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Friday, July 31, 2009

The true purpose of credit scores

Here's another good article on Examiner.com, this one by Mary Supinger. It explains the true purpose of your credit score as well as the benefits of exercising your rights under the Fair Credit Reporting Act. Here's the article:

"Given the current state of the mortgage industry, rates may be low, but the add-ons for low credit scores are getting higher everyday.

Make no mistake; no one cares about your credit more than you do.

You are the one who must foot the bill for bad credit so it is in your best interest to listen up and take action.

Because human beings input this information into the system and because all three credit bureaus (CRAs) have various servers across the country both good and bad information can pop up on your credit report.

Thankfully, most of that information is correct. Some of that information is incorrect or true, but negative. Depending on who you speak with, up to 72% of all credit reports contain errors. This is why you need to practice routine maintenance of your credit report; because items do pop up again after they have been removed. It can be maddening until you learn how to handle the situation and use it to benefit yourself.

In my business as a loan officer, I have been an expert witness in several court actions because creditors have injured a person’s credit profile.

One of my clients was awarded over $250,000 in cash and at least another $100,000 in benefit for the refinance of their home. All this because we paid attention and fought for the rights that we are all entitled to under the Fair Credit Reporting Act.

To sum things up, all of the credit repositories must have a completely accurate reporting of an item or they are required by law to delete the item. You can use this to your advantage.

Credit scoring has been around for years and years. Car dealers and insurance companies have used them for decades. When mortgage lenders began using them for making loans in the early 90’s it set in motion the mortgage banking and portfolio lenders ability to make loans based on 'credit risk factors'.

That means that the credit score told the lender a lot of what they needed to know in determining whether a borrower would make their payments on time.

The entire purpose of credit scoring is to determine whether a borrower will have a 90 day late on any account within the next 24 months.

That’s it; plain and simple. By knowing whether that borrower is at risk, it enabled mortgage and home loan underwriters the ability to make a 'bare facts' decision out of the loan approval.

It leveled the playing field.

You will still need to prove your income and assets with most types of borrowing, but the higher your credit scores, the better the price will be for that borrowing."

Thursday, July 30, 2009

How your credit report can keep you from getting a job

Liz Wolgemuth of U.S. News and World Report wrote an excellent article about the tragic circle one can get caught in when looking for a job with a less than stellar credit report. Here's a quote:

"This sounds like a cycle of pure misery: First, you get laid off. Then, you're one of the 4.4 million Americans who in June saw their job searches stretch out six months or more. The bills keep rolling in—car payment, house payment, medical bills—and your credit card balance is ballooning. You interview for a job and you're one of the top candidates, but a late-stage credit check has the employer going with another hire. The bottom line: You need a job to improve your financial situation, but your finances are now hurting your ability to get a job.

A House bill introduced earlier this month aims to prevent such a situation. The Equal Employment for All Act would prohibit employers from using the details of a consumer credit report in making hiring decisions, with exceptions for financial firms and government agencies, as well as jobs requiring certain security clearances. The legislation follows efforts by some states to sharply limit employers' ability to consider a person's creditworthiness in hiring.

While credit checks historically were used to screen applicants for financial and government jobs, the practice has spread. More than 40 percent of employers run credit checks on job candidates, according to some research. Rep. Steve Cohen, who introduced the bill, points to a report that a third of workers making less than $45,000 a year have poor credit scores linked to bankruptcies, loan delinquencies, divorce, medical problems, or unemployment. The bill would give 'some of our most vulnerable, 'credit challenged' citizens—students, recent college graduates, low-income families, senior citizens, and minorities—the opportunity to begin rebuilding their credit history by obtaining a job,' Cohen says."

The rest of the article can be found here -

More identity theft arrests

John M. Roman with the Daily Times reported on three new identity theft arrests in Pennsylvania. Here's a quote from the article:

"Three Chester residents have been charged with operating a major bogus credit card and identity theft operation that contributed to losses of at least several hundreds of thousands of dollars in the banking industry, Delaware County District Attorney G. Michael Green announced today.

More than 400 legitimate credit card numbers of victims were recovered at an unoccupied apartment along with more than 50 manufactured credit cards and 2,500 blank check stock documents, Green said at a press conference.

The items were found in addition to numerous machines and devices used to reproduce credit cards and photo identification cards such as a laptop computer, a printer, an embosser, an ID card printer, a credit card scanner, boxes of blank checks and supplies used to manufacture photo ID, foil and holograms for the ID cards, Green said.

Kevin Wilmer Henson, 36, and Donald Mewha, 59, both of the 1100 block of Clover Lane and the 1300 block of Renshaw Road, Chester; and Henson’s girlfriend, Ylana Starks, 30, of the 1100 block of Clover Lane, Chester, were all charged with possessing instruments of crime, theft by deception, receiving stolen property, unlawful device-making equipment, identity theft and forgery, and related offenses, according to affidavits of probable cause."

New identity theft arrest

This hot off the Media-Newswire.com:

"CLARK MOWER, 58, of Seattle, Washington, was arrested today in Seattle on three felonies: Aggravated Identity Theft, Social Security Number Misuse, and Unlawful Production of an Identification Document.

MOWER was originally charged as 'John Doe,' as federal agents worked to unravel his true identity. MOWER had lived for 35 years unlawfully using the name, Social Security number, and date of birth of a man living in Oregon. MOWER used the victim’s identity in order to avoid felony and misdemeanor warrants from California, to file bankruptcy after incurring over $100,000 in debt, and to obtain Department of Social and Health Services ( DSHS ) benefits.

MOWER’s unlawful use of the victim’s identity for decades caused the victim numerous difficulties as he repeatedly attempted to correct his financial records and to correct his credit history. MOWER obtained fraudulent driver licenses under the victim’s name, as well as a counterfeit Social Security number card.

The charges in the complaint are punishable by a mandatory minimum two years in prison up to five years in prison. The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the Social Security Office of Inspector General ( SSA-OIG ), U.S. Marshal’s Pacific Northwest Fugitive Task Force, and DSHS Investigators.The case is being prosecuted by Special Assistant United States Attorney Johanna Vanderlee. Ms. Vanderlee is an attorney with the Social Security Administration Office of Inspector General who is specially designated to prosecute social security fraud and identity theft cases in federal court."

New identity theft scam

A new identity theft scheme has emerged, targeting landlords and renters. Here's a quote from a recent article by Connie Thompson at komonews.com:

"Someone is hijacking legitimate rental ads online, omitting the contact information, dropping the monthly rent by hundreds of dollars and steering renters to a Web site called eRentalApplications.

The site solicits both landlords and tenants, claiming to forward rental applications to landlords for specific properties listed on the site. Prospective tenants have to apply one line and submit an application fee of $14.95. Once the fee is cleared through Paypal, the site says your application will be submitted to the landlord. But landlords and property managers tell the Problem Solvers they know nothing about this company and the listings are unauthorized. In some cases the properties are not even available for rent. Local renters report being interrupted repeatedly by people knocking on the door wanting to look at the home they found listed online.

In addition to being charged $14.95, unwitting consumers are providing a disturbing amount of private information on the application; name, address, email address, date of birth, names and birth dates of all children, names of pets, current and previous addresses, current and previous employment information, credit history, drivers license and license plate numbers -- all just to apply for a home they've never seen.

The requested information has nothing to do with wanting to look at a house or apartment.Even more disturbing is that the privacy page, which also refers to the name Linskiy Company LLC, says the company can obtain more information, including your social security number, from your credit report. The site also says they can share your information with third parties.Should someone be intent on stealing your identity, they'd have everything they need. And for every application filed, whoever is behind eRentalApplications is collecting nearly $15 through Paypal. The Internet is being flooded with complaints from across the country.

I traced the company to what turns out to be a post office box in Roseville, California -- a city outside Sacramento. But the box belongs to a very shocked carpet cleaning business whose owner says had the box since the first of the year and has never heard of eRentalApplications. The California Department of Real Estate tells me the company does not have the license that's generally required to solicit landlords and tenants.My phone calls prompted California regulators to look into it. The Federal Trade Commission is also checking it out.

In the meantime, do not give money or information to eRentalApplications.com.Consumers with complaints are urged to contact the FTC and file complaints with the Better Business Bureau, and the Attorney General's offices in both California and Washington state."

One more scam to watch out for.

Wednesday, July 29, 2009

More coverage regarding Experian's win against LifeLock

The following is an article from Jeff Blyskal at ConsumerReports.org about a case I reported on a while back (see my post at http://fcralawyer.blogspot.com/2009/06/another-article-about-lifelock.html).

"The days of paying companies $10 a month to place fraud alerts on your credit report every three months may be numbered, thanks to a recent U.S. District Court ruling. Two identity theft protection companies have already stopped placing the paid alerts.

In late May, Judge Andrew Guilford, of the U.S. District Court for the Central District of California, ruled that the federal Fair Credit Reporting Act (FCRA) prohibits commercial enterprises from placing fraud alerts on paying consumers’ credit reports. The partial summary judgment was in favor of Experian, one of the big three credit bureaus, which had sued LifeLock, one of the first fraud alert placement companies.

As the Consumer Reports Money Adviser first reported in December, 2007, LifeLock made a big business out of charging consumers $10 a month to place fraud alerts on their credit reports, which are supposed to stop ID thieves. When a crook tries to open a new credit account in your name, the prospective lender is supposed to see the alert when he pulls your credit report, and to call you to check whether the person who says he’s you really is you.

Problem was, we pointed out, the FCRA gives consumers the right to place fraud alerts themselves for free. What’s more, fraud alerts are no guarantee against ID theft, since some lenders don’t see them and let crooks open accounts in other people’s names anyway. 'We know this isn’t 100 percent bulletproof,' LifeLock CEO Todd Davis told us. 'You can still be a victim. If that happens, we’re there to clean up the mess' with a $1 million guarantee.

Davis was not available to comment on the ruling, but a company spokesman said, 'We have filed our motion for the court to reconsider its ruling in light of new evidence we have uncovered since the hearing in January of 2009. We have provided the court with extensive arguments and expert information, which we believe prove that the court's initial ruling should be changed.'

LifeLock did not respond to our request for a copy of its motion and new evidence.

'Experian is pleased with the ruling of the court, as it upholds the regulations outlined by the Fair Credit Reporting Act,' an Experian spokesperson said. 'Experian believes that the court has rightly recognized Lifelock’s unfair business practices. This ruling is not just positive for Experian, but for consumers. Experian will continue to work with consumers to provide education and services to assist them with understanding the credit reporting system.'

One other identity protection company, Debix, already has stopped providing fraud alerts. (See more on Debix’s better fraud-alert system in my next blog.) And IdentitySecure has shifted to letting consumers place their own alerts directly with the credit bureaus through a simple web interface and sending customers a reminder e-mail every 90 days so they can renew the alert. Equifax also has stopped accepting fraud alerts from LifeLock. 'Our decision to stop accepting LifeLock generated fraud alerts is based completely and solely on our interpretation and understanding of FCRA and is consistent with the recent interpretation by the U.S. District Court for the Central District of California. And in that interpretation there is what we consider an unequivocal ruling that LifeLock’s practices are in violation of public policy,' an Equifax spokesman said.

What will happen to LifeLock now? The company wouldn’t answer further questions. But a customer service representative on LifeLock’s toll free line told me that the company continues to place fraud alerts through TransUnion, which, in turn, told me, 'We are aware of the litigation and the decision of the court as to LifeLock's practices related to Experian. Pending a specific ruling in this matter from the court, we have continued to operate as in the past, in support of each consumer’s right to choose.'”

Interesting that Experian actually think the FCRA required something. They usually claim the opposite in my cases, that whatever I am claiming they didn't do was not required by the FCRA.

For more about LifeLock, see here - http://fcralawyer.blogspot.com/search/label/LifeLock.

FTC delays enforcement of the Red Flag Rules ... again!

The Red Flag Rules, which require certain types of businesses, including some small businesses, to come up with and implement procedures to prevent identity theft, was supposed to go into effect on August 1. Key words being "supposed to". It was also supposed to go into effect on May 1 and even on November 1 of last year.

Its now delayed to November 1, 2009, one year to the day from when it was "supposed to" go into effect. Joe Campana at the Identity Theft Examiner sums up what this latest delay means:

"Further delay in enforcement may mean that many businesses will sit on the sidelines again to wait and see what happens when November 1st comes around. For most businesses, enforcement does not mean an audit, inspection or test. It simply means that if an identity theft incident occurs within a business, and there was a violation of the Red Flags Rule, then the law can be enforced by the FTC, the state attorney general or through a private right of action.

In the press release, the FTC suggests it would not enforce the law against to small low-risk businesses that are likely to 'know their customers.' Reviewing FTC enforcement of other laws over the last few years, shows that the FTC in general does not enforce laws against small businesses, and that it brings few enforcement actions, which some consumer advocates have already criticized.

This delay a compliance date may suggest that small low-risk businesses do nothing. Many already do not comply with other laws such as the FACT Act Disposal Rule, the Gramm-Leach Bliley Act and state breach notification laws. However, once an enforcement date is finalized, private citizens can sue businesses under the law if they can show harm resulting from the negligent authentication of a thief using their identity. Even today, small businesses are at risk of such lawsuits brought under common law."

As I have said before, the threat of FTC enforcement of any law is virtually meaningless. I am glad that the Red Flags Rule includes a private cause of action, thereby giving it enough teeth to actually give someone pause enough to at least attempt to comply with it. That is, if it ever actually goes into effect.

Tuesday, July 28, 2009

Reduce the risk of having your identity stolen

One good way to reduce the risk of having your identity stolen (while saving some trees in the process) is to stop the stacks and stacks and stacks of junk mail being sent to you. The FCRA provides for one way to help stop junk mail.

You can opt out of pre-approved screening lists that potential creditors use to decide whether you might be eligible for whatever they are trying to sell, be it cars, insurance or new credit cards. Most of the companies mailing you junk mail get your name, address and, in some cases, how well you match up to their criteria, directly from Equifax, Experian and Trans Union. Opting out of pre-approved screening lists keeps your name off these lists and, as a result, drastically reduces the amount of junk mail. You can opt out by calling the credit bureaus at the following numbers:

Experian - (800) 353-0809
Equifax - (888) 567-8688
TransUnion - (800) 680-7293.

Call 'em, opt out and tell the credit bureaus that I say "hi".

Monday, July 27, 2009

One step closer to the creation of the CFPA

Breaking news:

"Addressing the Obama Administration's proposals to reform financial regulation in the US, Barney Frank (D-MA), Chairman of the House Financial Services Committee, has promised to report legislation which would create a new Consumer Financial Protection Agency (CFPA) before the House adjourns for its August recess at the end of July."

If this legislation is passed, the CFPA will be in charge of enforcement of the consumer protection statutes including the FCRA. Of course, you will still be able to file lawsuits for violations of any of the statutes containing private causes of action. But maybe with the CFPA you can get somewhere on the non-private causes of action since the FTC can't and/or won't do anything about it.

Sunday, July 26, 2009

Red flags rule may also help prevent medical identity theft

An article from fiercehealthcare.com by Anne Zieger:

"About 250,000 times per year, a thief uses someone else's personal identity information--such as their name, Social Security number and date of birth--to bill medical services to an unsuspecting stranger, according to the Federal Trade Commission. While that's only about 1.3 percent to 3 percent of all identity theft crimes, this is a growing phenomenon which the agency is attempting to nip in the bud with a new set of regulations known as Red Flags Rules.

The Red Flags Rules, which actually went into effect November 1, 2008 but only imposes penalties as of August 1, will require physicians' offices and hospitals, along with some other businesses, to create procedures to spot some classic "red flags" for identity theft, such as signs of fake or altered IDs, telltale inconsistencies in medical records or fraud alerts from consumer credit reporting agencies.

Doctors will also be required to set up procedures for detecting signs of bogus IDs or other warning signs, but also create policies for how they'll handle problems, such as alerting victims and holding off on billing for services."

The whole article can be seen here - http://www.fiercehealthcare.com/story/medical-identity-theft-protections-take-effect-next-month/2009-07-24.

Another good reason why Congress should create a new agency to replace the FTC

While the below article from www.statesboro.biz focuses on the Fair Debt Collection Practices Act, it is also true about the Fair Credit Reporting Act. I know of no actions against the credit bureaus recently filed by the FTC or other governmental agencies but FCRA lawsuits filed by individuals are happening every day. Too bad some of the best parts of the FCRA can only be enforced by the FTC or other governmental agencies.

Fortunately, Congress is currently considering creating a new agency to give this power to that allegedly be able to focus more on enforcing the FCRA, FDCPA and other consumer statutory schemes. Unfortunately, this will probably result in more of the same. The best (and cheapest) alternative is for Congress to allow private lawsuits for all the consumers' rights under the FCRA, FDCPA, etc. This will allow for the enforcement of these statutes without costing the government the expense of doing the enforcing. And it will allow attorneys to make money, which is then taxed as income to the attorney and thus makes the government money. This is what is typically called a "win win", but probably won't happen since this is the GOVERNMENT we are talking about. If it makes sense, it usually won't happen. But I digress.

Here's the article about the FDCPA:

"Most of 4,054 the federal consumer credit lawsuits filed so far in 2009 are Fair Debt Collection Practices Act (FDCPA) against Debt Collectors and debt collection law firms.

You can see for yourself at Justia.com.

If you ask me that’s a lot of consumers being abused by debt collectors using questionable collection tactics. This is quite troubling as it shows that for the most part the Federal Trade Commission (FTC) and state attorney general’s are not getting involved in consumer abuse as much as they should be.

These numbers also show that many debt collectors are willfully violating federal and state law to collect debts. I could see if there were maybe 75-100 (total) filed each month, but the numbers of lawsuits that consumers file themselves without the aid of federal and state law enforcement is quite staggering.

Maybe it is a good idea that consumer issues such as the FDCPA and FCRA (Fair Credit Reporting Act) be taken away from the Federal Trade Commission and to a new consumer protection agency that is being currently being proposed in congress. From all outward appearances the FTC is failing US consumers in protecting them from predatory and illegal debt collection.

What’s more the $1000.00 per incident damages outlined in the FDCPA is chump-change to many of the the large US debt collection companies, hence the large number of federal lawsuits filed against them. The Fair Debt Collection Practices act needs to be beefed up and hit debt collectors hard, right in the wallet. Put some meat in the FDCPA and once a couple of large cash awards hit the debt collectors the illegal collection tactics will dry up to a trickle.

Now let’s take a look at how many Federal consumer credit lawsuits were filed against large debt collection companies and Debt Collection law firms so far in 2009.

January 1, 2009 through July 24, 2009

Asset Acceptance – 226 lawsuits

Allied Interstate – 215 lawsuits

NCO Financial Systems (Group) – 205 lawsuits

Palisades Collections, LLC – 153 lawsuits

Allied Interstate Inc. – 98 Lawsuits

-- the above totals 897 lawsuits close to 1/4 of the total number of consumer credit lawsuits filed in 2009 --

Client Services Inc – 65 lawsuits

Midland Funding/ Midland Credit – 65 lawsuits

Mann Bracken – 60 lawsuits

Portfolio Recovery Associates – 54 lawsuits

LVNV Funding – 46 lawsuits

MRS Associates – 38 lawsuits

United Collection Bureau (aka UCB) – 31 lawsuits

First Revenue Assurance – 26 lawsuits

Alliance One – 26 lawsuits

LTD Financial Services – 32 lawsuits

West Asset Management – 23 lawsuits

Mitchell N Kay PC – 23 lawsuits

Unifund CCR Partners – 20 lawsuits

Gerald E. Moore & Associates, P.C. – 19 lawsuits

Eskanos & Adler, PC – 13 lawsuits

Scott Lowery Law Office, P.C. - 11 lawsuits

Accounts Receivable Management – 10 lawsuits

BUREAU OF COLLECTION RECOVERY – 7 lawsuits

Allen, Lewis & Associates, Inc – 5 lawsuits

I have probably overlooked a few of the larger debt collection law firms and debt collection companies, however as you can see it not just one or two lawsuits being filed against them, it is dozens and some hundreds. Feel free to search federal civil filings at Justia.com (consumer credit lawsuits) and pull others you may have been abused by.

All these lawsuits filed against debt collectors in 2009 and in the last year the Federal Trade Commission has done nothing against any of them (so far as we know). It’s extremely sad if you ask me that consumers are being harassed and the very federal enforcement agency hasn’t done anything. No wonder debt collectors violate the law, they know that the FTC is going to do anything to them. I for one, am glad that congress is thinking of creating a new consumer protection agency and take some of the Federal Trade Commissions enforcement powers away. Like the old saying goes “Use it, or lose it” and the FTC only has themselves to blame…"

Alleged Pakistani identity theft ring busted by counter terrorism investigators

One of the good things to come out of the war on terror was the increased scrutiny for possible identity theft associated with terrorist activity. For instance, the 911 terrorists were operating using stolen identities.

Counter terrorism investigators have busted an alleged Pakistani identity theft ring in California. Here's the article by Joel Rubin of the L.A. Times:

"On a spring day last year, a Pakistani man came to Shamsha Laiwalla looking for help. He told her he had recently jumped off a cargo ship docked in the Port of Los Angeles and was now looking to buy a new identity.

On the surface, Laiwalla was not an obvious go-to person. She owns a seemingly innocuous vehicle registration company -- one of the thousands in California that take care of DMV-related tasks for people willing to pay for the convenience.

For years, however, the 44-year-old Pakistan native has offered customers a startling menu of illegal services as the architect of an extensive fraud ring involving several DMV employees she regularly paid to produce licenses and other documents, according to Los Angeles police and federal officials. The names of at least some of her alleged clients have surfaced in ongoing federal investigations into national security issues, said LAPD Deputy Chief Michael Downing.

The Pakistani man was, in fact, an undercover detective in the Los Angeles Police Department's counter-terrorism bureau, which is headed by Downing. For $3,500, Laiwalla told the detective, she could get a valid California driver's license with his photo, an expertly forged birth certificate and a Social Security card, police say. All the documents would bear his new name, Francisco Gonzalez Rios.Laiwalla recently pleaded guilty to federal charges of identity theft stemming from the investigation and is awaiting sentencing. Last week, prosecutors in the Los Angeles County district attorney's office filed 11 state charges against her. They also charged 13 of her alleged accomplices.

She pleaded not guilty to the state charges Wednesday. Her attorney, Roger Rosen, declined to discuss the case, saying he had not had a chance to review the allegations.LAPD counter-terrorism officers, who recounted the undercover operation in interviews with The Times, said she has not been connected directly to any known terrorist organizations. But her tangential ties to a recent case, they said, underscore the risks posed by such security breaches.

In 2007, one of Laiwalla's contacts altered DMV records for members of a criminal organization that dealt drugs and sold counterfeit goods in L.A.'s garment district, police say. The money from the enterprise is suspected of having helped fund Hezbollah, the Iran-backed militant Shiite Muslim group that operates in Lebanon. That Laiwalla hails from one of the world's epicenters for Islamic terror groups has added a level of concern for law enforcement officials. According to an affidavit filed in the federal case, she told the undercover officer that 'she has helped numerous individuals from her native Pakistan.'

'We have no idea how many thousands of people might be out there with these documents,' said LAPD Det. Mark Severino, who helped run the investigation. 'If we're talking about counter-terrorism issues, that's a scary thought. How do you track a man with a valid license and the name Rios?' Laiwalla allegedly offered to sell undercover officers valid licenses from Nevada or Washington, indicating that her reach extended to other states. And Downing says it is almost certain that other people are running similar operations in California and elsewhere. In 2005, clerks at Virginia DMV offices and others were charged with helping more than 1,000 people falsely obtain driver's licenses over a five-year period.

Another breach was uncovered in the Bay Area the same year.Gregory Huber, commander of the DMV's internal affairs branch, acknowledged the challenge of staying ahead of criminally-minded employees. With roughly 9,000 people scattered across scores of field offices throughout the state, identifying and preventing suspicious activity is a daunting task. 'There is always going to be a criminal element on the outside that is going to be looking to exploit weaknesses in our system,' he said. 'Our employees don't get paid very much. The temptation is always there.'

Although the services Laiwalla is alleged to have offered might seem relatively harmless, they exemplify the type of vulnerability terror groups use to their advantage.

'People involved in terrorism are not reinventing the wheel,' Severino said. 'If they need documents or whatnot, they are going to use the criminal enterprises that already exist.' Severino and others noted that the 9/11 hijackers fraudulently obtained driver's licenses from Florida, California, Arizona and Virginia.Laiwalla first fell under suspicion in June 2007, when an FBI agent working on an unrelated case heard about her alleged dealings with DMV employees, according to court documents. The FBI launched an investigation and the following year merged it with one being run by a team of LAPD counter-terrorism detectives and investigators from the DMV and district attorney's office.

Over the next eight months, LAPD officers conducted 16 undercover operations as they followed the various tentacles of Laiwalla's alleged network, Severino said. If someone needed to register a car or truck stolen from another state, Laiwalla typically charged $400 and sent clients to two auto shops in Torrance and L.A. to forge various inspection documents, police allege. And, for a $75 fee, she would arrange for one of two driving schools to fabricate documents showing the client had attended court-mandated classes following traffic violations.

Two other women, one of whom was found guilty of identity theft charges in federal court alongside Laiwalla, are accused of procuring forged birth certificates and Social Security cards with legitimate numbers for about $1,500. But it was the relationships Laiwalla allegedly built over several years with three employees at the DMV's Inglewood office that most disturbed enforcement officials. Those employees have been fired, Huber said.

One of the former employees is charged with illegally processing a license for an undercover agent -- a service for which Laiwalla charged $800 -- by forging the results on the written exam and driving test, according to court records. Another employee is charged with helping to illegally register a car.

The third faces charges that she accessed DMV databases to help protect members of the crime ring associated with Hezbollah. That employee, police believe, erased electronic notifications the DMV uses to alert law enforcement during traffic stops that an arrest warrant has been issued against the person being detained."

The link to the article is http://www.latimes.com/news/local/la-me-fraud26-2009jul26,0,2461518.story.

Now the FBI is watching me "closely"

Got another scam e-mail today. Now the FBI is watching me "closely" because of all the "communications" I have had with all the "criminals" in Africa sending all that money to folks over here in the good ol' U.S.A. The e-mail starts off by recognizing that most of the promised payments from Africa are scams so the U.S. government has halted all such payments, that's why they need more information from me, so they can send my "legitimate" payment via "diplomatic" means? What? Is somebody going to show up at my house with one of those "diplomatic pouches" that ambassadors are allowed to carry around? The e-mail is from an e-mail address with a .co.za ending which I think means its from Zaire. Since when did the U.S. government start using a gmail account from Zaire to send official e-mails?

Here's the text of the e-mail.

"Hello

During the United Nations summit held last week at Geneva, The United Nations has stopped every paymentcoming from Africa and Europe to be made by all those corrupt African officials as they are using it to extortmoney from innocent citizens. Because of their habbit of requesting for more money after the other, Mostinnocent citizens have cleaned their life savings trying to receive their long awaited payments. This havebroken many homes in the United States, put alot of families homeless, taken alot of lives, causing severesickness to people e.t.c.

You are advised to stop every communications with any person or group of persons who are promising to getyour funds to you and receive your funds within 5 working days through a first class diplomatic means. Thisis the only approved payment method for proper records. Your funds are already sealed in a trunk box with ahigh diplomatic immunity coverage which is presently lying in the United Nations safe room in SeattleWashington U.S.A.The FBI is aware of this and are watching you closely incase you did not stop communications with thosecriminals.

Your funds will be shipped to your address as soon as we have an understanding with you.

You are advised to confirm the below details:

FULL NAMES:
DELIVERY ADDRESS:
CLOSEST AIRPORT:
DIRECT PHONE NUMBERS:
AGE:
OCCUPATION:

I have been officially assigned to handle this delivery.

Thanks for your understanding

John Harvey
US. Diplomat
206-333-1451"

Apparently, they should be spending this money they are always sending to us poor ol' Americans on grammar lessons so their e-mail scams might actually look more convincing.

Friday, July 24, 2009

Another conviction of a Mississippi identity thief

For the second time in as many days, I am posting about a newly convicted identity thief from Mississippi.

Kudos to wlbt.com, Jackson's channel 3 NBC affiliate, for reporting on a conviction of an identity thief for the second time this week. I'll tell you the story wblt.com (and everyone else) is missing beneath the fold. But first, here's wlbt.com's article:

"A Jackson man admits to identity theft. Jermaine McClure of Jackson pleaded guilty to aggravated identity theft in U.S. District Court Thursday.

McClure was arrested by Clinton police in September 2008. He was found with various forms of identification belonging to others as well as counterfeit checks.

Authorities then linked him to an identity theft ring led by Milton B. Johnson of Jackson.
The Johnson ring is one of the largest identity theft rings operating in Central Mississippi.
McClure is set to be sentenced October first. He must also pay full restitution to all victims."

If any of the victims of identity thief Jermaine McClure read this and need help, advice or possible representation from an experienced Fair Credit Reporting Act attorney, please e-mail me at ckittell@merkel-cocke.com.

Now, I promised the real story that's being missed. Here it is. While identity thieves like McClure start the nightmare of identity theft, he had help in the form of an "I don't care" attitude from credit card companies, etc. Credit card companies, cell phone companies, utility companies, and even banks (although local banks are better about caring about and, as a result, preventing identity theft than large national banks such as the inept Bank of America) allow identity theft to happen.

I recently sued a major cell phone company that took a total of 12.2 seconds from the completion of the application to the granting of the application. Even though they pulled my client's credit report (to get his excellent score), they failed to even look at what was on the report. Had this cell phone company taken the short, easy step of reading, oh, I don't know, the full name, address or date of birth on the report, they would have realized that the person who completed the application did not know their "own" middle name, address or date of birth. They might have also noticed that the identity thief was applying for a cell phone in Illinois even though the consumer he was impersonating lived in North Carolina and was currently serving in Afghanistan (and had a active duty alert on his credit reports).

This type of ignorance allows identity thieves such as Jermaine McClure to steal innocent people's identities. Until companies such as that cell phone company wake up, identity theft will still run rampant.

Red Flag Rule deadline draws nearer

The August 1 deadline to have your identity theft prevention program in place is looming. With it is coming more articles about what is called the Red Flag Rule. Here's a good article about this new law going into effect:

"With the deadline to implement the Federal Trade Commission's Identity Theft rules looming, federal agencies issued a set of frequently asked questions to help affected businesses, such as veterinary practices, comply.

The questions provide guidance on numerous aspects of the rules, including which types of entities and accounts are covered, establishment and administration of an Identity Theft Prevention Program, address validation requirements applicable to card issuers and the obligations of users of consumer reports upon receiving a notice of address discrepancy.

The FTC also developed a Web site, www.ftc.gov/redflagsrule, with additional resources and guidance for creditors and financial institutions that are within its jurisdiction.

Identity Theft Prevention Programs must include four basic elements:

Reasonable policies and procedures to identify the 'red flags' of identity theft you may run across in day-to-day operations; the program must be designed to detect the red flags identified; it must spell out appropriate actions to be taken when red flags are detected and it must address how the program will be re-evaluated periodically to reflect new risks that arise.

The 'Red Flags and Address Discrepancy Rules,' in effect since January 2008, become mandatory Aug. 1. They implement sections of the Fair and Accurate Credit Transactions Act of 2003, which requires financial institutions and creditors to develop and implement written identity-theft prevention plans and requires issuers of credit cards and debit cards to assess the validity of notifications of changes of address.

The rules also provide guidance for users of consumer reports regarding reasonable policies and procedures to employ when consumer reporting agencies send them notices of an address discrepancy.

The Federal Reserve System, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision and Federal Trade Commission all collaborated on the rules."

Remember, the requirement for your red flag rules begins August 1.

New e-mail scam - this one offering a deal on a new Ford!

Here's the text of an e-mail I received today which is an obvious scam:

"Dear Mr/Ms,

Due to the World Economy Recession, Ford Motor Company, Inc undergo a statistic fall in Sales and result in a drastic financial crisis this last season.

The Government has given us the opportunity to bounce back on our feet, but unfortunately we have not achieved the fund necessary.Therefore, we offer you the opportunity to purchase a very good Auto at 35% discount of the price. We decided to pull the sales of 1.000 cars at a very low price for us to aquire the capital needed to bounce back in business and to use this medium to increase the scale of our valued customers.

The payment shall be made in installments through the bank at 1 month after signing the contract.The first payment for all documents necessary and lawyer is made within five work days or you have the opportunity to get 10% discount if you pay 100% payment.We will send you: the FORD SALES AGREEMENT between Seller and Buyer, and our payment department will contact you with the invoice to buy with confidence using our Payment Protection.The vehicle will be delivered to your location. It will be shipped within 5 days after the payment will be cleared the bank.

The shipping is free of charge and the vehicle is fully insured for damage during the transportation, inspection process and prior to the physical sale.You will have 7 days to inspect the vehicle upon delivery. You have the option to use an independent Inspection Authority to make sure that the vehicle is as described.If the vehicle is not as described or not passes your inspection, the vehicle will be collected and you will be fully refunded. Refund requests are processed within 3 days.

If you are interested in this offer please fill out the application form, A representative will contact you about this application within two business day.

Thanks for your understanding and we hope to serve you better.Sincerely,Jeffrey

K Thompson
Sales Director
Ford Motor Company
P.O. Box 6248
Dearborn, MI 48126
info@fordssistance.com"

Of course, if you fill out the form, they get your personal information, subjecting you to identity theft or other problems.

While I have not confirmed with Ford Motor Company that this is a scam, I do know a few things that make me think its a scam.

1. Ford is the only one of the American automakers that is actually making money. In fact, it was just announced that their recent profits were in the $2 Billion range (yes, with a B).

2. Ford is the only one of the American automakers that did not take any stimulus funds from the government.

3. Usually, Ford execs such as a sales director would have at least a third grader's grammar, unlike the fool that wrote this e-mail.

Fortunately for consumers, most scammers are as inept as whoever wrote this e-mail, making their attempted scams as easy to spot as this one. Also, if you are ever not sure if an e-mail you get is a scam or not (or if you get a "forward" that you just want to debunk), go to www.snopes.com, which will tell you if the e-mail is for real or not. While you are checking out snopes.com, I'm going to use the millions I have been told I won in the European lottery to buy something better than a discounted Ford.

Thursday, July 23, 2009

Identity thief sentenced in MIssissippi

An identity thief was sentenced to multiple prison terms yesterday in Marion County, Mississippi. Here's the story from Jackson's WLBT:

"A judge sentences a Marion County woman to multiple prison terms. 58-year-old Pamela Loizzo of Foxworth, Mississippi entered a guilty plea Monday to one count identity theft and one count of fraudulent use of identity.

Marion County Circuit Judge Prentiss Harrell sentenced Loizzo to serve ten years in the custody of the Mississippi Department of Corrections with three years suspended. She also received three years of post release supervision and must pay a $1,000 fine, $500 to the Crime Victim's Assistance Fund, $1,000 to the Marion County Public Defense Fund, all court costs, and $3,000 in restitution.

Loizzo was also sentenced to serve five years on the fraudulent use of identity charge to run conconcurrent with the identity theft sentence."

From what I understand, Loizzo was a maid that stole her employer's identity, using it to open several credit cards. You really have to be careful who you let in your house.

Tuesday, July 21, 2009

Identity thief in West Virginia pleads guilty

Another report of a conviction of an identity thief - this time reported on by Cheryl Caswell in the Charleston Daily Mail. Here's a quote:

"A Putnam County [West Virginia] woman who defrauded the Social Security Administration and committed identity theft faces a prison sentence.

Ramona Mack, 39, of Winfield pleaded guilty Monday before U.S. District Judge Robert C. Chambers to aggravated identity theft and taking of Social Security benefits to which she was not entitled.

An investigation by the U.S. Postal Inspection Service, assisted by the Social Security Administration, revealed that Mack began collecting disability benefits in 2004 based on her income. But she used an online search to find the Social Security number of a person with a similar name and then used that information on applications to various employers.

As a result, Mack received approximately $62,000 in benefits she was not supposed to have. Mack also used the stolen information to secure a home mortgage, an automobile loan, credit cards and checking accounts, resulting in victim losses of $310,000."

Despite this arrest and conviction, identity theft is still the most under prosecuted crime in America.

For the whole article, see http://www.dailymail.com/News/PutnamCounty/200907210373.

Monday, July 20, 2009

Red Flags Rule

Joe Campana at the Identity Theft Examiner has an article about the new Red Flags Rule. Here's a quote:

"The Red Flags Rule is a U.S. federal law that requires most every business and organization to develop and implement an identity theft prevention program. The purpose of the identity theft prevention program is to authenticate the identity of customers to reduce incidences of identity theft. Authentication is required when a new financial or credit account is opened or when a change is requested on an existing covered account. The law covers consumer and business accounts.

The broad definitions of 'covered account' and 'creditor' include most every business and organization. If a business or organization accepts payment for products or services after they are delivered, they are a creditor under the law and must comply. Those that only accept payment prior to or upon delivery are not creditors regardless of how payment is accepted—cash, check or credit card.

Compliance is risk based, meaning that entities must implement a compliance program that is reasonable and appropriate to cover the risks the organization is likely to encounter. For most entities, especially small businesses, compliance is simple, straightforward and will prevent fraud and financial loss by assuring the entity is doing business with a legal person or legal business, and not with an identity thief.

The Red Flags Rule was enacted on January 1, 2008 under the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), the first revision to the Fair Credit Reporting Act (FCRA). Compliance under the Red Flags Rule was effective on November 1, 2008 for those entities under the purview of any of five federal banking and credit union regulators (OCC, Federal Reserve System, FDIC, OTS, NCUA). Compliance has been required on August 1, 2009 for those entities regulated by the Federal Trade Commission (FTC).

The law requires that entities regularly conduct a risk assessment to determine if they have covered accounts and to determine if they have any other accounts for which there may be a reasonably foreseeable risk to identity theft. If there are, a written identity theft prevention program is required to describe how the entity will authenticate customers that open new accounts, change existing accounts and access accounts electronically. The program also requires top-level management support and oversight as well as regular risk assessments and program review.

The law gets its name from methods commonly used to authenticate the identity of customers. For example, if new customers are authenticated by requesting picture identification and the picture and description of the person does not bear any resemblance to the person presenting the identification, this is a red flag."

Oddly enough, I use powerpoint presentations in almost all of my trials, particularly cases involving the FCRA. I almost always use a timeline with pictures of "red flags" every time the credit bureau was told or should know that what it was reporting was wrong. Been doing that for years. Glad Congress finally caught up with me. :)

Friday, July 17, 2009

New identity theft bust - this time a police sergeant!

A University of Central Missouri police sergeant and his wife have been busted as part of an identity theft scheme. Not only is it the most underprosecuted crime in the nation, now the cops are apparently getting involved ... on the wrong side of the law! Here's the article written by Mara Rose Williams of the Kansas City Star -

"A University of Central Missouri police sergeant and his wife have been arrested in an identity theft involving the stolen Social Security numbers for 7,000 students and alumni.

James and Amanda Drake have been charged with fraud, forgery, illegal credit card use and filing a false police report.

The FBI and university police are continuing their investigation.

'There may be other arrests connected with the investigation forthcoming,' said Bob Ahring, chief of the university’s Department of Public Safety.

'It appears that about a dozen individuals may have had their personal information used for fraudulent purposes,' said Jeff Murphy, spokesman for the school.

During an unrelated investigation of Amanda Drake, 30, on warrants involving passing bad checks from Johnson and Henry counties, police recovered stolen computer printouts with the names, addresses, telephone and Social Security numbers for students from the summers of 2005 and 2006."

For those 7000 students and alumni that are now at risk of identity theft, check your credit reports and, if you find out you are a victim of identity theft, please contact me (ckittell@merkel-cocke.com). I know some good Missouri attorneys who handle identity theft cases.

Thursday, July 16, 2009

Theft of a child's identity

Bob Segall with wthr.com writes about the theft of children's identities. I have seen this fairly often in my representation of people with errors on their credit reports. A good percentage of the time the errors result from an identity theft that occurred before the victim was 18. What's even more tragic is that it often turns out to be a family member who steals the child's identity.

Here's the article written by Bob Segall -

"Imagine someone stealing your child's identity. It happens to thousands of kids every year and most parents have no idea how to stop it. 13 Investigates shows you how to protect your children from this devastating crime, and it's free.

Christina Morog had a credit card before she learned how to ride a tricycle. According to her credit report, Morog opened the credit card account when she was one year old.

'I would never open a credit card when I was one,' she said. 'I didn't do it.'

It turns out someone used Morog's social security number to get a CitiBank credit card in 1987. She discovered the problem almost two decades later when she asked for a copy of her credit report but, by then, it was too late. The credit card linked to her social security number had a $30,000 balance.

'I was sort of in shock. I've never even seen $30,000,' Morog told 13 Investigates. 'It's scary because you hear about people that can never get this stuff off their credit.'

Morog's story is not uncommon.

According to the Federal Trade Commission, there were more than 34,000 incidents of childhood identity theft between 2005 and 2007, and the actual number of cases is likely much higher because the crime often goes undetected for years.

'Bad guys love child social security numbers because it's kind of a sleeper account,' explained Steve Ely, president of consumer services for the Equifax credit bureau. 'If you can get ahold of a child's social security number when they're two years old, you've got 14, 15, 16 years of being able to use that identity without potentially getting caught.'

Four-year-old with a mortgage payment

Recent cases show why some unscrupulous adults target kids for their credit:

In January, prosecutors charged a Florida woman with stealing her 7-year-old daughter's identity to open a credit card account. The woman faced felony charges of grand theft and fraudulent use of personal information after her estranged husband discovered a maxed-out, overdue credit card had been opened in their daughter's name.

Earlier this year, police in California arrested a man for allegedly stealing the identity of a four-year-old child who died in 1984. Investigators from the San Bernardino County Disrict Attorney's office said the man used the deceased boy's identity to buy a home and a vehicle and to obtain several credit cards.

And last year near Chicago, a man was charged with felony identity theft after he allegedly created a fake social security card bearing the name and social security number of a four-year-old boy. Police say the man used the victim's information to obtain a truck, three jobs, gas and electrical service for his home, a credit card, unemployment benefits and over $60,000 in pay and services.

'That's scary and that's alarming,' said Chrissy Shah, while playing with her three sons at Indianapolis' Holliday Park. Like most parents, Shah has never checked her kids' credit files. Because children are not supposed to have credit (and, therefore, no credit history and no credit file) most parents assume there is no reason to ask if a credit file exists.

According to Indianapolis Metropolitan Police, childhood identity theft is most often committed by parents, but teachers, coaches and babysitters have also been charged with the crime. Police say social security numbers (for both adults and children) should be provided only when absolutely necessary and should otherwise be closely protected.

Monitoring Your Kid's Credit is Free

But with thousands of cases of childhood identity theft each year, major credit bureaus say parents shouldn't make assumptions when it comes to their kids' credit. And monitoring your child's credit is free.

'We can let the parent know if indeed there is a credit file opened in that child's name,' explained Ely. 'If you were to discover that your 9-year-old has a credit file open, that would probably indicate that a bad guy has gotten ahold of their social security number and created a new identity .... If a file does exist, that's a pretty big red flag that there's something wrong there and you need to look into that.'

Equifax, TransUnion and Experian all allow parents to request what's called a Minor Child Credit File Check. While the check-up is free, the credit bureaus do require parents to submit copied documentation such as a drivers license, social security card and/or birth certificate to verify identities before they will release credit file information.

If you request a file check for your kids, you'll then be notified with one of two responses: either your child has no credit file (that's good) or a credit file linked to your child's social security number already exists (that's trouble). If your child has a credit file, you will also be told what steps are needed to protect your child's credit and identity, and how to remove any fraudulent activity from your child's credit file.

In Morog's case, it took nearly two years to wipe her credit file clean.

'The faster you can catch it, the less amount of problems that are going to happen,' she said. 'For me, it took like eighteen years before I found out and then it feels like you're running around in circles to get it fixed.'

For the full article, click here - http://www.wthr.com/Global/story.asp?S=10741483&nav=9Tai.

Nancy Grace gets it wrong

My wife makes me watch Nancy Grace just about every night. Actually, my wife watches Nancy Grace, sometimes multiple times a night (she's on at 7:00, 9:00, midnight and 2:00 a.m., trust me, I know). While my wife is watching Nancy Grace, I am usually blogging. Last night Nancy Grace had a brief 15 to 30 seconds about identity theft and what to do if you become a victim. Nancy Grace's big advice - report it to the Federal Trade Commission?!

Sorry, Nancy, but this is pretty much useless advice. While the FTC is a fine institution, it simply does not have the manpower to help consumers who are victims of identity theft. This is why it is crucial that consumer protection statutes, such as the Fair Credit Reporting Act, need to provide for private enforcement of its statutes. This allows private citizens whose FCRA rights are violated (you know, the people with actual incentive to enforce the law) to hire private attorneys to sue the credit bureaus or furnishers who violated the FCRA.

Most of the FCRA provides for private enforcement. Unfortunately, some of the best parts of the FCRA (1681s-2(a) for example) do not provide for private enforcement and, as a result, become meaningless because the only ones who can enforce them are the FTC and other governmental entities. These governmental agencies simply do not have the manpower to help even a small fraction of those injured by identity theft, thus leaving those sections without private enforcement unenforced.

What advice should Nancy Grace have given? Report the theft of your identity to the FTC but hire an attorney experienced with FCRA litigation if you actually want anything done about it.

Lexis Nexis reportedly waits more than a year before notifying victims of data breach

Why did Lexis Nexis wait over a year before notifying victims of data breach?! Time is very much of the essence when trying to prevent identity theft. If the reported delay is true, Lexis Nexis should be held accountable.

"Two data breaches involving a subsidiary of LexisNexis have exposed the personal information of more than 13,000 consumers, leaving them vulnerable to identity theft and fraud.

The New Hampshire Attorney General's office posted notification of the breaches on its website last Friday, according to IDG News Service. Under New Hampshire law, data breaches that affect residents of the state must be reported to the AG.

The AG's office has since removed the letters. LexisNexis spokesman Nick Ludlum said Wednesday that 13,329 letters were sent out to affected consumers June 19, according to the Associated Press. The letters say personal information including name, address, driver's license and Social Security number may have been accessed through a former customer of Seisint, a subsidiary of LexisNexis.

Lee Klein, a Florida man with alleged connections to organized crime, is accused of the breach, according to the AP.In May, LexisNexis warned about 32,000 people that their information was stolen as part of a credit card fraud by former business customers of LexisNexis and its subsidiary ChoicePoint.

Computerworld.com reported at the time that LexisNexis waited for more than a year to begin notifying the identity theft victims at the request of the U.S. Postal Inspection Service."

A better than usual article about preventing identity theft

This article provides some new stats about identity theft:

"Over 27 million Americans have been victims of the fastest-growing crime of identity theft. There is little risk to the thief of being caught; Some people may not notice the theft for months, if not years.

Identity theft can happen to anyone. Many people assume they are safe because they do not shop online or use the internet for banking and paying bills. However, online theft of personal information accounts for only 11.6% of all identity theft cases.

The majority of identity theft occurs offline—resulting from information taken from your mailbox, your wallet, your telephone, or your home. The top three types of identity theft are credit card, phone / utility, and bank fraud. Alarmingly, studies also show that half of all identity thefts are committed by someone the victim knows.

The first step in preventing the theft of your identity is to understand how thieves get your information in the first place. By securing four potential access points, you can protect yourself from becoming a victim.

1) Your Mailbox

A thief can easily steal your mail from curbside mailboxes or communal mail piles. They can use the personal information found on credit card and bank statements to access your accounts. They can even file a change of address form in your name to divert mail and gather your information at a different address altogether.

Keep a close eye on your incoming and outgoing mail. Know what time your mail comes and try to pick it up as soon as possible. If you notice that you stop receiving mail, immediately contact your post office. Never put outgoing mail, especially bill payments, in a curbside mailbox. Instead, use the Postal Service mailboxes or your local post office. Consider purchasing a locked mailbox. When you are out of town, have the post office hold your mail for you. If you order new checks from your bank, pick them up in person instead of having them mailed to your home. Remember that anyone can stop and take things from your mailbox at any time.

Know when your bills and bank statements usually arrive in the mail. If you pay your bills online, consider paperless billing. When you notice that something is late, call to find out why. By not knowing what bills are coming and when, you risk both late fees and identity theft.
You can also contact the Direct Marketing Association to have your name taken off direct mail lists. This stops pre-approved credit card offers from being mailed to you. Write them at:

Direct Marketing AssociationMail Preference ServicePO Box 643Carmel, NY 10512
www.the-dma.org/index.php

2) Your Home

During a burglary of your home, thieves aren’t just looking for electronics and jewelry. They often take important documents such as birth certificates, passports, copies of tax returns, and account statements. When they leave, the financial loss to your family is just beginning.
In many cases, a thief doesn’t even have to break into your home. Your trash may contain canceled checks, credit card and bank statements, receipts, and pre-approved offers of credit.

There are three things that every household should own: a paper shredder, a safety deposit box, and a safe or lock box. Use the shredder to destroy every financial or personal document that you throw away. Having a safe deposit box not only protects your finances from a thief but also a fire or natural disaster. You should keep your birth certificates, passports, tax documents, copies of documents that you carry in your wallet, credit cards you do not use, and other financial records in a safe deposit box. For documents that you must keep in your home, consider using a lock box or safe in a hidden location.

Remember that your computer is easy to take from your home and can contain plenty of financial information. Clear out your internet history on a regular basis. Don’t keep a list of passwords for accounts on your computer or near it. Don’t write down passwords, memorize them. Make sure that you change your passwords on a regular basis, especially if you use financial programs to download your banking information. If you sell your computer or donate it to charity, make sure that you remove the hard drive and destroy it. Don’t simply erase the information on it. Remove it.

3) Your Personal Information

All it takes is your Social Security number or bank account number. Many identity thieves can simply use information they gather from a local newspaper story or a phone book to start the process of stealing your identity.

Never give out personal information to anyone who calls you, e-mails you, or comes to your home. Many thieves will pretend to be government officials or other legitimate business people who are looking to gather information for various reasons. Use caution. Never give information to anyone who contacts you first. Always double-check by calling the local office or branch of the agency that is trying to gather information from you.

When making phone calls, make sure that you are in a secure location when giving out personal or financial information. Don’t give out personal information in order to collect or win a prize. If you are contacted for a donation or purchase something over the telephone, ask that the information be put in writing and mailed to you. That way you can consider it more carefully.

Your Social Security number is something that you should carefully guard. There was a time that it was used to identify you on hospital charts, driver’s licenses, and work and school identifications. Today you should only give it out when absolutely necessary. Thieves have been known to take numbers from medical charts and other documents. Always ask how your information is protected. Never carry your Social Security card with you. Keep it in your safe deposit box.

4) Your Personal Finances

Many people never realize that they have been a victim of identity theft until they try to borrow money and find that their credit report shows negative information. You should closely look over your credit reports from each of the three major national credit reporting agencies—TransUnion, Equifax, and Experian—at least once a year. Make sure that all of the information contained on your credit report is correct. This is often the easiest way to find out if anyone is opening credit accounts using your name.

When it comes to your existing accounts, you should carefully go over each and every statement you receive. Do not simply pay them and shred them. You should be able to account for every purchase on your credit cards and checking accounts.

There isn’t any reason to carry every credit card you own in your wallet. Carry only what is necessary. Make sure that you keep track of your wallet or purse at all times. When shopping, make sure that your credit card account number isn’t printed on receipts.Be aware of your surroundings. Watch for people standing too close to you at the ATM; they may be trying to photograph or record your card number and password with their cell phone. Keep your wallet in your front pocket and hold onto your purse at all times. Don’t keep important personal information in your car or at your place of work.

It isn’t always easy to protect your personal and financial information. By taking the effort now to safeguard your information, you can save yourself thousands of dollars and hours of worry that identity theft victims must expend to clear their good names."

Excellent article found at http://www.huliq.com/0/83621/now-there-are-ways-help-prevent-identity-theft.

North Carolina gets new identity theft law

North Carolina has passed a new law to give more protection from identity theft.

"Consumers will have more protection against identity theft including being able to freeze their credit for free under a new law approved today by the NC General Assembly, Attorney General Roy Cooper said.

'A security freeze on your credit blocks criminals from opening new accounts and running up debts in your name,' Cooper said. 'This new law means you can freeze your credit for free to protect your good name.'

Senate Bill 1017, sponsored by Senator Josh Stein, won concurrence in the Senate today after winning unanimous approval in the House earlier this week. Starting October 1, the measure will allow North Carolina consumers to get a security freeze for free through a secure website or for a low fee by telephone or mail. A security freeze prevents an identity thief from opening new accounts or taking out credit in your name

'This legislation represents a major step forward in the fight against identity theft. North Carolinians can now put on a security freeze, which is like a padlock on your credit report, at no cost and much more easily,' said Stein. 'We are also the first state in the country to require businesses to notify you that you have a right to a free credit report before they sell you a credit monitoring service.'"

For the rest of the article, see here - http://www.citizen-times.com/apps/pbcs.dll/article?AID=/20090716/NEWS/90716057

Identity theft conviction

From the Associated Press - "Federal prosecutors say a District Heights (Maryland) man has been sentenced in an identity theft and bank fraud scheme.

Thirty-year-old Alvin Spencer was sentenced Wednesday to four years in prison. He was also ordered to pay more than $165,000 in restitution and to forfeit jewelry.

According to Spencer's plea agreement, in 2006, he cashed checks stolen from the mail at the Upper Marlboro post office provided to him by a conspirator. Prosecutors say Spencer received fraudulent driver's licenses and other identification in the names of the people listed on the stolen checks."

Monday, July 13, 2009

Canadians, look out. Identity theft on the rise in Canada.

From an article by Calvin Azuri, appearing at http://it-cost-reduction.tmcnet.com/topics/security/articles/59758-online-identity-theft-the-rise-canada.htm.

"Complaints of online identity theft are reportedly on the rise in Canada, with the information superhighway granting potential thieves access to personal information. According to the Canadian Anti-Fraud Call Centre (CAFCC), more than 6 million such cases were reported in 2007. Canadians need to beware and be informed, rather than fall victim to online identity theft.

Increased online transactions are enabling thieves to steal and use personal and financial information of unsuspecting Canadians. According to the Criminal Intelligence Services of Canada, online identity theft trends have moved towards economic, environmental and financial crimes. A large number of Canadians engage in online transactions on a daily basis, unaware that identity theft can happen at several points of online contact. Since no one is immune, the only way to refrain from becoming victim to identity theft is to be cautious and aware."

More identity theft news

Below is a quote from an article by Chuck Miller appearing on http://www.scmagazineus.com/ATT-temp-indicted-in-ID-theft-scheme/article/139966/.

"A federal grand jury has handed up an indictment that charges a temporary employee at a Chicago-area AT&T office with stealing the personal information of some 2,100 employees of the telecom giant.

Two others involved in the scheme also were indicted and charged with stealing $70,000 by applying for 'payday loans' using some of the stolen confidential data, according to the indictment handed up last week.

The trio, all women, also forged driver's licenses bearing the names of victims, using photos of random people, and faxed them as part of the loan applications.

The women, Cassandra Walls, 25; Jermaine Jones, 27; and Deedra Massey, 40, set up bank accounts and had the loan money wired to them, according to the indictment. The three are charged with five counts each of federal wire fraud and identity theft.

A company called PayDay One took information for the loan applications over the internet, ostensibly for 130 victims – except that the applications, according to the indictment, were made 'without the knowledge or consent' of the victims.

In fact, many of the victims did not find out about the fraudulent loans until they were overdue, and the victims were contacted by collection agencies, according to a report in the Chicago Tribune.

If the women are convicted, they will have to forfeit the $70,000, along with their computer equipment, and also face time in federal prison. Each count of wire fraud carries a maximum of 20 years in prison and a $250,000 fine; each count of identity theft carries a mandatory consecutive sentence of two years on top of any other sentence."

ID cards another potential source of information for identity thieves

New identity theft news - Interesting article about yet another way for an identity thief to steal your identity.

"With only a Matrics antenna and a Motorola reader purchased on eBay for $190, Chris Paget drove around San Francisco with the goal of locating the identity cards of strangers, wirelessly.
According to an Associated Press report, it only took him 20 minutes to achieve his goal.

He was able to download the serial numbers of two pedestrians' electronic U.S. passport cards encoded with radio frequency identification, or RFID. In only one hour, he'd 'skimmed' four additional microchipped PASS cards from 20 feet.

More and more, government officials are endorsing the chipping of documents as technology that will speed up border crossings, protect against counterfeiters, and will stop terrorists from getting into the country. Paget's experiment has revealed what privacy advocates have worried about for years: RFID and other technologies can cause people to be traceable without their awareness.

RFID has the capability of making everybody pop up on someone's radar screen.

On June 1, it became a rule that Americans coming into the US by land or sea from Canada, Mexico, Bermuda and the Caribbean had to have identity documents with RFID tags, although regular passports are valid until expiration.

Amid new options is the 'e-passport' and the PASS card, a credit card sized gadget with a digital photograph and a chip that can be scanned from 30 feet.

The point of RFID is not to detect people, said Mary Ellen Callahan, the chief privacy officer at Homeland Security, to AP News, but 'to verify that the identification document holds valid information about you.'

An RFID document 'only makes it easier to pull the right record fast enough, to make sure that the border flows, and is operational' - even though a 2005 Government Accountability Office report noted that RFID readers often did not sense travelers' tags.

Neville Pattinson, vice president for government affairs at Gemalto, Inc., a supplier of the microchipped cards, has concerns about the RFID movement. In a 2007 newsletter for privacy professionals, Pattinson noted that the chipped cards were susceptible 'to attacks from hackers, identity thieves and possibly even terrorists.'

RFID, he stated, has an inherent flaw: Every chip faithfully transmits its identifier 'in the clear, exposing the tag number to interception during the wireless communication.'

Once a tag number is located, 'it is relatively easy to directly associate it with an individual,' he says. 'If this is done, then it is possible to make an entire set of movements posing as somebody else without that person's knowledge.'

In the mean time, Homeland Security has been encouraging the overall use of RFID, even though its own advisory committee on data integrity had concerns. In its 2006 draft report, the committee came to the conclusion that RFID 'increases risks to personal privacy and security, with no commensurate benefit for performance or national security,' and recommended 'RFID be disfavored for identifying and tracking human beings.'

For now, PASS cards and driver's licenses are not being widely used across the US. Only 192,000 EDLs exist in Washington, Vermont, Michigan and New York.

As more Americans acquire them 'you can bet that long-range tracking of people on a large scale will rise exponentially,' says Paget, a self-proclaimed 'ethical hacker' who is an Internet security consultant.

Gigi Zenk, a spokeswoman for the Washington state Department of Licensing, insists that Americans 'aren't that concerned about the RFID' in a time when 'tracking an individual is much easier through a cell phone.'

After Sept. 11, the State Department proposed that Americans and foreign visitors have 'enhanced' passports, with microchips hidden in the covers.

In February 2005, when the State Department reviewed public opinion over the hot topic, 98.5% of opinion was negative, and 86% of people had privacy concerns.

Identity theft and 'fears that the U.S. Government or other governments would use the chip to track and censor, intimidate or otherwise control or harm them' were of "grave concern,' they stated. Lots of Americans worried 'that the information could be read at distances in excess of 10 feet.'

According to department records, a debate about security concerns with the e-passport started in January 2003, but tests were not conducted until the department faced public criticism two years later.

When the AP inquired about when the testing started, the State Department said only that 'a battery of durability and electromagnetic tests were performed' by the National Institute of Standards and Technology, and tests 'to measure the ability of data on electronic passports to be surreptitiously skimmed or for communications with the chip reader to be eavesdropped,' testing which 'led to additional privacy controls being placed on U.S. electronic passports ... '

The State Department, according to its own records acquired under Freedom of Information Act, knew about the hacking concerns before the e-passport debuted in August 2006.

'Do not claim that these chips can only be read at a distance of 4 inches,' Frank Moss, deputy assistant Secretary of State for passport services, wrote in an April 22, 2005, e-mail to Randy Vanderhoof, director of the Smart Card Alliance. 'That really has been proven to be wrong.'

The RFIDs in driver's licenses and PASS cards have a silicon chip connected to a wire antenna, which puts out an identifier through radio waves when 'awakened' by an electromagnetic reader.

The government insists that the ID cards only transmit RFID numbers, which go back to records in safe government databases. Although a hacker could copy an RFID number onto a blank tag for a fake ID, the forger's face would not match the cardholder's photo in the database.
Critics feel that RFID-tagged identities will only help identity thieves in committing 'contactless' crimes."

The article can be found at http://www.redorbit.com/news/technology/1719439/id_chips_raise_concerns_over_identity_theft/.

Sunday, July 12, 2009

15 U.S.C. 1681c-2 - part 2

I conclude my explanation of 15 U.S.C. 1681c-2 of the Fair Credit Reporting Act with this post.

"(d) Exception for Resellers

(1) No reseller file. This section shall not apply to a consumer reporting agency, if the consumer reporting agency --

(A) is a reseller;

(B) is not, at the time of the request of the consumer under subsection (a), otherwise furnishing or reselling a consumer report concerning the information identified by the consumer; and

(C) informs the consumer, by any means, that the consumer may report the identity theft to the Commission to obtain consumer information regarding identity theft."

[In other words, this section does not apply to resellers of credit information as long as they are not furnishing or reselling a credit report regarding the consumer at the time of the report of identity theft. The reseller must tell the consumer that he or she may report the identity theft to the FTC to get more information regarding identity theft.]

"(2) Reseller with file. The sole obligation of the consumer reporting agency under this section, with regard to any request of a consumer under this section, shall be to block the consumer report maintained by the consumer reporting agency from any subsequent use, if --

(A) the consumer, in accordance with the provisions of subsection (a), identifies to the consumer reporting agency, information in the file of the consumer that resulted from identity theft; and

(B) the consumer reporting agency is a reseller of the identified information."

[The reseller that is currently reporting a credit report at the time of the report of identity theft must only keep from block the credit report from any subsequent use.]

"(3) Notice. In carrying out its obligation under paragraph (2), the reseller shall promptly provide a notice to the consumer of the decision to block the file. Such notice shall contain the name, address, and telephone number of each consumer reporting agency from which the consumer information was obtained for resale."

[If the reseller is publishing a credit report regarding the consumer when it is told by the consumer of the identity theft, the reseller must inform the consumer that it is blocking his credit file and provide the contact information for the credit bureau that provided the information to the reseller that ultimately caused the credit report to be blocked.]

"(e) Exception for verification companies. The provisions of this section do not apply to a check services company, acting as such, which issues authorizations for the purpose of approving or processing negotiable instruments, electronic fund transfers, or similar methods of payments, except that, beginning 4 business days after receipt of information described in paragraphs (1) through (3) of subsection (a), a check services company shall not report to a national consumer reporting agency described in section 603(p), any information identified in the subject identity theft report as resulting from identity theft."

[The duty to block information resulting from identity theft does not apply to check verification companies, except that, starting four days after the report of identity theft, they are not allowed to publish the identity theft information to any national credit bureau.]

"(f) Access to blocked information by law enforcement agencies. No provision of this section shall be construed as requiring a consumer reporting agency to prevent a Federal, State, or local law enforcement agency from accessing blocked information in a consumer file to which the agency could otherwise obtain access under this title."

[This section creates an exception for law enforcement to be able to see blocked information if it would normally be allowed access absent the block.]

This concludes my explanation of 15 U.S.C. 1681c-2 of the Fair Credit Reporting Act. I will start my explanation of 15 U.S.C. 1681d in the next installment.

Saturday, July 11, 2009

15 U.S.C. 1681c-2

Today, I start explaining 15 U.S.C. 1681c-2 of the Fair Credit Reporting Act.

"15 U.S.C. 1681c-2. Block of information resulting from identity theft.

(a) Block. Except as otherwise provided in this section, a consumer reporting agency shall block the reporting of any information in the file of a consumer that the consumer identifies as information that resulted from an alleged identity theft, not later than 4 business days after the date of receipt by such agency of --

(1) appropriate proof of the identity of the consumer;

(2) a copy of an identity theft report;

(3) the identification of such information by the consumer; and

(4) a statement by the consumer that the information is not information relating to any transaction by the consumer."

[This section was added in the most recent amendments to the FCRA and, upon first glance, seems to solve the identity theft problem as it relates to credit reporting. Unfortunately, nothing is that easy when dealing with the credit bureaus. I have had clients do the above but still not have the identity theft fraud accounts removed from their credit report. And many consumers do not know about this option, as it is not well advertised by the credit bureaus. And many consumers can not get a police report about the theft of their identity for whatever reason (i.e. because the crime occurred in a far away jurisdiction that requires police reports to be made in person) and do not know that police reports are just one kind of identity theft report. Identity theft reports can also be made via the postal inspector.

In theory, however, it should only take proof from the consumer as to his or her identity, an identity theft report, the consumer indicating which information on his or her credit report resulted from identity theft and a statement that the informaiton is not related to any transaction by the consumer.]

"(b) Notification. A consumer reporting agency shall promptly notify the furnisher of information identified by the consumer under subsection (a) --

(1) that the information may be a result of identity theft;

(2) that an identity theft report has been filed;

(3) that a block has been requested under this section; and

(4) of the effective dates of the block."

[This is what the CRA must do once the consumer provides the information in subsection (a), i.e. the CRA must tell the company that furnished the fraud information that the information may be a result of identity theft, that an identity theft report has been filed, that the consumer has requested that the identity theft information be blocked, and provide the effective dates of the block. What I do not understand is why there would be "effective dates" if it is fraudulent. It should simply come off the report forever.]

"(c) Authority to Decline or Rescind

(1) In general. A consumer reporting agency may decline to block, or may rescind any block, or information relating to a consumer under this section, if the consumer reporting agency reasonably determines that --

(A) the information was blocked in error or a block was requested by the consumer in error;

(B) the information was blocked, or a block was requested by the consumer, on the basis of a material misrepresentation of fact by the consumer relevant to the request to block; or

(C) the consumer obtained possession of goods, services, or money as a result of the blocked transaction or transactions."

[This section allows the CRA to refuse or remove a block on information if it was either requested or done in error (i.e. the CRA blocked the wrong thing), or if the consumer made a material misrepresentation to get the block (i.e. claiming identity theft when no such fraud occurred) or if the consumer obtained goods, services or money as a result of the blocked transactions (i.e. the consumer benefited by the alleged identity theft).]

(2) Notification to consumer. If a block of information is declined or rescinded under this subsection, the affected consumer shall be notified promptly, in the same manner as consumers are notified of the reinsertion of information under section 611(a)(5)(B).

[This section just means that the CRA must tell the consumer if the block is removed or denied.]

"(3) Significance of block. For purposes of this subsection, if a consumer reporting agency rescinds a block, the presence of information in the file of a consumer prior to the blocking of such information is not evidence of whether the consumer knew or should have known that the consumer obtained possession of any goods, services, or money as a result of the block."

[This just means that the consumer is not charged with knowledge that he or she obtained possession of any goods, services or money just because the block was rescinded.]

I will complete my explanation of 15 U.S.C. 1681c-2 in part 2.

Friday, July 10, 2009

One of my law partners gets a big verdict in a tragic case

A Shelby County, Tennessee jury returned a $23,600,000 verdict in favor of Plaintiffs Courtney Hill and Robert Hill of Desoto County Mississippi today. Plaintiffs’ counsel are William B. Raiford of the Clarksdale, Mississippi law firm of Merkel & Cocke, Jim Lees of the Charleston, West Virginia law firm of Hunt & Lees, and Philip Stroud of the Southaven, Mississippi firm of Stroud & Harper.

The lawsuit involved a claim of medical malpractice against Dr. Claudia Moise, and her clinic, OB-Gyn Specialists P.C. of Memphis, Tennessee, for failing to timely diagnose a complained of lump which later proved to be breast cancer.

On July 15, 2003, Courtney, then only 23 years old, called her Ob/Gyn’s office and reported to the receptionist that she had found a lump in her breast which had persisted for two months with "possible dimpling" and asked whether she should come in immediately. The nurse relayed the message in writing to Dr. Moise with a question to the doctor of whether the patient should have a mammogram. Dr. Moise informed her nurse to tell Courtney "no", that she did not need to come in immediately and to tell Courtney to wait until Courtney’s next scheduled appointment two weeks away. Dr. Moise also advised the nurse that no mammogram was necessary.

At Courtney’s next appointment, Dr. Moise performed a scheduled gyn procedure. Despite the documented phone message, Dr. Moise had to be reminded to examine the complained of lump before the patient left. Based on the patient’s testimony, which Dr. Moise did not refute, Dr. Moise did an exam and advised Mrs. Hill that the lump she complained of was a cyst or fatty deposit, and that it was "nothing to worry about". Dr. Moise’s decision not to perform further testing was based solely on palpation alone, despite her later admission under oath that she could not distinguish cancer from benign masses by palpation alone. Dr. Moise did not order an ultrasound or other testing, and did not arrange for any type of followup. Dr. Moise further did not document her findings in the medical record, and did not document any reminders to herself to further evaluate the complained of lump at a later date.

Mrs. Hill subsequently became pregnant. Ms. Hill was seen in the Defendants’ offices on 16 subsequent occasions without further evaluation or testing. Dr,. Moise admitted the patient kept every visit and complied with every recommendation made by Dr. Moise during the many years she was Courtney’s physician. Dr. Moise admitted she never ordered followup testing.

After her pregnancy, the lump was noticed by Courtney to be now larger and painful. Courtney called the Defendants’ offices but was unable to be seen by Defendant Moise because her schedule was already full. On February 14, 2005 (Valentine’s Day), Courtney was able to be seen by the Defendant’s partner, Dr. Paula Pilgrm. Dr. Pilgrim examined the breasts, found a suspicious mass and immediately ordered a mamogram and ultrasound, which confirmed a 4 cm mass. A biopsy the next day proved breast cancer. PET and CT scans the same week, and further biopsy, proved the breast cancer had mestatasized to Courtney’s liver, with no chance of cure despite the heroic efforts of Courtney’s treating oncologist, Dr. Lee Schwartzberg of Memphis’ The West Clinic. Courtney’s treatment included nine to ten separate rounds of chemotherapy, a lumpectomy, a complete hysterectomy and radiation treatment. Dr. Schwatzberg is considered by many to be one of the country’s leading experts on breast cancer and was highly praised by Mr. and Mrs. Hill. Even experts paid by Dr. Moise to testify of her behalf at trial (some being paid up to $5000 a day) acknowledged Dr. Schwartberg to be Memphis’ leading expert on breast cancer.

Courtney was unable to be present at trial because of her health and testified by way of video deposition.

The Rev. Greg Davis of Desoto County testified of the Hills’ unwaivering faith in the face of adversity and as to the Hills’ constant positive attitude. Rev. Davis recalled that on the day of Courtney’s diagnosis the Hills had met privately with him and placed their hands in the Lord, with no fear. He further recalled that when Courtney initially lost her hair due to chemotherapy, the majority of the congregation, without being prompted by him, wore pink hats to church as a sign of their love and support of the Hills.

Robert and Courtney began dating in high school and were married one week after Courtney graduated from Ole Miss with a degree in biology. Courtney had gone on to teach fifth and sixth grade. Robert, at age 32, is the general manager of the local office of a major electronics firm which has over 1300 employees in the Memphis area. The proof at trial showed that Mr. Hill was an extremely loving husband and had been present for nearly every single time Courtney had been to the doctor dozens and dozens of times in their battle with cancer.

The Hills have one daughter, now age 4.

Dr. Moise made no offer of settlement before or during trial. Instead Dr. Moise argued that she complied with acceptable standard of medical care through her evaluation of the lump by palpation alone, and/or that whatever lump Courtney complained of in July 2003 was not the same lump found by Dr. Moise’s partner in 2005, and/or in the further alternative that, despite the 18 month delay in diagnosis, even if the lump Courtney had complained of in 2003 was in fact cancer it had already metastasized to Courtney’s liver in July 2003 making Dr. Moise not responsible for the Hills’ tragic situation. Dr. Moise’ was represented by attorney, William Domico of the Memphis law firm of Domico Kyle, which includes state senator Jim Kyle.
After a two week trial presided over by the Hon. Kay S. Robilio of Division 5 of the Circuit Court of Shelby County, Tennessee, the jury unanimously found that Dr. Moise, as an employee of her medical corporation, Ob/Gyn Specialists P.C., had violated the standard of acceptable medical care required in Memphis and that Dr. Moise’s actions did in fact cause injuries to Mr. and Mrs. Hill which would not have otherwise occurred.

The jury awarded the Plaintiffs a total of $23.6 million in damages for their tragic losses. The award included an award to $11,850,000 to Courtney Hill and an additional $11,750,000 to husband Robert Hill.

The Hills hope this award will help deter this type of medical negligence, and to prevent others from being harmed by such medical neglect in the future.