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February 28, 2012

Scam alert regarding buying prescriptions online

There is a new scam being used to cheat consumers out of their hard earned money. Or even their not so hard earned money. It goes like this:

Victim buys a prescription online. Some time later, sometimes years later, a scammer posing as an FBI agent calls the victim, usually from a Washington, D.C. number just to make it look more legit. The FBI impostor tells the victim that buying the medicine online is illegal and criminal charges are being pursued. The victim is often told a warrant has been issued for his or her arrest. The victim, however, can avoid the criminal charges by going ahead and paying a fine. The fine, if paid, goes into an overseas account, usually in the Dominican Republic. The "fine" ranges from $100 to $250,000!

Be on the lookout for this scam. And, for goodness sake, don't pay a $250,000 fine!

February 20, 2012

Mississippi legislator proposes draconian loser pay law

For those of you interested in justice for all, check out my post on my recently launched Say No to Tort Reform blog.  Its about a really nasty law that a Republican legislator in Mississippi is trying to get passed in order to close the courthouse doors to anyone other than the rich. 

Here's the link -

February 19, 2012

Identity theft ranked No. 1 of the dirty dozen tax frauds

The IRS annually lists the "dirty dozen" tax scams in an effort to protect the public and itself. This year, identity theft is ranked as the top of the dirty dozen scams.

Identity thieves use a taxpayer's identity to file a tax return and fraudulently obtain a tax refund. The IRS reported that it blocked $1.4 Billion from going to the wrong person last year. Small wonder identity theft is ranked no. 1.

Other scams include "phishing" (i.e. tricking people into revealing personal identifiers), hiding funds offshore, reporting false income and abuse of charitable organizations.

If you suspect you are the victim of tax return identity theft, you should contact the IRS immediately.

February 17, 2012

Trans Union being sold for $3 Billion

According to reports from Trans Union, one of the three national credit bureaus, A group led by Advent International and a Goldman Sachs investment fund are purchasing Trans Union for a reported $ 3 Billion dollars. That's a lot.

Although Trans Union announced an IPO last year, it never went through with it and is therefore still privately owned, primarily by the private equity firm Madison Dearborn Partners and the Pritzker family. The Pritzker family originally the Marmon Group, which at some point spun off Trans Union.

The sale is expected to go through in the second quarter. According to Trans Union, it's CEO and its top management will remain with the company.

February 16, 2012

CFPB to supervise credit bureaus and debt collectors?

Looks like the credit bureaus are in for some oversight (finally):

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced a proposed rule to include debt collectors and consumer reporting agencies under its nonbank supervision program. This would mark the first time these important and far-reaching consumer financial market participants are subject to federal supervision.

“Consumer financial products and services have become more complex over the years and they have expanded well beyond traditional banks,” said Richard Cordray, CFPB Director. “Our proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks. This oversight would help restore confidence that the federal government is standing beside the American consumer.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, authorizes the CFPB to supervise nonbanks in the specific markets of residential mortgage, payday lending, and private education lending. In addition, for other nonbank markets for consumer financial products or services, the CFPB has the authority to supervise “larger participants.” As directed by Dodd-Frank, the Bureau must define such “larger participants” by rule, and an initial such rule must be issued by July 21, 2012. Last summer, the CFPB sought public comment about possible markets to include in the initial rule and available data sources the Bureau could use to define larger participants in nonbank markets.

Debt collectors and consumer reporting agencies touch millions of American consumers. About 30 million Americans have debt under collection. For these consumers, the average amount under collection is $1,400. Three main kinds of debt collection firms dominate the market: firms that collect debt owned by another company in return for a fee; firms that buy debt and collect the proceeds for themselves; and debt collection attorneys and law firms that collect through litigation. A single company may collect through any or all of these activities.

Under the proposed rule, debt collectors with more than $10 million in annual receipts from debt collection activities would be subject to supervision. Based on available data, the CFPB estimates that the proposed rule would cover approximately 175 debt collection firms -- or 4 percent of debt collection firms -- and that these firms account for 63 percent of annual receipts from the debt collection market.

The consumer reporting market plays a critical role in the consumer financial services marketplace and in consumers’ financial lives. It includes the largest credit bureaus selling comprehensive consumer reports, consumer report resellers, and specialty consumer reporting agencies. According to the Consumer Data Industry Association, each year there are 36 billion updates to consumer files, and three billion reports are issued. The three largest consumer reporting agencies alone maintain information on 200 million American consumers.

Lenders use consumer reports, which are commonly called credit reports, when evaluating applications for credit cards, home mortgage loans, automobile loans, and other types of credit. Specialty consumer reporting agencies collect and provide information used to make eligibility decisions for a variety of products, such as checking accounts.

Under the proposed rule, consumer reporting agencies with more than $7 million in annual receipts from consumer reporting activities would be subject to supervision. This would include approximately 7 percent of consumer reporting agencies based on available data. The proposed threshold would allow the CFPB to cover about 30 consumer reporting agencies. The CFPB estimates that these 30 companies account for about 94 percent of the annual receipts from consumer reporting.

This is the CFPB’s first in a series of rulemakings to define larger participants. The CFPB chose annual receipts as the criterion for both debt collection and consumer reporting because it approximates market participation in these two markets. As the CFPB adds new markets, it will choose the best criteria and the appropriate thresholds for each market.

The proposed rule is open for comment for 60 days after the rule is published in the Federal Register. The CFPB welcomes comment from the public on the proposed rule.

The proposed rule will be published online on Thursday at 11 a.m. here:

More information about the CFPB’s Nonbank Supervision Program is available here:

February 15, 2012

Tax Refund Identity Theft

Its that time of year again.  Millions will file their tax returns between now and April 15.   An increasing number of those tax return filers will find to their dismay that their refunds have already been swiped by an identity thief.

The scam is pretty simple.  Identity thieves forge tax returns using your identifying information.  All that has to happen is that the Social Security number must match the name on file with the IRS.  The address does not have to match, since the person could have moved since the last tax return was filed.  The identity thieves use this loophole to provide an address that they can use to pick up the tax refund.

By filing these forged tax returns early and using bogus income totals that result in a refund, the identity thieves receive the refunds before the unsuspecting victim ever files his or her return.

If this happens to you, immediately contact the IRS.  They will provide you with the appropriate forms to dispute the fraudulent tax returns and obtain your rightful refund (assuming you are eligible for a refund).  Also, only use reputable tax return preparers, as a lot of this type of identity theft seems to occur when less than professional tax return companies are used the year before.

The IRS has allegedly stepped up its efforts to prevent this type of identity theft.  They have allegedly added some "filters" to the screening process that will supposedly catch this fraud at the outset.  I hope this is true as I have seen a marked increase in calls to my office about this type of identity theft.  And, unfortunately, there is usually no legal recourse that I can use to help these victims (unlike victims of traditional identity theft) so its up to the IRS to take measures to protect the public from this type of fraud.