Charles Schwab Backdoor or Executive Office?

[shane82388]

This is slightly off topic, but I opened a second checking account at Charles Schwab and all was fine.

Then I pull my Equifax last night and they did a hard inquiry! I'm so mad right now...Ive been a customer for years and have opened more secondary accounts in the past before this one and never recieved any kind of inquiry at all, let alone a hard inquiry! If i needed to be checked out because I was new, it would make a whole lot more sense but im already a years long customer!

I emailed them through secure message asking nicely to have it removed or changed to a soft inquiry and was basically told me to eat it...

I only have 1 other inquiry on Equifax from about a year ago but this is just making my blood boil for some reason...Does anyone know a backdoor number or an executive office email or something like that so I can try to get past the front line CSR and get this silly thing taken care of?

thanks

[GOldfishes]

That's very strange. I have brokerage and checking with Schwab and they have never done a HP.

[shane82388]

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@GOldfishes wrote:

That's very strange. I have brokerage and checking with Schwab and they have never done a HP.

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Exactly! I've had mine for years...opened bunch of other accounts like savings...never anything at all. Its quite annoying.

I understand banks doing credit checks for deposit accounts...but it should be a soft inquiry. (really should just do a Chexsystems, but whatever)

 I'm not applying for credit...I dont even think they offer overdraft protection if they wanna consider that "credit"? (i think they just auto transfer from your brokerage or something)

[TheConductor]

Hmm...it does seem odd.  When they pulled mine I presumed it was because I was not yet a brokerage customer, so to qualify for the investor checking account I also needed to open a brokerage account.  I thought the credit check was for establishing creditworthiness to trade on margin with the brokerage account.

But if you're already a brokerage customer, then it sounds like they may just pull EQ period for any new checking account.  Which is odd compared to most banks (which usually just pull Chexsystems), but it is still a permissible purpose under the FCRA.  You may not think of a checking account as a request for credit, but the ability to overdraw the account (and incur fees which then further overdraw the account) is effectively an extension of credit.  You can potentially owe money that you have not paid.  And the FCRA also allows for some non-credit legitimate business needs:

3. ``Legitimate Business Need''

Under this subsection, a party has a permissible purpose to obtain a consumer report on a consumer for use in connection with some action the consumer takes from which he or she might expect to receive a benefit that is not more specifically covered by subsections (A), (B), or (C). For example, a consumer report may be obtained on a consumer who applies to rent an apartment, offers to pay for goods with a check, applies for a checking account or similar service, seeks to be included in a computer dating service, or who has sought and received over-payments of government benefits that he has refused to return.

From http://www.fdic.gov/regulations/laws/rules/6500-2700.html

I find the "seeks to be included in a computer dating service" an amusing one.  

[missjae]

I know it's not Charles Schwab, but I have had several accounts with Capital One since 2003. I recently opened more accounts, including a checking. I was asked ID verification questions and I asked the CS rep if they were pulling my credit for the account. He said yes. I asked if it was an HP and he said yes. He went on to explain that since I was not doing this in person they had to check my credit to verify it was actually me. It took me by surprise since they didn't bother telling me in advance.

So I asked him why they don't use Chex Systems. He didn't have a clue what Chex Systems was. I figured he must be young.

Anyhow, that's the explanation I got for HP credit reports for opening accounts, despite being an established customer.

[mtrea001]

Hi, did you by any chance open a brokerage account too?  I know if you want to use the firms margin option they do a preliminary credit evaluation to gauge your investor risk.  I opened both a checking and a brokerage account a few years ago, I think in the fine print it does say they will pull a CR to open the account though.  :/

[shane82388]

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@missjae wrote:
I know it's not Charles Schwab, but I have had several accounts with Capital One since 2003. I recently opened more accounts, including a checking. I was asked ID verification questions and I asked the CS rep if they were pulling my credit for the account. He said yes. I asked if it was an HP and he said yes. He went on to explain that since I was not doing this in person they had to check my credit to verify it was actually me. It took me by surprise since they didn't bother telling me in advance.

So I asked him why they don't use Chex Systems. He didn't have a clue what Chex Systems was. I figured he must be young.

Anyhow, that's the explanation I got for HP credit reports for opening accounts, despite being an established customer.

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I'm still not seeing the justification for a HARD pull when they could have just soft pulled for the same effect...? I'm debating if i should write a letter or call...?

[shane82388]

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@mtrea001 wrote:

Hi, did you by any chance open a brokerage account too?  I know if you want to use the firms margin option they do a preliminary credit evaluation to gauge your investor risk.  I opened both a checking and a brokerage account a few years ago, I think in the fine print it does say they will pull a CR to open the account though.  :/

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Yes, its kinda their package deal they sort of make you do when you open one or the other, but i specifically opted out of the margin option so that seems like it shouldnt of been why they pulled hard pull...but ive seen stupider things done by banks, lol.

[longtimelurker]

If you google

charles schwab hard pull

you will find lots of hits! My daughter opened an account with them for free international ATM withdrawls while working in Europe.  I was going to do the same till I found the HP issue.

Experience seems to be: won't go away.   If you have $10M, YMMV

[TheConductor]

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@shane82388 wrote:

I'm still not seeing the justification for a HARD pull when they could have just soft pulled for the same effect...? I'm debating if i should write a letter or call...?

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You could make that "same effect" argument for any hard pull ever.  Every credit card, loan, and mortgage application could be done with a soft pull.  

But that would seriously diminish the value of credit reports in assessing the potential credit risk of an applicant, because the information about how often the applicant seeks credit would be completely absent from the reports. And in the absence of good knowledge about that contributing factor to risk, we'd ali pay higher interest rates and have a harder time getting access to credit.

As far as the law of the land is concerned, the FCRA makes no distinction between soft and hard pulls.  The law assumes everything pulled for a permissible purpose will be a hard pull. So when you, or I, or anyone gets a soft pull instead, that's a courtesy, not a right.  

It is legal, fair, and correct for lenders to report every customer-initiated request for credit (or other permissible purpose). In this case, Schwab could have done a hard pull on all 3 of the major CRAs.  The fact that they only pull one is in itself a courtesy.  Every lender could be like Capital One and triple-pull for every customer-initiated request.

When they don't do so, it's a favor they're doing as a form of loyalty to their customers.