Archive for the ‘Bureau of Consumer Credit Protection’ Category

Consumers should prepare for more data breaches

CONSUMER FORUM

Posted Sept. 07, 2014, at 1:09 p.m.

They are dirty, rotten scoundrels. Unfortunately, we’re getting much too used to them.

They are the writers of the sinister computer codes that prowl the Internet, looking for vulnerable systems to infect and mine for our personal and financial data. They have found mother lodes of info on several servers that try to handle big retail’s payment systems.

The breaches come so frequently and in such staggering numbers we barely pay attention any more. The crooks keep coming, and the security people are swamped. Consider one estimate that some large banks face as many as 35,000 threats of possible computer mischief every day.

Security officers quickly toss aside the work of hacker wannabes, so the number of real threats they face may number 100 or so a day. That’s still a pile of work, and missing a genuine threat can cause major problems for the company and its customers.

The results stunned us when we first heard the reports: 110 million or so consumers affected by last year’s Target breach. By the time news broke last week about what could become an even larger breach of Home Depot customers’ data, our eyes were beyond glazed over.

The good news, really, is that the banks that issue credit cards assume the financial liability if those cards are misused. That’s written into state and federal law, with varying standards and deadlines for avoiding fraudulent charges on your credit versus debit cards.

The bad news is that the underlying security nightmare will continue as long as most American commerce is tied into magnetic stripe technology. Much has been written about the much better chip-and-pin technology, backed by use of a personal identifying number. What has worked well in much of Europe for several years is still on the horizon for many U.S. retailers.

That technology will come, but it will be costly. Banks have tried to shift financial liability for data breaches to retailers, pointing at poor security systems. As you’d expect, retailers have reacted strongly; however, they are moving faster toward adopting more modern card security technology.

Will Lund, superintendent of Maine’s Bureau of Consumer Credit Protection, told me last week the changeover will happen piecemeal, and that will mean problems during the transition.

“Questions of liability may arise if a store has the technology but the consumer’s card does not, and vice versa,” Lund said.

Lund’s bottom-line advice to consumers is to remember they are not liable if they take reasonable steps to notify their banks of unauthorized charges. They can get free credit reports at each of the three major reporting companies each year — rotating requests yields a new report every four months — by visiting annual.creditreport.com. Lund said consumers should not feel scared or bullied into buying identity theft insurance, credit monitoring or other costly products, because “the most important rights and protections are already granted by state and federal law.”

People in Lund’s office and at the Bureau of Financial Institutions can answer individual questions about data breaches and consumers’ rights. Both are part of Maine’s Department of Professional and Financial Regulation.

Visit our blog — necontact.wordpress.com — and search “breach” to read PFR’s information and guidance to consumers regarding financial breaches. You can find information online at the PRF website — maine.gov/pfr — or by calling 207-624-8500.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit necontact.wordpress.com or email contacexdir@live.com.

 

“Gone Phishing” – WABI-TV

Video link

David Leach of the Maine Bureau of Consumer Credit Protection was in the studio with Russ Van Arsdale on Monday for this week’s Consumer Contact segment. They were speaking to Joy about a new anti-scam guide being released by the bureau. The guide is called “Gone Phishing” and it gives tips on avoiding all manner of scams and protecting your credit.

Order form for all Bureau publications

Publications available on-line:

State Officials Issue Consumer Protection Alert Following Data Breach Announcement by Shaw’s Parent Company

Press Release

GARDINER – Governor Paul R. LePage joined officials at Maine’s Department of Professional and Financial Regulation to reassure consumers that state and federal laws are in place to protect them from major losses due to file breaches containing debit and credit card information, such as the one disclosed August 14 by AB Acquisition LLC, which operates Shaw’s supermarkets in Maine and other states.

 

Although it’s unknown whether consumers will be impacted by the data breach involving Shaw’s, the company indicates that stores in Maine were among those affected,” Governor LePage said. “I encourage people to closely monitor their credit and debit card statements, and to contact the financial institution that issued the card promptly if questionable charges appear.  Staff at Maine’s Department of Professional and Financial Regulation is also available to provide information and guidance.” 

The Bureau of Financial Institutions and Bureau of Consumer Credit Protection at the Department of Professional and Financial Regulation outlined the following information and guidance for consumers responding to news of a financial data breach:

  • Consumers should always thoroughly review credit and debit card statements from the card issuer, and also review all other account statements from their bank or credit union.
  • If consumers have online access to their credit or debit card information, they should review account activity as soon as possible, rather than waiting for the statement to arrive in the mail.
  • If a credit or debit card was used at a business that has experienced a data security breach, or there is uncertainty about whether a card was used, consumers should be especially diligent in evaluating charges or withdrawals on their statement.
  • Since the data breach involving Shaw’s reportedly began in June, consumers should review statements covering June to the present.
  • If unknown charges or other suspicious activity appear on the account, consumers should notify the financial institution that issued the credit or debit card.
  • Consumers do NOT need to contact the company that experienced the data breach, such as Shaw’s.
  • Consumers’ liability for unauthorized use of a CREDIT CARD is limited to $50.  If account numbers have been stolen, consumers have no liability for unauthorized use.  
  • Consumers noticing unauthorized activity on their DEBIT CARD resulting from a data breach have sixty (60) days from when the bank or credit union sent the statement to report it.  If consumers fail to notify the bank or credit union of unauthorized transactions within this time, they are liable for the amount of the unauthorized transactions. This 60 day timeframe applies ONLY when the card’s data has been compromised through a data breach, as in the Shaw’s case.  See below for details about when a DEBIT CARD has been lost or stolen.
  • When a DEBIT CARD has been lost or stolen, consumers have two (2) business days after learning of the loss or theft to notify their financial institution in order to limit their liability to $50. If they do not notify their bank or credit union about the lost or stolen DEBIT CARD within two (2) business days, consumers may be liable for up to $500 of the unauthorized transactions. If consumers do not notify their financial institution within sixty (60) days after being provided a monthly statement that lists a fraudulent debit, they can be liable for unauthorized withdrawals of any amount that occur after that 60 day period.
  • To be safe, DEBIT CARD holders should act immediately if they notice unauthorized withdrawals.
  • If impacted by unauthorized charges or withdrawals, consumers should first call the bank or credit union that issued the credit or debit card, and then follow up in writing to explain the problem.
  • Some banks and credit unions may issue new cards to customers whose credit or debit card numbers are known to have been compromised through a data breach.
  • Consumer may ask a financial institution to re-issue a new card if they have concerns about their account.
  • Again, consumers do NOT need to contact the business that was subject to the data breach; and they need to contact the bank or credit union that issued their credit or debit card ONLY if they notice suspicious activity on their statement.
  • For more information, contact the Bureau of Financial Institutions toll-free at 1-800-965-5235, or the Bureau of Consumer Credit Protection is 1-800-332-8529.

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There’s no such thing as a ‘free government grant’

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT
Posted July 20, 2014, at 6:01 a.m.

As soon as she heard the offer of a “free grant from the U.S. government,” Barbara Purington of Litchfield was suspicious.

It was offered simply because she was a good citizen, she was told. She kept the caller on the line, getting as much detail as she could before saying she would think about the offer. Instead, she called David Leach, principal examiner at Maine’s Bureau of Consumer Credit Protection. Leach told her what she thought she might hear: The offer was certainly a scam attempt.

Unsolicited offers of “free government grants” are always scams:

— Government officials don’t make random calls for such purposes.

— The government doesn’t have money to give away.

— Government representatives don’t get angry or upset with people on the phone who won’t do what they ask.

What the caller asked Barbara to do was to go to the nearest store that sold Green Dot prepaid cards, buy one for $250 and wire the money by Western Union. She knew if she did so, she would never see the money again — even though the caller assured her “that’ll come right back to you; [the money] will never leave the voucher.”

Barbara told the caller she would continue to think about the “offer.” He called back three consecutive days, leaving a phone number so he could “walk her through the process” of wiring money. The last call came from another man, who became belligerent when told his offer sounded fishy.

The final caller threatened to sue Barbara. She invited him to show up with his paperwork in hand and see who ended up behind bars.

People at BCCP know cases like these are all too common.

“There’s been an explosion of these scam calls,” David Leach said. “We know as regulators we only see the tip of the iceberg.”

Scammers often try to pass themselves off as government officials. On its website, the Council on Financial Assistance Reform — which coordinates federal assistance — states callers purporting to represent COFAR have told people they can receive grants of up to $25,000 if they’ll pay an up-front “processing fee” of $150 to $700. As with all other such offers, these calls are scam attempts.

Scammers don’t restrict themselves to phone lines. Fake websites abound, saying they’ll get you thousands of dollars if you’ll only send a few hundred up front for “processing” or “administrative” fees. They might also want your bank account number “for direct deposit.” If you reveal enough of your personal information, they can steal your identity.

When considering any such offer, ask for details in writing. People making legitimate offers will not hesitate to send written details, while scammers want quick answers along with your money.

Follow this advice from a BCCP news release last week:

— Don’t wire money to an unknown caller.

— Don’t give out your personal information to such callers.

— If someone calls claiming to be from a federal agency, ask for the agency’s name, physical address and supervisor’s direct-dial (not 800) phone number.

— Report any suspected government grant scams to the Bureau at 1-800-332-8529. More information about the Bureau is available at www.Credit.Maine.gov.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Maine State Officials Issue Warning about Fake Offers of Government Grants in Exchange for Advance Fee

PRESS RELEASE
David Leach, Principal Examiner
Bureau of Consumer Credit Protection

GARDINER – Governor Paul R. LePage joined officials in Maine’s Bureau of Consumer Credit Protection in highlighting a recent trend of Mainers receiving unsolicited offers of substantial government grants if they pay an initial advance or administrative fee. In some of these cases, the consumers are also asked to provide personal and financial information.

“Government agencies aren’t in the business of making unsolicited calls to offer grants or financial awards of any kind,” Governor LePage said. “Mainers receiving such offers are encouraged to be cautious and to contact the Bureau of Consumer Credit Protection, which provides expert advice and assistance on many personal finance matters, including those related to unexpected offers of funds, prizes, debt management services or other financial incentives.”

The Bureau’s Principal Examiner, David Leach, outlined several recent cases:

  • A Chelsea resident received an unsolicited call from the “United States Federal Grant Program,” promising an $8,400 grant for an advance fee of $400. The consumer’s Caller ID displayed a Washington, D.C. area code (202), but the call was traced to India.
  • Another Mainer was offered a government grant through the “Finance Accounting Department.” This $6,000 grant, she was told, could be obtained by sending $250 through a Green Dot Money Pack card.
  • The “Federal Treasury Department” offered a Maine man a $6,500 grant in exchange for an unspecified wire payment to cover administrative costs and other program fees.
  • The “Federal Grant Program” called another Maine consumer informing her that she had been selected out of 1,500 Mainers to receive a $7,000 grant. The consumer became wary when the caller demanded an upfront “administrative fee” payment.

In each of these cases, the consumers contacted the Bureau, and were warned not to send funds or permit access to their checking accounts. The phony grant dollar figures typically range from $800 to more than $8,000.

“Consumers are often asked to disclose their bank account numbers, under the premise that the funds could be transmitted directly into those accounts, and are asked for their Social Security numbers and dates of birth,” David Leach said. “But then, before their “grants” are sent, the consumers are told they must transmit funds using money services such as Western Union, MoneyGram, Vanilla Card or Green Dot card to pay administrative costs and fees,”

Leach said the personal information, such as bank account numbers, Social Security numbers and dates of birth, is likely collected to perpetrate subsequent identity theft. He emphasized that if an unknown person offers free grant money in exchange for an advance or processing fee or disclosure of personal or bank account information, it’s a scam.

The Bureau of Consumer Credit Protection offers the following guidelines:

  • Never send money, especially using money transmitters or prepaid cash cards, to unknown telephone solicitors.
  • Do not disclose personal information such as Social Security number, date of birth, credit card or bank account numbers to unknown callers. This could lead to identity theft.
  • If the callers say they are from a federal agency, ask for the exact name of that agency, the agency’s physical address, and their supervisor’s direct dial (not an 800 number). If the caller claims to be in Washington, DC, the number should have a Washington, DC area code of 202.
  • Report any suspicious activity involving government grant scams to the Bureau of Consumer Credit Protection, 1-800-332-8529. Additional information about the Bureau and its resources is available at http://www.Credit.Maine.gov.

The Maine Bureau of Consumer Credit Regulation was established in 1975 to enforce consumer financial protection laws. The Bureau is an agency within the Department of Professional and Financial Regulation, which can be reached online at http://www.maine.gov/pfr.

Using common sense when you buy will keep your home from plunging ‘under water’

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT
Posted March 09, 2014, at 8:50 a.m.

DowneastGuide-to...yourMainehomeWe’ve all heard the ads urging us to buy, since “interest rates are near historically low levels.” With spring approaching (at least on the calendar) and those low rates expected to hold for a while, many renters are thinking about buying a home.

Many may think twice, wondering if all those horror stories about houses going “under water,” or costing more than they’re worth, might come back to bite them. Those with second thoughts might want to spend some time with a new publication from the Maine Bureau of Consumer Credit Protection.

It’s called The Downeaster Common Sense Guide to Finding, Buying and Keeping Your Maine Home. The 32-page guide was written by the bureau’s principal examiner, David Leach, and senior consumer credit examiner, Edward Myslik.

It starts in exactly the right place: asking if you should buy a home or continue to rent. Once you’ve determined that your best bet is to buy, the real work begins.

The best piece of advice in the guide is not to buy more home than you can afford. You figure affordability through a debt-to-income ratio. The “front-end ratio” is figured by dividing the monthly mortgage payment (principal, interest, taxes and insurance) by the borrower’s total monthly income. The ratio should not be more than 28 percent.

What’s termed the “back-end ratio” is a measure of income against the mortgage cost plus the cost of all other loans.

The guide cautions against allowing this ratio to go higher than 43 percent.

New federal lending rules are aimed at ensuring that borrowers will be able to make payments on schedule; those rules make it unlikely that a loan will be approved if the back-end ratio exceeds 43 percent.

Once you’ve ordered an up-to-date credit report ( www.AnnualCreditReport.com, 877-322-8228) you’ll have an idea what your credit score will be. The score is not part of the report; it’s a number generated by Fair Issue Corporation, also known as FICO.

The scores provided to each of the three credit reporting bureaus may be different, and lenders will use the lowest number when offering an annual percentage rate, also known as APR, on a loan.

When shopping for a mortgage, you need to decide between conventional loans and Federal Housing Authority, also known as FHA, backed loans. Under the latter type, the FHA provides a guarantee to investors should a borrower default. The guide advises that, while FHA loans are priced about the same as conventional loans, the mortgage insurance costs more (meaning higher APRs).

The guide has lots of nuts-and-bolts info on shopping for mortgages. Note rate vs. APR, mortgage points, disclosure, home inspections and other concerns are all covered. The authors also caution against falling for three advance payments that guarantee a low APR. Advance fee loans are always scams and are illegal in the U.S. and Canada.

Read the guide online at www.Credit.Maine.gov and go to “Consumer Guides.”

Maine residents can also request a free printed copy by calling 800-332-8529. For a real estate professional’s take on home mortgages, visit www.realtor.com/home-finance/mortgages/how-to-get-best-interest-rate.aspx?source=web.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

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State’s Bureau of Consumer Credit Protection Issues Comprehensive Home Mortgage Guide

GARDINER — Maine’s Bureau of Consumer Credit Protection, an agency within the Department of Professional and Financial Regulation, announces the release of a new, comprehensive mortgage guide, titled The Downeaster Common Sense Guide to Finding, Buying and Keeping Your Maine Home. Free to Maine residents, this 32-page booklet provides information for those contemplating the purchase and financing of a home. Covered topics include:

  • How to evaluate whether renting or buying makes the most sense, given income and future plans;

  • How to use current income, debt load and credit reports to predict if a loan may be approved;
  • How to select a mortgage lender or loan broker;
  • How to choose the type of loan product that best fits your needs; and
  • Understanding your obligations after the loan closes

Governor Paul R. LePage commented on the timeliness of the guide and the information it offers. “With interest rates near historically low levels and the Maine economy improving, this is an excellent time to purchase a home,” Governor LePage said.  “But it’s important to know if you’re in a good position to make a significant purchase of this kind and to fully understand the home-buying process.  This new booklet provides thorough, step-by-step guidance.”

“This publication will help Maine residents to become better-informed mortgage borrowers,” David Leach, principal examiner with the Bureau and one of the booklet’s co-authors, said. “One thing we’ve learned from assisting hundreds of homeowners avoid foreclosure is that some did not know the right questions to ask when they were deciding to get a mortgage.”

An online copy can be found at www.Credit.Maine.gov by clicking “Publications” or “Consumer Guides” (directly at www.maine.gov/pfr/consumercredit/documents/MortgageGuide_RevisedOnline.pdf). Printed copies are available free of charge by calling the Bureau at 1-800-332-8529 (toll-free in Maine).

“With federal regulators setting tougher borrowing standards this year for so-called ‘qualified mortgages’ (QMs), it’s more important than ever that potential borrowers understand how lenders calculate debt-to-income ratios,” Edward Myslik, Bureau senior consumer credit examiner and co-author of the guide, said. “This booklet demystifies the process. Understanding how current debt loads factor into lenders’ decisions will help consumers make prudent decisions, such as avoiding taking on additional financial obligations if they plan to apply for a mortgage.”

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The Bureau of Consumer Credit Protection, which is part of the Maine Department of Professional and Financial Regulation, was established in 1975 to administer the state’s consumer financial services laws.  The agency investigates consumer complaints, conducts compliance examinations, licenses companies that offer financial products to Maine residents, and performs outreach to advise consumers and creditors of their legal rights and responsibilities.

 

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