(UPDATED below)
When I heard the news that the Federal Trade Commission was going to begin regulating the way identity theft prevention is advertised, my mind flashed on all the deceptive advertising about free-but-not-so-free credit reports and I was hopeful. I actually thought this could be a great thing: the FTC is stepping in to help consumers get the best information possible about identity theft and its related crimes. That can only be good for you, for me, and for the thousands of people who have been screwed over by the nonstop ads, websites and TV commercials we've all heard over and over, the singing pirate jingles of "F-R-E-E spells free, baby"--when it doesn't!
But I was wrong. Those deceptive ads weren't the focus of the FTC's wrath after all. Neither was EMC mortgage, or any of the other mortgage servicing companies who have been the subject of widespread complaints that many feel are being totally ignored.
Now don't get me wrong. I like the idea that the AG's and FTC would unite on our behalf. And I am glad they are setting the standard for ALL companies selling identity theft protection services as I believe it will separate the good from the bad.
But: What about the REAL predators?
What makes many of us consumers, homeowners and activists unhappy is their lack of action against the real predators out there.
As a long-time consumer advocate, nothing--and I mean nothing--would make me happier than to see the FTC take a strong stand against those entities that participate in massively deceptive advertising practices. Unfortunately, this time, I believe--as many others do--that the FTC has missed the mark. After all -The FTC has spent time and considerable money making spoof videos to help point consumers in the right direction of finding their really free credit report. Why not go after them? They have many thousands of complaints lodged against them and now -a class action. As far as aggressive marketing, no one can turn on the TV or visit a website without being bombarded with singing pirates touting free credit reports -heck we can't even maneuver annualcreditreport's site without being tripped up by links directing us credit monitoring services.
I know of many innocent consumers who have been suckered into paying for credit services they didn't want and countless homeowners who have been pleading with the powers that be to step up and stop unregulated mortgage servicers from stealing their homes. However, despite millions of upset homeowners, many of whom who have been steadfastly reporting / speaking out against mortgage servicing fraud, accounting errors, and predatory lending practices, their complaints seem to fall to lightly on deaf ears.
At yesterday's press conference, when the regulators were asked how many complaints had been lodged against LifeLock, there was no clear answer --noting possibly 200 or so complaints. Don't get me wrong, whether it's 2 or 200 complaints, the FTC is doing us a favor whenever they right a few wrongs. No problem there. But --we would have to add some zeros to that number to come close to the number of complaints against mortgage servicers; EMC, Ocwen, Litton, Chase, Bank of America and on and on!
So the good news is, there may be hope.
Now that the FTC has taken this tough stand against this company --they must be getting ready to go after those predators out stealing homes --ruining credit ratings unfairly and harming our economic recovery.
We can hope.
What do you think? Email me your thoughts, your story, or scroll down to leave your own comments!
See a few earlier blogs that underscore the need for regulatory action:
Have you been hurt by EMC?
Complaints against EMC should be filed with the FTC
UPDATE: Due to a number of calls and emails relating to my opinion of identity theft protection services, and LifeLock, I feel compelled to provide the below update which is relevant to blogs published prior to March 1, 2012;
My opinion of identity theft protection services and LifeLock, and their value / trustworthiness should not be considered as relevant or accurate and should not be relied upon when making choices whether or not to purchase an IDTPS.
Re:The above blog post relating specifically to the FTC vs. LifeLock;
The FTC got it right --I got it completely wrong. Unfortunately, in my opinion, my former view of view of LifeLock, (their management, policies, services) became skewed by an array of mistruths that were repeatedly and intentionally relayed to me by senior management as part of a scheme designed to effectively manipulate my trust and mislead me and the public's trust. I hope the FTC continues to keep close watch over this company, and any other company, who has allegations of corporate misconduct levied against them.
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Well said, Denise!!
You know that I can't agree with you more on those points as we have had several conversations concerning why/how the government freely chooses to NOT help the innocent consumers. Instead, they (government) choose to 'pick on' those businesses and individuals that are truly trying to make a difference in this society.
I have questioned this many many times and can not explain it enough or with a loud enough voice to anyone that I talk with concerning their foreclosure stories. It saddens me to know that this wonderful group of individuals that we call 'our government' is turning a blind eye to the abuses and illegal practices of the mortgage servicing companies, yet they are vicously attacking those who are making great strides for the people - to protect the people.
Again, I would be more than willing to go to Washington D.C. to voice my story and DEMAND action from any of those government offices. You know that I have complained multiple times to any/all agencies only to be ignored or passed on to someone else or, better yet, be told that they don't have the jurisdiction to assist me.
If they don't have that jurisdiction, then why are they there????
Thanks again for all your hard work in being brave enough to publicly stand up for the consumers.
Denise, I am glad you raise the Federal Trade Commission issue. The question I ask is this:
Is the FEDERAL TRADE COMMISSION aiding and abetting in the crimes of the Corporations they investigate?
Here are the condensed facts and your readers can draw their won conclusions.
In 2002-03, I was contacted by one of the investigators in charge of the investigation into the criminal enterprise known as Fairbanks Capital (n/k/a Select Portfolio Servicing criminal enterprise).
The FTC investigation resulted in a $55 million dollar fine, which was to be used to redress the hundreds of thousands of Fairbanks victims. Two independent researchers estimated Fairbanks had stolen about $4 Billion dollars from unsuspecting homeowners. One victim, who continued to pay her mortgage one month in advance and lost thousands of dollars to Fairbanks in bogus fees, received a check for $.85. Another homeowner who provided evidence that they overpaid Fairbanks $27,000.00 - received nothing. Fairbanks then transferred this mortgage to the criminal enterprise known as EMC Mortgage (a subsidiary of the duly defunct Bear Stearns Securities). EMC Mortgage immediately began foreclosure proceedings, even though this family had documentation showing they overpaid. Fortunately, this family went to a local bank and had the loan officer go to MSFraud.org so she could see what was going on. When the loan officer showed the website to the bank president, he agreed to refinance their mortgage to get them away from EMC. The stories of consumer abuses, as we all know, are endless.
Then in July 2005, my expert trial witness, who is now a Certified Fraud Examiner, flew me to Washington D.C. to meet with four FTC attorneys. The meeting was also attended by a Certified Fraud Examiner from Alabama; my Washington D.C. lawyer and his Washington lobbyist partner. Based on the evidence in my case against EMC Mortgage, the FTC decided to investigate.
During the meeting, I explained to the lead counsel in the Fairbanks case, that the entire mortgage fraud industry and its accomplices were holding their breath to find out what happens when one of their own gets caught running this illegal operation. I went on to explain to her that the FTC’s miniscule fine against Fairbanks did nothing more than throw gasoline on the fire. The Fairbanks settlement was reduced to a small cost of doing business, and if that is all we have to pay for operating our illegal operation, then let’s crank up the volume. And as we all know now, that is exactly what the mortgage fraud operators did. If you look at any of the charts out there, you will notice that the number of predatory loans and unlawful foreclosures began to increase soon after the Fairbank’s investigation. What if the FTC hit Fairbanks with a several hundred million dollar fine; or better yet, what if the fine was one billion? Would the FTC investigation made a difference then, because it should be obvious it made no impact whatsoever, as Fairbanks/Select Portfolio is still fully engaged in the same fraud they were investigated for in 2003. Fairbanks patently breached the FTC settlement, yet the FTC has not gone back after them. More importantly, what about all the loss of money and the irreparable harms suffered by those targeted by Fairbanks? Fairbanks got to keep the money and homes they stole.
Imagine getting caught robbing a bank and being told to only pay back pennies for each dollar you stole, and then told you will have to change your name if you want to keep robbing banks. And then told not to worry, we don’t investigate the same criminal enterprise more than once.
The FTC investigation into EMC was an embarrassing fiasco. I have heard from many EMC victims who lost hundreds of thousands of dollars to EMC and whose names were not even included on the victim list. Myself, and my expert witness who set up the FTC meeting, and who I have yet to reimburse for my trip, received nothing. My name was not on the list either.
Last July, the FTC contacted me to say they have been monitoring www.MSFraud.org and asked that I direct visitors with information and evidence that EMC breached the FTC settlement to a special webpage the FTC set up. During the call, I asked why I was not on the list to receive redress funds. The FTC said I definitely qualify and they would look into it and get back with me. That was almost 9 months ago and I have not heard from them.
My home was stolen by Bank of America and EMC http://www.youtube.com/watch?v=mjhArDbEu50. It was not lost in a tax sale or lawfully foreclosed upon… it was stolen. http://www.youtube.com/watch?v=JCQTC71EYSY&feature=player_embedded EMC admitted I was never in default, and the monthly payment on my adjustible-rate note was only 2%-14% of my monthly income.
After receiving a copy of President Obama’s 11/17/2009 Executive Order 13519, I wrote more than 20 letters to those listed in the President’s order. To date, I have received only one response, and it was not the FTC. Just that single acknowledgment of interest into the criminal side is huge. I have been directed to put all my evidence together and write it up to include every executive, in-house lawyer and out-house lawyer, law firm, judges and anyone else I believe to be involved. So far, I have written 98 pages, plus binders of evidence containing almost 50 counts. If only 10% of my charges make it to the grand jury, that should make a huge impact on foreclosures nationwide. I can already see bank lawyers running away from foreclosure cases when they learn of the severe penalties that may be imposed agaisnt them. They could have their tickets pulled or end up in prison.
The FTC has had some of my evidence for nearly 5 years and been supplied with evidence that EMC breached the FTC settlement, yet no investigation has been mentioned.
So you decide whether the FTC is part of the solution - or part of the problem.
Credit repair and credit monitoring companies should provide a target rich environment for the FTC. That being said, Lifelock is more representative of the guys wearing white hats than anything else.
What about FreeCreditReport.com? What about the CRAs? If Lifelock has 200 complaints against them - and I'm not sure that they do - that is nothing in comparison to the number of complaints against many of the other companies in this industry! If you don't believe me, just do a Google search for FreeCreditReport complaints, or substitute some other company name. Then try the same thing with Lifelock. You are not going to find message boards full of people badmouthing them. You will with many of the other companies.
All of this begs the questions of who is driving this at the FTC and why? Are there former CRA executives now working in the Obama administration who are not fond of Lifelock because they compete with the CRAs? Or perhaps who in the FTC or the administration is married, sleeping with or related to someone working for one of Lifelock's competitors. Or even, which of Lifelock's competitors is giving generous campaign donations and to whom? Time to follow the money.
It seems quite disingenuous for the FTC to say that with all of the problems within the credit industry that Lifelock is the biggest and best target they can find. Of course, if they have now set their complaint threshold to 200 for opening an investigation, the FTC should start hiring right now. I can guarantee that there are dozens of other companies involved in financial services that have well surpassed this level. I wouldn't hold my breath though.
Jim Malmberg
American Consumer Credit Eduction Support Services (ACCESS)
www.GuardMyCreditFile.org
One person wrote above --in respect of actions against lawyers;
"If only 10% of my charges make it to the grand jury, that should make a huge impact on foreclosures nationwide. I can already see bank lawyers running away from foreclosure cases when they learn of the severe penalties that may be imposed agaisnt them. They could have their tickets pulled or end up in prison."
Sadly, the bar associations are far more likely to "take away the tickets" of lawyers that try to help homeowners prevent foreclosures by enlisting the aid of non-lawyers to give them the leverage needed to make even a stab at halting the servicer foreclosure juggernaught"
Every day now that winter is over, thousands of homeowners that were lured into predatory loans that moved them from prime to subprime stus overnight are forced into the street by courts pushing foreclosures through rocket dockets. Then the servicers move to collect of the deficiencies--except in pelosi-country-- then chase these people inti bankruptcy.In bankruptcy courts, the debtors are obliged to give up everything they own under chapter 7 to escape the predatory collction. For those who earn more than $70,000,chapter 7 doesnt apply and the alternative chapter 11 proceedings force the victims to pay all disposable income into the predators accounts for 5 years under "reforms" in 2005 when the lenders closed the trap on the victims with congress help. In this case disposable income includes money withdrawn from iras to pay kids college tuition, new home purchases, etc--in other words, once the trap is closed about the only way out for boomers is suicide. They dont even give us the option of debtors prison cause that would cost money. We are the people perched very literally on the edge of homelessnous irretrievably. There is no govt agency that is interested in this---they are run one and all by the banks. Anyone who thinks otherwise is deluded. At no level is govt there to do anything other than to enforce the collection of notes for servicers, even if the several programs and mortgage insurance arrangements backstopped by our tax dollars have already paid off the notes in part or in full. Reality is far worse than anything one could have imagined because imaginitaive investment bankers dreemed it up in advance from start to finish. This must be the way it was in the Soviet Union circa 1997.
I want to say I agree with Mr. Malmberg that this is nothing more than a political smear against this company. someone in this administration has a grudge with or connection to a competitor that is pissed off. It is spurred on by money and it is disgraceful that the FTC has decided to ripp apart this company as if they were the she-devil when there are real devils out there! Get real and keep it real FTC! it goes to show why citizens no longer trust our govt to do the right thing. Do we really need to persecute this company in a way that has them plastered all over the world wide web? I agree with you Dennis that the mortgqage companies should be next and then the credit card companies . OMG maybe now they will chose to use the money extorted from lifelock to go after them. genious!== btw i really like your blog and believe you speak for those of us who can't. keep up the great work. thanks for being our watchdog since the ftc and our attorney genrals are not. people like you should run for office i bet you would win by landslides.
An estimated 200 complaints that the FTC is taking action on? 200 ?!?!?
Jack summarized things fairly nicely above. That said, the FTC received more than twice that against Fairbanks Capital Corp. between June 2005 and November 2006, if I remember correctly - more than a year AFTER they settled USA/Curry v. Fairbanks. I've got the FOIA info to prove it. Overall, the FTC certified 281,100 victims by the time they were done "investigating" Fairbanks/SPS. Of course, the criminal investigation that was killed as part of the civil settlement would have been just as effective, if not more so,than the civil "settlement.
HUD-OIG had interviews from Fairbanks people (Exhibits T, U & V on the GAO review) - I'm going to guess Mark Finston and Melissa McGlinchy among others - wherein they disclosed knowledge of kickbacks - KICKBACKS - among to Fairbanks/SPS for force placed insurance being supplied by Balboa Insurance among other potential infractions. And yet, to the best of my knowledge nothing was ever acted upon. Funny thing, the Third Circuit Court of Appeals recently revived a class action against Countrywide and Balboa alleging kickbacks for private mortgage insurance. I wonder what else could be found if anyone actually took the time to look at the criminal aspects of these cases.
Search the phrase "inability to pay" at FTC.gov. I got 197 hits on it with many of the links pointing to cases where the defendants couldn't pay the penalties so the FTC apparently let them off the hook.
Bottom line is that civil charges are nice but if there isn't any kind of real business conduct reform going on after the civil penalties then the corporation doesn't deserve to keep doing business and creating additional victims. Maybe it's time to see if the criminal solution would work because the civil process certainly isn't helping consumers out too much so far. But that's just my opinion...I may very well be wrong.
I agree Jc. Denise would win by a landslide. I would be first in line to cast my vote for her!!!
Would be wise to refute this article.
http://chicagopressrelease.com/press-releases/ftc-lifelock-claims-misleading-customers
Thanks Alessandro for pointing out the article- I opted to comment on it.
http://chicagopressrelease.com/press-releases/ftc-lifelock-claims-misleading-customers#comment-3253
As you know we can't believe everything we read. Remember those full page ads from Chase promising they are working with their customers? Your work shows that to be less than genuine.
You might be interested in this Lisa Madigan sighting at the White House, since she was the one who went after Life Lock.
http://hillbuzz.org/2010/03/15/question-why-did-illinois-attorney-general-lisa-madigan-go-to-the-white-house-last-week/
Maybe there is at least SOME hope left. The court system is already overworked but if they are going to be left to do the heavy lifting maybe there is at least something left.
http://www.myfoxtampabay.com/dpp/news/local/hillsborough/0318-tub-salesman-gets-30-years-in-jail
Tub salesman gets 30 years in jail
"The crime centered around walk-in bathtubs. For seniors who might otherwise be unable to bathe or shower, walk-in tubs are an option to help them keep their independence, and keep out of nursing home.
Fraud investigators say William Becker made a lot of broken promises selling walk-in tubs, collecting $167,000 from trusting seniors like Donald Schoenberger.
"The judge then sentenced Becker to 30 years in prison, with 15 years to be served after prison on probation. The two dozen seniors, still out their money, called it justice. "
$167,000 stolen and he gets 30 years in jail. Hmm... Fairbanks/SPS. 281,100 victims per the FTC in 2004. Zero jail time for anyone despite a criminal investigation that was ultimately shut down. EMC/Bear Stearns...86,000 victims per the FTC in 2008. Zero jail time.