Sunday, December 28, 2008

Who is Fair Issac? And why are they given free reign to destroy lives?

Everyone blames their own culprit for the current credit crisis. Banks blame “risky borrowers.” Borrowers blame “greedy lenders.” News pundants offer their "expert analysis." Guess-accusations disguised as fact gets bandied about on the early morning news show coffee klatches.

Let’s face it. Banks are out of control. But few are looking at the unregulated source that determines who is credit worthy and who is not.

That distinction belongs to Fair Issac, the shadowy giant responsible for divvying out FICO credit scores.

Personally I think there is something sinister about FICO scores and the company that issues them. Here’s why.

To be honest, one reason is I’m baffled why a friend who declared bankruptcy has a better FICO score than mine. Rather than declare bankruptcy, I decided to pay off my creditors instead. Isn’t that what banks want, people who pay their debts? Apparently not, according to our scores.

I noticed the discrepancy right away. Although we opened accounts at the same bank with the same opening deposit amount, she was given overdraft protection and a host of other perks and I “didn’t qualify.” That was ten years ago.

Today, I make triple her income. I’ve never defaulted on a loan; never declared bankruptcy. I’ve never had my telephone service, cable, gas or electric disconnected. I’ve bought at least five cars over my lifetime, had numerous personal bank loans, and paid thousands over time for electronics equipment, furniture, two houses and more -- all paid as agreed. Yet she regularly gets offers for credit card offers in excess of 20-, 30- or more thousand dollars. If I get one offering me a mere thousand, I’m lucky. Why?

Only Fair Issac knows for sure. Even when I pay my credit balances down to zero, they find reasons to keep my score low.

To FICO I’m a credit risk. To make things worse, the three major credit bureaus can also find unfathomable reasons not to fix erroneous credit reports, even though the experts say that’s illegal.

Banks too, seem to have a vested interest in not fixing errors, all the while blaming “risky” borrowers for problems clearly of the banks’ own doing.

I’d like to be at the head of the line of consumers championing a thorough investigation of the banking industry, especially, Fair Issac, the FICO folks. Fact is, many borrowers who thought they’d be able to refinance their mortgages when their “risky” credit scores got better found themselves stuck when those scores didn’t rise as they expected. Their once single digit mortgage interest rates more than doubled. Suddenly a once fairly reasonable 5 or 6 percent interest loan ballooned to 10, 15 and even 28 percent. Payments soared and the ability to pay them fell out of reach for many. Fast forward to mortgage industry melt-down.

My "risky credit" experience goes like this. Several years ago Citibank unceremoniously charged off my Visa account, even though I was paying on it monthly, in amounts above and beyond what was agreed. How can that be?

Through a series of unforeseen circumstances -- namely I was laid off -- I fell behind in my Visa payments. As advised by the so-experts, I called Citibank and notified them of the situation. I made payment arrangements to get caught up again--thinking it was the responsible thing to do.

Citibank promised they would ‘recycle’ my account current if I agreed to pay $48 dollars a month for four consecutive months. I agreed, and in addition to paying the amount promised, I paid them an extra $60 each month since I found a new job. In the final month of our “agreement” I made a lump sum payment of over a thousand dollars -- paying half of the entire outstanding balance. I also sent them a letter notifying them I’d pay the remainder of the balance in full the next month.

My reward for all of this due diligence? My account was charged off and sent to a collection agency for non-payment. Huh?

The only reason I can figure is, for some reason, my checks always seemed to arrive at Citibank a couple days after the due date, no matter when I mailed them.

I refused to negotiate with the collection agency – okay maybe that was my fault, I agree. Instead I kept my promise and mailed the full payoff amount directly to Citibank. They never cashed the money order.

I discovered that more than a year later, when the charge off was still showing up on my credit bureau report. Luckily I still had the receipt of my payment. I went back to the place I purchased the money order, verified it had never been cashed, then resent the money directly to Citibank and moved forward.

That same year for some reason unknown to me, the IRS decided to put a lien on my house for unpaid taxes…taxes that were already paid both by me and my employer. Rather than pay the disputed amount immediately, I sent proof that the taxes had already been paid by my employer. By the time I got that error straightened out with the IRS, several months had gone by. After realizing the mistake, the IRS subsequently removed the lien. The credit bureau didn’t.

Now back to FICO. To FICO, it doesn’t matter that Citibank decided not to cash my money order or that they charged off my account even though I was paying them exactly what I was asked.

Both the charge off and the lien, of course, showed up on my credit report. On review, I also discovered something on my report I knew nothing about…a charged-off amount of $30 for a cable account I never had. I suddenly realized that a tenant had subscribed to cable service in my name.

Interestingly enough, that tenant subsequently paid the amount in full a few weeks after they had fallen behind. Yet, the time during which they fell behind was showing up on my credit report.

I contacted the company immediately with proof I had never opened the account, never used their service and didn’t owe them a dime. When the company refused to correct the item I also contacted the Better Business Bureau.

I notified all three credit bureaus - Equifax, Experian and Trans-union – about each of the situations above -- repeatedly. I sent proof of the release of the lien, with a copy of the letters from the IRS. I sent statement copies, letters, money order copies and more detailing my dispute with Citibank. I showed proof that I never signed up for cable, and was out of the country when the order was placed.

To date, the fictitious cable account still appears on my credit report. So does the lien, even though I have repeatedly sent copies of the letter from the IRS removing it. So does Citibank, although it shows up as a “paid” charge off.

Every time I contact the credit bureaus to correct the information, I get the runaround. Experian even sent me a letter claiming that although the erroneous cable charge would remain on my report, because of my “request,” they would put a fraud alert on my credit file. Never-mind that I never asked for a fraud alert to be placed on my file or that the cable account in question was closed years ago.

That brings me to today. Recently I discovered a store-card account was 60 days past due. I’ve had the account since I was in college. I turn 51 this week. For some reason the company says I opened the account in 1996, even though I have statements dating back to the 80s (and copies of payment checks dating back into the 70s).

In all the years I’ve had the account it has always had a grace period. Suddenly, as of June, it doesn’t. And now since I consistently paid my bill a few days after the due date, on the 19th instead of the 14th -- like I’ve been doing for more than 20 years -- it’s now seriously delinquent. Huh?

Okay, so I didn’t read the change in terms I got in the mail. If you can read those things and understand them, you’re a better person than me – and I worked in the credit card industry for almost a decade.

I paid the past due amounts, and may now close the account. Meanwhile, my "always pay-on-time-because-of-overdraft-protection" friend who simply declared bankruptcy when she got behind on her debt has a perfect FICO score, while mine hovers somewhere around 400.

What goes into a FICO score? If this number is used to determine every financial aspect of our lives, we should know more about what drives it and what doesn’t.

Isn’t it all completely subjective guesswork, versus being based on scientific evidence? How do we know profiling isn’t part of the equation? Because Fair Issac says so? The potential for abuse here is beyond measure -- just ask those guys in the “free-credit-score-dot-com” commercials.

Come to think of it, why do I have to pay to view something that controls my very livelihood? Why should I pay an annual fee to view something that can determine if I work or not and in some cases, where I can live? Why is it that someone who completely writes off his or her debt can be viewed as more responsible than those of us to work to pay our debts off, albeit slowly and maybe not perfectly? And if a creditor makes a mistake, why do I have to pay for it with a poor credit score?

To me, it seems FICO scores determine who has ready access to excess cash, rather than who is or is not "risky." People who have overdraft protection that covers their checks, regardless of whether or not they actually have the available funds, can always pay on time. They don't have to give a thought to whether or not those funds are currently in their checking accounts when they pay a bill. Additionally people with extraordinarily high credit lines can afford to charge hefty fines, like taxes, and pay them on time, even if if they are incorrect. They can pay them up front, while waiting for disputes to be resolved and the charges reimbursed.

So, risk isn't about who pays or who doesn't. It's about who has ready access to money, and who doesn't. Apparently it's better not to pay your bills at all than to be a few days late doing it.

On television recently I saw a bank commercial that offered a simple solution to fix the current credit crisis: don’t lend to risky borrowers. I have a better fix: let’s do some prying into what makes Fair Issac tick, and why some borrowers are deemed “risky” and others not.

Monday, December 22, 2008

Go, Joe!

Vice President-elect Biden talks with Larry King about the challenges facing the Obama administration.

Monday, November 24, 2008

Friday, October 31, 2008

The Politics of Race

I was watching Chris Mathews last night on CNN's Hardball. Chris was expressing his relief that neither Barack Obama nor John McCain have brought race into the election. According to Matthews, the fact that John McCain refuses to use Reverend Wright as part of his smear campaign against Obama, Mathews believes race hasn't been a factor. He's wrong.

When a recent New York Times editorial accused the McCain camp of racism, Mathews scoffed. But the fact is, racism has run ramphant in this election. It was apparent during the debates. It's a prominent thread running through many of McCain's ads. It has even played a role in, how news coverage is interpreted and disseminated.

Take the issue of experience. McCain's attacks against Obama challenge his alleged "inexperience." Obama served in the Illinois senate for eight years (1996-2004) before becoming a U.S. senator in 2005. That's twelve years....which is more actual legislative experience than Hillary Clinton, who became a U.S senator in 2001, but had no legislative experience before that. How much more experience does he need?

Bush only served eight years, or two terms as Governor before becoming president. Was he called "naive" when he first ran for president? Labeled "inexperienced?"

And what exactly are we talking about? Experience with what? Foreign policy? If that's the gauge then no first-term U.S. president for the past 32 years, save one, has had "experience" before they were elected.

Yet in debate after debate McCain looked down his nose at Obama's lack of "experience." Time and time again he rolled his eyes with disdain at what he called Barack's naiveté. The charge has nary been challenged by the press, who repeat the ridiculous assertion as if it were a given.

More scary is the number of people who actually buy the charge that Obama, a magna cum laude graduate from Harvard, is somehow lacking in reasoning capacity. Question is: How many similarly educated Harvard graduates finishing at the top of their class would be branded as "naive?"

In fact the converse is true. As Robert Silvers recently observed in the Huffington Post: "...if you run a tally, Obama's record over the last year shows a remarkable degree of foresight, even-tempered judgment, and a real willingness to make hard calls that aren't the politically popular flavor of the week. Indeed, almost every one of Obama's foreign policy positions has been vindicated."

Here's a recent New York Times article that explores this issue.

It fascinates me that so many McCain supporters claim that Obama doesn't have a plan for the country, or they don't know what his plan is. How could that be after, in debate after debate, Obama was the person focused on actual policy issues while McCain kept repeating old sound bytes?

If they didn't hear Obama's proposed policies, what on earth were they listening to? In one debate McCain repeatedly ask Obama "how much is fee you'll charge small businesses for health care," even after Obama stressed repeatedly stressed that there was no fee.

Some questions for McCain:
What's all the fuss about Bill Ayers or Rev. Jeremiah Wright? One of McCain's chief political advisors is Richard Quinn, editor of the racist Southern Partisan Review.

Wright was Obama's former pastor. Obama was eight years old when Ayers was involved with the Weather Underground.

But Quinn advises McCain NOW. To get a clearer picture, Fairness and Accuracy in Reporting (FAIR) describes the Southern Partisan as "a publication that defends slavery, white separatism, apartheid and David Duke.'' Quinn, himself has supported Duke as a "political maverick." Say what???

Judging from McCain's track record on issues effecting people of color, maybe that's one association worth learning more about.

Thursday, October 30, 2008

Delaware's Joe Biden

Here's Joe Biden's new commercial ad....WONDERFUL!

Sunday, October 26, 2008

The Indiana Diaries: Working with the Obama Campaign

Countdown to Election Day

Tuesday, October 28

The election is exactly one week away. Last night I finally saw an ad contradicting the smear ads now running on local television. FINALLY!!!! They were very well done and very effective....

The website is online and it allows everyone to plug in their own personal information and see for themselves what their tax cut would be under the Obama plan. Very cool. Also helps dispell all the rumors. Luckily AOL also ran an article today that helped identify all of the lies currently flying around.

Monday, October 27

Very busy today. We had volunteers making calls all throughout the day. The guys left early to go to a training session in Muncie at 9 p.m. WHEW. It's a 30-minute drive and they have to be back in the office the next day.

Sunday, October 26, 2008

No heat this morning. But I really didn’t notice. I was checking my clothes for more creepy crawlers. Didn’t find any, thank goodness. We had a slow day at the campaign office. More calls and more volunteers to try to schedule to help get out the vote.

Saturday, October 25

Today was very busy. We had a number of volunteers come to the office for training on working the polls and on how to canvass. At noon we had a Early Vote party. I realized that all five of the people who attended were new volunteers contacted by me, either by the web listing I posted or through Rebecca. Two additional people came in to see Jake and we corralled them in to voting.

I hate to stereotype, but as I suspected, I had to do some last minute running around to really get us ready. The pulled pork sandwiches arrived sans rolls. We had no dessert or side dishes and utensils were scarce. I ran out and got potato salad, bowls and serving spoons. Julia, one of the democratic committee leaders here, got potato chips, ice and sodas.

Adam fired up his i-pod for music and we had a good turn-out. We got a new volunteer to phone bank, the son of one of Becky’s friends. I think it was the first time he voted, which was pretty cool.

The canvassing training was interesting. We had one girl who was pretty chatty. I asked her to pass out stickers to volunteers and she really grew in to that role. I was proud of her and our team.

Tonight I found a huge centipede in my room on the wall near the door. Needless to say, I slept on the couch most of the night, next to the living room light. I did go back into my room around 4 a.m., but I slept with the light on and on top of the covers. Why they created centipedes is beyond me. I wonder if it’s a sign that I need to move. I wonder if I brought the creature with me in my luggage, since I have been constantly fighting to get rid of them at home. EEEYOUUUUU!!!

Friday, October 24

Called in to John Watson’s talk show on WILM-AM today to promote the Drive for Change in Delaware. I wonder if it did any good????

Thursday, October 23, 2008

On Thursday we travelled to Indianapolis to hear Senator Obama address a crowd of approximately 35 thousand people. We left bright and early at 6 a.m. in the morning and got there around 7.

Although we had to stand for several hours straight, we were right in front and well positioned to hear him speak. It was encouraging to see so many different types of people there, Black, white, Hispanics of all races, Asian. His message was one of unity and cooperation, a far cry from the hateful, devisive tactics used by the other party in recent years. Here are some photos from the event:

Monday, October 20

My first day at the Anderson Field Office was awesome. They got me set up to make telephone calls to prospective.

Becky invited me to attend the NAACP debate of local candidates. More than a dozen people lined up on the stage to state their case for office. Interestingly enough, there was a live radio show that broadcast during the second hour. They stopped the debate for each commercial break to work around his schedule.

A group of us ate at Red Lobster and talked a little politics. Day two in Anderson, my first full work day mission accomplished.

Sunday, October 19

It took me two days to drive 10 hours, but I was glad I paced myself instead of trying to drive all of it in one fell swoop.

Google maps is pretty phenomenal. You can print pictures of key intersections for visual landmarks each step of the way. That’s pretty cool.

I rolled into Anderson, Indiana at around 4 p.m. and first stopped at a Big Lot’s to get a few supplies. I met my house-mate, Becky, and we seem to hit it off well. I think it’s going to be a great two weeks and a great experience over all.

We went out for a late nite dinner at Appleby’s. I had a shrimp and spinach salad. First night accomplished with a flourish.

Saturday, October 18

I've finally been deployed to help with the Barack Obama Campaign for Change. Destination: Anderson, Indiana. I'm "fired up and ready to go...."

I stopped overnight at a Holiday Inn near Wheeling, Ohio. Treated myself to a movie and laughed my way through Beverly Hills Chihuahua before going to bed early.

Tuesday, October 21, 2008

Delmarva Power: To regulate, or not to regulate. That is the question

Not to long ago I was traveling through India, torn emotionally by the realization of what life in a third world country was really like. I returned to find a $1,417 gas and electric bill in my mailbox. How could that be?

I’ve been asking myself that question for quite sometime. Long concerned about my utility bill I turned my thermostat completely off from March until October, when fear of frozen pipes and other ailments forced me to turn it on again – cranking it down to the lowest it could possibly go…a brisk 40 degrees.

Because I leave for work at 7 a.m. and seldom come home until way past 9 p.m., I rarely cook. Instead when at home I bundle up, put extra blankets on my bed and spend most of the time huddled in my room watching television. I thought I had the utility bill problem licked. I was wrong.

Meanwhile I read articles that promise a 59 percent increase in DP&L rates and wonder how anyone who actually spends time in their home – someone who actually comes out of their bedroom now and then; who cooks, takes long hot showers and turns on the lights more two or three hours a day – can possibly afford it.

A closer look at my astronomical bill explained that my utility costs more than doubled during the month of December, even though my usage habits hadn’t changed from my perspective. No Christmas lights on the house and no tree for the first time in more than a decade. I even covered drafty windows in plastic, thinking I’d cut the bill even more. I switched to energy efficient light bulbs. I do admit however, that a couple of days during the month I was truly brazen -- turning the heat up to 60 degrees for a hour so I could quickly shower and dress without fear of pneumonia. Guess I shouldn’t have. I’ve now learned my lesson.

Which brings me back to India. I was struck by so many people living in poverty, with no more means of shelter than a concrete hut or a worn tent pitched on city streets. At night, to keep warm, I’d see groups of people huddled in front of an open fire on the open street.

What do people in this country do when they can’t afford to pay their utility bill? When it’s a choice between heat or food, how can they make the choice? Wilmington, as has most residential communities, long since outlawed building bonfires on your front lawn. Even if it were legal, I can’t imagine that doing such a thing would endear me to my suburban neighbors.

When it comes to food, it’s not like you could invest in a roster and a couple of hens for eggs and food when times get tough. Fruit and vegetables can be grown in a garden, but how many of us could find alternate sources for meat if our lives depended on it?

In modern day civilization, the self-sufficiency of farming, raising or catching your own food, like generating your own heat, aren’t really options. You can’t chose to pay the heating bill, use candles and let the electric go and until you can raise the extra money. With combined gas and electric, you lose one, you lose both.

Interestingly enough, years ago when I hosted a public affairs program on local cable, Delmarva Power was one of the sponsors. Then I thought they were the good guys. How funny. What a difference deregulation, coupled with a decade or so makes.

Four days after my return from India, while I was stewing over what to do next about my bill, a nice yellow envelope came in the mail informing me I was in line for service disconnection. The moral? Never go out of the country and miss paying your bill by a few days when already on a payment plan. I wondered if I should even bother to call. More importantly I wondered how much more I could possibly cut back in order to avoid a future case of utility bill sticker-shock .

Making matters worse, I stumbled across an old electric bill from a time way back when I was a young mom with a busy toddler, a heated fish tank, an Atari game consol hooked to the TV, an electric blanket, two freezers and a electric lawn mower. My monthly utility bill grand total? $55 dollars.

Sigh. Oh, for the good old days.

Thursday, October 9, 2008

Fuzzy Math = Beware False Advertising at the Kirkwood Highway Richardsons

Here’s the moral: A penny saved is a penny not overcharged you by the “nice guys” at Richardsons’ on Kirkwood Highway.

I learned the hard way. After a solid weekend of rain, the Monday afternoon sun found me ready to roll up my sleeves for some fall planting. So I jumped in my car headed to my favorite place to buy plants, Richardsons’ on Kirkwood Highway.
There I found perennials on sale at 50% off. So I happily embarked on a mission to introduce a few new plant friends to my waterside rock garden, escaping the final vestiges of our torrential downpour.

I found two nice sized perennial sedum originally priced at $5.99 a piece. I also spotted ornamental reed grasses for about the same price. I headed to the register. At 50% off, I expected the two sedum to cost $5.99, or the price of one plant had it not been half off. Instead, the Hispanic woman at the register who didn’t speak English, charged me $6.00. I asked why. After all 100% of $5.99 is $5.99. She couldn’t answer.

She summoned a nice Hispanic man who didn’t speak much English either to explain.

“$3.00 a piece,” he explained.

“But, I have two,” I responded. “You owe me a penny.” He insisted I pay $6.00 and I balked. Not that I needed the penny. But if a store advertises a $50 percent off sale, it should honor its posted sale and not charge more than the face value of the item. $6.00 for plants originally sold for $5.99 is false advertising.

The nice Hispanic man with little English skills bounced me up the food chain to Dave who was the manager, I was told.

Dave explained it like this: “If you can figure out how to split a penny, let me know.”

Say what?? That may make sense when purchasing one. But I had four – no penny-splitting necessary.

Dave wouldn’t budge either. He felt overcharging me a penny was more important than repeat business. I immediately reflected on the $200 I recently spent at that very same Richardsons -- on various plants and pottery and assorted bird feeder thingies.

I left without the sedum. I did wind up at another Richardsons, however -- the one in Glasgow. There a very nice man with a pleasant smile and a true appreciation of happy customers with money to spend restored my faith in Richardsons, charging me $5.99 for my two sedum plants and the identical price for two heuchera.

I, like many Delawareans, have been shopping at Richardsons for decades. I shopped there when they opened in front of the New Castle Farmer’s market complete with a hand painted sign and a few plants sprawled out on the grassy median. I watched the Kirkwood highway location grow from just a small wooden stand with a few plants -- to the massive site it has now become, complete with pottery, lawn ornaments, wild bird food and feeders and a virtual cornucopia of outdoor goodies.

There is something to be said for honesty, getting what you pay for, and keeping paying customers happy. I doubt I’ll ever shop at the Kirkwood Highway outlet again. I’d rather spend my hard-earned penny shopping where my money and my time is appreciated, not pilfered away one penny at a time through a fake 50% off sale.