Monday, December 26, 2011

Hackers penetrate Stratfor, pilfer consumer accounts; are the banks liable?

The hacking movement called “Anonymous”, connected to Julian Assange, claims to have played Robin Hood by stealing credit card, debit card and other personal information from a US security think tank, Stratfor. The money pilfered from these accounts was then given to some charities like Save the Children, but obviously the charities will have to return the funds.  Will the banks affected (with debit cards) have to make up the difference?

The Business Week story is here

Stratfor Global Intelligence now says that its site is “undergoing maintenance”, link here
Supposedly Statfor had not encrypted the information. 
The latest, from TGDaily, (link) is that Anonymous denies the attack. 
Here’s Stratfor video on YouTube (34 min, on month old) with Robert Kaplan and George Friedman, on China’s dominance.  

Thursday, December 08, 2011

Using NCOA as part of a scheme to stop fraudulent accounts could help USPS revenue and budget situation

The United States Post Office is announcing big budget cuts, with longer delivery times and probably suspension of Saturday and maybe Tuesday deliveries.  The USPS says it is totally self-supported, not by taxes. 

It would seem to me, then, that to use NCOA as a plan to buttress identification of people to prevent fraudulent accounts from being created  (Sept. 25, 2006), could help add revenue to the USPS, which it badly needs. 

There has been talk that Facebook’s strict policy on using real names is motivated by the idea of using the site as a de facto standard of online identity, maybe a real future revenue-generating opportunity for the company.  If so, it would seem that it’s conceivable it could be brought in as a partner in a way of preventing fraudulent accounts. 

Tuesday, December 06, 2011

Does the FICO score really monopolize the credit world?

Lynn Parramore has a big article on AlterNet on the Fair Isaacs FICO Score, “Are you held hostage by bad credit? The hidden truth behind the shady credit agencies that can ruin your life”, link here.

Now, “ruin your life” is a loaded phrase. I remember drill sergeants using it in Basic Training back in 1968, claiming an “Article 15” would “ruin your life”.  It wouldn’t.

When I worked for Chilton (now Experian via TRW) in Dallas in the 1980s, we had a project called “risk predictor”, extracts from credit reports fed to Fair Isaacs.  There is also a competing score called Vantage (discussion) and Sunday I discussed a new service called CoreLogic. 

But AlterNet is right to question why the responsibility to bear the burden of errors in reports should fall on consumers.  I have not had many problems; I did have a credit card hack in 1995, and in 2000 I got dinged by a debt collector for a credit card that I thought I didn’t have anymore (a debt more than ten years old).  

Sunday, December 04, 2011

Core Logic offers more refined credit reports and scores on consumers

There’s a new credit reporting company, CoreLogic, which will provide lenders a more nuanced credit score and report based on smaller items like rent payments and even payday loans.  It appears to look for items frequently requested by services like TenantCheck.

Tara Siegel Bernard has the New York Times story Saturday here

Here is CoreLogic’s source on consumer lending.  The company says it also provides information on trends in property values which could help consumers as well as lenders (avoid loans that will go upsidedown).

Will credit scores based on “online reputation” come next?

Saturday, December 03, 2011

Arrest for ATM-related crimes in MD raises questions of consumer liability

A man who had been released on bail in Maryland after one carjacking committed several moe, including three at a Wheaton, MD mall. He would kidnap elderly drivers returning to their cars and force them to drive to ATM’s.  A Nov. 30 story reports on his re-arrest by Montgomery County, MD police. 

The question that comes up is, would  consumer habits placing a limit on the daily withdrawal from an ATM (say $300) minimize loss and discourage such crimes?  Would limiting ATM use to just one card also help?
Will banks refund for losses to such robberies?  What about on debit cards?  If on credit cards, are consumers still liable? 

Does anyone know?  News reports didn’t cover this.  Here is Washington DC ABC affiliate WJLA's coverage.

Friday, November 18, 2011

FTC reports rapid increase in complaints against debt collectors

According to a USA Today story Friday Nov. 18, 2011 (front page) by Oren Dorell, complaints about abusive debt collection practices are accumulating more rapidly than in any other industry, including debt consolidation and other financial services.

The increase in complaints has risen from about 100000 in 2008 to over 140000 in 2010.

Companies vary in how strictly they enforce the Fair Debt Collection Practices Act (FDCPA) with their collectors, who typically make less than $13 an hour but get bonuses for performance.  And I know from my own experience in Minnesota in 2003, where an interviewer, for a job that I did not get, asked me about assertiveness, that companies do push employees into manipulating others.  (I did get a job with a different company and did fairly well before moving back to the East Coast later in 2003.)

Is this increase in complaints mainly about individual debt collectors, about specific debt collection companies, or against the industry itself?  Many of the abuses occur with debts that the companies have purchased outright for cents on the dollar.

Thursday, November 03, 2011

Some credit cards emit wireless signals that leave them vulnerable to hackers

Walt Augustinowitz, who founded Identity Stronghold (link), helped television station WJLA (ABC, Washington DC) report on “electronic pickpocketing”.  Some credit cards have a “wireless hologram” that send out a signal that cell phones or other devices can pick up, and credit card transactions processed on smart phones can sometimes be hacked.  

It’s prudent to ask credit card companies to send cards without the wireless gonzo.

So far, very few such hacks have actually been reported to police.

A similar report has also been aired recently on Fox channels. 

Wednesday, November 02, 2011

Unpaid fines (parking, photo-enforced light or speeding) can get turned over to collections, affect credit scores heavily

Recently, the media have been reporting that more states and municipalities are turning over unpaid parking and photo-enforced speeding or red-light tickets to collection agencies.  A single collection agency submission of an out-of-town ticket can lower a FICO score of maybe 780 or so by as much as a hundred points.
In many jurisdictions, people can lose points on driver’s licenses for unpaid tickets in adjoining states, but not far-away states or on car rentals (whose contracts always insist that tickets be paid; I had to pay a Delaware toll problem in 2002 when I didn’t know what lane to be in on 95).

But people will lose credit score points for unpaid violations anywhere if turned over to collections.

Here’s a question from Yahoo! on paying an old ticket, link

Here’s a story on collections activity from Atlanta, link.

Monday, October 17, 2011

Banks have you hooked on their debit cards with their automated bill pay; is it really safe to use the cards in public anyway?

Maybe this story doesn’t really apply so much to “personal identity security”, but maybe it does, as far as this column has dealt with debt collection.

The New York Times Sunday ran a story by Nelson D. Schwartz showing how big banks can get away with their new debit card fees because they have everyone hooked on the ease of automated bill paying. It would be too much work to move twenty bills to a credit union, right?

For now, if you never use your debit card to actually make purchases (which security experts say you shouldn’t do anyway – so here’s the relevance) there’s no problem.

But it’s a lot easier to use it at the 7-11 than worry about trips to the ATM with your same bank.

Here we go with the story. A friend had said on Facebook that it was easier just to pay bills by mail. I don't think so. 

Monday, October 10, 2011

Couple faces foreclosure because "right" lender never received mortgage payments

This is not exactly an “identity security” situation, maybe a debt one, though. A family (Brian and Khanklink Pyron) in Houston may face foreclosure after making all its payments on time to Bank of America, the lender. The problem is that the title company, through whom BofA was supposed to pass payments to Wells Fargo, went under, and nobody told the homeowners. The Huffington Post story and video is (website url) here

In Massachusetts, someone faced foreclosure over a missed zero payment (does that make sense), and in Florida a similar situation occurred over a $4.70 fee.  

Wednesday, September 28, 2011

Things a debt collector won't tell you (I didn't either when i worked as a collector)

Here’s a cute story from the October 2011 Reader’s Digest, “13 Things a Debt Collector Won’t Tell You”, by Michelle Crouch, link here.

I worked as a debt collector in Minnesota for a while in 2003, and I did not like the idea of “fooling” people by not telling them things they have the right to do, especially now when I have gotten deeper into publishing stories as a “journalist”.

The tip about the possibility of expiration is interesting, and how it gets restarted if you acknowledge the debt again. Also provocative is the idea of telling people to borrow money from family or friends.  I didn’t do that, but I did take other credit cards.

It’s true, a manager will not help you, as she says. 

Sunday, September 18, 2011

Maryland will make it tougher to collect on "purchased debt" without proper documentation that debts are real

Michelle Singletary has an important column in the Sunday Washington Post, Business, “The Color of Money”, p. G1, “Maryland makes it tougher for debt collectors to sue consumers”, link here

She is referring to the practice of buying debt, not just collecting debt under contract.

I once got caught in something like this. In 2000, I requested my credit report and found an old Visa card from Chemical Bank in NYC that I thought had been closed.  A $125 bill had blossomed to $650 in ten years.   I called National Credit Systems, and a woman called back and threatened to sue me. She would not accept a dispute. I wound up paying. It's possible that the card could have fallen through the cracks when I moved from New York to Texas at the beginning of 1979.

I went to work for RMA, a debt collector, in Minnesota for a while in 2003.  It wasn’t until then that I learned that this charge probably had been wrong.  There was nothing I could do.

Singletary reports that in many states, courts rubber stamp “robo signed” suits for bought debt without requiring due process or proof. Maryland is trying to tighten up the process. 

Friday, September 02, 2011

IRS refund scams in Florida based on mass identity theft from family-tree websites

MSNBC and Peter Williams are reporting on an IRS refund scheme in Tampa, FL based on identity theft.  Identities were lifted off of “family tree” and genealogy websites.  So far 49 people have been arrested in the Tampa area, with more to follow.  One case involved the stealing of a developmentally disabled person’s identity.

Thursday, August 25, 2011

MSN lists the latest schemes to steal credit, financial information

Here’s another list, on MSN, “5 ways thieves steal your credit”, link here.

Some of the schemes involves waiters, “gas station lasses” who skim gas pumps, and ATM’s, as well as the better known schemes to steal info at wireless hotspots for from public computers, or from phishing.

AOL is offering paying customers “free” use of Lifelock; I got an advice from AOL tonight.

Sunday, August 07, 2011

NYC thief enlists bank tellers as part of ID theft ring

A crook who stole wallets on NYC streets has been indicted in an identity theft ring that included collusion with bank tellers, especially those of J P Morgan Chase. He was called “Geovanni Kasonova” . In this story, the bank employees say they were fooled and are not guilty of crimes.

The ABC story and video are here

It’s not clear if the stolen identities were active very long unbeknownst to their targets.  As I’ve written here before, the critical point would be lenders checking addresses before giving credit to individuals, where billing information has been changed and made up by thieves.  Much of this could be stopped.

Another good question would be whether the use of nicknames or pseudonyms on the web, on social media, a controversy raised recently here on other blogs, could make it easier for thieves to make up fake people and match them to stolen SSN’s.