Start-ups angling to change how credit scores are used
Nobody, it seems, is fond of credit agencies. They sell your data to thousands of people who subsequently bombard you with junk mail. Data selling can also lead to fraud.
"The three credit agencies sell data for fraudulent purposes. They don't know they are doing it. The problem is that they want to maximize revenue," said Scott Mitic, co-founder of TrustedID, said at PC Forum, taking place this week in Carlsbad, Calif. "ID theft costs the U.S. economy, depending on the statistics, $20 (billion), $30 (billion), $40 billion dollars a year."
TrustedID is trying to tackle the problem through a paid service that will let consumers control the sale of their data from one institution to another. Legislative changes will be required before this sort of service could become widespread. Twelve states have already passed laws that give consumers some control over how their data gets sold and the federal government is considering taking action. Lobbyists from the major banks and auto dealers, however, will likely oppose changes, Mitic said.
Instead of trying to restrict the sale of data, Root Markets is aiming to give consumers something back when they give up their data. Root Markets sells ad leads to marketers. The consumers in turn get a rebate or a discount on transactions completed from the lead. Granted, some people will end up giving up their privacy data for a free iPod pouch, CEO Seth Goldstein said, but at the moment they get nothing.