Denise Richardson

Beware of Credit Card Inactivity Fees

2010-02-08T18:25:56Z

More and more credit card companies are taking steps to ensure that all of their credit card accounts are profitable and that means cutting credit limits, raising interest rates, charging annual fees and initiating inactivity fees.

Up until recently, credit card inactivity fees were a rarity in credit card terms of service agreements. Most customers avoided credit card offers with these fees in the same manner they avoided credit card offers with annual fees. So credit card companies would instead use other tactics, such as canceling or suspending inactive accounts. However, as credit card companies have begun to look for new streams of revenue using loopholes contained in new CARD Act regulations, they are now eying account inactivity fees.

The Rationale

Banks believe that inactivity fees are easily justifiable. In the world of banking, if you pay your bills without accruing interest -you are viewed as a dead-beat. They aren't making money off of you, so they need to find ways around that. If they are issuing you a credit card, they want something in return. Credit card companies make a profit on virtually every credit card transaction made. These profits should more than cover any costs of mailing your bills to you, providing customer service to you, and doing basic account maintenance for you. However, they don't agree.

So What's the Problem?

Many consumers, who have had the same credit card accounts for years -even though used rarely, hold onto the cards to keep their credit score from taking an unfair nosedive. Credit score algorithms use factors that include the length of time you have had an account and the amount of available credit you have. If you close out a credit card it can negatively impact your credit score.

Secondly, customers may not notice the one line in their latest terms of service agreement alteration that says an account maintenance fee will be charged for inactive accounts. They also may miss seeing the definition of an inactive account, which can vary from a credit card used less than once per year to a credit card used less than three times per month. That is quite a variance.

In requiring greater clarity about fees, the new CARD Act regulations are helping somewhat but more accountability and oversight are needed. Many people don't worry about reading any changes in terms that come for credit cards they rarely use, thinking that the fact they rarely use such cards makes changes to the terms inconsequential. that's no longer true. It's important to try and read all changes in credit card terms of service agreements very carefully.

If you know about the inactivity fees, and the required activity level is merely that you use your card once or twice per year, you need not be inclined to worry about the inactivity fee or run out and cancel your card. However, if the account inactivity definition is too burdensome, you need to know that so you can determine whether or not to cancel the card.

Protecting your credit score

Your credit score can determine whether or not you get a car loan, get approved for a new apartment lease, or even find a job. Your credit score is based on your credit history. The score, usually a number between 350 and 850, represents how reliable you are as a debtor, and is used whenever you apply for credit.

5 Factors that affect your credit score

1. Credit Payment History: Making up 35 percent of your credit score, your history of making payments is the single most important factor. Whenever you make a payment on time, your score gets better. Whenever you miss a payment, it gets worse. Having a long history of steady, regular payments is bound to help your credit score and make your life a lot easier. In other words, make your payments. It is the single easiest way to get a better credit score.

2. Debt Owed: How much money you owe is the second most important factor, accounting for 30 percent of your score. Having credit cards that are maxed out, for example, will hurt your score. On the other hand, carrying a card balance that's less than between 30 and 35 percent of the card's limit generally increases your score. Keeping the amount of credit you carry relatively low is very important. Not only does it allow you to make payments on time, but it will directly affect your credit score for the better.

3. Length of Credit History: Making up 15 percent of your score, the amount of time you've had a particular kind of credit is the third most important factor. Having the same credit card for many years, for example, will give your score a little bump, while having a bunch of new kinds of credit will lower it.

4. New Credit: The number of new credit lines you have, or have applied for, accounts for 10 percent of your score. Opening several new credit lines at once is not a good thing for your score, while getting a new form of credit every so often can be a benefit.

5. Types of Credit: The final 10 percent of your score is based on the kinds of credit you have. Having only credit cards is not good, while having a few cards, a home loan, a car payment and maybe a personal loan is a good mix.

Knowing the five factors that go into your credit score can help you understand how this score works, why it is important, and how to make it better.

Bank of America charged with Fraud

2010-02-04T20:50:26Z

The New York Attorney General's office announced today that they're charging Bank of America and its former CEO Ken Lewis with fraud. The charges stem from BofA's disastrous merger with Merrill Lynch and their alleged failure to disclose important information about the deal to shareholders or the federal government.

This investigation drives right to the heart of the financial crisis and taxpayers deserve to have all the facts. Tell Bank of America to come clean with all the information surrounding the Merrill Lynch deal

If proven true, these fraud charges could expose the shady nature of the deals made behind closed doors that helped fuel our economic collapse. And they'll send a powerful message to Wall Street's CEOs: You can't expect to crash our economy, take our money, and walk away scot-free.

Stand up for transparency in the big banks - call on Bank of America to come clean with all the information surrounding these charges.

Actions have consequences. The truth matters. Let Bank of America know that taxpayers will continue to seek the truth, and we will hold them accountable for their actions.

Attorney General Cuomo says;

"We believe the bank management understated the Merrill Lynch losses to shareholders, then they overstated their ability to terminate their agreement to secure $20 billion of TARP money, and that is just a fraud," Cuomo said at a press conference. "Bank of America and its officials defrauded the government and the taxpayers at a very difficult time."

Cuomo said Bank of America scheduled a shareholder vote to approve its plan to buy Merrill on Dec. 5, 2008. By that date, Merrill incurred losses of more than $16 billion, Cuomo said. Bank of America's management, including Lewis and Price, knew of the losses and knew that more were coming, Cuomo said.

Bank of America's response;

"The decision by Mr. Cuomo to sue Bank of America, Mr. Lewis and other executives in connection with BofA's acquisition of Merrill Lynch is a badly misguided decision without support in the facts or the law," said Mary Jo White of Debevoise & Plimpton LLP in New York, who represents Lewis. "There is not a shred of objective evidence to support the allegations by the Attorney General."

Sources: BusinessWeek,
SEIU.org

Florida foreclosure problems are brewing ahead!

2010-02-03T14:17:32Z

Existing laws and policies don't seem to be enough for lenders here in Florida when it comes to foreclosures. Claiming that finalizing foreclosures are both "time-consuming and expensive" they're looking to speed up the process. If members of the Florida Banker's Association have their way, homeowners facing foreclosure could have as little as three months before having to leave their homes. That isn't much time considering it takes at least that long to modify or refinance a loan -or simply try to clean up erroneous credit reporting caused by mortgage servicing abuses.

Florida homeowners have been caught up in foreclosure nightmares for long enough and someone needs to start looking out for them, especially those homeowners who are going through this process unfairly. Many of these foreclosures have been the result of bank accounting errors or less than above board mortgage servicing practices.

Homeowners are going to be at even greater risk of losing their homes now because they will have even less time to prove that the lenders have started illegal proceedings against them due to errors, fraud, misinformation or deceptive practices. Defaulting homeowners are going to be unfairly pushed through an accelerated foreclosure process. Responsible homeowners who have arranged loan modifications with their lenders, but who have been lost in a sea of red tape, will be at risk of losing their homes if they don't have the proper amount of time to prove their innocence -or that they are in good standing on their loans. This shouldn't happen.

The banks simply want to put foreclosure on the race track in Florida and push each one through as quickly as possible by instituting a non-judicial foreclosure. This type of proceeding bypasses the legal courts, judges, and sufficient time for tracking down the proof that the homeowner is being targeted for foreclosure unfairly. Technically, this new bill would require non-judicial foreclosures to occur sometime between 90 days and 12 months. While many states already have a non-judicial foreclosure in place, it would be new to Florida, a state that has been especially hard hit with foreclosures and fraud.

The Florida Consumer Protection and Homeowner Credit Rehabilitation Act currently being perused by state lawmakers would give lenders the right to go after homeowners for unpaid mortgage debt even after they have been evicted. While banks have that right, they can opt not to exercise it. This is small comfort for the homeowners who can no longer rely on mandatory mediation since the new bill totally bumps that concept right out of the picture.

What is the impetus behind this bill? Well, bank officials say they want to help those individuals who are hurt when foreclosed homes sit in a state of disrepair on their block. Plus, they want to assist cities and neighborhoods in avoiding the burden of empty homes.

Sounds like more spin.

Maybe they ought to focus on the state of disrepair the mortgage servicing industry itself is in! We need a system that works to keep people in their homes, not kick them out. What about aiding the people whose homes are being taken away from them not because of any fault of their own, but because of the mishandling of their loan accounting, credit or so-called missing paperwork? There certainly are plenty of them out there.

Find useful information on what you can do, find support and helpful links here.

We need a Consumer Financial Protection Agency that will provide the protection innocent families need to make sure they aren't wrongly fast-tracked through a broken system!

(Scroll down for comments and video links)

Journalists Tracking Education Stimulus Spending -- and how you can help!

2010-02-02T17:07:53Z

The recent economic stimulus package included billions of education dollars. We all know that whenever large sums of money are involved, it is of utmost importance to follow its trail -- right from the start! How else do we know where the money goes and how it's being spent? Well, a new project supported by the Bill and Melinda Gates foundation hopes to tackle that very problem.

A national project spearheaded by the Education Writers Association, a journalists organization for journalists and their communities created -EdMoney.org and they are going to track education stimulus spending in public schools across the country and in doing so, taking out the guesswork for taxpayers.

Sponsored by the EWA, EdMoney.org will document spending of American Recovery and Reinvestment Act (ARRA) funds in states, school districts and schools. It is a project of EWA and its members, and others interested in stimulus spending, assisted by HotType Consulting. But this isn't just another website stuffed with indecipherable statistics: this is a community reporting project by journalists for journalists and their communities.

EdMoney.org is requesting journalists to link their stories about school spending, but also to comment about the issues surrounding stimulus dollars attached to education. But the web site would like to see parents, students, teachers and community members chime in as well. They hope to create a community and constant interaction on the page. Here's an excerpt from their new Welcome page:

If the federal government gave your school (or school district) a lot of money - A LOT OF MONEY - with few strings to help it through the bad economy, would you want to know how that money was spent? That's what we thought.

And what if you were connected to education reporters all over the country who also wanted to know and could share what they were seeing in their communities?

All stories and tips will be coded by state, school district and schools to help reporters and their communities understand how these funds are being spent. The Over time, a database of information will come together, free and available to anyone who wants to know where the money goes.

Well respected journalists, Mc Nelly Torres, Lori Crouch and Nirvi Shah are the brains behind EdMoney, based on ideas developed by Kent Fischer while he was on staff at the Dallas Morning News.

You can help to grow this database of information!

They want you to send your stories and tips - which will be uploaded to the website.

If you can help to grow this database of information, please submit your stories and tips to torres.mcnelly@gmail.com, lcrouch@ewa.org or nirvi_shah@yahoo.com and read more about this worthy project at EdMoney.org and help them -help watch over your kids and your dollars.

And don't forget to leave your comments or even links to important sites in your communities.

Mortgage Company Adds to Family's Hardship

2010-02-01T16:12:07Z

Pennsylvania homeowners Margaret and John Krenitsky were hit with some tough news. John was laid off and Margaret learned she was living with a brain tumor. Most of us, myself included, would think that's enough for any family to deal with --but Margaret would tell you that's simply not the case. Their stress levels would continue to rise, as would their hardships, caused by accounting errors, misinformation and mishandling of their mortgage held with Chase Financial.

Margaret and John's difficulties highlight the struggles homeowners continue to face when forced to deal with big financial institutions who appear to compound problems by neglecting their duties and their customers. The Krenitsky's, like many of us, hope that by writing about these wrongs-someone will be inspired to help right them.

Here's the Krenitsky story, published in their words, with their permission:

This is our story. I know we are not alone.

In the winter of 2008-2009 for the first time in a very long time my husband had been laid off for more than a month.

Facing health issues of my own and a loss of income I started researching refinancing options. It has been one disappointment after another.

Back on July 21, 2009 my husband and I were offered a home mortgage loan modification through our mortgage company CHASE Finance.

We had approached them 5 months earlier looking to refinance, but simply received a form letter 4 months after the initial application saying we couldn't refinance due to their pre payment penalty on our current loan (However, we had already received all of our closing docs in overnight mail.)

We then asked what they could do to help, seeing my husband had been laid off through the winter months due to extreme winter weather and we were trying to catch up. I also had a brain tumor removed 5/27/09 so we were facing some unexpected hardships.

From 5/2009 - 7/2009 we were told they COULD NOT help us because we were not three months behind and until we were in foreclosure there was nothing they could do! WHAT??? Finally on July 21st we reached what we thought was a department that could help. We were told this loan modification program was implemented to help homeowner's get their interest rates and payments lowered to a more affordable amount.

Well my husband and I are beginning to think that the whole thing is a scam. No way can President Obama be aware of what these banks are doing to their customers with this program.

After three trial period payments they are suppose to lower your interest rate and payment. It's been over seven months. We have made 4 payments, we have never received any proposal with new interest rates and new payments. Our trial period payments were auto debited from our checking account as follows:

July 2009
September 2009
October 2009

After the October payment we then received foreclosure papers telling us we needed to "Act Immediately". I called the 800 number on the papers and the young man from the Loss Mitigation Dept told me NOT to make any additional payments. We had completed the trial period and would have documents sent to us within 2 weeks stating our new interest rate and new payment. He also stated not to get upset that 32,000 Chase customers were sent foreclosure notices in Error!!

Three weeks passed and nothing!! I then called the same 800 number and spoke to a different representative (I don't have her name in front of me, but I have it) She stated that we needed to make another payment because our file was not complete and another 4506-T was needed. I had just authorized for Jacob to initial our fifth 4506-T three weeks earlier.

On November 16, 2009 we made our 4th payment. Keep in mind we have never received a single document from CHASE showing any of our four payments nor a document showing their proposal as to what our new interest rate/payment would be. Nothing.

In December we made the decision after numerous attempts to get them to send us a correct Mortgage statement NOT TO MAKE A PAYMENT. We have no idea where our money has been applied. One rep tells you one thing and yet another tells you something completely different.

My husband called on December 16th and was told we did not need to make a payment that our application was with the "decision maker" and we would have an email sent to us shortly. Our December mortgage statement arrived, and still no indication that a payment had been credited.

My husband called back December 28th and this time he was told the application could not be completed and they needed another 4506-T. We then received a letter saying that they needed additional information and I called on January 15th. A very rude rude supervisor informed me it was a "privilege" to be offered this loan and that all day long she handles irate customers "pleading their stories as to why they can't pay their bills" She also stated that CHASE does not show the credit of my payments on my monthly mortgage statement because they are 2 separate loans. She made it perfectly clear that we will owe the $8,000 showing in arrears and every penny of the late fees.

I hung up and that's when I contacted Fannie Mae. Helena the Level 2 officer is very nice but nine days have passed and she can not get CHASE to respond to her or her emails either. I did talk to her yesterday and she said to be patient and not to get upset. She said CHASE had never forwarded the file to them for consideration

So , that's where we are...and I am worried about how to protect my home. I need to be assured that my payments have been credited. No one would walk in to a store and make a 1459.79 purchase and walk away without a receipt. I have made four of those payments. No receipt, no statement, they have never even called my home asking for a payment. They don't call us at all.

We are just exasperated by this whole thing. I am not healthy and the stress is getting to me, but I will not let them steal my home.

It is now January 31,2010 and seven months have passed with nothing from CHASE.

I don't know what more we can do. Everything they asked we did and not just once...

*we have had to send 4 sets of paperwork (including hardship letters and pay stubs)
*we have had to sign or initial a 4506-T tax card every month
*we are receiving our monthly mortgage statements showing us $8,000 in arrears with hundreds of dollars in late fees
*we do not have a single piece of paperwork showing the payments they auto debited from our account for the trial period which amounts to $ 5838.80
*we have not received one call from them updating us on the status, and when we call them we speak to someone different each time and are never given the same information
*we have been told by several CHASE loss mitigation reps NOT to make any more payments because we had completed the trial period and our documents were being emailed
*we have received 2 sets of papers saying we were in foreclosure only to be told when we called that the papers were mailed in error
*we have been rudely talked to*we found out by calling Fannie Mae in Washington directly that the application has never even been finalized and sent to them for review.

What are we suppose to do? They are destroying our credit...the stress has been unbearable...we have spent hours on the phone and typing complaint letters and most recently wrote to our state Congress.

This is such a disgrace.

We had never been late, we had good credit with them, we just wanted what we were entitled to.

CHASE ought to be ashamed of what they are doing, but they don't care.

And to think that through all this mess, I had surgery to remove a brain tumor (benign thank god).

Seriously...enough is enough

We are so discouraged. I made it perfectly clear to the Fannie Mae Level 2 rep who is trying to help us that I will not make another payment to CHASE until they start to treat us with some respect, send us paperwork with some type of proposal, send us a current monthly loan statement documenting the payments we have made and removing the erroneous $493.00 late fees.

I cannot believe that President Obama will let these banks get away with such scams that are ruining the lives of a lot of good people. All we wanted was an interest rate lower than 8.5 and allowing us a lower mortgage payment. Please Please Please..we all need your help.

Sincerely,

Margaret Krenitsky

As is clear from many reports from the trenches, mortgage servicing companies continue to wreak havoc in the lives of consumers nationwide.

Whether it is due to negligence, deceptive practices, accounting mistakes, or outright fraud, homeowners continue to be harmed by abusive practices leveled at them by the mortgage servicing company that handles (or rather, mishandles) their mortgage payments.

These continued and growing complaints from homeowners and credit cardholders continue to back-up the need for stronger financial regulations and oversight. As many of you know, the Obama Administration in June released its comprehensive plan for regulatory reform. Included in the President's plan, was the creation of the Consumer Financial Protection Agency (CFPA), a stand-alone consumer protection regulator.

The proposed CFPA's mission is to put consumer protection first - ensuring "transparency, simplicity, fairness, accountability, and access in the market for consumer financial products and services."

Killing the CFPA is the financial services' top priority. Hundreds of their lobbyists are flooding Capitol Hill and are logging thousands of calls into Congressional offices. If you agree that we need reform within the financial industry, call or e-mail your elected officials today, and tell them that we need a strong and effective Consumer Financial Protection Agency.

Cutting Credit and Its Snowball Effect on Consumers and our Economy

2010-01-29T14:09:21Z

While the banks sit high and mighty on their perch on the shoulders of the average American citizen, homeowners struggle to come to terms with the fact that the banks simply do not care about helping them out.

Today's economy has a stranglehold on lots of consumers who face a daily struggle to pay their debts and survive despite the fact that the banks have arbitrarily cut off their credit. Not only does this make it more difficult for homeowners to stay in their home, but it also makes it more difficult for them to obtain new credit now or in the future.

Unfair, and often fraudulent practices and irresponsible behavior on the part of banks and mortgage servicing companies have left thousands of consumers without a means to pay their bills, obtain new credit, or find employment. As banks slash home equity lines and decrease credit card limits without cause or justification, families continue to be placed at risk of losing their homes due to failure to refinance, modify loans or meet monthly mortgage payments. They are at risk of incurring late fees and penalties and end up growing their debt rather than reducing it, essentially making it impossible to keep their head off the chopping block when the foreclosure man comes a-knocking.

Surviving difficult economic times, whether caused by the loss of a job, a health crises or simply keeping up with the rising cost of living, credit often helps sustain a family -just as unemployment can. Whether it comes in the form of plastic credit cards or a mortgage agreement with your name on the dotted line, the ability to have credit is fairly certain to be the best way to survive when cash isn't in the picture. Regardless that neither the interest paid on credit cards or unemployment funds are allowable deductions anymore -as once were, and again should be, each form of assistance is a Godsend to a struggling family trying to weather this recession.

Unfortunately, consumers cannot access credit without the help of the financial industry -and what outrages most consumers is their seeming lack of interest in returning the help taxpayers extended to them when needed. Not only have consumers been unable to get assistance -but these actions or in-actions by lenders and mortgage servicers are equated to kicking someone when they are down -and then laughing about it. While having credit suspended might not look like a problem at first glance, it has been to countless consumers who have been the unwitting victims of unfair lending and mortgage servicing actions, especially when dealing with interest rate hikes, forbearance agreements or the slashing of home equity loans and credit limits.

Decreasing credit limits not only takes buying power out of the hands of consumers, but it also creates a situation in which their credit scores begin to take a nosedive as the ratio of available credit to accessed credit tightens up. Lower credit scores equals fewer real opportunities to obtain new employment, auto loans, or credit of any kind whatsoever.

No one truly knows what the final outcome will be from the unfair mortgage servicing and credit card issuers actions that continue to flourish --despite the protests of consumers. The financial industry continues to lobby against any real financial reform. But consumers have had enough and though these growing complaints have caused a few politicians to take notice, consumers are now changing their own banking policies and moving their accounts to community banks and credit unions. Nonetheless, we have to wonder what it is going to take for someone who can make a difference to wake up and realize the true harm that these types of financial practices cause to our economy.

Elizabeth Warren; What part of we bailed you out do you not get?

2010-01-27T18:51:03Z

Harvard Law Professor and Chairman of the TARP Oversight Committee, Elizabeth Warren made another appearance on The Daily Show last night.

When sharing her knowledgeable viewpoint on CEO's, banks and people in power she declared, "They get it. And they work best behind closed doors." If the decisions are in their hands, she said, "Nothing, nothing will change. You know, I want to turn to these guys sometimes, and I want to say: what part of 'we bailed you out' do you not get? These are people who would not have their jobs because they would not have their companies."

Watch the below video -and read a few earlier blogs here for more of her insights on financial regulatory reform and why we need a Consumer Financial Protection Agency.

Read more about her appearance on the Daily Show over at the Huffington Post here.

Also take a moment and read a few consumer stories that help to humanize and shed light on why a CFPA with stronger financial industry oversight and reform is needed.

The Daily Show With Jon Stewart

Mon - Thurs 11p / 10c

Elizabeth Warren

www.thedailyshow.com

Daily Show
Full Episodes

Political Humor

Health Care Crisis

New Tech Identity Theft Protection Provides Security and Peace of Mind

2010-01-27T14:47:17Z

You can't stop identity theft, so you have to take measures to reduce your risk and the impact one can bring into your life before it occurs. In a more secure manner than ever, new technological identity theft protection measures can help safeguard consumers against becoming the victims of identity theft in the first place. With identity theft on the rise, guarding your personal information has never been as important as it is now. Staying informed to new proactive services can go a long way in keeping your information where it belongs: in your hands.

These new methods are redefining the steps people should take to protect themselves and safeguard their privacy and identity. They go above and beyond the typical steps that people follow, helping to protect consumers in a way that actually provides a blanket of security offering far more comfort than older solutions while also offering reliable protection. If only creditors would do their part in stopping identity theft by verifying in the first place who the applicant for credit really is, consumer vigilance would be a lot less burdensome.

LifeLock has just introduced several new high tech proactive options to their array of consumer protection services. I endorse their services and in the interest of full disclosure, LifeLock is a sponsoring friend and ally of my efforts at GiveMeBackMyCredit.com. However, it is equally important to me to further note that their sponsorship is not now, nor ever has been, my motivation behind establishing a relationship with them.

Anyone who knows me would agree: I say it like it is, and I don't hold back. I have done business this way since long before LifeLock was around. See, being a survivor of identity theft, inaccurate credit reporting, unfair credit card interest rate jacking and mortgage servicing errors is the dictator of my passion. I draw on those experiences for strength and wisdom. LifeLock has never and will never dictate my words or censor me in anyway. And they've never tried. They simply allow me to speak about what I am passionate about, and as you all know, that's consumer protection.

As a survivor of identity theft, I learned that no matter how safe you think your information is, it isn't. And no matter how simple it appears that you could prove your innocence, that isn't either.

I learned firsthand the enormous amount of time and overwhelming frustration involved in deterring, detecting and defending an identity theft. And equally important, I also learned it is essential to have a plan in place if you are not prepared to go it alone. Making various phone calls and dealing with repetitive paperwork isn't fun--been there, done that. I don't ever want to be solely responsible for protecting or restoring my identity again. In fact, as I write this, I am not sure to what other use my Social Security Number, name and date of birth are being put. You don't know what your personal information is doing while you aren't looking. Your information can be used to obtain medical services, loans, cell phones, cars, housing, employment, government documents -and more. It is often used to commit other crimes that can land innocent people behind bars.

I know the difficulty victims of identity theft face when trying to protect their identity and always coming up short in thwarting the bad guys. Once your Social Security Number and personal identifying information has landed in the hands of those who buy, sell and trade stolen information in any of the ten thousand plus underground identity theft chat rooms, it is irretrievable.

The misuse of personal information needs to be stopped if ID thieves are going to be stopped in their tracks. Among the latest available options that consumers have are the new laptop protection services safeguarding personal information even after a laptop has been stolen. LifeLock now offers their members Computrace LoJack for laptops, a premium service that provides strong proactive protection against identity theft. LoJack can track and locate stolen laptops so that personal information can be recovered and rendered useless to thieves.

LifeLock members can now also tap into additional protective services provided by the new LifeLock Command Center option. This option will alert members if their personal information is used for purposes beyond just credit. With continued reported data breaches, lack of law enforcement resources and sloppy creditor practices when extending credit, monitoring a broad base of potential sources of information that identity thieves can and do lift personal data from is the best strategy for protecting yourself, your money and your peace of mind.

Consumers can also follow these tips to prevent their personal information from falling into the wrong hands, and to lessen the damage if it does.

• Protect Your Social Security Number: Perhaps the most important number associated with your name, your social security number should be protected at all times. Never give the number out unnecessarily or leave documents that include your number lying around.

• Sign up for an identity theft protection service: These services provide important alerts for their members, letting them know in a timely fashion that something is amiss. Typically, this type of service goes well beyond the average credit monitoring service.

• Never store important account information on your laptop: If a thief does get hold of your laptop, any information that you store on it could be stolen. That is, unless you have signed up for LoJack.

• Shred your personal documents: Destroy important papers before throwing them in the recycling. Once you are finished with any documents that include any account numbers at all, shred them. Then recycle them.

• Review your credit reports: For many consumers, staying on top of what is in your credit report is the first step in identifying suspicious activity. As part of your proactive protection against identity theft, make sure you take advantage of your free annual credit report by ordering from the correct site online (annualcreditreport.com) or better yet, call the toll free automated line at 877-322-8228.

• Be aware of scams and hoaxes. Keeping up to date with the latest hoaxes and techniques criminals use to scam you can go a long way in keeping you from falling victim to any one of the many rip-offs in progress today.

• Make sure your computer is safe. Keep your virus protection software up-to-date. Avoid using unsecured wireless networks and be sure that you (or your children) don't have any peer-to-peer software on your computer as these systems leave easy access points for hackers, all providing an opportunity for someone to bypass your security and copy items from your computer, including photos, email, tax returns and other important documents.

Got Debt? Five Balance Transfer Mistakes to Avoid

2010-01-26T20:25:17Z

If you are stuck with a high-interest credit card and your credit card provider refuses to lower your interest rate, you may consider transferring your outstanding balance to a new card.

But simply put --borrower beware!

Before you agree to a balance transfer, make sure you know exactly what you are getting into. Balance transfer mistakes can cost you money, damage your credit score, and leave you deeper in debt.

Here are five mistakes you don't want to make -(and a couple options that may help)

1. Closing the Original Credit Card Account
After transferring an outstanding balance to a new credit card, many individuals close their old accounts. Closing your old account may seem perfectly reasonable, especially if you have no intentions of using the account again in the future. It can, however, have a negative effect on your credit score.

The age of your credit history is responsible for 15% of your credit score. If your original credit card account is one of your oldest accounts, closing it will shorten the length of your credit history and change the way your credit score is calculated. This can result in a lower score. In addition, the credit scoring formula takes into consideration the amount you owe on your revolving accounts and your spending limit. The lower the ratio is between the two, the better you can expect your credit score to be. When you close a credit card account, the spending limit is no longer factored into the credit scoring formula and your score my suffer.

2. Not Verifying the Spending Limit Ahead of Time
A credit card company will not notify you of the spending limit you qualify for until your initial application is approved. After the application is approved, you may call to inquire about your spending limit at any time. It is vital that you know your what your spending limit is on the new card before you initiate a balance transfer. If the amount of the balance transfer is greater than the spending limit on your new credit card, you may lose the low introductory rate by going over the spending limit with your transfer.

3. Not Considering Balance Transfer Fees
Some credit cards will charge you to transfer your balance. Balance transfer fees are often a percentage of the balance you are moving to the new card. These fees can be substantial if you plan to transfer a high balance. Some banks charge as much as 5% of your current balance to conduct a transfer. Therefore, if your current balance is $1000, you could expect to pay a fee of up to $50. If your balance is closer to $5000, however, your balance transfer fee could be up to $250.

4. Ignoring the Default Interest Rate on the New Credit Card
Low introductory rates on new credit card accounts are only temporary. After the introductory period, the interest rate will default to a higher rate. It is possible that your new interest rate could be as high as the rate on your old account. It could even be higher. Should this occur, you will be left repaying your debt under the same unfavorable terms you thought you had left behind. If you know your credit score, you can call the credit card company and ask which interest rate you qualify for. Although your interest rate is not set in stone, this will give you a good idea of whether you will end up with an interest rate similar to the one you already have.

5. Losing the Low Introductory Rate
If you do not closely follow the terms of your new credit card agreement, you may lose your low introductory rate before the rate is scheduled to expire. Making a late payment or going over your spending limit can cause the low introductory interest rate to be revoked, depending on your credit card provider. Read the fine print of your new credit card agreement to find out what will cause your interest rate to reset.

So who do you turn to for help getting out of debt quicker?

The answer to that question just might be yourself.

One way to bay off debt quicker is a little known system called "snowballing".

When using this method, it is all about paying your debts in the correct order. By paying off debts with the highest interest rate first, you can rid yourself of debt sooner than later and save thousands in interest payments.

In snowballing, you put as much money as you can afford on the higher rate card, and then pay only the minimum payment on the other debts. This calculator allows you to enter up to 20 different debts with their associated APRs, and the total amount you want to spend per month servicing your debts, and it'll work out the order in which you should pay your debts, together with the specific monthly payments you will need to pay. In the end, it shows you the date you will be debt free. It may take a little effort and work now -but in the end you will save thousands of dollars in interest and shave off years of debt.

Check with you local bank or credit union.
If you are considering a balance transfer -do so with care and full knowledge of what the transfer will cost you -in both time and money. If you looking to consolidate your debt in order to roll debt into a one payment loan, or find a credit card with a reasonable interest rate, I would suggest checking for various options you may find through your local neighborhood bank and credit union.

Slashing of Consumer Home Equity Loans Prompt Florida Senator to call for Hearings

2010-01-25T16:04:47Z

An earlier blog noted the filing of class action lawsuits over the illegal suspensions of home equity credit lines by Wells Fargo, WAMU, Chase, and others without cause.

The lawsuit alleges that the big banks engaged in mass reductions of Home Equity Lines of Credit (HELOC) limits and even suspended accounts, by falsely claiming that customers' incomes had been reduced, as a way to justify the suspensions. Here's an excerpt from a press release on the class action;

"The message to former WAMU customers and others is clear: Chase is coming after your home equity credit line," said attorney Jay Edelson, whose firm, KamberEdelson, LLC, (n/k/a Edelson McGuire, LLC) previously filed a similar lawsuit against CitiBank. "When banks take billions of dollars in taxpayer money, they have an extra duty to follow both the letter and the spirit of the law. We believe that congressional hearings should commence immediately," Edelson explained. (more)

Here's an interesting development on this issue from the state of Florida:

Incoming Senate President Calls for Hearings to Investigate Banks for Fraudulently Reducing Consumer Home Equity Loans;
Sen. Mike Haridopolos also calls on members of Congress to investigate these claims.

Incoming Senate President Mike Haridopolos today called for hearings in Tallahassee to investigate claims that after banks received hundreds of billions in federal bailout money they squeezed consumers and fraudulently or arbitrarily reduced Home Equity Lines of Credit (HELOC) to improve their own bottom lines.

"I have heard the stories of this happening across our state and our country, and the courts are filled with lawsuits," says Haridopolos (R-Merritt Island). "This needs to be investigated because if true it's outrageous. The very banks that are bailed out with taxpayers' money then stick it to homeowners?"

Haridopolos says he is asking his Washington counterparts to honor their promise to call hearings as well.

"When Congress gave away the taxpayers' money to the banks, they guaranteed the public that if the banks did not use it to lend money, they would immediately call for hearings and hold the banks accountable," says Haridopolos.

Indeed, Democrat leaders like Sen. Chris Dodd (D-Conn.) promised: "If it turns out that [the banks] are hoarding, you'll have a revolution on your hands. People will be so livid and furious that their tax money is going to line their pockets instead of doing the right thing. There will be hell to pay."

"Since then, we have seen the President sit down with the leaders of the big banks and refuse to meet with the average Americans who are being hurt by their practices," Haridopolos says. "Because of this, it's of little surprise that Democrat leaders, like Sen. Durbin, have since conceded that the banks control the federal government. I can tell you, the banks may control D.C., but the people control Florida and we're going to keep it that way."

Haridopolos was referring to Sen. Dick Durbin's confession last year that as ""hard to believe in a time when we're facing a banking crisis that many of the banks created - [the banks] are still the most powerful lobby on Capitol Hill. And they frankly own the place."

Although federal regulations permit account suspensions when financial circumstances adversely change or when properties suffer a substantial decline in their property, many homeowners are claiming that the banks are use false pretenses as excuses to call in home loans.

It is common for families to take out a Home Equity Line of Credit to make improvements to their homes to use as a cushion should they need extra cash for emergencies. There have been a slew of private lawsuits against the biggest banks that received loans including JP Morgan Chase (NYSE:JPM), Washington Mutual (NYSE:WM), CitiGroup (NYSE:C) and Wells Fargo (NYSE:WFC) that they engaged in such behavior.

Haridopolos said he wants his hearings to include testimony from homeowners, consumer groups, and the banks so that everyone has a chance to publicly weigh in.

Source:
PRNewsChannel

For additional information on mortgage servicing practices, and lender practices, read a few earlier blogs. Also see Talk Back South Florida - Sun Sentinel Editorial Blog.

New Twist On Counterfeit Check Scheme Targeting U.S. Law Firms

2010-01-21T15:32:16Z

The FBI continues to receive reports of counterfeit check scheme targeting U.S. law firms. As previously reported scammers are sending e-mails to lawyers claiming to be overseas and seeking legal representation to collect delinquent payments from third parties in the U.S.

The law firm receives a retainer agreement, invoices reflecting the amount owed, and a check payable to the law firm. The firm is instructed to extract the retainer fee, including any other fees associated with the transaction, and wire the remaining funds to banks in Korea, China, Ireland, or Canada.

By the time the check is determined to be counterfeit, the funds have already been wired overseas.

In a new twist, the fraudulent client seeking legal representation is an ex-wife"on assignment" in an Asian country, and she claims to be pursuing a collection of divorce settlement monies from her ex-husband in the U.S.

The law firm agrees to represent the ex-wife, sends an e-mail to the ex-husband, and receives a "certified" check for the settlement via delivery service. The ex-wife instructs the firm to wire the funds, less the retainer fee, to an overseas bank account. When the scam
is executed successfully, the law firm wires the money before discovering the check is counterfeit.

All Internet users need to be cautious when they receive unsolicited e-mails. Law firms are advised to conduct as much due diligence as possible before engaging in transactions with parties who are handling their business solely via e-mail, particularly those parties claiming to reside overseas.

See public service announcement posted to the IC3 web site regarding a similar Asian extortion scheme

Big Banks Accused of more Fraud; non-reported cash on side for short sales

2010-01-19T15:58:23Z

CNBC's Diana Olick reports that for homes with two mortgages, the second mortgage holder is often demanding a short sale buyer pay them in cash on the side, and they're not disclosing it. And that's against the law.

Diana Olick from CNBC (see below video) has uncovered evidence of growing fraud surrounding Short sales - when the lender allows the home to be sold for less than the value of the loan. And according to the National Association of Realtors, about 12 percent of all home sales by the end of 2009 were short sales.

Excerpt:

In order for a short sale with two loans to happen, the second lien holder has to drop the lien. If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.

In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.

That's all legal. But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money hidden -"on the side" from either real estate agents or the buyers in the short sale -clear violation of RESPA disclosure laws.

Read much more here at realtycheck.cnbc.com and from the Source at CNBC

Scam Alert: Beware of UPS Phishing Scam

2010-01-13T16:33:22Z

A UPS scam is circulating throughout the web in the form of an email that lands in potential victims mailbox. It can be dangerously convincing, especially to those who often receive packages from UPS. (See email below)

Victims are lured into clicking on an embedded link to go to their site and make arrangements to pick up the package at UPS.

It's a scam.

Don't download or click on any link. The link is devised to download malicious spyware on your computer.

Here's what was contained in an email I received this morning;

Subject: UPS Tracking Number 1540021

Hello!

The courier company was not able to deliver your parcel by your address.
Cause: Error in shipping address.

You may pickup the parcel at our post office personaly!

Please attention!
The shipping label is attached to this e-mail.
Please print this label to get this package at our post office.

Please do not reply to this e-mail, it is an unmonitored mailbox.

How to Protect Yourself from Scammers During the 2010 Census

2010-01-13T14:50:57Z

With the beginning of a new decade, the 2010 census is in place to gather information for the Census Bureau regarding housing, economic, and demographic information. This data is used to determine the number of Congressional representatives each state gets as well as to distribute federal funds

While this is a legitimate undertaking, more than a few scammers will use it in an effort to steal personal information from unsuspecting individuals for the purpose of committing identity theft. Some will even use this as an opportunity to gain entry into your home so they can steal from you. Scammers will suddenly be working overtime to try and take advantage of this situation, especially in the early days before the word gets out and people morph into hyper vigilance against them.

Since scammers will use phone, postal mail, e-mail, and in-person approaches to gain your information, it is important to know how to recognize an authentic representative or an authentic document. The Census Bureau has specific guidelines that it follows when taking a census. Therefore, there are strategies that you can use to determine whether or not the individual posing as a census taker is indeed a legitimate representative from the Census Bureau.

In Person

The census questionnaire is sent via postal mail, so be wary of anyone trying to tell you that they have the questionnaire in their possession. If you fail to complete the form and send it back in as required by federal law, someone from the Census Bureau will show up at your doorstep. Plus, if additional information is needed, a census worker may show up at your doorstep looking for it. Your best strategy is to mail back the census form promptly. This will help you to avoid having a scammer show up pretending to be a real census worker.

If someone comes to your home claiming to be a census worker, step outside to speak with the individual and do not invite them into your home. If you are outside, neighbors or people who are passing by can see you and assist you should you need help. Use the tips here to help you verify the individual's status as a census worker.

Census workers must carry an official government badge that clearly identifies them. This badge includes the individual's name, so you can ask for a second form of identification with their name on it for comparison. Along with the badge, a legitimate census worker carries a confidentiality notice and a binder containing a list of the people they must contact regarding the census. He might also have a small, handheld device or and an official census canvas bag.

Emails

Typically, the Census Bureau will not send emails to anyone. If they do send any emails, they will not ask for personal information. If an email does ask for this type of information,it's a phishing email and has not been sent from the bureau. If you do receive any emails claiming to be from the Census Bureau, do not click on any links or open any attachments as they might contain spyware or a computer virus.

Postal Mail

Postal mail coming from the Census Bureau is marked as such and typically includes the phrase "Official Business of the United States."

Phone Calls

Census phone calls are typically related to surveys only. Do not provide the following information to anyone claiming to be a Census Bureau representative on the phone: social security number, birth dates, credit card numbers, and bank account numbers.

Points to Remember

Census workers will not ask to enter your home at any time. They will not ask you to submit information online or thru email. They will only ask you questions that are included on the official census form including name, age, gender, and race. If they ask for any financial information, it will just be for your salary range and not account numbers or information. They will not ask for donations or fees. So if someone comes by expecting to get paid, you can be sure they are scamming you.

When in doubt, contact the census bureau concerning any suspicious contact.

What will you say to Bank of America?

2010-01-11T17:25:24Z

For lots of us, the goal for 2010 is to make it as little like 2009 as possible. And for millions of Americans, that means trying to get a fresh start on their mortgages after Wall Street ravaged the economy.

But the big banks are making it next to impossible for them - piling on fees, then hiking up interest rates to squeeze out every last drop of profit. And one bank, Bank of America, is sitting on more of those bad mortgages than anybody else.

Tomorrow, homeowners from the PICO National Network are holding a meeting with a team of Bank of America executives.

This is a rare opportunity to sit, face-to-face, with the bank holding more bad mortgages than any other institution in America, and show them the devastation they've caused. The plan is to show them the damage their bank has done can't fit into one room.

SEIU is asking you to submit your story for a meeting with BofA execs! Let BofA know how Wall Street's greedy behavior has hurt you and your community by using the form to the right to share your story.

You have an opportunity to hold Bank of America accountable for what they've done. Here are a few of your recent stories about BofA, shared on this blog

Share the news and link and help them help you.

Source: SEIU