The Consumer Financial Protection Bureau (CFPB) has targeted many industries since Richard Cordray was appointed the bureau’s director, such as banks, credit card issuers, mortgage companies, payday lenders, and private student lenders.   This agency was created to protect consumers. In February 2012, Cordray announced that he is targeting the consumer reporting and debt collection industries next. This was based upon receiving a considerable number of consumer complaints about their practices and the impact they have on millions of Americans.

CRAs

The Consumer Financial Protection Bureau is targeting consumer reporting agencies (CRAs) with at least $7 million in annual revenue, which includes 30 companies, representing 94 percent of the market and 7 percent of the companies.  The 30 include the three major consumer credit bureaus – Equifax, Experian and TransUnion. The main consumer complaints about them are the difficulty in updating reports and in correcting errors. read more »

In part one of this blog on the top twelve scams or the “Dirty Dozen” identified by the Internal Revenue Service (IRS),  I talked about the first six -  identity theft, phishing,  return preparer fraud, hiding income offshore, “free money” and Social Security scams, and false/inflated income and expenses. This blog discusses the next six scams: false form 1099 refund claims, frivolous arguments, falsely claiming zero wages, abuse of charitable organizations and deductions, disguised corporate ownership, and misuse of trusts.

7. False Form 1099 Refund Claims – The taxpayer files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. They believe that the federal government maintains secret accounts for U.S. citizens and taxpayers can gain access by using this form. read more »

When lenders review your credit report to make a decision whether to grant you credit, they purchase one credit report from one of the three credit reporting agencies (CRAs) – Equifax, Experian and TransUnion. Mortgage lenders are the exception and purchase reports from all three.  You don’t know which credit bureau they used, unless you are turned down for credit. You don’t have to be concerned about the credit bureau selection – the credit reports at the three bureaus are basically the same.

Same data contributors

The same companies contribute information to all three bureaus. The data contributors include banks, credit card companies, retailers, mortgage lenders, auto lenders, credit unions, personal finance companies, student lenders, collection agencies and public records. Public record data is supplied by one company, PACER, which provides this data to all three bureaus.  There can be slight variations, with data contributed by local or regional companies and in the companies that review your credit report and post an inquiry. read more »

The newly appointed director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray, shared his top three top priorities with CNN Money.  The priorities are: “Know Before You Owe” campaign, policing non-banks and holding financial firms accountable. The U.S. Consumer Financial Protection Bureau was created to regulate consumer protection in the financial services industry.

1. “Know Before You Owe” Campaign

The purpose of the “Know Before You Owe” campaigns is to help consumers understand consumer debt products including all the terms of their mortgage, credit card and student loan agreements. By July 2012, the Consumer Financial Protection Bureau will complete a simplified federal read more »

In January 2012, Suze Orman launched a prepaid card that she created and spent $1 million of her own money to develop.  She worked with TransUnion, one of the three national credit reporting agencies, to develop it and the card is issued by Bankcorp Bank. The card is called the Approved Prepaid MasterCard®.

Card Features

The features of the card are:

A monthly fee of $3 includes up to four cards and all benefits when you use the card exactly how Suze tells you. (this is code for “it’ll cost you more if you use it some other way.”)

No activation fee is charged. read more »

This is one of those “yeah, but” articles, which means there could possibly be several answers to the question posed in the title.  The fact that you are not employed does not hurt your credit score.  What can hurt your credit score are your payment history and abuse of credit cards, which can certainly be caused by unemployment.

Payment history

Your payment history is 35 percent of your credit score and impacts your score the most. It is important to pay your credit obligations on time. This can be difficult if you are unemployed. read more »

Javelin Strategy and Research conducted its 7th Annual Banking Identity Safety Scorecard; this study was titled “Prevention Falls Precipitously as Financial Institutions Struggle”.  The scorecard evaluated financial institutions (FIs) security by prevention, detection, and resolution.  They evaluated consumer account security at the top 25 financial institutions by deposit size.  Bank of America won Best in Class-Overall for the seventh consecutive year and “Best in Prevention”. Citibank and Navy FCU were both awarded “Best in Resolution”, and Huntington and U.S. Bank tied for” Best in Detection”.

Overall the financial institutions have not kept up with increased security demands in authentication. Fraud prevention has declined from 79 percent of the financial institutions meeting the criteria in 2009 to only 54 percent in 2011. Javelin made changes to the scorecard to keep up with the fraud demands, but the banks in general did not. read more »

Approximately 40 to 45 percent of American adults make at least one New Year’s resolution each year.  About 75 percent of these resolutions make it past the first week, 71 percent past the second week, 64 percent after one month, and 46 percent after six months.  I am surprised at the proportion that keeps their resolutions after six months.  Where do you fit in?

Top ten resolutions

The top ten resolutions for 2011 are listed below.  Do you think they will change much for 2012? read more »

In November 2011 I discussed CoreLogic’s new consumer report, the CoreScore Credit Report.  CoreLogic made this report available to lenders on December 7, 2011.  CoreLogic is another consumer credit reporting agency. They collect credit reports from the three major credit reporting agencies – Equifax, Experian and TransUnion – clean up the reports, merge them and sell them to the mortgage industry.  Now they have added proprietary and other data to the reports.

CoreLogic Credit Report

Approximately 100 million U.S. consumers will have a credit report at CoreLogic compared to 200 million at the three major credit bureaus. The CoreLogic credit report combines the traditional credit report data from the three major credit reporting agencies, along with CoreLogic’s proprietary data which includes: read more »

CredAbility, one of the largest nonprofit credit counseling and education agencies in the U.S., issues a quarterly index called CredAbility Consumer Distress Index.  This index tracks five categories to determine the financial condition of the average U.S. household – employment, housing, credit, how families manage household budgets, and net worth. Proprietary data collected from more than 630,000 individuals that CredAbility serves annually is also used to determine this Index. The index looks at each category nationally and by state.  The latest index is from third quarter 2011.

The Consumer Distress Index for U.S. households in third quarter 2011 was 66.7, which was a decrease for 69.2 in second quarter 2011. This was the largest drop since third quarter 2008 and the first time the index didn’t increase in the past six quarters. U.S consumers have been in financial distress for 12 consecutive quarters. The Consumer Distress Index is based on a scale of 1 to 100, with a score below 70 indicates financial distress.  Overall the housing and budget categories were below 70, indicating financial distress.  The credit category is not in financial distress and the Consumer Distress Index increased to 84.95, which is the highest in 15 years. read more »