@sarge12 wrote:
@UncleB wrote:IMHO there's no 'right' or 'wrong' answer to this one.
People on each side of this are usually firmly entrenched with their opinion and are unlikely to change their mind, and that's OK. For some it's the principle, and for others it's a bit more technical.
For example, if there's a data breach and a dependent's information is compromised, who is liable? One would hope it would be the issuer responsible for the breach, but it could also be argued that the applicant provided the information to begin with and shares responsibility (the dependent isn't a customer, after all). Also, an ex-spouse's SS# is required to be on the tax return if alimony is paid... while some ex's might be understanding if there was a breach, some certainly would not... it could get interesting.
Some prefer to avoid the possibility of any of this and just say 'no' to the transcript.
What's objectively true is that issuers have the right to request the 4506-T, and equally we have the right to refuse to provide it, with the understanding that we (likely) won't be approved for the account or CLI, of course.
I agree completely....if the applicant is comfortable with surrendering all the data that is on a tax return to whichever financial institution, then I am not going to critisize their decision. I know I never will for a credit card, but the Target, Equifax and many other recent data breaches has me admittedly paranoid about voluntarily surrendering data that should not be needed just to verify income. What I don't know is the following...Is this data entered into their mainframes for any employee to access?...is it sold to what they refer to as partners?...Why is a W2 form and pay stub not sufficient for income verification?...And the biggie for me, I recieve income from my 401k which is on the associated 1099 forms which includes account numbers. No matter how unlikely, could this be used by a hacker to steal the 1/2 million dollars in that account? Probably not, but the fact that it is a question for me to even ask means the value of a credit card is simply not worth the risk. If I had dependant children, giving a credit card issuer a document with a ss# that someone might use for identity theft before they are even ready to establish their own credit profile would also be a bridge too far for me. The practice of CC issuers requesting a 4506-T is still too recent for the possible future pitfals and abuses of this voluntary surrender of this data to be fully known, and I do not wish to be on a future newscast regretting having given some Bernie Madoff charachter the data he needed to lead me to financial ruin.
The bigger question is: why do some financial institutions skip right to 4506-T before asking for W-2's and paystubs? In my mind, unless there's a significant discrepancy between the reported income and what's on the W-2/paystubs, there's no grounds for asking for my tax return.
