Tag Archives: credit

College, credit and identity theft

credit card scams

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This post will be a little more personal in nature.  Recently I went shopping with my 25 year old son, who is getting ready to embark on the grand adventure of marriage.  Together we visited the jewelry stores.  He was hoping to find the perfect engagement ring to give to his soon to be fiance (we were pretty sure she would say yes) and I was there to negotiate the best price.  Finding the perfect ring we discuss the price.  Once we get the price the store was ready to accept we now have to find out the best way to pay for this item.

Like many college students (he graduates this December as he worked full time his way through college) he didn’t have the amount saved because every penny counts.  Having never had any credit since his car was paid for (thank you grandma and grandpa), as was his housing and other expenses we thought now would be a good time to begin to build it.  After all the cost of the ring was not that bad and it would be a good way to get started on the way to responsible credit use. Getting his bonuses over the next six months and each of them could pay for the expense, he decided to fill out the application.  After all, who knows a few years from now the next thing I hope to help him find is a new house (somewhere closer than 1900 miles away).

“I’m sorry, you weren’t approved,” the salesperson tells us.  Crushed, he quickly becomes curious, and asked to see the denial.

Lesson no. 1 If denied credit always ask to see the written response, you may be surprised.

The denial says he has unpaid credit card bills and outstanding credit (not outstanding as in really good either!).  But how can this be he asks.  Other than his monthly cell phone bill he has not had any credit cards, no monthly payments.  Not even student loans, because although he took one out his first year they are deferral because he is in school.   “Mom! What do I do?”

Lesson no. 2 Run your credit report immediately.  He can start with his free credit report, but considering these circumstances he may want to use a service like CreditSesame because they also offer additional services to help him stay on top of his credit rating.

We ran his credit report and now the work really begins.   It’s time to clean it up.  There are a number of different problems with it, from fraudulent use of his name, Social Security Number, creation of a new identity using his old address and of course the big problem, unpaid items of credit, whether it was a fast cash item or credit card.   “How did this happen?” he wonders.

Lesson no. 3 It can happen a number of ways from old mail, credit card offers in the mail, his Social Security Number used at the college or even a so called friend or roommate which had access to his information.  Stolen wallets, filled out forms, responding to spam messages, there are a whole number of different ways that this happens.  Maybe he was just unlucky.  Most identity theft takes bits and pieces of the true to create a “new you.”  That’s where this gets messy.

What can you do?  Now it’s time to take action.  Either file a dispute through the credit monitoring service that you are using or grab some pen and paper and do it the old fashioned way.   Either way you need to contact the credit reporting agencies with the information that is incorrect, correct it and include any proof that you may be able to provide.

Lesson. no 4 Some say you can file with just one agency and that all the information will be sent to all three.  However, to be safe I recommended that my son send the information to each of them if he didn’t want to file it online.

Here are some sample letters to use when filing your dispute.

Should you take the snail mail route here are the mailing addresses for each of the three reporting agencies.

TransUnion
P.O. Box 6790
Fullerton, CA 92834

Experian
P.O. Box 9530
Allen, TX 75013

Equifax
P.O. Box 740241
Atlanta, GA 30374

Remember mistakes can be made on anyone’s credit report but it has been reported that identity theft is on the rise for college students, so pass this information on to them so that they know what to do.

 

Can Smartphones Steal Our Credit Card Information?

There was a time when credit cards had to be slid through a funky machine and stamped. This left your personal information fairly insecure or at least at the mercy of the retail establishment’s security procedures. Now credit cards are so fancy you can simply walk by and tap them to pay for your bill. Would it surprise you to know that your credit card could be even more at risk today despite the jump in technology? A CBC News investigation is saying that a simple Smartphone app is capable of swiping your information right through your wallet. In about one second, they were able to use a Samsung Galaxy SIII and an app that shall remain nameless to do the deed. Information like the card number, expiration date and name was quickly stolen with a simple walk by.

That is alarming news to those of us that use PayPass or payWave from MasterCard and Visa collectively. Both appear to be susceptible to the app and the smartphone despite what is said by those with Visa or MasterCard. Both companies say that their products are safe and that you are not responsible for unauthorized purchases anyway. For me, the proof is in the doing. They were able to take a card’s information with a simple walk by, and then use it to purchase a Coke. That shows me that it is possible despite claims to the contrary.

This is a natural progression that one should expect to see when new technologies are being formed. If you come up with a new way to do things where paying and money is concerned, someone, somewhere is going to try to exploit it. It is the unfortunate way of the world. Once they have been caught a few times, then the technology will Continue reading Can Smartphones Steal Our Credit Card Information?

Jail time for unpaid debts: Debtors prison making a comeback?

Jail time for unpaid debts?  Debtors prison?  These sound like something straight out of history and a Charles Dickens novel.   Unfortunately it isn’t only the ghost of debts past, but for some it also be be ghost of unpaid debts in the present and the future.

Do these facts and figures bother you? 

Robin Ebersohl had a loud muffler, but no money to fix it.  Instead of getting pulled over because of her car she was arrested and spent three days in jail before her father could pay the $500 to get her released.  What was her crime? Unpaid medical bills.  She was a truck driver who came down with cancer.  She lost her medical insurance when she could no longer work.  Medical bills piled up. Eventually she got disability benefits but still couldn’t pay off the bills.

A 53 year-old woman named Vivian Joy was stopped for a broken tail-light in Champaign, Illinois.  When the police discovered that she still hadn’t paid $2,200 to a collection agency, she was cuffed and carted off to jail.

Breast cancer survivor Lisa Lindsay didn’t even owe the money.  This twenty something teaching assistant received a medical bill that was incorrect. After being told she didn’t have to pay it, it was turned over to a collection agency and she ended up in jail.

How does debtors prison happen? 

A credit files with the court.  A notice is sent to the person owing money.  Does everyone always receive this mail?  No probably not.  The hearing is held and if they don’t appear then the judgment is filed.   A warrant is then issued for the person’s arrest.  After bond is made, the money from bond goes straight to the collection agency (sort of like a wage garnishment) because after all if you can pay bail, you should be able to pay your bills right?  What about the family member that posted your bail for you?  Too bad, so sad, sorry about your luck.

In Pennsylvania, the criminal court charges for police transport, sheriff costs, state court costs, postage, and “judgment.”  Now you not only owe your debt, but you also out the court system.

The Wall Street Journal reports:

  • More than a third of all U.S. states allow borrowers who can’t or won’t pay to be jailed.
  • Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people.
  • AIG got a $122.8 billion bailout from the federal government.  Jeffrey Stearns happened to owe AIG $4,000 on a loan for his pickup truck. Jeffery was picked up and arrested.  He was strip searched, sprayed for lice and spent two days in jail.

AIG wasn’t the only bank to receive a bailout.  Many others did too, but consumers are spending time in jail, even after government bailouts and selling unpaid debts to collection agencies actually “make them whole.”

Debtors’ prison is actually illegal, but that doesn’t mean that people aren’t spending time in jail for unpaid debts.  In this NPR article, Illinois Attorney General Lisa Madigan says she thinks more can be done. It’s illegal in Illinois for people to be sent to jail because they’re in debt. But Madigan thinks some creditors are abusing the law.
What do the experts say about debtors prison?

“You wouldn’t be in that predicament if you didn’t have debt,” Madigan says. “But for being in debt, you wouldn’t be in prison. And that essentially equates to being thrown in jail, debtors’ prison.” “Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month,” Illinois Attorney General Lisa Madigan said last month in a statement voicing support for the legislation. “Too many people have been thrown in jail simply because they’re too poor to pay their debts. We cannot allow these illegal abuses to continue.”

“The law enforcement system has unwittingly become a tool of the debt collectors,” said Michael Kinkley, an attorney in Spokane, Wash., who has represented arrested debtors. “The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it.”

“It’s just one more blow for people who are already struggling,” said Beverly Yang, a Land of Lincoln Legal Assistance Foundation staff attorney who has represented three Illinois debtors arrested in the past two months. “They don’t like being in court. They don’t have cars. And if they had money to pay these collectors, they would.”

A 2010 report by the American Civil Liberties Union that focused on only five states — Georgia, Louisiana, Michigan, Ohio, and Washington — found that people were being jailed at “increasingly alarming rates” over legal debts.

According to the ACLU: “The sad truth is that debtors’ prisons are flourishing today, more than two decades after the Supreme Court prohibited imprisoning those who are too poor to pay their legal debts. In this era of shrinking budgets, state and local governments have turned aggressively to using the threat and reality of imprisonment to squeeze revenue out of the poorest defendants who appear in their courts.”

Think arrest should be stopped for unpaid bills? Tell Your Lawmakers: Shut Down The New Debtors’ Prisons.   What’s next breaking legs?

Or maybe you agree . . . maybe you think “you do the crime, you do the time” as some comments on the articles referenced here state.   Some call it “stealing” while others say that in today’s economy you would be hard pressed to find someone that doesn’t have unpaid bills.

Watch this video on Debtors’ Prison  and let us know what you think.

5 Ways to Make Sure Your Teen Is Using Their First Credit Card Safely

If there’s one thing teenagers are good at, it’s wanting. They want later curfews with fewer check-ins, they want to take the car out on weekends without telling you where they’re going, and most of all they want a credit card to call their very own. Now, there’s nothing wrong with teaching your teen how to build and use credit responsibly, but if you’re going to pick up a piece of plastic for your kid these days, you need to be extra-vigilant about how they use it. Why? Because credit card theft has changed since you were a kid.

These days, a thief doesn’t even need to pick your teen’s pocket to steal that first credit card. They can just skim it with a hidden device on a gas pump, or read the information wirelessly from a hacked cell phone. So if you want to make sure your child’s first foray into the world of credit is a safe and happy experience, try following these 5 steps to make sure they’re using their credit card responsibly.

1)    Don’t just give them your premier credit card. If you’re going to give your teen a copy of one of your credit cards instead of signing them up for their own, make sure it isn’t your ultra-exclusive credit card with the $10,000 limit. That’s like handing your kid the keys to a new Corvette the day they get their license and telling them to step on it. Instead, start them out with one of your low-limit cards – like the one you use for online shopping. This way, if and when they lose the card, you can cancel it before any serious damage is done to your credit score.

2)    Monitor their credit scores. Under federal law, everyone is entitled to a free annual credit check from each of the three major monitoring services – TransUnion, Equifax and Experian. You should use these free reports to check up on your teen’s credit score every four months. Not only will you be able to see if they’ve been using their card responsibly, but you can also check the charges for suspicious activity.

3)    Teach them to use a shredder. One of the most common ways for thieves to get hold of personal information like credit card numbers is by sifting through trash cans and dumpsters for old statements and bills. That’s why it’s important to get your teen into the habit of shredding all of their bank statements and credit card bills before throwing them away. It’s a cheap and easy way to ensure that sensitive information doesn’t fall into the wrong hands.

4)    Make sure they’re using their credit cards online, not their debit cards. It can be hard for teenagers to tell the difference between a credit card and a debit card, but they’re going to have to learn if they ever want to shop online. Why? Because credit cards offer a number of protections under the CARD Act that will limit your teen’s liability if their information is ever stolen from a merchant database. Debit cards, on the other hand, don’t offer these protections at all.

5)    Keep their computers clean. Even if your teen uses his or her credit card responsibly, information can still be stolen by malware hidden on their computer. It only takes one wrong click on a phony email or website link to download this dastardly software, and once it’s on a computer it can transmit personal information to hackers for years. That’s why you should install malware removal software on any computer that your teen uses to transmit credit card information. By running regular checks and removing suspicious files when they’re discovered, you can make sure that your teen’s computer stays as safe as it was the day you bought it.

Nowadays, credit cards are as much a risk for teens as they are a resource. Thieves are waiting around every corner, so it’s important to keep an eye on the way your teen  is using that first credit card. By teaching your teenager how to check credit reports, shred personal documents and use credit cards online, you can help your child develop healthy habits. You’ll be teaching your son or daughter how to spend safely well into adulthood. Then the only thing you have to worry about is that whitewater rafting trip the gang is planning for next summer.

 

 

Thank you to our guest author Bill Hazelton of CreditCardAssist.com! 

Bill Hazelton is the founder and CEO of CreditCardAssist, a leading pro-consumer credit card resource. Since 2004, he’s been providing American consumers with all the tips, tricks and news they need to navigate the world of personal finance. His on-site reports have been cited by the San Francisco Chronicle, the New York Post, Yahoo! News and more.

 

 

Unsolicited credit cards: What to do with them and who is “offering” them

Do you always open all your mail?   Or do you get busy and assume that it’s junk mail or just another credit card offer?  Today I saw a news cast on one very good reason why you should always open your mail and read the fine print.

10TV.com reported on a Columbus, Ohio man who recently opened his mail to find, not just a credit card offer, but a credit card.  A credit card that he never asked for or completed an application for.   But here it is.

Reading through the letter that accompanied his brand new Discover Card he finds out that his particular membership at Sam’s Club includes a Discover Card, unless you “opt -out” either when registering your Sam’s Club membership or when sent a letter which let’s you know you were approved and your credit card is on its way.

Sam’s Club is not the only store that offers this type of “service.”  Macy’s customers found that they had become the not so proud owners of Citibank MasterCards.   Apparently, 3.5 million Macy’s customers were issued the Citibank MasterCard that they could use anywhere, since they were already users (in same cases even inactive users0 of the Macy’s store credit card.  JC Penny, Sears, and Target have also performed a similar service.

Isn’t receiving an unsolicited credit card against the many credit card laws that are meant to protect consumers?   Continue reading Unsolicited credit cards: What to do with them and who is “offering” them

Is the United States getting “smart” about credit cards?

So what happens when the United States lags behind in credit card technology?  Does it really matter if the rest of the industrialized world is now using credit cards with chips instead of magnetic strips?  Well, it does matter if you’re an overseas traveler.
As other countries have already adopted credit cards with chips and are done with or at least transitioning out credit cards with magnets, not all places abroad even have a “swipe” machine for magnetic strip credit cards, including places like train kiosk.  In other places, businesses use both but U.S. travelers have been learning that cashiers are often very unfamiliar with how to use the seemingly obsolete machines.
The smart cards, called EVM cards, have an encrypted chip to tighten security.  This EVM was a joint project of Visa, MasterCard and Europay.
Wells Fargo gave out 15,000 credit cards with chips earlier this year and reports that the response for international travelers was a huge success.  Wells Fargo says they plan to offer more chip embedded credit cards for travelers.  U.S. Bank also gave 20,000 select travel rewards customers smart cards this year as well.

Back to school is cool: But don’t let those school forms burn you

It’s back to school time and many of you may have papers from the school or enrollment cards to fill out. Maybe you are sending a child off to preschool for the first time and need to fill out the admission forms. There sure is a lot of information required but what you might not know is that there is also a great deal of information shared, maybe more than you would like.

Social Security Numbers

Social Security Numbers are not required in order for your child to attend school – any school. Schools may not require the use of your child’s social security number for attendance. According to federal law, social security numbers are not valid forms of identification and cannot be required (remember when you used to write your SSN on checks too?) It’s your decision, but before you fill the form in remember this, every teacher, counselor, administrative official, and office worker in the entire school district has access to that information now.

Don’t just take my word for it, the Social Security Administration shares, “Schools are putting children at risk of identity fraud by obtaining their Social Security numbers when it is not required by law and often unnecessary, the Social Security Administration’s Office of Inspector General has concluded.”

“We believe such practices increase the risk of SSN misuse and unnecessarily subject students to the possibility of identity theft, investigators said in the report, which noted the growing number of identity theft victims who are under the age of 19. “Identity thieves often target children because they have clean credit histories, and their records may be used for years before they realize their identity has been used for criminal activities.”

Name, address, telephone number, date of birth

You have to include this information on your paperwork; however, you are not required to provide a home telephone number. As long as you provide an emergency contact like your cell phone or office number the paper work is complete. Dates of birth are required in order to ensure that every child attending school is meeting the date of birth deadlines.

Permissions

You may find that there are a great many permission forms that you are signing, such as can your child use the computer, have their picture taken, have their picture used by the school or school district and permission to include your contact information in the class or school directory But did you know that these permissions in many schools extends to providing this information to any parent who calls in and makes the “proper” request. Any parent could call in and request your name, address and telephone number. Maybe they just want to invite your child to a birthday party or maybe they have something else in mind.

In May 2010 a Broward County teacher was sentenced to 5 years in prison for the identity theft of her several of her high school students.

Former Pittsburgh area school teacher Jason Joy was arrested for identity theft this year, of friends, family, and former students and using it to commit eBay fraud.

Children are one of the highest risk groups to be victims of identity theft. This is mainly because it will take so long to figure it out. Your 5 year old could have their information used for identity theft and no one would even know it until he or she applies for student loans or financial aid, credit cards or purchases a car. That’s a long time to have to spend someone else’s money.

Remember, most forms of identity theft and credit card fraud occur as a result of putting bits and pieces of information together to form a whole new identity. Your address can be used to steal your mail and accept credit card offers or simply use an existing credit card by completing the change of address form.

It’s up to you who you want to have your information, so before you check that box “YES” to sharing information to the students, teachers and parents or anyone who asks be sure you want that the convenience of that free student directory is one that won’t cost you a lifetime of debt.

Do you know what a “live check” is? You should!

Picture this: a mysterious loan check arrives in your mailbox. You are not exactly rolling in the dough so the figure of eight thousand dollars immediately catches your eye ($8,000.00). All you have to do is endorse it and deposit it into your bank account. Sounds like a great idea, right?

The mantra of ages is applicable yet again: If something sounds too good to be true, it probably is.

John (not his real name) received his live check for $8000 and, feeling the economic crunch, deposited the check into Continue reading Do you know what a “live check” is? You should!

What is the Restoring American Financial Stability Act of 2010 and How Will It Affect Consumers?

“Resolved, That the bill from the House of Representatives (H.R. 4173) entitled ‘An Act to provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, to regulate the over-the-counter derivatives markets, and for other purposes,’ do pass with the following …”

That is how the bill known as H.R. 4173 begins. It was introduced into—and passed—the House last year as the Wall Street Reform and Consumer Protection Act of 2009 and, in its latest incarnation in the Senate, is known as the Restoring American Financial Stability Act of 2010.

Designed to end predatory lending, close regulatory gaps, and overhaul questionable financial practices that ultimately led to a worldwide financial meltdown, the bill introduces sweeping new changes for both consumers and financial institutions. Passed in the House, and expected to pass in the Senate, what will it all mean to you, the consumer? Continue reading What is the Restoring American Financial Stability Act of 2010 and How Will It Affect Consumers?