The President explains his plan to address one of the major causes of the current economic crisis -- the breakdown of oversight leading to widespread abuses in the financial world.  The new Consumer Financial Protection Agency will have the sole job of looking out for the financial interests of ordinary Americans by banning unfair practices and enforcing the rules.  This is a cornerstone in America’s new economic foundation.

This is a positive change that is long since past due.  When a consumer is faced with illegal and unfair practices within the financial industry, it often frustrates the consumer due to the lack of enforcement of existing laws.

In the past, unless you had private funds to initiate a law suit against a creditor, the credit reporting agencies, or a collection firm – you were out of luck.  The damages for victims of Identity theft, unfair banking/billing practices, unfair debt collection practices, and inaccurate credit reporting resulted in job loss, loss of home, and further harmed the economy by increasing insurance rates, interest rates, and even reducing the ability for people to continue their education. 

As a survivor of identity theft under the old rules, I welcome this change.  For 10 solid years I was denied student loans, lost my home and was forced into Section 8 Housing, was denied medical care, and was forced to pay increased car insurance, renters insurance rates.

Although I had a job of 15 years, once my identity was compromised, I was unable to refinance a property without entering into one of the refinance scams.  Having read the documents and not being able to obtain a traditional fixed rate mortgage,  I was forced to give up my home and go into a rental.  I applied for several apartment communities and because of the inaccuracies in my credit, I was forced into Section 8 housing that was ill-maintained, infested with bugs and the owners frequently being brought into court for unsafe living conditions.  Because of the bad credit, I was denied medical care until I could pay all out of pocket expenses in cash, up front.  A medical credit plan, did offer a loan, but at 29% interest, giving the lender the title of my car, AND allowing the bank to pay the medical provider up front.  That $1,000 co-pay would wind up costing in excess of $3,000 by the time the loan terms were met.

As a victim, I believed the FTC was on my side there to assist in identity recovery.  It was mandated by law (FACTA - http://www.privacyrights.org/fs/fs6a-facta.htm) that I would receive cooperation.  I filed my police reports.  I filed with the FTC and I started writing to creditors and credit reporting agencies on inaccurate trade lines estimating over $1,000,000 in unsecured debt.  Realize I was merely an Executive Assistant earning $40,000 annually, this was devastating. 

Within the first six months 50% of the inaccuracies were corrected including listings of multiple social security numbers, records of marriage, addresses I never resided at, and various “alias” names.  Most collection agency trade lines were deleted.  Store based charge cards such as Macy’s, Disney, etc. were deleted.

There were two car loans in my name.  Both car loan companies confirmed, it wasn’t even fraud but a mixed file.  My name was not associated with either loan.  It took three years of supplying letters from the original creditor before the credit reporting agencies corrected their files.  It took writing to the Federal trade Commission, the Attorney General, my Assemblyman, various consumer agencies and eventually calling the local news (On Your Side), to have these items removed.  Not one governing agency was interested in owning the obvious FACTA, FCRA violations and prosecuting.

Even to this day, the occasional junk debt buyer will call on my old wireless (same number from that period) for the purpose of collecting a debt that was written off as part of the fraud and/or it was something that we never even detected at the time in 2001-2007.  Even when you tell them to cease, call the original creditor to complain, and send copies of your documentation – you are still subject to automated dialers that have that number stuck in their system.

With the new ways of communication established since 1977 when the FDCPA came into play, it is confusing to consumer and agent what can be said during a collection call.  Auto-dialers typically fall under the FCC Communication laws where they must disclose a point of contact, the company name, the company telephone number, the purpose of the call, and an opt out.

One such collection agency uses their auto-dialer providing personal information pertaining to the debt which is to their benefit, but do not provide an opt out. FCC will not prosecute because collection agencies don’t fall under the laws.  The FTC claims FDCPA does not appear to be violated alleging that confidentiality can not be breached by an automated dialer. 

This Hub is the tip of the iceberg. 

We need to look at security.  Did you know third party collectors are using call centers in countries who are known for identity theft?  They are sending your personal information to unknown companies with unknown security protocols. It’s not a new issue, but one that has been unresolved for years http://www.creditinfocenter.com/wordpress/2008/08/20/india-debt-collection-call-centers-who-is-responsible/ .

Here is a little reported issue that hinders accurate reporting.  You request your credit report (annual free or through a fee based service).  An Equifax special investigative representative advised during a call in 2005 that she did not want me to file anymore credit disputes on inaccuracies.  Many consumers are requesting and being denied copies of their credit reports.  The credit reporting agencies will request identification proving their requester’s identity.   The problem comes in where the credit reporting agencies will claim the documentation was not received, even when documentation is sent certified return receipt. 

This ongoing stonewalling to avoid providing copies of credit reports, is rarely spoken of.  Consumers faced with multiple inaccuracies often have the credit reporting agencies lose their file.  This is also an unfair assessment, as folks with no credit history are considered a red flag such as a young adult, a person who is not a US citizen and/or living outside the US and considered high risk, and/or a potential for the individual having been incarcerated for a period of time. 

On a final separate topic, Banks are required to “know their customer” and they adhere to very strict guidelines.  Bank employees are required to be fingerprinted, background checks performed, and bonded.  As a condition of employment all employees are mandated to participate in annual training, specifically geared to prevent identity theft, money laundering, privacy issues, etc.

Non-bank owned lenders, collection firms, and credit reporting agencies who handle personal and sensitive information ARE NOT REQUIRED under the law to pre-screen employees, or conduct annual training.  Most reputable companies already have a standard practice in place to ensure ethical conduct of business.  Many more, count on consumer ignorance and frustration, to just fold and accept what they say to be true.