Saturday, October 16, 2010

the fine print: pre-screened offers of credit

It's yet another letter from a faceless money-grabbing corporation offering me an exclusive (which really means that I am just one of many recipients) pre-selected (which means that my name was among the results parbroken by some proprietary software that is privileged to view obscure metrics maintained by three faceless entities ("Credit Reporting Agencies") to control your perceived economic worth ("Credit")) invitation (standard template with empty slots for the name and address of the recipient ("Me")).

One of the most entertaining parts is the Prescreen and Opt Out Notice, which is compliant with 16 CFR part 642 and looks like this:

You can choose to stop receiving "prescreened" offers of credit from this and other companies by calling toll-free 1-888-5-OPT-OUT (1-888-567-8688) See PRE-SCREEN & OPT-OUT NOTICE on other side for more information about prescreen opt out

The actual notice it refers to looks like this:

If you do not want to receive prescreened offers of credit from this and other companies, call the consumer reporting agencies toll-free, at 1-888-567-8688, or write to: Trans Union LLC, Attn: Name Removal Option, P.O. Box 97328, Jackson, MS 39288-7328; Equifax Options, P.O. Box 740123, Atlanta, GA 30374-0123;or Experian Opt-Out, P.O. Box 919, Allen, TX 75013.

The important thing to remember is that "pre-approval" is an etymological weapon of confusion: it does not mean "all you have to do is say yes and you will get this exciting new credit card"; it actually means "say yes and we'll then really check your credit and might even reject your application, because we didn't really check carefully the first time." The consequence of a rejected application -- thanks to the Rube Goldberg-ian algorithms in place for this "Get punished without doing anything" setup can be a dark spot on your credit. Opt out or just hurl this thing into the shredder.

Read the finer print at the end of this exciting letter to learn about MCCs (Merchant Category Codes), which offer these credit companies another weapon to deny you "rewards"; take a look at the big fat disclaimer at the end:

The rewards program is managed in part by independent third parties, including a travel agency registered to do business in California (Reg. No. 2036509-50); Ohio (Reg. No. 87890286); Washington (6011237430) and other states, as required.

That travel agency is most likely Travel Leaders Group, LCC, which spun off from Carlson Travel Group in 2008.

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