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In light of the following story (BW March 28, 2005, page 35) it is
probably advisable to use one personal credit card for your
trader expenses, rather than a credit card issued in the name of the
entity (or as is more likely - a business card issued with the
entity name on it, but guaranteed by you as the owner). Simply
earmark one of your personal credit cards to be used 100% exclusively
for your trading expenses. Use different credit cards for all of
your personal expenses.
http://www.businessweek.com/magazine/content/05_13/b3926048_mz011.htm
Forget
Those Comfy Old Rules About Fraud
Way back when most banking transactions were conducted at a teller
window or with a checkbook, the rules governing who was liable for
losses from fraud were simple. Customers
who had their checkbooks stolen weren't liable for the loss if a thief
used them to write hot checks. Similarly, as credit cards took hold,
consumers were legally on the hook for just the first $50 in
unauthorized transactions.
But in the digital era -- where electronic purchases, payments,
and fund transfers can move around the globe at the speed of light --
consumers are learning that the old rules don't always apply.
Depending on how fraudsters gain access to your account or use your
identity, banks may not always absorb the losses. Fraud victims
who have wrangled with banks say this is particularly true with
unauthorized debit-card transactions or mysterious electronic
withdrawals from bank accounts.
Banks still absolve consumers of any losses from the fraudulent
use of credit cards -- even months later. Most also now waive even
that modest $50 payment. That's not the case for business cards,
though. Federal laws that limit user liability apply only to
consumers -- and most banks make corporate customers assume far
more liability for cards issued to their employees. Their reasoning:
Employees may not treat a business card with the same care as their
own, since it isn't their money.
What's more, while many banks indemnify consumers from fraud
involving debit-cards and electronic funds transfers, that's far from
universal. Under federal law, banks can hold consumers liable for the
first $50 of losses from cases reported within two days, and up to
$500 in losses going back 60 days. And consumers who wait more than
two months after receiving a statement to report fraud may be out of
luck. Banks are under no obligation to reimburse them.
That was the experience of John S. Watson, a NASA engineer in
Santa Clara, Calif., who discovered in early 2003 that $7,600 had been
transferred the previous fall from his Bank of America account to an
Internet-based payment service. BofA refused to reimburse Watson,
saying his claim was outside the 60-day window. So Watson took the
bank and the payment service to small-claims court, where a judge
ordered both to make him whole. "I had always thought that 'money in
the bank' meant your money was safe," Watson now says. BofA declined
comment.
While many banks say they reimburse customers for any unauthorized
transfers or withdrawals from their checking accounts, that isn't
always the case -- particularly for businesses. Consider Joe
Lopez, who with his wife owns a computer-parts distributorship in
Miami. Last April, Lopez says he discovered a mysterious $90,348 wire
transfer from his Bank of America account to a bank in Latvia from
earlier that morning. Lopez immediately notified BofA, which in turn
alerted the U.S. Secret Service. When the feds examined
Lopez' PC, they discovered it had been infected with a Trojan virus
called CoreFlood that helped hackers get his password.
Lopez says when he asked BofA for help, the bank refused --
arguing that Lopez was at fault for not using antivirus software
robust enough to detect the Trojan. In February, Lopez sued the bank.
"I'm not afraid to go up against BofA," he says. For its part, a BofA
spokeswoman says, "[we intend] to vigorously defend ourselves." Lopez'
experience is a cautionary tale about the importance of antivirus
software. And it also serves as a reminder that in cyberspace, it's
every man for himself.
The following story (BW June 30, 2008, page 30) says that credit
granting agencies are looking at what consumers spend their money on.
It is
might be advisable to use one business ID credit card for any odd
expenses that could hurt the credit rating of the cord holder.
http://www.businessweek.com/magazine/content/08_26/b4090030423218.htm?campaign_id=rss_daily
Your Lifestyle May Hurt
Your Credit
Lenders may be monitoring your bar tab or marriage counseling
bill—which could be costly for consumers Most borrowers know a late
payment or high outstanding balance can hurt their credit. But what
about frequenting a massage parlor, retreading a tire, or visiting
a marriage counselor? Such activities count, too, according to a
suit filed by the Federal Trade Commission in federal court in Atlanta
on June 10 against card issuer CompuCredit.
Lenders, insurers, and other
financial firms use credit scoring systems to make a host of decisions
about consumers, including the interest rate on their mortgages, the
limits on their credit cards, and the monthly premiums for their auto
coverage. Some rely heavily on FICO, a three-digit score developed by
Minneapolis-based financial firm Fair Isaac, while others use
proprietary models developed by statisticians. But companies don't
disclose what's baked in to their formulas, leaving many borrowers to
wonder which factors determine their financial fate. The FTC suit
against Atlanta-based CompuCredit for allegedly "deceptive" marketing
practices offers a rare look inside the opaque business of credit
scoring. It reveals a mechanism that consumer advocates and
politicians have long suspected exists—one in which purchasing
behavior, not just payment history, matters.
The allegations, in part, focus
on CompuCredit's Aspire Visa, a subprime credit card for risky
borrowers. The FTC claims that CompuCredit didn't properly disclose
that it monitored spending and cut credit lines if consumers used
their cards at certain places. Among them: tire and retreading shops,
massage parlors, bars, billiard halls, and marriage counseling
offices. "The company touted that cardholders could use their credit
cards anywhere," says J. Reilly Dolan, assistant director for
financial practices at the FTC. "What they didn't say was that you
could be punished for specific kinds of purchases." The Federal
Deposit Insurance Corp. is also seeking $200 million in penalties from
CompuCredit in the matter.
It's not the first time
CompuCredit has come under scrutiny from authorities. In 2006, the
credit card issuer and another financial firm agreed to fork over
$11million to consumers and reform its marketing and billing
procedures as part of a settlement with then-New York Attorney General
Eliot Spitzer, who had launched a probe the year before after
receiving various consumer complaints.
CompuCredit maintains that the
FTC's lawsuit is without merit, and defends its practices. "Every
time a consumer accesses their credit, a new decision to extend a loan
is being made," says Rohit H. Kirpalani, CompuCredit's general
counsel. "These scoring models are commonplace across the industry."
GAMING THE SYSTEM
With competition increasing,
databases improving, and technology advancing, companies can include
more factors than ever in their models. And industry experts say
financial firms increasingly are looking at consumer behavior, as
CompuCredit did. The worry is that companies may tweak the credit
scoring systems in unfair or biased ways, weeding out or limiting
borrowers based on race, gender, or sexual orientation. (In the
case of CompuCredit, regulators are taking issue with the lack of
disclosure, not specifically its use of behavior-based scoring.) "We
as consumers should become aware that behavior is used to determine
our creditworthiness," says consumer advocate Karen Gross,
president of Southern Vermont College. "What CompuCredit portends is
the [use] of information to create a more robust and potentially
nefarious credit scoring system."
http://www.BankRate.com
http://www.CardRatings.com - Credit Cards
http://www.DebtSmart.com
http://www.BadCreditCards.org
http://www.BadCreditCards.org/Database.htm
Export-Import Bank:
http://www.exim.gov
FDIC: Federal Deposit Insurance Corporation:
http://www.fdic.gov
Federal Reserve System:
http://www.federalreserve.gov
Office of the Comptroller of the Currency:
http://www.occ.treas.gov
http://www.helpwithmybank.gov
http://www.mortgagesfinancingandcredit.org
U.S. Department of Commerce:
http://www.stat-usa.gov
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WARNING: Avoid unscrupulous credit granting agencies.
Even if you
have one of those promotional rates, you can still get burned.
Promotional rates are only as good as the legal and moral honesty of the bank standing
behind them. Getting locked into a high balance and low rate and
then having that rate ripped out from under you during a bank buy-out or
for any number of other quazi-legal or illegal methods means you need to
retain a lawyer to enforce your rights... in other words you lose
because the cost for the attorney exceeds the illegally assessed costs.
Notwithstanding this, it has been said that the following credit cards
should be avoided entirely, because they are not honest lenders - rather
they are experts at trickery and deception, locking their prey (that's
you) into high interest rates and high fee obligations. As
you try to fight for your rights the bank often will actively seek to
destroy your credit rating score to obtain more leverage against you:
Metris Companies (the sub-prime lender) and related cards including:
- Direct Merchants Credit Card
Bank (unlawful
business practices)
- Discover Card (since September
2005)
- The GM Card (since August
2005)
- HSBC Bank (since August 2005)
- Banco Popular North America
(since July 2000)
- Mercantile Bank National
Association (since September 1997)
- Metris Direct Services, Inc (deceptive
business practices)
- Fraud Alert Services (deceptive
business practices)
- Beneficial Finance
- Household International
- Alamo Cycle Plex :: American
Blinds and Wallpaper :: Apache Honda :: Arnold's Furniture :: Art Van
:: Bally Total Fitness :: Bedroom Expressions :: Bedroom Super Store
:: Best Buy :: Bose :: Bowflex :: Builders Square :: Carpeteria :: CC
Bill.com :: Climate Control :: CompUSA :: Costco :: Culligan :: Dana
Buchman :: David's Bridal :: Denver Matress :: Dominion Furniture :: E
Bay account processor :: Elisabeth :: Ellen Tracy Outlet :: Fators
Motorcycle Sales Inc :: Full Throttle Motorsports :: Furniture Row ::
Furrows :: Gateway :: Galyan's Trading Company :: Gardner-White ::
GMAC :: Good Guys :: Guitar Centers :: Hattiesburg Cycle :: HealthCare
:: Heilig Meyers :: Helzberg Diamonds :: Home Base :: Home Show Canada
:: HP Shopping :: John Burr Cycles :: John Lewis :: K Mart :: Kawasaki
:: Kittle's Furniture :: Kodiak Yamaha :: Kragen Auto Parts :: Krauses
:: Levitz :: Lindsay Eco Water Systems :: Liz Claiborne :: Los Andes
Air Systems :: Los Angeles Motor Sports/Sam Ash :: Lowry's Kawsaki ::
Lucky Brand Jeans :: Mac Tools :: McRae's :: Marks & Spencer :: Marlow
Furniture :: Massachusetts Guitar Center :: Menards :: Mexx ::
Mitsubishi :: Mor Furniture for Less :: NamCo :: Nautilus Sleep
Systems :: North Shore Cycles :: Northern Tool :: Oak Express :: One
Source Heating and Cooling :: Oreck :: Parisian :: Payless Cashways ::
Pergament Home Center :: Plunkett Furniture :: Polaris-Sea Doo ::
Powerhouse :: QVC :: Rainbow :: Rainsoft :: Rhodes Furniture :: Rooms
to Go :: Ruby Gordon Furniture :: Saks including Saks Fifth Avenue -
Saks Off 5th - Parisian - Proffitt's - McRae's - Younkers -
Herberger's - Carson Pirie Scott - Bergner's - Boston Store :: Sam Ash
:: Saturn :: Sears Home Improvement :: Seamans Furniture :: Selfridges
:: Sleep Better :: Sleep Number Bed System :: Sound Advice :: Sound
Track :: Sun Valley Water Beds :: Suzuki :: The Brick :: The Goodguys
:: The Home Place :: The Powerhouse :: The Wiz :: Tony's Cycles ::
Toshiba :: Transamerica :: United Furniture Warehouse :: Waitrose ::
West Coast Motor Sports :: Wolf Furniture :: Yamaha :: --- Some
merchants are out of business. A few changed financing
Consumers with questions or
complaints about credit card registration and protection services are
encouraged to contact the NY Attorney General's office at (800)
771-7755.
http://www.oag.state.ny.us/
Consumers with complaints about banks may also contact the USA Office of
the Comptroller of the Currency (OCC) at 202-874-4700.
http://www.occ.treas.gov/ but
keep in mind that this is a gov't bureaucracy and the bank's experienced
legal dept responses will frustrate your complaints.
Popular FOIA Requests
http://www.occ.treas.gov/foia/foiadocs.htm
If you are a whistleblower
seeking to start a
qui tam lawsuit brought under the False Claims Act, see
Phillips & Cohen LLP
http://www.classcounsel.com/publications/developments.html
DeMando v. Morris, 206 F.3d 1300 (9th Cir. 2000). Plaintiff received a
solicitation letter from Capital One Bank in June 1995 that stated: "Receive
a 10.9% Lifetime APR!" and "Simply Transfer $250 or more to your
Capital One card and receive a low fixed APR of 10.9% for life!" In
August 1997, Capital One mailed to plaintiff a Notice of Change in terms
informing her that her APR would be increased to 14.99% effective
October, 1997. Plaintiff filed a complaint alleging violations of
Truth in Lending Act (TILA), the California Consumer Legal Remedies Act,
breach of contract, unfair competition, fraud and negligent
misrepresentation. On the very next day, Capital One sent a letter
to plaintiff to inform her that it was voluntarily rescinding the
proposed increase in her APR.
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