Federal Trade Commission seeks public input on how's identity theft affects senior citizens

The Federal Trade Commission is seeking input from the public about the effect of identity thef on senior citizens. Senior citizens are more at risk to be victimized by identity theft due to their increased susceptibility to identity theft scams such as phishing scams, both via e-mail or over the phone. Phishing occurs when a consumer is contacted by what appears to be a reputable source and is tricked into revealing private identifiers that can be used to steal their identity. Senior citizens are also at risk because most of their Medicare cards bear their Social Security numbers, which is absolutely ignorant in this day and age. The FTC wants information about particular identity theft scams and their use to target senior citizens. The deadline to submit information to the FTC on this subject is July 15, 2012. For more information, see here - http://ftc.gov/opa/2012/04/idtheft.shtm.

Consumer Federation of America issues results of study about identity theft services

The Consumer Federation of America has issued the following press release regarding its study about how well identity theft prevention/protection services measure up to the services they claim to provide.  Good reading:

CFA Report: How Identity Theft Services Measure Up to Best Practices

Less Hype, More Clearly Presented Information About What ID Theft Services Actually Offer is Needed

Washington, D.C. – Today Consumer Federation of America (CFA) is releasing Best Practices for Identity Theft Services: How Are Services Measuring Up?, which analyzes how well identity theft services are providing key information to prospective customers. The study is based on CFA’s Best Practices for Identity Theft Services, voluntary guidelines that CFA developed with the help of identity theft service providers and consumer advocates. Released last year, the best practices resulted from CFA’s first study of identity theft services in 2009, which raised concerns about misleading claims about the ability to protect consumers from identity theft, lack of clear information, and other troublesome practices.

The new report examined the websites of 20 identity theft services and also looked at Internet complaints about identity theft services. “We found that most of the services’ websites did a fair job of complying with the best practices but there is need for improvement,” said Susan Grant, CFA’s Director of Consumer Protection, who led the project.

The CFA study focused on the how the services did in these categories:

Don’t misrepresent protection

Provide clear information about how they protect/help consumers

Use statistics accurately

Don’t misrepresent risk or harm of identity theft

Provide basic company information

Clearly disclose refund and cancelation policies

Provide a clear privacy policy

Provide clear, complete cost information

Don’t request consumers’ free credit reports

Clearly describe fraud assistance

Cleary describe insurance and guarantees

“Now that we have examined identity theft services’ websites through the lens of these best practices, we’ve identified improvements that identity theft services need to make to meet the goals they set,” said Ms. Grant.

What CFA found:

Some of the hype goes over the line. Statements such as “stop fraud before it starts,” “stop identity theft in its tracks,” and “prevent identity theft” imply that identity theft services can do more than they really can. While these services may alert consumers about possible identity theft quicker than they would discover it themselves, they can’t prevent consumers’ personal information from being stolen or detect identity theft in all instances. It’s not always possible to stop identity theft, especially if someone’s Social Security number has been compromised. CFA recommendation: Identity theft services must avoid statements that overpromise how they can protect consumers.

There is some sloppy use of statistics. Statistics about the number of identity theft victims, the rate of identity theft, and the amount of time it takes to resolve problems are frequently used as marketing tools. In some cases the statistics used are out of date. Also, complaint statistics are sometimes used to indicate the incidence of identity theft, which is inappropriate since complaint data are not representative of the population as a whole. Another problem is with id theft services that claim to be “#1” or “top-ranked” without providing the source or date. CFA recommendation: Statistics used to describe identity theft should be the most recent available. Sources and dates should always be provided for statistics, and care should be taken to use complaint statistics properly.

Information about the features that services offer and how they work could be improved. In some cases to find the details of features such as monitoring and alerts, CFA had to hunt through FAQs, terms of service, and other less obvious places. Sometimes it was never found. Some descriptions were unclear and key information was sometimes lacking. For instance, if a credit score is provided, some services don’t explain that it is an educational score, which is not the same score that lenders use. CFA recommendation: Critical details of services should be provided where they are first listed or in prominent links. All services must be clearly explained.\

Refund and cancelation policies aren’t always adequately disclosed; on disclosing the cost, services did better. Some services provide the refund and cancelation policy on the main product page and others have a link to it at the bottom of every web page. But in many cases it is buried in an FAQ, in the terms of service, or on the enrollment page. Sometimes the policies are unclear. While most services did better on price disclosure, in one case CFA couldn’t find any information about the cost after the free trial offer, and in another it was only on the enrollment page. CFA recommendation: Refund and cancelation policies should be clear and easy to find, and all costs must be provided before the page where consumers sign up for the service.

In many cases the assistance provided to identity theft victims isn’t clearly described. This problem, noted in CFA’s first study, continues. Some identity theft services act on behalf of customers if they become victims to resolve their problems, but most only provide advice and counseling. Vague descriptions such as “a trained specialist will guide you through the process of recovering your credit and good name,” and 24/7 access to helpful identity theft specialists, do not tell consumers what to expect and may lead them to expect more than they’ll actually get. Sometimes the details are only found in the terms of service or insurance policy. CFA recommendation: Information about exactly what services do to help victims should be clear, straightforward, and easy to find.

Details about insurance are much easier to find. While CFA believes that identity theft insurance is of little value, it is frequently touted as a feature of identity theft services and consumers need to know what it does and does not cover. In CFA’s first study it was difficult to find the insurance details. While this time it was easier, there were still cases where the detailed information was not easily accessible or even provided at all. CFA recommendation: A detailed summary of the insurance should be provided via a link from wherever it’s mentioned.

Consumer Complaints

The most frequent complaint about identity theft services is not covered in the best practices: Free trial offers. While many identity theft services are offered for free for a limited trial period, from the complaints that CFA found online it appears that the terms aren’t always made clear. In addition sometimes consumers can’t get through to the company to cancel. Some consumers are charged even though they never agreed to try the service, usually because they gave their financial account information to that company or a partner of that company for something else. CFA recommends that companies:

Not share consumers’ financial account numbers with affiliates or other companies for marketing purposes;

Provide consumers with 48 hours’ notice that a free trail is ending, along with information about how to cancel and the cost if they continue;

Provide quick and easy means of cancelation – no endless busy signals, no multiple hoops to jump through.

Did you know?

Did you know that recent changes to the law require credit card companies to apply any payments in excess of the minimum payment to balances with a higher interest rate?  Say you have a balance that had a promotional rate applied to it (i.e. 0%) and also a balance with a normal interest rate (say 15%).  If you have a minimum payment of $50 but instead pay $150, the extra $100 must be applied to the balance with the 15% rate, thereby saving you money.

Always a good idea to check your credit card statements and make sure this is being done.  While I have not caught a credit card company not doing this right (yet), I recently saw a comment on one of my credit card statements by the credit card company bragging that they apply your excess payments to the balances with the higher rates.  In other words, they were bragging that they follow the law.  That's like bragging that you didn't murder someone today.  Which, if you've dealt with certain credit card companies today (Bank of America springs to mind), refraining from murdering someone might be something worth bragging about!

Lawyers.com article

I was quoted yesterday in an article on lawyers.com.  You can read it here - http://blogs.lawyers.com/2012/04/credit-processor-pays-1-million-for-data-breach/

What to do if everyone thinks you are dead

First, sit up and scream - that'll scare them!  Actually, I'm not talking about when someone thinks you are dead in person.  I am talking about when the powers that be report that you are dead, despite your very active pulse.  In fact, being reported as dead is enough to get your blood pumping.

Here's a brief article about someone who had this problem - http://www.businessinsider.com/what-to-do-when-a-credit-bureau-believes-youre-dead-2012-4

The article gives some brief tips about what the alleged deceased should have done when she found out she was "dead".  The problem with the article is that the steps given often do not fix the problem.  So, if this should happen to you, take the article's advice and, if their advice does not work, hire an attorney experienced in Fair Credit Reporting Act cases to help you get the mess straightened out.  You will likely even have a claim under the FCRA that could lead to you receiving compensation for the hassle the credit bureaus put you through.  Feel free to contact me if this happens to you and I will either help you out or refer you to someone closer to you that can.

Georgia (and the other 49 states plus DC) has reason to fear identity theft

Good article about the full range of type of identity theft - from the Atlanta Journal Constitution - Georgia has reason to fear identity theft  | ajc.com

Where getting your drink on and identity theft collide

Like many teenagers, fourteen Sarasota Springs, NY teenagers wanted to get their hands on some beer. But they put themselves at risk for identity theft to do so. That's definitely not the kind of buzz they were looking for.

The teenagers allegedly supplied their photos, Social Security numbers and $75.00 to a website in China for extremely realistic looking fake IDs. I knew China was winning the trade war, but exporting fake IDs? Come on.

While the teenagers face misdemeanor charges and public ridicule for being boneheads, their identities have also been sold to identity thieves, according to authorities. One of the teens was quoted as saying "Dude." It is unknown whether any of the teens responded "sweet" but I would not be surprised.

And the Chinese website was not just selling your daddy's version of a fake ID. These would not just fool a bouncer or gas station clerk, but, according to authorities, were good enough to fool police, border patrol and airport security. Some of them even had magnetic strips that could be swept in card readers and holograms visible under a black light. Not too shabby for $75 bucks. How much is that in yen? No wonder China is winning the trade war if even the fake IDs they sell our kids are technologically superior.

The kids involved should start monitoring their credit reports often since they are definitely at a high risk for identity theft. If they don't, they will be crying "Dude, where's my credit?"

Six credit myths debunked

A few credit myths debunked. Nothing earth shattering but good to know nonetheless - http://www.elitefinancialllc.com/tag/trans-union. Happy reading.

New case law about marking a debt as disputed

From the recent case of Shap v. Capital One:

"The Court finds that a furnisher's "technically accurate" report of a delinquent debt may be misleading and negatively effect a consumer's credit report if the furnisher fails to mark the debt as disputed.

The Court qualifies this finding, however, as did the court in Gorman; the dispute submitted by the consumer to the furnisher must be bona fide to create furnisher liability under § 1681s-2(b). This holding is consistent with the holdings of those courts within this Circuit that have addressed the issue and is consistent with the purpose of the FCRA "to protect consumers from the transmission of inaccurate information about them, and to establish credit reporting practices that utilize accurate, relevant, and current information in a confidential and responsible manner."

SHAP v. Capital One Fin. Corp.

Dist. Court, ED Pennsylvania, 2012
... CYNTHIA RUFE, District Judge.

Number of Identity Theft Cases in Mississippi Skyrockets

The Clarion Ledger in Jackson, Mississippi, included an article today by Jimmie E. Gates regarding the sharp increase of the number of identity theft cases in Mississippi.  The Magnolia State jumped from 32nd in the nation in the pro rata number of identity theft cases five years ago to 17th in the nation last year.  Read the full article here --> http://www.clarionledger.com/article/20120409/NEWS/204090317/Identity-theft-soars-Miss-?odyssey=tab%7Ctopnews%7Ctext%7CHome

Not what the FCRA is supposed to be used for

An Antelope man (apparently a man from Antelope, California, not a freakish variation of a centaur) abused the protections of the FCRA to trick the credit bureaus.

Ricky Lamont Flemings plead guilty to two counts of Mail fraud related to his attempts to trick Experian by falsely claiming to be a victim of identity theft. Fleming then demanded that certain entries on his Experian credit report be Deleted from his credit report, even though the accounts were actually his. When Experian blocked the supposedly fraudulent but actually legitimate accounts from his credit report, Flemings looked to be a better credit risk then he actually was, which helped fool lenders into lending him more. As a result of his scheme, Flemings was able to finance the purchase of a Lincoln Navigator and a boat.

Flemings is to be sentenced on July 6. My suggested sentence would include Flemings giving a tutorial on how to get Experian to listen to your disputes of fraudulently opened accounts, since he was able to do what many real victims of identity theft are not able to do, i.e. get Experian to listen. He should be required to share the wording of his disputes, since he obviously knows the magic words to seduce Experian. Wonder if he k who's the secret incantations that would work on Equifax and Tran Union as well? Flemings could become the Frank Abignale of disputing to the credit bureaus, helping actual victims of identity theft to get relief from the credit bureaus. Surely such a valuable service to the community should be worth some time off of his sentence?! Just saying.

Top 40 under 40 in Mississippi

I am pleased to announced that I was selected this year as one of Mississippi's top 40 trial lawyers under the age of 40 by the National Trial Lawyers association. My law partner Charles Merkel III was also selected. I am both honored and glad to be reminded that I am still (slightly) under 40!

Here's a link with more info for anyone interested: 40under40.thenationaltriallawyers.org/

Tips on reducing your chances of becoming a victim of identity theft

Anyone can become the victim of identity theft. It happened to the wife of Ben Bernanke, the current chairman of the Federal Reserve. It also recently happened to Paul Allen, the co-founder (with Bill Gates) of Microsoft. Federal investigators allege that Brandon Lee Price pretended to be Allen when he called one of Allen's credit card companies and changed the address on the account. Price then had a debit card issued in Allen's name but sent to Price.

Price's scheme unraveled when the bank's fraud protocol spotted red flags when Price allegedly attempted a $15,000 Western Union Wire transaction and made a payment on a bank loan. But all that could have been averted had the credit card company had more safety protocols in place before allowing an unverified caller to change the address on Allen's account.

Here's some good advice from Adam Levin, co-found and chairman of Identity Theft 911, about how to avoid having this nightmare happen to you:

1) Develop a strong relationship with your Bank and ask what provisions they have to protect you if you become a victim of identity theft.

2) Ask your bank or credit card company what steps it takes to authenticate the identity of someone attempting to access the account by phone. If there is no pin or secret password in place, ask for one.

3) monitor bank accounts daily. I know that sounds like a daunting task in this fast paced world, but make use of the ability to be "logged in" from practically anywhere to your advantage. Keeping a close watch on your accounts could save you a lot of hard ache elsewhere.

And one that Levin did not mention. Ask your credit card company or bank to add either e-mail or text alerts for any changes to your account. If Allen's credit card company had texted him when Price changed his address, a lot of hassle could have been avoided.

Also, and this is one that I was guilty of in the past, don't use the same login and password for all your internet activity (i.e. banking, social media, e-mail, online games) because, if you do, once your password is compromised, they got you. Use something hard to figure out (i.e. not your birthday, mother's maiden name or kid's name) and use upper and lower case letters and numbers in every password. And not just numbers at the end but in the middle too.

Hope these tips help you avoid the nightmare of being an identity theft victim.

Yet another data breach putting millions of consumers at risk

Global Payments is a company that processes credit card transactions.  It announced late Friday (conveniently near the close of business right before the weekend) that a data breach may have allowed unauthorized access to 1.5 million credit card numbers.  Global Payments would not say what types of credit cards were potentiall affected, but Visa confirmed that the data breach included all of the major players (i.e. Visa, Mastercard, Discover, etc.).

Global Payments also released a statement on Sunday with more details.  Most importantly, according to Global Payments' statement, the data breach did not include cardholders' names, addresses or Social Security numbers.   That should lessen considerably the risk of true name identity theft, but the risk of account take over via the compromised credit card numbers is still present.

SO what should the consumer do?  Same as always - watch your credit card statements for any transactions that you did not make.  If you find one, report it as fraud.  The credit card company should eat the charge and issue you a new card with a new card number.  Considering 1.5 million is only a very small percentage of the estimated one billion credit and debit card numbers being used in the U.S., the chances that this data breach will affect you is slim.