Identity theft grows more prevalent on a daily basis. As consumers, we use every caution to protect ourselves. Still, it happens.

The Federal Trade Commission (FTC), the National Credit Union Administration (NCUA), and the federal bank regulatory agencies have issued regulations called the Red Flag Rules. They were enacted in November 2007 and are part of the Fair and Accurate Credit Transactions (FACT) Act of 2003.

These rules require banks, creditors and other financial institutions to develop, and carry out written, in-house programs to detect and prevent identity theft. They are to be implemented by November 1, 2008. The Red Flag rules provide financial institutions with guidelines to use as examples when creating their programs. The program must be managed by senior employees and staff training provided.

The Red Flag Rules will enable financial institutions to recognize, and respond more quickly to specific activities or patterns that distinguish identity theft. Any unusual or suspicious activity on an account, suspicious documents or requests for personal information will be flagged.

Most personal or family accounts will be covered, including cell phone, utility, credit card and bank accounts. As well as loans and mortgages. Any account which has a possible risk of identity theft, such as a small business or sole proprietorship, is also covered.

Will the Red Flag Rules make a difference in early detection and interception of identity theft? It’s a step that will most certainly help when put into use. Consumers need to remain active and diligent in using caution to protect themselves. Common sense and careful use of personal identification cards and account numbers should always remain a top priority.

Even so, it’s nice to know our financial institutions are being made aware and accountable in the battle against identity theft.

Phishing scams are going back to school in the upcoming weeks.  As you get ready to send your son or daughter back to college, or prepare to go back to school yourself, there’s something you’ll need to take with you that has nothing to do with bed linens or Ramen noodles.

And that is a lesson in keeping your personal information secure.

By now, most people know better than to click on a link requesting personal information that is sent in an e-mail from an unfamiliar Hotmail account, Yahoo! account or any other address that you can register for for free. However, people are more likely to trust an email coming from an institution they belong to, such as a school or employer. Consequently, students can be quick to trust that an e-mail coming from their school’s domain is valid. This is why more and more identity thieves are sending their phishing emails from spoofed .edu addresses.

This has already become a big problem at at least one school: Rice University in Houston, Texas. In the most recent issue of the school’s student newspaper, the Rice Thresher, it was stated that 14 different phishing scams have permeated the school’s email system since February of this year. As a result of these emails, at least 12 members of the campus community inadvertently submitted their personal information to the identity thieves, including their campus ID numbers and passwords.

However, Rice University is definitely not the lone educational institution falling victim to these attacks. Identity thieves are known to send hundreds and even thousands of emails per day, which means they will be reaching a college near you in due time, if they haven’t already.

Remind your kids – or yourself if you are the student – to not trust or respond to any emails that ask for personal information, not matter how reliable the source may seem to be. Always call the organization and verify the request – using a number posted on the official website, not one listed in the email message.

There’s still time to put in your claim for the TransUnion Class Action settlement and receive six or nine month of free credit monitoring. All you have to do is log on and fill out the simple form by September 24, 2008. If you have any credit accounts at all, there is no reason why you shouldn’t be eligible. The class can include anyone who has held a credit card or other loan account at any point between January 1, 1987, and May 28 of this year.

With this free credit monitoring service, you will receive a free copy of your credit report – from the TransUnion bureau only of course – as many times as you request it for the length of time you are subscribed to the monitoring service. You can also get a free copy of your credit score under the same terms. The main difference between the six-month period and the nine-month period of monitoring service in regards to the settlement is that if you choose nine months of monitoring you will not receive a portion of the cash reward that is doled out when the case is resolved. (This amount is undisclosed at this time and will depend on the number of claimants.)

So what is the class action suit about? It’s in regards to a claim that TransUnion distributed information from Americans’ credit files for marketing purposes without their permission, which is prohibited under the Fair Credit Reporting Act. Note that TransUnion still maintains that it did not violate the Act.

All who file their claims by September 24 should most likely see their credit monitoring benefits available in the next couple months. As far as the cash reward, that may take up to two years or more to show up, so don’t add it to the budget for next week’s grocery bill.

The Fair Debt Collection Practices Act (FDCPA) is a set of rules governing debt collection and how collectors should behave. This Act sets requirements and prohibits any unfair or disrespectful act against you by debt collectors, such as phone harassment or debt collection letters laced with threats of lawsuits.

As it turns out, however, the FDCPA does not treat all debts equally. The distinction arises from its own definition of “debt”. As stated under the Definitions section of the FDCPA:

(5) The term “debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes…

In other words, the FDCPA covers only consumer debt. If you used your credit card for private purposes, such as paying for medical expenses or to purchase a new car, your debt is covered by FDCPA benefits. On the other hand, if you use your credit card to finance a business, that expense is considered business debt and falls outside of the FDCPA. If you do incur such debts and are unable to pay them, you may be vulnerable to unsavory collection tactics. It is not uncommon to be woken up by a late night phone call to be told by a collector that you are facing immediate arrest for late payments on your credit card debt.

Plan out your strategy carefully before using your credit card to fund your business. Be also aware of your state laws governing debt collection. If you’re already being harassed by debt collectors, contact me to discuss what they can’t do to you and what you can do about them.

Is it possible to get a debt collection lawsuit over a debt so old your credit company had already written it off as a loss? As two women found out, the answer is unfortunately, yes. Even worse—it’s legal.

A recent My 9 News story reveals that debt collectors such as New Jersey-based First Century Financial buy up old credit card debts at pennies on the dollar, then use their legal arm Pressler & Pressler to pressure consumers into paying up – even if the debt is too old to legally collect. The two women featured on the show were shocked to receive debt collection letters, claiming they owed thousands of dollars to collectors they’ve never even heard of, and that failure to pay would result in arrest and legal action.

Thankfully, there are ways to fight back. The Fair Debt Collection Practices Act protects consumers from debt collection harassment. When faced with a debt collection letter you should always demand proof of the debt’s existence and the name and address of the original creditor. If you receive any legal papers – a lawsuit – you should contact a qualified attorney immediately.

Have you been the victim of debt collection harassment? If so, contact me or click here to set up a free, no-obligation telephone consultation to discuss your rights.