Protect Your Good Credit

When I tell mortgage applicants that, if they’re in credit counseling, they are less likely to qualify for a home mortgage, they are agast!

Since most consumers seek credit counseling in an effort to improve their credit worthiness, it is clear that the information given to them at the onset by credit counselors, fails to provide an accurate understanding of the process.

After hundreds of complaints from consumers about misleading and/or high-pressured sales tactics which included significant fees and poor education, the IRS has revoked the tax-exempt status of four nonprofit credit counseling agencies. An IRS official also indicated that they are reviewing the status of many more of these nonprofits who offer credit counseling services.

This brings to fore the many misperceptions of consumers seeking debt-relief through credit counseling. The counseling services may reduce some of the high-interest rates you are paying on credit cards, but the counseling services don’t improve your credit rating. In reality, once you sign on for credit counseling, your credit is further damaged and it can prevent you from qualifying for a loan.

Many mortgage companies will not extend credit to anyone that is in credit counseling and, often, for a specified time after leaving the counseling service. It can effectively impact your qualification for a home mortgage just like bankruptcy.

If you wish to improve your credit or seek debt-relief you should carefully investigate all options and be confident that you understand the benefits as well as the consequences of credit counseling through any fee-based agency.

I’ve said it before and I’ll say it again, “If it seems to good to be true, then it probably is. You can’t get something for nothing!”

Credit card companies have long been encouraging consumers to sign up for their card by offering “introductory” teaser rates. For a while, it worked. I know a lot of people who made a career out of flipping their credit card debt from one company to another trying to stay ahead of the “introductory” rate expiration. The shine of those promotions has dulled and consumers aren’t as likely to sign up for a temporary low rate, especially since most learned the hard way, when the “introductory” rate expired, the base rate was usually in the 24% range.

So now there’s a new ploy to get consumers to sign up for yet another credit card. The special interest, special program cards. Yep! They have one for NASCAR which if you use enough and manage to build up an incredible number of points, you could possibly win a chance to become a “Crew Chief for a Day” and get to hang out in the pit with a race team.

When Discover began offering “cash back” rewards, others quickly followed suit. Now you can even get a GMAC Mortgage Equity Reward card which will pay $25 to your mortgage for every $2500 you charge on the card. (Of course, you also have to have a mortgage with GMAC!)

They have found something to attract most everyone. There’s the Amazon.com Platinum Visa, Toys R Us Visa, AARP Rewards Platinum Visa, or the Starbucks Card Duetto which “automatically credits a cardholder’s account with 1% of his/her purchases which can be redeemed for Starbucks coffee. “Depending on how much you spend a month, you may never have to pay for a latte again,” said Chase spokesperson David Chamberlain.

Forget it, folks! It’s just another method contrived to get you to build up credit card debt. You don’t need it. I can pretty much guarantee you that if you look at what it costs to “earn” whatever deal they are offering, it’s more than what it would cost you just to pay for it outright! Whether it’s airline tickets, a trip, toys, a DVD player or coffee, you’re still paying for it……….you’re just paying for it with interest!

As Hurricane Dennis plows across the Gulf of Mexico toward the US coastline, I am reminded of my experiences when Hurricane Isabelle slammed inland and hit Richmond in September of 2003. While I faired better than most and had only minor damage from downed trees, I was glad that I had prepared for the worst and taken necessary precautions to safeguard my family and home. The following links provided very helpful information and guidelines.

www.weather.com/safeside/emergencyplan

www.weather.com/safeside/supplykit

My local Sunday paper contained an article about a woman in Georgia who, as a result of her identity being stolen, has been convicted of a felony. This only reinforces my belief that not only are we all at serious risk, the credit reporting ones may be minor compared to the possibility of criminal charges.

If your identity is stolen and the thief uses your identity to perpertrate a crime, you could find yourself facing criminal charges and conviction. This could result in job loss, family loss and/or loss of your individual freedom if you are imprisoned.

The victim from the news article was a single mother with two children, an honorably discharged veteran who was also a full-time student. A real estate license that she held, but was not actively working while in school, was at the center of the identity theft. Since the thief conducted the same real estate scam in several counties around the victim’s home, she faced charges in multiple jurisdictions.

Evidence proved the identity theft victim was not the perpertrator of the crime but, nonetheless, she was convicted in one of the counties. She was sentenced to 10 years probation, 100 hours of community service, a fine of $2500 and restitution to the scam victim of $975. This woman whose identity was stolen states clearly in the article that this situation has “ruined her life”. She faces an uncertain future while she stuggles with trying to have her name, records and reputation cleared.

That’s a tough pill to swallow if you are the victim of identity theft. The bottom line, none of us are safe from these type threats. It can happen to anyone, anywhere, anytime.

If would like some guidelines for protecting yourself from identity theft under current regulations, please download a copy of my free report. (Simply click on Free stuff, under Pages on the right-hand side of the column, and follow the instructions.)

On CNN.com yesterday, a headline read “FTC chief’s credit card data stolen”. If you read the article, it outlines how Federal Trade Commission chief Deborah Platt Majoras’ personal credit card information was stolen along with 1.4 million other’s from a company database. Majoras received a letter from DSW notifying her of the theft last week.

The security breach of the Ohio-based company occurred in March, however, consumers were not notified until after the attorney general of Ohio filed a suit to force the retailer to contact it’s compromised customers. Customers located within 25 different states were affected. The article also includes the following statistics on identity theft:

Nearly 10 million people fall victim to identity theft annually, costing consumers $5 billion in out-of-pocket losses and businesses $48 billion, according to the FTC.

So my question is, if the FTC and other agencies are collecting and recording the data necessary to provide these statistics, WHY has this been allowed to continue and what is it going to take for Congress to finally take action?

And what is Congress spending it’s time doing? Battling back and forth over whether or not the next Supreme Court justice appointee is going to be pro- or anti-abortion. They are trying to legislate morality and/or prohibit individual choice while the American people continue to be financially raped and pilladged by creditors who are selling them out for profit!

That’s right, with the next election campaign cycles for the Presidency (in 2008) and Congress (in 2006), already underway, our elected officials are spinning into partisan, single-minded focus on yet another political nomination, while 10 million Americans are being devastated or placed at risk by the failure of credit information brokers exercising due diligence in the protection of our personal identity information.

Until this threat is acknowledged as serious to our well-being as a nation and our elected officials are compelled to take action, that number will continue to increase.

Yesterday’s Washington Post included an article “Have You Been Stolen?’ in which the numerous recent security breaches of personal data by several large national creditors are outlined in detail. In several of my recent posts, I also noted these breaches and pointed out that this is an increasingly significant threat nationwide.

The Post’s article refers to “legislative fixes already in place. Federal law requires financial institutions to safeguard personal data. Several state legislatures have passed laws requiring that potential victims be notified if their information is compromised, and other states are following.”

What the American public should infer after reading that is these breaches are not new. They have been occurring for years and the public is only being made aware of it now due to new state legislation. What has the federal government been doing to protect us?

Apparently not much! As I noted before, your medical records are carefully safeguarded as a result of federal HIPAA regulations. Medical history protection is nice, but thieves and scammers can’t steal your identity and ruin your finances and/or credit with medical history……….but they most certainly can with your personal data.

Additionally, the threat, once you’ve been compromised, NEVER goes away! It could be years before a thief decides to use your identity to perpetrate a crime. After all, with the sheer volume of identities compromised, it may take time for the thieves to get around to you. However, the financial, credit and legal ramifications of having your identity used to commit fraud, steal or some other crime are HUGE!

If the custodians of our medical records can be charged serious fines for failure to protect our records, wouldn’t it only make sense for the same or stronger penalties to apply to your personal identity records?

We must also keep in mind that these creditors, while they carelessly compromise our data, also allow access to it for profit. When they’re not losing it or failing to protect it, they’re selling it………..and as long as they make money on it, they will continue to do so!

Until it hurts creditors who are careless with our data financially and they are forced to absorb the responsibility for their actions, then for most of us, it’s only a matter of time before we find ourselves victims of identity theft.

If would like some guidelines for protecting yourself from identity theft under current regulations, please download a copy of my free report. (Simply click on Free stuff, under Pages on the right-hand side of the column, and follow the instructions.)

Once our governing bodies begin to address this problem with new legislation and regulations, I will update the report accordingly.

This email notice was just forwarded to me by a friend. While have not yet confirmed this with VISA or MasterCard, scammers are always coming up with new methods of getting your personal information. Therefore, I’m posting the email verbatim to help ensure that as many people as possible can be forewarned. As I have noted in earlier posts, I recommend NEVER answering any questions about personal data over the phone. If you get a ever get a phone call from a company about your account, listen to what they are calling about then immediately tell the caller you will look into it and hang up. Call the company in question and ask them about it directly.

The email read:

Note, with this scam the callers do not ask for or confirm your card number.

By understanding how the VISA & MasterCard Telephone Credit Card Scam works, you’ll be better prepared to protect yourself.

My husband was called on Wednesday from “VISA”, and I was called on Thursday from “MasterCard.” The scam works like this: Person calling says,”This is (name), and I’m calling from the Security and Fraud Department at VISA. My Badge number is 12460 Your card has been flagged for an unusual purchase pattern, and I’m calling to verify. This would be on your VISA card which was issued by (name of bank.) Did you purchase an Anti-Telemarketing Device for $497.99 from a Marketing company based in Arizona?”

When you say “No”, the caller continues with, “Then we will be issuing a credit to your account. This is a company we have been watching and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement, the credit will be sent to (gives you your address), is that correct?”

You say “yes.” The caller continues - “I will be starting a Fraud investigation. If you have any questions, you should call the 1-800 number listed on the back of your card (1-800-VISA) and ask for Security. You will need to refer to this Control Number. The caller then gives you a 6 digit number. “Do you need me to read it again?”

Here’s the IMPORTANT part on how the scam works. The caller then says, “I need to verify you are in possession of your card.” He’ll ask you to “Turn your card over and look for some numbers.” There are 7 numbers; the first 4 are part of your card number, the next 3 are the security numbers’ that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the 3 numbers to him. After you tell the caller the 3 numbers, he’ll say,”That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?”

After you say No, the caller then thanks you and states, “Don’t hesitate to call back if you do”, and hangs up. You actually say very little, and they never ask for or tell you the Card number. But after we were called on Wednesday, we called back within 20 minutes to ask a question. Are we glad we did! The REAL VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of $497.99 was charged to our card.

Long story made short - we made a real fraud report and closed the VISA account. VISA is reissuing us a new number. What the scammers want is the 3-digit PIN number on the back of the card. Don’t give it to them. Instead, tell them you’ll call VISA or Master card directly for verification of their conversation. The real VISA told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your 3 Digit PIN Number, you think you’re receiving a credit. However, by the time you get your statement you’ll see charges for purchases you didn’t make, and by then it’s almost to late and/or more difficult to actually file a fraud report.

What makes this more remarkable is that on Thursday, I got a call from a “Jason Richardson of MasterCard” with a word-for-word repeat of the VISA scam. This time I didn’t let him finish. I hung up! We filed a police report, as instructed by VISA. The police said they are taking several of these reports daily!

There’s been another ‘breach’ of security and the credit cards of almost 40 million citizens have been compromised. This time, instead of losing the data being sent from one location to another, security at the collection point has been breached.

First of all, according to news reports from CNN and others, the vendor, a company handling transaction processing for Visa and MasterCard, was storing cardholder information after transactions and claimed it was being used for “research purposes”. Visa and MasterCard purportedly have rules prohibiting card processors from saving cardholder information after the transactions, but do they actually take measures to ensure their rules are followed?

If you experience a violation of your personal medical history, HIPAA regulations can award you between $100 to a maximum of $25,000 per standard voilated. The results, our medical history is carefully safeguarded by those who handle it. Why? The penalties are steep! If these fines were applied to credit violations, the minimum payment for this incident would be $4 billion.

Are there any penalties for compromising our credit/personal data? I haven’t found anything of consequence in my research so far. So when does this problem get addressed? After we’ve all got impeached credit reports?

Americans need to realize there are too many companies out there making money brokering our personal data. The credit bureaus allow access to our data. Companies we choose to do business with allow access to our data. They make money doing so.

As long as we fail to take action, our personal security and privacy will continue to be violated. It’s time to get Congress’s attention and demand action preventing these ‘breaches’ and accesses to what should be protected and private.

The goal must be to incentivize our creditors and credit bureaus to protect our data. Until they are held accountable for their failure to do so and suffer consequences for that failure, we are vulnerable, both personally and as a nation. Fines, penalities and stringent regulations must be imposed before these companies will take responsibility for protecting our information.

Write, fax or email your Congressional representatives and demand they take action to protect our data. The following link will give you contact information for your represenatives in both the House and Senate by state: 2005 Congressional Contact center.

Send me an email if you would like a draft letter that you can use when contacting your representative.

With all the recent reports of credit data being compromised one way or another, you must take care that you are not creating the risk of exposure yourself.

Wi-Fi advertisements are springing up like yard onions. Every coffee house, sandwich shop, hotel or major transit stop provides free Wi-Fi. While it’s convenient, being able to access your email from most any location, it also increases your risk for having your personal data stolen.

I am technology challenged in most respects, but I do understand the basics. If you are in a public forum utilizing “free” radio waves to access your personal data, be it your online banking or your email account, you are giving those unscrupulous tech savvy folks the ability to snatch your stuff “right out of thin air”, so to speak.

To protect yourself fully, don’t use Wi-Fi in public venues and disable your wireless transmitter when in public locations with Wi-Fi. To reduce your risk if you simply must check your email at Starbucks, don’t access any of your password protected accounts such as your online banking while in a public Wi-Fi location. Wait until you are on your regular hardwired network connection to check t0 see if that last check you wrote cleared.

Where personal data theft is concerned, better to wait, than provide more bait!

The Fair Credit Reporting Act is the federal legislation governing credit reporting. The Federal Trade Commission and other federal agencies request and review studies of the credit reporting industry. The focus of these studies is to improve reporting accuracy and consumer awareness.

Most of the studies are looking for ways to improve communication between consumers and creditors by informing individuals of things like a creditor issuing an “adverse action” after reviewing their credit report. This would mean implementing rules requiring creditors that issue the “adverse action” provide a copy of the same report to the consumer.

While this may improve a consumer’s awareness of a problem, it doesn’t necessarily educate the consumer about possible solutions. In order for legislation to be effective it has to be two-fold. It should provide consumer awareness and education as well as consumer protection. It should also provide accountability and restitution to consumers when inaccuracies, data loss, etc. of creditors and/or the bureaus negatively impact the consumer’s credit.

The Federal Trade Commission is currently seeking consumer comments as part of their studies of the credit reporting industry. Whether you have experienced problems with your credit report or not, you should learn about the studies currently underway and provide feedback to the FTC.

Giving voice to your experiences, observations and needs as a consumer is vital. It is the first step toward implementing change. For more information, visit the FTC website at www.ftc.gov/os/statutes/fcrajump.htm.