Saturday, February 18, 2012

Debt collecting companies will be regulated in a manner similar to credit reporting companies

The “new” Consumer Financial Protection Bureau (CFPB) will issue rules that propose that debt collection companies be regulated with accountabilities similar to those of credit reporting companies. 
The Reuters story is here.

The debt collection industry, where I worked for a while in 2003 and where I have interviewed in the past, has more variable business models, and companies that actually buy debt seem to be creating more problems for consumers.

Reuters is also reporting on a problem of “old mortgages” that are supposed to go away with refinancing but don’t.  Some people have received foreclosure notices when they did not even know they had mortgages.

That story is here
A related problem back in the 1990s had been unqualified assumptions, which could lead to litigation against previous owners who had sold homes, not realizing they were still liable. 

Thursday, February 16, 2012

NARCA offers CD media presentation, "Avoiding the Debt Trap: What Young Adults Need to Know"

The National Association of Retail Collection Attorneys, or NARCA, has a CD called “Avoiding the Debt Trap: What Young Adults Need to Know”.

The CD offers a Power Point presentation of about 50 slides, along with some PDF’s explaining all the concepts.  The CD has an “exe” file that loads a viewer on a computer that doesn’t have PowerPoint.  I watched it on a MacBook with Microsoft Office Mac.

There is am embed of the CD on the main website or NARCA, here

I picked up the CD (free) at a local church in northern Virginia. 

The subject for young adults is important because this population is particularly likely these days to be loaded down with student debt. 

Perhaps NARCA and Suze Orman could produce a short film together on this.

Tuesday, February 14, 2012

Maryland Piedmont town has identity theft outbreak

Several media outlets report an epidemic of identity theft on one street in the town of Urbana, MD, near Frederick, MD, a couple miles off of I-270, as in this Gazette story

There is some suspicion that the thefts are happening in the physical world first, with mail boxes, although someone could have hacked town or county computers.
Station WJLA has a story by Horace Holmes, here.  The broadcast story identified the town, but the online story doesn't. 

It's pretty hard to believe that the scam could go on much longer.  Crooks have opened new accounts for "dopplegangers", but Visa and Master Card have very sophisticated fraud tracing systems, one of them (apparently near Dallas) recently shown in a Nightly News broadcast.  Employees are not allowed to have their own cell phones in the facility. 

Monday, February 13, 2012

Suze Orman's new "Approved Card" avoids smackdowns, aims to help people build credit scores without credit cards, auto loans or mortgages

Suze Orman, “the personal financial planner for the whole World”, has been advocating use of the “Approved Card”, which is a prepaid debit card, link here. Orman hopes that in time the major credit reporting companies and credit scoring companies (Fair Isaacs FICO, Vantage) will consider the use of the cards (favorably) in calculating a credit score.

Jennifer Tescher, on “Bank Think”, gives a detailed discussion of Orman’s card and ideas, here

And the Oprah Magazine has an article in the Feb. 2012 issue, here. I have to admit, I need to check out how Oprah is doing with her new channel for my TV blog, and will do so soon. 

Suze Orman recently explained her new card on Anderson Cooper's daytime show. 

I should add, that I have a "normal" Bank of America debit card and have not yet run into any security problems.  I do have a maximum daily withdrawal limit from it, for personal security.

Note: There is a discussion of the new concept of "data lockers" on "BillBoushka" site Tuesday Feb. 13.

Suze Orman's book "Women & Money" is reviewed on my Books blog, Feb. 14, 2008.  It had been offered on the Oprah Winfrey show that month. 

Saturday, February 11, 2012

Identity security without the fees -- just how far should one go?

Alina Tegund has an important piece in the New York Times, “preventing identity theft without paying th the monthly fees”, link.

She say that you can get the banks to warn you about every debit card withdrawal, and lists a lot of other things to check.  And she does recommend shredding of paper.  I would add, have a maximum ATM withdrawal or debit card transaction for any 24-hour period.  All banks will offer this. 

Why go to some much trouble?  Shouldn’t the banks be responsible for protecting you?  Well, they do, to a great extent (watch it with debit cards).   The biggest problem isn’t so much stolen cards as counterfeit ones. 
The ethical issue or philosophical one is that the buck stops somewhere, and ultimately it’s still the consumer.  Why?  You can’t have freedom without it.  True, banks may be in a position to protect their customers, but then must other businesses always protect everyone from any form of downstream liability?  What would this mean on the Web?

Admittedly, many people, in practice, are much harder to forge than others.  Many people, in practice, are not a much risk.  It pays to check your accounts online regularly. 

Wednesday, February 01, 2012

Debt collectors paying record fines over stretching the rules

The New York Times, in a story by Tara Siegel Bernhard, reports that the FTC has levied the second-largest-ever fine on Asset Acceptance, link (website url) here.

The company, which apparently buys other debt at pennies on the dollar, would make threats to sue consumers (which it cannot follow up) and to goad consumers into making partial payments to wipe out the expiration of limitations.  

As noted before, employees in many debt collection agencies face extreme pressures to meet quotas and bend the rules.  

Another company paying a big fine is West Asset Management.