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Debt collectors routinely try to collect on debts that they know would not be enforceable in court. They may even try to get you to restart the debt by making a partial payment or by transferring the old debt to a new credit card. But, in a lawsuit settlement with one of the biggest debt collectors, the FTC lets the debt collection industry know that collecting on expired, or time-barred debts, is not ok.

The FTC sued Asset Acceptance, a company who might be listed on your credit report, following allegations that the company violated several rules including: telling consumers they owed debt that the collector may not have been able to prove, failing to tell consumers that their debts were past the statute of limitations, and failing to tell consumers that a partial payment would extend the statute of limitations.

In addition to a civil penalty of $2.5 million, Asset Acceptance has agreed to inform consumers when their debts are too old to be legally enforceable and to let consumers know that a partial payment would essentially restart the statute of limitations on that account. Asset Acceptance also has to inform consumers when they’ve placed a negative account on the consumer’s credit report.

While a judge hasn’t signed off the terms of the settlement, they set a precedent for what the FTC expects of the collection industry. The agency has also released a new publication, “Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts,” to help consumers better understand what to do about old debts.

You may know that the statute of limitations varies by states. It’s generally between Read more…

A cashier at a Westchester NY has been alleged to have played a part in a consumer credit card scam that netted more than $180,000. The cashier has been accused of selling credit card information she stole while working at Staples.

Valerie Fajardo, a 21 year old from the Bronx, utilized a credit card skimming devise to steal credit card data from customers from May to December.

The information she scammed from the customers was then sold to a man for $6,000. The man who bought the stolen credit card information then used it to create fake credit cards and subsequently used those cards to charge more than $180,000 in purchases. The cashier was finally arrested this week and booked on charges of scheme to defraud and criminal possession of a forgery device. She is still in jail without bail. There was no word on the charges, if any, filed against the man. Read more…

The Federal Reserve released its monthly report for December outlining the use of consumer credit. It appears the percentage of consumers borrowing credit outside of mortgages has actually gone up for the month. The month of November also showed an increase making the two month span the highest rise in consumer credit borrowing in the past 11 years.

It appears more consumers are feeling confident enough to borrow on credit. The increase is mostly contributed to student loans, vehicle loans, and credit cards. This information may indicate the United States economy is rebounding and consumers are gaining their confidence back.

The data may also be due in part to banks and lenders lessening their strict lending standards. Consumer debt is also said to be falling since 2008 but the amount consumers have borrowed currently sits at $2.5 trillion which is about the same level as it was prior to the recession hitting. Read more…

Personal finance experts have long been warning consumers about investigating credit card fees before signing up for a card. Believe it or not, there are card holders actually willing to fork over $400 a year to have one of First Premier Bank’s cards.

This $400 annual fee card is not designed for the rich and famous. This card is actually promoted to consumers who hold poor credit score but still want access to credit. In addition to the $400 annual fee, the credit card carries an astounding 36% interest rate as well as other high fees that go along with the card.

A First Premier Bank representative stated their card fees are based on the risk associated with the consumer applying for the card. In the case of people with poor financial histories, the risk of card payment defaults is significantly higher than with consumers holding excellent scores. The bank representative defends the high rates as a way to protect the company’s bottom line.

Critics say that the higher fees for cards are not doing a thing to help people struggling with bad credit. It can be a vicious cycle of debt and bad credit for consumers that seek out more cards in order to have access to money. Read more…

New credit reporting tactics mean that rent payments may now have an impact on your credit score. So if you haven’t been faithful about making timely payments because they’re not reported to the bureaus, it’s time to change that habit.

In June 2010, Experian purchased RentBureau, a rental reporting agency that collected rental payment information. Months later, Experian began reporting timely rent payments on consumers’ reports. Those payments, in turn, were reflected in consumers’ VantageScore based on Experian credit report data. This year, Experian plans to begin reporting both negative and positive rental history. That means late payments can hurt you the same way that timely payments can help you.

A newer reporting agency, CoreLogic, is working with FICO, provider of the well-known credit score, to create a report and score that includes rental payment history, according to the New York Times. Timely rent payments can make it easier to rebuild a bad credit score, especially if Read more…

Capital One Financial Corporation launched the new Journey Credit Tracker. It is an online credit education resource for customers with Journey Student Rewards accounts. Capital One’s new venture is powered by CreditKarma and allows cardholders access to their credit score each month from the TransUnion reporting agency.

Capital One instituted the Journey card to teach students the basics of a credit foundation. It is designed to help student card holders build a strong financial history and understand the importance of making a good financial choices especially as a young adult.

The Journey Credit Tracker will help student cardholders track the financial progress by allowing fast access to their score and ongoing monitoring of that score to see how financial decisions will affect it. Students can utilize the tools to compare their own score to other people of the same age or location. The tool allows users to simulate what would happen to their credit score if they made certain financial sources. In addition to the tracking tools, the Journey card website provides Read more…

There have been a lot of news headlines over the recently released card by Suze Orman, personal finance expert. Many consumers believe using debit cards keeps them out of debt and avoids high interest rates. However, if you are intent on repairing your credit score, using a credit card is a wiser move to make but you must do it responsibly.

Fraud is one reason consumers should consider when avoiding credit cards, especially when making online purchases. Debit cards do not protect you like credit cards can. If someone accesses your bank card information, they literally can access all of the cash you have in your account. Since many consumers do not notice until it is too late, this can be detrimental to your overall finances.

Another concern of personal finance experts is the lack of credit rebuilding power associated with a debit card. When you make purchases on a debit card linked to your bank, you are doing nothing to increase your own score. This can be dangerous, especially now when many industries are relying on your score to make decisions. Read more…

There are several news stories this week pertaining to a consumer’s quest to achieve the best credit score. Currently, lenders have set their standards for good credit scores around 730. Those that hold a score of 730 or higher are assured in getting the best options when it comes to financing a loan, obtaining car insurance, or other financial services.

While it is good news that consumers are taking a more proactive interest in their credit scores, the quest to achieve a score of 800 or more may not be as achievable as one would think. Personal finance experts are now saying that once a consumer has achieved a FICO score of 760, efforts to increase that score any higher may be ‘futile’.

Once a 760 score is achieved, consumers are not likely to find any better interest rates or financial service offers that are better than that. However, some consumers are not to be swayed. They continue their quest to achieve an 800 or better for their credit profile despite the difficulty in increasing scores after they hit 760. Read more…

The online shoe company, Zappos.com recently suffered a breach in security that gave hackers consumer information. One of the company’s services housed in Kentucky was breached the CEO of Zappos.com announced this weekend.

So far it seems the only data the hackers could access was the account information of customers registered with the site. Information including name, address, and the last four digits of the credit card stored on the site was available. The company’s secured credit card and payment data information was not found to be tampered with.

CEO Tony Hsieh stated that Zappos.com has spent years building up their reputation and trust among customers. The company boasts an impressive customer base of 24 million, all of whom received the notice about the hacking incident. 6pm.com, an online affiliate of Zappos.com, was also affected by the breach in security and had to issue a warning to their customer base.

Zappos.com is not happy about the breach but also suggests the situation could have been worse. Other online sites that have had their security breached suffered much bigger consequences, including Sony’s PlayStation Network. During this hack, 12.3 million of the company’s registered account holders had their credit cards and other personal data compromised. The site also experienced Read more…

The United States consumer credit skyrocketed up 10 percent in November. This is the biggest move upward for consumer credit in the last ten years. It is a good sign for the economy that consumer credit card spending is up as well as the fact that government student loans are on the rise.

With a jump of $20.37 billion during November, the Federal Reserve has indicated this has been the biggest increase since 2001 and comes out three times above the median forecast as predicted in a poll conducted by Reuters.

Financial experts feel that the growth is certainly a positive signal that consumers are more confident about spending on credit. However, there is a cautionary warning in place in that credit card use is up so high due to the high rate of unemployment. Lack of jobs may be prompting consumers to rely more on credit cards because they don’t have the cash to Read more…