Alabama Consumer Law Blog

Our friend Denise Richardson of givemebackmycredit.com has posted an article about a brand new mortgage assistance program that was unveiled on September 8th. But homeowners who are facing foreclosure or are having to deal with crooked mortgage servicers or policies shouldn't get too excited yet.

Only about 421,000 homeowners managed to get permanent mortgage modifications using the government's mortgage programs. This is an incredibly unimpressive number since 1.5 million homeowners received trial modifications and there were 3.1 million loans eligible for program aid. Most applications didn't qualify for permanent modification because of income restrictions or because they quit making payments even after their loan was restructured.

Through July, the loan modification program called HAMP had cost taxpayers $75 Billion. As misguided as the program has been, it at least had some reasonable income and expense requirements for borrowers. The new program throws those requirements out by incenting lenders to make the same types of risky loan decisions that led to the housing collapse in the first place.

The Obama administration's new big program targets homeowners who currently owe more on their homes than they're worth. Banks will have to reduce the principle loan amount by 10%. Once that agreement is made, then the borrower can't surpass a loan-to-value ratio of 97.5% on their first loan, or a total of 115% on the first and second loans.

Put another way, the government is incenting banks to lend money on homes that still won't be worth the amount owed on them, and then the government will guarantee the loan for the bank. That means that if the borrower defaults on the new loan, the government will insure that the bank takes no further losses by backing the loan with your tax dollars. Borrowers will only need to have a credit score of 500.

Believe it or not, the news gets worse. Part of the new program is targeted at the unemployed. The government is going to take taxpayer money to give the unemployed new loans and then guarantee the banks giving the loans will be insured against losses.

It still gets worse. Banks will also be able to choose which homeowners to allow into the program. This means that banks will be more likely to select borrowers with a highest risk of default or whose loans aren't currently insured for the program. Weathering a 10% loss on the loan is a much better alternative for the bank than losing the entire loan through foreclosure. The bank will naturally select the option that offers them minimal loss.

The program will also artificially inflate housing prices, causing another housing bubble, because it will give homeowners (who are going to lose their homes anyway) several more months of homeownership.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

MyCreditGroup.com has posted a very helpful article that discusses how having bad credit has a negative impact on your financial well being and credit report. Having bad credit can send you into serious debt in the long and short terms unless you look into some options for credit repair.

Here is a list of just a few of the negative effects caused from bad credit:

- Your loan application could be denied. If your credit score is lower than the average, lenders will see you as too risky to lend money to. Your credit score will make it look like you won't be as likely to pay back the loan as someone with an average credit score. Some lenders might not offer you any line of credit at all.

- Creditors and lenders, specifically the ones behind credit cards, view your bad credit with skepticism and will slap you with high interest rates. The interest rates can actually be so high that you end up only paying half of it off on your monthly payment and aren't paying any of the actual debt at all.

- Your insurance company also checks your credit score, meaning you will have higher premiums. Higher premiums are directly related to low credit scores.

- If your bad credit is because of overdue bills, the only thing that can help is paying your bills off. A No Call list only applies to solicitors and won't do any good if you're dealing with debt collectors. The only solution is to pay the bills.

- A bad credit score will very likely affect your apartment hunting. If your credit is low, the landlord is likely to not approve your application until you fix the problem. Or if you do get the apartment it won't be for as good a rate as someone with good credit would receive.

- Buying a new car is very difficult if you have bad credit. Lenders will see you as very high risk and will be quite reluctant to give you a loan for a new car. Those "No Credit, No Problem" advertisements are too good to be true. They might not check your credit score, but the interest rate will be sky high.

- You can actually be denied employment because of a bad credit score. With the unemployment rate being so high, employers can afford to be very picky about who they hire and credit scores are often a deciding factor. In this economy, you don't need to be turned down for a job you're qualified for because of bad credit. Do something to fix the problem!

If you have had problems with debt collector harassment or credit reporting errors and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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Bloomberg Businessweek has posted an article about an inmate who was running a debt collection company while he was incarcerated. Lamont D. Cooper was imprisoned in October 2009 for violating the terms of his release for a drug conviction and continued to run Legal Action Recovery, his debt collection agency. He was "barred from the business" in back in April 2009 for using "threats and intimidation" when dealing with collecting debts, but it seems most of his business was directed toward people who didn't owe any money in the first place.

Karen Freifeld, author of the article, writes that while Cooper was in prison, his employees would pretend to be law enforcement officers when they contacted debtors and tried to scare them into paying, sometimes nonexistent, debts. People were told they would be arrested and put in jail unless they paid immediately; some people actually sent money through wire transfers or authorized the withdrawal from their bank account. About $1.38 million was collected and deposited into Cooper's CMC Recovery Services account.

While this was going on, Cooper was telling his probation officer that he was employed by a financial corporation that bought and sold debt portfolios. He said he made $72,000 a year plus bonuses.

Cooper has been accused of operating a scheme to defraud and can face up to four years in prison. He can also be charged with criminal contempt and be sentenced to an additional year.

If you have been harassed by a debt collector and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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In our articles section of our website we have added a new article that discusses the factors that typically are present when Fair Debt Collection Practices Act case settles quickly.

Here's an overview:

First, the more clear cut the violation the more likely the defendant debt collector will want to settle with you.

Second, the debt collector will want to see if your lawyer is familiar and experienced in litigating these types of cases.

Third, the debt collector will want to know what your attorney's hourly rate is so it can calculate the risk in fighting a legitimate violation.

Finally, and perhaps most importantly, is your attitude towards settlement.

We hope this article is helpful to you and wish the best!

If you have any questions about dealing with debt collectors and you live in Alabama, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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The Wall Street Journal has posted an article about the unexpected dangers of "professional" credit cards, which are typically used by small businesses or corporations. It's a little known fact that professional cards aren't covered under the Credit Card Accountability and Responsibility and Disclosure Act of 2009. The Card Act bars billing practices such as the raising of interest rates at random, inactivity fees and shortened billing cycles.

Professional cards used to only be used by corporate executives and small business owners, but then the Card Act passed in March 2009. Since then, credit card companies have been sending professional card offers and applications to normal consumers. The research firm Synovate found that there was a 256% increase, about 47 million, in professional card offers that were sent out in the first quarter of this year. The Card Act has drastically cut banks' profits and they are attempting to regain some of that loss by bribing consumers with professional cards, and thus bypassing the regulations of the Card Act.

While the Card Act bars issuers from raising rates on existing balances unless a cardholder is at least 60 days late with a payment, there isn't any such prohibition on the Ink From Chase card, one of several business cards offered by the bank. The card agreement says Chase is free to implement a default rate of 29.99% if a customer is late by just one day on a payment.

Chase's Ms. Rossi says its small-business credit cards have "added benefits and features designed specifically for small-business owners."

Holders of Capital One Financial's Business Platinum Card, meanwhile, can see their low introductory interest rates spike if they are just three days late with payment twice in a 12-month period, far less than the 60-day notice period required under the Card Act.

Credit card companies have also simplified their applications for professional cards. For example, in January, Chase sent out applications for their Ink From Chase Cash Business Card that required information such as the name of the cardholder's company, type of business, federal employer ID number, and address. On the July applications there was just a box to check that said Yes, I am a business owner" or "Yes, I am a business professional with business expenses."

Some consumer advocates say the increased mailings, coupled with offers requiring only minimal business information, will lead to more customers ending up unprotected and unaware. "A lot of consumers really don't know the difference, and some of the wording on the offers can be ambiguous," says Beverly Harzog of Cardratings.com, a consumer-education website.

Most consumers don't realize that professional cards aren't covered by the Card Act until they don't get the full 21 days between when the statement was mailed and the payment due date. Despite the significant differences, credit card companies still pitch professional cards as normal credit cards.

If you have had problems with credit card companies and have further questions and concerns, feel free to contact us through our website or by calling 205-879-2447.

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It is not unusual for consumers to find a debt that does not belong to them on their credit reports. When you call the company -- a debt collector or a creditor -- the response is often

"Ok, maybe this is not your debt but if you will just pay it off then we'll get it off your credit reports. And I'll tell you what -- since I'm a nice guy -- we'll let you take 25% off of the amount."

What should you do? Here's our suggestion -- if you don't owe it. Don't pay it.

Click here to read more in our article that discusses this topic of bogus debts being on your credit reports.

We have many free articles on our website that you can read by clicking here.
If you have had problems with being harassed by debt collectors or you have bogus debts on your credit reports and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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Truth-out.org has posted an article how the difficulties of the government instigated mortgage assistance programs were designed to help banks "earn their way back to health." Only a small percentage of homeowners are eligible to receive any assistance, and out of those, very few get any "meaningful assistance." The overall idea of the programs is to lower homeowners' monthly mortgage payments, but doesn't reduce the overall burden.

Often, the burden on homeowners increases because money, that the homeowners could have otherwise saved, is funneled to help bail out banks. The Treasury has recently admitted that all the elaborate mortgage assistance programs were designed to "pump money into big banks and shield them from losses on bad loans"... and at all about helping homeowners. The Treasury's only "serious" program to help ordinary people is really just a sham to help megabanks.

Zach Carter, author of the article, says that:

Treasury Secretary Timothy Geithner has long made it clear his financial repair plan was based on allowing large banks to "earn" their way back to health. By creating conditions where banks could make easy profits, Getithner and top officials at the Federal Reserve hoped to limit the amount of money taxpayers would have to directly inject into the banks. This was never the best strategy for fixing the financial sector, but it wasn't outright predation, either. But now the Treasury Department is making explicit that it was—and remains—willing to let those so-called "earnings" come directly at the expense of people hit hardest by the recession: struggling borrowers trying to stay in their homes.

The program was successful in the sense that it kept the patient alive until it had begun to heal. And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks. Policymakers openly judged HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock. I believe these policymakers conflate, in full sincerity, incumbent financial institutions with "the system," "the economy," and "ordinary Americans."

Here's a rundown of how the Home Affordability Modification Program (HAMP) really works. Homeowners experiencing hard times can apply for relief on monthly mortgage payments through their banks. The banks who have agreed to participate in HAMP have also agreed to do several things to reduce homeowners' monthly mortgage payments, such as lowering interest rates or extending the loan's term. And the bank gets the big benefits because it gets to continue collecting payments on a loan that it otherwise might have lost.

Homeowners don't benefit so much in the long run. Banks only reduce monthly payments, not how much is actually owed. If a homeowner owes more money than their home is worth, it just means that they'll be making payments longer than they were before. Most people get into the program and expect real relief and/or assistance from their mortgage payment. After the three month trial period, homeowners realize the program doesn't really help them and they (understandably) quit.

These borrowers would have been much better off simply finding a new place to rent without going through the HAMP rigamarole. This example is a good case, one where the bank doesn't jack up the borrower's long-term debt burden in exchange for lowering monthly payments.

When a bank agrees to adjust a mortgage payment, they take an upfront loss, but that loss is still a lot less than if the property had been foreclosed on.

If, say, Wells Fargo had taken a $20 billion hit on its mortgage book in February 2009, it very well could have failed. But losing a few billion dollars here and there over the course of three or four years means that Wells Fargo can stay in business and keep paying out bonuses, even if it ultimately sees losses of $25 or $30 billion on its bad loans.

The Treasury is still pushing this program with the ultimate goal of getting homeowners to help giant banks. However, not paying your mortgage can be just as good for the economy -maybe even better- as enrolling in a mortgage assistance program. Think of it this way. Instead of wasting money on modified bank payments that aren't doing any good, homeowners could spend that money at businesses which would generate revenue and encourage job growth.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Fraud is rampant in the mortgage industry -- so often companies are lying about modifications and the net result is Alabama consumers are losing their homes in foreclosures when they never should have suffered a foreclosure.

We have a new article on this subject which explains one option you have when you have been the victim of fraud by your mortgage servicing company. You can also read our other articles here for free.

If you have any questions and you live in Alabama, feel free to pick up the phone and call us at 205-879-2447 or fill out our online contact form if you would like for us to call or email you.

The Washington Post has posted an article about the growing problem of debt tagging. Debt tagging is when debt collectors relentlessly contact a consumer about a debt, the problem is that the person being contacted doesn't owe the debt. Sometimes this is because debt collectors confuse two people with the same name and contact the one who doesn't owe the money. The debt can even show up on the wrong person's credit report. Sometimes it's intentional, such as calling a wrong number constantly to try and pry information from whoever answers. They can then take that information and use it to convince the person that they owe a debt they really don't.

With the economy being so poor, people are exceptionally mindful of anything that could harm their credit score.

The FTC said it recognizes that third-party collectors contact millions of people each year, and it receives more complaints about the debt-collection industry than about any other.

In its 2010 annual report on the Fair Debt Collection Practices Act, the FTC said it received 119,364 complaints about third-party and in-house debt collectors in 2009, up from 104,766 the previous year. To be sure, people who receive mistaken calls from debt collectors don't always report anything to regulators. In Hughes's case, he contacted fraud resolution specialist Identity Theft 911 to help repair the damage to his credit report. He said he hasn't heard from collectors since.

Mark Sciffman, a spokesman for ACA International- a credit and collection trade group- said the FTC doesn't separate consumer complaints from inquiries and his agency has worked with the FTC to try and get more "clarity on its complaint data," but it hasn't happened yet. He says complaints should be taken very seriously and they always work with consumers to resolve them.

J. Reilly Dolan, assistant director of the FTC's Division of Financial Practices in Washington, said his team made a point of bringing the CBCS case.

"It's not an isolated incident," Dolan said. "We want a case out there to make sure everyone understands it's not acceptable." He said the FTC expects to continue challenging such practices.

Kristin Mack Deuber, a spokeswoman for CBCS, said that the FTC's allegations involved activities that took place years ago, from 2005 to 2007, and the settlement didn't necessarily constitute a finding or admission by the company that it violated the law.

Experts say that tracking a debt back to its proper owner can be surprisingly complicated. Creditors can sell their debts to other collection companies, for a fraction of the original value, and don't always include information on who owes the debt. Debts can also be sold several different times, and end up in several different hands, and information gets lost or becomes inaccurate along the way. Things a consumer does, like moving or changing a phone number, throws debt collectors off and results in the wrong people being contacted about a debt.

Those seemingly random connections can pay off for collectors. Some will pursue a person who might cave under pressure. Mark Fullbright, fraud specialist at Identity Theft 911, said CBCS called one of his clients, Molly Harrington, and managed to get her to divulge her Social Security number. Then Harrington, 75, got a bill for $4,197 from an electric company for power at a home in Putnam, Conn. But she was from Chepachet, R.I., and had never lived in Connecticut; someone reported the debt under her name in her credit history early this year.

Fullbright ended up making the phone calls to remove the debt from her file. He said that he was put on hold about eight times. When he challenged CBCS for proof that Harrington owed the money, he said, the collection agency didn't tell him much until he threatened to report them. "I don't know how they let this go on for such a long time," Fullbright said

If you see debts on your credit report that aren't yours, you can dispute them. The credit reporting agency will take the information to the original source to verify the debt. It's up to the creditor to provide proof of the debt. The process takes around 30 days then the corrected credit report is sent back to the consumer. If you're being harassed by a debt collector it's important that you document everything. Send a letter, with delivery confirmation, and inform the debt collector that they are contacting the wrong person and you don't want to be contacted again. If the contact doesn't stop you should talk to a lawyer.

If you have had problems with errors in your credit report or have been harassed by a debt collector and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Fraud is rampant in the mortgage industry -- so often companies are lying about modifications and the net result is Alabama consumers are losing their homes in foreclosures when they never should have suffered a foreclosure.

We have a new article on this subject which explains one option you have when you have been the victim of fraud by your mortgage servicing company.

If you have any questions and you live in Alabama, feel free to pick up the phone and call us at 205-879-2447 or fill out our online contact form if you would like for us to call or email you.

You can check out all of our free articles here.

The Bankruptcy Law Network has posted an article which gives some good information that you should know prior to filing bankruptcy. When you file any chapter of bankruptcy, you are required to list all debts you may have as well as your assets. Failing to list everything can have very serious consequences, such as being guilty of perjury.

According to Douglas Jacobs, the writer of the article, all of your debts have to be listed, regardless or not if you want the bankruptcy to include a certain credit card or other obligation. Once everything is listed, there's no law that says you are obligated to pay the debt back, but you can if you want to.

There are two ways to repay someone after you have filed for bankruptcy. The first is to simply pay what you can when you can. You can also sign a "reaffirmation agreement," which is basically a contract that is filed in bankruptcy court that legally obligates you to make regular payments of a designated amount. This does away with discharging the original debt and you are required to pay it. Signing a reaffirmation agreement is usually a bad idea, you should consult with a bankruptcy attorney before doing so. Why would you want to reinstate a debt after it has been discharged?

If you have interest in filing bankruptcy and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

In this article we explain five of the major benefits to suing under the Fair Credit Reporting Act (FCRA):

1. Forcing the credit reporting agencies to do the right thing and fix your credit reports;
2. Recover actual damages to compensate you for your losses;
3. Recover attorney fees from the credit reporting agencies and furnishers;
4. Recover punitive and statutory damages when you have faced intentional or reckless conduct; and
5. Let the bureaus and furnishers know that you will not be abused -- instead you will stand up for your rights.

We hope this article is helpful to you. We also have a FAQ on the FCRA that may answer some of your questions. But if you live in Alabama you can always pick up the phone and call us at 205-879-2447 or contact us through our website.

If you or your friends or family have suffered through an improper and wrongful foreclosure, and you are wondering if maybe it is too late to do anything about it, take a few moments and read this article. It is not necessarily too late and you may have more options than you realize.

The Bankruptcy Law Network has posted an interesting article about a loophole that debt collectors in Minnesota have found to throw debtors in jail...a modern day debtor's prison. Debtor's prisons were officially banned in the US in 1833, meaning the only debt that will land you in jail is if you fail to pay taxes or child support. Just being behind on bills will not lead to jail time.

But debt collectors in Minnesota seem to have found a loophole and have successfully used imprisonment (literally or just the threat of it) as a debt collection tactic. Jonathan Ginsberg, author of the article, outlines how it works:
-The debt collector files a legitimate lawsuit on a delinquent debt
-If the consumer doesn't repsond, the debt collector will get a default judgment from a court of law.
-The debt collector will file post-judgment interrogatories and requests for documents to be produced that will ask the consumer to provide detailed information about his income and any available assets.
-If the consumer still doesn't respond, the collector will request a state hearing where the consumer must appear.
-If the consumer doesn't appear, the collector can request that an order of contempt of court be issued (specifically leading to incarceration) and let the judge set bail.
-When the consumer puts together bail money, the debt collector seizes that money to collect on the debt.

This technique has been especially popular among debt buyers – those who purchase old debt for pennies on the dollar. As reported elsewhere on this blog, there are many instances where the alleged debt is so-called “zombie debt” in which the statute of limitations for collections ran months or years previously, or it is debt that has been bought and sold so many times that there is no proof tying this debt to the defendant who was sued.

This is just another tactic debt collectors are using to take advantage of American consumers.

If you have had problems with being harassed by debt collectors and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Mortgage companies and the lawyers they keep busy complain in court that they have "No reason to ever lie about the foreclosure sale date" and our numerous lawsuits against them for doing this are crazy.

First of all, I'm not sure how a lawsuit can be crazy. But I do know that what the mortgage companies do is very calculated. Very deliberate. It is done with an eye towards the enormous profits that can be gained. It is done by closing their eyes to the havoc these abusive mortgage companies are creating in our communities.

OK, but why do they do this?

Its all about the money.

Read this article to find out more about why these mortgage companies do what they do in lying about the foreclosure date being suspended or postponed or cancelled.

D Magazine.com has posted an article about a recent lawsuit against a debt collection company that revealed some startling (and not to mention illegal) practices that were going on behind the scenes.

Allen Jones filed a suit in 2008 against the Pennsylvania-based debt collection company Advanced Call Center Technologies, specifically including Alonso Rodriguez and Carlos Olivia- two of the company's former employees, after receiving harassing phone calls over an $81 debt that he claimed to have already paid. The calls used excessive profanity and threatened physical violence against Jones as well and his wife. The lawsuit included various violations of consumer protection laws on debt collection such as:

invasion of privacy, intentional infliction of emotional distress, deceptive trade practices, and—against ACCT only—negligent hiring and supervision of one of the two employees.

After failing to settle in mediation, the case went all the way to trial, which surprised Jones'

During the two-week jury trial, Malone and Frenkel presented a series of witnesses, each seemingly more damning than the previous one. They played videotaped depositions of four former ACCT employees (they were not parties to the litigation), who testified about a workplace gone wild, where debt collectors got high, made fun of debtors while they were on hold, and derisively referred to black debtors as “crows.”
attorney, Mark Frenkel, because of the overwhelming evidence against the collection agency.

One of the collectors, Carlos Olivia, originally denied making the harassing calls but later changed his story and said that it was "hard for him to shed his prison mentality while working for ACCT." He was imprisoned for about 6 years total for drug related offenses, assault, and a DWI. However, after supervisors at ACCT found out about it, Olivia still kept his job. He is no longer employed with the agency, but Malone says that there is “no evidence that either defendant was terminated as a result of the allegations or the lawsuit itself.”

The jury showed no sympathy for Olivia, Rodriguez and ACCT and ruled in favor of Jones by awarding him with $50,000 for mental anguish, $143,000 in attorney fees, and $1.5 million in other damages. This case should serve as a reminder to companies to be careful who they hire and to lay down ground rules that illegal harassment tactics will not be tolerated. Consumers should also learn from this case that if you are being illegally harassed by debt collectors, you can take action and remedy the problem.

If you have had problems with being harassed by debt collectors and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

USA Today has posted an article that discusses how you can help your college-age child to build a healthy credit score. Thanks to a new law that was put into effect last year, credit card companies are barred from issuing cards to people under 21 unless they can prove they are able to make the monthly payment. This is designed to prevent college students from going so far into debt that they won't be able to pay it back and will be penalized by having difficulty with things like getting an apartment or qualifying for a car loan...and even getting a job.

Even if your child is under 21, you as a parent can still help them build a positive credit history. Here are some of the ideas Sandra Block, the author of the article, mentions:

-You add your child to your current credit card as an authorized user.

By doing this, you are still responsible for the card's payments, but your child can use the card. If your child misuses the card you can have them removed as a user before too much damage is done. When you make payments, it will show up in the child's name too, and help them build a good credit score.

However, there are some downsides. If your child racks up a massive bill, or you lose your job, and you can't possibly afford to pay the bill, both of your credit scores will suffer. Another problem is the limit of available credit. If you have had your card for awhile you can have close to $10,000 for your credit card limit. Parents need to consider if their child is responsible enough to wisely handle that much of a credit limit before adding them as an authorized user.

-You can co-sign a credit card with your child.

The card will be in the child's name, but you will also receive monthly statements and the credit limit cannot be raised without your approval. Because the card is in your child's name the limit will most likely be a good bit lower than your credit card, limiting the damage they can do.

But if your child can't make the payments, as a co-signer, you are responsible for paying. If there is a late or missed payment, or if your child goes over the credit limit, it will also reflect negatively on your own score. Also, you and your child would share control of the account...meaning that you can't close it without your child's permission. Because of this, it's generally a much better idea to add your child as an authorized user to your own card.

"If you put your student on your existing credit card as an authorized user, you have full control of that card," she says. "If Junior doesn't abide by the rules, I don't want to be asking his permission to close the card."

-Find out if your child can qualify for a credit card.

The card may have a very low limit, but sometimes students with part time jobs may be able to qualify for a credit card without a co-signer.

-Get a debit card for your child.

Debit cards won't help your child develop credit but it will help you monitor their spending and teach them how to handle money responsibly. Teaching money management is a good first step to assure that when your child won't go crazy when they get a credit card.

If you have had problems with your credit score, such as reporting errors, and have further questions and concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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We are often asked "What do I actually say in my dispute letters to the credit reporting agencies when I have errors on my credit reports?

We realized that we have not given specific enough suggestions on this and so we wrote an article that we hope will be helpful to you if you are like so many Alabama consumers who are facing false information on your credit reports.

Take a look at this article on credit report dispute letters and if you have any questions please pick up the phone and call us at 205-879-2447 or contact us online.

The Los Angeles Times has posted an article about a recent case of identity theft that involved Mr. Donald Bren, a wealthy and well known real estate mogul in Orange County, California. He has been ranked as the 45th richest man in the world, the 16th richest American and is estimated to be worth $12 billion.

In a truly bizarre twist, what seems to have happened is that a man (who looks nothing like Mr. Bren) walked into a branch of East West bank, opened accounts in Bren's name and then deposited a $1.4 million tax-refund check that he had somehow managed to steal from Bren. The thief used $1.1 million of the check over the next few weeks.

He used a fake driver's license and Social Security number to open the accounts, and even put "smoke shop" as his occupation. The identity thief didn't mention Bren's job has the chairman of Irvine Co., which is a massive land development company, and over the next few weeks proceeded to transfer money to account-holders of outside banks. Authorities are still working on finding out who controls the accounts.

If you have had problems with identity theft and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below: