Saturday, December 26, 2015

Strict administrative procedures to avoid ID theft by banks keep a lot of lower income people "unbanked", especially in NYC

Stricter administrative procedures by banks to verify identities of new customers are causing many on the lower economic rungs in New York City to remain unbanked, according to this story in the New York Times Dec. 24, by Michael Corkery and Jessica Silver-Greenberg, “Banks reject New York IDs, leaving ‘Unbanked’ in lurch” (or on “sidelines”).

But my own suggestions for a new system, based on NCOA, proposed here Sept. 25, 2006, intended to make it practically impossible for a new account to be opened without the liable party’s knowledge, could probably run into similar problems. 

Wednesday, December 23, 2015

Creditors use debt collectors to help sue and then block counter-litigation to dispute claims, claiming "arbitration"

In a front page column “Beware the fine print: Making people pay” in the New York Times Wednesday, Jessica Silver-Greenberg and Michael Corkery report “creditors sue, then block use of courts to fight back” by applying “arbitration” clauses in contracts.

The result has been garnishment of bank accounts for old debts, some of which a consumer has forgotten or been unaware of.  There would be the risk that identity theft could set up a situation leading to the garnishments, since (as often written here before) there are not enough security safeguards in the system to verify the identity of people getting loans or to prevent information from being hacked.  The news story also reports that debt collectors have gotten away with collections from states in which they are not authorized to operate.

Monday, December 21, 2015

IRS is supposed to start using collection agencies; will this confound the scam phone call problem?

Congress has recently passed a law directing the IRS to use debt collection services to recover receivables from taxpayers.  A column by Joe Davidson in the Federal Diary in the Washington Post, Monday December 21, 2015, p. A14, reports a concern that consumers will get calls that they will believe are scams.  The IRS did not want this policy change, as it has always said it will not collect by phone.  However, taxpayers would get collection notices in the mail before getting calls.
The risk increases for taxpayers who have very complicated returns, where the possibility of major errors increases.

Debt collectors often can negotiate down balances to settle debts, although the deficiencies may continue to harm the consumer’s credit score.  It wasn’t clear if that negotiating power applies here.

Thursday, December 17, 2015

Lifelock pays a big fine to FTC this time

Lifelock will pay a $100 million fine to the FTC for failing to come through on promises to serve users after privacy breaches, according to a story by Ceclia Kang today, link here.

Lifelock has been fined much less in 2010 and had made an agreement with the FTC.

The company’s services are part of AOL membership.

I have gotten one or two warning texts from Lifelock, but they did not turn out to be real problems.