Credit Monitoring Services Are Not Worth the Cost

POSTED BY: Mark F. Anderson | Consumer Credit 101, News

Credit monitoring services advertise heavily in the media. For a monthly fee, they promise to alert you of any adverse changes in your credit reports. They are a waste of money for the vast majority of consumers. This is Liz Weston’s conclusion as she reports on the MSNBC Money site. There are many reasons they are not worth the costs. Number One–they lie. They advertise free credit scores, but the credit monitoring they are selling is not free. Consumers often sign up for and only later realize they agreed to make monthly payments when the bills start coming in. Some...

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New Rule Protects Federal Benefit Checks from Seizure by Creditors

POSTED BY: Mark F. Anderson | Consumer Credit 101, News

A new federal rule effective May 1, 2011, vastly strengthens protections for Social Security, SSI, VA, federal retirement checks, and certain other federal benefits from seizure by creditors. Heretofore, in theory such benefits were protected, but not in practice. Under the current rules, creditors could seize the consumer’s bank funds and it was up to the consumer to hire an attorney to challenge the seizure or garnishment. Needless to say, hardly any consumer successfully challenged the seizures leaving many consumers unable to pay the rent. The new rule requires all banks and credit unions to determine whether exempt federal benefits...

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Debt Settlement Industry Rips Off Consumers

POSTED BY: Mark F. Anderson | Debt Collection, News

Some 250 “debt settlement companies” pray on consumers who are overwhelmed by debts. Consumers are lured by Internet and TV ads promising consumers their debt problems will cease if they just sign up. Typically, the companies require the consumer to make payments to the company while not making payments on their debts. The companies promise that once a pot of money accumulates in the consumer’s account, the company will settle the debts with the creditors by paying a percentage of the debt. In their sales pitches, the companies omit over the fact that they deduct outrageously high fees, that the...

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FICO Reveals How Mistakes Affect Credit Scores

POSTED BY: Mark F. Anderson | Credit Score, News

Banks and other creditors commonly extend credit based on your credit score. Your score is based on such factors as late payments, missed payments, number of open accounts, length of one’s overall credit history, actual amount of available credit used and negative occurrences such as charge-offs and bankruptcy. FICO, a company that created credit scoring, has long kept its exact formula secret. Until Thursday, FICO revealed only broad categories of factors influencing the score, but not the number of points at stake for consumers who fail to pay as agreed. The “damage points” information will be made available through its...

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Minnesota Atty General Suit Alleges the National Arbitration Forum Is Fraudulent

POSTED BY: Mark F. Anderson | News

Today, the Minnesota Attorney General sued the National Arbitration Forum, the major arbitration firm that banks use to prosecute consumers who owe credit-card debt. The AG’s complaint states that NAF represents to the public, the courts, and consumers that it is independent, operates like an impartial court system, and is not affiliated with any party. However, what the consumer does not know is that NAF works alongside creditors behind the scenes against the interest of consumers. The truth is that NAF is actually controlled by major collection law firms that represent credit-card companies. A New York hedge fund known as...

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