The Internet is just crawling with these people

Just as an illustration of how careful you have to be when it comes to credit repair/credit counseling/etc. on the Internet, after I posted yesterday’s article I also updated the FPU Twitter feed. The update contained the words “credit repair,” because I was stating how many of them were scams.

This morning I had three new followers on Twitter.

Every one of them was from a credit repair scam business. The first one was obvious…every post contained the same URL, they were following a thousand people but had three followers. The second was from a place with a D- rating by the BBB. The third had a big, fat F.

Needless to say, I blocked all three. Then I found a few that I’d missed, hiding out in my list of followers. I’m not allowing these criminals (which is what they essentially are) to follow the FPU on Twitter.

They’re watching Twitter for the words “credit repair” and latching onto anyone who mentions it. Not on my watch.

I may start calling them out by name every couple weeks if it happens enough to annoy me. I’ll just post their Twitter names, their business names, and their ratings from the BBB. And a warning that the Fraud Prevention Unit recommends you do NOT contact these businesses.

If they are contacting you first, it’s a scam. Pure and simple. There are legitimate credit counselors in your area. Do the research if you need their services. You can’t afford not to.

Credit Repair Scams

They’re out there.

They’re waiting for you.

They say they want to help you. They say they can fix your less-than-perfect credit history.

What they really want is to rip you off.

Big time.

First off, it is important to know that there are legitimate agencies that can help you get your financial situation back on track. I’ll talk about some of those later.

However, there are also a lot of agencies looking to help themselves to your cash. Here are a few things to remember:

  1. You should never pay an upfront fee for any type of credit counseling service. This is a major warning sign that they are up to no good.
  2. They must (by law) provide you with a copy of your rights as a consumer. This tells you what you may and may not do in regards to your credit history. If they do not provide this information, it is another warning sign.
  3. If your credit history has accurate negative information, it’s there to stay for seven years (ten for bankruptcy). There is no legal way to have it removed. Are they offering to delete records of a credit card you actually defaulted on? Warning sign.
  4. If there are mistakes on your report, know that you can correct them yourself for free. If an agency is trying to keep you from contacting a credit bureau yourself, that’s…you guessed it: a warning sign.
  5. It is illegal to try to create a new Social Security number or Employer Identification number for the purpose of creating a clean credit file. It doesn’t work, and it can get you into far worse trouble (we’re talking about the kind of trouble that could involve handcuffs and mugshots).
  6. Check out any credit reporting agency with the Better Business Bureau before you even consider using their services.
  7. The minute they use the term “piggybacking,” walk away. It doesn’t work. Warning sign.
  8. There are advertisements everywhere for credit repair services—email messages, on the radio, even on television. I’m just going to throw this out there: ignore them all. Maybe some of them are legit, but many are not. Do your own research and make your own decision. A flashy commercial that makes big promises is a definite (say it with me) warning sign.
  9. Legitimate credit counseling agencies are non-profit organizations. Every single one of them.

So…now that you know how to avoid a scam, where can you go for legitimate credit couseling?

REGIONAL Federal Credit Union works with Consumer Credit Counseling Services of Northwest Indiana (http://www.cccsnwi.org/), a non-profit agency. REGIONAL partners with CCCSNWI because they’re trustworthy, and they do exactly what a credit counseling service should do.

You can also find information about legitimate services nationwide from the National Foundation for Credit Counseling (http://www.nfcc.org/). They don’t work with scammers.

As always, before you use any credit counseling service, check them out with the Better Business Bureau (http://www.bbb.org). If they’re not BBB accredited, and if they don’t have a pretty spotless record, look elsewhere.

Personally, I’d never use an agency that had anything less than an “A+” rating.

Five Things About Credit Reports

  1. By law, you are entitled to one free credit report per year from each of the three major credit reporting agencies, TransUnion, Experian and Equifax.
  2. There is only ONE place to safely obtain these credit reports: https://www.annualcreditreport.com/. Beware of websites with similar names, since these could be spoof sites created to steal personal information (which you are required to provide when you get your credit reports). Also, do not be taken in by cute commercials with catchy songs. You know the ones I’m talking about. That is a service (of debatable value) that costs around $80 per year and, from what I hear, is very difficult to cancel. They’ve gotten in some hot water regarding advertising practices, too.
  3. You can obtain your credit score when you get your reports, but you will have to pay for this information. The report is free, getting the score is not. For the purposes of checking for identity theft, fraud and errors, you do not need your score. Actually, you don’t really need it for much of anything, unless you’re the type who wants to brag about your credit score. People are not impressed by that, incidentally.
  4. All three of the major credit reporting agencies are required to share new information with each other within 24 hours, so your credit reports should all contain the same information. Use this to your advantage: stagger your reports so (for example) you’re getting TransUnion in January, Equifax in May, and Experian in September. It’s a great way to keep tabs, rather than getting all three in January then waiting 12 months to check your reports again.
  5. When you read your credit reports, you’re looking for accounts you did not open, errors regarding late payments, charge-offs or collections, and balances that are wildly different than what you think they should be (if it says you owe Discover $14,000 when you’ve never owed more than $27, for example). Basically, you’re checking to make sure all the information is accurate.

Credit reports are a vast, complex subject. I’ll talk more about them this week—this could turn into a series!

Well, don’t be PARANOID, per se.

All this talk about fraud and identity theft can paint a pretty grim picture of the world.

This is not the intent of the Fraud Prevention Unit.

The point of this information is to help you know what to look for when it comes to this type of crime. You have to be watchful, but to become cynical and paranoid is taking things too far.

We each have an individual view of the world, a lens through which we view ourselves, other people, society and life in general. We each have a set of values and beliefs that influences how we perceive every single piece of data we encounter.

This is a good thing. It’s what makes us all different, and that keeps life interesting. But this flipside is that, whether we realize it or not, we also seek confirmation of those same values and beliefs. We seek out those things that reinforce our view of reality, and reject those that would contradict it.

If you convince yourself that “everyone but me is dishonest and is trying to steal everyone else’s identity and money,” you will end up only seeing those things which confirm this view of the world.

Without realizing it, you may even set yourself up to become a victim, since you expect it to happen all the time anyway. For example, if you always expect to be ripped off, you may actually decide to take your car to a less-than-trustworthy mechanic, without realizing why you even made this decision (your subconscious desire to prove that the world is an ugly, terrible place with nothing but bad people in it).

The fact is, most people are honest. Even in a crummy economy, if you drop your wallet, most people will try to return it to you. There are so many people doing good things to help out others every single day, all around the world. Let yourself see it. Sure, you’re getting phishing emails a couple times a week, but those are coming from a very small number of criminals. Be alert, but don’t let yourself become cynical. Life is just no fun that way.

Video Dispatch: Protect Your SSN

Today’s Video Dispatch is a “musical number” of sorts. The song is called “Protect Your Social Talking Blues,” and while I’m not sure if it qualifies as a true talking blues per se, its message is vital: you have to be careful when it comes to giving out your Social Security Number. There are situations where you have to give it (opening new financial accounts, getting a new job, doing your taxes), and there are times when you need to keep it to yourself.

Yes, that’s me “singing” and playing all the instruments (through the magic of home recording equipment). It’s not my normal style of music, but it works for the information I’m delivering here.

Note: Videos hosted on YouTube contain links to other video content, which will play on the current page if clicked. REGIONAL Federal Credit Union is in no way affiliated with or responsible for this content and has no control over videos or advertisements that may be linked from our video content.

By the way, you didn’t win the lottery

Here’s a good rule of thumb when deciding how to respond to a potentially fraudulent email message, letter, telephone call or other type of communication: if a stranger walked up to you on the street and said the exact same thing, would you believe them?

For example, you’re walking down the street when a random guy in a shabby gray suit approaches you. He says, “Greetings, I am a foreign dignitary currently in exile and would like to ask for your assistance in transferring my fortune into the United States, totaling 250 million USD. If you help, I will let you keep 25% of that amount. I will need your checking account number to complete this process.”

You’d tell the clown to get lost.

Or perhaps he says, “Congratulations! You have been selected in the Canadian lottery as the top prizewinner! In order to claim your prize of 2.5 million USD, please give me a cashier’s check for $2,945.23 to cover taxes and other fees.”

Unless you’re very gullible, your reaction would be the same.

I know that the economy isn’t good at the moment. You might be facing layoffs, reduction in pay, or worse. Your employer might be going out of business completely. You get an email that promises instant riches and it seems like all your prayers have been answered.

These thieves know that. That’s why they’re in the fraud business to begin with. They’re counting on your sleepless nights of worrying about where you’re going to get the money to make it. And they’re only going to make your situation worse.

You have to keep your guard up. Imagine that offer coming from a stranger on the street, and you will instantly see through it.

New Identity Theft Laws in Indiana

The video is available here.

It looks like Indiana has been taking some proactive steps in the fight against identity crime, including stiffer penalties for violations (including child identity theft and businesses who don’t properly dispose of sensitive information).

It’s good that they’re trying to make it easier to block access to credit if your identity is stolen, but don’t be misled: identity theft still a major hassle to go through.

They also don’t mention anything about whether or not the system would help in cases of medical or other types of identity theft. Since it’s mostly dealing with credit, I’m guessing not. Still, these new laws are a giant step in the right direction.

Gone Vishin’

It’s 9:30 at night when the phone rings.

The Caller ID displays “Card Services” and a toll-free number.

You pick up the phone, and an automated voice informs you that “your card has been compromised.” It gives you a phone number to call to take care of the issue. The phone number is the same number on the Caller ID display.

Now…what should you do?

If you answered, “hang up and ignore the call,” you’re right.

Currently, there is a move towards integrating older technologies with the Internet. Eventually, I believe these technologies will be fully integrated; your television signal, Internet connection and telephone service will all be traveling along the exact same lines as part of the same service. These different technologies will also become more “seamless” over time—there will be less of a distinct divide between how you use your TV and your computer, and between the content you will receive from both. Okay, you’ll probably still use your phone to call Mom, but the signal will be digital, and it will be traveling through the Internet.

However, there is a downside, at least for the time being: vishing. Using Internet telephone services (Voice over Internet Protocol, or VoIP), criminals are able to spoof Caller ID information, to make a phone call appear to be from a trusted entity such as a financial institution or credit card issuer.

Let’s face it, you’re more likely to believe a call from “Card Services” than you are a “Blocked Call” or “Unknown Caller.” And that’s the basis of how Vishing works.

What happens if you call the number as instructed? You will be instructed to enter your credit or debit card number, expiration date, PIN and other security information. This is pretty much everything a crook needs to use your card for fraudulent purposes. They might also attempt to get your personal information, such as date of birth or Social Security number—basically, everything they would need to commit identity theft.

Phishing Alert: 07/06/09

Emails and text messages that claim to come from Allegius Credit Union are rampant in Northwest Indiana right now. In fact, several REGIONAL employees have received these over the past two weeks.

Of course, not everyone who gets one of these messages is a member of Allegius, in which case it’s easy to see through the phishing attempt, like a few years ago when I received a phishing message that claimed to be from a credit union in Hawaii. However, Allegius does have a lot of members, and that’s what the criminals are counting on.

For example, let’s say they sent 100,000 emails, and 5,000 of those people are members. If only 1% of those people fall for it, they’ve got 50 account numbers, PINs, and probably some other information as well. That’s more than enough to do some serious damage and drain a lot of money from victim’s accounts.

I’m pasting the text of these email messages below. I don’t have an example of the text message version of this scam, but it essentially said the same thing: “your account has been suspended, please go to this site and log in.”

Your financial institution will never contact you in this way regarding account security. If you receive such messages, delete them immediately. Never click a link inside an email message of this nature, as it will take you to a website designed to appear legitimate, but set up for the sole purpose of stealing your information.

Example #1:

Subject: You have 1 new ALERT message

You have 1 new ALERT message
Please login into your Allegius Credit Union
account !
To Login, please click the link below:

Click Here

Copyright © 1998-2009 Allegius Credit Union All Rights Reserved.

Example #2:

Subject: Important Security Information

Dear Member,

Your It’s Me 247 Online Banking account has been locked temporarily due to many unsuccessful login attempts.

You are kindly advised to Login to It’s Me 247 Online Banking and follow the instructions on your screen.

The data submitted will be transmitted over an SSL encrypted connection (128 bit Secure Socket Layer).

The line about SSL encryption in the second message is a cute touch. Yet another attempt to make the message seem realistic. You might also think the phrase “You are kindly advised” seems a little off. It doesn’t seem like a phrase a financial institution would use, does it? It has a weird, “translated” aroma to it. Since a lot of these scams originate overseas, that’s probably not far from the truth.

Stay vigilant.