Monday, May 28, 2012

Fraudulent "early" tax refunds rampant in South Florida

Lizette Alvarez has a story in the New York Times about rampant IRS refund fraud by stolen identities, particularly in South Florida, link (website url) here.

 The refunds are often deposited to prepaid debit cards popular with people who don’t have bank accounts (the unbanked).

The story indicates the scale of the problem, overwhelming the ability of the IRS to prevent it with any reasonable procedures.   Usually the fraudulent returns are filed before the real ones, and real filers find out they have been spoofed when they try to file.

Police often find identity theft paraphernalia at routine traffic stops. 

Monday, May 07, 2012

Ohio newspaper documents comingling of credit histories, seemingly impossible for consumers to get fixed

The Columbus Dispatch has a disturbing story on the consequences for consumers of credit reporting agencies mixing people up with the same or similar names, where one of the people has bad credit and the others have good credit. The story by Mike Wagner and Jill Riepenhoff, “Credit Scars: Mixed and Marred: When credit reporting agencies blend your files with others’, the financial damage can be devastating”, link here was carried Sunday night by the AP. 

The story provides a new wrinkle. When creditors pull reports, the need only to give minimal information (like SSN) which has often been incorrectly comingled. When consumers pull their own reports (from free legally mandated services or even monitoring they pay for) they have to provide more information, which causes the incorrect information not to be pulled in before it is sent to them. So they can never get a problem resolved.

The problems documented in Ohio (from my mother's side of my family, a "second home state")  have been persistent, with many consumers unable to get problems fixed at all. One suicide has resulted, and massive litigation seems to be beginning.

I worked for the credit reporting industry, Chilton (now Experian) from 1981-1988 in Dallas.  I never heard about problems on this scale.  I also worked as a debt collector briefly in 2003, and often heard consumers deny debts claimed of them.