Scam of the day – November 22, 2014 – FTC takes action against “free” credit score scams

The Federal Trade Commission along with the Attorneys General of Illinois and Ohio has announced a settlement with three companies that marketed what the companies advertised as free credit scores and then billed the unsuspecting customers $29.95 per month for credit monitoring services that they neither wanted nor knew that they had ordered.  Under the terms of the settlement, the defendants will be refunding 22 million dollars to scammed customers.  The companies marketed their programs MyCreditHealth and ScoreSense through at least fifty websites and bought advertising on Google and Bing that would appear high on a list when consumers looked for “free credit reports.”  One of their misleading ads read “View your latest Credit Scores from All 3 Bureaus in 60  seconds for $0.”  In the fine print of their agreement, the companies were able to bill the consumers’ credit cards until the customers called to cancel their membership.  Even then, the companies, in many instances did not cancel the contract until after repeated calls.

TIPS

It is important to note that a credit report and a credit score are not the same thing.  Your credit report, which you have a right to a free annual copy of at each of the three major credit reporting agencies, Equifax, Transunion and Experian does not contain your FICO credit score which is derived from the information in your credit report and used by companies to measure your creditworthiness.  There are many companies that also promise free copies of your credit report only to do the same scam of charging you hidden monthly fees for additional services.  The only website to use for your free credit report is www.annualcreditreport.com.  You should also be wary of any company that offers something free and then asks for your credit card.  This is a red flag that what you are ordering is not free.  There are no websites that offer your actual FICO credit score at no charge although there are a number of websites including CreditKarma, CreditSesame and Quizzle that will provide a free approximation of your score sometimes called a FAKO score that can be helpful.

Scam of the day – October 31, 2014 – Free credit score scams

Based on the information contained in your credit reports, your credit score can have a significant effect on whether you are granted a loan and at what interest rate, whether you will be hired for a job, whether you will be sold insurance, whether you can rent an apartment or many other purposes.  We all have a right to an annual free credit report from each of the three major credit reporting agencies, however, your free credit report will not provide you with your credit score.  Recently many people are receiving emails with offers to provide a free copy of your credit score.  Unfortunately, as with any other email or text message that requires you to provide personal information such as your Social Security number which is required to obtain your credit report or credit score, you cannot be sure that the offer is legitimate.  In some instances, companies offering to provide “free” credit reports or scores are actually signing you up for a continuing service that you may not either desire or need.  These sites generally ask for your credit card number, but tell you that they only need the credit card number for verification purposes.  Of course, that it is a lie.  If you were getting something free, you would not need to provide a credit card number.   They are getting your number to use it to charge you monthly fees for services that you may not have thought you ordered.  Even worse however, are scams in which the company offering to provide you with your free credit score is actually just scamming you in order to get your Social Security number which they will use to make you a victim of identity theft.

TIPS

As I always say, you cannot trust any email or text message to be legitimate.  Never click on links, download attachments or provide personal information in response to unsolicited emails or text messages.  The risk is too great.  If you want your free credit reports from each of the three major credit reporting agencies, Equifax, Transunion and Experian, the only place to go is the website www.annualcreditreport.com.  It is important to monitor your credit report not just to find evidence of identity theft, but also to find mistakes that may appear on your report that can adversely affect your credit score.  As for your credit score, the website www.creditkarma.com is a legitimate website that you can trust, that encrypts your data and provides your credit score for free.

Scam of the day – October 24, 2014 – President Obama’s Executive Order regarding credit card security and identity theft

President Obama has signed an Executive Order leading the way for greater protection for Americans from data breaches and identity theft.   He also announced that a number of companies including Home Depot Target,  Walgreen and Walmart are accelerating their move to more secure chip and PIN credit card use at their stores. Although regulations that would encourage retailers to switch to these smart cards no later than October of 2015, these companies are planning on completing the move to smart card readers by January of 2015 with Walmart already leading the way.  Also starting in January Citi and FICO are joining together to make credit scores available free to Citi Bank credit cards.  Already providing free credit scores are Discover, Barclaycard, Pentagon Credit Union and First National Bank of Omaha.  It is hoped that more banks will follow this example.  Under the President’s order the reporting of credit card fraud will be made quicker and easier within two years.  Finally, the President announced that the Department of Justice and the FBI are working to improve greater information sharing between hacked companies and affected consumers with the National Cyber-Forensics and Training Alliance’s Internet Fraud Alert System.

TIPS

The President’s actions are a good first step and they do indicate a greater willingness of businesses to work with the government in order to better protect consumer data.  However, much remains to be done and Congressional action is definitely required to improve the laws necessary to protect consumers from data breaches and identity theft.  However, it is good to see the President taking the lead on this important issue. Meanwhile, the primary responsibility for protecting ourselves from identity theft still rests with all of us as individuals.  I urge you to pick up a copy of my new book “Identity Theft Alert” which provides simple steps you can take to dramatically improve your chances of avoiding identity theft.  You can order the book from Amazon by clicking on the link on the right hand side of this page.  I also urge you to read scamicide.com every day so you can become aware of the latest scams and identity theft schemes.