Protect Your Good Credit

Protecting yourself from identity theft is important for anyone, but, for soldiers that are on active duty and serving far from home, it can be extremely difficult. Many of the day-to-day financial responsibilities 0f soldiers on deployment must be turned over to spouses, family or trusted friends. Now, however, worry that their credit history will be stolen or abused can be aleviated, in part, by placing an “active duty” alert on their credit report.

The FTC offers information and advice on how members of the military can protect themselves. Click here to read the full article and get the facts.

One of the simplest ways to improve your credit is to “clean up” unnecessary accounts that you have open. Since most consumers are inundated with pre-qualified/approved offers and offers of instant credit at many retailers, it’s easy to end up with numerous credit accounts that you don’t really need or use. Often my mortgage clients will discover accounts being reported to their credit that they no longer have cards for, paid off years ago or have forgotten ever opening.

Paying a credit balance on an account off and cutting up the card does not close the account. You must request, in writing, that the creditor close the account and report it as “closed at consumer request” to the credit bureaus.

Since a regular review of your credit history is a good way to monitor whether or not you’ve been the victim of identity theft, when checking your report, identify all the open accounts listed. Determine if you really need the account or if you can close it permanently. Draft a letter to the creditor and to the credit bureaus indicating you wish to close the account as referenced above.

Be sure to include your name, address, contact number, the creditor’s name and the account number. (Note: account numbers shown on credit reports are not always complete or the same number on that’s on the credit card. Include your social security number in the letter if you are unsure of the accuracy of the account number.) Send a copy by mail to each credit bureau and the creditor.

Close all accounts that you can reasonably do without. Use a Visa, Mastercharge, American Express and/or Discover card for credit purchases. Close department store or specialty shop credit cards. By reducing the amount of your unnecessary “available” credit, you can improve your overall credit rating.

The credit bureaus have recently announced they are adopting a new scoring method for consumer credit histories in order to have “more uniform” scores across the three bureaus and provide better “predictors” of credit risk. Yeah, right! A Waltz is a waltz, whether the tune is Blue Danube or not.

Bottom line, just because they are claiming to adopt this “new” system for the consumer’s benefit, doesn’t mean that consumers will—benefit, that is!

Once again, with the classic misdirection of every, even slightly talented, magician, the credit bureaus are trying to take the focus off their real issues and focus consumers on something else. Quick—look over there while I switch things over here.

If Honda, Toyota and BMW all announced that they have “adopted” the same exact plan for building a car so they they will be uniform for the public, most people would immediately ask—what’s up with that?

The same goes for the credit bureaus. There are three because they, in competition with each other, came up with different scoring methods for determining consumer credit scores. If they are going to use the same model now for the “public good” then why would we need three bureaus???? One should be be sufficient, shouldn’t it?

Hacking may not be a spectator sport but it’s one of the fastest growing ones. Computer thieves are stealing us blind everyday while we’re in the safety of our own home or office. The warnings about computer data theft in public Wi-fi locations made consumers more cautious but the newest threats will come to you, wherever you may be.

What’s even scarier???? The thieves don’t have to be talented “hackers” anymore. All they have to do is get the program—that’s right, you can purchase a hacking program as easy to use as Windows which will do the work for you with a couple of clicks.

Brian Krebs, on staff with the Washington Post, writes an in-depth review of this serious problem in his article, Hacking Made Easy. Thieves are able to gather huge quantities of information through keylogging trackers and other malicious data miners. Once the data is captured, the thieves can patiently sift, pick and choose what they want and how they want to exploit it.

The best protection, as noted in Kreb’s article, is to maintain the same “safe-computing” rules that have applied since the first outbreak of computer viruses,

Stay up to date on security patches and be extremely wary of clicking on links and attachments that arrive unbidden in instant messages and e-mail.

Much of the information on this website has been about informing consumers how their credit history is used by the credit bureaus and the untold numbers of companies they sell it to. When people apply for something as weighty as a mortgage, most would think the information they provide their loan officers/brokers is confidential and private. After all, mortgage applications are one of the most detailed summaries of a consumer’s overall financial picture.

Unfortunately, the credit bureaus and the marketing companies they sell to are usually privy to that information within hours. A current marketing trend is for credit bureaus to create lists of those that have had their credit checked by any type of mortgage company. They then sell that information to other mortgage companies or companies that market to mortgage companies. The potential mortgage client is then bombarded with ad campaigns, teaser rates, and the works.

I found this out quite by accident. As a broker, I regularly access credit reports for my clients’ loan applications. Due to my knowledge of the perils of identity theft, I routinely check my own credit several times a year.

After pulling my own credit report last month, I received a phone call from my current mortgage company asking me why I was planning to refinance. When I replied that I wasn’t, they told me they received a report from the credit bureaus saying I had applied for a new mortgage. When I questioned them further, I was finally told they pay the credit bureaus to inform them anytime one of their mortgage customers has their credit pulled by another company. They use this information for “client retention” purposes.

In addition to the call from my current lender, I have been inundated with offers of mortgages and home equity lines with ridiculously low teaser rates. Were I not in a position of reviewing lending rates daily, it would be easy to be confused or mislead by these unrealistic offers. In my office, I began receiving solicitations selling “mortgage leads for potential loan applicants that are within 12 hours of the initial credit check.”

The result, it tells me just how many times my credit information has been sold and the corresponding increased risk of theft of my identity. Unless the buying and selling of credit histories is limited or stopped, the risk of identity theft for all consumers is like living with a cancer in remission—you never know when it will raise its ugly head in the future or how debilitating it will be when it does.

Despite new laws, increased media coverage and consumer awareness, identity theft appears to be more a of threat than ever. More stringent FTC regulations and higher penalties still fail to stem the increasing exposure consumers experience with every new security breach.

The recent $10 million ChoicePoint settlement with the FTC for 160,000 individual’s personal data being sold to identity theives is the highest fine in FTC history. But, will it solve the problem? Granted, the risk of millions in fines may make personal data handlers more careful about their practices when selling our information, but does it help when the breach is a result of compromised computers, lost tapes or failure to shread paper records marked for disposal?

In keeping with the old saying, the squeaky wheel gets the grease, the sale of our personal data to undesired sources or its flow into unscrupulous hands will not stop until consumers demand it.

What will it take? For starters, consumers’ willingness to forego things like instant credit, shortcuts for establishing and maintaining accounts of all kinds, vigilance in updating passwords and pins on a regular basis, and the list goes on. While the majority of the burden should fall on those who traffick in selling our data to the highest bidder (usually to provide us with so-called “opportunities” to have credit with yet another company or to fill our mailboxes with even more offers for products and services we don’t need or want), consumer’s themselves will still have to share in the responsibility for stemming the flow.

The question is: How much longer can you afford to wait before demanding change?

Insidious and subtle, software vulnerability and self-profligating viruses and worms are a danger to anyone with a personal computer. Whether you are an avid internet user or not, these programs can weaken and/or destroy your ability to maintain your computer’s security. An associate who is a principal with a local technology group has posted the following security warnings on their company website. The links below will take you to the group’s main webpage and to the security announcement page.

Anyone that utilizes a computer, for business or personal use, can click on the links provided and take advantage of the security warnings and/or solutions offered there. Forewarned is forearmed. If you are unsure about your computer’s vulnerability or the solutions offered, contact your system administrator or technology consultant for assistance in protecting your PC from exposure to these new threats.

The following Security Announcement is from the website of Convergent Technologies in Richmond, Virginia.

Security Announcements

Windows WMF Exploit

A serious new remotely exploitable vulnerability has been discovered in Microsoft Windows’ image processing code.

UNTIL THIS IS REPAIRED BY MICROSOFT, ANY ATTEMPT
TO DISPLAY A MALICIOUS IMAGE IN WINDOWS COULD
INSTALL MALICIOUS SOFTWARE INTO THE COMPUTER.

Sober Worm to Launch on January 6, 2005

W32.Sober.X@mm is a mass-mailing worm that uses its own SMTP engine to spread and lowers security settings. It sends itself as an email attachment to addresses gathered from the compromised computer. The email may be in either English or German.

According to a recent article on CNN.com, a study completed by American Online and the National Cyber Security Alliance, “phishing scams” fool 70% of internet users. Tatiana Platt, Senior Vice President of AOL, said, “What’s happening is that more and more people are actually engaging in transactions online that would generate e-mail traffic that the scammers are copycatting.” In addition, Platt said, “too many people still don’t have adequate computer security to guard against viruses, hackers and other threats.”

Federal Trade Commission tips to avoid getting “hooked” by phishing scams:

Don’t respond to emails asking for personal information. Call or write the company instead. If you want to repsond electronically, type in the company’s web address and proceed from there. Don’t use the link provided in the email.

Keep your antivirus and firewall software up-to-date. This can help protect you from unwanted intrusions or someone’s ability to track your computer usage.

Don’t email personal or financial information. Even if you are sending information to a trusted source, you risk it being accessed by hackers.

Whether you are seeking work, credit, a purchase, a service or a place to live, the three credit bureaus, Equifax, Transunion and Experian, have some influence on how you are treated as a consumer. Yet, they aren’t public service agencies, they aren’t consumer agencies, they are not beholden to the consumers whose credit they control or to the businesses that pay for their credit reporting information. They are large money-making corporations and they are making billions.

Every time they are mentioned in the news these days, it seems they are apathetic to the very consumers whose data they barter.

MSNBC reported in recent months that the FTC had charged Experian as a result of complaints.

Credit bureau Experian settled charges that it misled consumers with the lure of a free credit report and instead enrolled them in costly credit monitoring services, the Federal Trade Commission said.

Under the terms of the settlement, Experian admitted no wrongdoing but agreed to give refunds to some consumers and surrender $950,000 in what the FTC called “ill-gotten gains.” In addition, Experian, one of the nation’s three major credit bureaus, [had to change] the way it advertises credit monitoring services at ConsumerInfo.com and FreeCreditReport.com.

According to an article by Kim Zetter of Wired News,

“Equifax’s chief executive says he opposes federal legislation that lets consumers obtain a free copy of their credit report to help them monitor financial accounts for fraudulent activity.” While speaking to a group of reporters in San Francisco, CEO Thomas Chapman called the legislation “unconstitutional and un-American because it cuts into profits that Equifax and [it's two rivals, Experian and Transunion,] earn from selling credit reports and monitoring services. Equifax maintains data on 220 million Americans [and earned] $1.27 billion in revenue last year.”

Trafficking in personal data is the focus of their business: selling your name, address, phone, credit history, etc. to marketers/companies that want to sell you something. Ensuring that your credit history is accurate and that you are not victimized by fraudulent activity is not the focus of their business.

If the credit bureaus weren’t influencing almost every aspect of our daily lives by what they tell businesses, lenders, and creditors about us, it would be such a huge issue. Now, however, reporting inaccuracies can cost consumers significant amounts of money. The more businesses rely on what the credit bureaus report to determine how they will treat consumers, the more impact those inaccuracies have on consumers’ finances.

It may be time for legislators and businesses to evaluate the influence and control of the credit bureaus. Protecting consumers’ rights, resources and data should be foremost in the evaluation process. If the credit bureaus are unable or unwilling to ensure accuracy, privacy and protection, then another method for establishing and maintaining consumer credit must be found.

No laws are coming together quickly enough to make it through Congress before the end of the year. That may be a good thing!

According to an article by Ryan Singel of Wired News, consumer advocates are seeing many companies take more agressive steps to prevent theft and are providing individual notification if records are compromised. The consensus is that no federal bill is better than a weak one. Strong state laws are motivating companies to take more action regarding individual data protection. If federal laws are not going to further strengthen the identity protection of citizens, then the feds failure to implement new laws is actually better for consumers.

To read the entire article, click here.