Credit Bureau Alerts!!! What`s this all about?In December 2007, there was a change to consumer protection legislation (in Ontario) aimed at reducing the risk of identity theft and related fraud. Under this new legislation, clients are able to place a ‘consumer alert’ on their credit bureau file. Lending institutions are then obligated to confirm a client’s identity before granting credit. This change, known as Bill 152, took effective in Ontario only on January 1, 2008 (although other provinces are also considering making similar changes to their consumer protection legislation).
Bill 152: Phase 1
To comply with this change many lenders are noting that the alert will appear as follows:
*** WARNING*** ALERT TO VERIFY CONSUMER’S IDENTITY – PLEASE CONTACT CONSUMER AT (000)000-0000 BEFORE EXTENDING CREDIT
***ADVERTISSEMENT*** ALERTE POUR VÉRIFIER LÌNDENTITÉ DU CONSOMMATEUR – VEULLEZ APPELER LE CONSOMMA AU (000)000-0000 AVANT DÀCCORDER UN CREDIT
Bill 152: Phase 2
Over the next few months lenders will implement processes to ensure they act on these consumer alerts. At this point in time the auctioning of these alerts, or verifying the client`s identity, will be handled as efficiently as possible. This means, the broker does not have to do anything different then they do today. However, for the clients with these alerts, credit approvals may take a bit longer.
Given that clients initiate these alerts, and are made aware of this impact when they sign up, a possible delay should be expected.
Clients with questions about the new legislation or who wish to apply an alert to their credit bureau file should be directed to their credit bureau provider.
* All mortgage applications that contain an identity Verification Alert on the credit report requires verification of the applicants` identity
* Effective March 31st, 2008, if an Identity Verification Alert is on an applicants` credit report underwriters will place an outbound call to the applicant to validate their identity at the number provided on the credit report.
* This procedure applies to all lenders