I hope your summer 2011 is off to a good start.

We’ve received many, many complaints from identity theft victims that they have had problems with local police agencies taking their identity theft police reports. Some police agencies have refused to take a police report from identity theft victims. As you probably know from other blog entries, many of your civil law remedies rely on you initially obtaining a copy of an identity theft police report and providing it to the credit bureaus and to the creditors who are pursuing you for identity theft debts.

At a recent dinner I attended, I sat at the same table as two deputies from the California Department of Motor Vehicles. I discussed this problem with them, and each indicated to me that the DMV is more than happy to take an identity theft report and provide a copy to the consumer for his or her later use. In fact, DMV has jurisdiction over many identity theft cases because DMV regulates driver’s licenses, which are still the favored form of identification for many financial transactions.

So, if you find yourself the victim of identity theft and you need to file a police report, go to the DMV. A DMV identity theft report has all the force of a report issued by a police department or a sheriff, and DMV can cross-connect your report to your driver’s license.

Here’s the contact information you need:

Phone: 1-866-658-5758
Email: DLFraud@DMVCA.gov

Hope this helps!

We get a lot of inquiries about LifeLock and other similar services, wherein you pay the company a monthly fee to protect your credit report. Guess what? You could do this all yourself if you followed the advice on my website or on the Federal Trade Commission website, www.ftc.gov. For the most part, LifeLock simply places security alerts or security freezes for you, which is something you can and should do yourself anyway. It is not a service you need to purchase. It is the financial equivalent of paying a lot of money to have someone put gas in your car when you can do it yourself for less.

Evidently the Federal Trade Commission and several states Attorneys General agree with me. Today LifeLock (What a Crock!) paid out $12 million to settle fraudulent advertising claims. Here’s the story.

LifeLock Will Pay $12 Million to Settle Charges by the FTC and 35 States That Identity Theft Prevention and Data Security Claims Were False
LifeLock, Inc. has agreed to pay $11 million to the Federal Trade Commission and $1 million to a group of 35 state attorneys general to settle charges that the company used false claims to promote its identity theft protection services, which it widely advertised by displaying the CEO’s Social Security number on the side of a truck.
In one of the largest FTC-state coordinated settlements on record, LifeLock and its principals will be barred from making deceptive claims and required to take more stringent measures to safeguard the personal information they collect from customers.

When I talk about debt in this article, I’m referring to your personal credit card debt, not the many other debts which are probably equally painful, such as car loans, home mortgages, home equity loans, student school loans or tuition, etc.

This article is not intended to teach you how to avoid or get out of debt. It is intended to teach you how to avoid the second four-letter word being experienced by a growing number of consumers trying to manage and reduce their debt: scams perpetrated by ‘scam artists’ – unscrupulous debt industry members (collectors, consolidators, counselors) who want you to believe they will help you get rid of your debt, but are, in reality, con-men who are out to profit from your debt misery by convincing you to give them your money (or worse, your identity).

Debt scam artists know you are in debt. They know you need help, and that if they can be convincing enough (usually by phone) they can persuade you to give them what they want: your money or your personal information, before giving you their ‘assistance’ (in advance), in exchange for their ‘guarantees’ or ‘promises’ to help you reduce or eliminate your debt using their debt services!

Your loss is literally their gain.

The scary part is how easy it is to be victimized (ripped off) by these smooth-talking debt scam predators. Why? Because they seem so real! They know so much about you. They know you are vulnerable because your need for their help is great and your defenses are down. You will likely give them money or information to get the debt relief they promise! They are like water to a parched, thirsty person in a hot, dry desert. Your thirst for debt relief makes you desperate –they know it and are eager to profit from your misery.

Questions and Answers

Two common debt scam questions I often hear are:

1) How can I differentiate the legitimate company from the scam operation? I want to avoid the scam and select the legitimate firm to get the help I need, and not be burned again, and

2) What can I do if I have already been victimized by a debt scam? Can I get my money back? My identity?

Answers to these questions will help consumers facing the twin plagues of debt and scams.

1. How can I differentiate legitimate companies from scammers, to avoid the scam while finding a firm that can really help me reduce my debt?

• Scammers often say they are attempting to collect a debt related to an internet payday loan obtained by the consumer, but which the consumer never repaid.

• If, when questioned, the caller refuses to disclose the full name or address of the collection agency they claim to represent. It is a scam.

• If you are threatened with arrest for fraud or some other fictitious crime unless you agree to immediately wire money via Western Union, don’t do it. It’s a scam.

• If a fictitious caller tries to frighten and confuse you into paying a debt by using legal sounding terms like “We’re filing an affidavit against you” or by stating a lawsuit has been or is in the process of being filed against you. It is likely a scam.

• A hallmark of scams is calling consumers repeatedly at their place of employment.

• If the caller refuses to provide any identifying information to allow you to send a written dispute, it’s a scam.

• If the caller continues to call you, numerous times a day, regarding a payday loan you never obtained, it’s a scam.

• If you are not provided with written validation of the debt, you refuse to pay without it (which is your legal right), and you are then threatened with bring arrested, it is a likely a scam. (One person was told, ‘If that’s the case, I will have local law enforcement come to your place of business and drag you out kicking and screaming’.)

• Scam debt collectors persuade you to pay just a little of your total amount due, then use your bank information to improperly withdraw more money from your bank account.

All of these practices are typical indicators of a scam debt collection operation.

Legitimate debt collectors are legally prohibited by the Fair Debt Collection Practices Act (“FDCPA”) from making false or misleading representations (such as telling you that you have committed a crime), stating (or implying) that your nonpayment will result in your arrest, or threatening violence if you refuse to pay.

It is important to remember that legitimate debt collectors can, and do, violate the FDCPA. If a debt collector violates the federal FDCPA in trying to collect a debt from you, you indeed have legal rights which can include your damages and having your attorney’s fees paid by the debt collector. Go to www.socaldebtcollectionabuse.com for a more detailed description of your rights under the FDCPA.

Naming Names:

In addition to such typical debt scammer practices and ‘language’, some debt scam operations have been identified by federal and state law authorities by name. Scam artists have most recently identified themselves as: ACS, National Affidavit Processing Department and United Financial Crime Division. Though, like criminals, they may also use additional phony names. If you should have any questions, contact the Federal Trade Commission (www.ftc.gov) or your state’s attorney general to find out if the alleged debt collector shows up on any of the lists of phony scam artists posing as debt collectors.

2. I’ve already scammed! What can and should I do now?

As described earlier, there are two valuable things you can lose to a debt scam: your money and your identity. These are the two things that most scammers want from you. It is the reason why they contact you (either obtaining your money directly from you, or obtaining enough of your personal (financial) information (i.e. Social Security number, bank account number, etc) from you to access your money themselves.

a) If you have given a debt scammer money, your primary remedies are: filing a complaint with local, state or national law enforcement authorities (state Attorney General, Federal Trade Commission (FTC)) or business organizations (Better Business Bureau), consumer advocacy organizations), media (consumer reporters), and/or web sites (blogs, etc).

Don’t expect that any of these agencies or organizations will get your money back for you quickly (if at all). On the other hand, you will be helping other consumers who use these sources in their research of debt assistance services. Your complaint can help them avoid the same scam you just suffered.

Public law authorities such as the FTC and state Attorney General will take legal action against debt scammers when they get enough complaints about a scam to show a pattern of legal violations. Their enforcement can lead to recoupment of money from a consumer scammer, but, again, the enforcement and results do not happen overnight. (The FTC receives more consumer complaints about debt collectors than any other industry.)

Victims of debt scams can also file a lawsuit against a debt collector in state or federal court. If you believe that your rights have been violated by a debt scammer and you are in Southern California, please feel free to call me at 1-818-249-5291. You can also visit our website at www.socaldebtcollectionabuse.com.

If you are elsewhere, look for a local credit damage and consumer protection attorney at www.naca.net

However, please be advised: many scam debt collectors are “fly-by-night” operators, and suing them will do little good—they’ll simply fold their tent and go elsewhere. If my firm determines that a given debt collector is a “fly-by-night,” we will not pursue the lawsuit—it will be nothing but an exercise in frustration. Believe me, I know this from experience.

b. If you think your identity has been stolen you should:
i. Contact the three major credit bureaus (Equifax, Transunion, and Experian) as soon as possible after the theft occurs, and place a ‘fraud alert’ on your credit file. This advises your potential creditors who use that report that you are an identity theft victim (or potential victim.) Ask for an extended fraud alert, which lasts for seven years. Fraud alerts expire after 90 days. Identity thieves know this and often try to re-apply for credit with your credit information 90 days after they find out about the fraud alert.
ii. Fill out a police report about the identity theft, and make several copies. Send these copies to all three credit bureaus, and any creditors who have opened fraudulent accounts in your name. Include directions to cancel any fraudulent accounts. Send all copies by certified mail. ‘
iii. Monitor your credit report at least every week while the identity theft situation is occurring. If you see any false or fraudulent charges, immediately send a certified letter to the creditor, with a certified cc to the credit bureaus, informing them that the charges are false. Keep copies of all letters and continue to monitor your credit reports to see that the false charges are corrected.
iv. If you suffer damages as a consequence of your identity theft and wish to consult a lawyer, please contact our offices (if you’re in Southern California) at 1-818-249-5291. You can also contact us online at www.socalcreditdamage.com. If you are elsewhere, look for a local credit damage and identity theft attorney at www.naca.net

v. As with lost money, file a complaint with federal and state consumer law enforcement authorities (the FTC, your state Attorney General’s office). The FTC uses the information to coordinate with the FBI to track down the larger identity theft rings and break them up.

vi. File complaints on-line with consumer advocacy/fraud organizations such as the National Consumer League’s Fraud Center, at www.fraud.org, or the National Consumer Law Center, at www.consumerlaw.org.

vii. Share your information with a local newspaper’s consumer reporter.

viii. Share your experience through social networking sites, blogs, and elsewhere on the internet. The more people learn about your experience, the more you will help them avoid such scams and perhaps help law authorities find and stop the debt scammer.

There are many types and forms of debt and debt scams. Any time you owe money to another party, including a bank, other lender, business, or person, it is a debt. This article focused on debt scams involving consumer credit-related debt. Future articles will focus on avoiding scams associated with other common kinds of debt –home mortgage, equity loan (2nd mortgage), car loan, student loans, and more.

Copyright © 2010 by Robert F. Brennan. All rights reserved. If you should have any further questions about your rights with respect to debt collection or credit reporting, go to www.socalcreditdamage.com or www.socaldebtcollectionabuse.com, where you can send us an email. You can also call us at (818) 249-5291. Thanks for reading!