HOUSING MARKET MELTDOWN PROVES MY CONCERN OVER CONSUMERS’ PERSONAL DATA AT MORTGAGE COMPANIES…ONLY FOR A DIFFERENT REASON

In September of 2007, I did a post on how companies schlep your name and personal data around the world. One of the most precarious locations was felt to be mortgage offices where you must lay out your entire life history to get financing for a home. My reasoning was that all that private information lying around in file cabinets was extremely vulnerable to potential break-ins by the bad guys, and could prove too irresistible to insiders. I was right about the lax security but wrong about how your sensitive data would be compromised. No one broke into the office to steal your information or even accessed it online, and employees did not steal it. They took the simple approach and dumped it into the trash. According to an MSNBC article, “Bankrupt lenders throwing away your privacy,” Floridians who had applied with industry giant, Magnus, found out their loan documents, still on paper, were in boxes in an unlocked dumpster in Fort Lauderdale. Magnus—a company we once considered doing business with—touted their technological advancements in computerization which turned out to be false because most records were still on paper. And, they didn’t even have the consideration to properly dispose of these customer records when the company went belly-up. The MSNBC piece indicates that this isn’t an isolated incident, so you should check your lender to be sure. Here’s a list from The Mortgage Lender Implode-O-Meter that seems to be up to date, but I cannot verify its accuracy. It is the only documentation like this that comes up on the first few pages of a Google search. All these mortgage applications must include your Social Security number, and also require date of birth, various financial data like bank account and credit card numbers, and of course your name and address. Bingo for the identity thieves. Another company, Alpha Mortgage Services of Toledo, OH was apparently at least environmentally concerned when throwing the complete records of hundreds of former customers in the recycle bin behind a grocery store. The Fair and Accurate Credit transactions Act (FACTA) requires disposal of these documents in a way to protect the individual’s information, but, as usual, the Act doesn’t go far enough. FACTA doesn’t actually require physical destruction of data. Our government at work. As usual, the Federal Trade Commission (FTC) is no help. The FTC has brought only one case after its rules advising the burning, pulverizing or shredding of personal documents went into effect in 2005. It’s like the bureaucracy doesn’t understand the importance of protecting this information, and, when they find out, don’t have the slightest idea of what to do. Since it takes forever for the word to get around, and the fact that the housing mortgage crisis seems to be worsening every day, we can probably expect more of the same in coming months. Each time a new catastrophe like this pops up, it reinforces my concept that consumers should have control over their names and personal data. If that were the case, none of this would matter, except to realize how dumb some of the people who control our private information can be.