Feds still targeting deceptive mortgage ads

Effective August 19, 2011 a federal truth-in-lending law strengthens bans against deceptive advertising from mortgage lenders, brokers, and servicers; real estate agents and brokers; advertising agencies; home builders; lead generators; rate aggregators; even on- and off-line publications.

by Broderick Perkins
© 2011 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime



Deadline Newsroom - A new federal rule targets mortgage advertisers who attempt to pull the wool over consumers' eyes when they shop for a home loan.

Effective August 19, 2011 a federal truth-in-lending law strengthens bans against deceptive advertising offered by mortgage lenders, brokers, and servicers; real estate agents and brokers; advertising agencies; home builders; lead generators; rate aggregators; and others, including on- and off-line publications.

The Federal Trade Commission (FTC) rule does not cover banks, thrifts, federal credit unions, and other entities not regulated by the FTC.

For years, the FTC has been at war with outfits using deceptive mortgage advertisements.

As recently as June this year, the agency sent hundreds of advertisers and media outlets warning letters that some mortgage ads are either potentially deceptive or in violation of the Truth in Lending Act.

The massive missive mailing came following a nationwide review of claims for low monthly mortgage payments or low, low interest rates, without adequate disclosure of other important loan terms.

Some ads claimed rates as low as 1 percent, but failed to disclose adequately:

• That the stated rate was a "payment rate," not the interest rate.

• That the payment rate applied only during the loan's brief initial period.

• The loan’s Annual Percentage Rate (APR), the uniform measure of the cost of credit that enables consumers to shop for and compare mortgage offerings.

The fraudulent behavior is not unlike actions used to push toxic mortgages that became the scourge of the economy and helped plunge the nation into recession, the effects of which are still felt today.

Since 1995, the FTC has busted dozens of mortgage operations for a host of infractions, including:

• Claims for loans with specified terms, when no loans with those terms were available from the advertiser.

• Misrepresentations that rates were fixed for the full term of the loan.

• Misrepresentations about, or failure to adequately disclose, the existence of a prepayment penalty or large balloon payment due at the end of the loan.

• Claims of mortgage payment amounts that failed to include loan fees and closing costs of the kind typically included in loan amounts,

• Failure to disclose adequately that the advertiser, not the consumer’s current lender, was offering the mortgage.

• False or misleading claims that consumers were "pre-approved" for mortgage loans.

The new rules list 19 examples of prohibited deceptive claims including misrepresentations about:

• The existence, nature, or amount of fees or costs to the consumer associated with the mortgage and other products sold in conjunction with the mortgage, including credit insurance and credit disability insurance.

• The terms, amounts, payments, or other requirements relating to taxes or insurance associated with the mortgage.

• The variability of interest, payments, or other terms of the mortgage.

• The type of mortgage offered.

• The source of an advertisement or other commercial communication.

• The consumer's ability or likelihood of obtaining a refinancing or modification of a mortgage or any of its terms.

New rules also address misrepresentations involving pre-payment penalties; interest rate and payment comparisons; affiliation with government agencies and a consumers likelihood or ability to obtain a home loan.

• Click on the keywords below for more stories on this subject.

© 2010 DeadlineNews.Com

Advertise on DeadlineNews.Com | Shop DeadlineNews.Com

Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!" now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Under the DeadlineNews Group umbrella:

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Real Estate Examiner
• National Consumer News Examiner
• National Offbeat News Examiner

Other DeadlineNews Group Feeds are available from DeadlineNews.Com.

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!

Site to See: Esteemed Lending Services (It's a fake)

Cow dentist prolongs bovine life

The FTC created a faux website for a fictitious lending company to warn consumers how easy it is to be fooled by scammers, especially online scams, charging up-front fees for bogus loans, including mortgages.

by Broderick Perkins
© 2010 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - The Federal Trade Commission's new loan website Esteemed Lending Services offers "A Loan for every situation. Guaranteed."

However, and pay attention now, unlike other websites offering similar come-ons, it's a fake.

The website is a convincing example of how the Obama Administration gets it when it comes to what consumers face in the financial world -- too much bull.

The FTC created the faux website for a fictitious lending company to warn consumers how easy it is to be fooled by scammers, especially online scams, charging up-front fees for bogus loans, including mortgages.

The site also explains how to spot and avoid loan scams.

The website is part of the FTC's stepped up consumer education campaign to help consumers manage their money and learn to recognize rip offs.

At Esteemed Lending Services consumers enter the fictitious world of "a guaranteed loan for every situation – regardless of your credit history," only to find a world where:

• Lenders aren't interested in your credit history and claim bad credit isn't a problem. (Honest ones are and bad credit can be a problem.)

• Fees aren't' disclosed clearly or prominently. (Honest firms disclose fees. Regulations mandate it.)

• Loans by phone are legal. (They aren't.)

• Lenders use copy-cat names that sound like well-known or respected organizations to convince you they're legitimate. (While using variant names isn't necessarily illegal, it is a scamming tactic.)

• Lenders are not registered in your state. (While state registration is not a guarantee the best loan, it does help weed out the come-ons by giving you a government agency to seek redress.)

• Lenders ask you to wire money or pay a particular person. (Don't!)

The FTC explains its ruse with links to "testimonials," "FAQs," "loan programs," "contact us," all of which point to warnings about scammers masquerading as lenders.

While Esteemed Lending Services isn't particularly loaded with a lot of new information, it is a website that reveals how easy it is to scam consumers. It's also a handy website to use as a reminder of what's out there to take you to the cleaners.

Bookmark it.

A feature of DeadlineNews.Com, "Site To See" reviews are occasional, but timely critiques of content-heavy real estate Web sites deemed unique, consumer-friendly, informative and easy to use.

• Click on the keywords below for more stories on this subject.

© 2010 DeadlineNews.Com

Advertise on DeadlineNews.Com | Shop DeadlineNews.Com

Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
• National Consumer News Examiner
• National Real Estate Examiner

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!

Preventing ID Thieves From Stealing Innocence

by Broderick Perkins
© 2007 DeadlineNews.Com

Deadline Newsroom – Kids have become easy targets for ID thieves because of exposure offered by popular social networking sites on the Internet. In their naiveté, kids are also too often willing to give out information that can be used fraudulently.

Former Arkansas Treasurer and gubernatorial candidate Jimmie Lou Fisher, now the consumer education instructor for the state's attorney general, is a pioneer in child privacy issues, including the fight against child identity theft.

She says a child's stolen Social Security number, used to open credit, may not be discovered until after the child turns 18 or attempts to open a credit account.

Case in point: In Pensacola, FL, a Girl Scout leader pleaded guilty to stealing her scouts' personal information in a ruse to obtain $87,000 in illegal tax refunds.

The scout leader admitted asking parents to provide their children's Social Security numbers for a medical release the scout leader claimed was required for field trips. The leader used the numbers to file 19 false tax returns, including four using her own kids' Social Security Numbers.

And then there's Zach Friesen who became the poster child for ID theft when at 17 he applied for a job and a school loan and discovered he was in debt for a $40,000 house boat. Someone stole his identity when he was only 7.

Now 21 and a political science major at the University of Colorado, Friesen works for the Qwest Communications' Incredible Internet Program spreading the beware gospel to teens, parents, legislators and others who need to know about child ID theft.

Kids have become easy targets for ID thieves because of exposure offered by popular social networking sites on the Internet. In their naiveté, kids are also too often willing to give out information that can be used fraudulently.

According to the Federal Trade Commission (FTC), 400,000 children have their IDs stolen each year and are perfect targets because they have clean credit histories. The crooks often can get away with the crime for years because kids and their parents seldom if ever check kids' credit reports.

However, kids have the same protections adults can use to protect their identity.

It starts with using free annual access to a kid's credit reports available through the federally-sanctioned Annual Credit Report.com.

Avoid offers from similarly sounding Web sites offering "free" credit reports. They typically come with mandatory fee-based services, say credit report monitoring.

Some child privacy advocates say the Social Security number assigned at birth is enough to trigger the creation of a credit report by one of big three credit reporting agencies, Experian, Equifax and Transunion.

However, many kids won't get a credit report, until, say, a parent's credit card account is used to issue a card in the child's name, a child co-signs for a auto or other loan, or perhaps if an older teen manages to secure a gas, retail or other merchant card. Youth employment, a rental application or other activities that warrant a credit check by a company could also generate an initial credit report.

If a child spends a lot of time online in chat rooms, social networking sites or other information gathering and sharing sites, parents checking for a credit report isn't a bad idea, if only to determine a credit report doesn't exist or that there is no suspicious activity.

The free-credit-report provision of the 2003 Fair and Accurate Credit Transactions Act (FACTA), which amends the Fair Credit Reporting Act (FCRA) gives anyone access to credit reports from the big three credit reporting agencies and others governed by federal regulations.

The provision is not for a single, free credit report a year, but one from each of the three major credit reporting agencies every year. That means parents can check for free three times a year, each time getting a different report from a different agency. Parents may need a birth certificate to prove the identity of a child to check their credit report.

Another tool is a no- or low-cost credit freeze, previously offered by law in three dozen states and now offered for a fee by the three credit reporting agencies.

The freeze placed on a credit report -- via direct contact with each credit bureau -- blocks requests for credit and may be particularly useful for kids who typically don't have a need for credit until they are young adults.

Also, for kids who become ID theft victims and generate a police report, parents can, for free, call any one of the three credit bureaus and have a fraud alert placed on the credit report to prevent future infractions while sorting out the mess. In this instance, contacting just one bureau gets the fraud alert placed on your credit report at each of the three credit reporting bureaus.

For kids in general, Qwest Communications, the FTC, Arkansas' Fisher and others suggest the follow child ID theft prevention measures:

• Insist that kids never provide personal information to strangers on or off line. That includes phone numbers, addresses, age, school, gender, hobbies or interests. Kids should always use a screen name, rather than their real name on social networking sites. Likewise their email address shouldn't include their real name.

Posting personal photos isn't a good idea. Nor is posting photos with identifying info including, say, a t-shirt emblazoned with your high school name or a photo with a your house and home address number in the background.

• Be sure you know who is receiving instant messages you send. Under the supervision of a parent, kids should exchange email addresses in person, rather than online.

• If something inappropriate happens online, kids should report it immediately to parents. Parents can also use CyberTipLine.com and report suspicious activity to the police.

• Kids and adults should always be alert to Internet scams and protect themselves and computers with software that thwarts spyware, spam and viruses.

• Parents should know kids' passwords and screen names. They also should learn Internet lingo such as POS: parent over shoulder.

• Parents should monitor their kids' online activity to be available should a site ask for personal information -- like a last name or address -- to make sure the child doesn't provide the information.

• Parents shouldn't ignore junk mail in a child's name. Parents should react to kids getting credit cards promotions in the mail as a red flag. It's time to pull the kid's credit report.

• Parents should put magazine subscriptions in the parent's name to keep the kids' names off mailing lists.

• Don't let kids carry their Social Security cards or numbers with them -- nor should parents. Keep cards and numbers in a safe place at home.

• Check for an earnings statement for your kids from the Social Security Administration. Unless your child has earned Social Security taxed income, there should be no earning associated with his Social Security number. You can sign up to have an annual Social Security earnings statement sent to you.

• Final 'Red Flag' Rules Set To Wave Off ID Theft
• New ID Theft Study Blames Strangers
• More Related News From DeadlineNews.Com

© 2007 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

---

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!

Final 'Red Flag' Rules Set To Wave Off ID Theft

Preemptive federal "red flag" regulations, designed to strike at the heart of identity theft in its earliest stages, rolls out this year. (More ID theft news.)

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom – Preemptive federal "red flag" regulations, designed to strike at identity theft in its earliest stages, rolls out this year.

Beginning Jan. 1, 2008, with all federally regulated financial institutions ordered to be in full compliance by Nov. 1, 2008, the so-called "Red Flag" provisions of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), requires that financial institutions and creditors develop and deploy an Identity Theft Prevention Program for combating ID theft on new and existing accounts.

The Red Flag regulations are included in the same massive regulatory overhaul of the Fair Credit Reporting Act (FCRA) that gave consumers free credit reports and a host of additional protections.

Under Red Flag provisions, each institution must develop a program that will

• Identify relevant patterns, practices, and specific forms of activity that are "red flags" signaling possible ID theft.
• Include a mechanism to detect red flags identified by the program.
• Quickly respond to detected red flags in a way to both prevent and mitigate ID theft.
• Be updated regularly to reflect changes in real world risks from ID theft.

If you are the victim of ID theft, you don't actually lose your identity and wander aimlessly like an amnesiac Jane or John Doe.

ID theft occurs when someone steals your personal identifying information and uses it in a crime. With your Social Security number, driver's license number, credit account numbers, passwords or other information in hand, thieves can masquerade as you to access your financial accounts, withdraw cash, make credit purchases, and open additional accounts in your name.

The newest identity theft data reveals greater awareness, new consumer protections and industry actions have already begun to stem the tide of ID theft.

The number of victims of ID thefts decreased from 10.1 million in 2003 to 8.4 million in 2007. From 2006 to 2007, the total amount lost to ID fraud decreased from $55.7 billion to $49.3 billion; per victim losses decreased from $6,278 to $5,720 and resolution hours per victim fell from 40 hours to 25 hours, according to Javelin Strategy & Research's 2007 Identity Fraud Survey Report.

Federal regulatory efforts should take a bigger bite out of the crime.

The final rules especially target the incidence of requests for changes of address followed closely by a request for an additional or replacement card as a common ID theft method of operation to watch. The rules also include an additional two dozen guidelines to help institutions root out other suspicious activity that warrants attention.

The guidelines say actions institutions should be on the lookout for include:

• ID numbers. Use of a single Social Security number or other identifying number used to open accounts under different names.
• Alerts and freezes. ID theft alerts from fraud detection services, customers, law enforcement agencies and others. A credit bureau's notice of credit freeze provided to an institution along with the institution's requested consumer credit report.
• Extra activity. An increase in credit report inquiries or other unusual patterns on a credit report.
• Questionable information. The appearance of doctored or forged documents; inconsistent information or identifying information associated with known fraudulent activity.
• Inconsistencies. A new revolving credit account used in a manner commonly associated with fraud patterns; an account used in a manner not consistent with established patterns of activity on the account; applicants failing to provide all required identifying information and information supplied that is not consistent with existing information on file.
• Mail sent to the customer's on file address repeatedly returned as undeliverable among others.

• Consumers looking for help with ID theft prevention efforts should visit OnGuardOnLine.com, and take the animated "ID Theft Face Off" game-quiz to test ID theft knowledge and play the file sharing "P2P Threeplay" game to get some insight on the associated risk.

The Web site features a host of entertaining, game-like approaches to learning about Internet fraud, computer security, and personal information protection.

• Also visit the Federal Trade Commission's ID Theft Page for details on ID theft protection steps.

• Deadline Newsroom's ID Theft Archives

• DeadlineNews.Com's Consumer Credit Center

© 2008 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

---

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!

New ID Theft Study Blames Strangers

by Broderick Perkins
© 2007 DeadlineNews.Com

Deadline Newsroom – Don't let a new identity theft study confuse your approach to warding off the crooks. No matter the source of the pilfering, the fundamentals of ID theft prevention apply.

A new study about who is likely to steal your identity shifts the blame from people you know to those who are more likely to be strangers.

In its "Identity Fraud Trends and Patterns," Utica College's Center For Identity Management & Information Protection (CIMIP) tracked Secret Service arrests and convictions of offenders and found that identity thieves engaged in these methods of operation.

• ID thieves used the Internet or some other technological device in the commission of the crime approximately 50 percent of the time. Among those who did not use technology, tactics like dumpster diving and change of address were used 20 percent of the time.

• ID thieves snatched information from service, retail, financial industries or other corporations in 50 percent of the cases in which the point of compromise could be determined. A family member or friend was the point of compromise in only 16 percent of those cases.

• ID thieves used their place of employment to gain access to information 43.8 percent of the time among those who worked at retail outlets including stores, car dealerships, gas stations, casinos, restaurants, hotels, hospitals and doctors' offices. Private corporations were the scene of insider ID theft in about 20 percent of those cases.

The study is in contrast to reports from Javelin Strategy & Research, which has studied the issue from the perspective of victims, rather than the crooks.


"Online Banking and Bill Paying: New Protection from Identity Theft," a study released several years ago by Javelin Strategy and Research, a consultant for financial services, payments, and commerce sector companies, analyzed findings from Federal Trade Commission (FTC) and U. S. Postal Service reports, as well as its own studies.

That study found ID theft stems from a paper trail -- 40 percent of all ID fraud starts with the theft of a wallet or a purse; 14 percent of the time when someone sets up a new account it's done with information the perpetrator took out of a mailbox.

Javelin also said the greatest sources of ID theft are friends and family.

James Van Dyke, responding to the Utica study, said he didn't see a conflict with his firm's results because the Secret Service takes on high-dollar cases -- the median loss in the Utica study was $31,000.

A recent Gartner Inc. survey of victims found the average to be about a tenth as much, $3,300.

Van Dyke also says smaller investigations are handled by local or state police.

When it comes to consumer protection, it doesn't matter how identity theft occurs or who gets fingered at the perpetrator . Consumers are advised to guard all the possible approaches to personal information.

Learn about ID theft prevention strategies outlined on the Federal Trade Commission's Identity Theft Site.

Read Deadlinenews.Com series "Special Report: FACT Act Amends Fair Credit Laws" to learn about protections under the Fair Credit Reporting Act and it's major overhaul, The Fair and Accurate Credit Transactions Act.

Learn more.

Credit Freeze Doesn't Guarantee ID Theft Protection
How To Protect Your Identity -- For Little Or No Cost
Website To See: AARPs Online Identity Theft Seminar
ID Theft Protection Can Give You A False Sense Of Security
Online Banking Stifles Identity Theft

© 2007 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

---

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!