[danjoc]

>It is Experian, Transunion and Equifax, by holding this fraudulent loan against Alice, who are victimizing Alice.

I think you're confused. It's BigBank that's falsely placing a debt burden on Alice. The credit reporting agencies are only reporting what they are told. Imagine if Alice doesn't care about her own credit worthiness. Let's say she has no debt, and no intention of acquiring debt. What happens if criminal tricks BigBank? They say, "Alice, you owe us this money." Alice tells BigBank, "No, prove it or pound sand."

What happens then? BigBank goes to the court and tries to get a judgment against Alice for the money owed. If Alice isn't aware of the proceeding, the judge will grant BigBank's request, and now Alice will owe BigBank the money stolen by criminal.

BigBank's poor authentication and the judicial branch are the ones doing the real harm to Alice. If anything, the credit reporting agencies are providing value to Alice by warning her before BigBank goes after her in a secret proceeding and makes the debt hers.

[shimon]

What actually happens:

1. Alice does have debt, and does intend to acquire debt in the future, like most people. The presence of this fraudulent debt in her credit report makes credit more expensive and hard to get.

2. Before filing suit and going to court, BigBank makes persistent but usually polite attempts to collect. But when she says "that wasn't me" they don't believe her, because lots of deadbeats say that sort of thing too.

3. Perhaps BigBank sells the debt to a collection agency, which is far more aggressive and (willfully?) ignorant of laws regulating how and when they can contact Alice. Perhaps they call Alice's employer, threaten to garnish her wages (even if they legally can't), or lie about Alice's ability to contest the debt.

4. If Alice is determined enough to keep fighting and go to court, she has still sunk significant time and money into fighting this. It's unlikely she'll be compensated fairly for that.

I agree the credit reporting agency is in some ways helping Alice, and would add that these agencies probably do reduce the rate of fraud overall. But they also have a responsibility to do a good job minimizing errors. We can't expect them to never make a mistake, but they should have some skin in the game when their inaccuracies hurt a credit applicant.

[danjoc]

Step 3 is the insidious part. If Alice files a paper with the reporting agencies, they're required to remove the false report. But the collection agency will just as persistently file an equal but opposite paper to reinstate. The reporting agency is legally caught in the middle of he said, she said. And if asked for proof? The collection agency says BigBank told them Alice owed it, and sold them that debt. So now the originator of the loan has harmed the collection agency as well as Alice.

Don't kill the messenger. The credit reporting agencies are doing what they are obligated to do in that business. There needs to be penalties for BigBank beyond the money BigBank lost in the scam perpetrated by criminal.

Blaming the credit reporting agencies for bad credit reports is intellectually lazy. Blaming them for garbage computer security is much more appropriate in this story. A more interesting discussion here would be about the technical details of the hack.

[kamaal]

If the credit reporting agencies wishes no responsibility then for all practical purposes they are a database table, nothing more. In that case they must offer their services on the same lines as AWS or Google Cloud. That is guarantee is only on infrastructure uptime and availability and not the quality of information. Note even in this case, a level of liability regarding security is on them.

If you wish to provide a service with a level of guarantee, responsibility and liability comes along with it.

[mycall]

It isn't BigBank warning her.. it is the collection agencies, but that's just semantics.

[danjoc]

That's exactly the point. BigBank isn't going to warn anyone. It's just going to seek judgement, or sell the debt to shady collectors and write off the difference.

https://www.nytimes.com/interactive/2014/08/15/magazine/bad-...

Think about the credit reporting agencies as a rather sloppy "master list" of who owes who money. It seems what is needed are stiff penalties for banks and collection agencies who falsely claim they are owed money. Until then, you can't live in peace. Someone is going to claim you owe them money if you have any money yourself.