How Monitoring Your Kids on Instagram Could Land You in Jail

Instagram is apparently the teen and tween social network of choice. That means parents who want to do the responsible thing and monitor their children’s Instagram accounts may be tempted to demand that their children “hand over the keys” to their accounts. But accessing your child’s Instagram account is — technically, at least — a violation of federal law.

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Midland Funding Robo-Signing Class Action Settlement Struck Down

Under the terms of the settlement reached in several class actions against Midland Funding for its (apparently past) practice of employing robo-signers to execute affidavits for debt buyer lawsuits, each class member would receive under $20 — and that’s it. The Sixth Circuit rightly decided this was unfair (pdf).

Unfortunately, the Sixth Circuit seemed to think the settlement was unfair primarily because the named plaintiffs (i.e., those whose names actually appeared on the complaints) would receive $8,000 plus the elimination of their debts. The class members who opted into the settlement just got $17.38 each, and still owed their debts:

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FTC: 26% of Credit Reports Have Errors, but 95% of Consumers Are Unaffected by Them

It turns out that a comically-large number (26%) of consumer credit reports may have errors. However, 95% of those with errors do not need to worry about them, because those errors do not affect their “credit risk tier.” Or, conversely, only 5% of the consumers with errors on their credit reports were “significant enough” that the consumers affected (about 10 million) might have been denied credit or paid more for it.

Which means there is a good chance that you have errors on at least one of your credit reports (which you should obviously fix), although they probably do not affect your credit.

Of course, being denied for credit or paying more for it are only two consequences of credit reporting errors. Many more people experience other consequences, like incessant calls from debt collectors looking for someone else.

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Elizabeth Warren Comes Out Swinging at Banking Regulators

While there are a lot of people you can blame for the state of the US economy, government regulators are at the top of the list. So it’s satisfying that someone has finally taken them to task. Elizabeth Warren, finally on the Senate Banking Committee where she belongs, had some hard questions for banking regulators yesterday, specifically on why they are happy to accept pennies on the dollar to settle claims against banks.

What she got in response was a lot of hemming and hawing by the spineless regulators in question, none of whom seemed to know the last time anyone took a bank to trial.

I’m a little concerned that too big to fail has become too big for trial.

At Senate Hearing, Warren Comes Out Swinging” (NYT) (via Reddit)

Put Free Credit Scores on Congress’s Agenda

Right now, you have a right to a free credit report, but not a free credit score. That’s annoying, because the score is what really matters whenever you apply for credit. Consumer Union wants to make it easier for consumers to get their score, and is putting in motion a grass-roots campaign to put free credit scores on Congress’s agenda.

So contact your representatives, and let them know you want a free credit score. Here’s where you can find out how to contact them:



The Computer Fraud and Abuse Act May Cost Americans Billions of Dollars a Year

Americans spend nearly $6 billion on digital music every year, and that number is growing fast. That is an already-huge and fast-growing pile of digital things. But there is a problem with all those digital assets. Even though you can take your digital music, movies, and books with you everywhere you go, they are much harder than the physical version to give to someone else.

That is because digital things and physical things are treated differently. When you buy a digital thing, it’s more like you are paying for the right to use it in ways specified by the creator of that thing. When you buy a physical thing, on the other hand, you own that thing. You can sell it, loan it, or give it away. Eventually, we all die and give everything away. Maybe our kids aren’t thrilled to get a complete set of Fleetwood Mac records, but someone else might want them — and be willing to pay money for them.

But you cannot pass on most of your digital assets. Not legally, anyway.

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How a $1,200 Espresso Machine is Cheaper Than a $120 One

It turns out that less-expensive products aren’t always cheaper in the long run, as we found out when comparing a $529 Nexus One to a $199 (on contract) iPhone. The up-front cost is never as important as the ongoing cost.

This holds true even when comparing a $1,200 espresso machine to a $120 one.

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Debt Collector FDCPA Prohibitions Checklist

The Fair Debt Collection Practices Act is basically a checklist for debt collectors, a list of things they must do and things they cannot do. With some regularity, someone actually breaks it up into a list. Consumerist just put together a list of 23 things debt collectors may not do, which includes the obvious:

    3. Use threats of violence or harm;


    5. Use obscene or profane language;

As well as the not-so-obvious:

    17. Use a false company name;


    21. Contact you by postcard.

This list is far from complete, but it is a good place to start. It is also worth pointing out that these prohibitions only apply to consumer debts; they do not apply to business debts. (Via Consumer Law & Policy Blog)

Avoid Refund Anticipation Loans

It’s a new year, and time to start thinking about taxes. Which means it is also time for another warning about refund anticipation loans.

Refund anticipation loans are very similar to payday loans; they are short-term, high-interest loans made in anticipation of future income — your tax refund, in this case. And they are a bad deal.

The best interest rate you can expect from a refund anticipation loan is around 36% APR. That is two or three times the rate someone with decent credit can expect to get from a credit card. But APRs of 100% or more are still common. That means if you paid the loan back in one year, you would actually pay back twice the amount you borrowed.

In other words, the math doesn’t make sense. It is much better to just wait for the check from the IRS.

Should Debt Buyers Have a Higher Burden?

I’ve said as much, and the Minnesota Attorney General thinks so, too. Well, actually, she thinks “a debt buyer should have admissible evidence” to back up its claims. That’s not really a higher burden; it’s what the law requires. Except in cases of default, which is what debt buyers really want, after all.

The reason this is even an issue is that debt buyers often file thousands of lawsuits without the ability to back up their claims. They often have faulty information, and frequently get default judgments, which gives them the right to garnish bank accounts.

The ability to garnish bank accounts is serious. It gives debt buyers the right to freeze money in a defaulted defendant’s account before the court is even aware of the lawsuit. This is too serious to allow without knowing whether or not the debt buyer can even produce evidence to support its claims.