Online dating is HOT.  How hot? Clicking and swiping for love has tripled among young people since 2013, the Pew Research Center says in a study released just in time for Valentine’s Day.

Some 27% of Americans ages 18 to 24 now report using online dating, up from just 10% in 2013. Feuling that trend: app-dating, with Tinder and Tinder-like tools such as Bumble becoming mainstream. Nearly one-in-ten American adults (9%) have used a dating app on their cellphone, up from just 3% who reported doing so in 2013.

Not since the early days of the Internet — when only eBay and dating sites like Match.com made money — has online love been such a big deal. Even older Americans are getting in on the act – 12% of 55- to 64-year-olds have ever used online dating, double the 6% who reported doing so in 2013.

Attitudes about online date seeking are changing, Pew says, which might be contributing to the growth. Eighty percent of Americans who have used online dating agree that it is a good way to meet people. Some 62% agree that online dating helps people find a better match, and 61% agree that online dating is easier and more efficient than other ways of meeting people. Meanwhile, 29% know someone who has met a spouse or long-term partner via online dating — and 46% of college grads knows a digital marriage.

Some hesitation remains.  About 45 percent agree online dating is more a dangerous  way to meet people (more women than men think so), and 16 percent say “people who use online dating sites are desperate.”

Online dating presents other risks, too. Last year, I wrote about and IBM study revealing most dating apps are vulnerable to hackers. There’s also the Internet’s most effective crime, Romance Scams (Here’s a 10-year-old story on that.) And do I have to mention Ashley Madison?

Which brings me to my real point here.  By now you should know that Ashley Madison was jam-packed with fake profiles. I’ve been hearing a lot about new dating apps having the same issue.  Have you encountered fake profiles on dating apps? I’d like to hear from you.  And I also hope you find whatever you are looking for on Valentine’s Day.

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Consumer Federation of America

Consumer Federation of America

Auto insurers levy something akin to a home renters’ surcharge on policy-holders, and that’s unfair, the Consumer Federation of America alleged on Monday. The interest group says it secret-shopped for typical driver policies in 10 U.S. cities and found renter rates averaged 7% higher – costing those consumers $112 annually – over rates offered to an identical consumer who was a homeowner. Renter rates were as much as 47% higher, the CFA said.

“To raise people’s auto insurance premium because they can’t afford to buy their homes unfairly discriminates against lower-income drivers,” said J. Robert Hunter, CFA’s Insurance Director and the former Insurance Commissioner of Texas. “A good driver is a good driver whether she rents or owns her home. Insurance companies should not be allowed to target people based on homeownership status.”

The organization says it tested rates for minimum limits liability coverage in 10 cities from the nation’s largest insurers – State Farm, Geico, Allstate, Progressive, Farmers, Liberty Mutual and Nationwide. It used company websites to solicit two premiums in each city for a 30-year old female motorist who drives a 2005 Honda Civic and has a perfect driving record.

(This story first appeared on Credit.com. Read it there.)

Liberty Mutual penalized the renter the most, with premium hikes averaging $307 per year, or 19% more, CFA said. The firm did not immediately respond to a request for comment, but directed questions towards industry group the Insurance Information Institute.

But there were several double-digit percentage increases around the country. For example, Allstate charged renters in Tampa 19% more than it charged homeowners; Liberty Mutual charged Baltimore renters 23% more and 26% more in Newark; and Farmers Insurance charged renters in Louisville 47% more (or $768) than homeowners for a basic auto insurance policy.

Jim Lynch, chief actuary for the Insurance Information Institute, did not dispute CFA’s findings, but he said the advocacy group mischaracterized the results. He said data shows that renters are more likely to have accidents than owners, so the difference in rates are the result of “an actuarially justifiable variable.”

“The CFA has their spin on it,” he said. “They are really, really eager to call something a penalty. What I see is that homeowners (pay less). ..Most consumers would say if you present less risk you should pay a lower rate.”

He speculated that there are many reasons renters file more claims: as one example, many renters park in crowded surface lots, where the likelihood of accidents is higher than in homeowners’ driveways.

It would be difficult to go to a homeowner and say, ‘We’re going to charge you the same rate because somebody else says that’s the way it ought to be.’ If I were that homeowner, I would say, ‘That’s not fair.’ But that’s how fairness operates in the insurance (industry),” Lynch said.

There were a couple of exceptions to the renters “penalty” in the CFA data.

“Geico was the only company tested that did not consider homeownership status in any of the 10 cities,” CFA said. “The only premium decrease for renters was found in Chicago, where Allstate lowered rates by 11% compared with premiums for homeowners.”

Also, state laws in California prohibit using homeownership status when setting premiums. When CFA tested rates in Oakland, California, it found that all companies charged the same premium to a good driver whether she owned or rented her home.

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Saving someone money will get you a big, big hug.   Click to watch the NBC Nightly segment on the BillFixers. (And remember, you read it here first)

Saving someone money will get you a big, big hug. Click to watch the NBC Nightly segment on the BillFixers. (And remember, you read it here first)

Remember the BillFixers brothers I wrote about last month (and I’ll write about each month in The BillFixers Files). That story got a lot of attention: I did a version for NBCNews.com, the New York Times picked it up, and NBC Nightly News is going to feature the brothers on national television this week.  Not all the attention was positive, however. More on that in a moment.

Here is episode 2 of The BillFixers Files, where the boys explain how to make sure you aren’t paying a $1,200 “convenience fee” to your cell phone provider.  Then, below, I write about the BillFixers tactic of impersonating consumers, and the recent NY Times story that called them out on it.

But first, the happy ending.

The BillFixers Files: Volume 2

Name: Mike Montgomery

Location: Nashville, TN

Industry: Cell Phone

Nature of Dispute: Plan Change

Resolution: Cut bill from $158.99 to $60 a month!

Time: 1 day

No of contacts: 4 Calls to Sprint, a call and an email with Mike

The story: “Mike had signed up with us with a Sprint bill. He was paying $158.99 a month (plus tax!) for unlimited data with them. His wife had seen some TV ads about cutting their price down, but it turned out they were only for new customers, so they’d given up. We took a look at the bill and realized he was using about a third of a gigabyte. I looked back at his past usage and realized he’d never used more than even half a gigabyte. So, he was paying for a plan that would only have made sense if he was using 20+GB a month, but never was using anywhere near that much. I called up Sprint and got a quote for a plan at $75 a month for 2GB (1GB per line) which would be more than quadruple their max usage, but half the price. I got in touch with Mike, told him about the details of the plan, explained that Sprint could switch him back to an unlimited plan if he really wanted and that with Sprint, they never charge overages, just throttle data speed, and asked if he’d be interested. He took us up on it, we made the switch, I had them drop the plan another $15 because he’d been overpaying for so long, and he was set! So, that worked out to savings of $1,212.88 a year, forever, essentially.”

Lesson learned: “Always look closely at your plan. Just because it might have been the right plan for you when you signed up doesn’t mean it’s the right plan for right now. For Mike, he was paying for way more than he needed for way more data than he ever used. For every year that he kept that outdated plan without calling in, he was paying a $1,200 convenience fee. It never hurts to double check if there might be something smarter out there!”

OK, now onto the explanation. I intially wrote the below as a separate entry, but I feel it’s more appropriate to attach it here.


Click to read the NY Times story.

Click to read the NY Times story.

Great! The New York Times picked up on my new BillFixers Files monthly feature last week.

Not as great: The Times’ headline described the BillFixers as “ethically ambiguous.”  That’s a pretty negative phrase which conjures up images of compromised politicians.  As in, “Well, what they are doing isn’t illegal, but … ”  It’s pretty heavy language, and I’ll let you decide how you feel about the characterization.

I feel a need to explain as I’m continuing my BillFixers Files series.

You might recall the two brothers who started a business negotiating consumers’ bills for them, and keeping half of whatever “winnings” they can obtain. Customers who are beaten down by endless hold times and neglectful customer service agents are happy to split their savings with the Julian (26) and Ben Kurland (23). In fact, the pair have been so successful that they’ve had to hire staff.

Last month, I announced a regular feature where the BillFixers give away their secrets (for free!) through the lens of one consumer’s success story. Happy endings!

Plenty of folks have picked up on their story since then (and others had written their business earlier, too). Ron Lieber of the New York Times was even more industrious: He traveled down to Tennessee to see the BillFixers boys work their magic in person.  And he picked up on something the rest of us did not:

The Kurland brothers and their workers impersonate consumers when calling companies on their behalf.

I did not know that.  If I did, I would have questioned them on it.

In fact, I did question them: during an initial interview, I asked the brothers if they ever had any trouble working with companies as a third party; they simply said no.   I should have expressed more incredulity at that, though I know firms often allow authorized parties to do this kind of “acting on behalf of” account interaction. I was more interested in getting to the nitty-gritty of how they do what they do so you, my readers, could learn from it.

This is a reporting error on my part and I feel badly about it. More substantively, how should you feel about it? And  what does the law saw?

Lieber makes his feelings clear.

“Is this legal? Even if it is, are the ethics even remotely defensible?” he says early in the piece.  And later, “I do not endorse the way the company conducts itself when initiating calls.”

I called the brothers after the piece was published to express my disappointment that they didn’t give me a real answer when I asked about calling as a third party; and I asked them for a reaction to the Times story. Here’s what they said:

“It was not our intention to hide it.  We do it every day and don’t even think about it. Like using software,” Ben said.

When BillFixers first began, they did indeed find that companies would insist on speaking directly to account holders.  Sometimes, they’d go to the trouble of conducting conference calls with consumers, or getting added as authorized users.    But that slowed them down; firms often “lost’ authorization forms, and so on.  So they slid into the next step and just started pretending to be the consumers who were their customers.

The technique had its origins much earlier, when one of the brothers negotiated with a Comcast on behalf of his girlfriend and pretended to be her father.  Pretending to be another family member is a fairly time-tested technique for dealing with phone call hassles; the BillFixers have taken this to a new level, however.

They do disclose this impersonation on a (new) frequently asked questions page: “To save you hassle, we’ll just call using your name, but if you prefer a little hassle, you can call your provider and add us as official authorized users.”

They admit some consumers may not realize the BillFixers are impersonating them.  But when they find out, “almost nobody has a problem with it,” Ben said.  They always offer to go the authorized user route, but hardly any consumer takes them up on it.

“(The Times) has raised it as a serious ethical issue. But the only people we are lying to are these big corporations,” Julian says. “I’m not going to come out and apologize to Comcast for this. But I do feel bad about anybody who didn’t realize we were doing it this way.” And they vowed to be more transparent about the technique.

Now: Is this deception illegal?

Long-time readers might recall that I spilled a lot of digital ink writing about “pretexting” about a decade ago: the once-thriving and legally murky business of private investigators lying to phone companies to steal consumers’ phone records and sell them. After a scandal involving Hewlett Packard’s use of such techniques, a federal law was passed making the practice a violation of federal law.  My opinion is that the brothers are not obtaining personal records without consumer permission for sale, so they are not operating in violation of that law. I’m not sure I’d want to do what they are doing and find out, however.

What about the corporations?  Are they breaking some law by misleading companies they deal with? If they are, none of them could tell Lieber what law they’d broken.  And no federal agency had a comment.

Julian is a lawyer, and that means he has professional conduct rules to follow. Can lawyers ethically pretend they are someone else to obtain information? That’s a pretty grey area; but it happens often.  On the one hand, evidence obtained that way would never withstand scrutiny in court.  But does “secret shopper’ calling a firm to see if it is behaving in a  way that is harmful to a client cause for censure?  That would be a complex determination.

Have I ever pretended to be someone I’m not to get information as a journalist? Of course I have. There are rules governing when that’s done, and what to do with the information obtained. But where would we be without hidden camera investigations?

Is what the BillFixers are doing “ethically ambiguous?” By the definition of that phrase, yes.  But it’s such a loaded phrase I think it’s a bit overdone. Getting a big political donation to help grease the skids for an affordable housing project is “ethically ambiguous.”  Taking a shortcut to help consumers save money when dealing with a company that makes billions specifically by erecting as many obstacles to consumers as it can?  Some could argue that’s just re-balancing the scales a bit.

I don’t like the shortcut the BillFixers are taking; to grow from a tiny operation into a real company, the brothers will have to change their business model and do things the more annoying way. (Ben, by the way, disagrees. “Our goal continues to be to save people as much money as possible with as little hassle as possible, and it’s our belief that we can grow doing that.”)

I really don’t like that I feel I may have misled you, my readers, and I apologize.

But I also think BillFixers techniques are great and incredibly useful for you, so I’m going to continue with my monthly series.

What do you think?

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Click to read the story at Grow

Click to read the story at Grow

Let’s say you could use some extra cash, and someone offered you a quick-and-dirty part-time gig with OUTRAGEOUS pay. Say …$200 an hour.

SCORE, right?

Well, I’m here to tell you that just about every one of us has a $200-an-hour job lying somewhere nearby, if only we know how to look for it. Welcome to the new Monthly Savings Challenge, which I’m running with my friends over at Grow. Follow along at #GrowSavingsChallenge on Twitter, on this page, or at my Facebook page.

There’s two ways to make more money.  One is to get a raise. The other is to spend less.  Spending less always sounds like a drag, but it actually can be fun. And profitable.  Long-time readers know that I harp a lot on the part of our rigged economy that comes from Gotcha Capitalism; firms overcharge us for services hoping we won’t notice, and knowing that we are all too busy raising kids or taking care of sick parents to join in yet another “Your call is important to us” stare off. So we just pay.

There’s plenty of good reasons to do this.  It’s not worth an hour of your time and the increased blood pressure to get back a $3.99 late fee.  But I’m here to tell you that often, it is very much worth your time. Back when I wrote Gotcha, I did a study with the Ponemon Institute and we conservatively estimated that the average American loses more than $1,000 annually to nickel-and-dime fees.  At the same time, Consumers Union guessed it was more like $4,000 per household.  Either way, that’s real money.

Here’s the key. If you could spend 60 minutes right now wrangling a better cell phone or cable deal and save yourself just $15 a month — that’s nothing — you would have just earned $180 over the next year.  I know some of my readers do pretty well, but very few of us can afford to turn down a $180-an-hour side gig.  Of course, the more you save, the more you’ll “earn.”

I’m really excited to start  this project, which I’ve had on my mind for some time.  Every month, I’m going to offer advice on how to cut one of your bills.  Hopefully, you’ll try it and share your success stories on Twitter at #GrowSavingsChallenge, or on other social media.  By the end of the year, we’ll have a whole calendar of happy endings…and maybe $1,000 or more in your pockets.  And then we’ll start all over again. All I need is 60 minutes of your time and a little stick-to-it-ive-ness.  We’ll start with your cell phone. Here’s the top of my piece at Grow…click the image to keep reading.  Or, just call your cell phone company right now and start bargaining!

Click to read the rest of the Savings Challenge at Grow.

Click to read the rest of the Savings Challenge at Grow.

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Click to read the report

Click to read the report

Even under normal circumstances, racial discrimination can be hard to spot. Identifying discrimination in car purchases and loans is particularly challenging, however – auto dealers don’t have to log the ethnicity of borrowers, and car loan terms are often bargained as part of a complex transaction.

Still, the Consumer Financial Protection Bureau promised to be aggressive about making sure that minorities had equal access to credit when buying a car, and back in 2013, it threw the book at Ally Financial, formerly General Motors’ lending arm. The agency said racial minorities were routinely charged higher interest rates than whites, costing 235,000 consumers an extra $300 or more during the life of their loans. Ally settled the allegations without admitting wrongdoing, and agreed to pay $80 million to consumers for damages.

Disbursing those “refunds” is a challenge, however, because neither Ally nor the CFPB knows which consumers belong to a minority group. Recall that, unlike mortgage applications, auto loan applications do not collect ethnicity.

(This story first appeared on Credit.com. Read it there.)

Back in 2013, to calculate the potential number of victims, the CFPB used a fairly new and controversial method: it made educated guesses based on an algorithm known as “Bayesian Improved Surname Geocoding.” By plugging criteria such as surnames and home ZIP codes into a formula, the CFPB was able to calculate the likely ethnicity of the borrower. (UPDATE: Toyota Motor Credit has settled a similar case with the CFPB.)

This technique was criticized when it was used to estimate total victims to calculate the settlement. Now that it’s time to send out money (checks were supposed to start mailing out in January), criticism has grown much louder.

On Jan. 20, the Republican-led House Financial Services Committee released a report ringing the alarm bell that some non-minorities will receive payouts from the settlement fund.

“Sending remuneration checks to white borrowers as a means of remedying alleged discrimination against African-American, Hispanic and Asian borrowers is an unorthodox approach to fair lending enforcement, to say the least,” the report says.

Committee Chairman Jeb Hensarling (R-Texas) went further, saying the CFPB-designed method for sending out checks “invites fraud on a massive scale.”

In a statement, the CFPB said it is aware of the criticism. It declined to answer follow-up questions.

“We are reviewing the report from the majority staff of the House Financial Services Committee,” agency spokesman Sam Gilford said. “The CFPB’s goal has been, and continues to be, the elimination of illegal discrimination. Discrimination in auto lending has resulted in minority borrowers being unfairly charged higher interest rates on their loans. We will continue to fairly and consistently enforce the Equal Credit Opportunity Act to ensure borrowers harmed by discrimination receive the relief they deserve.”

The disbursement controversy revolves around what to do with consumers that the algorithm is unsure about – a group of nearly 200,000 borrowers. For those consumers, Ally has been directed to send a simple “opt-out” notice – the consumer is told to respond only if she or he is not a minority. Consumers who do nothing will later receive a check. [Update: The CFPB declined to use an “opt-in” procedure for this group, which would have required consumers to affirmatively reply to the notice, confirming their minority status. The CFPB did use an “opt-in” procedure on consumers with a lower probability of minority status, but did not require them to sign an oath or supply any kind of affirmation.]

Not surprisingly, using that approach, only a tiny fraction – 0.46% – opted out of receiving disbursements. Hensarling believes that means non-minorities will receive checks, and has asked U.S. Attorney General Lorretta Lynch to suspend distribution of the money.

“It defies logic for federal agencies to distribute settlement funds without first verifying the eligibility of prospective recipients, particularly when the Bureau’s case is premised upon a flawed statistical analysis,” Hensarling wrote in a letter to Lynch.

The committee says internal CFPB documents claim that the opt-in method would have reduced the number of victims receiving checks to somewhere between 36,000 and 143,000, rather than the 235,000 expected by the CFPB.

“The Bureau employs a remuneration process designed to achieve political ends notwithstanding its acknowledgement that funds will be distributed to ineligible recipients. In this respect, the Bureau does a disservice to legitimate fair lending investigations undertaken by federal agencies,” the report concludes.

The House Financial Services Subcommittee on Oversight and Investigation promised to hold a hearing on the Ally issue in early February.

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Photo caption: Tiffany Doyle, left, with sister Brittany Meda at her wedding. (Rennard Photography)

Tiffany Doyle, left, with sister Brittany Meda at her wedding. (Rennard Photography)

Call them the invisible victims of the housing collapse: The millions of homeowners who’ve spent nearly a decade dutifully making mortgage payments on homes worth less than the balance of their loans. Known as “being under water,” many in this crowd were never in danger of losing their home. But that doesn’t mean they didn’t suffer.

Tiffany Doyle, 44, was one of them. She bought her two-bedroom townhouse outside Seattle for a very reasonable $289,000, well within her means. But her timing was terrible. She pulled the trigger in 2007; very near the market’s peak. When the recession hit, her townhouse’s value plunged all the way to an estimated $220,000.

You might think as long as Doyle could keep making payments on the mortgage everything would be fine. Wrong. After the bubble burst, her company was acquired by a New York-based firm. To get ahead — or at least to feel secure in her position — she’d have to relocate to New York. But that wasn’t possible.

“I could not even consider moving,” Doyle said. If she did, she would have lost much of her life savings paying off the balance of her loan after her townhouse sold. Meanwhile, she also knew declining the move might put her future prospects with the firm at risk. “I remember feeling trapped. I thought I was making a move towards a better financial stability and then the market dropped out from under me.”

Doyle’s story was repeated across the country during the depths of the recession — it’s the kind of thing I am chronicling in The Restless Project. Homeowners who are under water often can’t sell their homes, meaning they can’t move for job opportunities — or at least they end up long-distance renting or living as split families. They also can’t obtain home equity loans or refinance, since their homes have no equity, but relief may finally have arrived.

Real estate data firm RealtyTrac says the number of “seriously” under water homes fell dramatically in 2015 as housing prices around the country continue to recover from their 2008-2009 lows. At the end of 2015, there were 6.4 million U.S. homes at least 25% under water. That’s roughly 11.5% of all homeowners with a mortgage. While that sounds like a lot,  it’s down from 7.1 million at the end of 2014 — 12.7% of all homeowners with a mortgage — and down from 18.8% at the end of 2013.

Doyle fits this profile neatly. Her townhouse is now worth an estimated $267,000 — still well below what she paid, but since she’s made several years of payments, she’s reasonably close to break-even. In other words, her mortgage is no longer a financial anchor around her neck.

“It was only a few months ago when I saw the value of my house start going up, and I did immediately feel more free and a huge sense of relief,” she said.

Even in the hardest-hit areas, relief is coming, though more slowly. In Florida, for example, 19.8% of mortgage holders are still seriously under water, but that’s compared to 24.7% last year. In Arizona, the number fell from 16.1% in 2014 to 14.3% in 2015. In Georgia, it fell from 19.2% to 14.1%, according to RealtyTrac.

But of course, there are still millions of homeowners struggling with the same situation Doyle recently escaped. For them, relief might still be many years away.

“Over the past three-and-a-half years, the number of seriously underwater properties has been cut in half, but we continue to deal with a long tail of seriously underwater properties, and it will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” said Daren Blomquist, vice president at RealtyTrac.

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Click to read my story on Grow from Acorns.

Click to read my story on Grow from Acorns.

Middle-class struggles — the kind I am covering in my Restless Project — are now front and center in this year’s presidential election . And whatever you think about his ideas, Bernie Sanders deserves credit for sharpening the spotlight on those struggles. Whether his ideas — which are unquestionably radical — can survive a presidential campaign, let alone interaction with Congress, is a very open question.

Last week, I wrote a piece for Grow / Acorns about the Republican candidates and what the impact they might have on your wallet if elected. This week, I wrote about the Democrats for Grow.  Again, it’s a brief overview. But if we spend the next several months talking about issues like student loans, health care reform, family leave and the financial industry, that can only be good for America. Feel free to posts links to stories or data sources you feel add something to the discussion.

Sanders and Clinton are on the same side of many issues — but on most, Sanders goes quite a farther than his chief rival.

On the minimum wage, for example, Clinton says she supports an increase to $12 an hour; Sanders supports $15.  Clinton’s “New College Compact” would make community colleges free. Sanders “College for All” Act would make all public colleges and universities free.   Clinton wants to improve Obamacare by allowing the federal government to negotiate with drug companies for lower prices.  Sanders wants to replace Obamacare with a “single-payer” system, similar to covering all Americans under Medicare.

Sanders has some other radical ideas, too. He has said he would like to cap credit card interest rates at 15 percent, for example.

Perhaps his most radical idea, however, is his willingness to raise taxes — even on the middle class.  Both Clinton and Sanders support family leave.  Sanders’ FAMILY Act would give family members 12 weeks of paid leave to stay home with a newborn baby or a sick relative.  Sanders would pay for it by adding a payroll tax to all Americans’ paychecks, estimated to be $1.38 per week for the average worker and employer.

“I think that’s a pretty good investment and I would hope every candidate running for president of the United States would be a strong advocate of this legislation,” Sanders has said.

Clinton supports similar benefits, but says she would make only the wealthy pay it — she rejects the notion of a payroll tax, saying middle class families don’t need a tax increase. Instead, she’d “ask the wealthiest Americans to pay their fair share.” Previously, she has said “middle-class” includes households earning up to $250,000 annually, suggesting only those earning more would pay for a fund to cover family leave costs.

To learn more about Sanders and Clinton’s ideas on health care, taxes, students loans, etc.,  please click over to my story at Acorn’s new personal finance site, Grow. 

If you’d like to try Acorns, use my referral code by clicking on this link and you’ll get a $5 bonus deposited into your account. BIG DISCLOSURE: I will get $5 also if you use my referral code.  

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Javelin Strategy & Research

Javelin Strategy & Research

U.S. consumers have finally been liberated from archaic technology that used to protect them and their credit cards from identity theft. Millions of Americans now have chip-enabled credit cards.  And now the results of this sweeping change are in.

Just as many consumers were hit by ID theft last year – an estimated 13 million.

And in fact, a more serious type of ID theft — new account fraud — actually doubled last year.  It’s too soon to know why, the switch to chip cards is the likely culprit, say the folks at Javelin Strategy and Research, which just released its annual Identity Fraud study on Tuesday.

(This story first appeared on Credit.com. Read it there.)

“Fraud is changing in a way that makes it more dangerous,” said Al Pascual, director of fraud and security at Javelin. “There is some troubling news, but some good news, too.”

Chip credit and debit cards, also known as EMV cards, make creation of counterfeit credit cards nearly impossible for identity criminals. Fraud rings used to take stolen account data from big retailers like Target and print the account numbers onto fake credit cards for use by criminals. But that route is growing extinct as EMV use grows. So those criminals undertake other frauds, such as using stolen Social Security numbers to open up brand new credit cards in victims’ names.

“With the much-anticipated U.S. shift to EMV well underway, fraudsters are transitioning along with consumers,” the Javelin report said. “This drove a 113% increase in incidents of new account fraud, which now accounts for 20% of all fraud losses.”

New account fraud had declined for the past three years.

The results aren’t a big surprise; plenty of experts predicted that EMV wouldn’t end fraud, but rather shift it to other forms. It also doesn’t mean the shift to EMV was a mistake; it does mean that, as criminals move to other forms of crime, bankers and retailers have to react.

Avivah Litan, a fraud analyst at Gartner, thought it was too soon in the ongoing switch to EMV for such a dramatic impact on new account fraud levels. But clearly, fraud is changing, she said.

“I definitely see a huge increase in identity hijacking for one reason or another,” Litan said.

In the meantime, there are new headaches for consumers. Detecting new account fraud and recovering from it is much more complex than disputing fraudulent charges on an existing card.

The Javelin report also found that victims of data breaches are now more likely to become victims of fraud than in the past. Last year, 1 out of 7 breach victims were hit by fraud; this year, the odds increased to 1 in 5.

Pascual said he wasn’t surprised by that finding because database thefts in 2015 often involved Social Security numbers and other personal information — think of the Anthem health care database theft — rather than merely credit card information, as in the Target and Home Depot thefts.

“We had been projecting this kind of change. But it was compounded by the fact that last year was a big year for theft of sensitive information. There were 64% more Social Security numbers exposed in 2015 than 2014,” he said.

Not surprisingly, victims of Social Security number data theft were dramatically more likely to suffer new account fraud — 4% of Social Security number theft victims versus 0.6% of the general public, Javelin said.

The news isn’t all bad. The overall amount of fraud continues to drop, from $23 billion in 2010 and $16 billion in 2014 to $15 billion last year. And the amount of existing card fraud dropped from $9 billion to $8 billion last year, the report said.

But in another shift expected by the financial industry, so-called “card-not-present fraud” — fraud where a physical card need not be presented, like online or telephone shopping — overtook point-of-sale fraud, Javelin said.

The banking industry isn’t sitting still. To combat increases in card-not-present fraud, merchants and banks are slowly turning toward digital token-based systems that would do for online transactions what chips do for in-person transactions.

But that shift is slow, so the usual advice to consumers is even more imperative this year: Check credit card statements every month for fraudulent charges, and check credit reports at least once each year for signs of new account fraud. You can get your credit reports for free at AnnualCreditReport.com and you can get your credit scores for free every month on Credit.com.

In the cat-and-mouse game played by thieves and the financial industry, things might get worse for consumers before they get better.

“Criminals have to find a way to get paid,” Pascal said.

The annual Javelin study of ID theft victims is in it 13th consecutive year. The firm surveyed 5,111 U.S. consumers in 2015 and has surveyed 64,000 respondents since 2003. The study is independent, the firm said, but funded by LifeLock Inc. 

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Stu Stull

Stu Stull

When you think Ohio, you probably think Cleveland, and you might think Cincinnati. Almost certainly, you don’t think Columbus, but here’s a secret: Ohio’s capital city is larger than its more famous neighbors to the north and south. In fact, it’s the largest U.S. city to make Credit.com’s top 10 most affordable cities list. By some measures, it’s larger than Denver, Seattle, and Washington, D.C. And yet, it doesn’t feel crowded, said native Stu Stull.

“Best thing about Columbus is the ease of getting around and not having to waste time waiting for everything like Chicago, Washington, LA and other cities,” said Stull, 58. “There are no hour-and-a-half waits for dinner, no looking for 10 to 15 minutes for a parking space or waiting in traffic for way too long.” Except for college football Saturdays, of course.

(This story first appeared on Credit.com. Read it there.)

Stull was born and raised in the central Ohio city. He left briefly for Texas, but returned years ago and never looked back. A city employee, his mortgage on a small 3-bedroom house with a garden and screened-in patio eats up only 20% of his income.

“I can get downtown in half an hour and I am 10-plus miles away. Pro football, basketball, and baseball are within a two- or three-hour drive,” he said. The NHL’s Columbus Blue Jackets are right in town. “Concerts, like the Rolling Stones last year, and other entertainment comes here often.”

The Columbus economy weathered the recession better than many Midwest towns, thanks to its status as home of The Ohio State University and state government. But Columbus has a thriving private sector, too. Plenty of financial firms are located there — inexpensive housing helps keep labor costs down — like JPMorgan Chase, PNC Financial and Nationwide Mutual Insurance. It’s also a haven for fashion, and home to firms that operate Victoria’s Secret, Abercrombie & Fitch, and other well-known brands.

The Columbus economy was recently projected to possibly overtake Cleveland by 2018, according to the Columbus Dispatch.

Stull, who is a graphic designer and a part-time musician, said Columbus is still a place with a strong middle class.

“My experience when traveling to other cities is that life is easier here,” he said. “Most people are not living like a Kardashian no matter where they are.”

Columbus also has both old-world charm and hip hangouts. The historic district, German Village, makes drivers slow down with cobblestone streets. They should slow down anyway to see the gingerbread-like homes built by German immigrants who settled the area. The neighborhood is also home to one of America’s best independent book stores, Book Loft. Meanwhile, the Short North, near the city center, is a busy strip full of high-end restaurants and local pubs; it has the feel of an outdoor festival during every football weekend.

Columbus has its critics, of course. The winters are gray, and some residents lament that it’s a bit boring compared to coastal cities like New York. But with a median home sales price of around $117,000, perhaps there’s enough money left over for frequent trips to the Big Apple.

Stull might be a bit biased, but he said the music scene is surprisingly robust.

“It is a place without the extremes of other places,” Stull says. “To quote native James Thurber, ‘Columbus is a town in which almost anything is likely to happen, and in which almost everything has.’”

Life in Columbus, Ohio, by the Numbers

  • Affordable Cities Ranking: 9th
  • Housing Poor Residents: 30.4%
  • Median Home Sales Price: $117,475
  • Median Household Income: $46,481

The cheapest cities in America, based on percent of residents who are housing poor.




Click on these links to see their stories: Pittsburgh, Oklahoma City, Buffalo and Raleigh

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What do the presidential candidates think of domestic intelligence collection — or spying on Americans, depending on your point of view?  What do they think of Ed Snowden?

We haven’t heard a lot about the NSA or Snowden during the noisy campaigns so far, and that’s a shame. That’s because all the air is being sucked out of the conversation by more trivial concerns, such as Donald Trump’s debate schedule.  But all the candidates have spoken about domestic spying and about Snowden.

As we welcome election season proper, here’s a primer on the candidates’ views.

But first, a few notes: The most remarkable item of note is that Sen. Bernie Sanders voted against the original Patriot Act back in 2001 as a member of the House. He’s part of a very select group who did so.

Second, while some candidates have expressed a bit more sympathy for Snowden’s role as whistleblower, they’ve all called for him to face prosecution for treason. Even Sanders.


Marco Rubio

On Snowden: He “sparked conspiracy theories”

From the Atlantic: “We must also distinguish these reasonable concerns from conspiracy theories sparked by Edward Snowden. This man is a traitor who has sought assistance and refuge from some of the world’s most notorious violators of liberty and human rights.”

On domestic surveillance: (The Washington Post) Those who voted for the Freedom Act, like Ted Cruz, put America at risk by making it harder to gather intelligence.

Ted Cruz

On Snowden: His opinion seems to have grown harsher over time

In 2013, he said (TheHill.com): “If it is the case that the federal government is seizing millions of personal records about law-abiding citizens, and if it is the case that there are minimal restrictions on accessing or reviewing those records, then I think Mr. Snowden has done a considerable public service by bringing it to light.”

More recently, he said: “Today, we know that Snowden violated federal law, that his actions materially aided terrorists and enemies of the United States, and that he subsequently fled to China and Russia,” he continued. “Under the Constitution, giving aid to our enemies is treason.”

On surveillance: (The Guardian) Cruz has defended his Senate for the USA Freedom Act, which clarified the NSA’s metadata telephone records collection pogram

Donald Trump

On Snowden: He’s hinted that he’d lead a charge to return and execute Snowden.

“I think he’s a terrible traitor, and you know what we used to do in the good old days when we were a strong country? You know what we used to do to traitors, right?” Trump said on Fox. 

On surveillanceI tend to err on the side of security, I must tell you,” he has said (TheHill.com).  “I assume when I pick up my telephone people are listening to my conversations anyway, if you want to know the truth… It’s a pretty sad commentary.”

He also said he would be “fine” with restoring provisions of the Patriot Act (TheHill.com) to allow for the bulk data collection.


Hillary Clinton

On Snowden: He should ‘face the music’

(The Atlantic) “He broke the laws of the United States… He could have been a whistleblower, he could have gotten all the protections of a whistleblower. He chose not to do that. He stole very important information that has fallen into the wrong hands so I think he should not be brought home without facing the music.”

On surveillance:

Clinton voted for both the 2001 Patriot Act and the 2008 FISA Amendments that extended NSA data collection capabilities.  More on her views at The Atlantic.

Bernie Sanders

On Snowden: “I think Snowden played a very important role in educating the American public … he did break the law, and I think there should be a penalty to that,” Sanders said (HuffingtonPost.com). He went on to say that the role Snowden played in educating the public about violations of their civil liberties should be considered before he is sentenced. On the other hand, this mildly Snowden sympathetic story is posted on Sanders’ senate webpage.

On surveillance:

Sanders voted against Patriot Act in 2001 as a member of the House of Representatives.  Later in the Senate, he voted against the 2008 FISA Amendments.

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