I've Been Mugged

FTC Seeks Information From The Public About How Identity Theft Impacts Elders

The U.S. Federal Trade Commission (FTC) seeks information from the public about how identity theft and fraud impact senior citizens. According to the Bureau of Justice statistics, 11.7 million people, about 5 percent of the population ages 16 or older, were victims of identity theft between 2006 and 2008. The FTC is concerned that:

"... seniors may be particularly susceptible to identity theft. They are often targeted for phishing scams; some seniors have granted powers of attorney giving wide access to their personal information; and most seniors' Medicare cards list their Social Security numbers. In addition, the personal information of senior citizens may be vulnerable in hospitals, nursing homes, and other care facilities."

To learn about the problem, the FTC seeks:

• Original research about the scope of identity theft and elders,
• The types of scams (e.g., phishing, tax, power of attorney, door-to-door) targeting elders,
• Obstacles to fighting or preventing this identity theft,
• Solutions by both the public and private sectors, and
• Any related issues

The FTC focuses upon enforcing laws, sharing its identity-theft complaint data with local law enforcement, and educates both consumers and businesses about data security. The FTC has brought actions against 35 companies for failing to adequately safeguard the sensitvie consumer data stored. In the summer of 2011, the FTC held a forum on the impacts upon children of identity theft. In September 2011, the FTC testified before Congress (Adobe PDF) about the problem and the actions it was taking.

Comments and submissions must be received by July 15, 2012. Information can be submitted in electronic or paper formats. Submissions should be mailed or delivered to:

Federal Trade Commission
Office of the Secretary
Room H-112 (Annex L)
600 Pennsylvania Avenue, N.W.
Washington, DC 20580

Submissions received will be made public on the FTC website.

The FTC helps consumers to prevent fraudulent, deceptive, and unfair business practices. It also provides information to help consumers spot, stop, and avoid them. If you have been a victim of identity theft and fraud, you can file a complaint in English or Spanish at the FTC Complaint Assistant website, or call 1-877-FTC-HELP (1-877-382-4357). The FTC compiles complaints it receives into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.

How To Get Help And File Complaints About Private Student Loans

To complete college and/or graduate-level study, many consumers took out student loans. According to the Consumer Financial Protection Bureau (CFPB):

"Student loans have now surpassed credit cards as the largest source of unsecured consumer debt... unlike federal student loans, private student loans do not generally have the same borrower protections such as military deferments, discharges upon death, or income-based repayment plans."

More help is available. The CFPB announced that it provides assistance for consumers who are experiencing problems with taking out a private student loan, repaying their private student loan, or managing a student loan that has gone into default and may have been referred to a debt collector:

• Before applying for loans, students should read the financial aid shopping sheet. Some consumers have already submitted feedback to the CFPB about what they want in this draft disclosure sheet. The CFPB will use this feedback in crafting future disclosure guidelines for lenders.
• Students who already have loans can use the Student Debt Repayment Assistant interactive, online tool to discover new repayment options.
• Borrowers who are experiencing difficulties paying loans, managing loans, or loans that have gone into default can now submit complaints at the CFPB website about private student loans. the types of complaints include: payment difficulties, confusing advertising or marketing terms, billing disputes, deferment issues, debt collection problems, and credit reporting issues.

Borrowers can also submit complaints to the CFPB via a toll-free phone number (1-855-411-2372), via fax (1-855-237-2392), and via postal mail (CFPB, P.O. Box 4503, Iowa City, Iowa 52244).

Private student loans are issued by banks, credit unions, schools, and similar lending institutions. If you aren’t sure what kind of loans you have, the CFPB advises students to visit the National Student Loan Database System for Students and select “Financial Aid Review” for a list of all federal loans made to you. Click each individual loan to see who the company is that collects payments from you.

Complaints about federal student loans (e.g., Direct, Stafford, Perkins, etc.) should be submitted to the U.S. Department of Education. The CFPB will automatically forward complaints it receives about federal student loans to the Department of Education.

BCBS Of Tennessee To Pay $1.5 Million To HHS To Settle 2009 Breach

Blue Cross Blue Shield of Tennessee (BCBST) announced a settlement agreement with the U.S. Department of Health and Humans Services (HHS) about its 2009 data breach which exposed the medical records of about 500,000 patients in 32 states. Terms of the settlement agreement require BCBST to pay a $1.5 million penalty and submit to a 450-corrective action plan.

HHS had alleged in a lawsuit that BCBST had violated the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rules. The HIPAA Security Rules require covered health care organizations to notify affected individuals of any breach involving their health information, and to notify HHS and the news media about any breaches affecting more than 500 consumers.

HHS disclosed in a news release:

"... BCBST failed to implement appropriate administrative safeguards to adequately protect information remaining at the leased facility by not performing the required security evaluation in response to operational changes. In addition, the investigation showed a failure to implement appropriate physical safeguards by not having adequate facility access controls; both of these safeguards are required by the HIPAA Security Rule."

The 450-day corrective action plan requires BCBST to:

• Review, revise, and maintain its Privacy and Security policies and procedures,
• Conduct regular and robust trainings for all BCBST employees covering employee responsibilities under HIPAA, and
• Perform monitor reviews to ensure BCBST compliance with the corrective action plan.

SAIC To Pay $500.4 Million to Settle Suit With U.S. Attorney And City of New York

Last month, Science Applications International Corporation (SAIC) announced a settlement with the U.S. Attorney Office for the Southern District in New York and with the City of New York about the company's CityTime system. Terms of the settlement require SAIC to pay $500.4 million in restitution and penalties, and an independent monitor selected by the U.S. Attorney's Office will review certain policies and practices by SAIC for three years.

CityTime is an automated workforce management system used by about 163,000 New York City employees in 65 agencies. According to a press release (Adobe PDF) by the U.S. Attorney's Office:

"Under the agreement, SAIC will forfeit a total of $500,392,977 to the Department of Justice, and forgive more than $40 million still owed by the City to SAIC in connection with the CityTime project. In a Statement of Responsibility (the “Statement”) that was part of the agreement, SAIC acknowledged that it failed to properly investigate a 2005 ethics complaint filed by a whistleblower alleging, among other things, that the project’s Program Manager, Gerard Denault, had to be receiving kickbacks on the project from the single source subcontractor he had hired to perform the work. SAIC also accepted responsibility for the illegal conduct alleged against Denault and admitted to by Carl Bell, who served as Chief Systems Engineer in SAIC’s New York City office."

The City of New York had selected SAIC's CityTime system to modernize its timekeeping and payroll systems across City agencies. In 2000, SAIC became the lead contractor on the City's CityTime project, with a value then of approximately $73 million. The Washington Post reported recently:

"Last year, SAIC said it removed three top executives — Deborah Alderson, president of the company’s defense solutions group; John Lord, her deputy; and Peter Dube, general manager of the enterprise and mission solutions business — although the company said there was no evidence that any of the three were involved in the fraud."

SAIC, a Fortune 500 scientific, engineering and technology applications company employs about 41,000 people worldwide, and about 93% of its business is generated by government contracts. In 2011, SAIC was involved with a TRICARE data breach that exposed the sensitive personal data of 4.9 million active and retired military personnel and their families.

Your Rights And The Differences Between The Three Types Of Plastic In Your Wallet Or Purse

While this blog has covered a variety of banking issues, one of the more important issues is that consumers need to know about the three types of "plastic" in your wallet or purse. Otherwise, you are likely to be "mugged" by your bank or card issuer.

As part of National Consumer Protection Week, the U.S. Federal Deposit Insurance Corporation (FDIC) listed the differences between credit, debit and prepaid cards. There are important differences about how interest rates, fees, and your liability apply. Your rights vary greatly with the type of "plastic" you choose to use.

What protections do consumers have with prepaid cards? How are prepaid cards different? The first thing you need to know is that there are several types of prepaid cards:

• "General purpose reloadable" (GPR) cards: these carry a brand of a card network (e.g., Visa, MasterCard) and can be used wherever that brand is accepted
• Payroll cards
• Gift cards

Prior blog posts have discussed payroll cards from Bank of America and the Walmart MoneyCard. How prepaid cards work:

"... allow consumers to spend only the money deposited onto them, can have a number of different features. For instance, some gift cards may be used only at a single merchant; most GPR cards may be used to pay for purchases and access cash at ATMs."

When using a prepaid card, your liability is different from a credit or debit card:

"Liability depends on the type of funds on the card. If the card is a payroll card, then the liability rules are the same as for debit cards. But if the card is a general purpose reloadable card or a gift card, then there are no protections to limit your liability under federal law."

What prepaid card issuers (e.g., retail store, employer, bank) must tell you in the prepaid card agreement varies:

"Disclosures depend on the type of card. For example, payroll cards must disclose any fees and the error resolution process, but a GPR card does not have any disclosure requirements. In addition, gift cards must disclose the terms of dormancy fees, whether there is an expiration date, and any other associated fees."

Similarly, your rights and access to statements are different with prepaid cards:

"Payroll cards must provide either a periodic statement or account balance by telephone as well as electronic transaction history. GPR cards and gift cards do not have periodic statement requirements under federal law."

When terms change for a prepaid card, your rights about advance notice of changes are different, too. With prepaid cards, you generally don't get as much advance notice as with credit cards (45 days):

"Payroll cards must provide 21 days notice before making changes to fees charged or the liability limits for unauthorized transactions. GPR cards and gift cards are not required to do so under federal law."

Some people like prepaid cards because they can avoid interest rates. It is wise for consumers to fully understand the types of fees that apply to prepaid cards:

"GPR cards and gift cards have certain restrictions on dormancy fees charged. There are no specific requirements related to payroll cards under federal law."

So, you are probably wondering if prepaid cards are a good deal, or not. That answer depends upon your financial situation and the type of prepaid card you expect to use.

Since I already have checking and savings accounts at a bank, prepaid payroll cards are of no value to me. I find extremely troublesome the lack of restrictions on payroll cards, which means the banks can change terms, fees, and interest rates whenever they want; and as high as they want.

If you don't have a checking account, then a payroll card may benefit you. (Given the fee schedules and lack of restrictions, payroll cards will definitely benefit the banks but not necessarily consumers.) However, closely read the card agreement and fee schedule first. You may be better off (e.g., fewer fees, lower rates) opening a checking account instead at a community bank or credit union.

I still find retailers' prepaid gift cards (e.g., Dunkin' Donuts, Stop 'n Shop, Cheesecake Factory) useful for some holiday or birthday gifts, but the lack of agreements with many prepaid gift cards is troublesome. The lack of an agreement means the card issuer can change things whenever they want and not notify you. I will likely reduce my use of prepaid gift cards to only those that have card agreements.

What's your opinion? Do you use prepaid cards? If so, which types? If not, why not?

HSBC Agrees To Pay $5.25 Million Settlement To NCUA

Last week, the National Credit Union Administration (NCUA) announced a settlement agreement with HSBC. HSBC hs agreed to pay $5.25 million to the NCUA for a complaint about its sale of residential mortgage-backed securities to five failed credit unions. The settlement agreement does not require HSBC to admit fault.

Similar to FDIC and the banks it oversees, the NCUA charges the credit unions it oversees with fees to cover failed credit unions and to protect depositors' assets. The NCUA uses the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) to cover failed corporate credit unions. In this instance, the true risk of the mortgage-backed securities sold to corporate credit unions allegedly wasn't disclosed and led to the failed credit unions. Any payments the NCUA collects is used to offset future fees the NCUA charges for the TCCUSF.

The NCUA had filed five lawsuits against various securities firms, and had negotiated settlements with Deutsche Bank Securities ($145 million) and Citigroup ($20.5 million).

Corporate credit unions provide various services (e.g., short-term loans, check clearing, electronic funds transfers, ATM networks) to the consumer credit unions they serve. Consumer credit unions are the credit unions which we consumers join. Corporate credit unions are chartered by the NCUA or states.

In its 2010 annual report, the NCUA listed the following corporate credit unions:

Corporate Credit Union Name	State	Assets (Mill)	Members
Corporate America CU	Alabama	$3,701.7	369
First Corporate	Arizona	$979.4	51
Western Bridge Corporate Federal	California	$16,756.3	1,010
System United Corporate Federal CU	Colorado	$2,091.3	363
Southeast Corporate	Florida	$2,561.5	390
Georgia Corporate Federal CU	Georgia	$1,737.1	171
Iowa Corporate Central CU	Iowa	$108.2	159
Members United Bridge Corporate Federal	Illinois	$10,012.9	2,166
Kansas Corporate	Kansas	$302.3	148
Kentucky Corporate	Kentucky	$363.3	105
Louisian Corporate	Louisiana	$146.7	172
Eastern Corporate	Massachusetts	$507.5	278
Tricorp	Maine	$617.1	184
Central Corporate	Michigan	$2,394.3	359
Missouri Corporate CU	Missouri	$501.0	223
Treasure State Corporate CU	Montana	$386.3	63
First Carolina Corporate	North Carolina	$1,917.7	172
Midwest Corporate	North Dakota	$181.7	60
Corporate One Federal CU	Ohio	$2,881.1	768
MidAtlantic Corporate	Pennsylvania	$3,025.7	888
Volunteer Corporate	Tennessee	$1,351.7	256
Southwest Bridge Corporate Federal	Texas	$7,745.3	1,377
VA Corp	Virginia	$1,056.5	229
Corporate Central CU	Wisconsin	$1,623.7	281
West Virginia Corporate Federal CU	West Virginia	$228.1	110
U.S. Central Bridge Federal	Kansas	$18,412.9	56
Total		$81,591.1	10,428

FTC Survey: The Good And Bad Experiences Of Identity-Theft Victims With Consumer Reporting Agencies

The U.S. Federal Trade Commission (FTC) released the results of its survey of consumers who had reported to the FTC that they were identity-theft victims. The survey assesses consumers experiences with recovering from identity theft and contacting the national consumer reporting agencies (CRAs). The survey also assesses how consumers exercise their rights under the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACTA - 2003).

Overall findings:

• 68% of survey respondents were somewhat or very satisfied with their overall experiences with the national consumer reporting agencies (e.g., Equifax, Experian, and TransUnion), but many consumers said it was difficult to reach a live person.
• Less than half of the respondents were aware of most of their rights under FACTA before they contacted the consumer reporting agencies.
• Few consumers exercise their right to block selected information in their credit reports from identity theft and fraud, since most consumers (78%) don't know about this right
• Some respondents complained about feeling pressured to buy additional identity theft monitoring products when they called the consumer reporting agencies.

FACTA gave consumers the right to:

• Pace Fraud Alerts on their credit file with the nationwide CRAs,
• Request a free credit report from each of the three national CRAs when placing a fraud alert,
• Block fraudulent information from appearing in their credit reports,
• Receive a notice of these and other rights from the CRAs

When placing a fraud alert, consumer only need to contact one of the three national CRAs. After successfully placing a Fraud Alert on their credit file with one CRA, most of the time the other two CRAs will automatically add Fraud Alerts to the consumer's file on their systems. When requesting a Fraud Alert, consumers can also request a free copy of their credit report. Survey results about Fraud Alert and free credit report requests:

• 44% of survey respondents were not aware before contacting a CRA of their right to place a Fraud Alert on their credit file. Despite this, 85% of respondents ultimately requested a Fraud Alert on their file.
• When requesting a Fraud Alert, 58% of survey respondents reported that all three national CRAs placed alerts when requested. 36% of respondents were unsure what happened, and 6% reported that at least one CRA didn't place a Fraud Alert.
• 44% of respondents who requested a Fraud Alert said they were very satisfied with the process, 32% said they were somewhat satisfied, and 17% said there were either somewhat or very dissatisfied with the process.
• Most survey respondents (56%) requested their free credit report (when placing a Fraud Alert) by telephone, compared to the website (33%), and postal mail form (14%).
• Most (51%) said that they received their free credit report from all CRAs they contacted, while 33% stated that they received it from only some of the CRAs they contacted. 11% said that they did not receive any credit reports.
• 43% of respondents said that they were very satisfied with the process of requesting free credit reports after placing a fraud alert. 32% said that they were somewhat satisfied. 22% said that they were either somewhat or very dissatisfied.

Errors occur in credit reports, either from identity fraud or from honest mistakes by the CRA or lender. Consumers can dispute this erroneous data and demand that it be removed or corrected. Survey results about credit report accuracy:

• Most survey respondents (60%) were aware before contacting a CRA that they had the right to challenge the accuracy of information on their credit report.
• 36% of respondents who contacted a CRA disputed the accuracy of information on their credit report in connection with the identity theft that led to the contact. Of those who disputed information, 72% filed disputes with a CRA and while 46% contacted the creditor that provided the information to the CRA.
• The types of credit report information disputed: 47% challenged identification and employment (47%), payments (48%) about a specific debt, and unauthorized lenders who obtained their credit report (40%).
• Of survey respondents who disputed information in their credit reports, 52% said that the information was corrected or removed, 22% said that the information was not corrected, and 18% said that they were not sure what happened.
• Of survey respondents who had information corrected by the CRA, 42% said that the error was corrected after a single contact. 27% said the error was corrected after two contacts. 24% said the correction required three to five contacts, and 4% said they contacted the CRA six or more times.
• Of survey respondents who disputed information in their credit reports, most (57%) said that they were either very or somewhat satisfied with the process. 17% said that they were somewhat dissatisfied, and 21% said that they were very dissatisfied.

Consumers can block certain information within their credit reports that resulted from identity theft and fraud. Blocks are different from disputes. CRAs must respond within four (4) days after receiving a valid request to block certain data in a credit report. Survey results about blocking fraudulent information:

• Of survey respondents who contacted a credit reporting agency, 78% were not aware of the right to block information in the credit file. Few survey respondents (21%) exercised this right to block the reporting of information resulting from identity theft.
• Of those who requested that information be blocked, 46% said that all CRAs blocked the information. 18% said that some of the CRAs blocked the information, and 9% said that none of the agencies blocked the information.

The FTC concluded in its report (bold emphasis added):

"Despite the 68% general satisfaction rate with the CRAs, the survey reveals three areas where respondents faced difficulties in exercising their FACTA rights. First, one prominent complaint was the difficulty in reaching a representative at a CRA with whom to speak about identity theft. Many respondents said that it was difficult or impossible to move past the automated response system... Second, the survey results suggest that a relatively small number of identity theft victims are aware of their FACTA rights. Less than half of the respondents were aware of most of their rights prior to contacting the CRAs. Even for the most well-understood right – disputing inaccurate information – only 60% of respondents who contacted a CRA were aware of this right prior to contacting the CRA... Third, both the survey respondents and the focus groups raised concerns about the CRAs using consumer contacts about identity theft as an opportunity to sell identity theft protection products. Several respondents and focus group participants complained that they felt pressured to buy one or more products and that, in some cases, they received services that they did not want or need."

The FTC sent survey invitations to about 3,000 consumers who had previously reported to the FTC hotline that they were identity-theft victims. The survey questions were based on six focus groups conducted in 2009. 634 consumers responded. The FTC maintains the anonymity of all survey respondents. Download the FTC, Using FACTA Remedies Report (Adobe PDF - 4.9 M Bytes), which is also available here.

Want to learn more? Suggested readings about credit and CRAs:

• Fraud Alert Renewal: Easy And Fast
• Placing a Freeze (Or Lock) On Your Credit Files
• Fraud Alert or Credit Freeze: What's The Difference?
• Are Fraud Alerts Useless?
• Is It Wise For Credit Bureaus To Outsource To Foreign Call Center Firms (Part One)?
• Have You Heard About Credit Reports From Innovis?
• Directory Of Credit Reporting Agencies
• What It Means To Have An Unrequested Security Freeze On Your Credit Report
• A Primer On Credit Scores
• FTC Testifies Before Congress About Identity Theft And Fraud
• FTC Changes Disclosure Rules For Sites Offering "Free" Credit Reports
• FTC Releases Report Of Top Complaints Submitted By Consumers During 2011

CFPB Accepts Complaints From Consumers About Checking And Savings Accounts

By now, you have probably heard about the new Consumer Financial Protection Bureau (CFPB), a federal agency designed to ensure that financial products and services for consumers are beneficial for consumers. Previously, the CFPB accepted complaints about credit cards and mortgages. Consumers can now submit complaints about checking and savings accounts to the CFPB. The website has a different form for consumers to share their stories about experiences with financial products.

Also, the CFPB is investigating how checking account overdraft programs affect consumers. Part of this investigation the CFPB seeks feedback from the public about a proposed “penalty fee box” disclosure on a consumers’ checking account statements to clarify the amount overdrawn and total overdraft fees charged.

Reportedly, the average overdraft fee ranged from $30 to $35 in 2011. A 2008 study (Adobe PDF) by the Federal Deposit Insurance Corporation (FDIC) found several alarming trends and statistics about overdraft programs.The CFPB has four concerns about overdraft fees:

1. Transaction Re-ordering that Increases Consumer Costs: the way that overdraft fees are applied by some banks increase costs to consumers. One practice is the co-mingling of all checks, bill payments, debit card transactions, and ATM withdrawals each day and processing the largest transactions first -- rather than in the order received. This maximizes the number of transactions that will trigger overdraft fees.
2. Missing or Confusing Information: the CFPB is analyzing how consumers anticipate and avoid overdraft fees given current banking disclosures -- and if there is a better way.
3. Misleading Marketing Materials: the CFPB is investigating reports that consumers have received misleading marketing materials about overdraft fees, since opt-in rates to overdraft programs vary widely by bank.
4. Disproportionate Impact on Low-Income and Young Consumers: The CFPB is concerned that overdraft programs disproportionately affect certain groups. The same 2008 FDIC study found several alarming statistics, including that 9 percent of checking account customers pay about 84 percent of overdraft fees.

You can view a prototype of this "penalty fee box" at the CFPB website (Adobe PDF). To submit feedback about overdraft fees, include the Docket No. CFPB-2012-0007 with your submission by:

• Online instructions: www.regulations.gov,
• Email: cfpb_overdraft_comments@cfpb.gov
• Postal Mail: send letters to Monica Jackson, Office of the Executive Secretary, Bureau of Consumer Financial Protection Bureau, 1500 Pennsylvania Ave, NW, (Attn: 1801 L Street, NW), Washington, DC 20220.

The CFPB began operation on July 21, 2011. In its annual report (Adobe PDF) to the U.S. Congress, the CFPB reported that by December 31, 2011, it had received 13,210 complaints from consumers, including 9,307 credit card complaints and 2,326 mortgage complaints. 44% of all complaints were submitted through the CFPB website, and about 15% via telephone calls.

The FTC advises consumers who experience identity theft or fraud with financial products to both submit a complaint to the CFPB and submit a complaint to the FTC.

CFPB Reports List Of Consumer Complaints About Financial Products

In its annual report, the new Consumer Financial Protection Bureau (CFPB), a federal agency designed to ensure that financial products and services for consumers are beneficial for consumers, listed the leading complaints submitted by consumers. The CFPB accepts complaints about credit cards and mortgages.

The CFPB began operation on July 21, 2011. In its annual report (Adobe PDF) to the U.S. Congress, the CFPB reported that by December 31, 2011, it had received 13,210 complaints from consumers, including 9,307 credit card complaints and 2,326 mortgage complaints. 44% of all complaints were submitted through the CFPB website, and about 15% via telephone calls. The leading types of credit-card complaints received:

Leading Credit Card Complaints Reported By Consumers to CFPB. July 21 - Dec. 31, 2011	Number	Percent
1. Billing Disputes	1,278	13.7%
2. Identity Theft / Fraud / Embezzlement	1,014	10.9%
3. APR or Interest rate	950	10.2%
4. Other	854	9.2%
5. Closing / Cancelling Account	478	5.1%
6. Credit reporting	437	4.7%
7. Credit Card Payment / Debt Protection	383	4.1%
8. Collection Practices	378	4.1%
9. Late Fee	364	3.9%
10. Other Fee	334	3.6%
Total for Top 10 complaint types	6,470	65.9%

The types of mortgage complaints received:

Mortgage Complaints Reported By Consumers to CFPB. July 21 - Dec. 31, 2011	Number	Percent
1. Problems when you are unable to pay (Loan modification, collection, foreclosure)	889	38.2%
2. Other	540	23.2%
3. Making payments (Loan servicing, payments, escrow accounts)	501	21.5%
4. Applying for the loan (Application, originator, mortgage broker)	235	10.1%
5. Signing the agreement (Settlement process and costs)	96	4.1%
6. Receiving a credit offer (Credit decision/Underwriting)	65	2.8%
Total Mortgage Complaints	2,326	100.0%

The FTC advises consumers who experience identity theft or fraud with financial products to both submit a complaint to the CFPB and submit a complaint to the FTC.

I like the CFPB's mission and its website. The agency's consumer response mechanisms are still new and in their infancy. They will become more beneficial as the agency identifies and resolves problems. What is your opinion of the CFPB?

National Consumer Protection Week

March 4 - 10, 2012 is national Consumer Protection Week (NCPW). About 30 federal agencies and the U.S. Federal Trade Commission (FTC), plus consumer groups, state, county, and local government agencies are participating with the goal to:

"... focus attention on the importance of consumer information and provide people with free resources explaining their rights in the marketplace."

During the week, various groups will share information and tips about how to:

• Avoid identity theft, and scams,
• Protect your privacy, and
• Manage your money

NCPW began 14 years ago. The website has materials in both English and Spanish. David Vladeck, Director of the FTC's Bureau of Consumer Protection, said:

"The information on NCPW.gov can help consumers understand their rights, protect their privacy online and off, manage credit and debt, avoid identity theft, recognize foreclosure rescue scams, and report fraud... Visitors can download and print materials to share with friends and neighbors, or use the toolkit to plan a larger community event."

To learn more, visit NCPW.gov.

10 Tips To Recognize And Avoid Scams That Target Elders

In it's Winter issue of Consumer News, the FDIC provided several tips for consumers to recognize and avoid scams, identity theft, and fraud that target elders:

1. Choose an advisor carefully: perform research of any new broker, attorney, accountant, or other professional you are considering to hire. Meet with the professional and ask questions before making a hiring decisions. Also, check with the local consumer protection agency in your state.
2. Use the powers-of-attorney legal document carefully: FDIC experts want that this document can easily be abused by the appointed person. Review and discuss the document with a lawyer before signing.
3. Protect your personal financial information: Don't disclose bank account numbers, Social Security numbers, PINs (personal identification numbers), passwords or other sensitive information without first verifying the identity of the person requesting the information. Don't give out this information over the phone to unsolicited callers. Don't give out this information to door-to-door sales people.
4. Files at home: store your checkbook, account statements, and other sensitive information in a safe place. Shred paper documents containing sensitive information (e.g., Social Security numbers, bank account numbers, health care plan numbers, etc.) that is no longer needed.
5. Monitor financial accounts activity: closely review monthly credit card and bank account statements when you receive them. Look for unauthorized or suspicious transactions, and report them to your bank immediately.
6. Don't rush major financial or investment decisions: take your time to fully understand the offer. Ask questions if you don’t. If you need it, ask a lawyer or financial advisor to help you review any documents. Reject immediately anyone saying that you must make a decision immediately.
7. Be aware of reverse-mortgage scams: reverse mortgages allow homeowners ages 62 or older to borrow money from the equity in their homes. However, these arrangements have several risks and costs. The U.S. Department of Housing and Urban Development’s Federal Housing Administration (HUD or call 1-800-569-4287) provides guidance about how to use reverse mortgages and locate approved lenders or counselors.
8. Telemarketing calls: beware of unsolicited callers asking for money or personal information. Consider the national Do Not Call Registry (call 1-888-382-1222) to register to opt out of telemarketing calls.
9. Sending money: don’t comply with requests from strangers to wire money to a foreign location or to deposit a check into your account (perhaps as part of an online sale). the checks are usually bogus.
10. Social networking site use: if you use social networking websites, don't post the names of relatives, home addresses, and birth dates. Scam artists troll social networking sites looking for personal information to pretend to be a friend or family member.

To learn more about common frauds targeting seniors, visit the FBI Common Fraud Schemes site, the FDIC Consumer News site, or MyMoney.gov.

After reading this list of tips, I must say that it is good advice for consumers of any age.

FTC Releases Report Of Top Complaints Submitted By Consumers During 2011

Earlier this week, the U.S. Federal Trade Commission (FTC) released its annual report of the leading complaints filed by consumers. During 2011, identity theft (again) led the list of complaints. This is the 12th consecutive year that identity theft has led the list:

Type of Complaint or Scam	Number	% Of Total
1. Identity Theft	279,156	15%
2. Debt Collection	180,928	10%
3. Prizes, Sweepstakes and Lotteries	100,208	6%
4. Shop-at-Home and Catalog Sales	98,306	5%
5. Banks and Lenders	89,341	5%
6. Internet Services	81,805	5%
7. Auto Related	77,435	4%
8. Imposter Scams	73,281	4%
9. Telephone and Mobile Services	70,024	4%
10. Advance-Fee Loans and Credit Protection/Repair	47,414	3%

Other notable findings:

• Fraud: 990k of the 1.8 million complaints were fraud-related. 68% of consumers reported a fraud complaint where they paid an amount. The total amount paid was $1.5 billion, and the median amount paid was $537. 43% of consumers were contacted via email. The five states with the highest per-capita fraud reported were Colorado, Delaware, Maryland, Nevada, and Virginia.
• Identity Theft: Government documents/benefits fraud (27%) was the most common form reported, followed by credit card fraud (14%), phone or utilities fraud (13%), bank fraud (9%), and employment fraud (8%). 45% of consumers reported they contacted local law enforcement. The five states with the highest per-capita identity theft were Florida, Georgia, California, Arizona, and Texas.
• Countries: the top five countries were the USA (80%), Canada (4%), the United Kingdom (4%), Nigeria (2%), and Jamaica (2%).
• Age: consumers that filed complaints during 2011 were ages 50-59 (23%), followed by ages 40-49 (20%), ages 30-39 (17%), ages 60-69 (15%), and ages 20-29 (15%).
• Military: members from all four branches plus the Coast Guard reported complaints. For this group, identity theft ranked as the number one complaint, followed by Debt Collection. Mortgage Foreclosure Relief and Debt Management ranked as fourth for this group, compared to 13 for all consumers.

During 2011, consumers submitted about 1.8 million complaints, an increase of 24% over 2010. All complaints submitted by consumers are collected in the FTC Consumer Sentinel Network database, which contains 30 different categories of complaints. Download the 2011 FTC Consumer Sentinel Network Data Book (Adobe PDF).

Apple Says Path And Other iPhone Apps Violated Policy

A prior blog post discussed how a developer found the Path iPhone app collecting his contact information without notice nor consent. The All Things D blog reported a reply by an Apple spokesperson:

"Apps that collect or transmit a user’s contact data without their prior permission are in violation of our guidelines... We’re working to make this even better for our customers, and as we have done with location services, any app wishing to access contact data will require explicit user approval in a future software release."

Twitter, Hipster, and other apps that collected users' contact information also are modifying their processes to stop collection. The statement by Apple still doesn't explain why Apple did not reject apps that violate its policy from being sold in its app store. Nor does Apple seem to address the consequences for these violators.

The "working to make this even better" sounds disingenuous. Either an app violated the policy, or it didn't. Either Apple checks apps for compliance or it doesn't. There is no inbetween. One cannot be a little pregnant.

At press time, the Apple Press Info website section did not mention the above statement.

How To Dispose Of Your Old Smart Phone Or Tablet

It seems that about every few months, manufacturers introduce a new smart phone or tablet mobile device. Perhaps, you received a new mobile device recently as a Christmas or birthday present. Maybe, you are a consumer who must have the latest technology. Regardless, your collection of old and obsolete mobile devices can quickly pile up.

What should consumers do with their old mobile devices? Or more precisely: how should consumers dispose of their old mobile devices to avoid identity theft and fraud?

The U.S. Federal Trade Commission (FTC) advises consumers to, first, permanently delete all personal information from your old smart phone or mobile device:

"Permanent data deletion usually requires several steps. Remove the memory or subscriber identity module (SIM) card from the phone. That’s an important first step in deleting information, but you likely will need to do more to erase all the sensitive data on your device. You can command a cell phone to delete certain data, but that will only delete the references to where the data is located; the actual information stays on the phone’s operating system."

Consult the user manual for your smart phone (you kept it, didn't you?) for the exact steps to permanently delete contact information, lists of calls received and made, photos, passwords, and any payment information.

Second, you have several disposal options:

• Recycle: many cellular phone manufacturers, service providers, and non-profit organizations groups offer programs to recycle their components, including accessories like chargers. Visit the Environmental Protection Agency (EPA) to learn more about recycling programs. Consult Earth911 to find a nearby recycling center. The U.S. Postal Service operates a free “Mail Back” program for consumers to recycle small electronic products: smart phones, digital cameras, PDAs, and inkjet cartridges. Free envelopes are available at select Post Offices.
• Donate: some charitable organizations accept old mobile devices.
• Resell: Some individuals and organizations will buy your old mobile devices.
• Dispose properly: mobile device batteries should not be placed in the trash. Many cellular phones contain toxic metals, which can contaminate the environment. Instead, dispose when your town/city offers hazardous waste collection days.

If you operate a small business that collected the sensitive personal data of your clients, customers, contractors, and/or employees, then certain data security rules may apply. Check with your industry trade association of the FTC website. For example, certain rules apply for health organizations when disposing PHI data (PDF). Another example, the American Bar Association (ABA) advises its member attorneys:

"... However, the January 01, 2007 edition of the Federal Trade Commission's Disposal Rule (16 CFR Part 682) says that the responsibility to properly dispose of consumer information includes the sale, donation or transfer of any medium, including computer equipment, upon which consumer information is stored."

Insider Identity Theft Example: Banc of America Broker

If you wonder what the phrase "insider identity theft" means, this case below is an excellent example. The basic definition of insider identity theft is when an employee (or contractor) at a company accesses personal information they aren't authorized to access. In the case below, it included the contact information of the company's clients. If you are one of those clients, this case illustrates how your contact information can be abused.

The Forbes article described how Dante J. DiFrancesco worked at Banc of America Investment Services (BAIS). When he left BAIS, DiFrancesco attempted to take his clients' contact information with him, only to clumsily discover that he'd take the contact information for 36,000 clients instead of his 180 clients.

The good news in this story is that BAIS discovered DiFrancesco's data access attempts. Companies with good data security have processes in place to detect when employees attempt to access information they aren't authorized to access, as BAIS did.

Like many things in business, the case went to court. The Financial Industry Regulatory Authority (FINRA) investigated, filed charges, and ultimately ruled in favor of BAIS. DiFrancesco appealed the ruling twice; first at FINRA (which affirmed the first ruling) and then at the U.S. Securities & Exchange Commission (SEC). The SEC ruled against DiFrancesco, too.

Investigate The Banks

Professor, political economist, author and former Secretary of Labor chief Robert Reich called on President Obama to hold big banks fully accountable for their part in the alleged mortgage abuses and housing market crash -- which the President finally addressed, in part, during his SOTU speech last night:

"We'll also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people's investments. Some financial firms violate major anti-fraud laws because there's no real penalty for being a repeat offender. That's bad for consumers, and it's bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count."

To learn more, visit YesHeCan.org.

Learn About Credit Unions. Free Workshops At A Nearby City

While there hasn't been much mentioned lately in the mainstream news media, consumers are still moving their money out of the big banks to local community banks and credit unions. If you want to learn more about what a credit union is and its benefits, the National Credit Union Administration (NCUA) is hosting free workshops in several citys.

The NCUA is the independent federal agency that regulates and supervises federally chartered credit unions. The NCUA operates the National Credit Union Share Insurance Fund (NCUSIF), which insures deposits at federal credit unions and most state-chartered credit unions. Deposits are insured up to $250,000 per account.

Upcoming workshop dates and locations through June 2012:

• March 3: Phoenix, AZ
• March 10: Los Angeles
• March 22: Richmond, VA
• April 11: Chicago
• April 12: Portland, ME
• April 19: Philadelphia, PA
• May 3: Detroit, MI
• May 11: Minneapolis, MN
• May 19: New York, NY
• May 23: Albuguerque, NM
• May 30: Baltimore, MD
• June 2: Denver, CO
• June 7: Omaha, NE
• June 9: Dallas, TX

To learn more and register for a workshop, visit the NCUA website. The NCUA operates the MyCreditUnion.gov website for consumers, with plenty of resources, tips, and advice. This prior blog post includes basic information about how to find a credit union near where you live.

Several Websites Are Dark Today To Protest SOPA And PIPA

To protest the proposed SOPA and PIPA legislation in the U.S. Congress, several websites have gone dark for the day. Critics of the legislation are concerned about the legislation's negative impacts on jobs and on free speech on the Internet. You could call the proposed legislation an online mugging.

Some of the websites that have promised to go dark on Wednesday:

• Free Press
• iSchool at Syracuse University
• MoveOn.org
• Mozilla
• Reddit
• TwitPic
• Wikipedia
• WordPress
• XDA Developers

Other websites, like Google, support the protest by remaining available but with anti-SOPA and anti-PIPA messaging:

"End Piracy, Not Liberty"

In December, GoDaddy reversed its support of SOPA after many users protested by moving their websites to competitors' hosting services.

If you want to learn more about the online protest, read this. If you want to learn more about SOPA and PIPA, read the analysis by EFF. The text of the SOPA legislation is here. ABC News has a basic summary.

Bank Of America Agrees to Pay $335 Million To Settle Discriminatory Lending Lawsuit

Bank of America Corporation has agreed to pay $335 million to settle a government lawsuit that its Countrywide Financial unit discriminated against minority home buyers. The settlement, filed yesterday in the U.S. District Court for the Central District of California by the U.S. Justice Department, must be approved by a federal court.

The government alleged that Countrywide and its subsidiaries charged more than 200,000 African-American and Hispanic home loan borrowers higher interest rates and fees than non-Hispanic white borrowers with similar incomes and credit scores. The lawsuit also claimed that:

"... Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were discriminated against were qualified for Countrywide mortgage loans according to Countrywide’s own underwriting criteria."

Subprime loans are generally more expensive, with prepayment penalties and adjustable interest rates with sudden and huge increases after two or three years. Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, said:

“Countrywide’s actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream... We are using every tool in our law enforcement arsenal, including some that were dormant for years, to go after institutions of all sizes that discriminated against families solely because of their race or national origin.”

The department’s investigation into Countrywide’s lending practices began in 2007 after referrals by the Board of Governors of the Federal Reserve and the Office of Thrift Supervision to the Justice Department’s Civil Rights Division. Bank of America purchased Countrywide in 2008 for about $4 billion. The settlement amount is the largest of its type filed by the U.S. Justice Department.

How To File A Complaint About A Bank

Recently, a friend posted this status message on Facebook:

"How does Bank of America stay in business? They continue to threaten and harass even after I have been assured that all issues have been resolved! Issues, by the way, created by their own incompetence! Who do I lodge a complaint with?"

Consumers have several resources to help them with filing a complaint about a bank. Since my friend lives in Massachusetts, first I directed her to the Massachusetts Division of Banks, which regulates banks that operate within the state. This can include help with or submitting a complaint about abuses involving mortgage foreclosures or checking/savings accounts.

If your "banking" problem includes stock or securities fraud, then consumers should consider filing a complaint with the Massachusetts Secretary of State. The responsibility of this administrative agency varies across states, and is based upon the constitution and laws of your state. In Massachusetts, the Secretary of State's office manages several important functions including investment securities, deeds, registration of corporations, elections, and public records.

If you live in a different state, then you can search online for the consumer protection bureau or consumer complaint board within your state that regulates banks. Most states have one.

A second resource is the Federal Deposit Insurance Company (FDIC), which insures banks and financial institutions operating within the USA. The link to the consumer complaint form is conveniently on the FDIC home page.

Sometimes, the problem includes both a bank and a retail company. Then, it is appropriate to submit a complaint the U.S. Federal Trade Commission (FTC), which regulates the activities of retail companies operating within the USA. It is appropriate for consumers to file complaints about deceptive marketing tactics, scams, identity theft, and other topics. The FTC operates a very comprehensive complaint process and database.

If your phone number is registered in the Do Not Call Registry and you belive a company has violated that telemarketing law, then you should file a complaint at the Do Not Call Registry website.

Related articles in this blog which you may also find helpful:

• How To Check Your Insurance Company's Complaint Record
• Received Poor Customer Service? How To Complain Effectively