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This comes from a piece in the Whittier Daily News about how demand for the new federally mandated free credit reports has fallen far short of expectations. It also discusses the general lack of knowledge about credit reports and credit scores.
"Checked your credit score lately? If you haven't, you're not alone.
One of the Big Three credit-reporting agencies has said Americans' demand to see their credit reports this year has fallen well short of expectations. Meanwhile, a survey by the Consumer Federation of America and research firm Fair Isaac Corp. showed nearly half of all Americans fail to understand that credit scores measure their credit risk.
That lack of knowledge has put consumer advocates in a quandary. Late last year, the federal Fair and Accurate Credit Transactions Act made it possible for Americans to obtain a free credit report from each of the three major reporting agencies: Equifax Inc., Experian Information Services Inc. and Trans Union LLC.
But consumers appear to have missed the message."
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Under a new state law, Vermont residents can now freeze their credit report if they find themselves the victims of identity theft, thereby preventing further damage to their credit. If you enjoy this article, you may also be interested in an article entitled 'Vermont defies the FDA and sues to allow the importation of prescription drugs from Canada.'
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"Internet security is not foolproof — as evidenced by the recent security breach at CardSystems Solutions, which exposed over 40 million credit card accounts to possible theft. However, law enforcement officials note that consumers not only have to worry about individual hackers, but also buyers of stolen credit card and account data on the Web.
Many account numbers are purchased online at sites including the International Association for the Advancement of Criminal Activity. Many of these sites are run from the former Soviet Union and act a lot like eBay, where traders are ranked according to the accuracy of the data they provide buyers. In other cases, many sites are providing services to change billing addresses or locate safe drop off locations.
Those who purchase the stolen credit card information are using the accounts to purchase goods online and have them dropped at safe locations so the items can be fenced later on in public or on the black market. Message boards and banner ads are also being used by this black market to advertise the sale of stolen credit cards and account information. Federal investigators are finding that data aggregators are most vulnerable to theft, especially when thieves can access the systems by simply posing as legitimate clients."
From IdentityGuard.com
An excerpt from an editorial in the Daily Times about how auto insurance companies use credit scoring to determine insurance premiums and insurability for car drivers: "You could be one credit reporting error away from disaster. There is a business practice used by many insurance companies that could put you on the road to ruin. It's the use of credit scoring to determine how much you pay for your policy premium for auto and homeowners' insurance. This week, I talked to two of the most reputable insurance companies doing business in Delaware in an effort to understand why they would penalize a policy holder with a low credit score by making them pay a higher premium. One of those companies is my own. David Fetterman of Nationwide said, 'I do support it because those people who have credit problems have a larger tendency to have problems keeping their insurance paid and with issues of reliability.' Cristy Cote of the Progressive Group of Insurance Companies said, 'Credit has proven to be a very powerful and independent predictor of future loss,' adding that the practice is supported by the company's data and research from a number of different groups. Both Nationwide and Progressive said that credit scoring is one of several factors, including driving history and vehicle type. Both companies denied that it is a punitive measure against poorer customers. They see the practice not as a penalty against the customer with bad credit but a reward for the ones with good credit. It makes no sense to me. Low insurance premiums are the reward for good driving. It should not matter if the driver is rich or poor." Full Article
From a recent Lincoln Journal column: "Identity theft is a dreadful and costly experience for the innocent victim. I am convinced that it would be virtually nonexistent if the credit card companies were made legally responsible for the total losses which result from the issuing of a credit card to an identity thief. This should include all costs associated with prompt restoration of the credit record of the victim.
The fact that regulation of credit card companies is very lax and poorly enforced plays into the greed of these companies. Their dishonesty is evidenced by the fact that they send applications for credit cards (even to nonexistent persons) saying, 'Due to your excellent credit record you are pre-approved for a credit card with up to a $5,000 limit.'"Full article
This is from a report by Channel 10 News in Tampa. Offering some good advice about credit reports and scores, from Consumer Reports: Your credit score is used by lenders and others to predict whether you're a good credit risk. The three big reporting bureaus-- Experian, Equifax, and Transunion--calculate your credit score based on the data they have about you from banks, credit cards, and from public records such as bankruptcy filings and tax liens. A bad credit score can impact everything from your mortgage to whether you can rent an apartment or even get a job, so it's important to know your credit score and look over your credit report for errors. It is estimated that one in four reports have serious mistakes.
Consumer Reports says that the easiest way to get your credit reports with the corresponding credit scores is to go to myfico.com. For about $45, you'll get your reports from the three leading credit bureaus. But once you've gotten your report, you might be shocked by how long and complicated it is. Consumer Reports has the following tips on deciphering your credit report.Full article
A very interesting article from BankRate.com suggests that credit card fraud is the bank robbery of the future. From stats they quote, it could be a lot more prevalent than people think, and will probably only become more common as more crooks catch on to the new techniques for stealing. Also interesting to note, a lot of the credit card theft techniques mentioned on the article don't have anything to do with the Internet. It's the offline fraud tactics that people probably need to worry about the most--the ones we are the least aware of! Where there's a World Wide Web, there are criminals ready and able to perpetrate all sorts of havoc, from using your credit card number to ship dozens of computers overseas on your tab to hacking into customer databases, obtaining thousands of valid card numbers and using them to extort fortunes from their stunned corporate victims.
Internet fraud is the dirty little secret of the New Economy. For every well publicized Ebay or Egghead hacker attack, others go unreported, the corporate chiefs preferring to quietly pay the ransom rather than risk scaring off potential online customers with the negative publicity.
Nobody wants to cut e-commerce off at the knees just as it's getting on its feet. Credit card issuers, acquirers, processors, merchants and consumers alike welcome the convenience of online, real time transactions.
The problem is, so do the crooks.
"The criminals are going to go where the money is, and a lot of money right now is in e-commerce," says Jeff Winter, spokesman for the U.S. Secret Service Office of Investigations. "It's anonymous and it's extraordinarily lucrative.
"Robbing a bank these days is not as appealing. When you go in and you've got cameras looking at you, you know you're going to get caught and you're only going to get a couple thousand dollars. On one stolen credit card alone, on average you can get $3,000 with a skimming device. In a lot of ways, it's the bank robbery of the future."
The way crooks steal today will determine in part how we buy and sell tomorrow.More from BankRate.com
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