If you’ve recently applied for a mortgage loan, you may have noticed a trend – your phone is ringing (even more than usual) with numbers on the caller ID you don’t recognize. If you answer, you’re likely getting pitched for a mortgage from a company you never contacted and a loan officer or dialer you don’t know. If this has happened, you’ve likely been sold as a “trigger lead”.
What is a Trigger Lead
When your credit is pulled, the credit bureaus have a record of the credit inquiry, and unfortunately, they sell this information to bidders in the form of “leads”. This generated “lead” is sold to lenders, letting them know you’re in the market for a mortgage. They sell this data with complete disregard for your privacy or your desire or lackthereof to talk with any lenders or loan officers. Seem unethical? Trigger leads are a hot topic in the mortgage industry and are one of things most consumers don’t fully understand. Lenders don’t have any ability to stop the data being sold, as it’s sold from the credit bureaus. Worse, the data is often sold to numerous lenders, which results in many phone calls after credit is pulled for a mortgage. But there are steps consumers can take to eliminate these calls, or at least slow them down.
What You Can Do
- Opt-Out of prescreened offers.
- Register with the Do-Not-Call Registry, donotcall.gov.
- Contact the Federal Trade Commission.
- Contact Congress.
- Stop other forms of direct marketing by visiting the Direct Mail Association’s Web site at: dmaconsumers.org/consumerassistance.html.
Since many “trigger lead” lenders are not reputable, it’s best to ignore these calls and the mail that is likely to show up in your mailbox as well, and to pay attention to the fine print – many times the mail sent is designed to look like it’s from your current lender, with only the fine print showing who the real sender is. These mail pieces often contain “too good to be true” loan terms, and again, in the fine print you’ll usually be able to see enormous fees and other loan terms that are not borrower-friendly.
It’s important to know that your loan officer or lender doesn’t initiate these calls, and it’s not the credit pull itself that causes these calls, but the credit bureaus selling information after the credit pull and them placing you on a prescreened list. One piece of good news to keep in mind as well is that these additional calls and mail do NOT mean your credit was run again – while a hard credit inquiry by your original lender will appear on your credit report, any other companies calling do NOT have access to your credit report or history, so the calls you’ll receive do not mean any of your personal private information was compromised.
Think this practice should be put to a stop? You’re not alone! Many others feel trigger leads are unethical, and the best way to change this practice is by voicing your concerns for your local congressional representatives (you can find them by calling 202-224-3121) or by contacting the FTC at ftc.gov.