Equifax has purchased identity theft protection company ID Watchdog for approximately $63 million. ID Watchdog is a company similar to LifeLock that consumers and/or businesses pay to monitor their credit and "protect" them from identity theft.
Once again, Equifax is turning identity theft into a profit center for its bottom line.
Equifax is charged by the Fair Credit Reporting Act to perform reasonable investigations of disputes made to it by consumers regarding inaccuracies on their Equifax credit reports. Many times these errors are actually credit cards, car loans or mortgages opened fraudulently as a result of the theft of the consumer's identity. Sometimes they are collection accounts placed on the consumer's credit report for the purpose of collecting a debt that was fraudulently incurred by the identity thief in the consumer's name.
Unfortunately for the victims of identity theft, Equifax often does not properly investigate the disputes it receives, particularly those resulting from identity theft. Instead of investing in its investigation department to make it better and thereby possibly comply with the Fair Credit Reporting Act and eliminate a lot of the problems caused by identity theft, Equifax instead turns identity theft into a means to profit by investing in a company that sells identity theft protection.
If Equifax consistently did the job that it is required by the Fair Credit Reporting Act to do and actually investigate the disputes it receives, consumers would not need to pay for additional identity theft protection or pay for multiple credit reports per year or monitoring services to monitor their credit. But instead of doing what it is required to do, Equifax instead chooses to profit from the misery of identity theft victims.
Equifax makes millions each year from the sale of credit monitoring services and the sale of extra credit reports to consumers worried about the contents of their credit report because their identities have been stolen. A quick glance at Equifax's website makes it clear that Equifax's emphasis is on profiting from credit monitoring rather than properly investigating consumer disputes. Equifax sells no less than 5 different plans to "monitor" and "protect" the contents of your credit report. They give these plans catchy names like Premier Plans, Advantage Plans, Family Plans, Patrol and even Patrol Premier, but they all have the same goal, to play on consumers' fear of identity theft to line Equifax's pockets.
The purchase of ID Watchdog provides Equifax with another mechanism to use to prey on consumers' fears. Instead of fixing the problem by deleting fraudulent accounts when disputed, Equifax wants consumers scared so they will buy more credit reports and purchase more monitoring plans. Not that Equifax is likely to delete any fraud accounts found by the consumers using Equifax's monitoring products.
Equifax needs to be held accountable for its decision to put its profits over the well being of consumers. The government has put in place the mechanism to hold Equifax accountable when it passed the Fair Credit Reporting Act. Now it is up to juries and judges to show Equifax and the other credit bureaus that putting profits over people will not be tolerated.
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August 14, 2017
August 08, 2017
When to Check Your Child's Credit Report
When will your child have a credit report? When should you check? When should you be worried that your child does have a credit report or his or her credit is being used illegally? These are all questions that parents should ask themselves but often do not.
Typically children do not have a credit report until they actually obtain their first credit card, car loan or other financial account that is reported to the credit bureaus. This should not be until they reach the age of majority in your state and can legally enter into contracts. Or possibly when you add them as an authorized user on your credit cards, not that I am advising that you do that!
However, children are often the victim of identity theft long before they are old enough to obtain their own credit. Oftentimes, it is the children's own parents that are the identity thieves. A credit application appears one day bearing the child's name. A quick application later and a credit card is issued in the child's name. An unscrupulous parent can then make charges that never are re-paid and that do not affect the parent's credit report.
And it does not have to be a parent that commits the crime. Children can be the victims of identity thieves that are complete strangers. Or they can be "merged" with another adult consumer whose name, Social Security number or other personal identifiers are similar to your child's. While the credit bureaus should never allow this to happen by simply complying with the Fair Credit Reporting Act, it does happen because the credit bureaus are known to utilize faulty matching logic that allows such mergers of credit files to happen. And when it does, the adult consumer's credit can and will land on your child's credit report, which can cause your child to be saddled with a bad credit history before he or she even begins their adult life.
So how do you protect your child's credit? What are the warning signs that a child has become the victim of identity theft?
You should check your child's credit report with the big three credit bureaus (Experian, Equifax and Trans Union). I suggest doing so when your child turns 16. At that point, the response from the credit bureaus should be that they have no file on your child. But, if there is a file, then you should obtain a copy (as the parent and guardian of your child) and confirm that no accounts have been opened in your child's name. If there have been, dispute them to the credit bureaus, including a copy of your child's birth certificate to prove that he or she is under age and thus not legally capable of entering into a contract to open the fraudulently opened account(s).
Should you ever check your child's credit before their sixteenth birthday? Yes - if your child starts receiving credit card applications, collection letters, collection calls or anything indicating that they have been active in the credit arena. This could be an indication that your child's identity has already been stolen. At that point, despite your child's age, you should check his or her credit report and dispute anything that is not your child's credit.
Ideally, such disputes will lead to the child's credit reports being corrected. But, as often is the case, the credit bureaus will not perform reasonable investigations of the disputes. At that point, you should consult an attorney like me who specializes in Fair Credit Reporting Act litigation.
August 07, 2017
Nigerian Citizen Living in North Carolina Arrested for Phishing Scheme Targeting Connecticut and Minnesota School Districts
Nigerian citizen Daniel Adekunle Ojo was arrested last week at his residence in Durham, North Carolina. He is being charged with fraud and identity theft charges filed by Connecticut U.S. Attorney Deirdre Daly.
According to prosecutors, an employee of the school district in Glastonbury, Connecticut was duped by a phishing scam which Ojo was allegedly behind. A phishing scam is one where an e-mail that appears to be legitimate asks for private information or asks the recipient to log into an account via a link in the e-mail that leads to a fake site. Any information obtained via a phishing e-mail can then be used to commit financial crimes.
In the scam in this case, Ojo allegedly spoofed the e-mail address of one school employee to make it appear that that school employee had e-mailed the duped school employee requesting tax information for approximately 1600 school district employees. Not realizing that the e-mail was not legitimate, the school employee provided the requested information, which was then allegedly used to file 122 bogus tax returns for nearly $600,000.00 in tax refunds.
At least six of the fake tax returns were successful, resulting in $37,000 in refunds being electronically deposited into various bank accounts.
It is also believed by authorities that Ojo is not a first time phisher. Ojo's e-mail address is allegedly linked to a phishing scam in Bloomington, Minnesota earlier this year and that he may have been involved in a similar phishing scheme that targeted the school district in Groton, Connecticut.
A federal magistrate judge has ordered that Ojo be transferred to Connecticut for prosecution.
My advice on phishing: Never, ever, ever click a link in an unsolicited e-mail even if it looks like it legitimately came from a company with which you do business. Phishers used to be easy to spot due to their poor grammar and odd phrasing used in their e-mails. But they have gotten better and thus less easy to spot. So think hard before you click.
August 06, 2017
Former Member of U.S. Air Force Sentenced for Identity Theft
According to prosecutors, Allen distributed the private information contained on the stolen personnel roster with the hopes of profiting financially from the information's dissemination. The information was then used to file tax returns and fraudulently open financial accounts using the names and other personal identifiers of the Air Force personnel on the list. It is unclear how many Air Force members were affected by the dissemination of their personal identifiers.
Identity thieves often open credit cards and obtain loans using the names and other personal identifiers of their victims. The criminals then make purchases using the credit cards and loans. The charges are never paid, thereby ruining the victims' credit history while the criminals profit without any consequence unless caught.
Forged tax returns are a slightly different version of identity theft and has become more prevalent in recent years. Instead of opening new financial accounts, the identity thief completes a fake tax return in the name of his or her victim. This is usually done as early in the year as possible before the victim files his or her real return. The taxes on the forged tax return are calculated in such a way as to result in a refund, which is then received by the identity thief instead of the victim. The IRS has been cracking down on this type of identity theft over the past few years, including issuing pin numbers to persons who have been victims in the past to prevent the crime from reoccurring.
While four years seems like a light sentence to me (the damage to the victims' credit histories will last longer than that), it is good to see an identity thief like Allen being forced to spend at least some time behind bars.
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