Posted by Brian Berg Google+
On any given day you’ll find a number of direct mail marketing pieces waiting for you. Some of this direct mail will be bills for the electric and phone, while others will be a coupon for a local electronics store. And undoubtedly there will be a direct mail piece that contains the wording “pre-screened” or “prequalified”.
So what exactly is a prescreen offer of credit? A direct mail piece containing a prescreen offer of credit, or “firm offer of credit” are based on information in an individuals credit report that indicates they have met specific criteria set by the business making the offer. This business using direct mail as a way to reach it’s potential audience has purchased a credit score mailing list containing people they are able to offer of credit to for their product or service.
The wording “firm offer of credit” means that all things being equal, the business making the firm offer must extend the credit to the recipient of their direct mail piece. The recipient of this direct mail piece may not qualify for financing because the though their credit score is high enough, their income may not be enough to support the additional debt load.
And since credit reporting agency doesn’t account for a person’s income, a “firm offer of credit” isn’t an automatic approval of credit. Therefore, in addition to the words “prescreen” or “prequalified”, the direct mail piece will also include disclaimer information. The disclaimer information is the fine print. Among other things, it says that there’s a possibility that if the debt to equity ratio is to high, or that the credit score has changed since the credit score mailing list has changed since the direct mail piece was mailed, the firm offer is void.
The prescreening works for direct mail because it surely filters out everyone unqualified on credit score alone. In the direct mail world, if you can utilize a mailing list that allows you to direct mail to less people, while hitting the same number of good direct mail recipients, you’re return on direct mail investment goes up.
Since there are no “inquires” on your credit report showing which companies obtained your information for prescreening, when a mailing list broker pulls your name for a direct mail campaign making a firm offer of credit, your actual credit score is not negatively affected.
Opting Out
If an individual wants to reduce the number of prescreened offers being direct mailed to them, they have two choices to “opting out”. They can call toll-free 1-888-5-OPTOUT (1-888-567-8688) or visit www.optoutprescreen.com for details. The telephone number and website are operated by the major consumer reporting companies. When you call or visit the website, you’ll be asked to provide certain personal information, including your home telephone number, name, Social Security number, and date of birth.
The information you provide is confidential and will be used only to process your request to opt out. Remember that if you have joint credit relationships, like a mortgage or a car loan with a spouse, partner, or other adult, you may continue to receive some prescreened solicitations until both of you exercise your opt-out right.
The Pro’s and Con’s of opting out
Some people would rather not receive direct mail of these kinds of offer, especially if they’re not in the market for credit. They prefer to reduce the direct mail “clutter” in their mail box by being removed opting out and being removed from the mailing list.
However, before a person opts out and is removed from the prescreen mailing list, they should consider that at some point, they may be in the market for a new car or a new mortgage. Prescreened direct mail offers help an individual stay in tune with all the options available to them. And a well informed consumer is one who keeps a watchful eye of all the options available to him. Opting out will take as long as 60 days to go into effect and will last for 5 years. After that, one may start receiving prescreened direct mail offers again and will have to once again opt out.
There are other opt-out programs available for the non-firm offers of credit. There’s the National Do Not Call Registry which is an easy way to be removed from a telemarketing list. This is done by going to www.donotcall.gov or calling 1-888-382-1222 from the phone you want to register. You should start reducing your call solicitations within 31 days of registering your phone number.
This also will last for a period of 5 years. And finally, there’s the Direct Marketing Association (DMA), a trade association for businesses in the direct mail marketing business. The DMA maintains a Mail Preference Service that lets the consumers opt out of receiving direct mail marketing from many national companies for five years. This will not however stop those organizations that are not registered with the DMA’s Mail Preference Service.
To register with the DMA, send a letter to: Direct Marketing Association Mail Preference Service PO Box 643 Carmel, NY 10512 Or register online at www.the-dma.org/consumers/offmailinglist.html.
The DMA also has an EMail Preference Service to help you reduce unsolicited commercial emails. To “opt-out” of receiving unsolicited commercial email from DMA members, visit www.dmaconsumers.org/offemaillist.html. Your online request will be effective for one year.