FTC Announces Further Extension On ‘Red Flags’ Rule Implementation To November 1st
To support small businesses and other entities, the Federal Trade Commission faculty will intensify its efforts to educate them about compliance with the “Red Flags” Rule and ease compliance by provisioning additional resources and guidance to clarify whether businesses are covered by the Rule and what they must do to comply. To give creditors and financial institutions additional time to review this guidance and develop and implement written Identity Theft Prevention Programs, the FTC will further delay enforcement of the Rule until November 1, 2009.
The Red Flags Rule is an anti-fraud regulation, necessitating creditors and financial institutions with covered accounts to implement programs to identify, detect, and respond to the warning signs, or red flags, that could signify identity theft. FACTAs definition of creditor includes any being that regularly extends or renews credit ” or arranges for others to do so ” and includes all entities that systematically permit deferred payments for goods or services.
The FTCs Red Flags Web site, www.ftc.gov/redflagsrule, offers resources to help entities determine if they are covered and, if they are, how to conform with the Rule. It includes an online compliance template that enables companies to design their own Identity Theft Prevention Program through an easy-to-do form, as well as articles directed to specific businesses and industries, guidance manuals, and Frequently Asked Questions to help companies navigate the Rule.
Although many covered entities have already grown and implemented appropriate, risk-based programs, some ” particularly small businesses and entities with a low risk of identity theft ” remain uncertain about their obligations. Among other things, Commission staff will create a special link for small and low-risk entities on the Red Flags Rule Web site with materials that provide guidance and direction regarding the Rule.
The Commission has already posted FAQs that address how the FTC intends to enforce the Rule and other topics ” www.ftc.gov/bcp/edu/microsites/redflagsrule/faqs.shtm. The enforcement FAQ states that Commission staff would be unlikely to recommend bringing a law enforcement action if entities know their customers or clients individually, or if they perform services in or around their customers homes, or if they operate in sectors where identity theft is rare and they have not themselves been the target of identity theft.
Todays announcement that the Commission will delay enforcement of the Rule until November 1, 2009, does not affect other federal agencies enforcement of the original November 1, 2008, compliance deadline for institutions subject to their oversight.
Rapid Recovery Solution is a national collection agency.
Massachusetts Toughens Rules For Small Claims Collection Lawsuits
The Massachusetts Supreme Judicial Court released last week that it has altered some of the rules governing the use of small claims courts. The Court said that the changes were created specifically to address the number of debt collection cases that are filed in small claims courts.
The rule changes come on the suggestion of the Small Claims Working Group, a panel of legal experts that was convened in 2006 to analyze and improve current small claims practices. In a press release describing the changes, the Supreme Judicial Court noted that While the rules apply to all small claims matters, there will be a major impact on debt collection cases. The changes address many of the affairs labeled by the Working Group in collection cases, and four in particular: increased genuineness of service, incompletely detailed claims, increased analysis of default judgments, and notice to the court when a judgment is paid.
Adam Olshan, an attorney with Law Offices, Howard Lee Schiff, P.C. in Worcester, Mass., agrees that some collection law firms will be affected. This will impact the high-volume collection law firms.
But Olshan, who was on the Working Group representing credit card issuers, noted that most collection law firms ” including his own ” do not make use of small claims courts. If the plaintiff fails to confirm the address, the court may not enter a default judgment if the defendant later fails to appear for trial.
The changes also add enhanced scrutiny to default judgments that are entered. New small claims laws require plaintiffs to send word to the court in writing when a small claims judgment has been paid in full, or be responsible for any reasonable costs incurred by the defendant in later establishing that it was satisfied.
Another requirement is that the magistrate or judge is to analyze the terms of any agreement for judgment with the parties if they are present in court. This makes certain that the court does not order or otherwise endorse any private payment agreement that relies on exempt sources of income. This avoids any arbitrary surprise to the defendant by delaying any levy on the judgment until the defendant has had an opportunity to pay as ordered or to attend a payment hearing.
Rapid Recovery Solution is a New York debt collection agency.
Identity Theft And Debt Collection
A call from a debt collection agency about a bill you know nothing about may be the first sign that you could be the victim of identity theft. This crime touches the lives of as many as ten million victims a year.
If a collector calls you about an unfamiliar bill, you should ask the collector for information about the debt, such as account applications and statements. The collector must notify the original creditor about the fraud or the identity theft.
It is a good idea to ask the collections agency to mail or fax you their fraud affidavit form. But the best tactic to avoid being a victim is prevention; there are a number of ways to protect your identity. Most importantly, protect your social security number.
Never carry your social security card in your wallet. Only give your social security number when it is completely necessary. If there are other types of identification that you can use in any situation, use that.
If you aren’t positive why a company is requesting your number, always inquire as to why. You should put passwords on your bank, phone and credit card accounts. Try not to choose passwords that could be easily guessed. Combinations of numbers, letters and special characters are usually the best.
Keep your information safe. Watch your wallet, and keep your information in a secure place at home. Shred your charge receipts, copies of credit applications, checks, bank statements and credit offers you get in the mail. You can opt out of receiving pre-screened offers of credit in the mail by calling 1-888-5-OPT-OUT. Promptly remove mail from your mailbox.
A preventative method that might be worth thinking over is identity theft insurance. While it won’t put an end to identity theft it can soften the damages to an extent. Bear in mind that in addition to loss of money, identity theft is time consuming. Also, many law enforcement officers and companies will only speak with you, making it impossible for someone else to help you.
Mallory McGuinness-Hickey is employed by debt collection company Rapid Recovery Solution and writes articles on business and finance.
FTC Forces Scam Artist To Pay Up
The Federal Trade commission plans to award 1.6 million dollars to thousands of consumers who were tricked into paying money that they did not owe by scam artists who used threats, harassment and lies to get them to pay up.
Back in 2003, the FTC sued three companies that were operating under the name National Check Control. They charged them with abusing and harassing consumers. This laundry list of illegal activity included falsely threatening criminal prosecution, collecting amounts that were not due, illegally communicating with third parties and other violations of federal laws.
Two years later the court put a permanent halt on their business and ordered them to pay back the consumers they had conned. The defendants, Check Investors Inc, Check Enforcement Inc, Jaredco, Inc and the companies owner Barry Sussman tried to appeal the case to the Third Circuit Court of Appeals and the Supreme Court in vain.
One day after the appeals court didn’t agree to look into his appeal, Sussman suspiciously retrieved an amount of coins valued at $335,000 from a bank safe deposit box. The federal court demanded that he turn over them to the FTC to pay back the consumers. Later, a federal jury convicted him of two felony counts, one for theft of government property and one for obstruction of justice. He was sentenced to forty one months in federal prison and is serving his sentence now.
All in all, the FTC was able to recover 1.6 million dollars to give back to the consumers that were scammed. They plan to distribute the funds to 24,916 consumers who lost a hundred dollars or more as a result of the scam. The victims will begin to receive checks this month.
The Federal Trade Commission is responsible for putting an end to fraudulent, unfair, and deceptive practices that may be harmful to consumers. Also, they provide information to help the consumer in seeing, stopping, and avoiding scams.
Mallory Megan works for a debt collection agency. She also does pieces about business, finance, consumer spending and debt collection.