Archive for December, 2012

Identity Theft Victim Exploring Credit Protection Alerts

Wednesday, December 5th, 2012

Question: I am the victim of identity theft of a credit card that I had no idea was opened using my name and Social Security Number. I cannot believe how many hours I have spent trying to resolve this and it is still far from over. I found out about it when my wages were being garnished by the Sheriff, who was ordered to do it by the Superior Court of the State of California. A judgment was entered several years ago, but I had no idea and I was never served with the papers or even made aware of it by the debt collection lawyers who sued me. I cannot believe how much of a hassle this is, making many phone calls to rude debt collectors, who repeat the same mantra: You must pay your debts. I have and I do. What should I have done differently? Would I have been able to stop this, had I subscribed to Lifelock or another company that is supposed to warn me of changes to my credit and protect me?

My response:
You could probably have found this on to your credit and take protective measures yourself a long time ago. In Consumer Reports magazine, their January 2013 issue, page 13 advises consumers “Don’t get taken guarding your ID.” The article explains that American consumers spent $3.5 billion a year for identity theft products, but suggests that DIY measures are as effective, and can be done for free or very little. In comparison, a paid monitoring service runs from $120 to $300 per year and the marketing hype “can be deceptive” for these ID theft products. Also, be aware of the fine print warnings that come with such services.

First, as explained in the Consumer Reports’ article, this type of ID theft, “new account fraud,” is uncommon. Though I have represented a number of consumers who were the victim of new account fraud, the number is small compared with how many consumers I have represented on debts that they recall opening and charging.

Second, the article states that the credit monitoring is flawed in two key ways. One flaw is false warnings to the consumer, such as emails or text messages to the consumer more often than needed. The other flaw is that it can take too long to appear on your credit, such that a consumer would not be aware of it for weeks or months after the fact.

In my blog posting from a while back (Make Your New Year Bright), I suggested visiting www.annualcreditreport.com at the start of the new year and check their credit for free, then dispute errors found. I also have a legal guide on Avvo.com for victims of identity theft, which also included checking credit as an initial step and suggests a security freeze, if the consumer learns that their credit has been compromised. The article in Consumer Reports recommends a security freeze and going to www.annualcreditreport.com three times a year, and get only one of the three credit reports at each visit, such that you end up with a different free credit report with each visit, to cover you throughout the year, at intervals of four months. That’s a great idea and totally free, no subscription, though it does require keeping track and having reminders when to make a new request and which credit report to obtain from Experian, Equifax, or Trans Union.

Consumers Reports proposes one other alternative to high-priced subscription services: a monthly alert for $5 at www.myidalerts.com. At $60 per year, it is not an excessive price, and perhaps they have periodic sale prices or discount coupons for signing up for a long term, but for some people is still too expensive, given how low the risk of new account fraud.

Many creditors and financial institutions will be (if they are not already covered) required by the Federal Trade Commission to put into place protections to prevent identity theft “red flags,” in particular to spot suspicious activity and prevent escalation into a “costly episode.” Here’s the link to the proposed regulation, recently issued by the FTC: http://ftc.gov/opa/2012/11/redflags.shtm

The most important thing a consumer can do is to check their credit at least once a year and examine each credit report closely for errors and inquiries of their credit reports that they did not initiate or are unrelated to their legitimate creditors or debt collection agencies collecting on unpaid legitimate accounts, then complete the dispute process, preferably in writing.

The other thing that Consumer Reports did not mention in this article, but other articles suggest at www.ConsumerReports.org, is to be proactive in protecting your passwords and sensitive personal information from persons who should not have access to it. shred all papers with a cross cut or confetti shredder, and protect yourself from online and telephone scams. The consumerreports.org site has more information on this as does my friend, attorney Mari Frank’s web site: www.identitytheft.org.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

If I file a Really Good DIY Answer, Is it 50/50 that I Can Win at Trial?

Saturday, December 1st, 2012

Question:
I’ve read your web site and many law blogs. Now that I have all this information, I feel that I can file for myself the form answer in court, pay the fee to the clerk, then wait for trial to see what the judge does with my case, when I show up. The lawsuit is for under $6000 plus the collection complaint wants interest at 29% from November 2010, court costs, and attorney’s fees. Maybe I’ll get lucky and the judge will dismiss. One of the other web sites said that at trial, the judge will probably throw out the evidence, because they don’t have original documents. Is it really 50/50? Sound like a plan?

My response:
As the first video on my home page makes clear (home page link), representing yourself against the debt collection lawyers is one option. However, as stated in my blogs in the category DIY Lawsuit Defense, many people who try DIY Lawsuit Defense get picked off by the debt collection lawyers, who know the drill and are in the civil courts almost every day on debt collection cases.

I have had many people come to me, while trying to represent themselves. The common situations when the DIY consumer-defendant contacts me are: (a) they don’t know what to do with the interrogatories, document demands, and requests for admissions received from the Plaintiff’s lawyers; (b) they did not respond to something that they received or do not recall receiving it, so now the Plaintiff’s lawyers have filed papers with the court for sanctions (a form of penalty on a party who does not follow the rules), on top of the judgment for the unpaid debt; ( c) the Plaintiff’s lawyers filed papers in court to get a judgment, even though trial has not been scheduled or is months away; (d) the court granted a money judgment for the full amount, after appearing at the trial to do this DIY Lawsuit Defense.

Certainly, there are a small percentage of debt collection cases in which the Plaintiff’s lawyers dismiss, after the defendant has filed a valid response in court, to prevent the entry of a default judgment on the complaint, or the case is dismissed shortly before trial, because the Plaintiff does not have their evidence ready for trial. More likely, however, is the likelihood that if the Plaintiff’s lawyers receive the paperwork from a DIY consumer defendant, they will look for and exploit any weaknesses, given their considerable experience collecting from DIY consumers. In my experience, the consumer-defendant’s papers are almost always defective. Even if the consumer-defendant’s court papers are excellent, the consumer later makes other big mistakes, which result in entry of a full money judgment against them at or before trial.

What is the basis for those web sites that claim a DIY consumer can get their case dismissed at trial or even before? Do they have verifiable results, or is it merely anecdotal? How many money judgments do those web sites acknowledge are entered against people who try DIY Lawsuit Defense? Often, the web sites don’t rely on actual statistics, they make unsubstantiated claims or have only a handful of favorable results. When the dust clears, the DIY Lawsuit Defense typically yields to the plans of the plaintiff’s lawyers to get a money judgment against you, if you did not agree to the terms they proposed. Otherwise, the debt collection clients will be dissatisfied with poor results and hire other lawyers who will get better results.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler