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.

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!

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 - http://saynototortreform.blogspot.com/2012/02/mississippi-republicans-trying-to-slam.html

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.

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.

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: http://www.consumerfinance.gov/notice-and-comment/

More information about the CFPB’s Nonbank Supervision Program is available here: http://www.consumerfinance.gov/pressrelease/consumer-financial-protection-bureau-launches-nonbank-supervision-program/

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.

Brag Time - for the second straight year, all of the attorneys at Merkel & Cocke are recognized by Super Lawyers Magazine!

A little off topic, but I was told once by a pretty good attorney to "gloat while you can".  So here's a little bragging on me and my law partners.  Below is an article about our recent honors:

Once again, all seven partners of Merkel & Cocke, P.A.were honored by their peers by their inclusion in the 2011 edition of Mid-South Super Lawyers, a magazine that annually compiles a list of the top attorneys in Mississippi, Tennessee and Arkansas.

The selective and prestigious Mid-South Super Lawyers magazine lists Charles M. Merkel, Jr., John H. Cocke, Cynthia I. Mitchell, William B. Raiford, III, and Edward (Ted) P. Connell, Jr. as part of 2011's list of Super Lawyers in the Mid-South. Charles M. Merkel III and Christopher E. Kittell were also selected by Mid-South Super Lawyers magazine as Mid-South Rising Stars for 2011.

Four of the partners of Merkel & Cocke - Charles M. Merkel, Jr, John H. Cocke, Cynthia I. Mitchell and William B. Raiford, III, were named as Super Lawyers in the tri-state area under the heading: “Personal Injury Plaintiff: Medical Malpractice.” Edward (Ted) P. Connell, Jr. was named a Super Lawyer in the area of “Personal Injury Plaintiff - General.”

Charles Merkel, Jr. was also included in the prestigious “Top 50 Mississippi” list, which is comprised of the fifty attorneys receiving the most points in the selection criteria in Mississippi. Likewise, Cynthia Mitchell was included in the Mid South’s “Top 50 Women,” a list of the female attorneys in the Mid South receiving the top fifty scores in the 2011 Super Lawyer selection process.

Charles M. Merkel III was chosen as a Rising Star in the area of “Personal Injury Plaintiff – Medical Malpractice,” while Christopher E. Kittell is the only Rising Star in the three state area in the field of “Consumer Law,” recognizing his experience in representing victims of credit reporting errors and identity theft.

After being nominated by peers in the legal profession, Super Lawyer and Rising Star candidates are evaluated based on twelve indicators, including verdicts, settlements, representative clients, experience, honors and awards, special licenses and certifications, position within the law firm, bar and other professional activity, pro bono and community service, scholarly lectures and writing, education and employment background, and other outstanding achievements.

Known Victims of Georgia Identity Theft Ring Total Nearly 9,000!

A Georgia identity theft ring has nearly 9,000 victims!  The current number of victims of the alleged identity theft ring centered in Suwanee, Georgia stands at 8,965 and includes people from Georgia to California.

Apparently, the identity theft ring ran a bogus tax preparation service that was submitting false tax returns for unknowing victims.  The scheme caused one victim, Jeanette Adams of Georgia, to get stuck with a $2400 tax bill.  A retired nurse, Adams struggled to keep a roof over her head and pay for her medicines while paying back the IRS for taxes she did not owe.  Unfortunately, no one would help her.  Only later did she find out she was a victim of identity theft.

Authorities discovered the identity theft ring when they served a search warrant on the home of Annette Ford of Suwanee, Georgia.  During their search, which was triggered by an investigation of some stolen checks, police found stacks of fraudulent tax returns, stolen checks and a legal pad containing handwritten notes of names, birth dates and Social Security numbers.

Ford has plead guilty in federal court.  Three others have also been charged.

I have seen more and more tax return identity theft over the last few years.  Unfortunately, there is usually no one to sue, since the debt rarely show up on the victim's credit reports.  The FCRA therefore is no help to those victims.  And the actual criminals usually are either never located or are judgment proof, making a civil suit against the criminals a waste of time.

Operation Swiper busts largest identity theft scheme in U.S. history

Who says the economy is struggling?  One identity theft ring that involved more than 100 criminals spent more than $13 million on iPads, iPhones, computers, watches and even swanky handbags from Gucci and Louis Vuitton.  The only problem - they used their victims' credit to make the purchases.

A sixteen month investigation, dubbed "Operation Swiper", led to charges against 111 suspects, 86 of whom have been arrested thus far.  The identity theft ring was run out of Queens, New York but stretched all over the globe, including China, Europe, Africa and the Middle East.

Employees at banks, restaurants and retail stores would start the identity theft by "skimming" the credit card data of customers (i.e. steal the information when they swiped the card, often by using a special machine to do so).  Members of the ring would also steal credit card information online. 

The information was then used to forge credit cards, which were placed in the hands of criminal shoppers, who would make the high end purchases identified above.  The items bought (but never paid for) would then be sold overseas for pure profit.

The credit card companies in the U.S. could have prevented a lot of this by installing anti-skimming micro chips in their cards.  Credit card companies overseas already install these chips so it must be feasible.  The untold number of identity theft victims I am sure would have appreciated this extra protection, had the credit card companies been wise enough to have implemented it.  Maybe losing out on over $13 million just from one ring will get their attention.

As always, any victims of this identity theft ring that need help can contact me through this blog or via e-mail to ckittell@merkel-cocke.com.  I have represented identity theft victims in NY before and thus know some good FCRA attorneys in NY that may be willing to help.

Horrible - TriCare refuses to provide credit monitoring to the victims of its data breach

TriCare is a healthcare program that provides healthcare coverage to uniformed service members, retirees and their families.  Last month, a number of TriCare's computer backup tapes were stolen from the vehicle of an employee of Science Applications International Corp.  The tapes contained the personal information (including Social Security numbers) and health information of 4.9 million beneficiaries.

Typically, companies that allow such massive data breaches to occur will offer free credit monitoring services to the victims of its negligence.  But not TriCare.  Its refusing to do the right thing.

According to TriCare, it was not offering credit monitoring services because "retrieving the data on the tapes would require knowledge of and access to specific hardware and software and knowledge of the system and data structure."  Hog wash.  Does TriCare not realize what the technologically savvy can do with computers these days?  It wouldn't take a moderately skilled hacker any time at all to successfully access the information on those tapes.

TriCare, get your head out of the sand and offer the credit monitoring service to your victims.  Its not much, but its at least something.