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The Daraja by Mosi Pacha:

 Facts about FACTA:

New law gives consumers tools to monitor and protect their credit

Story by: Mosi Pacha

December 1, 2004

What is FACTA? FACTA is the Fair and Accurate Credit Transactions Act of 2003. It is intended to ensure "that all citizens are treated fairly when they apply for...credit."  It aims to do this by providing consumers with tools that give them greater access to their own credit information, while offering a potent weapon in the fight against identity theft. For Californians and other consumers who reside in the western states, December 1, 2004 is an important date for you. 

What does FACTA mean to you? The most important aspect of FACTA is that now everyone will be entitled to receive a free copy of his or her credit report once a year. Take advantage of this new provision because it is one of the most significant steps you can take towards gaining better control over your credit - and guarding against identity theft, as will be shown later in this article. You'll be able to see what information lenders are using to base their decision whether or not to issue you credit. The credit agencies used to charge $9 or more to receive a copy of the information they've compiled on you. Now you can get this essential information free once a year.  

Most experts recommend getting a copy of your credit report about 60 days before making a major purchase such as a car or a house. This way you'll be able to see what's on the report and have time to clear up any discrepancies, if necessary, before you actually apply for the loan. The Daraja is big on being forewarned. This is another way to arm yourself. 

As you are well aware by now, Identity Theft is one the fastest-growing crimes in America today. The Federal Trade Commission says that in 2003, ID thieves perpetrated their crimes to the tune of $53 billion. Not only does ID theft cost you time and money, but depending on the severity of the activity, it could also wreck your credit for years and make your life miserable. FACTA takes a bite out of this crime. A few of the ways FACTA does this: 

1. One of the easiest ways criminals get your information is from discarded store receipts with your complete credit card number - and expiration date - on it. FACTA now requires that merchants only display the last five digits of your credit card number on store receipts. So even if the store doesn't properly safeguard and/or dispose of their receipts, or if you are not already in the habit of shredding your old documents, the new provision of this law makes it much more difficult for your credit card information to fall into wrong hands this way. (The Daraja strongly suggests buying and using a crosscut paper shredder.) 

2. FACTA creates a national registry to report identity theft should you become a victim. (Contact information was not available at press time.) In the past you had to make three separate phone calls to the credit reporting agencies. Now you need make just one call to get help, and to initiate a nationwide fraud alert to be placed on your file. Once the fraud alert has been placed, credit-reporting agencies must now follow a standard that obligates them to verify that future requests for credit are really from the customer, not an imposter. Military personnel can now request that an alert be placed on their files when they are assigned to duty outside of the country.  

3. Since FACTA mandates that you are entitled to a free credit report each year, you'll be able to see for yourself if there is anything suspicious on it. As mentioned before in the Expo Update's story on Identity Theft, it can take months, in some cases years, before a victim finds out he or she has become a victim. With report in hand, you will see the evidence immediately.  

As always, Consumers Union is on top of things. Read their article titled "Your Credit Matters" for an explanation of how to get the free copy of the credit report you are now entitled to. “Consumer Aid On Tap”, a CBS MarketWatch article, has more information about even more 'perks' you are entitled to under FACTA. Privacy Rights Clearinghouse has a fact sheet about FACTA available that is worth reading from top to bottom as it contains a wealth of information in plain English. It provides information about what FACTA provides consumers, and also explains some areas where consumers lose out.  

The ability to order your free report will be rolled out in phases in different sections of the country, with a new quadrant becoming eligible about every three months. Western states became eligible to receive their free credit report beginning December 1, 2004. The Midwest is eligible starting March 1, 2005, followed by the Southern states on June 1, 2005. The last quadrant, the East Coast, becomes eligible on September 1, 2005.

Again, you should order a copy of your credit report every year and before making a major purchase. The Daraja recommends ordering it as soon as you read this - before the credit reporting agencies become overwhelmed with requests. You can get your free credit report from the three major credit reporting agencies: TransUnion (800-888-4213), Equifax (800-685-1111) and Experian (888-397-3742). Be advised that you will not speak to a human on the other end. One glaring point of irony about that: these companies who have made millions off of consumers by charging them to get a copy of their own credit information make you leave your personal data - the very same information you are trying to protect - on a machine.

An alternative to calling the agencies is the one-stop web site that has just been unveiled by the national credit bureaus called AnnualCreditReport.com. You can order your free credit report from this site starting December 1st. MSNBC’s article called “Free Credit Report Details Announced” has more information about how the site works and warns that the site  - and phone lines at the credit reporting agencies – could possibly be deluged with requests after December 1st. AnnualCreditReport.com was mandated by federal law and does not permit advertising. Most importantly, it is a secure site.

If you've ever applied for credit or a loan, you know how all-important your credit rating is. Take advantage of all that FACTA makes available to you. It's one of the best ways to safeguard the credit you've worked so hard to build up.

All highlighted text links to more information on the subject.

For comments on this story, contact Mosi at: mosi_pacha@yahoo.com

Speedpass Scheme Scams Unwary Users

 Story by: Mosi Pacha

Modern conveniences make our lives easier. Unfortunately, these conveniences often offer more opportunities for thieves to find and take advantage of unsuspecting consumers. New scams are cropping up so fast that it is becoming extremely difficult to keep up with them. This is especially true with a new hustle involving Mobil's Speedpass.

Mobil's Speedpass, cleverly designed to attach to your key ring, is a device that allows the user to 'fly' through the gas station. No more fumbling around for cash or a credit card with Speedpass. Simply wave the transponder at the special area on the pump. Pegasus lights up to confirm your transponder is working. Then you enter your zip code, pump your gas and go. What could be easier? Speedpass also works inside Mobil's On The Run convenience stores. How can a system so simple be used by thieves to make your life so difficult? Read on.

The Scene: You drop your car off at the dealer, mechanic, or oil change place. You hand the attendant your entire key ring - which has your Speedpass dangling enticingly from it - and head for the waiting room to read a magazine or get a jolt of bad java. The last thing on your mind is what is about to happen next.

The Scam: The seemingly trustworthy attendant drives your car off to be serviced. Then, in a nefarious version of sleight-of-hand, once your car - and your key ring - are out of your sight, the light-fingered crook simply switches your Speedpass with another one; usually one that has recently been cancelled. You have no idea a crime has just been committed. Even when you try to use what you thought was your Speedpass and it is declined, you still may not be aware that you have been victimized. After all, how many people know the number on their Speedpass? (For that matter, how many even know there is a number on it?). Besides, all Speedpasses look alike. (A few customers have called Mobil to suggest they issue colored Speedpasses to make them more distinguishable and Mobil did temporarily issue some gray ones.)

At the end of the day, the attendant leaves work and buys gas - with your Speedpass. Frequently he lets his friends use it, too. He continues using your Speedpass until it is cancelled. He doesn't care. Where he works, as many as one hundred or more cars can pass through every day. The ubiquity of Speedpass ensures it won't take long to find another one. (You may have noticed above that this article mentioned your zip code is needed to make Speedpass work. How do the thieves get your zip code, let alone match it to your Speedpass device? Remember, they have your car along with the workorder that you filled out with your name, address, and zip code.)

Depending on the degree of the avarice of the thief that swapped your Speedpass, it may take as long as two months before you realize something is wrong. That's when a whopping gasoline bill shows up in the mail. Usually, though, the first indication of trouble is when your Speedpass is declined at the gas station, apparently for no known reason. In cases of extreme greed on the criminal's part, he/she may trigger a high activity alert, which will prompt Speedpass' fraud team to call you to confirm the usage. In some instances, even after the fraud representative tells the victim the device they are holding is not theirs, the victim often vehemently denies it. "What do you mean this isn't my Speedpass??!! I've had it since 1999!"

The Solution: The best way to avoid becoming a victim of this scam is to follow advice that has been around for decades, before the advent of computers and other such high technology: Never give your entire key ring to the mechanic, valet, or anyone else when dropping off your car. Give them the car key only. Always keep your other keys and your Speedpass on your person.

Strike-Back: If you order a new or replacement Speedpass, keep the paperwork that came with the device and write down the device's number somewhere on that paperwork. If your Speedpass is ever inexplicably declined, go home and compare the numbers. If they do not match, call Speedpass' fraud department immediately. The sooner the theft is reported, the higher the likelihood the crook will get collared.

Try 'customizing' your Speedpass. Add a couple of dots and/or stripes of colored nail polish in a unique pattern to the side and/or bottom of the device. This makes it instantly identifiable by you but doesn’t affect the operation of the transponder. If it somehow does get switched, you'll know right away. So will the thief.

Criminals are using technology against you. Use technology to minimize the damage and possibly stop them. Go online to the site of the credit card to which you have your Speedpass linked. Look for any suspicious transactions. If there are any, give this information to Speedpass' fraud group. Also, notify the credit card company. Speedpass should conduct an investigation at this point. Be sure to keep a record of names, phone numbers, dates, etc., related to making the fraud report. If you know where the crook may have switched your Speedpass, give them that information, too. It could be the key piece of information that leads to the capture of the perpetrator.

With well over four million identical Speedpasses in use, it's easy to see how a ruse like this can proliferate. But by following the advice above, you can help shut this scam down for good.

Mosi can be reached for comment at: mosi_pacha@yahoo.com

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'Check 21' Brings Check Clearing into 21st Century

Story by: Mosi Pacha

On Thursday October 28, 2004, a new law, aptly named 'Check 21', went into effect that will change the way checks are handled. On that date, creation of something called a 'substitute check' became a legal equivalent of an original check. This allows banks to process more checks electronically, moving the ancient method of check handling into the 21st century. 

According to the Federal Reserve Board, the entity that oversees the check-clearing system, 'Check 21' is "designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. The law facilitates check truncation by creating a new negotiable instrument called a substitute check, which would permit banks to truncate original checks, to process check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks. A substitute check would be the legal equivalent of the original check and would include all the information contained on the original check. The law does not require banks to accept checks in electronic form nor does it require banks to use the new authority granted by the act to create substitute checks."  

Mining the Internet turns up a number of good articles with useful information about Check 21. Explaining the above in plain English is one of the bonuses. The Cincinnati Post article "Check-writers: Be prepared for 'Check 21' " is a good example. Similarly, Bankrate.com's article "New Law Ends Checking Traditions" does an excellent job of explaining Check 21 in plain language. The Fed has on their web site a list of Frequently Asked Questions about Check 21. A word to the wise: read all of them.   

What does this mean for your bank? The Fed estimates that banks may save as much as $2 billion per year in check-processing-related costs. Since they no longer have to shuffle the paper checks from bank to bank, they stand to save an additional $250 million in shipping costs. Don't look for them to pass these savings on to you, though.

Check 21 does not make it mandatory that banks convert all paper checks to electronic ones. It only states that banks have to accept them. Paper checks will still be around for quite a while longer.

What does this mean for your business? Checks will clear faster, and you'll get the money into your account sooner, especially those out-of-state checks which can take four days or more to clear. Now they'll clear in about 24 hours.

What does this mean for you? Quite a bit. The Consumer's Union has come out with a few tips on how to cope when Check 21 goes into effect. If you want to get a full understanding of the effects of the new system, Consumer Union's tips and the Fed's FAQ's are required reading.

Some of the most important things to know are: 1) A substitute check created under the new system is "legally the same as the original check only if it accurately represents the information on the original check and includes the following statement: “This is a legal copy of your check. You can use it the same way you would use the original check.” The substitute check must also have been handled by a bank." 2) 'Float' will be eliminated. If you used to float or 'kite' checks (writing checks without having the funds in your account to cover them, but knowing you will have a couple of days to get to the bank to deposit the money before the check gets there), be prepared to change your ways. Under Check 21, checks can now clear in as little as 24 hours. If you continue to try to take advantage of the float, be prepared to face more bounced checks and the litany of repercussions they create. 3) The possibility exists that both the paper check and the substitute check can be presented to your bank for processing, thereby debiting your account twice for the same check (!). Check 21 does provide legal recourse if this happens, but you should start watching your account like a hawk if you aren't already. Consumer's Union tips mentioned above provide more valuable information about this scenario. 4) If your bank asks you to sign up for something called "voluntary check truncation", Consumer's Union recommends that you don't. It has the effect of diminishing some of the rights you are originally guaranteed under Check 21. Again, see the Consumer's Union tips linked above.

As you can see, Check 21 will change the way we used to do checking. There will be some new things to get used to, and some bugs to work out. Armed with the information you've just read, checking's move into the 21st century won't give you whiplash.

Highlighted text links to more information on the subject

Mosi can be reached for comment at: mosi_pacha@yahoo.com

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Don’t Get Hooked By Phishing Scams

For Internet users, it's one scam after another. Internet users must be very vigilant in watching which sites they visit, where they do their online transactions, and which e-mails they open. Now there is yet another scam that targets unsuspecting users through e-mail. The latest scams involve a technique called 'phishing', employed through 'spoofing' e-mails. Say what?

OK, let's break it down. 'Spoofing' is when a scammer sends a fraudulent e-mail disguised to make it look like it came from someone else. It takes its name from the act of spoofing, knocking off an original. But unlike satirical spoofs, there's nothing funny about e-mail spoofs. They can cost you money, possibly even ruin your credit if you become the victim of identity theft through one of these scams. And they are getting more difficult to detect.

'Phishing' is when an e-mail message arrives requesting the user to send back sensitive information such as passwords, credit card numbers, etc. Scammers are fishing for unsuspecting users who will give up this kind of data. Obviously once the scammer gets this data, he or she has enough of your personal information to illegally make Internet transactions, use your credit cards or even perpetrate a complete theft of your identity.

Here's how it works: A scammer sends out an e-mail message that appears to be from a company you may likely do business with. That's the spoofing part. The message says that there is some kind of problem with your account and in order for them to fix it they will need you to send your credit card information, password, or other identifying information. That's the Phishing part. Most people cannot tell it’s a fake.

The scammers frequently target huge companies like AOL, eBAY and PayPal, and banks like CitiBank. The fraudulent e-mails look real enough. In one week, just two days apart, I got one e-mail that spoofed eBay and one that spoofed PayPal. I do business with both of these companies. (Later that same week, Isidra Person-Lynn, who had no idea about the spoof e-mails that I had just received, forwarded me an article about phishing.) Fearing the worst, I started to go to eBay using the link provided in the e-mail, then suddenly remembered the cardinal rule about spoof e-mails; never, EVER attempt to verify your account information using links or icons in e-mails you suspect may be fraudulent. That is a phishing tactic. Those links lead to what looks like the spoofed company's site, when in fact it is the scammer's site set up to collect the information you provide, all the while you’re thinking you're giving it to your company. Instead, close the e-mail and go to the site from your browser. Verify your information that way. Later in this article, the Daraja will show you how to fight back against phishers and spoof e-mails.

Coincidentally as I was preparing this article, I received yet another fake e-mail, this one spoofing AOL. This is what it looked like:

Dear Mosi_Pacha

It has come to our attention that your AOL Billing information's records are out of date.
This requires an update of your billing information. Please take several minutes out of your
online experience and update your billing records. You will not run into future problems with our online services.
However, failure to update your records will result in your account termination. Please update your records right now.
Once you have updated your account records your AOL session will not be interrupted.
 

Please click the link below to update your billing records:

http://aol-cs1.com

Sincerely,

America Online, Inc.
 

This is an actual phishing attempt, albeit a bad one. First of all, AOL only sends billing inquiries to the main screen name on the account. Second, most companies refer to their clients by name when they send out important messages involving your account. Third, the grammar is poor; not something you’d expect to come from a reputable nation-wide company. If you get an e-mail message like this one, either delete it or report it.

Spoof e-mails are beginning to fool some of the experts. So how can us regular folks fight back against such high-tech scams? How can you spot a fake? First, be suspicious of any e-mail that requests you to provide personal information via e-mail or says something is wrong with your account. Second, if a link or icon is provided, position your cursor over that link or icon but do not click on it. The address it directs you to should appear momentarily either next to the cursor or on the bottom of your browser window. If this address has nothing to do with the company supposedly sending the e-mail, it's a fake. Report it immediately. (For example, a spoof e-mail arrives in your inbox and says there is a problem with your CitiBank account. It provides includes a link that you are supposed to click on to continue the process. But when you run your cursor over the link, the address that pops up reads something like “http://www.gotcha.com.de/fake/phish”. This address has nothing to do with CitiBank. You’ve just busted the scammer! You'll be able to spot most phishing scams this way.) Third – and this cannot be stressed enough – never, EVER follow links or icons in suspicious e-mails to check your account information. Rather, go to the site by typing the company’s web site address in your browser window. Fourth, you can always call the company to verify whether or not they sent the suspicious e-mail.

In contrast to high-tech methods of identifying these high-tech scams, a low-tech technique works well on many of them, too. What’s this low-tech tip? Grammar. A number of scammers, especially ones overseas, do not speak English as their first language. It shows up in the grammar of their e-mails. Poor grammar from a big company? Probably a scam.

But some even go so far as to make the link or icon look real. Unless you are absolutely sure that the message is really from the company in the ‘reply to’ line, do not go to the site using a link or icon in the e-mail. As mentioned above, go to the site by typing the company's address in your browser window, or use the Favorites if you have the site bookmarked.

The link at the end of this sentence takes you to examples of phishing scams against eBay and against PayPal: http://antivirus.about.com/cs/emailscams/a/blebayscam5.htm Fortunately most of the companies that are most often spoofed have a procedure for spotting and reporting fake e-mails. eBay and PayPal have an address where you can forward the fake message (spoof@ebay.com or spoof@paypal.com). In the two e-mails I mentioned earlier, I reported them both to the respective company. Both PayPal and eBay wrote back saying that they did not send out those e-mails.

Another type of phishing scam is not Internet-related. It involves something called 'skimming'. Skimming involves criminals installing a phony device over the card reader slot on machines like gas pumps or ATMs. The skimmer reads the information off the magnetic strip on your card. The hidden camera placed inconspicuously above and behind you records you as you enter your PIN. The only way to avoid being ripped off by these scams is to be aware that such a device is being used at a place where you plan to make a transaction using your card. If you do see one, report it immediately.

Scams on the Internet are getting harder to identify. They are difficult to prosecute because of the relative anonymity the Internet affords the scammers. Some of the perps are overseas. With that in mind, it would be wrong to say that you will never fall victim to a phishing scam. But now you can fight back and lessen your chances of getting hooked by one of them.

Contact Mosi at: mosi_pacha@yahoo.com