What Should I Do If I've Become a Victim of Identity Theft?

As Im doing my research on providing a service for identity theft victims, I ran across some really good information published straight from the Department of Justice. There is a whole page dedicated to identity theft. Heres the part from what happens if you've already become a victim. 

http://www.justice.gov/criminal/fraud/websites/idtheft.html

• What Should I Do If I've Become a Victim of Identity Theft?
If you think you've become a victim of identity theft or fraud, act immediately to minimize the damage to your personal funds and financial accounts, as well as your reputation. Here's a list -- based in part on a checklist prepared by the California Public Interest Research Group (CalPIRG) and the Privacy Rights Clearinghouse -- of some actions that you should take right away:
1. Contact the Federal Trade Commission (FTC) to report the situation, whether Online, 2. By telephone toll-free at 1-877-ID THEFT (877-438-4338) or TDD at 202-326-2502, or 3. By mail to Consumer Response Center, FTC, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.
Under the Identity Theft and Assumption Deterrence Act , the Federal Trade Commission is responsible for receiving and processing complaints from people who believe they may be victims of identity theft, providing informational materials to those people, and referring those complaints to appropriate entities, including the major credit reporting agencies and law enforcement agencies. For further information, please check the FTC's identity theft Web pages . You can also call your local office of the FBI or the U.S. Secret Service to report crimes relating to identity theft and fraud.
You may also need to contact other agencies for other types of identity theft:
1. Your local office of the Postal Inspection Service if you suspect that an identity thief has submitted a change-of-address form with the Post Office to redirect your mail, or has used the mail to commit frauds involving your identity; 2. The Social Security Administration if you suspect that your Social Security number is being fraudulently used (call 800-269-0271 to report the fraud); 3. The Internal Revenue Service if you suspect the improper use of identification information in connection with tax violations (call 1-800-829-0433 to report the violations).
Call the fraud units of the three principal credit reporting companies:
Equifax:
1. To report fraud, call (800) 525-6285 or write to P.O. Box 740250, Atlanta, GA 30374-0250. 2. To order a copy of your credit report ($8 in most states), write to P.O. Box 740241, Atlanta, GA 30374-0241, or call (800) 685-1111. 3. To dispute information in your report, call the phone number provided on your credit report. 4. To opt out of pre-approved offers of credit, call (888) 567-8688 or write to Equifax Options, P.O. Box 740123, Atlanta GA 30374-0123.
Experian (formerly TRW)
1. To report fraud, call (888) EXPERIAN or (888) 397-3742, fax to (800) 301-7196, or write to P.O. Box 1017, Allen, TX 75013. 2. To order a copy of your credit report ($8 in most states): P.O. Box 2104, Allen TX 75013, or call (888) EXPERIAN. 3. To dispute information in your report, call the phone number provided on your credit report. 4. To opt out of pre-approved offers of credit and marketing lists, call (800) 353-0809 or (888) 5OPTOUT or write to P.O. Box 919, Allen, TX 75013.
Trans Union
1. To report fraud, call (800) 680-7289 or write to P.O. Box 6790, Fullerton, CA 92634. 2. To order a copy of your credit report ($8 in most states), write to P.O. Box 390, Springfield, PA 19064 or call: (800) 888-4213. 3. To dispute information in your report, call the phone number provided on your credit report. 4. To opt out of pre-approved offers of credit and marketing lists, call (800) 680-7293 or (888) 5OPTOUT or write to P.O Box 97328, Jackson, MS 39238.
Contact all creditors with whom your name or identifying data have been fraudulently used. For example, you may need to contact your long-distance telephone company if your long-distance calling card has been stolen or you find fraudulent charges on your bill.
Contact all financial institutions where you have accounts that an identity thief has taken over or that have been created in your name but without your knowledge. You may need to cancel those accounts, place stop-payment orders on any outstanding checks that may not have cleared, and change your Automated Teller Machine (ATM) card, account, and Personal Identification Number (PIN).
Contact the major check verification companies (listed in the CalPIRG-Privacy Rights Clearinghouse checklist) if you have had checks stolen or bank accounts set up by an identity thief. In particular, if you know that a particular merchant has received a check stolen from you, contact the verification company that the merchant uses:
1. CheckRite -- (800) 766-2748 2. ChexSystems -- (800) 428-9623 (closed checking accounts) 3. CrossCheck -- (800) 552-1900 4. Equifax -- (800) 437-5120 5. National Processing Co. (NPC) -- (800) 526-5380 6. SCAN -- (800) 262-7771 7. TeleCheck -- (800) 710-9898

Negotiating your debt

Alright so I'm hanging out here on my vacation on the beautiful sands of Hawaii and I'm reading this great finance book called "i will teach you to be rich" by ramit sethi. I highly recommend this book to the younger readers because he really puts things into perspective and breaks it down for us to understand.
I have 1 problem with these finance books (other then them bashing on financial advisers)...they talk about paying off your credit cards like its a simple thing. Hells no it isnt...here's the problem...what if your in debt up to your ears and can even afford to pay for the monthly payments? If you're having problems paying off your debt here is a possible option. Settle you debt.

Alright, so in an earlier article I wrote about what to do to avoid those collections calls. Truth is your going to eventually have to pay them back (unless you want to wait 5 years statute of limitations). So here's in a nut shell to do what my partners and I charge people a good amount of money to do. Yes I'm throwing all I know out there for free...no buy my book no subscribe gimmick. I truly believe knowledge should be shared free of charge, services on applying the knowledge comes at a price. Negotiating is tough when you have a personal attachment to the settlement, and that's where experts come in. And that's why I like selling my services as a financial advisor, because we aren't going to get emotional about your money...so f you Ramit! Just kidding .

Ok so theres a few steps your going to need to do to negotiate your own debt. First, your best chances of a good settlement will come from if you can pay the debt in a lump sum. Payments will work, but spread over time they will expect more money. So when you are prepared to settle, make sure you have funds in hand. Borrow from someone if you don't have it. Ask your parents...just man up and tell them if you haven't, it will save you a lot of gray hairs in the future.

The next thing you need to have is a VALID hardship, yes I repeat a valid hardship. Heres the trick...don't make shit up people, if you get caught your committing perjury and thats worse then being in debt and they wont work with you anyways. But honestly, they arent going to hire Sherlock Holmes to check out your story. So I recommending taking a moment and truly figure a good story on why you couldn't pay your debt...then Hollywood it. Make it sound worse then what it was, make them cry...shit if you can keep a straight face cry while your telling it to them lol just,kidding...sort of.

So once you have these two in place you can get ready to call the collections agencies. They probably have been trying to reach you at this point and have,sent letters to you saying they are willing to settle for x percent of what you owe (which is usually around 70%). When you call the number on the letter pretend like you never saw that settlement. They will first ask you for a case number, give it to them and expect to be transfer to a negotiator. Heres where people get scared and where the experts have fun. They are going to ask what you want to do. You should reply with a "i would like to settle this account". They are at some point going to ask you why you couldnt pay your debt, at this point go on with the sob story (although they dont give a crap). After you do that, tell them you want to settle for less then whats owed. Just like any negotiation tactic, start low and eventually meet in the middle. I would suggest starting off at 10% of what you owe (if you owe 10k then your offering 1k). They would prob laugh and counter with something much higher like whatever they sent you in the mail. Tell them you can borrow the money and can do something like 20% of the balance. Negotiations will go back and forth and usual settlements are around 40% of the balance. If they dont budge, politely tell them you cant do that, hang up and call back in a couple months. Dont get frustrated, its part of the games.

Heres a few tips. The longer you have had the account in collections the more willing they are to settle and at a lower balance. Theres a statute of limitations for debt. Once you get sent to a collections agency, they have 5 years to collect from you or its wiped out. Also, never pay the agency until you get the agreed settlement on amount in writing. Remember the harassment collection calls you logged from reading the "how to avoid those collections calls" article? Well you can use them in the negotiations when things get heated. Warning, dont come out the gates guns blazing, that will piss them off. You want to act as naive as possible, and progressively bring up some laws if the conversation gets more heated, and if your lucky you wont even have,to pull out those tricks. When I was new to negotiating debt, before I knew any of this I spoke to the sweetest lady to resolve a discover card settlement. She helped me settle at 30% of the balance and had an email already sent to me before the convo was done. I didntThats because any money creditors get back is like icing on the cake. When you stopped paying they already wrote you off on their losses, but when you pay its like you finding money in those jeans you havent worn in forever.

Alright I know this is a lot of info and can be intimidating...if you eventually decided to hire a debt settlement agency heres some tips to not get scammed (or you can ask me). A good agency will give you different options of paying. They will either charge you the percent of what they saved you (my pick), which should be more then if they charge you an up front but it ensures results. Or if you feel the trust you can do a up front fee, but make sure they dont charge both. Second never let them hold your money! This is most important. You should have money set aside ready for settlement, but they should never be asking to hold it. If they do, walk away. A good settlement company will tell you what they came to agreements on and pay the creditors a certain amount.

Alright, thats all I got to say. Happy negotiating guys!

Dealing with those damn collections calls

Alright lets face it. The economy sucks and just about everyone is in debt. Statistics show that about 50% of credit cards are going into default because we simply just cant pay for them. There's no freaking jobs open and well...we spend too much. I know for a fact that I wouldn't be able to keep up with my spending habits (or drinking habits) if I didn't have my business lol. So here we go, lets talk about that skeleton in the closet that you have....
 
First off...I have to give a few disclaimers. "I am not a lawyer. I am not giving legal advice. Please consult an attorney if you have any pending litigation. Please seek legal advice if you are considering bankruptcy". Second, this is a piece for people that have unsecured debt and cannot keep up with the monthly payment because a legitimate hardship. I AM NOT telling you to stop paying for your shit people...and I would highly recommend against doing so because its a hard freaking climb to bring your score back up...trust me. Lastly, again I am not writing this as legal advice! If you owe money...and collections agencies are bugging the crap out of you, this is simply what I would do *wink* *wink*. If you choose to *do what I would do* then follow these steps precisely to make a credit restoration company's job (like mine) easier and save you a ton of money in the end.

So I'm going to tell you a little make belief story about my buddy...um Elvis. Shout out to my cousin Elf! For the people that know him, no he doesn't owe creditors money...just me...freaking asshole. Anyways so Elvis goes off to college and for the first time and is free to experience the world unfiltered. He moves out of his parents place and finds a nice little place to rent in the hood close to school because rent is cheap. Like many college kids in his same situation, Elf has a lot of new things to deal with that he hasn't ever had pay for before: rent, food, groceries, the bar. Yes...Elf has a part time job at my favorite little sandwich place La Metro (french for Subway), but he hasn't gotten the hang of budgeting yet and goes out of control with spending because evil credit card agencies keep sending him offers in the mail...and he accepts the offer to borrow money with the promise to pay them back...evil credit card agencies :-p.

Alright now here comes the interesting part of the story. Elf decides to say "F*** you credit cards"! He stops paying his monthly bill. After his first missed payment the credit card agencies start to get nervous and give him a call to see if maybe he forgot...but no answer. After 3 months of missed payments the credit card company realizes this little bastard isn't going to pay and starts calling him off the hook! The next thing they are going to do is sell his balance over to a collection company, usually a law firm, to bug him until he coughs up the money.

This collection company starts to call him non stop! They leave 2 or 3 voice messages a day because they think Elf doesn't know the rules of the Fair Debt Collections Act where they cant do that...because nobody knows their rights in this great free country right?

Elf is enjoying his life no worries because he found out of a little FREE service called Google Voice....damn I love google. Anyways, Elf signs up for google voice and uses his same number that hes been using for years. He sets his google voice to direct calls from specific numbers (like those 877 and 800 numbers) to go directly to his voice mail and they get logged.

After a few months and his credit is shot...he decides he wants to start to get serious about his finances and wants to see what he can do about his credit. So Elf goes to his extremely tall and hansom, super smart cousin "Quang" (lmao I had to do it!) for advice. Q tells Elf that he is going to need to pay off his debts owed on these cards, but what he can do is settle for less than what is owed on the cards. Since Elf has a log of times he received a voice message more then once in a day...Q has more negotiating power because that's considered a form of harassment and the company can be fined for every instance.

After some negotiation, Elf and the collection company agree to do a lump sum payment for less then half of what he originally owed. The next step he did was to go to a credit repair company to dispute the validity of how these bad remarks on his credit were reported. We will go over that in another blog.

Hope you guys learned some valuable pieces of info from this story to apply to your situation. Till next time!

PS. If your getting calls to your work number because they somehow got a hold of it. They should know that they are allowed to call once...and only once to your place of work to attempt to collect. But they aren't going to stop unless they know that you know.

Boosting your credit overnight with no money out of your pocket

As I'm writing about this story of how my enemy to deal with in credit repair became my best friend...I realized that the only people that would understand what I'm talking about are well...other credit restoration professionals. So ill save that post for another day and give you guys some simple tricks to boost your credit.

So your credit is a combination of a number of things. Id rather not go into something that can be explained by a google search in images and pulling up a pie chart. Quite simply put...its how long you have had your accounts and how you use credit.

Now here's the catch with credit. You are only going to get credit offers when you DONT need it! Sounds pretty backwards right? Like why would I get credit when I don't need it? Well here's what the bank is thinking...well if your in need of credit, then your spending more then what you can make, and that's risky.

So does this mean that carrying a balance on your credit cards lowers your credit score? To a certain extent...yes. The magic number is 30%. Once you keep balances of more then 30% of your credit limit, you will start to see your score gradually go down.

So why is this relevant to how to boost your credit overnight without any money out of your pocket? Well here you go. There's a little trick that credit bureaus hate...its called authorized users.

So whats an authorized user? Here we go...I'm going to try my hardest to explain it as simple as possible. You add someone to your credit card as someone who can make purchases as well. And there you go...that's an authorized user :) Here's where the magic happens though. Certain credit cards report authorized users the same way they do for their account holders!

So imagine this...you just added your little brother to your credit card. Say...its your **Capital One card**. Now he just took over that whole history for that specific card (all your good and bad history). And BAM! overnight your little bro that had no spec of credit history has a good standing card that has been paying on time.

So lets wrap everything up in this blog. Earlier I spoke about not being able to get credit when you need it. For people trying to build credit from scratch now...good luck. It is a bitch to get your first credit card...but once you get one, and you pay your bill on time for 3 months...every freaking bank will beg you to use theirs. Also I spoke about the balances you keep on your card known as "debt to credit ratio". If you are trying to build credit...don't get a family member to add you to their maxed out, delinquent account. You would be better off handing your social security off to a identity fraudster. At least they would know how get you some cards.

PS. The laws have changed so not every bank reports authorized users...actually I only know of **1 bank** that does it now. Hence them being my best friend now. Ill cover them in another blog, but I wanted to drop you guys a little info on how authorized users work.

The truth about credit and your bank accounts

So I've been a banker for close to 6 years now and the truth is...your banker probably knows little to nothing about credit. Honestly we just say what sounds right to either get you to open an account or to save one. Heres a perfect example, at work just the other day my manager was training me on objections to a person keeping large amounts of cash in safe deposit boxes at home (we get paid on the balances you take into the bank). He said that insurance doesn't cover cash in the case of something like your house burning down because you cant prove it. You can say your house burned down 1 million dollars...is he right? Neither of us are sure, but it sounds pretty damn convincing right? 

So heres the truth about credit and what your banker wont tell you. No closing your account does not affect your credit. Having bad accounts does not affect your credit. The credit and banking system are two different machines. Banking uses a system to screen bad people out or bad history accounts out by a system called chexsystems. The credit bureaus use a system called FICO. 

There's only 1 linking that Ive found between the banks and your credit. If you have an account at a bank, the more likely they will extend to you credit. But there's a trick...the system will only recognize you after you hit a certain time with the bank and have a certain balance in your accounts. The minimum time you have to be with a bank before you get a relationship score is 3 months and the minimum balance you have to hold in your account is $300.

If you have ever tried to apply for a secured card, any place you go your going to have to put an initial down deposit of at least $300. Don't ask me why $300 because I don't know. Maybe its the minimum a bank can make money off you. Because contrary to what you believe...banks are FOR PROFIT companies! Yes...we make money off your money...but it shocks me when someone comes into the bank and wants free shit all the time like checks and safe deposit boxes when you only keep like $30 in your account. Honestly...no company...how big it is will make money off your stupid $30...the economy sucks so don't be surprised when we start charging you monthly fees for your shitty balances people!

Alright...now that I've blown off some steam lets get back to the truth about credit and your bank accounts lol. So yes, the banks are for profit companies. And the more stuff you keep at a bank like direct deposit, online banking and bill pay, a savings account along with your checking the bank makes money off it. So the higher your relationship score will be and the banks will look at it when extending you credit for the first time. So if your starting out your credit journey, first start with your primary bank. After that, Id advise you to open an account with the bank your trying to apply for a credit card with even if you may get a monthly fee. 

Ill post another blog on how to build credit if you don't have any later and the little tricks you can use. Ill even drop some of the tricks I use for my credit restoration business. Keep posted guys, thanks for following me! 

PS. Ive seen more and more linking to bad credit and not being able to open accounts lately. Don't be surprised if pretty soon you cant open a bank account if you owe money to creditors and collections agencies. And definitely don't open a bank account where you owe the bank money on a credit card that your not paying on time...common sense people, dont be stupid. If you owed me money and you asked me to hold some cash while you went on a trip to Hawaii what would you think I'd do? Yea...ill keep your cash safe for you....

My Credit Journey

So this is my first blog and Im not sure what to write or where to start...so ill start by beginning with a little blurb about myself and how I came up with the idea of credit conscience.

About 5 years ago a buddy and I decided to become "investors"just like what we read in the book Rich Dad, Poor Dad by Robert Kiyosaki...even though at the time we didn't realize what that word event meant lol. We just wanted to be rich like any other person. 

The problem is we had no money of our own to start with. Luckily (or unfortunately for us) at the time, the economy was booming and any schmuck or 18 year old kid could access to large credit lines. Which was the case for my buddy and I. There was then...and still is, high speculation of silver being the next big boom. So we had this great idea, lets take out cash advances and buy silver stocks on margin! So we used not our own money to leverage a 2 to 1 trade for silver. I highly advise against ever doing this sort of trick with anything at all. But the idea that we had was if silver was going to be the next big boom, we would capitalize on the market and double the money we borrowed...and have a great way of making money out of thin air story. 

The market was rising and we were riding high or about a month telling everyone that we were going to be rich in 5 months. The problem is that around that time there was a 1 day dip in the silver market that kicked out all the speculating investors (ie my buddy and I) and we lost a ton of money and had to pay it back. 

This was my first experience with the power of leverage. It can make you or break you badly. Credit is a perfect form of leverage. Some people use it for good and expand their business, while others use it foolishly for consumer reasons and have it work against them. 

The point of this blog for me is to document my journey of how I figured how to use credit as a powerful tool to build wealth and educate some people along the way. Since this first incident I've lost much more money, but also learned many lessons along the way. Hopefully whoever reads this learns some tricks to help them on their journey to wealth. Good luck guys, until next time!