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How to avoid becoming a tax identity theft victim

The lawyers at Michigan Consumer Credit Lawyers have seen an uptick in people having their identities stolen for tax purposes.  Tax identity theft happens when someone uses your personal information to get a tax refund from the Internal Revenue Service (IRS). It also can happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return. The Federal Trade Commission states that tax identity theft is the most common form of identity theft reported each year.  A recent Associated Press article also noted that Michigan is one of the top 5 states in the US for tax fraud. Just conducting a quick search online, you quickly find numerous court cases in which the thieves ranging from street criminals to medical offices, trusted tax preparers – and even actual IRS employees, have been arrested for sharing social security numbers and filing fraudulent tax returns. The IRS offers these tips to prevent yourself from becoming a victim of tax identity theft:  Beat criminals to your return by filing your tax return early as possible  Use a secure internet connection if you file electronically, or mail your tax return directly from the post office.  Shred copies of documents containing your social security number, including old tax returns, drafts, or calculation sheets you no longer need.  Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.  Don’t give out your Social Security number (SSN) unless necessary.  Research a tax preparer thoroughly before you hand over personal information.  Check your credit report at least once a year for free at annualcreditreport.com to make sure no other [...]

Public records and inquiries – don’t overlook these key sections on your credit report

Public records such as judgments and tax liens can mistakenly be placed on your credit report.  This error happens quite frequently to people with similar names.  It can have a major negative impact on your credit score so you want to be sure if there is anything listed in this section it is correct. The 3 types of public records included in your credit score are bankruptcies, tax liens and civil judgments. In some cases, this information is simply gathered by an employee of a credit reporting agency to be including in your file. This means there is plenty of room for error – especially if you have a common name, or if you are named after another family member. It is also important to remember that this information does not have to be included in your credit report forever. Bankruptcies can remain on your credit report for up to 10 years.  Tax liens and judgments can remain on your report for up to 7 years from the date that you satisfy these items. Reviewing credit inquiries is the best way to see who has been viewing your credit report.  “Soft pulls,” such as receiving a copy of your own credit report have no impact on your score. However, “hard pulls” are those credit reports given to others to determine your credit worthiness.  When reading the inquiry portion of your credit report, be sure to pay close attention to any “hard pulls” that were not initiated by you. Under the Fair Credit Reporting Act (“FCRA”), a credit report can only be shared with a third party who has permissible purpose. If you did not give permission for someone to pull your credit report this could [...]

Become an authorized user to improve your credit score

When you have bad credit, or little-to-no credit it can be a struggle to find a creditor that is willing to give you an opportunity to show you are able to manage new debt. This makes it even more difficult to improve your credit. One easy route to help improve creditworthiness is to become an authorized user on someone else’s credit card. However, you must be sure you do this legally with a person you know. If a family member has a long-standing credit card with a low balance and good payment history, your best option is to ask him or her to make you an authorized user on that account. Eighty-percent of your FICO score is determined by payment history, amount owed and length of credit history so you can immediately begin seeing a boost by being added to someone else’s pristine account.   This is a perfectly legal act that parents and spouses have been doing for decades to help their loved ones improve credit scores. While scoring institutions have no qualms with family members helping one another, they have managed to stop people from taking this strategy one step further. Some companies found a way to make money by offering their clients a chance to pay a fee to a stranger in order to be added to his or her account and reap the benefits of that person’s good credit without ever even knowing them or seeing a credit card. This act, known as piggybacking is not favored in the eyes of credit reporting agencies and Fair Isaac so the scoring corporation has decided to modify how authorized users are considered in an effort to prevent unfair boosts to credit scores. According to [...]

Do you know your debt’s expiration date?

If you are being sued by a collection attorney for a debt, make sure that the debt has not expired.  Before making any agreements or payments, it is first important to understand the basic laws related to debt collection.  Few people know that there is a statute of limitations on debt, meaning once this period of time has passed, creditors and debt collectors can no longer sue you for repayment of the debt. While the statute of limitations for debt collection varies by state, in Michigan creditors and debt collectors have 6 years from your last date of payment to sue you.   It is important to note that creditors are allowed to continue attempting to collect debts after the statute of limitations has passed, and some will even still try to sue for payment in hopes that you do not know the law. When dealing with old debt, remember these facts: Be careful not to restart the statute of limitations time period Some debt collectors might realize your debt is near, or beyond the statute of limitations so they offer you installment options in hopes that you will make even one small payment to revive the debt. While it is your decision if you decide to start making payments, it is important to note that once you pay any amount toward the balance, you will completely reset the statute of limitations from the date of that payment.   If you are sued, it’s your responsibility to tell the court the debt is old The Consumer Financial Protection Bureau advises that even if a debt is beyond the Statute of Limitations, a court could decide to award judgment to a creditor if you do not use [...]

New Changes to the way your Credit Score is Calculated

You’ve heard that “The Only Thing That Is Constant Is Change.” This applies to to your credit score as well.  Recent online reports state that major credit reporting agencies such as Experian, Equifax and Trans Union and scoring companies such as Fair Isaac Corporation (the company behind the popular FICO scores) are actively working to take into account additional information to get a better indication of a person’s ability to handle their financial responsibilities. Some of these new considerations might end up helping your credit score, while others might bring it down. According to Experian, landlords and rental property managers could report derogatory payment information in the past, but they did not have a way to share positive data if a person pays his or her rent on time each month. This credit reporting agency says its new RentBureau division will help renters to now be able to use their rental payment history to help establish and rebuild credit. However, not all companies will only rely on Experian to help determine your credit score so this additional item on your credit report will not always be helpful. The most popular credit score, FICO also has seen changes over time to prove that it still is the best at understanding more about consumer credit behavior. On its website, Fair Isaac Corporation states that it rolled out a new version of credit scores, FICO 8 in 2009 and this new scoring system is increasing in popularity. This newer system can help your score in some ways because it recognizes isolated late payment as such, and it ignores collection accounts under $100, resulting in less of a negative impact on your score. However, the new FICO 8 scoring [...]

Don’t let student loan debt take over your life

We are raised to believe that if you get a college degree you will find the career of your dreams and live happily ever after with a good job, a nice home and a beautiful family. However, the Consumer Financial Protection Bureau says the reality is that Americans now owe more than $1 trillion in federal student loan debt. Therefore, we now put off buying a home, getting married or starting a family due to the burden of excessive debt after college. Before you let student loan debt determine your destiny, consider these tips: Only borrow what you really need. Most federal student loans are quite easy to obtain. They do not require co-signers or a credit check so some people take the opportunity to use larger loans to handle additional matters besides college related expenses. However, once the days of being a full-time student are over and people realize the magnitude of their debt, they feel it is seemingly impossible to ever pay it all back. Consider work in the public service. The Public Service Loan Forgiveness Program (PSLF)  gives full-time public service workers the opportunity to have their remaining federal student loan balance waived after making the first 120 payments. Your passion to help others might not result in a six-figure income, but if you would like to be a teacher, soldier, police officer, etc., your willingness to help others can get your student loan debt forgiven. Understand the difference between federal student loans and private student loans.   Federal student loans tend to have more programs in place for students who have trouble repaying a loan. In some cases, the government even pays the interest while you are in college if you are [...]

Robocalls, Caller ID Spoofing – The latest scam artist technology

Have you ever received a call from an odd number such as “123456789” or even “000000000” only to find a computerized message on the other end? Perhaps you received a voice message and tried to call back, only to be told you have dialed a non-working number? These are the latest practices being employed by scam artists – Robocalling and caller ID spoofing, the FTC warns on its Privacy & Identity web page. Telemarketing companies and scam artists enjoy using this technology because it allows them to send out thousands of phone calls per minute without paying for the manpower. The FTC warns that companies using these practices also tend to ignore the Do Not Call registry, so do not think you are safe from receiving such calls – they do not care about following the law. Telemarketing companies use robocalls in an attempt to lure consumers into buying a service, and even worse – scam artists use the recorded messages in hopes a consumer will provide them with personal information opening up the possibility of identity theft. Caller ID spoofing allows these cons to use fake numbers that constantly change so it is almost impossible to block all the source numbers or find the location of these illegal callers. The FTC notes that some prerecorded telephone messages are allowed if they are not making an attempt to sell anything. Legitimate creditors contacting you to collect a debt are allowed as well, as long as the recording follows all Fair Debt Collection Practices Act laws, including fully disclosing their company name and the purpose of the call (although this may violate other sections of the FDCPA). Some illegal robocalls might also originate from a more [...]

Bring in the New Year with a review of your credit report

The start of every new year is the perfect time to check your credit report to be sure all the information is in order and accurate. Your credit no longer only impacts your ability to buy a new house or a car but in the last couple decades, credit has managed to have more of an impact in our daily lives than most of us realize. To prevent potentially missing out on an opportunity or being denied a new account, be sure to first review your credit report for accuracy before taking any of the following actions this year: Applying for a new job or promotion Today when most applicants complete an application for an employment, they are also asked to sign a release form, which gives potential employers permission to review their credit report. In some cases, the employer may not immediately review a new employee’s credit report, but you must remember the employer can do so at any time since once you sign the approval, it is on file for them to use as they see fit. Depending on the type of work you applying for, too many derogatory entries on your credit report could prevent you from being hired or promoted. Looking for a new apartment Simply proving you have a steady income and convincing a new landlord that you always pay your rent on time does not necessarily qualify you for a lease. Credit reports are often used in determining not only whether or not you can move into a rental property, but also might determine your security deposit amount and the monthly rental rate. In some cases, an applicant can also be completely denied or asked to find a co-signer. [...]

Payday loan lender meets karma in a $19 Million win for consumers

Out of desperation, each year thousands of Americans turn to payday lenders with the intent of using them as a one-time option to take care of business that just can’t wait. While there are some payday loan companies who abide by the laws, others further exploit consumers who are already suffering from financial stress. The good news is that in 2012, the Consumer Financial Protection Bureau started overseeing payday lenders and now has authority to randomly audit their operations. This means there is hope that the repetitive phone calls, overcharges on interest and other illegal practices could soon be brought to a halt. The first big win came on November 20 in the amount $19 million. The Los Angeles Times reported that the CFPB fined Cash America International (also known as CashNet USA to online borrows across 32 states) $5 million for their wrongdoings, and they were also ordered to give $14 million in refunds. While it is tempting to obtain a payday loan when in a bind, the pros and cons of your decision to commit to these high interest traps should be carefully considered. With careful consideration, you might find that other alternatives are available. Most companies are willing to allow payment arrangements if you contact them to speak about your situation, in some cases they will even work with you to create lower minimum payments. If you are having car trouble, a co-worker or family member could possibly help you get to work for a couple weeks. The question to ask when considering a payday loan is “Can I really afford to have this amount, plus the massive interest immediately taken out of my next pay check?” If the answer is “no,” [...]

Protect yourself from ID theft and fraud this holiday season

The time for holiday shopping has come, which means the peak season for identity theft and credit card fraud is also upon us. The Federal Trade Commission (FTC) reported that there are almost 10 million incidents of ID theft and fraud each year and the average victim spends at least $500 to resolve each occurrence. During the holidays we become more susceptible to fraud and identity theft because we let our guards down while embracing the cheerful spirit of the season. In doing so, we forget that we’re suddenly in close quarters in crowded stores with strangers, or while shopping online we are more focused on getting the right gift than considering how much we trust a web site. Consider the following tips to protect yourself and your finances this holiday season: Only order from trusted sites It is tempting to purchase the last available item on your shopping list from an unknown web site to be sure that special someone gets everything he or she wanted, but think twice before making the online purchase. If you’re unfamiliar with an online business, be sure to search for more information about them. You might find that others have made complaints that could help save you money and frustration. If you decide to move forward with the purchase, avoid using a debit card or checking account since credit cards give you the most legal protection in case the goods are never delivered. Protect your cell phone Today we do everything on our smart phones including paying bills, checking our bank account balances and storing important passwords. If you lose your phone, criminals have access to many confidential pieces of information that will allow them to wreak havoc [...]

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