Consumer Protection: I'm All Outta Love

You may have heard about the Los Angeles, CA court case where the sixty (60) year old woman hired an online matchmaking service to find her a wealthy husband. The woman made an initial payment of $100,000 to the service and the service guaranteed it would introduce her to rich men; presumably eligible marriage candidates. The service took her money and promptly introduced the woman to a man in bankruptcy and another wealthy (but married) man.

The Solution: More Money
Unhappy with the results, the woman paid the service an additional $25,000 for instructions on how to snare a wealthy husband. The service then introduced her to a retired, middle class firefighter and several other middle class men. Still no wealthy prospects.

When All Else Fails, File Suit
In the end, the service failed to provide what it had guaranteed. After numerous unsuccessful matches, the woman sued the service. The jury awarded the woman her initial $100,000 as well as a punitive award of $2 million. Now she can marry whoever she wants (rich or poor) and still be distinguished as a millionaire's wife.

Identity Theft: Pardon Me Maam, But You Don't Look Like A Roger

Several years ago I worked with an attorney who had received a notice that her credit card limit had been exceeded and that she needed to pay more than $500 to bring the card under the limit. She was shocked. She never carried a balance on any of her credit cards and paid all of her bills promptly. I told her to check her purse to see if the card was missing. As it turned out, not only was her card missing but also her driver's license, debit card and other valuable information and documents. She was, at that time, in the process of learning what it is like to have her identity stolen.

The weeks following her discovery brought more distressing news. The thief who had stolen her information had obtained other credit cards using her name and social security number and had changed her bank account PIN. The thief had taken a substantial amount of money out of her bank account causing her to bounce checks and other financial hardships. She discovered that the process of straightening out identity theft is not an easy one and can take literally years to fix. I have even heard some people say you can never fully recover from this type of theft.

The good news (to the extent there was any good news) is that the thief was caught almost six months after the theft at a Wal-Mart located in southeast Georgia. The thief was trying to use her debit card to access her bank account. Given the hardship created by the process of regaining her identity this was only minor consolation.

Prevent Identity Theft
For some tips on preventing identity theft refer to the following website: Federal Trade CommissionThe website offers practical ideas for protect yourself from the situation faced by my attorney friend. Here is a related article dealing with identity theft.

What Is Credit Card Fraud
Identity theft and credit card fraud seem to go hand in hand these days. It is often easier for a thief to obtain personal information and use it to apply for credit cards than to steal cash or checks out of a persons wallet or purse. More lucrative too. Here is a brief explanation of credit card fraud:
1) when someone fraudulently obtains, takes, signs, uses, sells, buys, or forges someone else's credit card information;
2) when someone uses a credit card with the knowledge that it is revoked or expired or that the account lacks enough money to pay for the items charged. This type of fraud is committed by the person who actually owns the card; or
3) when someone sells goods or services to someone else with knowledge that the credit card being used was illegally obtained or is being used without authorization.

My friend was certainly a victim of credit card fraud. But she would be the first to tell you that reversing some credit card charges was only a minor inconvenience compared to the process of having to restore her identity.

Online Auction Fraud

By now everyone is familiar with the saying "if it sounds too good to be true, it probably is." But even the most careful of persons can end up the victim of fraud. One of my client's recently brought in a case related to an ebay auction he had bid on. The auction was for the purchase of an early 1970's model Camaro. Once the auction ended my client received an e-mail notifying him that he was the successful bidder at a price considerably lower than fair market value. The e-mail had ebay's logo on it and by all accounts appeared to have been sent from ebay. Excited about the purchase, my client quickly complied with the instructions in the e-mail and wired the money to a bank account in London, England. That was the last he saw of his money and the Camaro. He had been the victim of an e-mail scam that took advantage of ebay's auction practices. Despite our best efforts, ebay would not reimburse him for the money he had lost. The scammer disappeared and no legal recourse could be taken against ebay since they had not sent the e-mail.

Tips to Consider Before You Purchase From An Online Auction

The following recommendations have been made by the National Consumer League to protect consumers from online fraud:

1) Check the seller’s feedback rating if that information is available on the auction site. While a positive rating is no guarantee that you won’t have a problem, a negative rating is a danger sign;

2) Look for information about insurance and understand the terms. Some auction sites offer insurance protection, but coverage is limited to set amounts, there is usually a deductible, and there may be exclusions; for example, you may not be able to make a claim if you purchased something from a seller whose feedback rating was negative at the time of sale;

3) Pay the safest way. If you pay the seller directly with a credit card, you can dispute the charges if the item never arrives or was misrepresented. You don’t have that right if you use a third-party online payment service, even if you use your credit card to put the money into your account with the service. However, your credit card issuer may still be willing to help you;

4) Use an escrow service for purchases that aren’t covered by insurance or your credit card dispute rights. The difference between an escrow service and other online payment services is that the escrow service doesn’t pay the seller until you confirm that you got what you were promised.

The tips should prove useful to avoid being a victim of online auction fraud. A word of caution regarding online escrow services. A number of fraudulent escrow services have popped up recently. Before you open an account with an online escrow service look at the California Department of Corporations website. The website provides valuable information no matter what state you live in.

Watch Out For Some Credit Repair Companies

At least once a day I hear or read a television, radio, newspaper or internet ad claiming “Credit problems? No problem!” or “Let us erase your bad credit — 100% guaranteed.” The ads promise to help consumers with poor credit histories clean up their credit reports so the consumer can get loans, mortgages, insurance, etc. Never mentioned in the ads are the thousands of dollars often charged for such services. While many of the credit repair companies can in fact lower your monthly payments and negotiate down a debt, avoid the following at all costs:

CREDIT REPAIR COMPANIES TO AVOID
1) companies that want you to pay for credit repair services before they provide any services. The Federal Credit Repair Organizations Act prohibits credit repair companies from requiring you to pay until they have completed the services they have promised;
2) companies that do not tell you your legal rights and what you can do for yourself for free;
3) companies that recommend that you not contact a credit reporting company directly;
4) companies that suggest that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
5) companies that advise you to dispute all information in your credit report or take any action that seems illegal. If you follow illegal advice and commit fraud, you may be subject to prosecution.

DISPUTING A DEBT
The law allows you to dispute an inaccurate credit report free of charge. The "big three" nationwide credit reporting services are "Equifax," "TransUnion," and "Experian." Once any of these agencies receive a consumer dispute they are required to take the disputed debt off of the report until an investigation is conducted. A common tactic used by illegitimate credit repair companies is to dispute every negative mark on a credit report, show the consumer a clean credit report (clean because the reporting agency is conducting an investigation), collect the fee from the consumer for the temporarily "cleaned up" report and disappear once the fee is collected.

On the other hand, credit repair companies can be helpful in negotiating lower monthly payments and lump sum settlement agreements with creditors. Many companies have long established relationships with creditors and payment reduction agreements creditors are comfortable with signing.

One last thing, you can order a free annual credit report at annualcreditreport.com, or call 1-877-322-8228.