Obviously this is unjust, for a number of reasons. Do the corporations and debt collectors consider that they expend thousands, if not tens of thousands, of dollars–court time, police, jail expenses– sending a debtor to prison over puny debts? I should imagine that they would not complain about taxes under these circumstances, but evidently the corporate creditors want the luxury of spending thousands of dollars throwing poor and struggling debtors into prison, while expecting the remaining poor and struggling debtors to pay for it.

Besides, I personally think it’s bad enough that we impose jail sentences on small and relatively inconsequential offenses such as simple drug possession and the like. Personally, I would prefer our precious judicial and police resources be spent on more serious crimes.

Here’s the article. Normally I’d say, “Enjoy!” However, I don’t enjoy this at all.

http://finance.yahoo.com/news/jailed-for–280–the-return-of-debtors–prisons.html

Excerpt from the Yahoo! Finance article:

Debt Collector Watch
It seems that debt collectors have caught on to how difficult it is to hide on Facebook. According to MSN Money, debt collectors are infiltrating social network pages, contacting you, your friends and family through the site to force you to pay what you owe.

One debt collection agent, Michelle Dunn, confirms that this is a strategy used by debt collection agencies today. “If you look like a really good-looking girl, a lot of people would accept a friendship even if they don’t really know the person,” she explains. Luckily the The Fair Debt Collection Practices Act, designed to protect consumers against abusive practices by the debt collection industry, does offer you some protection in this area. Although it is not forbidden for collectors to post on your Facebook wall or ask your contacts of your whereabouts, they cannot post about your debt, because that is a serious breach of privacy. Nevertheless, it should be common practice not to accept friend requests from people you don’t know, and of course, if you do owe money, in order to avoid being found and potentially harassed on Facebook, you should answer mail or calls or from collection agencies in the first instance. Ignoring the problem will not make it go away.

Here are a few of the select tips from the officers:

1. There is no sure-fire prevention for identity theft. It is today a risk of doing commerce in our culture. The best thing is just to get as much information and education on it as possible so if it happens to you, it won’t be a disaster.
2. Debit cards: don’t use them. Use credit cards instead. With debit cards, the thieves are stealing your money and it’s harder and takes longer to get it back. With credit cards, banks and credit card companies usually re-credit you as soon as you prove that you have been a victim of ID theft.
3. Checks vs. paying online: for years I have been advising my clients to pay with old-fashioned checks as opposed to paying online. I primarily made these recommendations around the time of huge security breaches at Choicepoint, Lexis/Nexis, etc. A certain number of consumer advocates, including me, felt at the time that paying everything online exposed consumers to security breaches. The Glendale detectives at the luncheon disagreed with this, citing the fact that it is now easier than ever to fabricate a check, and the tellers at most banks are simply not sharp enough to detect false checks. Who to believe? I don’t know, honestly. I’m re-thinking my own financial protection. For years I’ve advised consumers to keep one low-balance credit card for online purchases, so that if they suffered a security breach, they could simply cancel the card and their exposure would not be too extreme. I’m starting to think that one low-limit credit card for online purchases and for bill paying might be the best idea. Depending on your financial circumstances, have one low-interest, low-limit credit card that you use for all online purchases and all online bill paying. If the card is ever compromised, you have to simply cancel that card, and because you are keeping a low limit, it’s not likely that the thieves will be able to get away with major purchases. Overall, I’m thinking this is probably the best plan.

Most of the other stuff from the luncheon involved things I’ve already said repeatedly throughout my socalcreditdamage and socalidentitytheft websites.

In general, I’m very impressed that many police departments, including Glendale, are taking these crimes more seriously and are becoming more responsive to consumers who have become the victims of these crimes.

Thanks for reading!

How to protect yourself? Smartphones: never do your banking or investing from your smartphone, and limit your credit card use from your smartphone to a single low-limit credit card which you can cancel if it gets stolen. Social media: limit your personal information on your pages. Your pages should never have your birthyear… or your address unless it is strictly a business address. Look over your Facebook or LinkedIn pages from the perspective of someone trying to steal identity: is there enough on there to actually steal yours? Also, put in place and keep in place privacy controls where they are available. Visit socalidentitytheft.com for more info.

http://finance.yahoo.com/news/rise-identity-fraud-tied-smartphone-144531921.htmlSee More

It’s August 5, 2011. I was supposed to be leaving for a backpacking trip in the Sierras today, but I had to postpone this until Monday. Good day to write a short blog article.

We are often approached for legal representation by people with imperfect credit: coming out of bankruptcies, foreclosures, repossessions, charge-offs, late-pays, etc. They frequently ask whether they can maintain a wrongful credit damage lawsuit even if the accurate parts of their credit report include negative entries.

The answer is yes, positively!

A person with imperfect credit may have to adjust their expectations downward in a credit damages lawsuit, because false information generally (but not always) does proportionally less damage if surrounded by accurate negative credit entries as opposed to accurate positive credit entries. However, both state and federal law permit consumers to pursue their rights under the Fair Credit Reporting Act, as well as the California version, the California Consumer Credit Reporting Agencies Act, even if their credit is not perfect. Under both laws, a prevailing plaintiff is entitled to an award of damages, possible punitive damages and their attorney’s fees and costs. As mentioned in other blog posts, my office usually takes these cases on a contingency or on a semi-contingency basis.

So, even if your credit is far from perfect, if you have FALSE or INACCURATE information on your credit report and you cannot get it removed in spite of your best efforts, you do have rights under both federal and state law, which may include compensation in your pocket.

Thanks for reading and I hope these “dog days of summer” (so named for the Dog Star, as I learned recently) are treating you well.

Bob Brennan

The new Consumer Financial Protection Bureau will undertake a study, with information provided by the credit bureaus, to address the problem of wide variations of credit scores that have been noted by so many consumers.

This short article describes the study to be done.

My only problem with the article is that it seems just a bit…pansy. Here’s my opinion of the real situation: the article below mentions the fact that the bureaus weight and process the information differently for different end-users of the credit scores. All true. What the article does not address is the fact that this rule holds true for the “consumer disclosures” (industry phrase for consumer credit report) which the bureaus provide to consumers. So, the calculations (industry term is “algorithms”, which is a mathematical term which basically means “formula”) for the consumer reports are different than the calculations for the various lenders, potential employers, insurers, etc. who may pull the report in connection with a loan, job or insurance application.

In other words, consumers consistently get the “white-washed” credit score. Potential lenders, etc. can and often do get something quite different.

Here’s the article, from Yahoo Finance. I hope you enjoy it.

Personal finance experts extol the benefits of periodically reviewing your credit report and score. In fact, credit reports are so important that federal law requires the three major credit reporting agencies to make credit reports available for free (see annualcreditreport.com for more details). While federal law generally does not require credit reporting agencies to give consumers their credit scores, there are many ways to get your score for free. And it’s consumers’ access to their credit score that has created a problem.
Consumers can purchase their credit score in several ways. They can get access to their credit score from one of the three major credit reporting agencies when they get their credit reports.
Consumers can also get their credit scores as part of purchasing either credit monitoring or identity theft protection services. And here’s the problem–the credit score consumers receive is not the same credit score lenders receive when evaluating an application for credit.
The Dodd-Frank Wall Street Reform and Consumer Protection Act addressed this discrepancy. The Act requires the newly formed Consumer Protection Financial Bureau to “conduct a study on the nature, range, and size of variations between the credit scores sold to creditors and those sold to consumers by consumer reporting agencies that compile and maintain files on consumers on a nationwide basis? and whether such variations disadvantage consumers.”
Last month, the CPFB released its first report on the differences between credit scores sold to creditors and scores sold to consumers. And the conclusion was eye-opening: “When a consumer purchases a score from a [credit reporting agency], it is likely that the credit score that the consumer receives will not be the same score as that purchased and used by a lender to whom the consumer applies for a loan.”
There are several potential reasons why scores may vary:
1. Educational Scores: The scores consumers purchase are often what the CPFB calls “educational scores.” While these scores may provide consumers with some indication of how potential lenders will view their credit worthiness, educational scores vary from the industry standard FICO score.
2. Industry Scores: Even if a consumer purchases his or her FICO credit score, it may vary from industry specific FICO scores. Not all FICO scores are the same, and certain industries (e.g., auto and home loans) use variations of the FICO scoring formula designed specifically for those industries.
3. Custom Scores: As if educational and industry scores were not confusing enough, some of the larger industries use custom formulas specific to their business. These scores typically start with a FICO score, and then make adjustments to the score based on a proprietary scoring formula known only to that company.
4. Credit Reporting Agency Variations: The three major credit reporting agencies generally have different information on file for each individual in their databases. As a result, even if the same scoring formula were applied to the data on file, the credit reporting agencies would typically generate different credit scores based on the information they have on file. As a result, a consumer purchased credit score would likely vary from what a lender sees if the scores are generated from different credit reporting agencies.
So just how big is the difference in scores? It’s that questions that the CPFB is studying. In conjunction with the credit reporting agencies, the CPFB is conducting a study to determine the scope of the variances between credit scores provided to consumers and those provided to lenders.
To undertake this study, each of the three national credit reporting agencies will provide data on 200,000 consumers to the CPFB. The data will not include any information that could identify the consumer files selected for the study. According to the CPFB report, the “purpose of the data analysis will be to determine with greater precision and understanding the nature, range, and size of variations between the credit scores most frequently sold to creditors and those most frequently sold to consumers.”
For now, however, consumers will have to accept that there is no “true” credit score. In fact, given educational scores, industry scores, custom scores, and variances in credit history among the three national credit reporting agencies, most consumers likely have many credit scores. And while educational scores can provide insight into the credit worthiness of a consumer, it’s best to take the score with a healthy grain of salt.

One of my readers has written an article which is quite useful, and I encourage you to read it and pass it along to your friends. Debt settlement companies are springing up like mushrooms in a swamp, and so many of them are “fly-by-night,” taking a consumer’s hard-earned money with a high retainer and delivering no results. (*sound of spitting something disgusting out of my mouth*)

Remember that debt settlement is generally preferred to bankruptcy from a credit reporting standpoint. While debts settled for less than full amount will be reported as derogatory to the credit bureaus, these derogs are nowhere as bad as a Chpt. 7 or a Chpt. 13 bankruptcy. So, this is information worth knowing.

My blogger friend, Teresa Smith, has provided a very useful article to assist consumers select out the good apples from the bad ones. Here’s Ms. Smith’s article, and I hope you enjoy it and find it useful:

How to Choose a Legitimate Debt Settlement Company

Are you submerging in pool of debt? Is your utter financial crisis compelling you to file insolvency? Are you not finding another option to make your way out of debt instead of filing bankruptcy? If this is the problem, you can consider a debt settlement program to get rid of your outstanding debts.
A legitimate debt settlement company can help you in this regard. However, before approaching any debt settlement company, be an aware consumer first. Before signing with any debt settlement company make an extensive market research and also make sure you do ask the following questions.

1. Is the debt settlement company accredited by The Association of Settlement Companies (TASC)? You can rely on any debt settlement company that is accredited by the TASC. Before providing any accreditation, TASC thoroughly investigates the company’ performance, competence and capabilities.

2.How much does the company charge? Are the rates reasonable? Make sure that the rates are realistic and affordable to you. You might face problems if you join the program without evaluating your monthly income and expense.

3.Does the company have IAPDA certified debt arbitrators? An IAPDA certified debt arbitrator has a solid understanding of the laws those govern the debt settlement industry.

4. Is the debt settlement company associated with the local Chamber of Commerce? If so, is your local Chamber of Commerce is a member of the Chamber of Commerce of the Unites States? These affiliations certainly help to build trust.

5.Does the Better Business Bureau (BBB) affiliate the debt settlement company? If yes, what is their rating? To me, the BBB is the best entity who truly observes and properly rates the debt settlement companies. Apart from this, you can also check out the website of the Association of Settlement Companies (TASC) to know if the company is a current member. TASC is such a watchdog that enforces strict code of conducts to its member companies. Further, TASC constantly monitors its member companies through a third party “secret shopper” program to ensure they maintain the accepted standards.