Investigators Report: Identity Theft Prevention Efforts Not Enough

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Report: Identity theft efforts lacking

WASHINGTON (AP) -- Nearly two years after an embarrassing flap in which veterans' personal information was put at risk of identity theft, federal agencies are still not doing all they can to prevent further lapses, investigators have found.

Most of the two dozen federal agencies examined by the Government Accountability Office, Congress' investigative arm, had not implemented five federal recommendations aimed at protecting personal information. Only two agencies -- the Treasury and Transportation departments -- met each of those recommendations. Two others -- the Small Business Administration and the National Science Foundation -- had met none of them, the GAO found.

The other 18 agencies met the recommendations to varying degrees. The recommendations were among those issued by the White House Office of Management and Budget following the 2006 VA incident, when a computer hard drive containing millions of names, Social Security numbers and birth dates was stolen from a VA employee's home in Maryland. The hard drive was later recovered intact.
A warning to Floridians -but it can happen anywhere...

TALLAHASSEE, FL - Attorney General Bill McCollum today issued a consumer advisory warning Floridians about the increasing number of credit repair scams and simultaneously announced that his office's Economic Crimes Division filed two lawsuits today, one against a Broward County attorney and one against a Clay County couple. The lawsuits allege the Broward attorney deceptively marketed misleading debt management services and the Clay County couple charged egregious fees for debt negotiation services that were never provided.

"Consumers who are trying to reduce or eliminate debt are working toward an admirable goal and it is unconscionable to take advantage of these efforts," said Attorney General McCollum. "Florida citizens should always be wary of companies or individuals who are making unreasonable promises or demands, either to restore credit or reduce debt."

Laura L. Hess of Coral Springs, her Broward County law firm and two other Florida-based companies she controls are named in the first lawsuit, which states Hess allegedly signed thousands of credit card debtors up for debt management services, claiming the law firm would provide legal services to cancel debts for pennies on the dollar. Representatives of Hess allegedly told consumers that the companies had audited the consumers' accounts and found numerous violations under the Fair Credit Billing Act, then sent notices to creditors disputing all charges. Consumers were falsely told that once these notices were issued, the consumers did not have to pay creditors and creditors could not sue or otherwise take action against them. The Attorney General's lawsuit alleges Hess's deception led to lawsuits and other actions against several debtors.

The second lawsuit, filed today in Clay County Circuit Court, alleges John J. Hacker and Christa L. Caparella, operating as United Debt Solutions, promised consumers that they could reduce their debts by 50 percent or more and demanded fees that greatly exceeded legal limits for debt negotiators. According to the lawsuit, Hacker and Caparella instructed customers to stop paying creditors and instead divert what they would have paid to the couple. Instead of contacting creditors to negotiate debt reductions, the lawsuit alleges the two simply pocketed the money. Requests for refunds were ignored and when their business ran short on funds, Hacker and Caparella debited their customers' accounts without permission. The Attorney General's Office has received nearly 100 complaints about the pair from all over the United States.

The Attorney General reminds consumers that they are entitled to one free credit report every 12 months, available, and should beware of companies that offer quick solutions for clearing bad credit. Credit repair companies claiming they can remove negative information from a credit report are not being honest. Accurate information within seven years of the reporting period, or 10 years if the information relates to a bankruptcy, cannot be erased from a credit report. The only information that can be changed are items that are actually wrong or are after the reporting date.

Some credit repair schemes offer to "hide" bad credit by helping consumers establish a new credit identity. The company may direct the consumer to apply for an Employer Identification Number (EIN) from the Internal Revenue Service, and to use the EIN in place of his or her Social Security number when applying for credit. This practice, known as file segregation, is a federal crime. MORE

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