Click here to close now.




















Welcome!

News Feed Item

SubscriberWise Issues Strong Warning with Proposed Legislation

SubscriberWise, the nation’s largest issuing consumer reporting agency for the communications industry, announced today that the proposed “Credit Access and Inclusion Act” currently assigned to Congress is a risky proposition. The legislation will result in worse outcomes for the overwhelming majority of the population it intends to help.

The analysis of SubscriberWise segmentation technology examined proprietary decision levels created by the issuing CRA to manage the significant population of underbanked prospects who apply for service with its member operators around the country. The analysis contains exclusively SubscriberWise® segmentation data from individuals who applied with member operators from 2006 through 2013.

“Approximately eighteen percent of the adult credit consuming population who apply for telecommunications services is non-scorable,” said David Howe, president of SubscriberWise. “And that percentage has remained constant for an entire decade. By non-scorable, we’re defining consumers who have a file at a national repository (i.e. Equifax, Experian, and TransUnion) but whose credit file fails to generate a credit score. The scoring logic leveraged by SubscriberWise (FICO 8) requires at least one open account that’s at least six months old or older and that’s been updated by a creditor at least one time during the previous six months1. For the vast majority of consumers, these rule thresholds are met with ease.

“So what’s the problem with the proposed legislation?” Howe asked rhetorically. “It assumes that the rent and cable payments from underbanked consumers are paid timely. It assumes that landlords and cable operators will overwhelmingly report positive payment behavior to boost otherwise marginal and poor credit records for the majority of this population. Moreover, the legislation infers that a positive tradeline from a rental agency or cable company will generate a favorable credit score for otherwise non-scorable consumers.”

The empirical evidence does not support this conclusion.

“The fact is that non-scorable consumers are riskier compared to credit-active consumers. Non-scorable consumers pay late and are disconnected often. It’s a fact that non-scorable consumers have an average 50 percent more collections compared to scorable consumers2. Among applicants to SubscriberWise member operators, it’s also known that underbanked consumers have fewer years of credit experience as reflected by the average age of an underbanked consumer vs. an credit-active consumer file2.

“And there’s another angle Congress has failed to consider: Reporting payment behavior – which would undoubtedly become an added and costly burden on the call center and staff – has the very likely possibility of adversely impacting consumer credit reports and scores among credit-active individuals. This is especially a concern among an operator’s otherwise slow-paying but highly reliable (profitable) customers – many of whom have good credit scores that could be seriously impacted by a single negative entry on their credit report.

“The protocol that operators employ today works incredibly well. It benefits both slow and non-payers equitably,” Howe continued. “Operators don’t report delinquency on a month-to-month basis. Instead, only after an account reaches several months of non-payment and ultimately becomes a write off, do most operators then send the obligation to a third-party collection agency. It’s then that the obligation – if continued to remain unpaid – may become a reported collection on the consumer’s credit file.

“In a query of one Midwest operator’s subscriber billing and management system, SubscriberWise quantified duplicate applications from every individual who had two or more SubscriberWise inquiries during a 7-year period. The query identified only those consumers who failed to generate a credit score on one application but later generated a FICO score during a subsequent service request (or during an account review inquiry following the initial application). The results were remarkable and revealed that only 4 percent of the underbanked population would move from a high risk decision segment into a low risk – or favorable – SubscriberWise segment. Another compelling fact: the average SubscriberWise decision level was a ‘Level 7.’ Level 7 subscribers are segmented based on FICO scores in the bottom 6 to bottom 15 percent of the adult credit consuming population,” explained Howe.

“The conclusions are unambiguous. When data is sufficient to calculate a FICO score among a previously unscorable consumer, one can anticipate a very low FICO score. And no matter the comparison timeline, the long-term data demonstrates this conclusion. Underbanked consumers remain high risk as evidenced by past due accounts and collection activity reported on credit reports, as well as very low FICO scores generated when data is sufficient. In my experience3 having evaluated more than 50,000 credit reports, there’s simply not sufficient evidence that a potentially positive tradeline – among the typically adverse underbanked credit report – would deliver its intended outcome of an improved credit score.

“It’s critically important for Congress to avoid making assumptions as it relates to the predictive ability of credit scoring that’s long proven highly accurate and reliable,” Howe concluded. “Congress must carefully evaluate the impact of this proposed additional reporting. Educating consumers about the benefits of responsible use of credit should be its zeal and pursuit.”

About SubscriberWise
SubscriberWise® launched as the first issuing consumer reporting agency exclusively for the cable industry in 2006. In 2009, SubscriberWise and TransUnion announced a joint marketing agreement for the benefit of America’s independent cable operators (http://www.subscriberwise.com/TransUnionJointMarketing.pdf). Today SubscriberWise is a risk management preferred-solutions provider for the National Cable Television Cooperative. SubscriberWise technology has prevented thousands of child identity thefts and uncovered the misuse of personally identifiable information for operators everywhere. SubscriberWise contributions to the telecom industry are in excess of twenty-five million dollars annually.

SubscriberWise is a U.S.A. federally registered trademark.

_______________________________________
1 http://www.subscriberwise.com/Fico850.pdf
2 http://www.subscriberwise.com/SubscriberWise_Quantifies.pdf
3 http://www.subscriberwise.com/fico_pro_certification.pdf

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Red Hat is investing in Tesora, the number one contributor to OpenStack Trove Database as a Service (DBaaS) also ranked among the top 20 companies contributing to OpenStack overall. Tesora, the company bringing OpenStack Trove Database as a Service (DBaaS) to the enterprise, has announced that Red Hat and others have invested in the company as a part of Tesora's latest funding round. The funding agreement expands on the ongoing collaboration between Tesora and Red Hat, which dates back to Febr...
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of ...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and a...
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Trel...
Cloud and datacenter migration innovator AppZero has joined the Microsoft Enterprise Cloud Alliance Program. AppZero is a fast, flexible way to move Windows Server applications from any source machine – physical or virtual – to any destination server, in any cloud or datacenter, using its patented container technology. AppZero’s container is also called a Virtual Application Appliance (VAA). To facilitate Microsoft Azure onboarding, AppZero has two purpose-built offerings: AppZero SP for Azure,...
WSM International, the pioneer and leader in server migration services, has announced an agreement with WHOA.com, a leader in providing secure public, private and hybrid cloud computing services. Under terms of the agreement, WSM will provide migration services to WHOA.com customers to relocate some or all of their applications, digital assets, and other computing workloads to WHOA.com enterprise-class, secure cloud infrastructure. The migration services include detailed evaluation and planning...
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
A producer of the first smartphones and tablets, presenter Lee M. Williams will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. In his session at @ThingsExpo, Lee Williams, COO of ETwater, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ET...
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of tech...
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...