FICO + Suze Orman = Higher Healthcare Bills?

Here at the Not the Jet Set ranch, we're big fans of The Biggest Loser. Besides being downright entertaining, it's also a pretty positive show - one of the few on after 8pm that the kids could watch (though some of those gym scenes do get pretty heated!). I was excited to see that the Season 8 winner, Danny, was going to make a guest appearance on last Tuesday. Not so excited to see who was also on - NBC's default talking head for all things money, Suze Orman. Knowing her propensity for making bone-head statements, we kept watching.

She started out by gloating about being the "go-to" financial adviser and then moved on to actually talking to the contestants - about the similarity of the burdens of the extra pounds and the burdens of money. Mostly harmless statements, some of which were actually on-point. But really, that's not why she's here. She's here to pitch for FICO. After a few pithy statements, Suze proceeds to throw it in everyone's face that she picked the season 8 winner, Danny. How did she do that?

  • Did she follow the show closely that season?

  • Did she look at contestants record of weight loss and potential for continued loss and analyze it like she would company stock?

  • Did she look at the contestant's psychological state and compare it with that of people successful in gaining control of their finances?
No, no, and no.

NBC apparently collected the contestants financial information to which they made the Suze privy to. By her own account, she reviewed "their finances and their FICO scores". That's it. And, yes, she specifically said "FICO" scores - not credit scores, not credit reports, not even generically lumped as 'credit', but "FICO scores" - so yes, she was pitching for FICO by being on the show.

So what is she here to do today? Help the contestants with budgeting? Give them a primer on financial fitness? Naahhhhh... she's here to strut her stuff and make her prediction for the Season 9 winner. Too bad she totally botched it. You see, based on her sophisticated analysis - again, finances and their FICO scores - her prediction was for Koli to be the winner. Unfortunately for ol' Suze, Koli had just admitted that he wasn't counting his calories as he should be for the show. You know, something actually relevant to the process of weight loss on the Biggest Loser. In light of that, she had to back pedal and revert to her second choice, which was Sunshine. Now of course, they didn't reveal any details as to the contestants finances, but here is an interesting detail - Sunshine, her new pick for season 9, is 24 years old. Maybe her more preferred credit and finances is due to her youth? No mortgage, limited other debt, maybe lives at home? I don't really know, just guessing.

So here's my issues with Suze, this time.

1> Suze is using a terrible method. As noted above: She's not analyzing the contestants like they were stocks and mutual funds which would require looking at relevant information. She's not comparing them to folks shedding debt and likening those successful behaviors to those shedding weight. What she is doing is auto-underwriting as if they were applying for a mortgage - a process that is under heavy scrutiny right now since it bears much of the blame for so many of the inappropriate loans that brought about the housing crisis. Even beyond that, her declarations go directly against one of the basic tenants of the show: She's saying that you are a number - this number defines you. This number says who you are and who you'll ever be. This number so accurately says who you are as a person, that it can be used to predict your future success or failure. Only that number is not their weight - that number is their FICO score. I'd be interested to hear what Jillian's take would be on that.

2> Suze is opening Pandora's box. And she's likely too dumb to know it. Maybe, that's too harsh.... Likely it was at the request of her puppeteers at Fair Isaac to which she more than willingly complied once she got done counting the zeros on the check. You see, it was some years ago that the auto insurance industry decided to draw the conclusion that low FICO scores indicate a higher likelihood of filing a claim. Many have labeled this practice as an inappropriate use of FICO scores and unfair to the consumer. For now, it's reality, and Fair Isaac reaps the rewards for the uptick in FICO score requests. Now Suze is opening the door for the health insurance industry to do the same. Does a low FICO score indicate a higher likelihood of poor health? Obesity? Diabetes? Of course not. But this is Suze's message. And in turn, a higher FICO score gives a person a higher likelihood of overcoming obesity. Again, I don't think she realizes what she is implying with her random-crazy-Suze method. But that is exactly what she is saying. And with the recent health care reform bill passing, I would guess that health insurance providers will be looking for any reason to charge you more seeing as pre-existing conditions and other practices were just taken away from them. Scary stuff - Thanks, Suze!

My Conclusion:

  • FICO is meaningless when it comes to your money. I could inherit one million dollars tomorrow and my score wouldn't change one point.

  • FICO is meaningless when it comes to your driving. I could be foreclosed on and it wouldn't affect my driving habits one bit.

  • FICO is meaningless when it comes to your health. I could stop exercising and start consuming a liter of high fructose corn syrup per day and FICO wouldn't have a clue.
Can you make observations and see correlations between FICO scores and driving records, FICO scores and obesity? Sure. Drawing conclusions? No - that's bad science and a blatant attempt to rip-off the consumer.

Stay tuned for our continuing coverage of Suze's path of destruction.


DogAteMyFinances said...

I think FICO scores say more about you than just whether you pay your bills. To some degree, they show whether you are responsible and if you have your act together. Is it the best? No. Is it limited? Obviously. But I do think it matters, at least a little bit.

Obviously, it's just stupid to say that is what will make you better at losing weight, but she got her gleaming teeth on there, didn't she?

Mr. (not) the Jet Set said...

"I think FICO scores say more about you than just whether you pay your bills. To some degree, they show whether you are responsible and if you have your act together." Without her, is my score that high? Doubtful.

Does it? See I'm not sure either of those are things are true. I'm terrible at paying bills. That's kind of an odd statement, like saying I'm bad at watching TV. But paying bills is the sort of thing that my personality tends to put off, forget about, whatev (see - two excuses and I'm already bored with it). Yet I have a FICO in the mid-700's last I saw. Clearly my FICO score is reaping the benefits of having a virtuous wife who excels at the sort of things that I do not. Collectively, WE have OUR act together.

So I would say, no - FICO scores do not show responsibility or even reflect the individual's actions. It shows that I have been in debt, how long I have been there, and if the check came in on time. Anything else is pure projections.

TA-TA said...

My husband and I were frustrated with this episode too. One of my biggest complaints about what she "preaches" is the whole concept of worshiping at the alter of the great FICO score. My first thought is some thing similar to yours - of course Koli and Sunshine have good FICO scores, they are young single people.

I can laugh now (looking back) because Sunshine isn't even on the show. Looking at Koli (his fate still to be determined) I think of a couple things -- if you don't track your calories, you probably won't track your finances either. Watching him in Vegas focusing so much on the finale and not on changing his life practices... he's likely to gain back all the weight. It's true with finances too. If you dont' change your lifestyle, you'll likely end up right back in the same place you started.

NBC had enough product placement on the show as it is. We dont' really need Suze plugging FICO too. Could have done without that episode all together. I'm actually rooting against Koli (wonder if it's a subconsious backlash from this episode). I'll be curious to see who wins next week.

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