States you also have an option to file a complaint with their government regulator. Consumer Financial protections bureau has a complaint form prominently featured on their website, as does the FTC for non-financial parts. Believe FDIC does for banks as well. Worth a shot and establishes a paper trail quickly!

FDIC only regulates some banks, OCC others, FRB takes complaints on Federal Reserve member banks, NCUA does credit unions. It's byzantine. CFPB is probably a good place to start in general.

Also, find your state financial regulator. Mine is the New York Department of Financial Services and they have teeth.

This is one of the undersold advantages of living in states that care about the decent behavior of corporations operating in their states. It's very expensive to screw people over in them, and so you are more resistant--not immune, of course--to many types of nasty behavior on their part.

I enjoyed reading this. Question for patio11 or others more knowledgeable about this - could a chatbot similar to the one being used to fight traffic tickets be useful in keeping a paper trail and putting the fear of god into banks/CRAs when this happens? Because why not automate this, especially for people who aren't as articulate/level-headed/organized, who might otherwise bungle it?

Decision trees for interpretation of the law are fraught; talk to a lawyer about where the line is.

The reason for not automating communications is in the post. The CRAs have carte blanche to straight-up ignore anything which they think comes from an automated process or a firm/organization specializing in helping people with their credit.

Could you potentially automate some of the record keeping? Possibly. Could you automate the sending of paper? Certainly. Automating the receipt of paper is tricky since, for all the predictable reasons, someone last living at 123 Maple St will have a lot of difficulty telling the bank or CRA to mail them at 1234 Commercial Parkway Suite 666 to discuss their credit. (You can do it, and I have done it, but expect to be put through some identity verification hoops.)

When I grow up, I want to be a Dangerous Professional.

Why wait? You can be a Dangerous Professional at any age. Being able to remain calm in emotional situations is a huge lever in many situations, not just when dealing with bureaucracies. It's almost like a super power. I recommend it.

The CFPB should definitely be added to the list of lawyer alternatives. I had a minor issue with a bank and filing a complaint with the CFPB got it quickly resolved whereas my state's consumer protection division didn't even bother writing back.

Does anyone know what I can do as an US citizen abroad to protect myself now? I tried to get a free copy of my credit report but it required a us address to process. I tried to set up an account to freeze my credit but those require a us address as well.

No idea, but I asked the same thing on the expats Stack Exchange site earlier today[0]. No responses yet, maybe we have to wait until Monday and call them? You might also contact the US Embassy in your country and ask.

I had a similar problem with signing up for an online "my Social Security" account, and learned that it is impossible. The US Embassy in London wrote back: "You must have a U.S. mailing address in order to create a my Social Security account and cannot open an account without one."

Having a credit record in the USA is no longer important as I do not plan to return, but you would think the credit reporting agencies should have some way of telling them "I'm long gone, if you see a credit application from the USA it's definitely fraudulent". Can't be done I guess.


Thanks I'll keep my eye on that question. Like you I probably won't care about my credit back home for the next decade or so but I don't know if I'll move back in the future.

Depends where you are. If in the EU, for example, you have some pretty strong rights to access personal data held about you, correct it, or even block its further use. They apply to data all over the world, provided it's processed by a company that has an "establishment" (e.g. subsidiary) in the EU, and the data use is somehow related to that establishment's activities. From May next year, when the new GDOR kicks in, the geographic link will be even easier to establish: businesses are caught the moment they monitor people in the EU. Check out the website of your local data protection authority for details.

There's nothing you can be or need to be "protected" from, especially abroad, so don't waste any time on it. Don't freeze your credit over this.


Would you please not break the site guidelines like this? If established users set such a bad example I don't see what hope there is for new ones.

Fair enough and I attempted correcting that in a second follow-up.

TFA says to order a free credit report or put freezes on your accounts, which as I just mentioned require usa addresses.

Write letters. Explain your situation. Make not fixing your problem a bigger problem than fixing your problem. Do so credibly.

That's the meta-message of TFA.

Excellent post!

I've mailed and emailed CxOs and VPs in the past (not for bank/credit related matters), whenever company's support utterly failed me. Doing this gives a much needed kick in the pants to the bureaucratic machine, which gotten stuck in gear.

Just a thank you to patio11 - I got a phone call from a debt collector yesterday, over something I thought I had finally persuaded the original owner was incorrect. (Mobile phone bill iymk)

I was going to call them Monday, but of course, now I will write :-)

This is good advice I think in general working with most CS groups. I'm taking this to heart right now in a completely different setting. I'm close to becoming heated but I realize that's not going to help anything.

Unfortunately, I've recently had our business credit card blocked from Facebook Advertising after a year of use without warning. Potentially suspending on going campaigns. On Thursday it was removed without my knowledge and was unable to be readded. There is no call center or email at Facebook to reach out to. You're the mercy of their overloaded support inbox system. No matter how much you spend. It's now Saturday and I am receiving multiple calls a day from owner's asking if it's been resolved. I have no recourse aside from praying that I get a response and a correction done.

"Do not sign up for credit monitoring; it is a great revenue source for credit reporting agencies but almost never a good purchase for consumers."

Further to this, UK customers can get free access to their Equifax credit report via Clearscore.com anyway. And the experian one via moneysavingexpert credit club.

"Angry people demand; professionals “require.” "

YES YES YES--it's not enough to merely be aware of the connotations of your words. You must also be aware of any unintended information conveyed through their use.

For example, despite being synonyms, the use of the word "demand" in this context exposes one as an amateur. It doesn't matter if you think this is unfair. It matters that you know all information conveyed, directly or indirectly.

(This is incredibly good writing! Great business writing exhibits the characteristics of great code: as simple as possible but no simpler, and unambiguous. Reading this post is worth your time just for the chance to see an example of a relentlessly relevant post.)

It might not be a formal difference, but here's something that I first noticed when reading the opinions of the Church Fathers when I was a grad student at Notre Dame.

They always wrote in a language suggesting that their opinions emanated solely from objective facts that were not of their own choice. "The law requires you to comply" is a statement of fact. "I want you to comply" sounds more like a personal feeling.

It may be that "require" expresses the former, and "demand" the latter.


Religious flamewar (which this crosses into) is off topic on HN, so please don't post like this.

My apologies, and thanks for the reminder. I was hoping, in some misguided way, to comment on the debate tactic rather than the underling religious content.

I think the mod was only talking to pmarreck. Your post was fine IMO.

When idiots shout down your truth, stick to principles, don't balk.

I should have said "more correct" instead of "less religious," then.

Hashtag doubledown.

There is no such thing as a "religious flamewar"; there is only a flamewar between "more correct" and "less correct" thinking. Any other assertion caters to prole bullshit, and you should be ashamed of yourself for supporting the critical-thinking-deprived status quo on an intellectual site such as this simply for the sake of avoiding the discussion. I'm sorry. I will agree that it's OT, though.

Sorry, I know this is very minor and beside the point (ironic, given what you just said about relevance), but isn't that exactly what connotation means?

>a : the suggesting of a meaning by a word apart from the thing it explicitly names or describes⁰

Or is this perhaps even more meta than that - the choice itself can convey something apart from the semantics of a word, and this isn't something that the word connotation covers?

My apologies for sidetracking, you just got me wondering. I'm neither a native speaker nor a linguist, so it's tricky for me to think about these things sometimes. I agree with what you're saying, by the way.

[0] https://www.merriam-webster.com/dictionary/connotation

The word connotation is typically used to describe inferences that you'd make about a statement given the word used which are widely available to native speakers of that language. Thin, skinny, and gaunt all mean the same thing; only "gaunt" has the connotation that the person described necessarily has a problem.

The other poster is describing something a bit more meta than what the word connotation typically covers. They are describing something akin to a shibboleth, a great linguistics word. One's use of a shibboleth is an (often very quiet) signal of membership in an in-group. (c.f. usage #2 here: https://www.merriam-webster.com/dictionary/shibboleth )

An example: if someone steals your credit card, and you call your bank to report that, you could describe your requested action as either "opening a dispute" or "filing a chargeback." These are functionally equivalent but saying "chargeback" suggests that you're likely rather sophisticated about the mechanics of credit cards relative to most well-educated people.

Isn't this what semiotics[1] is all about? The difference between connotations and denotations?

My parents were really into that sort of thing "Words have power" - So during my 'bratty teenager' phase, I standardized on the word with the most negative denotation that had the correct connotation in my speech. I still do it sometimes, as a joke, but it's... funny, because while I have the feeling that the connotation is somehow less important than the denotation, and when I do the above, I'm attempting to point that out, nobody else seems to see it that way. To 'hire someone profitably' is a dramatically different thing, in most minds, than to 'exploit someone', even though the two words have an identical denotation.

I used to see my lack of understanding here as a sign of how most people cannot see past their own emotions; I now see my lack of understanding as a sign of how I am not in touch with emotions in a fully human sort of way.


Connotations are not meaningless. It's a question of redundancy when encoding information and should be treated like a checksum.

What you say might be true, but it isn't covered by Google's denotational definitional of the word connotation:

connotation - 'an idea or feeling that a word invokes in addition to its literal or primary meaning.'

That seems to also cover whatever meta- preferences that a particular word choice may signal.

Funnily enough, we're now in the realm of debating the connotation vs. denotation of the word 'connotation' itself.

Yes, your meta interpretation is what I was getting at.

Also, will vs. shall.

The defendant will comply by...


The defendant shall comply by...

When in doubt, use the latter.

There are occasions where legally a "demand" is exactly what you need; e.g. A "formal demand notice" is a specific type of notice that a debtor is required to pay up immediately (i.e. 7 or 14 days) before a creditor files for involuntary bankruptcy (i.e. to force you into bankruptcy). Having said that you should never say "I demand" or "I require", it is always used to reference a document, a signed contract, a law, etc.

Small claims court goes with demand verbiage oddly enough in some states. So context matters.

"These days they have streamlined online applications for writing to them, but I suggest that you only send them paper letters. This is a really weird thing for a technologist to suggest, but when you send paper letters, you can establish and own a “paper trail.” When you type words into their godawful web applications and hit submit, you will likely fail to retain a copy of those words and fail to retain records about what they told you (exactly) and when. This will complicate your resolution with them. Communicate with them only over postal mail. Keep a log of every mail you send (including what you said) and when it was sent; keep a copy of every letter they send to you and when it was sent. You don’t need physical copies; digital is fine. I like organizing all of mine on a per-incident basis in Dropbox."

YOU SHOULD ALWAYS SEND LETTERS WITH 'USPS RETURN RECEIPT REQUESTED.' (It's the green card you get at the post office and once the recipient receives your letter, you will get a green card in the mail serving as proof of delivery and acceptance.) This is the lowest costing form of legal proof for a paper trail. Well worth it. I use it all the time and I learned this from my dad who has spent his life practicing law.

> YOU SHOULD ALWAYS SEND LETTERS WITH 'USPS RETURN RECEIPT REQUESTED.' (It's the green card you get at the post office and once the recipient receives your letter, you will get a green card in the mail serving as proof of delivery and acceptance.)

Also: 1) Get the actual green-card form beforehand; 2) type the green-card serial number above the inside address of the letter; and 3) keep a photocopy. Otherwise the recipient could claim that the signed green card, confirming receipt of the mailing, was for some other letter, not the one you sent. As a baby lawyer filling in for a more-senior associate at a court hearing, I had an opposing counsel make just such a claim to a judge; the judge gave the opposing counsel the benefit of the doubt. (The opposing counsel was later disbarred for unrelated reasons.)

Example of such an inside address:



   Evil Corporation
   9876 Main Street
   Anytown, Anystate  54321-9876

   Attention: Department of Fobbing People Off

   To whom it may concern:


Curious, can you not ask them to produce the other letter then? As they signed the green card.

Is the date that the green card was bought recorded by USPS? Basically, how exactly does writing the tracking number within the letter prove that the letter was mailed with that envelope?

Under civil law in the United States, the legal burden is not "irrefutable proof", but "preponderance of evidence".

If you produce copies of a letter with a given return receipt number indicated on it, the return receipt stub, and the received receipt, and the opposing party claims that "this could have been faked", then, unless your credibility is otherwise impeached, you have established a preponderance of evidence for your claim.

It sounds like several of you know more than I do about this, so I'm curious... I'm in the habit of using Priority Mail for things like this, because I can print out a mailing label at home and get a tracking number with delivery information.

Assuming I put the tracking number in the letter as you suggest, is there still an advantage to using certified mail and a green return receipt instead? Or is Priority Mail equally good?

Priority Mail AFAIK doesn't require a signature for receipt. It does provide tracking, but that's less rigorous proof than the actual return receipt.

Thanks. Priority Mail does have a signature-required option, which makes me curious whether that is as good as a return receipt.

Yep, for important written communications (e.g. CRAs, the IRS, debt collectors, etc.) I always use certified mail and request a return receipt. For any clueless millennials such as myself who are unfamiliar with the post office, this is a good video that shows exactly how to fill out the forms:


There are court documents I've read that say, to this effect, that in absence of any returned mail, it is assumed that it was delivered as intended.

That's from the prosecution.

Yep ( http://federalevidence.com/node/784 ) ; mail properly addressed is assumed to be delivered. For related reasons, any mail sent to a business is assumed to have been read. This is a rebuttable presumption.

Even knowing this, many lawyers (and other savvy people) send certified mail with a return receipt. It strengthens your case in the event that the other party tries to disavow receipt of the mail, and it says (rather loudly) that there is a folder on your desk labeled Evidence and that every additional action the other party takes will join that folder.

Thanks for the video. Curious why they say never to sign the letter.

You don't sign the letter because signatures have a way of magically[0] teleporting themselves onto documents that you've never seen.

0 - Using such fancy Merlin's wands of "Photoshop" or "scanning and then MS Paint copy/paste" or just "photocopy, cut with scissors, paste with tape, photocopy again."

That is highly illegal. The FCRA and related laws are enforced by the FTC, CFPB, and debtors' lawyers. However, forgery is a felony in all 50 states. If they forge your signature and mail it to you from another state, it becomes a federal crime. A creditor would have to be really stupid to try something like that.

I have always wanted a stamp that physically cuts out a complicated pattern as a signature.

> Mean words cannot hurt a bank. Threats cannot hurt a bank. Paper trails, though, are terrifying to regulated institutions. Your bank’s customer support representatives are taught to evaluate whether someone looks like they’re competent and collecting a paper trail. If they are, the CS rep is supposed to stop touching the case immediately and instead escalate them to a supervisor or to the legal department.

This is why I record every single one of my phone calls. I've recorded lies over the phone (without knowing they were lying at the time) and then played them back to another customer service rep to prove how I was deceived. I was immediately escalated as the author says and could feel how the evidence gave me power in the situation.

Edit: I'm not suggesting anyone break the law. If you're going to record phone calls, know your laws and get consent if necessary. This document which was last updated 3/10/2017 may be of help https://www.mwl-law.com/wp-content/uploads/2013/03/LAWS-ON-R...

Important not-a-lawyer advice: recording phone calls without the other party's consent is illegal in wide swathes of the U.S., but keeping copies of letters is legal everywhere.

Question: When the party states that "this call may be recorded for quality or training purposes", does that give you reciprocal permission to record the call or do you have to explicitly ask for it?

Any lawyers with opinion on this?

IANAL, but if you live in a two-party (all-party?) consent state, its only illegal if you don't tell them. You can do exactly what they do: prefix your call with "this call is being recorded for my records".

Remember, your goal isn't to secretly pull out a recording that proves they're lying while in court. You don't want to go to court at all. To that end, you want them to know you're keeping a paper (or virtual paper) trail. So tell them.

The problem is, what if they hang up? They have an unfair advantage here since they can refuse to consent to your recording, but you can't do the same thing. (I mean, you can, but then they're holding whatever you need to get done hostage.)

Then you make a note of it, and send them a letter (certified, receipt requested).

(a) Are they obligated to handle anything that they would handle over the phone via a letter too? I don't feel like many companies would be willing to do this.

(b) What if they just do all the typical customer service BS on the phone over snail mail? People spend hours or even days with a lot of back-and-forth to get non-routine stuff sorted out... if you do that over snail mail it could easily take many months to do things right. Not exactly practical, especially when you have a deadline coming up and it passes during this back-and-forth mailing.

I guess the answer is in many ways contained in the blog post.

Is there any legal regulation or contract compelling them to respond to you? If so, use that as leverage. If there is not, you may not be able to compel them to do what you want.

I would love to know the answer to this question.

Alternatively, I wonder something else: When they say "this call may be recorded" could you legally interpret "may" to mean as giving you permission, rather than as "might be recorded"? It would seem like they might have a hard time arguing "this call may be recorded for quality purposes" doesn't imply that you may (= can) record the call for quality purposes.

Follow up question:

What if I said "I am recording this call" while I am in an Automatic Voice Response system waiting for an human to arrive on the line and talk to me?

As far as I am concerned, human representative or the automated voice response system, both represent the company that I am interacting with. It's not my fault that the voice response system that the company used to talk to me (to answer my questions, or just make me wait) can't understand that I am going to record the call and act appropriately. The business is perfectly fine with using the automated system to take critical actions, then it should be fine with me telling it I will be recording the call, not my fault that their automated system failed to recognize that.

What do you think?

Well, when I used to work in a call center we were instructed to just keep repeating "I do not consent to your recording this call" or something to that effect until they said they stopped or they hung up.

Intent and reasonable expectations will come in to play.

Unlike the movies, judges hate word games and attempts to skirt the laws. As in, they really frown on it.

This is not legal advice and I'm not your lawyer. Consult a qualified legal representative in the appropriate jurisdiction.

Truth. I once happened to be in a hearing where the judge got the idea that the plaintiff's attorney might be jerking him around. It was an impressive display of wrath. Along with crocodiles and bears, federal judges are now on my "definitely do not fuck with" list.

Playing semantics games is almost guaranteed to piss off the judge. Pissed off judges are not nice.

It's a very long-winded story, so I will try for the short version. Courts default to being open to the public. You can go down and watch them. Chances are, you can even make use of a law library.

Anyhow, this is sort of a hobby of mine. I know, I'm a strange person - but I love watching the court. Like I said, it's a long story.

I think my favorite was a guy who was in district court and argued with the judge about the definition of marijuana and the word possession. Now, the judge was pretty polite and told them that they were trying to give them a very small fine.

The kid persisted and had no idea about procedure. I mean, he could have argued those things but there's a procedure. Procedure is very, very important to judges. Seriously, they love proper procedure so much that they will even tell you what you need to do. She tried to explain this to the kid.

But no, he persisted and tried to fake his way into appearing to be a legal scholar. Again, this was district court.

Suffice to say, he kept going before finally admitting guilt and she gave him the maximum fine and just until the end of the day to pay that fine. At which point he decided it was time to double down and refuse to recognize the court - though not as one of those sovereign citizen things.

I'm not sure what the end result was, but he was taken into custody by the court officers. The rest of the day went quite smoothly.

The best part of this story? He had the chance to speak with the DA prior to this and the State provides an attorney of the day. He took advantage of neither one.

It boggles my mind when people think they can out-talk people trained to parse semantics.

Perhaps answering every notice of recording with "me too" is enough?

Wow! this is a good one. I would love to hear a lawyer's take on this to see if this is notice enough. Seems like it though :)

If I tell someone "my nose may be touched" then I'm allowing them to touch my nose.

If I tell someone "this call may be recorded", then surely I'm giving them permission to record the call. Their ability to detect my lies seems to be a reasonable "quality" purpose.

You would be intentionally conflating two different definitions of the homograph "may" (i.e. permission "you are allowed to X" versus possibility "X might happen").

You could argue that "any reasonable person" would have interpreted the "may" in that statement as giving you permission to record the call for training purposes (as opposed to letting you know that your call might be recorded for training purposes), but I wouldn't want to be in you shoes when you try.

Just tell them that you're recording the call too, and sidestep the issue entirely.

This again varies between jurisdictions, as far as I'm aware.

As a maverick not a lawyer, it's worth noting that what this means in practice is that evidence of a crime obtained by illegally recording a telephone conversation may not be admissible in court. I say may not be because a judge could decide to allow the evidence if the alleged crime is sufficiently serious.

It's extraordinarily unlikely a criminal or civil case will be brought against you because you revealed to a company that you recorded a support call to them, especially if the content of those calls reveals impropriety on their behalf.

What probably would be a problem is if you recorded a telephone conversation with the intent to, or actually causing, harm.

At least, that's my lay understanding of how things might go.

Fortunately, all calls to/from the bank (or at least my bank) begin with the message "We inform you that this call may be recorded."

How do you record the consent itself? Or is it going to be a case of he said/she said? I'd assume you'd need proof that you had asked for consent prior.

The pedantic way (and maybe required under some theoretic draconian regulatory environment):

- no active recording -

Mr. Wants-to-record: "May I record this phone call?"

Ms. Recordee: "Ok"

- start recording -

Mr. Wants-to-record: "I am now recording based on the permission you just gave prior to starting recording. Are we in agreement?"

Ms. Recordee: "Yep"


FWIW, I've had conversations pretty close to that when doing mortgage applications over the phone.

> This call may be recorded for quality and training purposes.

They never ask me to say I'm OK with it.

Because you can hang up if you aren't. Additionally, I imagine upon reaching an individual immediately stating you do not consent to being recorded will likely trigger the appropriate outcome.

Depends on the seriousness of the call.

If you're entering into an actual contract verbally (e.g. applying for insurance or a mortgage over the phone), they'll typically go out of their way to ask if you're okay with the recording. They don't want even the slightest admissablility issue, and they want you to know you're giving a binding verbal signature.

If you're just talking to a low-level customer support rep, the stakes are a lot lower.

If you not okay then you simply hang up, no?

> How do you record the consent itself?

I suppose using a call recording device for a fixed line telephone, or an app for a smartphone.

> I'd assume you'd need proof that you had asked for consent prior.

My point is: even if you neglect to ask for consent, no company is going to sic their lawyers on you if you play back to them a call recording that proves they lied and therefore failed to meet their contractual obligations.

Edit: Oh, sorry, I see what you mean now about recording consent. You start by recording the call by default, if the other party requests the call not be recorded you cease recording. It would probably be okay to retain that portion of the recording.

I wonder if this law still makes sense. I feel it could be altered to say that recording someone without them even knowing you are listening should be illegal, but I don't see why it should be illegal to record a consenting conversation between two people.

Btw, does it apply to video recording as well?

Generally the laws on video recording are based on where the camera operator is standing while filming. If you have a lawful right to be where you are, it's probably ok to make a video. But take a look at the facts in Shulman v. Group W Production, Inc. (1998) 18 Cal. 4th 200, where the camera crew was lawfully present but intruded on a private encounter. Very much depends on context, at least in California.

Are you automatically covered if they give the standard boilerplate that they are recording the call?

That's a great question, this might be of interest to you:


The top answer states:

>Once AT&T, or anyone else for that matter, states that the communication is being recorded, it is no longer considered a confidential communication requiring the consent of all parties in order for any party to record it.

IANAL either, but I think either of informing the party upfront or soft beeps in the background are acceptable.

I've been informed by the other side many times that the call was recorded, and never once heard soft beeps. I think the announcement must be enough.


Yes. I believe either is sufficient, not that both are required

Yes, check your states laws. Some states are two-party consent, but a good number are one-party consent states. And in a one-party consent state you recording yourself is legal without the other parties knowledge because you gave your consent to make the recording of yourself.

Due to getting a new cell phone number that apparently once belonged to a deadbeat I know nothing about, I got a large number of debt collector calls. I wish I had a good way to get their address and record who is calling.

The only problem is that they all ask for <name>, give me no information about themselves, and hang up right away. I blocked a lot of them, but there's no good way to make that go away.

The federal Telephone Consumer Protection Act (47 USC 227) says that each of these calls is worth $500 minimum in statutory damages -- and may be trebled to $1500 per call if shown to be willful. Assuming you live in the US, this is a great case and you should keep track of the calls.

Problem is that they never identify themselves, they just say "we're looking for [xyz]" and hang up when I say I'm not them. I can't keep them on the call and the caller ID is faked to be some random local number.

It is legal in, for example, Sweden: https://en.m.wikipedia.org/wiki/Telephone_recording_laws

This is correct, if anyone is considering this then definitely look into your state laws before proceeding.

And here I am, fascinated, with all the technology available today, paper and pen is the gold standard.

How do you do this from a technical perspective? I've tried to look for solutions to do this in the past but never found any good options.

Recording phone calls without the other party's consent is super illegal, as in criminally illegal, in all-party consent states [1]. Needless to say, one gives up leverage when one commits a crime.

[1] https://en.m.wikipedia.org/wiki/Telephone_recording_laws

> super illegal

Trafficking large quantities of drugs, aggravated assault, serious sexual assault, murder. These are super illegal. No one is going to prison for recording a support call that reveals impropriety on behalf of the company providing support.

Many people here seem obsessed with laws, as if they possess value and worth in and of themselves, when really they are a very high latency side channel of society and power. The steps that would necessarily have to occur in order for a case to be brought against you because you illegally recorded a support call that revealed impropriety of the other party are fairly preposterous.

Anyway, all of this can be avoided by simply stating something along the lines of "I am recording this call for my records. Please advise me now, or at any stage, if you wish the recording to cease."

The illegality of acts like those I mentioned above can't obviated by stating your intention to commit them and offering an opportunity for the other party to decline to participate. In some jurisdictions it is a form of assault to seriously state your intention to harm another.

> The steps that would necessarily have to occur in order for a case to be brought against you because you illegally recorded a support call that revealed impropriety of the other party are fairly preposterous

It's as simple as "we will settle your qualms against our business in exchange for us not pursuing your wilful violation of criminal law in court". If you say no, a cheap state court filing would be routine for a business but hell for an individual.

TL; DR If you want to record a call, get permission.

Source: I helped a friend who had a call illegally recorded Cc our local AG on a letter protesting the matter. The AG requested information from the offender; they settled with damages for everyone involved's time and expenses. Running your life assuming nobody will hold you accountable works until it fails. When it fails you've handed the other party a ton of leverage.

My understand of how criminal allegations work, at least in Australia, and I believe the other Western democracies aren't too dissimilar, is that: 1. the compfny would have to report the matter to police, 2. the police would have to believe there is reasonable grounds to lay charges, 3. the police / public prosecutor would have to believe that a. the case is worth persuing and b. there is sufficient evidence for a guilty verdict if the defendant pleaded not guilty and the case went to a hearing before a judge.

I'll admit a company could threaten legal action, and this would usually be sufficient for the lay person to back down.

I agree with you in that running your life as though no one will hold you accountable works until it fails. I've had a close call with a major indictable, the charges against me ended up being dropped nolle prosequi because the police fumbled the evidence. And from my perspective lots of companies and law enforcement are riding roughshod over their obligations to us as people, so in a sense fuck them.

It's worth noting this approach probably isn't worth the hassle... But it does seem to be a personality trait I'm evidently not interested in changing, otherwise I probably would have by now.

This comment glosses over the fact that most US states are one-party consent states not requiring notifying the other party that a telephone call is being recorded.

From your source:

> States that currently require that all parties consent to the recording include: California,[21] Connecticut,[22] Florida,[23] Hawaii (in general a one-party state, but requires two-party consent if the recording device is installed in a private place),[22] Illinois (debated, see next section), Maryland,[24] Massachusetts[22] (only "secret" recordings are banned, but is the only state without a "public location" exception),[25] Montana (requires notification only),[26] Nevada,[27] New Hampshire,[28] Pennsylvania,[29] and Washington (however, section 3 of the Washington law states that permission is given if any of the parties announces that they will be recording the call in a reasonable manner if the recording contains that announcement).[30]

This is not accurate. California makes it illegal to record "confidential" communications, which is sometimes called "two party consent," but that shouldn't be interpreted to mean that affirmative consent is required. Notice that the call may be recorded defeats any presumption of confidentiality and makes it permissible for any party to record the conversation. (I am a lawyer and have litigated these cases. But I'm not your lawyer and this is not legal advice.)

I'm not seeing the claims that you are refuting about California in the quoted text. My point was just to illustrate that most states are not two party consent.

And that is why you state you are recording the call.

Is it legal if another side is recording (as they usually do)?

I love that this is both informative, seemingly complete, and genuinely useful, and I really hope it gets in front of the people who will need it the most.

It is, somewhat regrettably to me, not nearly complete. This is the Cliff Notes version -- it's biased towards the most useful particular bits for one particular use case and constrained by the fact that I was trying to write it in a few hours on a Saturday afternoon while still having time to play with my kids.

It gets the essential point across. Communication with a CRA is a battle of attrition. This is how to send specific early signals that you'll last longer than they will.

I don't disagree, but I imagine if you need up-close detail on this sort of thing, you'll likely also need an attorney of your own.

Another good way to protect yourself is to save money, and avoid needing to rely on banks for a credit lifeline.

You might not care about your credit rating but your credit rating, unfortunately, cares about you.

Do you want to rent an apartment in the United States? You will, in many geographical markets, expect to have credit pulled as a matter of course. This is partly to determine ability to pay and partly to determine whether you are socially established; "I have mountains of money, why would I need credit?" is something which is often said by people who operate meth labs.

Do you want to work in a job which requires a background investigation? Expect a credit pull.

Do you want certain varieties of insurance policies?

Expect this list to get longer as time goes on, because "credit" encodes a lot of things which are stupefyingly useful in predicting outcomes in advance. Like any bit of code which is stupefyingly useful, get_fico_score() is going to find its way in all sorts of places you'd never naively expect to see it.

Additionally, if someone comes to the mistaken conclusion that you owe them money, the harassment which likely accompanies that is a nuisance even if the dings to your credit score are not.

This is spot on. I didn't care about my credit score for a long time...until I did. An autopay error from one bank account to another resulted in a late payment and a 50 point drop. Coincidentally, I also needed to rent an apartment and apply for a small car loan.

Both of these things were made much more difficult, even with just a 50 point ding. The score recovered quickly and I learned my lesson. It was somewhat eye opening for me. One thing I do wish: after tons of research and discussion with "experts" it seems pretty difficult for the average American to predict a rise in their credit score once it takes a hit.

Sure, paying bills on time and carrying low or no balances help, but at the same time, paying off a loan can either help or hurt you, being added as an authorized user to a partner's card can be beneficial or not even acknowledged. I wish the algorithm for determining this was a bit more transparent, i.e. What are the mechanisms at work behind that credit report? Not some vague "your score may have fallen because of..." Or "doing this might help your credit..." I feel like the lack of transparency makes people fear credit to a degree.

I suppose the information is hidden to prevent gaming the system. As someone mentioned in another thread, they took out a loan for $1000, sat on it and just paid it off. Credit score goes up with zero risk for just the cost of interest. If the algorithm were exposed, it would be easier to game.

If the things they were tracking are reliable indicators of "credit-worthiness" then it would not matter if you "game the system" or not.

It's like that story about robbing the bank. First, we get jobs at the bank. Then we go in and work the jobs every day... (spoiler: we never actually rob the bank, because we get cushy jobs with benefits, and retirement plans. That's brilliant!)

Anyone with a good credit score can decide to burn their credit at any time. Loss prevention can also step in and cancel your cards at any time if they decide that you've gone off the deep end. They probably won't... but they could.

Any metric is gameable. And, if the current algorithm is the best way to predict "credit-worthiness," publicizing its details will drive consumers toward different behavior, which makes it less powerful

Imagine Google made its own credit score, based on your searches, social contacts, etc. It turns out that someone clicking on ads for product X have a very high likelihood of repaying their debt. This information ends up publicly leaked.

What do people start doing? How does this affect the quality of Google's credit algorithm?

Not any metric is gameable.

A reliable indicator of whether you will pay your bills in the future might be whether you paid your bills in the past. There is no way to game this metric, other than by paying your bills.

You just chose a metric that would be easily gamed and said that any metric is gameable.

> There is no way to game this metric, other than by paying your bills.

Except the exact situation outlined above, in which a person generated bills that they otherwise wouldn't have needed, for the sole sake of having more bills "paid on time".

So, how does one get over in gaming this metric? Take out a lot of credit accounts once your credit is good and then default on them? What's the end game where they come out ahead? See prior comment about the bank job... that's just called having and ruining your credit.

That's overstating it. "Whether you've paid back all debts on time" isn't gameable.

Actually it is. Simply take out a couple of loans you don't need and pay them off at the agreed upon schedule.

Taking out loans that you don't need, not spending the money, and paying them back on time (with interest) should be a very positive credit score indicator.

It shows that the person is planning ahead, is careful with not overspending even if they have cash available, is organized enough to make all the monthly payments on time. To me that seems like a better signal than someone who does need the loan.

How would a person who takes out the same loan, but actually spends the money be a better credit risk?

I agree, but in fairness, the way credit agencies use that information is nonetheless gameable. They ignore all of your payment diligence when it comes to bills (utilities, rent, cable, etc) but consider it a positive indicator when you get a credit card that you pay off every month.

This leads people to do something they don't want to do, and is no more informative than paying all those other bills would have been, merely to increase their score. That's a kind of gaming.

I think you do have to consider too, that these companies also want to give you credit (it is their business,) and in many cases they will likely have insurance that pays when you default.

If the way they have allowed you to "game" this metric results in you signing up for some credit in order to improve your credit score, that's nothing but a net win for them. They got you some credit, that's definitely a score for them.

(I'm not saying that credit card companies would prefer all of their customers to default, they would never be able to buy insurance again... I just want to put it out there that maybe the system works exactly this way, 100% deliberately, because it benefits them too.)

That doesn't change the value of "has paid back all debts owed?".

But it does affect the "has paid off x% of loans"

Which wasn't the couterexample.

But that is an indicator of credit worthiness. Having the financial discipline to spend your money repaying your obligations rather than treating yourself is a worthwhile indicator, regardless of how the situation comes about.

> "I have mountains of money, why would I need credit?" is something which is often said by people who operate meth labs.

Eh, this can get overstated on all those guides to hack your score.

My wife and I are both, to put it mildly, debt averse. When it came time to buy a house the lenders cared far more about debt to income ratio than scores, which we never built up through artificial debt, but turned out fine anyway.

Lenders deal with enough people that they quickly realized we were the sort of weirdos who would pay early and competed for our business. I suppose they could have wondered if we would be so confused by how debt works that we'd just skip random payments because we are bad at monthly responsibilities. Somehow they ruled that out by talking to us and looking at information about our lives. Makes sense, that's basically their job. Otherwise they're leaving money on the table.

So sure, definitely watch for errors. Don't take something on then default. But otherwise a light history is not going to sink you, at least not on its own.

This was a really excellent post, the best I've seen you write up this material, and among your top 5 posts ever.

Having said that, I'm tentatively going to disagree.

I made a conscious, somewhat coerced choice in my early 20s never to rely on revolving credit. A combination of random course-of-business (of course resolved) delinquencies and no history of revolving credit resulted in my having relatively poor credit. Compounding this, my disinvestment from my own credit score has led to a new dispute resolution strategy for e.g. medical billing mistakes, which is "ignore mistakes and disputes forever" --- you can imagine the resulting impact on my credit score.

The net effect on my life has been minimal.

It was comically difficult for me to obtain an actual bona fide credit card (which I wanted in order to broaden my choice of car rental agencies --- a problem that has become less important over time as more and more rental agencies accept debit cards). A few weeks after I got the first wire transfer from the sale of Matasano, calling Chase with a checking account balance that could fairly be called "moronic", I had to argue for about 30 minutes for them to issue me a credit card with an extremely minimal monthly balance.

That's about the extent of my problems.

Every landlord I've rented from has pulled my credit. My credit has always been bad. But my landlord references were spotless, and that's what landlords seemed to care about.

It's more than likely that if I was in a different career, and particularly if that career was in a lower-paying sector where workers have less leverage, my credit score would be a real concern in finding a job. But in this industry, my general response to being declined for a job as an adverse decision relating to my credit score would be to do to the reputation of the hiring firm on Twitter approximately what the lawyers at the Bank of Bigness believe their regulators will do over an FCRA violation.

I would almost certainly have a hard time getting a loan for a car. But then, see "revolving credit". Don't get a loan for a car. I had one once in my 20s and remember it being a pretty miserable experience. Until very recently, every other car I'd driven since was (a) worse than that car and (b) on balance a more pleasant experience for not coming with a Significant Monthly Bill. Obviously, in this industry, you will eventually reach a point in your career and your personal financial maturity where "obtaining what you believe to be a car commensurate with your status" will stop being an interesting problem.

Which, I think, leaves us with home ownership. I don't have a good answer here. I bought my house in 2005, weeks after starting Matasano, a company which for all the intents and purposes of my mortgage lender did not exist. Suffice it to say I was not able to push that lender around with the contents of my bank account, which were in 2005 also "moronic", but in the other direction. I probably got a worse rate. And it was 2005, so it's possible that my only effective qualification for buying a house was "50.0001% likelihood of currently having a pulse".

My tl;dr here though is, at least in my case: if you don't use credit cards ever, your credit score doesn't much matter, and as it turns out credit cards don't much matter either.

I mean, you're rich. The normal rules don't really apply. Your poor credit sounds like my poor credit, but it has a pretty big impact on my life.

You once mentioned you paid out of pocket to get your family member some kind of medical procedure. I think it was a CT scan? Anyone who can do that isn't really in the same class.

Here's one way it matters: every year, your entire well-being is determined solely by your landlord. You can be an excellent tenant and they'll decide not to renew your lease because reasons. Now you need to move your whole apartment in like three months, which means finding a new place. In some cases this requires a credit check. Not all, but that still limits your options in a tricky situation. Imagine if the place you lived was determined solely by that number you didn't pay attention to.

Want a nice car? Better have cash. Laptop? Cash. $3k to drop on a new laptop isn't feasible for the vast majority of people who aren't affluent.

I know you mean well, and I share your "fuck this broken system" feeling, but it can get you into trouble. Rebellion only works if you have the means.

Here's a concrete question: you need a laptop to do your job. How do you get one without credit? A second hand MacBook still costs >$1k. And yeah, we're talking sums of money that are tiny in comparison to what you're used to. It might be hard to believe that not everybody has $1k laying around. But paying $100/mo is far more pleasant, to say the least.

Here's another anecdote: new apartment in a new city. I was about 21 and had no credit history (bad or otherwise). I'm settling into my new apartment and call around to find out who the ISP is. It's AT&T. Call them up, ask for Internet. "No." "What do you mean 'no?'" "The system says 'unknown risk'. Our policy is to not do business in this situation."

I'm not exaggerating or making it up. There was no alternative, and I was completely screwed. There was no other ISP! We ended up using a family member to establish the account. But most people don't have anybody to fall back on. I don't know if AT&T still has that ridiculous policy, but there are other situations just like that.

Let me condense my last post down for you.

1. You're right, in the sense that most people on HN with an established career in technology are, relatively speaking, "rich". That was my point: if you're stably employed in technology, your credit score might matter less than you think it does.

2. You're wrong, in the sense that with the exception of the credit card anecdote, which I related as a way of demonstrating that I had in fact had some interaction with my credit score, all of that post concerned stuff that happened long before we sold Matasano. By the standards of HN in 2017, in the mid-00's, I was most assuredly not rich (the way you mean it; I'm just stipulating your term). I've had terrible credit the whole time.

A big part of my point is that "just use cash" worked out much better for me than attempting to rely on credit. Obviously, if I worked as a retail clerk, that would a very problematic strategy. But I don't. If I had been able to resolve "need a new laptop" with credit instead of cash, I'd have been worse off.

I get that the rules are different for tech workers. Part of the point of saying this is to remind people that the rules may be more different for us than we think, which should have moral implications for us as well.

Well, you mention that you sold Matasano, but that kind of sidesteps that you'd be screwed if it didn't happen. It's not tech workers vs retail clerks so much as financial windfall vs having a regular 9-5.

The credit system just sucks. It's a historical accident. But it's also not really realistic to say "In some cases you can get away with not worrying about your credit score if you're a tech worker."

I'm not arguing that the credit system doesn't suck. It sucks so much that I haven't had any meaningful contact with it for 20 years. For most of that time, the overwhelming majority of which I spent financially insecure (and a parent, to boot), my disengagement from credit has ended up feeling like a blessing. I genuinely do not understand why people get credit cards.

As for "windfall vs. 9-5", I spent ~20 years in the latter category, a category which I'm not unlikely to end up in again, and I simply don't agree with you.

Maybe another way to put it is this: for all the problems you've had with personal finances, I assert that acquiring revolving credit is a good solution to none of them.

Finally: since litigating this further is inevitably going to involve getting into pretty squicky financial details and debates over personal financial decision-making, I'm going to stop here. Since I think you'll probably disagree with me, I want to be clear that I expect and will read any rebuttal to this that you write, but I'm not going to continue the debate.

It solves getting your kids through college. That's one of the other pain points. The quality of life difference is massive if you have to work full time and also go to college full time.

It would be delightful to find an answer to some of the problems of bad credit. But it kind of matters.

Although I agree with your point broadly, $3k on a laptop is either a business expense or a luxury. Furthermore, tons of non-rich people who do NOT have money to up and pay for expensive medical costs etc. can readily save up for an affordable laptop (you can get pretty decent second-hand for under $1k actually). People who don't have $800 or $500 lying around might sell some stuff on Craigslist or work a couple odd jobs and save it up.

To be clear: everyone should understand that it's MORE expensive to be poor than to be rich. The key is a BUFFER, just like the buffer loading a streaming video. Someone with a $2k buffer can weather most common issues that come up as long as they can fill the buffer up again each time it gets used. Someone with a $2k buffer is not a truly poor person who is in debt and gets payday loans or worries about whether they will eat, but a buffer like can be had WAY before you can be called "rich" (and some rich folks can be incompetent and not keep a good buffer).

The vast majority of people are in a position where they could keep some buffer if they learn to. The class difference here is whether or not someone gets the financial education to care about keeping a buffer.

But obviously, some items can come up and kill any normal person's modest buffer, and then things get painful. And the rest of your points about how the system works are valid.

> It's AT&T. Call them up, ask for Internet. "No." "What do you mean 'no?'" "The system says 'unknown risk'.

That surprises me. I have relatives who have TERRIBLE credit. Reposessed cars, unemployed, a lifetime of poor financial decisions. They have had no trouble getting utilities or e.g. DirecTV service. They typically have to pay several months in advance as a "deposit" but they are not turned down flat.

Even "unknown risk" would be in the worst case approximately that. Doesn't seem to make sense.

I don't know if this is a late 201x thing, but over decades of having piss-poor credit and no funds with which to make advanced payments, I never once had a problem getting phone and Internet service. Renting cars? Yes. Needing to provide some extra documentation for landlords? Yes. Opening new checking accounts? Yes. Getting DSL or cable? Not once.

I was surprised too. It was for having zero credit rather than bad credit. Maybe it was just a corner case I fell into. It was in Petaluma CA in 2010 or so.

When I was moving into my first apartment in 2000, one of my planned roommates had the same problem. He had never had any sort of credit/debt account and the landlord wasn't able to actually pull a credit report.

It feels like there are many market-based solutions these days even if you had poor credit:


Every landlord I've rented from has pulled my credit. My credit has always been bad. But my landlord references were spotless, and that's what landlords seemed to care about.

Were you trying to rent in a tight housing market? In Vancouver, it's common for landlords to (completely illegally) weed out the tenants they don't want -- in particular, single parents, certain ethnic minorities, and people in low-class occupations -- via the excuse of credit scores (even though they accept childfree white professional-class tenants who have those same scores).

I suspect that maintaining a good credit score is far more useful for people who will encounter landlords which are looking for an excuse to reject them.

What happens when you have 10 valid applications as a landlord? Do they even have to tell you the reason why they chose application 3 over all the others? How does that work?

Yes: twice in San Francisco during the first bubble, with competing applicants in the room with us, first in SOMA and then in Noe Valley. Also once in Santa Clara during the same time period. (Also 4 times in Chicago, and 2 times in Ann Arbor, but those weren't as challenging.)

> Every landlord I've rented from has pulled my credit.

There is also a separate tenant screening for real estate that, at least for me, seems to be more reliable as an indicator for trust than the financial credit report. It is possible your landlords are doing the same? Perhaps that’s what you mean by reference checks?

> It's more than likely that if I was in a different career, and particularly if that career was in a lower-paying sector where workers have less leverage, my credit score would be a real concern in finding a job.

I’d point out poor credit is also problematic in high-paying professional fields, e.g. in a sector requiring clearance, or perhaps in a sector requiring licensure. As I understand it even public trust clearance would be problematic with poor credit.

It’s great your strategy has worked out well for you, but it seems a required part of your strategy is to be remarkably lucky.

I haven't been government-cleared for anything (as a matter of principle I won't do work for the federal government), but I've been background-checked repeatedly, including by major exchanges, and never once had a problem.

I'd like you tell me more about how you think I've been lucky with respect to my disregard for my credit score. I don't think I have.

> I haven't been government-cleared for anything (as a matter of principle I won't do work for the federal government), but I've been background-checked repeatedly, including by major exchanges, and never once had a problem.

I don't understand what this contributes. I guess it's great that won't work for the feds but that's hardly a generalizable position. Are you suggesting that passing the background check for a major exchange informs on the outcome of a public trust clearance or a professional license? Criminal background check portion perhaps, but not character and fitness—I would SWAG you'd need to correct your report before you could proceed.

> I'd like you tell me more about how you think I've been lucky with respect to my disregard for my credit score. I don't think I have.

Your tl;dr sums it up, your strategy works for you, but how it at generalizable even for a limited definition for “tech workers”? Partly I think you’re neglecting the advantage in being established in life before the Great Recession, which is part of why I say you are remarkably lucky. Does your strategy work for the younger cohort who would purchase a home post-2008? Does your strategy help for people who experience a significant adverse life event like divorce or a natural disaster?

That part of your "dispute resolution strategy" is to "ignore mistakes and disputes forever" and live unimpeded, when there are so many who could not do the same (myself included, it'd be a career-ender), leaves me slack-jawed with amazement. My congratulations to you, but I hope you see that few can get away with that.

I would suggest that your disagreement with patio11's post bears no relevance with people who already have credit ratings, have been caught by the Equifax leak, and are at increased risk for identity theft as a result (which, I think, are those the post addresses).

It seems to me you are simply gloating in your ability to avoid credit. Those who are able to avoid credit have little interesting to add to the conversation about credit reporting agencies.

This comment doesn't make any argument that wasn't addressed directly in the comments preceding it.

Okay, sorry, perhaps my point is different.

It is irrelevant whether you have any credit cards, or whether you have a bad credit rating, or whether you care. If you have a mortgage in the US, then Equifax, Experian, and TransUnion have your number. They have your number, they have mine, and they have brownbat's.

Now, other people have my number. And the only way I could have avoided that was to have paid cash for my house and/or had a fairly limited set of landlords forever. So the OP's point still stands, but I strongly agree with patio11's comment that my credit rating cares about me irrespective of how I care about it.

EDIT: sp

I think you've missed the point of this subthread, which is admittedly a tangent. I'm not suggesting that I'm less impacted by the Equifax breach.

Yeah, lack of a credit history hurt me when applying for apartment rentals. What's worse, back then the annualcreditreport.com assured me that my FICO was ~720 even though lenders and apartments would treat me as toxic purely on the basis of lacking a history!

(Not a problem since I built up history using a credit card but pretty kafkaesque.)

I have rented several apartments over the years (mostly in and around San Francisco) and have never once had my credit history checked by any of the rentees.

I have a car which I own completely (no loan) and I pay the absolute minimum amount of insurance required in California, which amounts to about $264/year.

I'm not saying credit doesn't matter, but the more you can do to limit your attack surface, the less likely you are to be harmed. The absolute best way to protect yourself is to not need to play along in the credit rat race.

I keep a security freeze on my credit reports, and never lose sleep. I can safely publish my SSN without giving one single fuck.

I can safely publish my SSN without giving one single fuck.

You should do so right here.

The CEO of the so-called credit monitoring services (can't recall which one) did that. Had his SSN published on billboards and other advertising.

Used to be pretty common to have SSN pre-printed on personal checks, also. It wasn't until the rise of online fraud that SSN became such a sensitive piece of information.

Really? That's awesome. Respect to that guy.

EDIT: Though it looks like it didn't necessarily turn out so great for him.



So looks like some fucks are being given after all.

Yes, however many industries in the US are attempting to "financialize" everything.

Debt-lenders no longer can sustain growth on just houses and cars- "let's go after furniture, all consumer goods, technology, payday loans"... etc.

It is a good solution for many to "just have money on hand", but when asset prices are inflated due to easy credit, how can I ever have enough to buy in cash?

Wait, save, then buy if you still want to.

You can buy a house with no credit history. Look it up.

According to credit suisse, only 33m people in this world have 1m+ USD of assets.

So, out of 3.5 billion adults in this world, only 0.7% have the ability to buy a home in a large city in cash.

What, then, should the other 99.3% of people do?

It seems odd to extrapolate to the entire world's population of adults, yet rule out the possibility of living anywhere that houses cost less than a million dollars.

Thanks for writing :)

I suppose the issue here is that the "wait and save" approach does not always have success, especially in the Bay Area.

The reason for that is because there is a finite number of houses, and an excessive number of bidders. These bidders use loans and leverage (other people's money) to pay a higher price than they normally would be able to afford.

Thus, waiting and saving is tougher.

Of course this begs the question, why not just avoid the Bay Area?

Unfortunately, most of the tech jobs are there. Other cities don't have the job capacity, despite having plenty of houses.

So, finally, there really only are 33m people on this Earth who can afford to pay cash for a home in the Bay Area.

The rest have to leverage, and thus, are affected by identity theft and credit scores.

I can just tell you, respectfully, as someone who has a successful career in tech far from the Bay Area, that it comes across as obtuse to presume one can't work or buy a house anywhere else.

Your comments imply Bay Area housing costs are the default, but they're not. They're the exception. Contrasting the number of global millionaires with Bay Area housing costs in response to a general statement about saving to buy a house is silly.

I'm not sure how realistic it is to save for instead of getting a loan for a house, but I started my career 30 minutes from a city in the US with an international airport. I got a mortgage, but the house was $117k, in a safe neighborhood, with a garage, three bedrooms, and 2.5 baths. There is a whole world outside the Bay Area.

How much job capacity do you personally need? Isn't it enough to have just one job? Many cities have that and more, and it only takes one job to support a family.

I hope you don't expect to lose your job every few months, but in case you do, remember that new jobs pop into existence. It's not like a city with 100 jobs is on the verge of running out. (several years later: "oops, the last job got used up in 2018 and we can't ever make any more; this city is all used up")

I've had my tech job for a dozen years now. It pays well enough to get a 3500-square-foot house on half an acre and feed a huge family, even though the pay is perhaps only 2/3 of what I'd make in San Francisco or Mountain View. The 5x to 10x difference in housing cost more than makes up for the salary difference.

Save and wait. Save more than you're comfortable with. If you work in the Bay area and you can't save. Get out.

Improve your skills, increase income, invest and save, live with roommates, learn that consumerism is programmed into people through TV ads and thus is completely unnecessary.

Mr. Money Mustache[1] has been blogging about this for years, and it's a great place to start for people who don't understand personal finance. Also check out the personal finance[2] and financial independence[3] subreddits.

[1]: https://www.mrmoneymustache.com/

[2]: https://www.reddit.com/r/personalfinance/

[3]: https://www.reddit.com/r/financialindependence/

Although that's all completely good advice for everyone, the facts on the ground are that we can't all be rich. The majority of rich people are the beneficiaries (either directly or indirectly) of an inherently exploitive system. A trivially small number of them actually added true wealth to the world equal to or greater than the wealth they've captured.

> the facts on the ground are that we can't all be rich

Yes but it's actually very doable and we can do it while adding value. Be the example that you don't believe exists.

I didn't mean "in reality, we aren't all rich", I meant "in the reality of our economic system and the way it works fundamentally, it is impossible for us to all be rich."

Whatever possible route there is to everyone being rich, it involves a fundamentally different economic system. Socialists would have you believe they have the answer to that, but there's good reasons to be highly skeptical. Capitalists don't pretend to have the answer, they (generally, there's lots of variations of "capitalism") openly accept that we need some people to be rich and others to be poor in order for the system to operate.

I used to try to live according to Kant's Categorical Imperative where I would aim to be the example for the world I want to see, the one where everyone would prosper if they all behaved as I do. Then, I realized that was just a delusional way to think. It's an interesting philosophical question to discuss, but people don't all act as I do in reality, so acting as though that fantasy were real is often totally counterproductive or self-sacrificing with nobody benefiting. Reality is complicated and complex.

When I say the following:

> Be the example that you don't believe exists.

It's in response to you saying:

> of an inherently exploitive system. A trivially small number of them actually added true wealth to the world

And I agree, not everyone can be rich, but on an individual basis it's not that hard.

The good thing about capitalism is that the average quality of life gets elevated. The rich do get richer (which we shouldn't focus on) but poverty also gets eliminated at the same time.

And yes, as you say, people won't act like the utopia we'd like, so it's not perfect. But it's better than anything else by a long shot.

> on an individual basis it's not that hard.

Well, yeah, that's the difference between micro and macro. In a free society without a nobility or class system, it's possible for any one individual to rise from poverty to privilege with luck and hard work. But if it's a zero-sum game where one success is another's loss, then "being the example" isn't an example of anything, it's just being the winner instead of the loser. Of course, most success isn't entirely zero-sum, but it has too many zero-sum elements far too often and is also too-often entirely zero-sum. And some people try to ignore the entire issue of when or whether or how-much some success is zero-sum.

> The good thing about capitalism is that the average quality of life gets elevated.

Crediting "capitalism" here is entirely dubious. The correct credit goes to technology and innovation. There's nowhere near adequate evidence to conclude that capitalism itself automatically increases average quality of life. Perhaps you are mistakenly lumping all of trade and markets with "capitalism"? Markets are often positive for everyone, and trade is generally positive for everyone, raising everyone's quality of life. In our society, probably because of propaganda to this effect, people consider markets and capitalism synonymous sometimes, the same semantic way people in some contexts might consider "moral" and "religious" (or even "Christian") to by synonymous.

In short, if you're just saying that markets and trade benefit everyone generally (but not necessarily), then we have no disagreement there.

I don't mean to be snarky at all, but I already do those things!

I really don't think there is a way to shoe-horn this for everyone.

If there was an easy way for everyone to be able to afford a house, it probably would have happened by now??

There are only so many 100k per year jobs available, and there's only so much expense cutting you can do.

At some point, the asset is just priced too high, often for artificial reasons.

See also: en wiki . org / 2007 mortgage loan crisis

You're looking at the cost of Bentleys and wondering how most people afford a car. They afford it by buying used Honda Civics.

Which is to say that there are job opportunities in Dallas and Indianapolis and Atlanta and so on and so on, which are all cities with the housing equivalent of Honda Civics.

If you insist on a Bentley (i.e. the largest coastal cities), then I guess I just don't know what to tell you except that you should reconsider a visit to the Honda lot.

1. You don't need a $100k per year job to buy a house. 2. Easy way = not spending but rather saving. It's simple, but not fun in the short term. 3. House too expensive? Save more or buy cheaper. 4. 2007 loan crisis. I.e. don't buy a house that's too expensive.

What can Money-Moustachism do about the fact that the well-paying jobs are increasingly concentrated in a few cities on either coast? Is the future that everyone becomes a down-at-heel rentier just like he is? Are we all supposed to be cheap John Arillagas living off the people who do actual, productive work?

Do work, save, don't go into debt, invest.

I'm not suggesting buying a house in cash. This would take a long time.

There are lenders who do not require a credit history. Look it up.

The "save, wait" comment was more general than house buying.

Ok thank you! I will go digging, but I am surprised and certainly skeptical :)

For me, the easiest solution has always been renting a room without a lease from a buddy at a rational price

Move away from the coasts, for starters. Cheap housing is the rule in the U.S. You're thinking of the exceptions to that rule.

But in many cases using credit will save you money. Two examples would be credit cards with their rewards (as long as you never pay interest) and house/car loans if you manage to get a low rate and invest what you don't pay up front.

This is a paradox I recently encountered - using credit cards can create another asset in the form of airline miles. A friend who is currently a college student (and just left a summer job as a postal carrier) used airline miles to pay for a weekend in a very nice hotel. At full rate, his few days would have cost more than a month of rent at my luxury apartment. He earned these miles through his ~20 airline-mile credit cards, and so now I'm researching how to game this "free to play" system.

Yep. I put my brother in a bad spot. It doesn't really hurt him much right now but I messed up some business work using CCs under his name. With his permission of course. I can't pay them off right now, but I've managed to get my credit score close to 800. So I'm going to be getting a couple of credit cards and balance transfer my debts over to myself.

All the decent or better CCs I've seen, offer pretty nice opening offers. I'll definitely be taking advantage of the "spend $3K in 2 months and get $500" sort of deals and pay off those balances. It'll essentially be free money. Like churning you said, Reddits churning subreddit provides a lot of info. Not sure if there are other good communities, but that seems good.

Spend $3k and get $500 in rewards... Why not just spend $2k instead?

Maybe spend the time increasing your income.

(I have done this... Rarely would the hassle.)

Because you are probably spending 3K in 3 months anyway. If you absolutely aren't (or you can't hit the minimum spend in other ways [pay for your friends etc.]), sure, don't get the card.

More work: - cancel the card because yearly fee. - pay tax on churned $. - shorten cumulative account age (lowers credit score).

I've done this... Not worth it. Focus on more important things.

One card with a yearly fee is probably worth it for the other benefits. Other than that, the traditional way is to downgrade it to a free card. Either way, it's fine if you think it doesn't make sense for you, but it's pretty much no-hidden-costs net positive, and that's why so many people actively churn.

I understand why. Semi-free money.

Invest in increasing your income instead. That's my recommendation. Long term thinking.

Can't you do both?

The older you get the more you realize how important it is to focus. Specifically long term.

I'm spending the money anyway. Don't see the issue in this case.

The "save money by spending money!!" argument is nonsense. People have just been brainwashed into conspicuous consumption to prop up the economic metrics.

Here's a brief list of where I use credit cards (which I always pay off monthly):

- Car payments (they let me use credit cards with no fee, >$9 / month rewards)

- utilities ($1 fee, with >$1 rewards)

- Food (>$20 / month rewards)

- Gas (>$5 / month)

There are more, but that's what $40 / month. If you then use a churning method to get more points, like opening a new card where you spend $4000 in three months get $500 back, then it's even better. It depends how much you normally spend, but for me - I don't need to change spending habits. Just only use that single card.

Last year I made $2500 from credit cards with my standard spending. I took out three new cards, paid for my wedding, then paid them off. Haven't used them much since and I didn't need to spend any more than I normally would have.

>There are more, but that's what $40 / month.

Help me understand, US$ 40 in rewards agains a monthly spending of?

Assuming a good cash-back rate of 2%, $2000 spent on the credit card for $40 back.

The point being he's spending the $2000 anyway, so he'd rather get $40 back from his credit card company rather than $0 back if he used cash or debit.

But cash-back is not the same as reward points.

Cash-back is "money", reward points (more or less) is "discount on given good".

Many cards let you cash out rewards points now. With Chase, for example, you can get a check in the mail, use points to pay off your CC balance directly, or use points on amazon (at full value).

Using Chase Ultimate Rewards points at Amazon is only worth 0.8 cents per point, not 1 cent per point like the others.

Then you have to pay income tax on the churn.

Income tax is only assessed on deposit accounts that offer sign-up bonuses. Credit cards aren't deposit accounts.

I stand corrected!

No, the scam is that all other shoppers are subsidizing your reward points in the form of slightly higher prices.

There are some apartments around here that let you pay rent by credit card. You'd be foolish not to take advantage of that and save at least 1% on your rent.

I think what go is saying is that credit card companies have trained us to spend more money by using credit cards. It is possible that you are in a small minority of people who has common sense™ but most of us (including me) tend to spend more or simply decide to spend or not bad on the small stimulus. Again, I'm not accusing you of irresponsibility. I'm just saying what I think is common.

Edit: I agree. If you're making an expense anyway, it is obviously better to get the highest reward you can get. But we're talking local optimization now.

I'd ask for a cash/direct debit discount instead. Cut out the middleman.

As an operator of multiple businesses, I much prefer customers who pay with cards than cash. There is a high cost to handling cash, making sure employees don't steal, counting it, getting change from bank, depositing it, etc. Therefore, it might not behoove the owner of the business to provide a cash discount.

Direct debit (or cash). Rental is more often done with direct debit than credit cards.

It would be nice to offer a discount for debit cards, but unfortunately, the card processing systems I've seen don't have the capability to determine credit vs debit and charge different price for it. It would be great if merchants could automatically charge people with rewards credit cards more.

You can spend completely normally and still make money from CCs if you pay them off. Everyone needs basics like food (supplies), transportation costs, and household/hygiene items. Maybe you're better than us, but most people also have utilities like internet and cell phone bills.

You likely paid for however you typed that comment. Putting that on a credit card with rewards and paying it off asap wouldn't hurt you one bit. Only can help you if you have the discipline not to over spend, which seemed like a given in OPs post.

> discipline not to over spend

Like the discipline to never use Facebook? Extremely rare. And psychologically expensive.

No facebook account here. Never had one, never will have one.

Also pay off CC in full every month, so no interest payments on what are effectively short term loans.

Neither is at all psychologically expensive. However paying off CC in full every month does require sufficient income (and/or restraint in spending for those without the sufficient income) to be able to do so.

Spending cash is a lot harder psychologically than spending money with a CC. Dopamine is in effect.

Much easier to keep scrolling and consuming on FB than stopping.

That's the comparison.

For some, it only takes discipline while you're establishing the habit, then it is very easy to keep it rolling.

I'd say FB is way different than the discipline to not over spend on CCs in a community like this. Not over spending on CCs being far easier.

It depends on what your choose to define as overspending.

Easiest thing in the world and it is psychologically a gain, not a cost.

What exactly?

Not using facebook.

Barring becoming a subsistence farmer, I have to buy groceries. Amex offers 6% cash back on groceries. As long as you pay it off every month, it's a significant savings.

Okay, so never buy food again and tell me how that goes.

If "invest what you don't pay" is the only benefit to buying a very quickly depreciating asset then you're not a very good investor.

Buy a used car and invest the bulk of the cash (if you actually have any). Can't get great deals on used car loans compared to new.

Fees/depreciation quickly kills the allure of a good rate.

If your user credit cards for rewards you don't realize that it actually makes you spend more money than you're getting in "rewards".

This right here. These companies are milking people and they have no idea because they only want to believe what already confirms their biases.

Even if you don't have a line of credit, identity theft is a very common occurrence. If you know you don't owe anything, it's still pretty scary to receive a letter saying your debt has been passed onto a debt collection agency.

Last year somebody opened a number of phone contracts and ordered TV (to my house...?) in my name. Here in the UK apparently you just need a name, address and date of birth to walk out of a shop with a brand new iPhone 7.

I eventually got it sorted, but it took a couple of months to get every cleared up. I made the mistake of using the phone, although the people I spoke to were helpful, I had to repeat everything from the beginning many times. If it happens again, I'll follow this advice and write letters.

The advice here is very American-centric and cites US law. You should look up the laws in the UK. Letter writing may not have the same punch that it does in the US.

How does this keep people from using your ssn and other stolen information to get a credit card or loan in your name?

Request a credit security freeze on all 4 credit bureaus (Equifax, TransUnion, Experian, Innovis).

I have a friend w/o a bank account and he basically can't rent an apartment, ever.

It's also hard without a credit score. But not impossible but any stretch.


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