Search This Blog

Thursday, October 05, 2006

A Problem Worse Than Unsolicited Credit Cards

The Check’s In the Mail

If you carry any credit cards at all, you must be receiving those pesky convenience checks that urge you to take advantage of some promotional offer that probably includes low interest rates. They are tied in with the card’s “Available Credit” you have, plus your “Available for Cash” amount. The checks arrive either in their own solo envelope—usually an extra-special come-on—or they piggy-back with the monthly statement.

Endless Cornucopia

I have been saving my supply for the last several months just for this post—actually you should shred them, not just tear them in half and throw in the trash—to see just how many our family would receive. They come from Chase, Discover and American Express, and we were actually shocked at how many we had accumulated. Just over one-hundred for the year. An average of 8.5 per month. That’s eight times each month our family is ripe for identity theft. It can happen, and it did.

Innocent Victims

The folks it did happen to—not us—were on vacation, with a relative house-sitting. They had one of those rural type mailboxes out front, and apparently the mail was not retrieved from the box each day. The night raiders—it was thought to be an organized gang—swooped through the neighborhood, and, voila, found the unfetched mail. Discover called the family—Chase did not—when they observed uncommon activity on their card. Chase was also notified.

The Good News and the Bad News

The good news is that there was no monetary loss, since the credit card companies assume most of the liability in these cases. The bad news is that the ID thief, when stopped by the police, had a driver’s license in the name of a member of the victim family. The female culprit had multiple licenses in her possession, thus, the assumption this was a crime ring. Although they hope to have confiscated all the fraudulent materials, there is no guarantee. Especially when it is an organized effort.

New Procedures Needed Now

I checked my inventory of unsolicited checks, and there is no information provided that would allow the recipient to opt-out of receiving these checks. Several years ago, it was made illegal to send unsolicited credit cards in the mail; still, they constantly shower us with unsolicited credit card offers that are almost as dangerous, although you can opt-out from those. Convenience checks need similar regulation, and Beth Givens, Director and Founder of Privacy Rights Clearinghouse, has urged the Federal Reserve Board to do just that.

In comments to Jennifer Johnson, Secretary, Board of Governors of the Federal Reserve System, Ms. Givens, along with representatives from the Electronic Privacy Information Center, and US Public Interest Research Group, submitted a proposal to modify Regulation Z of the Truth in Lending Act (TILA). That was March of 2005.

Regulation Z is the part of the TILA that controls disclosures of the terms of credit offers, and procedures such as opting out. As of this date, the group has had no response, but does have hope the issue is under consideration.