|Date: ||Tue, 20 Feb 2007 14:48:05 +1100|
|Reply-To: ||"Johnson, David" <David.Johnson@CBA.COM.AU>|
|Sender: ||"SAS(r) Discussion" <SAS-L@LISTSERV.UGA.EDU>|
|From: ||"Johnson, David" <David.Johnson@CBA.COM.AU>|
|Subject: ||Re: Credit Bureaus--Legal Liability and Model Validation|
|Content-Type: ||text/plain; charset="us-ascii"|
Irresponsible actions by a certain credit card issuer, let's say it is
"Calathumpian Malden" and a bank holding our business accounts meant
that we paid twice for a credit card bill that included SUGI travel.
(That's travel over the pond, which was just a little expensive.)
We took the matter to the Financial Services Ombudsman in the UK and
almost 14 months later the bank was re-credited with the amount they
paid (we had been recredited some time earlier) and we were paid
compensation for the time, costs and effort. The compensation was
trivial compared to paid working hours, but the win was in the moral
We closed our account with CalMal, were reimbursed for the membership
charges they impose and have pleasure in returning their posted
offerings (postage unpaid) with a terse refusal.
It seems to me that if a service was rendered by the Health Care
provider, a bill served and a payment made, then these three events can
be connected and the outstanding debt cleared. Then the erroneous
information should be removed on application to the credit reference
It won't happen immediately, and their responses will rival pre-global
warming glacial movement. I am not sure of your processes in the US,
but it seems to me that the situation as described bears the elements of
"obtaining financial advantage by deception", which is a criminal
A cool head and persistence will be needed to battle the individual
injustice. Have you a small claims tribunal or similar venue to raise
I wish you good luck.
/* - - - - - - - - - - - - - - - - - - - - -
It is a capital mistake to theorize before one has data.
Insensibly one begins to twist facts to suit theories, instead of
theories to suit facts.
-Sir Arthur Conan Doyle
- - - - - - - - - - - - - - - - - - - - - */
From: SAS(r) Discussion [mailto:SAS-L@LISTSERV.UGA.EDU] On Behalf Of Tom
Sent: Tuesday, 20 February 2007 2:24 PM
Subject: Credit Bureaus--Legal Liability and Model Validation
Thank you all for contributing to this post.
I agree with the recent posts talking about how a model looks at
AVERAGEs or GROUPs of people rather than individuals.
But I think one subject that keeps bothering me and I think all of the
posters have missed so far is this:
Credit Bureau scores have BECOME SO INSANELY IMPORTANT in our society
that VEY BAD adverse decisions can be made and are made for
_INDIVIDUALS_ like me and you.
Simply because we cannot develop models to predict _INDIVIDUAL_
performance, we must satisfy ourselves with mediocrity in the name of
$$$$$ ? Simply because we cannot develop models to predict individual
performance, we must refuse employment to an INDIVIDUAL who poses NO
RISK to an employer? (There may be very few exceptions, I understand,
since we now equate FICO score with MORAL CHARACTER as well.)
Take one of _YOU_, as an example, with a stellar FICO score and no
blemish ever: You have always been paying your bills on time, nothing
bad ever. You are an exteremely responsible financial person. Hey, you
have even stocked away a ton of rainy day money just in case you find
yourself unemployed some day and you want to be able to pay your
mortgage, car payment, etc. I mean, YOU are INSANELY responsible as I
have described here. Now a hospital comes along, posts this FALSE
information about you, your score goes to 610 and cannot rent an
apartment. Now, most of you statisticians on this forum will tell me
with a staight face that this extremely responsible person who poses no
risk to anyone even if he/she became unemployed for many months,
deserves to be GROUPED in a bucket with other individuals who do not
have this financial profile? I do not accept that. If we do not have the
mathematical skills or means to develop such a model for an individual,
I say, let's get credit t!
he way we got credit 80 years ago, namely, you go and you talk to your
friendly person at the bank. Now you see how insane I am, right? But, I
tell you, the way we base our lives on a SINGLE FICO score, no other
questions asked, it is just as insane. (No, I am not that old! I am a
baby trying to learn statistical stuff!)
If one of _YOU_ was refused EMPLOYMENT and you didn't have employer
insurance to pay for you medical treatmnet and died, then, I suspect,
you would MORE SERIOUSLY consider the GRAVITY of Credit bureau scores.
(Not that you would care once dead, I am just saying ...) Unfortunately,
NO ONE looks at ANYTHING ELSE other than one SINGLE NUMBER: FICO score
at that particular moment. No one really cares that you have NEVER
exhibited any bad financial habits as an INDIVIDUAL in the past and NO
ONE really cares that this one single blemish right now may, in
retrospect, may prove to be just that: a SINGLE blemish not to be
repeated again for many years to come. But, in the meantime, _YOU_, as
an INDIVIDUAL, have already felt the WRATH of the FICO score via
unemployment, or, to a lesser degree, via unfavorable terms in a
financial transaction. Even if the blemish is FALSE!!!!!!!!!!!!!!!
When you call up a credit card company to ask for a credit card, all
they do they look at your credit score as of that moment and they could
care less about how responsible you have been in the past. So, in
essence, an INDIVIDUAL may pay heavily for the bad behavior of the GROUP
The other thing that NO ONE has picked upon is what I have said many
times: The information provided to the credit bureau is WRONG! Yet, as
pretty much all of you seem to say, well, who cares? The credit bureau
can develop models based on information it receives and the credit
bureau has no obligation to fully investigate the derogatory
information. Garbage in garbage out?
That's where I disagree with most of you: When it comes to my
employment, or to my getting a mortgage to house my family, or to
purchase car insurance so I can go to work, or I can rent an apartment
so I can have a roof over my head, you bet your life I DEMAND that the
credit bureau fully investigate any derogatory information before it
includes it in the model. The credit bureau can put the derogatory
information aside and not included it in the model until and when it is
completely verified as such.
I would even say that the credit bureau ought to check with _ME_ (yes,
_ME_) BEFORE it posts any negative information to make sure I agree with
this bad information. If I don't agree, the item goes into a dispute
status until resolved, be it even in a court of law.
Sig mentioned predictive models do not need validation. Well, I will
leave this one alone since I like Sig so much it is beyond belief. But I
will say this much: In my view, model validation better be a BIG
OBJECTIVE of most banks and financial institutions since badly fitted
models, or models which do not pan out in life end up costing banks lots
of money in lost revenues, not to mention customers who end up not
getting a loan because a bad model said so. But then again, didn't one
of you say life isn't fair?
If, heaven forbid, one of _YOU_ pulls a credit report and finds a few
delinquent accts on there, which in fact have been paid, and you dispute
with credit bureaus, and credit bureaus do not lift a finger to verify
this information, and you are stuck with a 475 or 580 score, and you
can't rent an apartment, or rent a car, or be able to find some oxygen
to breath, then perhaps, you will understand what I have been trying to
say in this thread all this time.
FICO scores should and ought to be treated much more seriously when it
comes to model development--I am not convinced that they are.
My friend is now waging a war to try to remove this FALSE information
from Equifax. Equifax says this FALSE information is TRUE. The hospital
that posted the collection amount says it is true. Yet, a checked cashed
by the hospital (a bank digital copy with all the numbers on the back
proves that) serves as NO PROOF to either Equifax or the Hospital. So,
she is stuck with a 605 or sth like that score when in fact a couple of
months ago she had a stellar FICO score of about 745 or so. And she
never had a single blemish for as long as the bureaus keep information.
But you already said---who cares about her? As long as the
masses/averages indicate she will be a bad future risk, well so be it,
let her have her 605 and live with it for now, even with the WRONG
information used by FICO score.
You now say, Tom, you are a CRAZY person! In this world we live in where
we must have everything right this nonosecond or else, who has the time
or the money to do such a thing? And I say, well, that's why some of us
end up paying a heavy price for even a SINGLE derogatory mark on the
credit report. We, as a society, allow this to happen to us, and I say,
hey, who am I, a NOBODY, basically, to raise such concerns on this
And, of course, I am neither the first nor the last with these thoughts.
Thank you all!
Digital Timers for Automation
Selection of time controls, on delay, off delay and timer switches.
************** IMPORTANT MESSAGE *****************************
This e-mail message is intended only for the addressee(s) and contains information which may be
If you are not the intended recipient please advise the sender by return email, do not use or
disclose the contents, and delete the message and any attachments from your system. Unless
specifically indicated, this email does not constitute formal advice or commitment by the sender
or the Commonwealth Bank of Australia (ABN 48 123 123 124) or its subsidiaries.
We can be contacted through our web site: commbank.com.au.
If you no longer wish to receive commercial electronic messages from us, please reply to this
e-mail by typing Unsubscribe in the subject line.