Las Vegas real estate, mortgage, appraisal blog

US News published an article yesterday about how former Lending Tree employees helped lenders get information about borrowers with passwords they shouldn't have access to. Most of the forums are complaining about how these employees knew the passwords and about Lending Tree security but the larger issue isn't the letter:

April 21, 2008

Dear LendingTree Customer:

We want you to know that some loan request forms our customers sent to LendingTree may have been seen by lenders without our consent. These lenders then used the forms to market their own mortgage loans to our customers. While we don't believe that the forms were used for any other purpose, we want you to know what happened and what we did to correct this situation, as well as what you can do to monitor your credit records.

What Happened and What We Did

Recently, LendingTree learned that several former employees may have helped a handful of mortgage lenders gain access to LendingTree's customer information by sharing confidential passwords with the lenders. When we learned of this situation, we quickly contacted the authorities, and LendingTree is helping with their investigation. We promptly made several system security changes. We also brought lawsuits against those involved.

Based on our investigation, we understand that these mortgage lenders used the passwords to access LendingTree's customer loan request forms, normally available only to LendingTree-approved lenders, to market loans to those customers. The loan request forms contained data such as name, address, email address, telephone number, Social Security number, income and employment information. We believe these lenders accessed LendingTree's loan request forms between October 2006 and early 2008.

What You Can Do

Again, we don't believe any identity theft or fraudulent financial activity resulted from this situation. However, we suggest you get a free credit report. Look for any accounts you didn't open and/or inquiries from creditors that you didn't initiate. If you see anything you don't understand, contact the credit bureau. If you see anything suspicious, you may want to file a fraud alert with the bureaus. For more information on how to do this, please refer to LendingTree's Guide to Protecting Your Credit and Identity.

Where to Get More Information

We regret any inconvenience and apologize for any unwanted mortgage calls you may have received. For more information about this situation, and for more information on what you can do, please refer to the attached Questions & Answers.

Sincerely,

R.L. Harris

Instead the real issue is the reader comment below:

The number of times they sell your personal information leads to privacy breaches as well. You are led to believe that when you apply with them that you are applying to a "bank". In fact, your application (name, address, social security number, phone, fax, email) is SOLD to mortgage brokers, lenders and loan originators all over the country.

The only qualification you need to purchase a lead from Lending Tree is the ability to PAY for it.

One lead is sold to MANY. I have had people tell me that I am the 10th caller from thier one inquiry.

When you apply with LT then you are exposing your personal information to a large number of people and you don't know who. I don't believe there is any amount of security they can institute to stop information sharing.

The public should be made aware of this PRIOR to applying with them.

So let's get this straight everyone. It's not that lenders got information from Lending Tree and it's a huge breach of security. It's that the lenders didn't pay for it so Lending Tree is trying to scare people into not working with these lenders. Is it legal? Well, if you gave your information you gave them the right to distribute it to lenders and the lenders who got it from former employees did steal the information. Is it ok that this is happening? That's a whole different story.