Is your private information secure?

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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)

What to do if you get sued by a collection agency

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Today I received a text from my old college roommate who said he received a Summons and Complaint from a Junk debt buyer. He’s a Paralegal and will know what to do, but it got me thinking about how scary it is to be on the receiving end of one those things. So I jumped on over to one of my favorite credit repair go-to websites, Creditinfocenter and found a very good article on what you should do if you ever get sued by an original creditor, collection agency, or ANYONE for that matter. Here is a copy of what I found on the Creditinforcenter blog:

Sued by a Creditor? Learn How to Fight a Debt Lawsuit

 

With many collection agencies and JDBs turning to the legal system to collect, more and more people are talking to me about lawsuits over debts. This article will cover the best way to handle the situation if you find yourself with a summons. This article covers lawsuits dealing with DEBT ONLY. You might also watch to watch our video on being sued.

Please Note: I AM NOT A LAWYER. If you are facing court, it’s ALWAYS a good idea to hire an attorney or get some legal assistance. Depending on your area and circumstances, in some cases, you can get free help. If you cannot afford it, though, take heart. Lot of people have handled their cases pro per (in other words, without a lawyer.)

What To Do If You Are Served a Lawsuit

If you have been served with a lawsuit, the time to send a debt validation letter is OVER. People always think that sending a debt validation letter to the law firm/collection agency/junk debt buyer will somehow stop the court case or serve as a proper answer to the summons. IT DOES NOT. At this point, your priority should be writing your answer to the court addressing each point in the complaint. If you don’t do this, you automatically lose the case. Your time to answer the complaint is limited, usually 20-30 days from the day you are served. Don’t waste this precious time on debt validation.

What is a Summons and Complaint?

In the packet of papers you received from the process server, you will find:

• A paper telling you when your court date is,
• Some kind of certification that you were served (meaning it goes over how you were notified of the lawsuit: in person, by mail, etc.),
• Instructions for answering the complaint or a form to fill out,
• Any evidence the Plaintiff (i.e. collection agency) is submitting. There could be documents such as affidavits from the collection agency. There might also be documents from the original creditor, although this is extremely rare,
• A list of allegations, which constitutes the complaint. The paper may or may not be titled “Complaint”. Next we will go over the steps to identify the complaint in the paperwork. There will ALWAYS be a complaint in your paperwork. Please look for it.

Complaint

If you are still having trouble finding the complaint, this next information may help. Most complaints will look like the following.
Complaint Number #XXXXXXX Collection Attorney Plaintiff vs. YOU Defendant
Allegation 1: Allegation 2: Allegation 3: Typically, this next allegation will say something like “Defendant obtained a credit card from Credit card Company X” Allegation 4: Typically, this next allegation will say something like “Defendant used the credit card to obtain goods and services using the card” Allegation 5: Typically, this next allegation will say something like “Defendant racked up charges totally $XX and then refused to pay”

Answer

The most important thing you can do is to answer the complaint by the due date. This is the most important thing you can do when you receive a summons.
Once you’ve identified the paperwork which constitutes the complaint, you must answer it. You merely reply by stating whether or not you agree with the statements in the complaint and why. Don’t hide your head in the sand, you have NOTHING to lose by answering the complaint, even if you don’t do it exactly right. You must do it quickly, you only have 20-30 days (depending on your court) to answer the complaint. If you do NOTHING, you automatically lose and the collection agency has a judgment against you.

You MUST answer the complaint. It will cost you next to nothing to answer, and it’s pretty easy to do. If you do nothing, you AUTOMATICALLY LOSE. By answering, you have a good chance of winning.

Answering the Complaint Correctly

You can write your answer on a plain piece of paper, or type them up on your computer. No fancy or legal format is necessary. As long as your answer is clear, it will be fine. In some court systems, they provide written forms for you to fill out. You can use them and attach a more detailed answer. A sample answer is posted at the bottom of this page.
IMPORTANT: You must ADMIT or DENY each allegation. Failure to deny an allegation means that you are admitting to it. In the above complaint example

Your answer to Allegation number 1 can be: In your answer, you would ADMIT allegation 1, that the plaintiff is who they say they are.
Your answer to Allegation number 2 can be: You would also ADMIT allegation 2: that you (the defendant) are who Plaintiff says you are.
Your answer to Allegation number 3 can be: We are assuming in allegation 3, that you opened a credit card account with them, has been backed up by zero evidence. For instance, some lawsuits are filed by Junk Debt Buyers acting as collection agencies who don’t even list the account number of the original credit card. They don’t have any statements from the credit card companies, nothing. They’ve provided no proof so you, as a result, have no idea what they are talking about. The same holds true for allegations 4 and 5.
ADMIT in part. I did have an account with Bank X. DENY in part, I have been presented no evidence that the account I had with Bank X is the same account as the debt alleged in this complaint.
-or-
DENY. Responding Party objects to this request on the ground that it is vague, ambiguous and unintelligible in that Responding Party has to speculate as to the meaning of “the credit card” and “the account.”
Your answer to Allegation number 4 can be: DENY. This request calls for admission of matter defendant has denied and thus it is improper.
-or-
DENY. Responding Party objects to this request on the ground that it is vague, ambiguous and unintelligible in that Responding Party has to speculate as to the meaning of “the credit card” and “the account.”
Your answer to Allegation number 5 can be: DENY. This request calls for admission of matter defendant has denied and thus it is improper.

Affirmative Defenses

Affirmative defenses are legal reasons why the complaint should be thrown out. Some of the best affirmative defenses are:

• Failed to state the basis of the lawsuit: They did not cite an actual state law which was violated.
• Debt is Time-barred: The statute of limitations has passed.
• Statute of Frauds: No contract exists as proof.
• Failure of Consideration: No exchange of money or goods occurred between the plaintiff and the defendant.
• Lack of Privity: No relationship exists between the collection agency and you. You never signed a contract or agreement with the collection agency, remember?

You can list these affirmative defenses at the bottom of your answer, after the specific responses to the allegations.

File Your Answer

You will need to send a copy of your answer to the courts and the lawyer listed in the complaint. Make sure you send them within the time allowed and send them registered mail! As another option for selected states, here is a service where you can submit your court filing online.
A sample answer is posted at the bottom of this page.

Requests for Discovery

In some courts, you need to file any counter-suit along with your answer. In addition, if you intend to ask for discovery (request disclosure of information and documents from the Plaintiff), you may need to send it along with your answer. Every court’s rules are different, you need to look this up. Which brings us to the next item.

Look up Courts Rules of Procedure

Most courts have online instructions and information. Take the time to read it. You will at least need to know the timetable of your case.

Evidence Included in the Summons and Complaint

Most often you will be presented with exhibits (documentation which serves as evidence) in the case file, such as credit card agreements and affidavits of debt. Usually you can object to this evidence and get it thrown out of the case based on hearsay. If you are successful getting this evidence thrown out (struck from the records), the Plaintiff will have no evidence against you. If they have no evidence, they cannot win.

Tips for Filing Your Answer

Many courts will let you handle everything via the U.S. Mail. There is no need to take time off of work to personally file your answer. Send everything certified mail, return receipt requested; one copy to the court, one copy to the lawyer representing the Plaintiff.
Another good idea is to include a self-addressed stamped envelope and one extra copy with your answer to the court. In some cases, if you made a mistake in your answer, they will let you know immediately. If nothing else, they will send you a an endorsed-filed copy of the filing so you know it was entered. One of our readers received a hand written note from the clerk asking my reader to call so the clerk could help correct the filing.

Testimonial That This Advice Works!

I want to say THANK YOU!!!!! I was recently (11/06/08) sued by a Debt Collection agency and taken to my local District Judge for an old credit card account of just under $2500. This account was originally opened in the early 90s and I last made a payment to a collections dept. in 2002. Well, a junk debt buyer bought it and have been harassing me since 2004. I received a summons in the mail to appear in court, which I promptly replied that I would defend since referencing your creditinfocenter website.
I not only built a case using the SOL argument and re-aging, but embarrassed the counselor that showed up against me by asking for signatures, original documents, account histories, etc. He showed up with GENERIC documents w/ no signatures and I won the case!!!!
Thank you SOOOOO much. The best part was when the counselor stopped me after the judge left and said how impressed he was with my preparedness and that no one usually knows about those items!! Thanks so much.
Thanks again!
M. (Pittsburgh, PA)

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You can also read this detailed description of what it’s like to go to court against the big boys and WIN. The story is enlightening, educational and ENTERTAINING.

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Sample AnswerPLEASE DO NOT JUST CUT AND PASTE THIS – Every complaint is different. One size DOES NOT fit all. If you merely cut and paste, you WILL LOSE.

Complaint number #XXXXXXX Collection Attorney Plaintiff vs. YOU Defendant
Defendant’s Answer to Complaint
Allegation 1: Admit Allegation 2: Admit Allegation 3: Denied: Responding Party objects to this request on the ground that it is vague, ambiguous and unintelligible in that Responding Party has to speculate as to the meaning of “the credit card” and “the account.” Allegation 4: Denied: This request calls for admission of matter defendant has denied and thus it is improper. Allegation 5: Denied: This request calls for admission of matter defendant has denied and thus it is improper. FUTHERMORE, Defendant DENIES every other allegation not previously admitted, denied or controverted.
AS AND FOR AFFIRMATIVE DEFENSES
1. Plaintiff fails to state a cause of action against the defendant. 2. Plaintiff, as the defendant is informed and believes, lacks the legal standing to bring and maintain this action. 3. The action is barred by the Statute of Frauds. 4. The action is barred by the Statute of Limitations. 5. The court would unjustly enrich the plaintiff by granting the relief sought herein. 6. The plaintiff has not proven the debt is valid or the amount of the debt is accurate. The plaintiff must prove that the principal, interest, collection costs, and attorneys fees are all correct, agreed to in your contract, and lawfully charged. Defendant also insists that the plaintiff come up with the contract, account statements and purchase receipts to prove the amount of the debt.
WHEREFORE, the defendant asks the Court for judgment: a. dismissing the complaint herein with prejudice.

Not really sure who the real plaintiff is? Read this!

Zombie Debt: Help stop the haunting!

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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. 

How to get assistance from the Consumer Finance Protection Bureau

 Mortgage Assistance – CFPB

The CFPB can help you get connected to a HUD-approved housing counselor. At no cost to you, the counselor can help you work with your mortgage company to try to avoid foreclosure. A housing counselor can help you organize your finances, understand your mortgage options, and find a solution that works for you.
Here’s what to do:
Have this ready when you work with your mortgage company or housing counselor to discuss a possible work-out solution.

• Mortgage loan number (account number)
• Any additional paperwork from your mortgage company
• Recent pay stubs
• Recent tax return
• Household expenses (bills including food, utilities, car payments, insurance, cable, phone, credit cards, car loans, and student loans)

Call the CFPB at 1.855.411.CFPB (2372)
If you would prefer to look for mortgage help online, HUD provides a list of foreclosure prevention resources arranged by state. Military members or veterans can call us or visit the VA’s home loan website to get personalized assistance.
Foreclosure prevention and loan modification scammers target homeowners who are having trouble paying their mortgages. These scammers might promise “guaranteed” or “immediate” relief from foreclosure, and they might charge you very high fees for little or no services. Don’t get scammed. If it sounds too good to be true, it probably is. Call the CFPB if you think you may be the target or victim of a scam.

Legal aid

If you believe you are in need of an attorney, or if you have been served with a notice of foreclosure or other related legal complaint, there might be legal representation available at little or no cost to you. Find legal aid in your state.

Mortgage Assistance – FTC (federal trade commission)
The Federal Trade Commission has help for homeowners in distress.  They have useful suggestions and some resources that might provide you with the help you need.
To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government’s portal to financial education.
The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit MyMoney.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

 

There's a New Sheriff in Town: The Consumer Financial Protection Bureau

For years, the big three credit reporting agencies - Equifax, TransUnion, and Experian, have operated with little to no government oversight or regulation. These are the three agencies that control who gets approved or rejected for loans on everything from credit cards, to cars, to even buying a home.

Consumer protection organizations such as US PIRG (US Public Interest Research Group) have long claimed that the big three operate under a mysterious shroud of secrecy and are the reason the entire credit and lending system is plagued with inaccuracies and erroneous information.

Several studies over many years have repeatedly documented the chronic problem of inaccuracies in credit reports. The U.S. PIRG has conducted at least six studies between 1991 and 1998 and each time has found a shocking number of serious errors in consumer credit reports. US PIRG’s most recent study in 1998 revealed the following:

Twenty-nine percent (29%) of the credit reports contained serious errors --false delinquencies or accounts that had never belonged to the consumer --that could result in the denial of credit; 

 Forty-one percent (41%) of the credit reports contained personal demographic identifying information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect; 

Twenty percent (20%) of the credit reports were missing major credit, loan, mortgage, or other consumer accounts that would demonstrate the positive creditworthiness of the consumer; 

Twenty-six percent (26%) of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open; 

Altogether, 70% of the credit reports contained either serious errors or other mistakes of some kind.


Federal laws like the Fair Credit Reporting Act (FCRA) and the Fair Debt Collections Practices Act (FDCPA) provide consumers with some protections and more importantly, a basis for litigation against companies who violate consumer protection laws regarding how consumer credit information is handled, and how debts should be collected by collection agencies. Still, it seems collection agencies, and the big three credit reporting agencies have managed to sidestep the regulations aimed at protecting consumers from their mistakes, lack of security and illegal collection practices. Credit reporting agencies and collection agencies try to defend (even in courts of law) severely flawed business models that make it extremely difficult if not impossible for the average consumer to call them on their mistakes and get relief from practices that are intentionally harmful to a consumers credit file. Consumer requests to the credit reporting agencies to correct erroneous or inaccurate information in their file are routinely ignored or mishandled. Consumer investigation requests are conducted via a process that has been describes as “shoddy” and “grossly irresponsible” by legal professionals in the industry.


Evidence of high error rates in the credit reporting system is also found in the complaints received by the Federal Trade Commission regarding credit reports. For many years consumer complaints about credit reports have ranked at the top of all complaints submitted to the FTC for any reason. Identity theft, which also involves creditors or furnishers of credit information and credit reporting agencies, is now at the top of all fraud complaints received by the FTC. The FTC reported to Congress that as of March 2002, the FTC received approximately 3000 calls per week to their toll-free identity theft hot line. Approximately 43% of all complaints received by the FTC in all subjects are identity theft related. When one considers number of people applying for credit in the US on a daily basis, the number of persons affected by credit reporting agency mistakes and information mismanagement is absolutely staggering.


It is clear that the credit reporting agencies and the collection companies need more regulation and oversight. A close examination of their procedures and Operations reveal that their business models complement each other, resulting in a two-pronged attack upon the consumer. Well, it appears the consumers’ cry for help after all these years has finally been heard.


On July 16th in Detroit Michigan, the new director of the newly formed Consumer Financial Protection Bureau (CFPB) Richard Cordray announced: “the Consumer Bureau is issuing a new regulation to expand our supervision program to oversee these credit reporting companies. The authority to supervise firms is the authority to conduct on-site examinations of whether and how they are complying with the law. It affords an opportunity to gain a more thorough understanding of their business models and their business practices, to work with them to correct any problems we find, and to find ways to resolve matters that may be causing harm to consumers.”


Cordray went on to comment about the important role credit reporting agencies play in our entire economy:

“So this critical market is at the heart of our lending systems. It has enabled many of us to get credit and to afford a home or a college education. But it is also clearly a market that can cause considerable problems for consumers. For example, sometimes credit reports contain errors that inaccurately reflect people’s financial histories and can unfairly block them from getting approved for credit or can make it cost more than it should. Consumers also can encounter great difficulties at times in getting errors corrected. When the Consumer Bureau first opened its doors almost a year ago, we asked people to share their consumer experiences with us. We have heard reports since from many consumers that their credit reports are not accurate, and it is difficult to get them corrected. Because of the critical role that credit reports play in consumers’ lives, it is our job to make sure we understand the full extent of these problems and address them effectively.”

“Given its enormity, given its influence, and given its wide impact on our overall economy, you can see that there is much at stake in ensuring that the credit reporting market is working properly for consumers.”

David Holt, with Clear Point Credit Counseling Solutions says it's a good move. "This is a big deal for consumers," he says. The goal is to ensure credit reporting agencies are working properly for consumers, lenders and the economy. "The laws are already there in the Fair Credit Reporting Act but they are going to shore up the rules on what the agencies have to do," Holt says.

David Holt of Clear Point is exactly right, this is a big deal. However, the effectiveness of this new bureau will surely be measured by what they actually do, and what real regulative authority they have. I believe the effectiveness of any regulatory government agency should be measured first by its leadership, and second, by its mission statement. The CFPB is headed up by Richard Cordray. But as anyone who hasn’t spent the last three years in a cave would know, the first choice to lead the agency was Elizabeth Warren, the up and coming Harvard Law professor who gained notoriety as an outspoken critic and Chairman of the Congressional Oversight Panel of the infamous TARP Bailout of 2008.

In the hallowed halls of congress, Warren is considered the Champion of the beleaguered Middle Class. The CPFB was her own brainchild. As she crisscrossed the country, spreading the word about the C.F.P.B., Warren became a familiar face to many, especially to those who had seen her on television—on CNBC, Real Time with Bill Maher, and The Daily Show with Jon Stewart. Whatever the reasons, president Obama ignored scores of political groups like the AFL-CIO and thousands of people around the county who had petitioned him to appoint her as the nation’s top consumer protection watchdog. (See article in Vanity Fair).

So, who is Richard Cordray? As attorney general of Ohio, Cordray aggressively pursued lawsuits against some of the country’s biggest financial firms — including AIG, Bank of America and Fannie Mae — for misleading the state’s pension funds, ultimately securing a $700 million settlement from AIG over accounting fraud. He also led an early effort to go after so-called “foreclosure mills” that used falsified documents to speed up foreclosures on consumers, suing Ally Financial in 2010 and campaigning for big banks to slow down their own foreclosure proceedings. “We pursued many actions against foreclosure rescue scammers who were reaching into the pockets of desperate people in an effort to steal what little remained as they sought to keep their homes,” His background seems well suited for the position, but the jury is still out as to what direction the bureau will take and how affective it will be. For Mark Spindel, co-founder of the Potomac River Fund, that will be a major indicator of how effective the CFPB can be. “The key for me is whether and when and if this will have some impact on the foreclosure and housing markets. the real test for the CFPB will be in seeing how aggressive Cordray will be in pushing financial policy to favor consumers.















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The FHA Rethinks Its Mortgage Lending

The FHA Rethinks Its Mortgage Lending

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No. 03-1235. - JOHNSON v. MBNA AMERICA BANK NA LLC - US 4th Circuit

This court case represents how some collection agencies violate the FCRA by routinely performing "unreasonable" investigations when a consumer disputes an erroneous item on their credit report.

No. 03-1235. - JOHNSON v. MBNA AMERICA BANK NA LLC - US 4th Circuit

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The new Credit Card Act of 2010

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The events of the 2008 credit crisis and its fallout will shape the economic landscape for decades to come. The latest credit card usage trends are not encouraging. Take a quick look at these statistics provided by Credit Cards.com -an online credit card statistics data base:


Total cards in circulation in U.S.

(Through year-end 2009)

Visa credit: 270.1 million, down 11 percent (Source: Visa.com)

Visa debit: 382 million, up 18 percent (Source: Visa.com)

MasterCard credit: 203 million, down 22 percent (Source: MasterCard.com)

MasterCard debit: 125 million, up 1 percent (Source: MasterCard.com)

American Express credit: 48.9 million, down 9 percent (Source: AmericanExpress.com)

Discover credit: 54.4 million, down 6 percent (Source: Discover.com)

TOTAL CREDIT CARDS: 576.4 million

TOTAL DEBIT CARDS: 507 million

Most general purpose credit cards in circulation in 2008



Chase - 119.4 million

Citi - 92 million

Bank of America - 80.2 million

Discover - 48 million

American Express - 46.5 million

Capital One - 46.3 million

HSBC - 38.8 million

GE Money - 27.2 million

Target - 23.4 million

Wells Fargo - 17.3 million

(Original source: Nilson Report, February 2009)





Better take a second look at that credit card bill!According to the venerable researchers at TransUnion- one of the three major Credit reporting bureas-analyzed information from a data base of 27 million consumer records illustrating consumer credit use and performance. Nationally, the average credit card debt rose 4.81% compared to the 3rd quarter of 2008 , to $1,694 per houshold. Yet, credit card offers through the mail and other media continue to increase. The high rates of debt and delinquencies can easily be attributed to the current economic crisis; job losses, lay-offs, mortgage foreclosures, etc.. No doubt the current White House administration is aware of these dismal and downright scary numbers. As part of a comprehensive financial reform package, President Obama recently signed into law the Credit Card Accountability Responsibility and Disclosure Act. Here is the official White House Press release:



THE WHITE HOUSE



Office of the Press Secretary

________________________________________________________

FOR IMMEDIATE RELEASE May 22, 2009



FACT SHEET: REFORMS TO PROTECT AMERICAN CREDIT CARD HOLDERS

President Obama signs Credit Card Accountability, Responsibility, and Disclosure Act



WASHINGTON – Today, President Obama signs the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, marking a turning point for American consumers and ending the days of unfair rate hikes and hidden fees.



Americans need a healthy flow of credit in our economy, but for too long credit card contracts and practices have been unfairly and deceptively complicated, often leading consumers to pay more than they reasonably expect. Every year, Americans pay around $15 billion in penalty fees. Nearly 80 percent of American families have a credit card, and 44 percent of families carry a balance on their credit cards. To tackle these problems, the Administration moved swiftly with the Congress to enact reforms.



"With this new law, consumers will have the strong and reliable protections they deserve. We will continue to press for reform that is built on transparency, accountability, and mutual responsibility – values fundamental to the new foundation we seek to build for our economy," President Obama said.



In the Senate and throughout the campaign, President Obama called for measures to strengthen consumer protection in the credit card market. This legislation was made possible by the leadership of Chairman Frank and Representatives Maloney and Gutierrez in the House, and Chairman Dodd, Ranking Member Shelby and Senator Levin in the Senate. It builds on the strong first step taken by the Federal Reserve toward improving disclosures and ending unfair practices.





Principles for Long-term Credit Card Reform



First, there have to be strong and reliable protections for consumers.

Second, all the forms and statements that credit card companies send out have to have plain language that is in plain sight.

Third, we have to make sure that people can shop for a credit card that meets their needs without fear of being taken advantage of.

Finally, we need more accountability in the system, so that we can hold those responsible who do engage in deceptive practices that hurt families and consumers.

The Administration applauds the legislative efforts of both the House and the Senate. By working closely together, the House Financial Services Committee and the Senate Banking Committee were able quickly to enact strong protections that the President signs into law today. Below we highlight the critical elements of reform in this new law:



Bans Unfair Rate Increases

Prevents Unfair Fee Traps

Plain Sight /Plain Language Disclosures

Accountability

Protections for Students and Young People

Key Elements of the Credit CARD Act of 2009



Bans Unfair Rate Increases: Financial institutions will no longer raise rates unfairly, and consumers will have confidence that the interest rates on their existing balances will not be hiked.



Bans Retroactive Rate Increases: Bans rate increases on existing balances due to "any time, any reason" or "universal default" and severely restricts retroactive rate increases due to late payment.

First Year Protection: Contract terms must be clearly spelled out and stable for the entirety of the first year. Firms may continue to offer promotional rates with new accounts or during the life of an account, but these rates must be clearly disclosed and last at least 6 months.

Bans Unfair Fee Traps:



Ends Late Fee Traps: Institutions will have to give card holders a reasonable time to pay the monthly bill – at least 21 calendar days from time of mailing. The act also ends late fee traps such as weekend deadlines, due dates that change each month, and deadlines that fall in the middle of the day.

Enforces Fair Interest Calculation: Credit card companies will be required to apply excess payments to the highest interest balance first, as consumers expect them to do. The act also ends the confusing and unfair practice by which issuers use the balance in a previous month to calculate interest charges on the current month, so called "double-cycle" billing.

Requires Opt-In to Over-Limit Fees: Consumers will find it easier to avoid over-limit fees because institutions will have to obtain a consumer’s permission to process transactions that would place the account over the limit.

Restrains Unfair Sub-Prime Fees: Fees on subprime, low-limit credit cards will be substantially restricted.

Limits Fees on Gift and Stored Value Cards: The act enhances disclosure on fees for gift and stored value cards and restricts inactivity fees unless the card has been inactive for at least 12 months.

Plain Sight /Plain Language Disclosures: Credit card contract terms will be disclosed in language that consumers can see and understand so they can avoid unnecessary costs and manage their finances.



Plain Language in Plain Sight: Creditors will give consumers clear disclosures of account terms before consumers open an account, and clear statements of the activity on consumers’ accounts afterwards. For example, pre-opening disclosures will highlight fees consumers may be charged and periodic statements will conspicuously display fees they have paid in the current month and the year to date as well as the reasons for those fees. These disclosures will help consumers make informed choices about using the right financial products and managing their own financial needs. Model disclosures will be updated regularly based on reviews of the market, empirical research, and testing with consumers to ensure that disclosures remain clear, useful, and relevant.

Real Information about the Financial Consequences of Decisions: Issuers will be required to show the consequences to consumers of their credit decisions.

Issuers will need to display on periodic statements how long it would take to pay off the existing balance – and the total interest cost – if the consumer paid only the minimum due.

Issuers will also have to display the payment amount and total interest cost to pay off the existing balance in 36 months.

Accountability: The act will help ensure accountability from both credit card issuers and regulators who are responsible for preventing unfair practices and enforcing protections.



Public posting of credit card contracts: Today credit card contracts are usually available only in hard copy and not in plain language. Now issuers will be required to make contracts available on the Internet in a usable format. Regulators and consumer advocates will be better able to monitor changes in credit card terms and evaluate whether current disclosures and protections are adequate.

Holds regulators accountable to enforce the law: Regulators will be required to report annually to the Congress on their enforcement of credit card protections

Holds regulators accountable to keep protections current:

Regulators will be required to request public input on trends in the credit card market and potential consumer protection issues on a biennial basis to determine what new regulations or disclosures might be needed.

Regulators will be required either to update the applicable rules, or to publish findings if they deem further regulation unnecessary.



Increases penalties: Card issuers that violate these new restrictions will face significantly higher penalties than under current law, which should make violations less likely in the first place.

Cleans Up Credit Card Practices For Young People at Universities. The act contains new protections for college students and young adults, including a requirement that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.



So, with rising variable rates, deferred interest plans that leave the consumer worse off than when they initially accepted the card, and bogus advance notice rules, the consumer is once again fleeced and put out to air-dry in a cold market place. The best defense is to control how many cards you have in your wallet, control your spending, and get educated BY YOUR CREDIT CARD ISSUER regarding the small print of your credit card aggreement. It will save you a lot of money in the long run.