California Debt Blog

Six Ways in Which Identity Thieves Steal Your Information

Most people have probably heard of identity theft protection services, such as LifeLock. LifeLock and other similar services offer to monitor a customer’s credit activity and alert the customer when his or her personal information is being used to apply for credit cards or various types of loans, order checks, or take other actions to steal the customer’s identity.

 

But how do you keep identity thieves from obtaining your personal information in the first place? According to the Federal Trade Commission, identity thieves typically obtain your information in one of six ways:

 

• Dumpster diving. This means rummaging through trash in order to find account information, social security numbers, or other personal information.
• Skimming. This involves the identity thieves hooking up electronic devices to the machines that process credit cards. Once your card is scanned, they can access your account number.
• Phishing. This means pretending to be a financial institution or a company and sending emails (or pop-up ads) that direct you to a website that appears to be the company’s site. Once you are there, they will prompt you to enter your account information, and will use that to access your account.
• Changing your address. Identity thieves sometimes complete a change of address form for their victims, directing the victim’s mail to a new address. They then use the credit cards statements, bank statements, and other mail the victim receives to access his or her identity.
• Stealing. This includes stealing purses, wallets, mail, or anything that can be used to access someone’s identity.
• Pretexting. This means pretending to be a financial institution, credit card company, or another company for the purposes of obtaining financial information.

 

Next week I’ll discuss how to prevent thieves from obtaining your personal information, and what you should do once they’ve gotten it.

Company Blacklists Customers Requesting Credit Card Refunds

According to this article from WalletPop.com, a consumer watchdog site, the company BadCustomer.com keeps a list of customers who request a credit card reversal after making a purchase with a company. One single credit card reversal can land customers on the list. Companies can then obtain the list from BadCustomer.com and reject customers who have requested credit card reversals in the past.

 

Previously, if a customer wanted to remove his or her name from the list, BadCustomer.com charged a $99 fee. Recently, the founder of the company announced the company would no longer charge that fee and is trying to make the list more user-friendly in order to avoid blacklisting customers who have a valid reason to request a credit card reversal.

 

Many consumer groups still find the list troubling. Customers can legitimately request credit card reversals for a variety of reasons, including receiving defective merchandise or the wrong merchandise from the company. However, companies claim they need a mechanism to identify customers who frequently purchase merchandise, use it, and then return it, requesting a refund. Credit card reversals cost U.S. merchants $11.8 billion in 2009 alone.

 

Websites that blacklist customers do not fall under the Fair Credit Reporting Act, so therefore they are not subject to the same types of regulations as credit reporting bureaus like Experian and Equifax.

 

What should you do if you find yourself on a credit card blacklist? Contact the company you originally did business with and seek to resolve the credit card reversal issue. Carefully document your interactions with that company, then contact the owners of the blacklist, providing them with documentation that you had a legitimate reason to ask for a reversal.

Debt Collectors’ Claims Beginning to Cause Doubt Among New York Judges

According to this New York Times article, during the current recession, debt collectors in New York have begun to file suits against debtors in record numbers – and often, this occurs without sufficient evidence that the collectors have the right person or the debtor owes the debt. Finally, judges in New York are beginning to strike back at abusive practices by collectors.

 

Some of the recent egregious collection cases New York courts have dealt with include:

 

• A debt collection company sued the wrong person, but pursued the case anyway. A Manhattan judge threw the case out.

 

• In a case against a Long Island woman, she discovered that she had been sued, and a process server claimed it served her in 2004 at an address she hadn’t lived at since 1998. A Nassau County judge said a debt collection firm that obtained the judgment did not provide “a scintilla of evidence” she even owed the debt.

 

• A Brooklyn judge reprimanded an attorney who claimed she remembered mailing a document to a credit card holder, despite the fact the document had been mailed three and a half years earlier. The document formed the basis of the collection lawsuit.

 

• A Staten Island judge noted that a credit card company was claiming 28 percent on a balance due, which is illegal under New York law. The company argued that the card was issued by a bank in Utah, which has no usury law. The judge ruled the agreement was not enforceable in New York.

 

Part of the problem in New York stems from businesses that purchase debts, with lists of names of debtors and amounts due, for pennies on the dollar from credit card companies. They often have no evidence about the debtors. The businesses then filed thousands of lawsuits without evidence to back up their claims.

FAQ: What is a debt collector forbidden from doing?

Question: I think my debt collector is harassing me. What is the debt collector legally forbidden from doing to collect the debt?

 

Answer:  The Federal Trade Commission publishes a guide for consumers that details exactly what debt collectors can and cannot do under the Fair Debt Collection Practices Act (FDCPA) when they are attempting to collect the debt. The FDCPA applies to most consumer debts except those incurred in running a business.

 

Collectors may not:

• contact you at inconvenient times or places (such as early in the morning or late at night);
• harass you with threats of harm or obscene language;
• lie to you, such as about the amount you owe;
• tell you you’ll go to jail if you don’t pay;
• tack on extra interest that is not allowed under law;
• contact you at work if you’ve told them not to;debt co
• discuss your debt with anyone other than you, your spouse, or your attorney;

 

If a debt collector has violated the law, you can sue the collector in state or federal court within one year of the alleged violation. You can be compensated for any damages the debt collector’s actions caused, and you can also be awarded court costs, attorney’s fees, and $1,000.

And remember that California's Rosenthal Act applies many of these same rules to the original creditor.