Friday, May 29, 2009

Want to Lower Your FICO?

Along the lines of yesterday's post I want to point out that when you (or anyone acting on your behalf), issues a fraud alert in your name with the credit bureaus you stand a good chance of lowering your score. By issuing such an alert you are saying that you believe you are at increased risk to identity theft. That consideration alone can lower your score as you are seen as a credit risk. Additionally, issuing a fraud alert also infers that as well as being a potential victim you might be a potential thief. Identity thieves have been known to issue alerts in the name of their victims in order to obfuscate the crime. They use it as a smokescreen to continue to use the stolen identification. The bureaus initially have no way of knowing which is the case.
Fraud alerts should be limited to the uses intended by the law, to provide an individual with a proactive tool to use in the event of identity theft. Any action taken with the credit bureaus can have an adverse effect on your scoring, just as an inquiry or late payment statement does.

Another tool we should never forget is . You have the right to see each of your 3 national credit reports on an annual basis. This will not affect your score. Stagger them in order to have a fresh report every four months.

Thursday, May 28, 2009

Fraud Alert Services are Illegal

A federal judge last week decided that LifeLock's fraud monitoring practices violate California law, reports Wired. The identity-theft protection company was sued last year by one of the nation's three credit reporting bureaus for violating California's Unfair Competition Law. For a fee, LifeLock places fraud alerts on consumers' credit reports on their behalf. U.S. District Judge Andrew Guilford determined that the lawmakers writing the 2003 Fair and Accurate Credit Transactions Act (FACTA), which gave consumers the right to place free fraud alerts on their credit reports, did not intend for "companies and entities such as credit repair clinics," to be able to place the alerts. Full Story

I have been making this point now for several years. Fraud alert services are bogus attempts to get into a growing "industry". An industry in the most rare definition of the word that produces precious little but declares quite a lot. They simply took advantage of the rights we have under the FCRA, culled out one paragraph from that act and opened shop. This paragraph proposes that any entity that issues credit accounts must contact the individual or his/her designate prior to opening a new account if a fraud alert has been placed with the credit bureaus. The fact of the matter is that most creditors do not follow that practice. Add to that the irrefutable fact that credit related identity theft is less than 1/3rd of all identity theft and you are left with a highly ineffective service that in my opinion gives the public a false impression of identity theft and a false sense of confidence in the product to protect them. This is not about Experian nor any other entity this is about the truth. These companies will cook any statistic they can to assert their claims that they have effective services when in most professionals' opinion they offer little to no advantage for the client that the client cannot do for themselves at no cost.

Look at any other field such as law enforcement, medicine, engineering, and so on. Who are the people that own or manage the organizations? Are they marketing people or venture capitalists? No, they are professionals with experience in their field. When we began our Identity Theft Shield in 2003 those of us who were already seasoned fraud risk and privacy rights experts predicted that as the crime grew that opportunists would come along and try to take advantage of the increase in identity theft. And we also knew that they would be shaken out if their services did not offer true assistance and expertise.

The Internet is full of comparisons between the various services. You will almost always note one glaring exception, the Identity Theft Shield from Pre-Paid Legal and Kroll Fraud Solutions. There is only one reason for this omission, well two reasons. First we don't pay for comparisons, and secondly and most importantly, you cannot compare a professional service to these others that do either nothing to very little on behalf of the client but charge handsomely for the product. All of the above is of course my considered opinion.

As one very well respected identity theft expert once put it to me. "It's hard being right......early."

Wednesday, May 27, 2009

The Spector of Identity Theft at the Heart of the Matter

I didn't have time to comment on this but it was in todays privacy mail.

A Washington couple whose nephew spent a year cleaning up after his identity was stolen has "become very fussy" about protecting their privacy, reports the Yakima Herald. So when Aram and Marjorie Langhans noticed Aram's Social Security number (SSN) on a printout at the Yakima Heart Center recently, they requested its removal from the center's files. The center refused and denied treatment without the SSN. A center administrator said they collect patients' SSNs to help verify identity. But the Washington Attorney General's (AG) office said the Langhans were right to protect Aram's SSN. SSNs "have been compromised by employees in the healthcare sector...," said an AG spokesperson. "Anything a company can do to reduce access, we strongly encourage." Full Story