April 27, 2007

He Thought They Just Wouldn't Notice

Haven't you ever wished the bank would make a mistake and through some glitch deposit about a hundred thousand dollars in your account? And then never find out? Tell me you've never thought about that! Anyway, that happened to George Costanza, oops, I mean George J. Costa of La Vista, Nebraska. More than $106,000 was deposited in his account between August 2006 and February 2007 after a bank employee mixed up account numbers. What did Mr. Costa do? He spent most of it. What's happening to Mr. Costa now? He's being charged with felony theft.

Does Mr. Costa owe the bank the money? Almost certainly. Will he be convicted of theft? That's a much tougher call, but I definitely wouldn't like to be in Mr. Costa's position. Mr. Costa's lawyer said: "If somebody sticks money in your pocket and you spend it, you can't be convicted of theft." I'm not sure that's what happened here, but good luck. At least there's an argument to be made.

Mr. Costa probably would have a better chance of escaping a conviction if he hadn't spent the money on lottery tickets. Ok, I'm kidding on that one!!!!!

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April 24, 2007

Indiana's "In God We Trust" License Plates Challenged

Indiana car owners shouldn't be surprised, but Indiana's "In God We Trust" license plate has been challenged in court. Actually, the fact that there is no extra charge for it is being challenged. Sadly, I'm not surprised. I just wrote about how much I liked the new license plate a few days ago. (Click here to see that blog entry.)

The lawsuit was filed on behalf of Plaintiff Mark E. Studler by the Indiana branch of the American Civil Liberties Union. We'll see what happens, but I don't have a good feeling about the outcome. Tyranny of the minority is how I see it.

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April 19, 2007

Facts About Identity Theft

I received a mailer recently from Equifax. The mailer was selling Equifax's credit monitoring tool called Credit Watch Gold. It had a couple of "Identifact(s)" listed which contained a few statements that made me go "Hmmmm?":

* identity theft is now surpassing drug trafficking as the nations's #1 crime
* there are over 10 million victims of identity theft annually
* the average victim of identity theft spends 28 hours and $5,686 to resolve the case

The mailer cites the U.S. Department of Justice Statistics and the Federal Trade Commission for this information.

While these "facts" are presented as indisputable truth, a little internet research and a little common sense show that they are anything but. LESSON: NOT EVERYTHING PRESENTED AS A FACT IS ACTUALLY TRUTH.

Identity theft is now surpassing drug trafficking as the nations number one crime? Really? Knowing how widespread drug use is in this country, I find that hard to believe. And what about drunk driving? You're telling me that there are more instances of identity theft than all the drunk driving that occurs in this country, even including all the drunk driving that never comes to the attention of police? I couldn't believe it.

I did some research and found nothing to support this statement in terms of number of crimes committed. What I did find was some ephemeral evidence suggesting that for the first time, in 2004, the proceeds from "cybercrime" exceeded the proceeds from drug trafficking. I have no idea if this is true or not, but I do know that "cybercrime" is not equivalent to identity theft. Cybercrime involves a whole host of crimes in addition to identity theft, like corporate espionage, child porn, stock manipulation, and song piracy to name a few.

I don't think it can be called accurate in any sense of the word to say that identity theft is the nation's number one crime.

There are over 10 million victims of identity theft annually? If by "victim" Equifax means consumers, which I think would be the common use of the word and certainly what they are implying, then I'm not buying it. I know identity theft is pervasive, but 10 million is a lot of people. There are just over 300 million persons in this country, so exclude all kids and incompetent adults and you're down to maybe 225 million. Then, subtract from that all the adults who don't have any established credit history and those who don't have credit worth stealing and I think you'd be down to somewhere between 100 and 150 million. So one out of every 10 to 15 people in this country is a victim of identity theft, every year? I just can't buy that.

But maybe I'm wrong. Surprisingly, there is some support out there for this figure. In January 2006, Javelin Strategy and Research co-released its 2006 Identity Fraud Survey Report with the Better Business Bureau. This study found that the number of identity theft victims in the United States was actually decreasing, from 10.1 million in 2003 to 9.3 million in 2005 to 8.9 million in 2006. Well, I might be wrong, but I'm still not buying it. I think they must be including defrauded creditors into this figure as well. But even if this study's finding is accepted as true, Equifax's statement is still wrong.

The average victim of identity theft spends 28 hours and $5,686 to resolve the case? Actually, I can't really quibble with the time but $5,686????? NO WAY. No way, no way, no way. The clear implication of this statement is that the average consumer victim of identity theft spends $5,686 of their own money in order to stop all the collections and to get their own credit report back. Can I say it again? No way.

Now don't get me wrong. I KNOW there are some consumers who spend way more money that that. But as far as the AVERAGE goes, those figures have to be way too high. Remember, consumers rarely lose significant sums of money out-of-pocket as a result of the fraud (most of these losses are borne by the creditors).

Based on the figures I was able to find, it appears that Equifax was confused. The Javelin study I referred to above found that the mean amount per fraud victim (the creditors) rose from $5,249 in 2003 to $6,383 in 2006. Another study found in 2003 that the average loss to businesses from identity theft was $4,800 while the average loss to consumers was $500. That still sounds high to me, but, anyway, it seems pretty clear that the average consumer victim did not spend $5,686 "to resolve the case" as Equifax would have us believe.

Frankly, I can't believe Equifax would make such an obviously false assertion. I should point out that along with credit monitoring, the mailer also indicates that "up to $20,000 identity fraud expense coverage" is included with your membership in Equifax Credit Watch Gold. The false assertion about how much the average identity theft victim spends was obviously made with the intent to sell Equifax Credit Watch Gold. It might very well be a violation of Indiana Code 27-4-1-4, which prohibits the making of an untrue statement in a pamphlet by someone in the business of insurance.

Bottom line:
1. Equifax Credit Watch Gold is probably unnecessary for most consumers, but for some who can afford the $13 a month, the peace of mind might not be a bad deal.
2. Identity theft is a serious problem in the United States.
3. Don't trust everything you read.
4. If you believe you may be a victim of identity theft, click here to find out what to do.

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April 18, 2007

Many Indiana Cars Sporting "In God We Trust" License Plate

If you live in Indiana, or anywhere along the spring break travel route to Florida, you've probably seen quite a few cars with the new Indiana "In God We Trust" license plate. Actually, I've been amazed at how many I've seen. It's almost like it's Indiana's new license plate.

licplate.jpg

I knew that couldn't be, considering the message (a message I wholeheartedly agree with, by the way), but figured it must be a specialty plate. I assumed all specialty plates cost extra money, making it even more amazing how many Indiana drivers were choosing this plate. When I went to the license branch to renew my license plates this week, I found out that it is a specialty plate of sorts, but it's a specialty plate that doesn't cost extra. Apparently, it's the only "free"** specialty plate.

Stupendous. I signed up for the program.

The Indiana Bureau of Motor Vehicles has indicated the plate is doing very well. It sure seems like that on the road, too.

The other "free" alternative is to keep your old plate for one more year. The BMV is currently having an election of sorts for the new standard plate to be issued in 2008. Click here if you'd like to see the four choices and vote. The "In God We Trust" plate is scheduled to be around until 2012.

Frankly, I'm not sure how we got this plate, but I'm sure glad we did. It makes me proud to live in Indiana.

** Calling your license plate "free" in Indiana is so wrong it doesn't need explanation.

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April 13, 2007

Indiana's Lemon Law, How Does It Compare? (Part 2)

In Part 1 of this series, we compared the "reasonable allowance for use" provisions of Indiana's Motor Vehicle Protection Act (Indiana's "lemon law") against Indiana's neighboring states' lemon laws and found that Indiana's lemon law was the least favorable for consumers. In Part 2 of this series, I'd like to compare these lemon laws based on the kinds of vehicles to which they apply.

Indiana law reads:

Indiana Code 24-5-13-5 Sec. 1 5. As used in this chapter, "motor vehicle" or "vehicle" means any self-propelled vehicle that:

(1) has a declared gross vehicle weight of less than ten thousand (10,000) pounds;
(2) is sold to:
(A) a buyer in Indiana and registered in Indiana; or
(B) a buyer in Indiana who is not an Indiana resident (as defined in IC 9-13-2-78);
(3) is intended primarily for use and operation on public highways; and
(4) is required to be registered or licensed before use or operation.

The term does not include conversion vans, motor homes, farm tractors, and other machines used in the actual production, harvesting, and care of farm products, road building equipment, truck tractors, road tractors, motorcycles, mopeds, snowmobiles, or vehicles designed primarily for offroad use.

This definition basically limits Indiana's lemon law to passenger cars, pickup trucks and most vans. Notably, conversion vans and motor homes are specifically excluded.

Illinois law reads:

"New vehicle" means a passenger car, as defined in Section 1-157 of The Illinois Vehicle Code, a motor vehicle of the Second Division having a weight of under 8,000 pounds, as defined in Section 1-146 of that Code, and a recreational vehicle, except for a camping trailer or travel trailer that does not qualify under the definition of a used motor vehicle, as set forth in Section 1-216 of that Code.

It appears that the major difference here is that, in addition to the vehicles covered by Indiana's lemon law, motor homes are included. I can't say for sure but it appears to me that most conversion vans would also be included in Illinois' lemon law.

Michigan law reads:

“Motor vehicle” means a motor vehicle as defined in section 33 of the Michigan vehicle code, 1949 PA 300, MCL 257.33, that is designed as a passenger vehicle, or sport utility vehicle, but does not include a motor home, bus, truck other than a pickup truck or van, or a vehicle designed to travel on less than 4 wheels.

Michigan's law seems to cover mostly the same vehicles that Indiana's law covers, but in Michigan conversion vans appear to be covered and in Indiana they are not.

Ohio law reads:

"Motor vehicle" means any passenger car or noncommercial motor vehicle as defined in section 4501.01 of the Revised Code, or those parts of any motor home, as defined in section 4501.01 of the Revised Code, that are not part of the permanently installed facilities for cold storage, cooking and consuming of food, and for sleeping, but does not mean any mobile home as defined in division (O) of section 4501.01 of the Revised Code, recreational vehicle as defined in division (Q) of that section, or manufactured home as defined in division (C)(4) of section 3781.06 of the Revised Code.

Ohio law is a bit more expansive. It includes passenger cars, trucks and vans, motor homes (except for expressly excluded parts), motorcycles and basically any motorized, self-propelled vehicle that is not construction equipment, farm machinery, or a truck designed to carry more than a ton of payload.

Kentucky law reads:

"Motor vehicle" means every vehicle which is self-propelled, and which is intended primarily for use and operation on the public highways and required to be registered or licensed in the Commonwealth prior to such use or operation; however, "motor vehicle" shall not include:

(a) Any vehicle substantially altered after its initial sale from a dealer to an individual;
(b) Motor homes;
(c) Motorcycles;
(d) Mopeds;
(e) Farm tractors and other machines used in the production, harvesting, and care of farm products; or
(f) Vehicles which have more than two (2) axles.

Kentucky law appears to be slightly less restrictive than Indiana's lemon law; motorcycles, motor homes, and farm equipment vans are all excluded. It does appear, however, that Kentucky would include within its lemon law most conversion vans and some large trucks that might be excluded under Indiana's lemon law because of weight.

CONCLUSION

Again it appears that, with regard to what vehicles are included, Indiana's lemon law is the least favorable to consumers. Ohio's lemon law again appears to be the most favorable to consumers of the states we examined.

This time, however, I can't say I feel strongly that this provision of Indiana law should be changed. I know Northern Indiana has a large motor home and conversion van industry, and so I think it's unlikely this provision would be amended. I'm not aware of a large number of lemon motorcycles in the state either. But perhaps most importantly, owners of these vehicles often have another option besides Indiana's lemon law. The Magnuson-Moss Warranty Act is a federal law that allows consumers to sue to enforce written or implied warranties that were given with the vehicle. The remedies available under Magnuson-Moss can be, depending on the circumstances, just as good as the remedies under the lemon law.

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April 11, 2007

"Car Sharing" - An Idea Destined to Go Nowhere

Here's another way to avoid buying a lemon vehicle. Don't buy a car. Heck, don't even own a car.

On a recent flight back to Indiana, I picked up one of those in-flight magazines. In it was an article about Zipcar.com. Zipcar is a car sharing company. What is car sharing? It involves the online reservation of a vehicle, located in an urban neighborhood, anywhere from minutes to months prior to needing the vehicle. Then you just show up, punch in a code, and drive away. The rates range from 8 to 11 dollars an hour.

It doesn't sound like you get a whole lot of car for that rate, either. The article mentions Mini Coopers, Toyota Priuses, Scion xBs and Honda Elements as some of the primary rental vehicles.

Zipcar, the largest company in the industry, currently has more than 2,500 cars and 80,000 members nationwide. The articles talks about how the companies are bullish on the possibilities of growth in the industry, but I'd be surprised to see this idea ever really take hold in the United States. First, it's only really viable in upscale urban areas with strong public transportation systems. That pretty much eliminates all of Indiana right there. Second, people love their cars. My grandfather always said cars were a "necessary evil," but I'm pretty sure many people wouldn't agree. Your car can be a statement about who you are in addition to providing transportation. And they are FREEDOM.

No doubt cars are expensive, especially when you factor in the cost of gas, insurance, maintenance, parking and other incidental costs. But to most they are worth it.

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April 7, 2007

Indiana Real Estate Appraisers and Agents Apparently Need More Oversight

Indiana Attorney General Steve Carter has issued a press release applauding the passage by the Indiana House and Senate of a measure that would make the Homeowner Protection Unit a permanent part of the Attorney General's Office. The Homeowner Protection Unit was created as an experimental unit two years ago. It's primary target: mortgage fraud. Homes are being appraised for thousands more than their actual worth, and the homeowner typcially doesn't realize they owe way more than the home's worth until they go to refinance or sell the home.

Apparently it's not just a few bad apples in Indiana, either. In less than two years, the Unit has filed disciplinary actions against 211 real estate appraisers and 76 real estate agents. And the Unit is investigating another 750 complaints. In addition to these disciplinary actions, the Unit has also filed a civil lawsuit against a credit repair organization that "purported to provide ‘foreclosure consultant’ services."

The Attorney General said:

“The benefit of the unit is that it allows the relationship between appraiser, real estate agent, and lender to be analyzed in a coordinated way,” Carter said. “Making this Unit permanent is an important step for Hoosiers. We’ve made good strides the last year and a half and want to keep the momentum going. By raising awareness of the Unit, we hope that more people will recognize that there is a place to turn to for help if they believe they have been the victim of, or suspect, questionable business practices by individuals or companies in these professions.”

I agree. It's also important to note that Indiana consumers have a way to pursue compensation for unlawful business practices by licensed real estate appraisers or agents. The Indiana Deceptive Consumer Sales Act applies to sales of real estate, and likely would provide for a private cause of action for many of the acts being challenged by the Homeowner Protection Unit. Unfortunately, though, I'm afraid many consumers will be left out in the cold because, under the terms of the Act, no lawsuit may be filed more than two years after the occurrence of the deceptive act (no matter when the deception is discovered). For those consumers, there would still remain other actions, like common law fraud, but they won't have many of the advantages of suing under the Indiana Deceptive Consumer Sales Act. One of those notable advantages is that the Act provides for the payment of the consumers' attorney fees by the defendant.

If you believe you have been a victim of the questionable business practice of an appraiser or agent, contact the Indiana Attorney General's Office and a reputable consumer law attorney.

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