Thursday, October 23, 2008

Debt collectors still violate FDCPA: As a "third party" I get an illegal phone call

Yesterday (Oct 22), around 8:30 AM EDT, I received a bizarre phone call asking me to contact a “neighbor” to convey contact information about an urgent “personal business matter.” Since I worked in debt collection myself in 2003 while still in Minnesota, I was “suspicious” but I knew that if this was a collection matter, the caller was probably violating third party rules of the Fair Debt Collection Practices Act (FDCPA). (The FTC copy is here. I took down the information, including case number. I quizzed the caller further and he gave the address for which the party was a “neighbor,” which was my UPS Store mail box address. (UPS Stores now run what used to be called Mail Boxes ETC).

Apparently, the caller did not understand that these is a mailbox store in a high rise office building, and not a physical office number in such a building. At first, the idea that another mailbox in the same building would appear to be a "neighbor" sounds astonishing to common sense.

At the time, I wasn't sure that this was a collection call, or what it was, because it was so bizarre. I called the number he gave, and it repeatedly stalled and then went busy. Finally, around 11 AM I got through and got the name of the company. I looked up the company on the Internet and found out where it was, a "conventional" debt collection company.

I won’t name the company or the location (other than say East Coast – most debt collection offices are actually in the Midwest to take advantage of time zone spread) or, for that matter, of course, the supposed debtor here. I’m debating with myself whether to report this. Debtors should know they have a right to dispute collection calls and tell the agency to stop calling.

Actually, the prohibition against contacting third parties (which includes “neighbors” in the federal law but even includes spouses in a few states like Massachusetts [including same-sex spouses in that state]) is part of the whole new “reputation defense” problem. At least, imagine how it can be. This part of the FDCPA should be vigorously enforced.

Recently there have been several media stories about unscrupulous debt collection practices, even though most of the industry says it follows the rules.

In 2000, I found an old credit card debt on a credit report that had apparently been lost in a household move in the 1980s. It surfaced when Chase bought Chemical Bank. I called the debt company in New York City and was stiff-armed into paying it (about $600 ballooned from an original $120) when I should have been allowed to dispute it. In this case, the agency had bought the debt and was no longer just a third-party debt collector.

The industry trade association is the Association of Credit and Collection Professionals (ACA).

All legitimate debt collection calls should start with the mini-Miranda which is worded like this "This is an attempt to collect a debt and any information obtained will be used for that purpose" and should identify the debt-collecting company and the agent, at least by a first name of pseudonym.

I did read Max Ellison's "Beat the Bill Collector" back in 1997 (from Paladin Press).

Wednesday, October 22, 2008

Supreme Court to hear case about illegals who do not know they are simulating real people when getting work

The Supreme Court will hear, on Oct. 27, a the case of Ignacio Flores-Figuero, an illegal immigrant from Mexico who used the social security number of a real US person with the same name to get work in Illinois. Federal law says that all that is necessary for a conviction is that he used the fake identity of a real person. He does not need to know that this is a real person, but that is the constitutional point at issue. The Eight Circuit has agreed with this interpretation.

The story is by Adam Liptak in the New York Times, Oct. 21, 2008, “Justices take on Illegal Workers and Penalties for Identity Theft,” link here.

The US Code reference from the Cornell University Law Library is US1028a here and next page.

Tuesday, October 21, 2008

Rapid credit rescoring may help consumers during credit crunch

This morning ABC “Good Morning America” briefly discussed the concept of “rapid credit rescore” where errors or omissions on a credit report, was well as payment information as well as incorrect accounts are submitted to all three major credit reporting companies so that the FICO score can be recomputed, sometimes within 48 hours.

A number of companies and sources discuss this opportunity. These include Credit Score News, here, Cisco Credit (which offers a predictive recalculator) here and (prosaically) “” here.

Rapid rescoring can be important now in getting a mortgage or even an auto loan. News sources report that GM dealers right now will not give auto loans to those with scores below 700, although hopefully that will change if credit markets loosen with the bailout.

Credit rescoring should be differentiated from “credit repair” with is often scammy.

Monday, October 06, 2008

Could monitoring of individual credit extend to new areas? Also, some credit cards being closed

On this blog, I’ve repeatedly called for establishment of a “preferred contact point” system for lenders, with use of the USPS NCOA (National Change of Address) system. I’ve said that increasing notification and due diligence requirements on lenders could reduce identity theft and fraud, and I suppose the idea could gain traction given the current fiscal mess.

The main objection is, you guessed it, it give the government potentially a greater capability to track the activities and movements of individuals. Yes, this is not China and I am not as concerned about that, although maybe I should be.

There will be more regulation of a lot of other activities, particularly in the financial world, but that could lead to a climate where individuals are looked at more closely. That does worry me. Imagine a world where your credit report or FICO score was checked before you have an Internet domain (because ICANN is dealing with some fraud problems there now – as on my Internet safety blog) or get a domain, or even a social networking site or blog publishing account. Because of some arcane, if still theoretical problems, I can imagine how this could happen some day.

Consumer credit card accounts getting canceled:

By the way, WJLA in Washington is reporting that some banks (especially Bank of America) is starting to close some customer credit card accounts, mainly (1) delinquent or over limit, and some customers are having their limits reduced and (2) cards not used at all for one year or more.

Saturday, October 04, 2008

Major company loses shareholder personal info in shipment

Now there is at least one company that lost the personal information of shareholders during the routine shipment of a computer cassette to an iron mountain facility. As usual, the company (will not be identified here) offers free credit monitoring for one year. I know this from a letter to an individual that I personally saw.

More and more, it seems that many compromises of consumer and investor security are simply matters of logistical security and competence well known from the bricks and mortar world that preceded the Internet.

And this was just a matter of business-to-business logistics. It didn’t even concern employees taking work home or telecommuting.

I can remember when working sometimes taking corporate shipments to UPS or to USPS Express Mail myself and handling the receipts. It’s something that basic.

Thursday, October 02, 2008

Parents find that minor teenagers often have their identities misappropriated when the kids apply for tuition aid

Major media sources now report that an increasing number of high school students are discovering that their identities have been stolen when they apply for college financial aid.

In some cases, the breaches could have occurred over ten years ago. Because minors typically don’t have their own credit histories, parents don’t check for them. Crooks could have taken out loans in their names, which wind up on fake credit report entries for them which should not even exist.

ABC News offers a video on the issue dated Sept. 16, 2008, link here.

Credit reporting companies will need to develop mechanisms to allow parents to check for the possibility of invalid records for their minor children. Since I worked for Chilton (now Experian) in Dallas in the 1980s (mostly in daily and monthly billing), I can imagine that this would be a information technology big project.

Again, a mandatory notification system based on NCOA, as I have discussed here, could prevent the problem.