Wednesday, May 26, 2010

MSN Money: You can sue your debt collector for FDPCA violations

Here’s a good one: not just “beat the bill collector” but sue your debt collector. At least that’s the topic of an MSN article today, “Sue your debt collector: Federal law sets clear limits on what debt collectors can do. If their tactics go beyond those limits, you can win -- and it's a surprisingly easy process”, by Kathryn Reynolds Lewis of MSN Money, link here.

Federal law allows a debtor to receive $1000 for each instance of abuse of their rights under the FDPCA (Fair Debt Collector Practices Act), which can include making false threats or calling at non-allowed times.

It’s not clear from the article whether the debt collection company is liable, or whether the individual debt collector as an employee of the company is liable as an individual for an FDCPA violation, but I believe it is the latter.

Debt collectors don’t make that much an hour (typically $12 or less), but do make commissions on what they collect. So the system can invite abuse.

Sunday, May 23, 2010

ING creates site for educating kids about money, credit; says keeping low credit balances lowers credit scores

ING was my employer from 2000 through the end of 2001, and it’s good to see ING Direct has a website ("Planet Orange") to educate teachers and parents, and kids, about credit and money -- and at least indirectly, about protecting private information and keeping your identity safe. Here is the site. It calls its members “astronauts”, rather like Geek Squad (Best Buy) calling its techs “special agents”.  I think it's ironic that Titan, the largest moon of Saturn, may have a largely orange surface.

ING Direct also has its own quiz on which behaviors lower credit scores. The link on Yahoo! finance is here. What’s interesting is that keeping a small credit balance can lower your score. Many people (myself included) pay off last month’s bill but typically there are new charges since the last bill. I don’t know if this counts; Fair Isaacs can certainly identify a pattern of paying the due amount. Also, I don’t pay disputed amounts (as long as it won’t become delinquent). It’s normal for me to have a hundred dollars or so of bills in dispute. I wonder if that hurts. Yahoo’s link for the credit behavior quiz is here.

Tuesday, May 18, 2010

Congress considers a bill limiting ability of employers to check credit histories

Can you be fired for bad credit? Liz Pulliam Weston has an article on MSN for MSN Money (4/23) that is pretty sobering. In Cleveland, the Defense Financial and Accounting Service fired some workers for bad credit because they couldn’t pass security checks. And just as with online reputation, people don’t get job offers because of credit scores and are never told why. The link for the story is here.

According to a survey from the Society for Human Resources Management (SHRM) 60% of employers use credit checks for some associates, and 13% do so for all employees, even those who don’t handle money. Must 65% allowed applicants to explain credit check problems before making hiring decisions.

Representative Steve Cohen (D-TN) has a bill to prohibit credit checks except for jobs requiring security or FDIC clearance, a managerial position in a financial institution, or certain state agency jobs.

At the same time MSN has an article suggesting that stellar credit scores, from people who do pay bills on time, can be brought down by accepting new credit lines and not using them.

Needless to say, identity security issues could damage credit scores of job applicants.

In 1987, Chilton Corporation, a credit reporting company in Dallas, decided to require credit checks of employees (it seemed ironic it had taken so long), while I worked there; when TRW acquired Chilton, it dropped the requirement. TRW is now Experian.

Wednesday, May 12, 2010

Banks sell identity protection; so do homeowners insurance companies, with caveats

Consumers can often purchase identity theft protection, both from banks and from property (homeowners) insurance companies.

Wells Fargo, for example, has a link that explains how it covers up to $10000 for out-of-pocket losses, here.

And “Insurance agents” considers identity protection as almost a “mandatory” add-on for most people, as explained here.

Typically, this coverage is sold as an endorsement that will cover “resolution services” and lost wages and legal fees. But the coverage may not protect someone if the loss occurred because of online activity connected with a home-based business.  I presume that this is available for renters, too.

The whole picture of identity protection may be evolving quickly, as insurance companies are starting to become more concerned about the risks people are creating for themselves online.

Monday, May 10, 2010

AARP: Medical id theft usually costs victims a lot out of pocket

The May 2010 AARP Bulletin Today has a frightening article by Sid Kirchheimer “Scam Alert: Not what the doctor ordered: your medical records are very appealing to identity thieves”, link here.

Because of medical identity theft, victims sometimes lose health insurance or must pay higher premiums to keep coverage. The article says that it costs an average of $20000 out of pocket to close a case of medical identity theft. This is a shocking finding.

The problem could get worse if more medical records are automated (so that various specialists can see the medical chart and prescriptions online). The article also notes that stolen medical records could facilitate passport fraud, and could prove to a tempting lure for terrorists.

Tuesday, May 04, 2010

Consumer Reports notes that many people's carelessness on social media invites identity theft and other security problems

Consumers Reports has recently run a survey that found that about 52% of social media users routinely post birthdates, home addresses, vacation plans, and other information that could endanger both home security and increase the risk of identity theft through the Internet.

The San Francisco Chronicle ran a story May 4 by Benny Evangelista, “Social network users found to endanger privacy”, link here.

The article mentions a number of steps that can improve security, including better use of social media privacy controls, especially using “only friends” option on Facebook and unchecking search engine availability.

I did find an article on Consumer Reports, "7 things to stop doing now on Facebook", link here.  I did find the recommendation "letting search engines find you" a bit glaring, and it needs to be understood in context.

On the other hand, many individuals have, from their viewpoint, good reason to want to be found by everyone, including by search engines. This includes people who self-publish political or social materials, or artists and musicians attracting new performance opportunities. Furthermore, there is a big of a logical contradiction in sharing things only with “friends” if the purpose of social media is taken to be to make more “friends.”

Everyone’s situation is different, with regard to such matters as living circumstances, job conflicts, job travel, family structure, and most of all, skill in monitoring one’s own circumstances. So perhaps the adage “different strokes for different folks” applies here. A well implemented home security system is a good idea, as is the ability to monitor one’s own accounts and credit score online and ability to detect problems very early. Still another issue is maturity, and the ability to see through scams. Prevention of identity theft or other security issues has a lot to do with “whether you know what you’re doing”. Still, as I noted on the “BillBoushka” blog April 20 (and again April 29), interests ranging from property insurance companies to school principals are becoming increasingly concerned about the reach and subtlety of these problems, especially when there are minors at home without the maturity to deal with them.