Background

Credit reporting agencies are a key player, helping facilitate modern commerce

Credit records help predict the “risk” of a transaction

Credit bureaus actively gather data about consumers and businesses … but make it difficult for the subjects of theirreports to review their own records

In the US, the Fair Credit Reporting Act regulatescredit bureaus

Trust relationships

Between credit bureaus and their customers (credit reportusers)… not between bureaus and the subjects oftheir reports

Secret “scoring” algorithms don’t explain why aconsumer received a low score

Correction of erroneous data is difficult

Consumers have no control over the release of their personaldata to creditors

Identity theft due to Social Security Numbers

Fraud Assistance at Trans Union:

1992: 35,235 cases1997: 522,922 cases

Social Security Number misuse investigations:

1996: 3051997: 1,1531999: 39,000

International Credit Rules / international reputations

EU has strict rules protecting individual credit historiesAlso enforces strict rules about notification

Only one of the “big three” bureaus is active in Europe

Foreigners find that perfect credit records in their homecountries don’t follow them to new places.Effectively, they start anew after every move.

“Either have a US citizen co-sign, or be a student at a goodcollege, and you will be allowed to get a bank account.Then you get an ATM card, then a check card, and finallyafter a few months of credit history you get your first creditcard with a limit of $300.

“After four years I finally have good credit limits and any card I might apply for. In a few more years I’ll be able toget a mortgage for a house.”

- International student

Things you can do on the Internet Order a sandwich

Things you can do on the Internet Send flowers

Things you can do on the Internet Pay a bill

Things you can do on the Internet Balance your checkbook

Things you can do on the Internet Trade stocks

Things you can do on the Internet Buy US Treasuries

Something you can’t do on the Internet Manage your credit reputation

Credit bureaus in the news

Mar. 3: Financial services groups plan to fight tough newprivacy laws being considered in state legislatures.

Mar. 8: FTC orders Trans Union to stop selling consumerreports in the form of targeted marketing lists

Apr. 10: E-Loan allows consumers to see their “FICO”scores; Equifax cuts its data feed. E-Loan president:“Consumers have the perfect right to have their creditinformation and use it as they see fit.”

Apr. 10: Credit data vendors are fighting credit unions’attempts to improve privacy for their members.

The current environment

FCRA restrictions

Stringent privacy rules in the EU

“Big three” continuing pursuit of heavily-regulatedconsumer-hostile activities and information sales

Emerging Trends

Increase in small or one-time-only Internet transactions

Increase in small-scale international transactions

High awareness of privacy issues

Skyrocketing use of SSN for identity thefts

Development of XBRL (Extensible Business Reporting Language)

A credit report is like a “permanent record” for adults

• You cannot change the contents of your record

• You must ask permission (and often pay) to review your record

• You have little control over who else sees it

Doesn’t that seem odd?

(say “YES”)

What if you had some control over your “permanent record” ?

creditbinder

brings consumer controlto credit historiesand personal records

improves the qualityof information forall interested parties

How does it work ? Credit gathering

How does it work ? Infomediary queries

How does it work ? Secure one-time identifiers

How does it work ? Long-term identifiers

Target audiences

Educated, affluent, privacy-aware new-economy consumers

Emerging industries - Internet and highly-wirednew economy companies

Emerging markets - the developing world, C2C microeconomies

International consumers and companies who need aglobal credit/reputation dossier

Extensions

Medical records

Personal profiles you release to selected marketers

“Unlisted” e-mail addresses

Consumer controlConsumer cooperation

Borderless credit reputationsSecurity from ID theft and abuse