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Pre-2008 Posts

When Fraud and Thuggery Are Something Different

I read an article in the business section of one of the local papers the other day which described the way people who have the money can “buy” good credit for themselves.  The story was about a real estate mortgage broker in Florida who wanted to buy a $400,000 house but could not qualify for a low-interest mortgage because he had a few dings on his credit.  The solution to his problem was to pay a credit broker $1,800 to add him as an “authorized user” on credit cards belonging to persons with stellar credit.   This way, the stellar payment history would show up on his credit report, boosting his credit rating so that he could qualify for the mortgage loan he wanted.  Evidently, it costs $900 to buy a spot as an “authorized user” on one card, and more for each additional card.  There is no risk to the person with the stellar credit, because his actual account number and personal information is kept private and there is no way the buyer can use any of the credit cards; however, all of the buyer’s information is made available to the person selling his credit. 

Evidently the brokering of credit histories is such a booming business, people with good credit have been able to retire and live on what they earn selling their FICO score.

Then, I was going to blog about an article I read in which two doctors reported having received death threats for objecting to the FDA approving a new drug for prostate cancer.  The doctors said they were concerned that the drug was not safe and the impression I got was that they were being harrassed by thugs paid by the pharmaceutical industry.  Wow, thought I!  What a story about patriarchal medicine and Big Pharm!

Upon further investigation I learned that (1) neither of the doctors had actually provided evidence of the death threats; (2) one of the doctors was heavily invested in research and production of a competing drug.

So much of this kind of fraud, dishonesty, and scamming of the system goes on every day.  It’s the reason the rich stay rich, the powerful stay powerful, those on top, stay on top.  When poor people engage in the “borrowing” of credit, it is called “identity theft.”  If they had had some money, they could have bought it and it would not be criminal at all.  When poor or marginalized people threaten one another over money or valuables, it is called “racketeering” or they are imprisoned as gangland criminals.   When doctors do it, they’re just playing hardball.

Discussion

13 thoughts on “When Fraud and Thuggery Are Something Different

  1. Identity theft is slightly different: the practice you described is only meant to boost a low credit score while still using your own name, etc. As you said, the person being added as an “authorized user” is not privy to any personal information: no damage can be done to the original cardholder. In an identity theft, this information is stolen and used fraudulently. Often huge amounts of debt are run up for the victim and it can take years for the person whose identity is stolen to recover.

    Besides, if one has a good credit score, why can’t they profit from it?

    Posted by Katherine | June 14, 2007, 10:47 pm
  2. While yes, there are differences, if you look closely, they aren’t so great as you (generic “you”) might imagine.

    Leaving aside the situation in which someone gets credit in someone else’s name and then doesn’t pay the bill (which is clearly theft) say, as often happens, someone uses someone else’s name to get credit, but pays the bill on time every month. In that case, money is not being stolen. Just someone’s credit history. Which is fraud. But if you’ll read this link:

    http://www.komotv.com/news/national/7822957.html

    mortgage bankers say that to buy someone’s good credit is also to commit fraud because when people apply for a mortgage, they swear or affirm to those making the decision on the loan that they are not omitting information that is pertinent to their getting a loan (like that they actually have bad credit, and that their apparently good score is something they bought.)

    I think that people can and do profit — big time! — from having a good credit score. Sheesh, do they ever. Without selling the things! But I also think there are all sorts of reasons for having a good credit score besides being honest and responsible, and all sorts of reasons for having a bad credit score besides being dishonest and irresponsible. I think to cash in on your good credit score is often to cash in on someone else’s misfortune, in the same way that “offering” pay day loans and other kinds of predatory lending cashes in on others’ misfortune. I think it is to participate in system that rewards the affluent at the expense of the poor, all the while shoring up a system that consistently does the same thing by rewarding affluence (whether obtained dishonestly or honestly) and penalizing poverty and misfortune (which often have nothing to do with dishonesty or irresponsibility.)

    Of course, where credit ratings are sold, the seller has agreed to sell. There’s a global difference between that and having someone steal your name to establish credit. At the same time, fraud results, either way, and the selling of the good credit score deepens the inequities which already exist in a capitalist economy.

    And btw, there is a move underway to end the practice of credit piggybacking. It is described in the link in this comment.

    Heart

    Posted by womensspace | June 14, 2007, 11:13 pm
  3. “Besides, if one has a good credit score, why can’t they profit from it?”

    Because a credit score is meant to gauge your own credit worthiness, not someone else’s.

    It would be like saying that it’s fine for someone with clean urine to profit from selling their urine to someone who has drugs in their system so they can submit it as their own and pass the test.

    Both are fraudulent, whether it’s stolen or bought.

    Posted by manxome | June 15, 2007, 12:11 am
  4. I would agree completely Heart. Obviously, I am but one anecdote amoung many personal accounts but when I left my husband about 4 years ago he declared financial war on me. Despite having an income of 80k per year he defaulted on everything.

    At the time I was making a mere 11.00 hourly and trying like hell to keep the credit in good standing. I held onto the losing battle for months while he simply walked away from the entire mess.

    Ultimately my credit was ruined and still is because, despite a court order, he refuses to pay the credit cards he took out in my name and that continues to haunt me. However, he, with his 80k a year managed to buy a brand new car because he simply showed up with gobs of cash.

    It’s amazing what flashing cash will do to your credit score *wrysmile*.

    At one point, I actually broke down on the phone, sobbing and crying to the debt collector because they were calling me all day. I explained the situation to her, told her that I had just left a 10 year abusive marriage and that he was playing financial war with me. I explained everything in a gush of tears, her response?

    “Maybe you should of thought about that BEFORE you signed the agreement”

    Needless to say I was even more devastated at her response than I had been before. Here, I was busy feeling guilty for not being able to handle every bill from an 80k a year marriage on about 20k and he was buying brand new cars because he had enough cash to flash.

    Ahhh well, I’ve since given up worrying too much about it. However, I never answered the phone again from that company and didn’t try to speak with them about it again.

    Posted by bitingbeaver | June 15, 2007, 12:17 am
  5. Yeah, bb, and there are *so* many women who share your predicament! 😦
    I was thinking more about this. You know, I think that it would actually great if all people were progressive, first of all and got together and deliberately subverted the credit rating system by sharing around all the stellar credit ratings. HA!! For FREE!

    That would be great! 😀 Deliberately make credit ratings worthless. 😛

    Because very little disturbs me as much as the way now women can’t even get work if they’ve been in a situation like bb, can’t rent an apartment, can’t get credit.

    What bothers me about this is the *selling* of the credit rating to people who can pay for it at $900 and up. What that does is, again, ensure that the comparatively wealthy — wealthy by any means, including crime, dishonesty, whatever — continue to have access to mortgages, credit, jobs, etc., whereas the poor, people struggling for reasons beyond their control, medical bills, dental bills, accidents, exes who don’t pay support or deliberately ruin a woman financially, as many do, sink deeper and deeper into trouble, can’t get jobs, credit, a place to live, when in fact, they are *honest* and *responsible* and would pay their bills.

    Heart

    Posted by womensspace | June 15, 2007, 3:03 am
  6. It’s a crock of crap. My x got lazy with support payments again around the holidays last year. As a result my fucking house went into foreclosure by ONE day. Literally. For 10 years I paid on time, every single month, I was never late.

    After kicking the x out I’ve been struggling with it. The court decided that he shouldn’t have to help me refinance it, that I should do that on my own (that’s a whole other can of worms). In any case, I was keeping in constant contact with the mortgage company as the situaiton with the x progressed.

    My payment for October was sent on November 14th. They received it on the 16th but the home went into foreclosure on the 15th. I got it out of foreclosure but I’m being crushed under an enormous house payment for another year.

    After that I have no clue how or if I will ever be able to get it refinanced.

    In the meantime, the x still refuses to pay any of his bills, even the ones the courts ordered him to pay, and, because he has cash, he can BUY good credit!!!!!

    Talk about a slap in the face. Heart, this article has just pissed me off so badly I can scarcely stand it. He’s got plenty of cash and never has to pay a damned penny. During the marriage he took out numerous cards in his name as well as two credit cards in my name. When I kicked him out he transferred ALL of the balance from HIS credit cards onto my credit card.

    Ultimately he was ordered to pay those bills but that doesn’t stop the creditors from coming after me for the money. They keep saying that the cards were in my name therefore I am completely liable for it. Even though the courts ordered him to pay them.

    My credit is so destroyed that I couldn’t get a bank to let me borrow a frigging toothpick and that prick can go out and buy credit while defaulting on everything and doing his level best to get me out of the house.

    Some days it just seems to damned much *sigh*

    Posted by bitingbeaver | June 15, 2007, 4:26 am
  7. By the way, I LOVE that idea about subverting the credit card ratings hehe. Of course, that requires sacrifice on the parts of lots of individuals.

    You know, I had simply forgotten my lessons from my first marriage. That lesson being that credit, just like all the other things that we are told will give us ‘security’, is as fickle as the rest.

    I was reminded of that lesson after I kicked out husband #2…I think that this time it’s a lesson I will not soon be forgetting.

    Posted by bitingbeaver | June 15, 2007, 4:29 am
  8. You know, BB, if women don’t start coming together to do just that kind of thing, i.e., subvert the credit rating system, I don’t know that there is a lot of hope for us. At some point we are going to have to move in solidarity in ways that speak and make a real difference, that can’t be ignored.

    I am so sorry for all you’re having to deal with. So many of us have had to go through this, me too! When I left my second ex, my magazine got put out of business, of course, by the Religious Right. The money stopped coming in, but the work increased. There I was, by myself, nine kids, out in the sticks, business failing, and my ex makes off with the contents of all three bank accounts and the van.

    He returned one bank account (only when the bank manager said charges would be filed) but not the other two. So I went into court and the judge said he had one month in which to provide receipts or show what he had done with the money. He stalled and stalled, there were delays and delays in the hearing, when it was finally heard, he produced a handwritten list showing what he had supposedly done with the money, no receipts, then said he “didn’t have a bank account.” I never saw any of the money, it was never returned. Not to mention though I had all the kids, all the bills, the failing business, and he was retired (and had been for years, took an early retirement), I had to pay HIM $1,000 per month “spousal support!”

    !!! I am not joking!

    My house went into foreclosure, as well, I went through the whole forebearance thing — ohmygod, I KNOW how that hurts and how hard it is! Talk about trying to draw blood from a turnip! — and all sorts of other stuff happened. My car was burned to the ground in a mysterious fire. It was an older car, but it was special to me because it was the FIRST CAR I HAD CHOSEN FOR MYSELF. I had gone to the car dealership, found the car I wanted, plunked down the cash, got it in my name. (Which I had to do because my ex, who again, did not have any of the kids and no job, had taken the van.) Anyway it caught on fire and burned up and because it was older, I didn’t have comprehensive insurance on it, so I was just out a car.

    I couldn’t get a job, of course, because I HAD a job– my failing business– not to mention nine kids, the youngest of which were 4, 6, 8, 10, and 12, who had always been homeschooled. Not to mention I hadn’t been out in the job market for *years*, I’d published the magazine from home. And I had zero references because I was excommunicated and all my friends and publishing colleagues were shunning me!

    I don’t really know how I survived all that stuff, remembering it now. But your telling me what you are going through, BB, brings it all back up again.

    By the time my divorce was final, my magazine was finished. I owed thousands of people money for unfulfilled subscriptions and advertising. I had no job. My ex was ordered to pay $261 per month child support for seven minor kids (which he hasn’t paid for three years.) He disappeared, then, moved across the country and in with his sister and had nothing to do with the kids for 11 years, then showed up and wreaked havoc and caused untold heartache and grief for a little over a year, recently, and now he’s gone again.

    At least he didn’t bash my head in with a lead pipe like my first ex did!

    But yes, BB, you’re so right, we forget, we want to forget, we don’t want to have to go through it all again.

    Sigh.

    Heart

    Posted by womensspace | June 15, 2007, 4:54 am
  9. Speaking of what legally should be, but isn’t yet, fraud, this link is an absolutely outrageous example of it.
    “At the close of the G-8 Summit in Germany last Friday, leaders of the world’s richest countries reiterated their commitment, first made in 2005, to cancel all of the debt owed by the world’s poorest countries. However, so-called “vulture funds,” or companies that buy up third world debt at rock-bottom prices and then sue the countries for the full value and more, are undermining any promises of debt relief…
    “GREG PALAST: Goldfinger paid just three million dollars for some old Zambian debt, but eventually sued Zambia for 55 million. Worldwide, Goldfinger and fellow “Vultures” are suing desperately poor people for more than two billion dollars.”
    http://www.gregpalast.com/vultures-continue-to-pick-africa-clean/
    Un-fuckin’-believable

    Posted by Pramiti | June 16, 2007, 3:00 am
  10. Sorry about that, my name had a typo…. -_-;;;

    Fixed!

    xxxooo
    🙂

    Posted by Pramiti | June 16, 2007, 3:01 am
  11. Hopefully the original post will re-appear from spam-land soon…

    Posted by Pramiti | June 16, 2007, 3:02 am
  12. Here is a Youtube video of the actual investigative report.

    (1 of 2)

    (2 of 2)

    How is this legal??!

    Posted by Pramiti | June 16, 2007, 3:26 am
  13. There is no risk to the person with the stellar credit, because his actual account number and personal information is kept private and there is no way the buyer can use any of the credit cards; however, all of the buyer’s information is made available to the person selling his credit.

    this is actually not true. i work in the credit card division of a major bank that issues credit cards. an authorized user can (and has) called, looking for accounts on which their name appears, and i go looking for the accounts on their behalf. when i find them, the authorized user has legal access to them. most just want me to delete their names because the primary account holder has bad credit, and is dragging down their credit score.

    but as an authorized user, they can not only ask that their name is deleted from the account, but they can also request that i send them a new card, so long as they can provide a certain level of verification.

    from my perspective, this is an extremely risky practice, and at some point, the primary account holder can get seriously burned. an authorized user can legally make charges on the account, but is in no way, shape, or form, legally responsible for repayment. and since by allowing the authorized user to be placed on the account, they are, in effect, authorizing them to use the card.

    i would never, ever, put someone on my card as an authorized user who i didn’t know and trust completely.

    Posted by nexyjo | June 17, 2007, 6:56 pm

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