Lazy Man and Money

Sue Equifax: No Lawyer Necessary

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I’m the first person to say that I’m not a big fan of lawsuits. Full disclosure, I’ve been sued a few times now. That’s despite being the type of person who doesn’t cut the mattress tag off (even though you can). I’ve found that helping consumers by covering the same stories the news does (in the same way) tends to get me sued. Every lawyer representing me has said that I’ve done nothing wrong and no court has found that I’ve done anything wrong, but nonetheless anyone can be sued for anything.

Wait this article isn’t about me. This article is about Equifax. By now you must be aware that Equifax had this huge data breach and some 143 million people’s information may be floating around for identity thieves to profit from.

No one is happy about the situation (except for the identity thieves). The NY Times covers how I feel in this opinion appropriately titled, “Equifax’s Maddening Unaccountability. Here are a few choice quotes:

“I don’t doubt that companies regret these [security breaches], but I don’t think they care that much either. To them it means just a few days of bad press and at most a fine that amounts to a minuscule portion of their profits. With penalties like that, why would companies bother to make things better?”

“Most software failures and data breaches aren’t inevitable; they are a result of neglect and underinvestment in product reliability and security.”

“Perhaps the most maddening part of the Equifax breach is that the credit-rating industry is itself unforgiving in its approach to even the smallest error. I’m still dealing with the damage to my credit rating that resulted when I forgot to return a library book and a collection agency was called in (for a paltry sum). The Equifax executives who let my data be stolen will probably suffer fewer consequences than I will for an overdue library book. Even if they do get fired, it is likely that they will be sent off with millions of dollars in severance, which is common practice for executives.”

I think that last quote sums it up well. The only thing that I’d add is that none of us asked Equifax to have our data in the first place. I don’t think any of us could have opted-out. Even if we could opt-out, we probably would have realized consequences like it being difficult to get loans for homes, college, and cars – things that are fairly important.

How many people will have their identity stolen because of this? There’s no way to know. What we do know is that 143 million people now have be on DEFCON 2 for the rest of their lives.

I believe that Equifax should compensate people for their trouble and even the potential damage that could be caused. It doesn’t seem like Equifax is going to voluntarily offer compensation. From what I’ve been reading, it’s like pulling teeth just to get free credit freezes from them.

DoNotPay to the Rescue?

An entrepreneur, Joshua Browder, created an online application awhile back that has won 375,000 court cases involving parking tickets. He’s modified it so that you can draw up the paperwork to sue Equifax in a couple of minutes. This Yahoo article has all the details.

How much could you get? The maximum in small claims court varies from state to state. He says the average is between $10K-15K. My state is “only” $2500. I put “only” in quotes, because it’s still a large number.

Will you get that money? I think it’s going to be unlikely, but I’ve been wrong before. Browder partnered with volunteer lawyers so there’s some credibility behind the idea.

Is it fair for 143 million people to sue to Equifax in small claims court? I’m not sure that it is. However, the alternative is waiting for the class action settlement. Even if the settlement is for a billion dollars, which is HUGE, it would amount to $7 per person. I’m not sure it’s fair for people to get some small multiple of $7 either. Perhaps they have insurance, but I doubt they have insurance to cover something this large.

One more thing worth mentioning, it seems (and I’m no legal expert) that you can still be part of the class action if you are persuing them at the local level as well.

I’m going to give DoNotPay a shot. It may be unlikely to compensate me, but it is very, very low risk/effort and potentially with a large reward.

What do you think? Are you going to try to sue Equifax in small claims court?

Credit Score Transparency

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Do you know what your credit score is? Sorry to trick you with a loaded question like that. Different credit bureaus come up with different algorithms leading to different numbers. The three major credit bureaus, Equifax, Experian, and TransUnion, could all give you different numbers. And to get those numbers you typically have to pay them.

If you are a bit frugal with your cash, there are cheaper options. For instance, thanks to some great legislation you can go to AnnualCreditReport.com and request to view your credit report from each of the three major credit unions. It’s important to note that this is just a credit report – not a credit score. You get the information that they are pouring into Fair Isaac Company’s Black Box (FICBB), but not the number the box spits out. Alternatively, you can get a free score of TransUnion’s data from Credit Karma. The catch there is that Credit Karma’s black box is not the same as FICBB. I’ve found it to be fairly accurate for me, but there is no guarantee that is the case for everyone. If you can afford to pay for your credit score, it makes sense to do a little research on the available options.

I suppose you are thinking, “Yeah, great… so what?” I’m uncomfortable not knowing exactly how that FICBB works. While there are numerous hints and tips on how to fix your credit the process for calculating the score isn’t as transparent as it could be. We don’t really know what’s going on in the FICBB.

Now you may be thinking, “What do we gain from a transparent credit scoring system? I’ve done fairly well with the current system.” Our credit scores impact our finances greatly. Our finances impact our quality of life. I think we have the opportunity to make our credit scoring system more accurate. That will only help people with money to lend figure out who is a good credit risk. We’ll only find out if we open up the FICBB or develop another system that consumers can examine. Then, like open source software, we can look for holes in the credit scoring system and fix them. The overall product will be stronger because of it.

While I’m covering personal credit here, if you are a business owner, you may be more concerned about business credit. Credit Strong has a great resource to help you understand the differences between personal and business credit

Maybe someday a company (perhaps Credit Karma) will bring this vision to reality. Perhaps a company already has and it’s not on my radar. What do you think? Leave me a comment

Apologies to SmartyPig

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On Friday I went a little off the handle reviewing SmartyPig’s registration process. I got frustrated by the many security steps that I had to take before finally getting locked out because my information didn’t match the information in Equifax/SmartyPig’s database.

What I should have said is that many online banking security systems are not user friendly nowadays – and it’s not their fault. The fear of identity theft has driven everyone including regulators to more and more stringent standards. What confuses me is that not every bank has the expansive security process. I have accounts with Bank of America and TD Ameritrade. These account have thousands of dollars in them. These companies are worth billions of dollars – how can they not be required to implement these security systems? It makes no sense that a smaller start-up like SmartyPig, with a business plan that would lead to smaller accounts, should have to be more secure (and I don’t buy that they want to have this process in place).

Back in 2004, I worked for a company that created cell phone applications that utilized the GPS in some phones. It was a tremendously difficult business as only a small subset of phones were GPS enabled, and cell phone carriers didn’t want allow customers to install these applications on their phones (because they’d be the one that would get complaints if it didn’t work out). It was a frustrating time for the whole industry. I feel for SmartyPig – it seems like a similar situation to me. The comments from others showed that these extensive registration/login processes are frustrating customers. It’s not to the same degree, but when you are required to frustrate people, you are facing an uphill battle.

I don’t know if it came across on Friday, but I was particularly critical of SmartyPig. I had hoped to give them a review that would help them advance their product. It appears they will be taking my suggestion to reword the requirement of a driver’s license to include a state issued ID. I would like to see them be able to take a passport ID or a military ID in absence of those as well. Overall it’s a minor issue as most adults will have required ID. You’ll notice I stressed “adults” there. It would seem to me that the SmartyPig service would be popular amongst teens saving up for their first car or a video game system. Yet this target audience likely doesn’t have the state IDs necessary to sign up. I’m sure the SmartyPig team knows this and are looking at ways to address the youth market.

In the coming days and weeks, perhaps I’ll be able to set up an account manually and give a full review of the service.