Foreclosure Fraud Revealed: Your Mortgage Documents Are Fake! | Occupy.com

Foreclosure Fraud Revealed: Your Mortgage Documents Are Fake! | Occupy.com
Home foreclosures are still happening at record levels across the country. In some areas like Washington State, state legislatures are enacting laws that require banks to offer mediation to homeowners before they can start foreclosure proceedings. To understand why this fallout from the 2007 home foreclosure crisis has become just that – a crisis, you must understand the process of foreclosure and who stands to benefit from it.  Here is the dichotomy in which the foreclosure crisis resides: Hundreds of thousands of Americans bought homes in the run up to the foreclosure crisis – many of whom were considerably irresponsible in analyzing whether they would actually be able to afford a home in the first place.  They were lured by low interest rates and mortgage contracts that did not require proof of income.  When the recession hit and people lost their jobs or had to come up with an exorbitant balloon payment they were sunk. When housing sales tanked and prices torpedoed downward, people all of a sudden found their homes were “underwater” and could not even sell to get out from under the mortgage.  On the other hand, mortgage brokers and banks who actually knew that most of these mortgages would fail, bundled the loans, securitized them and sold them to Wall street as A paper investments.  Once the loans hit Wall-Street, all hell broke loose.  But let’s back up a bit. The root of the foreclosure problem has to do with who has clear title of the home and therefore who has the right to actually foreclose on the home.  Here is how Occupy.com explains it:

A mortgage has two parts: the promissory note (the IOU from the borrower to the lender) and the mortgage, which creates the lien on the home in case of default. During the housing bubble, banks bought loans from originators, and then (in a process known as securitization) enacted a series of transactions that would eventually pool thousands of mortgages into bonds, sold all over the world to public pension funds, state and municipal governments and other investors. A trustee would pool the loans and sell the securities to investors, and the investors would get an annual percentage yield on their money. In order for the securitization to work, banks purchasing the mortgages had to physically convey the promissory note and the mortgage into the trust. The note had to be endorsed (the way an individual would endorse a check), and handed over to a document custodian for the trust, with a “mortgage assignment” confirming the transfer of ownership. And this had to be done before a 90-day cutoff date, with no grace period beyond that. -

Technorati Tags: MERS,Foreclosure,Robo-signing,securitization

The above video Randy Kelton clearly explains how robo-signing, MERS, corrupt judges, mortgage – note bifurcation theory and fraud are the real root of what the banks and Wall-Street is doing to consumers.

An Excellent Review of ‘Validation of Debt’

 

Technorati Tags: Collection agency,Debt validation,Fair Debt Collection Practices Act,FDCPA,Federal Rules of Evidence,Validation of debt

There is A LOT of misinformation in print and on the internet regarding how debt validation works. The following review does a great job of demystifying the whole process and provides some good legal references as well. It is a lengthy article and does reference the Federal Rules of Evidence and other legal concepts, so you’d better put on your legal thinking cap before you delve into this one! I don’t normally recommend an article unless I have thoroughly researched the author and their credentials. This one gets my full approval as it is well written, well researched and very accurate.

DEBT VALIDATION

MYTH, MYSTERY OR MIND TRAP

A presentation of Senior Outreach Ministries

2006© All Rights Reserved

http://www.senior2senior.org

Disclaimer: The material in this e-book is for information and educational purposes only. It is not intended to replace professional legal, medical or accounting advice.

Any reliance on this material by the reader is done so at his/her own discretion.

Although this material was researched from presumably reliable sources such as the US government, the reader remains responsible to perform their own due diligence.

The estimates of the amount of debt carried by Americans ranges from about $2000 per adult to $8000 per adult and this is just on their credit cards. When you add in house, car, boat, motorcycle and RV payments on top of everyday household expenses like groceries, insurance, vacations, appliance and environmental home system repairs along with a myriad of other obligations, you can see why debt is more than a 4 letter word.

This e-book does not purport to be a get out of debt plan, a credit repair plan, tell your creditor to shove it plan or any other scheme in those channels. Rather, it is an e-book that covers only one topic: Debt Validation and it covers it the way I see debt validation as it exists today. In other words, since I believe I’ve done my homework, I’m sharing my opinion of what I think I learned.

Debt Validation comes into existence only at the time a person receives a letter from a debt collector stating something to the effect they are attempting to collect a debt for XYZ, Co. in the amount of $BBBBB.CC. They tell you in the letter unless you dispute this thing they are saying is a debt within 30 days; it will be presumed you owe it.

There are two ways to react to this letter. One, answer it. Two, ignore it. Number two is not a good idea for a myriad of reasons the least of which is you actually may not owe the debt. You see, debt collectors have been criminally prosecuted for telling someone they owe a debt when in fact the person did not owe the debt. You can Google a ton of stories about such happenings so I won’t say anymore here.

You also may not owe as much as they claim. Another debt collector trick which has cost them quite a few dollars after the court suit was settled in the alleged debtor’s favor. When you Google for the above information, I feel certain you’ll read about this faux-paus as well.

To understand the composition of the letter from the collector you should understand the law behind it. The law that sets the parameters is the Fair Debt Collection Practices Act (FDCPA). It states, for example, the collector must tell the alleged debtor that they are attempting to collect a debt.

Sidebar: I once had a debt collector state in their letter they were just writing a letter for a friend who happened to be a client and they didn’t include the required wording about attempting to collect a debt. I never heard from them again after I wrote and highlighted the violations of the FDCPA they had committed. Oh that all such collectors could be disposed of so easily.

Please become familiar with the FDCPA as it could become your newest best friend. Section 1692g of the FDCPA is the paragraph addressing debt validation. It is titled: Validation of Debt. This is important because validation and verification are not the same thing in the eyes of the law. The law is codified in Title 15 of the United States Codes beginning in section 1692. Use any search engine to find this Title.

Verification, although used in the Code, is not as requiring as validation. If you care to research this point, start with a good law dictionary then move into the court cases. Unless you want to fall asleep, I’d wait until I was contacted by an over aggressive debt collector.

Here is the applicable section as printed in the Codes:

Sec. 1692g. Validation of debts

(a) Notice of debt; contents

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing -

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) Disputed debts

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

(c) Admission of liability

The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

Notice the thirty-day requirement in the Code? They must give you 30 days to request a validation. Also, look at subsection (c) right above this paragraph. Should you fail to dispute the validity of a debt, no court is allowed to construe your failure as an admission of liability. This is a very powerful subsection because you no longer are liable simply because you did not dispute the validity of the debt at the onset. You may not have done so for any number of reasons. You, in fact, may have wanted your day in court without the encumbrance of a stack of paperwork or you may wanted to short-circuit the time the dispute would normally take if you entered into a letter writing campaign. All of that is now moot per the law. That’s a good thing. Now the question is reduced to what is this animal called validation you want from the debt collector? No part of this section clearly defines validation yet it lays the requirement for such an action squarely on the shoulders of the debt collector.

Debt collectors will take the verification route and use computer print outs or copies of paper work you allegedly signed years ago or copies of microfiche documents or a letter supposedly from somebody in the credit department of the original creditor. If the debt has been reassigned or sold several times, the new debt collector uses the collection letter the former collector sent you.

As you can imagine, most consumers do not accept this slight of hand as validation. They want their original contract or the other document(s) alleging a debt be brought forward that has their signature on it. On this point, unfortunately, the courts seem to be ruling that a computer print out from the creditor alleging a debt is sufficient as validation. And, unfortunately one more time, the Federal Rules of Evidence (FRE), sections 1002, 1003 and 1004 are allowing the courts to rule this way.

Here are the rules, along with their Notes, as they appear in the FRE.

Rule 1002. Requirement of Original to prove the content of a writing, recording, or photograph, the original writing, recording, or photograph is required, except as otherwise provided in these rules or by Act of Congress. Notes on Rule 1002: Notes of Advisory Committee on Rules. The rule is the familiar one requiring production of the original of a document to prove its contents, expanded to include writings, recordings, and photographs, as defined in Rule 1001(1) and (2), supra.

Application of the rule requires a resolution of the question whether contents are sought to be proved. Thus an event may be proved by nondocumentary evidence, even though a written record of it was made. If, however, the event is sought to be proved by the written record, the rule applies. For example, payment may be proved without producing the written receipt which was given. Earnings may be proved without producing books of account in which they are entered. McCormick § 198; 4 Wigmore § 1245. Nor does the rule apply to testimony that books or records have been examined and found not to contain any reference to a designated matter.

The assumption should not be made that the rule will come into operation on every occasion when use is made of a photograph in evidence. On the contrary, the rule will seldom apply to ordinary photographs. In most instances a party wishes to introduce the item and the question raised is the propriety of receiving it in evidence. Cases in which an offer is made of the testimony of a witness as to what he saw in a photograph or motion picture, without producing the same, are most unusual. The usual course is for a witness on the stand to identify the photograph or motion picture as a correct representation of events which he saw or of a scene with which he is familiar. In fact he adopts the picture as his testimony, or, in common parlance, uses the picture to illustrate his testimony. Under these circumstances, no effort is made to 6 prove the contents of the picture, and the rule is inapplicable. Paradis, The Celluloid Witness, 37 U.Colo.L. Rev. 235, 249-251 (1965).

On occasion, however, situations arise in which contents are sought to be proved. Copyright, defamation, and invasion of privacy by photograph or motion picture falls in this category. Similarly as to situations in which the picture is offered as having independent probative value, e.g. automatic photograph of bank robber. See People v. Doggett, 83 Cal.App.2d 405, 188 P.2d 792 (1948) photograph of defendants engaged in indecent act; Mouser and Philbin, Photographic Evidence-Is There a Recognized Basis for Admissibility? 8 Hastings L.J. 310 (1957). The most commonly encountered of this latter group is of course, the X-ray, with substantial authority calling for production of the original. Daniels v. Iowa City, 191 Iowa 811, 183 N.W. 415 (1921); Cellamare v. Third Acc. Transit Corp., 273 App.Div. 260, 77 N.Y.S.2d 91 (1948); Patrick & Tilman v. Matkin, 154 Okl. 232, 7 P.2d 414 (1932); Mendoza v. Rivera, 78 P.R.R. 569 (1955).

It should be noted, however, that Rule 703, supra, allows an expert to give an opinion based on matters not in evidence, and the present rule must be read as being limited accordingly in its application. Hospital records which may be admitted as business records under Rule 803(6) commonly contain reports interpreting X-rays by the staff radiologist, who qualifies as an expert, and these reports need not be excluded from the records by the instant rule.

Rule 1003. Admissibility of Duplicates A duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original. Notes on Rule 1003: Notes of Advisory Committee on Rules. When the only concern is with getting the words or other contents before the court with accuracy and precision, then a counterpart serves equally as well as the original, if the counterpart is the product of a method which insures accuracy and genuineness. By definition in Rule 1001(4), supra, a “duplicate” possesses this character.

Therefore, if no genuine issue exists as to authenticity and no other reason exists for requiring the original, a duplicate is admissible under the rule. This position finds support in the decisions, Myrick v. United States, 332 F.2d 279 (5th Cir. 1964), no error in admitting photostatic copies of checks instead of original microfilm in absence of suggestion to trial judge that photostats were incorrect; Johns v. United States, 323 F.2d 421 (5th Cir. 1963), not error to admit concededly accurate tape recording made from original wire recording; Sauget v. Johnston, 315 F.2d 816 (9^th Cir. 1963), not error to admit copy of agreement when opponent had original and did not on appeal claim any discrepancy. Other reasons for requiring the original may be 7 present when only a part of the original is reproduced and the remainder is needed for cross-examination or may disclose matters qualifying the part offered or otherwise useful to the opposing party. United States v. Alexander, 326 F.2d 736 (4th Cir. 1964). And see Toho Bussan Kaisha, Ltd. v. American President Lines, Ltd., 265 F.2d 418, 76 .L.R.2d 1344 (2d Cir. 1959). Notes of Committee on the Judiciary, House Report No. 93-650. The Committee approved this Rule in the form submitted by the Court, with the expectation that the courts would be liberal in deciding that a “genuine question is raised as to the authenticity of the original.” Rule 1004. Admissibility of Other Evidence of Contents The original is not required, and other evidence of the contents of a writing, recording, or photograph is admissible if—

(1) Originals lost or destroyed. All originals are lost or have been destroyed,

unless the proponent lost or destroyed them in bad faith; or

(2) Original not obtainable. No original can be obtained by any available judicial

process or procedure; or

(3) Original in possession of opponent. At a time when an original was under the

control of the party against whom offered, that party was put on notice, by the

pleadings or otherwise, that the contents would be a subject of proof at the hearing, and that party does not produce the original at the hearing; or

(4) Collateral matters. The writing, recording, or photograph is not closely related to a controlling issue.

Notes on Rule 1004: Notes of Advisory Committee on Rules.

Basically the rule requiring the production of the original as proof of contents has developed as a rule of preference: if failure to produce the original is satisfactory explained, secondary evidence is admissible. The instant rule specifies the circumstances under which production of the original is excused.

The rule recognizes no “degrees” of secondary evidence. While strict logic might call for extending the principle of preference beyond simply preferring the original, the formulation of a hierarchy of preferences and a procedure for making it effective is believed to involve unwarranted complexities. Most, if not all, that would be accomplished by an extended scheme of preferences will, in any event, be achieved through the normal motivation of a party to present the most convincing evidence 8 possible and the arguments and procedures available to his opponent if he does not.

Compare McCormick § 207. Paragraph (1). Loss or destruction of the original unless due to bad faith of the proponent, is a satisfactory explanation of nonproduction. McCormick § 201. Paragraph (2). When the original is in the possession of a third person, inability to procure it from him by resort to process or other judicial procedure is sufficient explanation of non-production. Judicial procedure includes subpoena duces tecum as an incident to the taking of a deposition in another jurisdiction. No further showing is required. See McCormick § 202. Paragraph (3). A party who has an original in his control has no need for the protection of the rule if put on notice that proof of contents will be made. He can ward off secondary evidence by offering the original. The notice procedure here provided is not to be confused with orders to produce or other discovery procedures, as the purpose of the procedure under this rule is to afford the opposite party an opportunity to produce the original, not to compel him to do so. McCormick § 203. Paragraph (4). While difficult to define with precision, situations arise in which no good purpose is served by production of the original. Examples are the newspaper in an action for the price of publishing defendant’s advertisement, Foster-Holcomb Investment Co. v. Little Rock Publishing Co., 151 Ark. 449, 236 S.W. 597 (1922), and the streetcar transfer of plaintiff claiming status as a passenger, Chicago City Ry. Co. v. Carroll, 206 Ill. 318, 68 N.E. 1087 (1903). Numerous cases are collected in McCormick § 200, p. 412, n. 1.

Notes of Committee on the Judiciary, House Report No. 93-650. The Committee approved Rule 1004(1) in the form submitted to Congress. However, the Committee intends that loss or destruction of an original by another person at the instigation of the proponent should be considered as tantamount to loss or destruction in bad faith by the proponent himself. Notes of Advisory Committee on 1987 amendments to Rules.

The amendments are technical. No substantive change is intended. You can find this information simply by going to your nearest law library and opening a

copy of the Federal Rules of Evidence to Rule 1002. By the way, some people say the above rules are located in the Federal Rules of Civil Procedure. This is simply not so as the FRCP are numbered 1 through 86 and never even touch numbering into 100 and above let alone 1000 and above. Regardless, now that you know where to find the applicable rules and have their accompanying notes, you are better armed to phrase your argument. The notes are extremely important because they add clarification to the rule itself. Always look for notes or annotations to any statute or code section you are researching. They not only clarify but lay out, in some cases, the thought processes of the law makers.

You have a right to demand the original as you can plainly read. However, for one reason or another, the debt collector can weasel out of producing the original. I believe the weasel clauses were allowed in the rules because of income taxes.

The IRS puts all kinds of entries into your Master File but never produces the original document authorizing them to make any of the entries. Having been down that road with this bunch of brigands, I can state flatly the court is never on the taxpayer’s side. It always allows the IRS to use a dummied up, at least in my case, computer printout as validation/verification of taxes owed.

This e-book is also not about the IRS but I reserve the right to inject my opinion about the genesis of why the original doesn’t have to be produced. I have researched many college treatises as well as having read many books in this area and I can only come to the conclusion that the leeway allowed the IRS has spilled over into the credit arena. For me, this is a truly sad day.

Others have adeptly written about certain cases decided in the validation argument and have said the courts either didn’t address the issue of the original or agreed with the debt collector that verification/validation is completed with the presentation of a computer print out or a copy of a supposed contract.

It is immaterial what the courts said or didn’t say because the governing doctrine is laid out in the already quoted sections of the Federal Rules of Evidence. Believe me, all states have adopted the FRE in one manner or another.

Why? Because it is a well laid out schematic easily adaptable to local rules and customs. Its ease of construction is hard to argue with.

Therefore, at least in my opinion, you stand a better chance of beating the debt collector by scrutinizing their legal responsibility to follow the procedures. For example, lawyers can be debt collectors and you would think they’d be the first to follow the procedures to a T, right? Wrong!

Not only do they have to follow federal procedures, they must comply with state procedures. If you live in Nevada like I do and a debt collecting lawyer sends you one of those “I am attempting to collect a debt letter” and she is not licensed to practice law in the State of Nevada, she may have to be licensed as a collection agency. Also, the form letter she mailed you must have been approved by the State. If neither of these requirements are met, you win on procedures. That’s a good thing. A debt collector may not have reported you to any credit bureau prior to resolution of your dispute. This is a common occurrence causing untold grief for alleged debtors. OK, at the beginning of this e-book I did say this book’s focus is strictly validation and I’ve gone astray. Not much, but enough to have to stop myself.

I have a Request For Validation letter I send to all debt collectors in which I ask certain questions. These questions set the stage for a law suit should the process go that far. I do not give this letter away as it has material I haven’t seen anywhere else. I am not saying it is bullet proof simply because I don’t know how a judge will rule in any presented set of circumstances. But, I do know, this letter does a beautiful job of protecting my interests and intertwining the FRE and local statutes into the matter. It also allows me to sue in the easiest and least expensive court in any state – Small Claims Court. The highest amount I could sue for in Nevada is $5000.00. However, if I believe I have more than $5000.00 in damages, I will file suit in Federal District Court.

I think my letter pinpoints the sections in both the Federal and State Statutes the debt collector will have violated. Therefore, I believe I will win on the procedures, that is violations thereof. Procedures they, and not me, must follow since the law specifically lays the procedural requirement smack on their door step.

There you have it. My take on Debt Validation and an alternative way to at least counter sue the debt collector.

I can be reached at tom@senior2senior.org with questions, comments or critiques.

Are You Facing Foreclosure? The Foreclosure Fairness Mediation Program can help!

Technorati Tags: foreclosure,HAMP program,mandatory foreclosure mediation,Wall-street,loan servicers,foreclosure fairness mediation program,department of financial institutions

In response to the subprime mortgage foreclosure crisis of 2007, the Obama administration passed legislation to create the Home Affordable Modification Program (HAMP). The HAMP program was supposed to help homeowners facing mortgage foreclosure with loan modifications.  HAMP was touted as a government ‘knight in shining armor’ for those facing foreclosure.  Under HAMP, mortgage servicers (lenders) are provided with the opportunity to enter into contracts with the Federal Government to modify homeowners’ mortgage loans in a particular and uniform fashion and receive incentive payments in return.

The first big mistake of the HAMP program was that the government actually trusted the banks to participate in HAMP program almost exclusively on their own terms and by their own free will.  For example, in the HAMP Handbook for Servicers of Mortgages from the US Treasury requires participating servicers to actively solicit borrowers to participate in HAMP before referring a loan to foreclosure or conducting a scheduled foreclosure sale. Of course, the banks were reluctant to go outside of their traditional foreclosure models because those models usually lead to the borrower being cheated out of a legitimate chance to refinance with affordable terms and additional earnings for the bank once the defaulted loan is securitized and sold on Wall-Street.

The second blunder of the HAMP program was that the incentives for the loan servicers weren’t enough to get them on board if they weren’t doing loan mods prior to the HAMP program.  The latest mortgage news is that the government has worked out a settlement deal with the five biggest banks accused of mortgage foreclosure malfeasance.  For a comprehensive report on just how ridiculous the government settlement with the banks go to here.  The five banks involved in the fraudulent activities and are required to pay approximately $25 billion to states, individuals and the government are :

• Bank of America
• Citi-Bank
• Wells Fargo
• Ally/GMAC
• JP Morgan Chase

The agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without knowing whether the facts they contained were correct.
Because of this litigation and the abject failure of the HAMP program, more than 30 states have implemented their own mandatory foreclosure mediation programs.  The states that are participating in mandatory mediation are:

• California
• Connecticut
• Delaware
• WA. DC
• Florida
• Hawaii
• Idaho
• Illinois
• Indiana
• Kentucky
• Maine
• Maryland
• Massachusetts
• Michigan
• Nevada
• New Hampshire
• New Jersey
• New York
• New Mexico
• Ohio
• Oregon
• Pennsylvania
• Rhode Island
• Vermont
• Washington State
• Wisconsin

In Washington State, the Governor signed into law the Foreclosure Fairness Act of 2011. The law provides Washingtonians facing foreclosure the opportunity to be referred by a housing counselor or an attorney to mediation with their lender to review available options to keep their home. This mediation is mandatory for all lenders before they foreclose on any home in Washington State.

If you live in one of the state listed above, contact your state Attorney General and ask about a similar program.

The Consumer Financial Protection Bureau Turns its Gaze To Collection Agency Business Practices

Share |

Today the Consumer Protection Bureau released a new set of rules allowing them to monitor and regulate how debts are collected by debt collectors, junk debt buyers, and any law firm or business who acts as a debt collector. These rules give the CFPB the authority to regulate any firm that has more than $10,000 in receipts from consumer debt collection activities. The CFPB’s authority over these business entities will begin on in January of 2013. This move by the CFPB to regulate debt collection activity is no doubt a response to the thousands of consumer complaints they have received. Companies like LVNV Funding, AFNI, Asset Acceptance Corp., and NCO Financial Systems are considered the worst of the worst amongst a murder of crows. The stories I have read on many credit repair blogs, and my own experience dealing with them confirm they are the biggest offenders of the law and will stop at nothing to collect a debt – whether the debt is valid or not. ”Millions of consumers are affected by debt collection, we want to make sure they are treated fairly”, said Director of the CFPB, Richard Cordray. “Today we are announcing we will be supervising the larger debt collectors in the market for the first time at the federal level” We want companies to realize that the better business choice is to follow the law, not break it”
Did you hear that sound? That is the collective sound of hundreds of thousands of Americans breaking forth in a great sigh of relief! Finally, the consumer has a protector – a champion who has not only the prerogative, but also the muscle to slay the beast…the Beowulf. Here are the details of what the CFPB is going to do regarding their supervision of collection agencies and how they are going to to do it:
Pursuant to the CFPB’s supervision authority, examiners will be assessing potential risks to consumers and whether debt collectors are complying with requirements of federal consumer financial law. Among other things, examiners will be evaluating whether debt collectors:

• Provide Required Disclosures: Examiners will evaluate whether debt collectors are properly identifying themselves and properly disclosing the amount of debt owed. The CFPB intends to ensure that debt collectors are upfront and clear with consumers.
• Provide Accurate Information: Examiners will assess whether debt collectors are using accurate data in their pursuit of debt. Inaccurate information can lead to collectors attempting to collect debt that consumers do not owe or have already paid.
• Have a Consumer Complaint and Dispute Resolution Process: As part of the CFPB’s compliance management review, examiners will assess whether complaints are resolved adequately and in a timely manner, whether the complaints highlight violations of federal consumer financial law, and whether the debt collector has a process in place to address consumer disputes.
• Communicate Civilly and Honestly with Consumers: Examiners will be assessing whether debt collectors have harassed or deceived consumers in pursuit of debt. For example, debt collectors should not be using obscene or profane language with consumers. Nor should they be engaging the consumer in telephone conversations repeatedly or continuously with intent to annoy, abuse, or harass. Debt collectors cannot threaten to imprison consumers who do not pay their debt or threaten to tell the consumer’s employer about the debt.

According to a report on the CFPB website, the CFPB is also publishing new questions and answers about debt collection in its Ask CFPB database. This interactive, online database answers consumers’ most frequently asked questions in plain language. The questions cover topics such as the definition of a debt collector, the best way to negotiate a settlement with a collector, and what a collector has the authority to do. You can also find information on debt collection on the FTC website under the Consumer Protection tab.

Is your private information secure?

Share |

For the last few days the news media has been all abuzz about an alleged cyber-attack on either one or all of the “Big three” credit bureaus that involved the publicizing of private financial information belonging to several celebrities including the First Lady, Michele Obama. According the AP news wire, a Russian based website called “exposed” is responsible for releasing the information. And the list of celebrities who’s information is now public is growing. No one is sure if the information is correct, but I don’t think it would be smart for any curious onlookers to somehow try to confirm the information as the White House has “released the hounds” to investigate who the owners of the website are and how they were able to hack their way into the three largest credit reporting agencies in the US.

Have you ever heard the saying, “if a tree falls in the forest and no one hears it, did it really make any noise? I use that analogy to say that there is an estimated 42 million credit reports held by Experian, Equifax, and TransUnion and in recent years, all three companies have experienced a massive increase in identity theft cases, some due to data security breaches at the agencies themselves, and other types because some guy decides to go through his neighbors garbage looking for bank statements. Apparently, it doesn’t really make the news until it happens to a celebrity. Believe me, my paltry $589.00 in my Bank of America checking account is just as important to me as Oprah Winfrey’s $589 million.

“We should not be surprised that if you’ve got hackers who want to dig in and devote a lot of resources, that they can access people’s private information,” Obama told ABC News in an interview aired Wednesday. “It is a big problem.”
Obama added: “It would not shock me if some information among people who presumably have pretty good safeguards against it, still gets out. Even though President Obama is not the one person whom I would assume has the last word on this country’s cyber security situation, it’s a pretty good bet that he is privy to some high-level information that informed his statements.

That alone is just scary.

The United States Department of Justice stated that in 2010, 7% of all United States households had at least one member of the family at or over the age of 12 who has been a victim of some sort of identity theft. Identify theft comes in various forms: medical information fraud, stealing the identity of persons deceased, credit card fraud, and check fraud. It is estimated that there 34,520 cases of various forms of identity theft per day, up from 22, 000+ in 2011.

Back in October of 2012, South Carolina Governor, Nikki Haley announced a massive security breach in the State’s Department of Revenue that resulted in the theft of 3.6 million social security numbers and 387,000 credit/debit card numbers (only 16,000 of which, it is believed, were unencrypted). These kinds of cyber-attacks are becoming more numerous as hackers are becoming more sophisticated.

I found a some good information on this subject at a site called Quizzle.com. They suggest some ways to protect yourself from cyber-attacks and identify-theft:

 

Don’t save credit card information on-line. I know that Google has an auto-fill plug -in that auto fill forms and job applications, etc. That same plug-in can save your credit card information as well. Don’t do it. Many hackers can figure out passwords by simply typing in multiple common passwords with different numeric combinations. If they get into an account that has stored your credit card number, they can easily charge items to your card without you knowing. The best way to avoid this is to use sophisticated password and not save your credit card number on any online store account

Keep your credit card pin number to yourself. Keep your credit/ debit card and the pin in completely separate places. And I don’t mean separately on your person, I mean if you have your credit card with you, your pin number should be at home. You should never write your PIN number on your credit card, according to experts at Identitytheft.com. Doing so makes it easy for thieves to access your account, if they get hold of your actual credit card. It’s also smart to shred all mail that you don’t want. This includes credit card offers and other mail that asks for financial information or social security number.

Be weary of Wi-Fi

Wi-fi has introduced a new opportunity for hackers to steal your identity, according to Hacked Info, a website devoted to cyber security. Most wi-fi networks are not covered by security software, thus making them a goldmine for hackers hoping to steal your identity. And computers typically have standard default settings that are common knowledge to most hackers, making it easy to get into your personal information.

To avoid having your computer overtaken through wi-fi networks, change the password on your wireless router. Passwords are often standard on routers, so replacing that password with your own is a great way to protect your computer from cyber attacks.

Think about what you’re posting on social networks

Cyber thieves stole above $25 million from businesses in the first quarter of 2009, and that number is consistently rising, according to Krebsonsecurity.com. And cyber theft has yet another target – social networking sites. People share information about themselves so freely that it is easy for criminals to pose as someone else and find your personal information.

The cyber theft process is easy for those with experience in programming, but many are buying software to steal information as well. Firewalls were once thought to protect your computer, but even they are not enough anymore.

Cyber security is all about being careful. If you engage in on-line shopping, slow down and ask yourself few questions before you enter that credit card number, “am I doing the most secure thing with my credit card information, or, am I sure this website is secure?” Be thoughtful about what you say and do while on the Internet and even on your home computer. A little common sense will go a long way to keeping your personal information safe from hackers and would-be identity thieves. And remember if you want to keep financial records like credit card numbers, and pin numbers or passwords more secure, place them on a thumb drive so the information is not just sitting online or on your computer waiting for some sophisticated hacker to get at it.

Related articles

My thanks to Shannon Dickinson at Quizzle for her article, “Combating Identity Theft: How to protect yourself from cyber crime” http://www.quizzle.com/blog/2010/10/combating-identity-theft-how-to-protect-yourself-from-cyber-crime/

• Chase Bank fends off cyber attack (heraldtimesonline.com)
• How To Prevent Identity Theft and Protect Your Credit Score (creditrepair.com)
• Senior US Official Says China Must Stop Cyber-Attacks (theepochtimes.com)
• Michelle Obama Victim of Hacking, Obama Does Not Confirm Amidst Meetings on Cyber Security (+Video) (theepochtimes.com)
• What To Do About Identity Theft (nationaldebtrelief.com)
• Pursuit of hackers who took credit reports expands (news.yahoo.com)
• Hackers Attack Bank Minutes After NSA Chief Warns Senate About Hackers Attacking Banks (theatlanticwire.com)
• Identity Theft in America by The Numbers (creditloan.com)

Zombie Debt: Help stop the haunting!

Share |

  

I have lived most of my adult life in Seattle, Washington. I have experienced life as a stable, working member of the community, and I have also fallen on times so hard that I had to live in my car and depend upon food banks to feed myself. If you visit food banks and emergency homeless shelters enough, eventually you will meet some very interesting people. I once met a brilliant young man who was an Oregon State University law-school drop out. He told me (as we sat on the sidewalk eating turkey sandwiches we had just scored from a homeless shelter) that he dropped out of law school in his 3rd year because he couldn’t stay focused, and could not get help to treat his ADHD (attention deficit hyperactivity disorder) condition. I remember thinking what a waste of a good mind.  If only he could have gotten the medical attention he needed, he could have finished law school. I don't know what he would have been doing had he finished law school, but I 'd bet he would not have been sitting on a corner eating a food-bank sandwich with me!

I’ve met a wide variety of people who exists as virtual ghosts, living in the underbelly of Seattle; they live under bridges, in alleys, in abandoned or foreclosed homes. ”Ordinary” people see the homeless but rarely acknowledge them - as if they exist on some other time-plane that makes their presence not quite physical. If you do take a minute and speak to a homeless person, or someone at a food-bank you will immediately notice that they are quite real, and as the Pemco Insurance commercial says, “a lot like you- a little different.”

Another thing I have noticed is Seattle has a large number of homeless persons who aren’t natives of Washington State. I am amazed by the number of people who have casually told me they came to Seattle because they heard the social, and low-income services administered by non-profit organizations were the best in the country. I don’t know this to be true from experience, as I have never needed to access social welfare programs in any state other than Washington, but I am convinced that Seattle has some pretty awesome low-income social service organizations here. I have featured two such agencies in this blog-post.

Below is a link to a video I found at the ‘Solid Ground’ website - a great non-profit organization in Seattle Washington, on how zombie debt is increasingly being used by collection agencies to unlawfully collect time-barred debts from consumers, and how it disproportionately affects the lives of low- income persons.  The video is part a campaign to get our state legislators to pass HB 1069. Poverty Action says HB 1069 is being considered by the legislature right now. This legislation would prevent debt buyers from:

• Suing debtors for time-barred debt (outside the statute of limitations);
• Suing debtors without sufficient proof that the debt buyer actually owns the debt;
• Not having proof of assignments of the debt to indicate a chain of title for the debt.

Zombie Debt: Help stop the haunting! The video was produced by Marcy Bowers of the Statewide Poverty Action network http://povertyaction.org/. Both organizations are committed to helping the poor through social service programs and housing assistance. Solid Ground has been around for a long time here in Seattle. Formerly known as the Fremont Public Association, the non-profit is widely acknowledged for their work helping low-income individuals and families. They also help the homeless overcome economic crises and develop skills and resources they need to get back on their feet. They offer over 30 programs and services to help needy families and individuals.

The Poverty Action Network is more focused upon building grass-roots campaigns that address issues such as consumer protections, basic needs, racial equity, and Immigration and Refugee justice. Poverty Action was founded in 1996 as a response to the federal government’s passage of the Personal Responsibility and Work Opportunity Reconciliation Act or “welfare reform.”

Poverty Action says they are Washington state’s largest anti-poverty organization.

Related articles

• 7 steps to avoiding zombie debt (thewiseme.com)
• Zombie Foreclosures: Reanimated Mortgage Debts (sgtreport.com)
• Old debt, uncollectable and not taxable (dontmesswithtaxes.typepad.com)
• The Walking Debt……Zombie Mortgage Appocalpse (kswiggins.wordpress.com)
• The Worst Part of Being Homeless: ‘No One Sees Me’ (alternet.org)

Can the new mortgage rules of the CFPB really protect the consumer from predatory lending?

On January 12th of this year, the Consumer Financial Protection Bureau issued it’s new mortgage servicing rules via a long-awaited press release. “For many borrowers, dealing with mortgage servicers has meant unwelcome surprises and constantly getting the runaround. In too many cases, it has led to unnecessary foreclosures. Our rules ensure fair treatment for all borrowers and establish strong protections for those struggling to save their homes.” said CFPB Director, Richard Cordray.

The new servicing rules highlight three basic areas of mortgage servicing: foreclosure avoidance, servicing transparency, and uncomplicated business procedures. The consumer Finance Protection Bureau has obviously done their homework. They probably conducted polls to find out what the major complaints were among those who were experiencing mortgage foreclosures. In the early to mid 2000’s, most American homeowners who found themselves trapped in bad mortgages were not wholly to blame as some would argue. Sure, there is something to be said for paying attention to what their loan paperwork actually said, but what if the loan originator had an ulterior motive that had absolutely nothing to do with what was even on the paperwork? Did not that loan originator have a fiduciary responsibility to their client? The answer to that obviously rhetorical question is, yes. In doing research to write this blog, I purposely read articles from differing perspectives – from the more conservative Wall Street perspective as well as from writers who had a more liberal perspective.

The differences between liberal and conservative perspectives on this issue were stark. The wall street pundits blame globalization, Trade deficits, market upheaval, shadow banking systems, world-wide fixed income investment increases, and artificial currency manipulation in the East. Liberal economists like Paul Krugman tended to focus on US Monetary Policy, Foreign Policy, and individuals like former Chairman of the Federal Reserve, Allen Greenspan, his predecessor, Ben Bernanke and their anti-regulation policies. Allen Greenspan publicly admitted during a Congressional hearing that he “had made a mistake in presuming that financial firms could regulate themselves.” In a Wall Street Journal article, columnist David Henderson, wrote, “It’s become conventional wisdom that Alan Greenspan’s Federal Reserve was responsible for the housing crisis. Virtually every commentator who blames Mr. Greenspan points to the low-interest rates during his last few years at the Fed” Henderson was referring to the decision Allen Greenspan made to lower interest rates from 3.5% to 1% in the wake of the 911 attacks and end of the Internet tech-bubble in hopes of avoiding an economic slowdown. I vaguely remember then President Bush telling America the best response to the 911 attacks was to, “go shopping.”

So let’s bring this thing back to Main Street America because that’s where you and I live – and because it was we who paid the price for Wall-Streets’ mistakes and Washington’s’ wrong-headed monetary policies. Now that the damage has been done, and lives have been ruined, we now look to our political ‘knight in shining armor’, the Consumer Financial Protection Bureau; the bureau that was birthed amidst a fire-storm of right-wing resistance, and was the brain-child of the champion of consumer rights herself – Elizabeth Warren. After all, it was she who originally sounded the clarion call in Congress to make those, “too big to fail” financial institutions pay back their TARP handouts, and pushed for more regulation of the financial services industry as a whole.

There is no longer any doubt in anyone’s mind that predatory lending was not just a phenomenon, it was going on before the credit crunch, and will continue if it is not stopped. It is malicious, destructive, and it is pervasive. It was born out of pure greed. The question is how to stop it. The CFPB has taken a very effective first step, but I believe the the problem goes much deeper than regulating the loan servicing department of a bank or financial institution. I believe the root of the problem is the securitization of Credit itself. In their book, The Securitization of Credit, James A. Rosenthal and Juan M. Ocampo, define credit securitization like this: “Credit securitization is the carefully structured process whereby loans and other receivables are packaged, underwritten, and sold in the form of securities (instruments called asset-backed securities).”
The causes of the 2007 mortgage default crisis has been described as a “systemic event,” meaning that the entire US financial system was in crisis to the point of insolvency. Too big to fail is no joke. If Citi-group, Bank of America, AIG, and the other too big to fail financial institutions had not received TARP funds, the United States would have collapsed financially, and yes, we would have had another Great Depression on our hands. While I truly believe the CFPB has committed some of the best legal and economic minds we have in this country to solving this problem, I cannot believe anything less than a total overhaul of our financial system is the only remedy that will prevent this from happening again. It may not happen in the mortgage/housing industry, but possibly another sector. In an excellent paper written by Gale Gorton and Andrew Metrick of Yale University, they describe the securitization of credit like this:

“An important part of the subprime mortgage innovation was how the mortgages were financed. In 2005 and 2006, about 80 percent of the subprime mortgages were financed via securitization, that is, the mortgages were sold in residential mortgage-backed securities (RMBS), which involves pooling thousands of mortgages together, selling the pool to a special purpose vehicle (SPV) which finances their purchase by issuing investment-grade securities (i.e., bonds with ratings in the categories of AAA, AA, A, BBB) with different seniority (called “tranches”) in the capital markets. Securitization does not involve public issuance of equity in the SPV. SPVs are bankruptcy remote in the sense that the originator of the underlying loans cannot claw back those assets if the originator goes bankrupt. Also, the SPV is designed so that it cannot go bankrupt.”

It stands to reason that any player in the financial services industry will undoubtedly experience what liberal economist, Paul Krugman calls ‘Moral Hazard.’ Moral is a concept saying that people will take risks if they have an incentive to do so. The idea is that people might ignore the moral implications of their choices. Instead, they will do what benefits them the most. Most people understand the trade off between risk and reward. If you take risks, there may be consequences. However, you might be rewarded.
What if those trade offs weren’t there? If you knew you could take risks without consequences, would you take more risk? What if someone else had to suffer the consequences of your actions? Moreover, Wikipedia notes: That is essentially what happened in mortgage default crisis with respect to the originators of sub prime loans, many may have suspected that the borrowers would not be able to maintain their payments in the long run and that, for this reason, the loans were not going to be worth much. Still, because there were many buyers of these loans (or of pools of these loans) willing to take on that risk, the originators did not concern themselves with the potential long-term consequences of making these loans. After selling the loans, the originators bore none of the risk so there was little to no incentive for the originators to investigate the long-term value of the loans. A party makes a decision about how much risk to take, while another party bears the costs if things go badly, and the party isolated from risk behaves differently from how it would if it were fully exposed to the risk.
Until the CFPB, the FTC, and Dodd-Frank can construct a systemic remedy for moral hazard in the financial services industry, you can bet the love of money will undoubtedly cause another financial catastrophe similar to the mortgage default crisis 2007.

Related articles

• CFPB to Help Mortgage Industry With Implementation of Rules (broadcastarchives.net)
• U.S. Mortgage Overhaul Turns Eyes on Borrowers (bloomberg.com)
• Warren, Brown, Reed demand majority vote on Cordray nomination (dailykos.com)
• New Mortgage Rules Readied by CFPB as Banks Seek Time to … – Bloomberg (bloomberg.com

Subprime credit card company survives CROA attack in Supreme court

Technorati Tags: CROA section 1979,Credit card deceptive practices

Wanda Greenwood and two others had filed a class action against CompuCredit and Columbus Bank and Trust over Aspire Visa subprime credit cards that the defendants marketed to consumers with low credit scores.
Though CompuCredit and Columbus advertised that there was "no deposit required" for the cards, which would help them rebuild their credit, they charged about $257 in fees during the first year, against a $300 credit limit, the class claimed. 

On January 10, 2012, the Supreme Court decided CompuCredit Corp. v. Greenwood, No. 10-948, holding that the Credit Repair Organizations Act ("CROA") does not preclude enforcement of an agreement to arbitrate claims brought under that act.
Congress passed the Credit Repair Organizations Act (CROA) to assist consumers in making informed decisions and to protect consumers from unfair or deceptive practices when dealing with companies that claim to help rebuild credit. The CROA augments the Consumer
Credit Protection Act with additional nonwaivable consumer
protections, including a mandatory precontractual disclosure of consumers’ rights when contracting with a credit repair organization.      
In Greenwood v. CompuCredit Corp., the Ninth Circuit denied a request to compel arbitration based on a predispute arbitration agreement, holding that the CROA’s mandatory disclosure term “right
to sue” creates a substantive, non-waivable right that precludes arbitration. 

Plaintiffs in the action—respondents in the Supreme Court—opened credit card accounts through petitioner CompuCredit. They later brought a putative class action, alleging that CompuCredit violated the CROA by making allegedly misleading representations regarding the credit cards' use to rebuild poor credit. The district court denied CompuCredit's motion to compel arbitration, concluding that CROA claims are not arbitrable. A divided panel of the Ninth Circuit affirmed.

The Supreme Court reversed and held that CROA claims may indeed be arbitrated. Federal statutory claims, just like other claims, are subject to the "liberal federal policy favoring arbitration agreements." Under Section 2 of the Federal Arbitration Act ("FAA"), contracts to arbitrate federal claims must thus be enforced—unless the FAA has been "overridden by a contrary congressional command."  The Aspire Visa card is marketed and owned by CompuCredit.  The card was the subject of a massive amount of complaints from consumer rights advocates and the card-holders themselves.  It was basically outlawed by Section 105 of the CARD Act of 2009.

CompuCredit is best known in consumer credit circles as the target of a 2008 FDIC enforcement action documenting the features of these cards, which typically come with a low credit limit and high up-front fees. The card at issue here had a credit limit of $300 and first-year fees of $257, leaving an available credit limit of only $43. Collectively, those features are likely to push the effective interest rate on purchases with the card far above one hundred percent per year. So CompuCredit is no stranger to dissatisfied customers.

CompuCredit represents what is wrong with this country’s financial system and why Congress had to pass the Dodd-Frank Reform and Consumer Protection Act. Following the 2008 near-collapse of the U.S. economy, which was fueled by the crash of the housing bubble, the Dodd-Frank Financial Regulatory Reform Bill established restrictive measures in an attempt to prevent such events in the future. In order to protect unsuspecting borrowers against abusive lending and mortgage practices, the reform bill established government agencies to monitor banking practices and oversight of troubled financial institutions.

In a report from the National Consumer Law Center, staff attorneys Rick Jurgens and Chi-Chi Woo stated Below is the executive summary of their scathing report:

EXECUTIVE SUMMARY

Millions of consumers are being victimized by “credit” card offers that charge hundreds of dollars in fees and extend minimal available credit – sometimes as little as $50. These cards, which we call “fee harvester” cards, share a common thread: high fees that eat up most of an already low credit limit, leaving the consumer with little real, useable credit and at a high price.  For example, one of the fee-harvester cards featured in this report comes with a credit limit of $250. However, the consumer who signs up for this card will automatically incur a $95 program fee, a $29 account set-up fee, a $6 monthly participation fee, and a $48 annual fee – an instant debt of $178 and buying power of only $72. While high fees, high interest rates, and other abuses pose a threat to consumers of prime credit cards as well as to those with bad and no credit histories, fee-harvester cards are designed to maximize profits by targeting the most vulnerable consumers. Fee-harvester cards are part of the subprime strata of credit cards, and represent an extreme version of the abuses by the card industry.

Fee-harvesting is very profitable. In 2006, one company – CompuCredit – collected $400 million in fees from a portfolio of fee-harvester cards that by mid-2007 had saddled cardholders with nearly $1 billion in debt.  The business models of CompuCredit and others that issue and market fee-harvester cards depend upon federal banking laws and regulations that preempt state interest rate caps and consumer protection laws.  Preemption also benefits the mainstream credit card industry, which makes enormous profits by charging interest rates and fees that could otherwise be limited by the states. Weak enforcement actions and guidelines issued by federal banking regulators have done little to contain the harm.  Preemption makes bank charters an invitation to extract high fees. For example, CompuCredit, frustrated in efforts to get its own bank charter, has marketed fee-harvester cards in partnerships with compliant banks that act as issuers.  Recently, CompuCredit partnered with Urban Trust Bank, which says its “mission” is to bring affordable banking services to minority communities. CompuCredit has other powerful partners, including a unit of Synovus, a large Georgia bank holding company that is also a major service provider to mainstream credit card companies. CompuCredit also has ties to some of Wall Street’s largest and most prestigious banks.

Several small banks specialize in the issuance of fee-harvester cards, including South Dakota-based First Premier; First National of Pierre; Delaware-based First Bank of Delaware; and Applied Bank, formerly known as Cross Country Bank. Some big banks also have big stakes in the subprime market, including Capital One, which has sometimes used the fee-harvesting model, and HSBC.

Congress should act to end preemption and to close the legal loopholes that now enable banks to attach high fees to nearly meaningless offers of credit that are at the heart of fee-harvesting. In addition, Congress should regulate interest rates, fees, and unilateral contract changes throughout the credit card industry, and permit individual consumers to seek recourse when creditors violate their rights under the Federal Trade Commission Act.

The entire report is excellent.  Definitely mandatory reading for anyone interested in the credit industry. 

The supreme court is well aware of these companies and how they prey on minorities the economically lower-class populations.  Justice Ruth Bader Ginsburg was the ONLY justice to speak out on the side of the “common man” as she put it.  In her lone dissenting opinion from the bench, she wrote in part: “here, congress’ intended target was vulnerable consumers likely to read the words “right to sue” to mean the right to litigate in court. She distinguished the case from other decisions holding that a statutory right of action does not preclude arbitration agreements, noting that the CROA specifically refers to a “right to sue”, mandates that consumers be informed of this right, and precludes the waiver of any “right” conferred by the act.” 

Ginsburg was the only justice who got it right.  Just because the CROA is “silent” with regard to overriding the FAA rule, the whole purpose Congress created the statute was to protect consumers from the exact kinds of greed and market manipulation perpetrated upon low-income and minority populations by so many credit banks and card companies, like CompuCredit and Columbus Bank. 

Do we need a new Consumer Financial Protection Agency?

Once upon a time, back in the good o'le days, most people didn't even have to know what their credit score was before making major purchases like a house or car. It wasn't until recently that knowing your credit score was even considered important by financial planners.

Now days, not knowing what's on your credit file is tantamount to financial suicide. The recent phenomenon of ID theft has millions of consumers worried about who has access to their credit file and what protections are in place to ensure their file is secure from unauthorized eyes. Even the smart consumer can be duped by phishing scams if the scammer tech savvy and sophisticated enough. According to the White House, the Fair and Accurate Credit Transactions Act of 2003 was supposed to provide consumers, companies, consumer reporting agencies, and regulators with important new tools that expand access to credit and other financial services for all Americans, enhance the accuracy of consumers' financial information, and help fight identity theft. Yet according to the US Public Interest Group (PIRG) Congress did not complete the job of protecting citizens from identity theft or credit bureau mistakes when it enacted the 2003 Fair and Accurate Credit Transactions (FACT) Act. Further, some identity theft protections of the FACT Act are enhanced and improved if states take additional action.

The FACT ACT, or more commonly, FACTA changed a lot how credit reporting agencies and issuers of credit like VISA, MasterCard and many others do business. It expanded the powers that the average consumer has regarding disputing information in their credit file they believe to be inaccurate, outdated or just plain wrong. It also gave consumers the power to dispute directly with the original creditor and required the creditor to prove the debt was the consumers instead of the other way around.

The president has been lobbying for a new federal agency called the Consumer Financial Protection Agency. This information is critical if you want to know more about how the credit industry affects our economy and your bank account. Elizabeth Warren, professor at Harvard and Chair of the Congressional Over site Panel discusses the credit market. In the attached You Tube video, she clearly explains our broken credit market and how it needs reform.