Experian reported this month that the average VantageScore hit an eight- year high at 682.

Improving credit scores come in the wake of higher consumer debt. The Federal Reserve Bank of New York reported last month that the total household debt increased by $92 billion (0.7 percent) to $13.95 trillion in the third quarter of 2019. This marks the 21st consecutive quarter with an increase.

“We’re seeing a promising trend in terms of how Americans are managing their credit as we head into a new decade with average credit scores increasing two points since 2018 to 682 – the highest we’ve seen since 2011,” said Shannon Lois, Experian’s head of analytics, consulting and operations. “Average credit card balances and debt are up year over year, yet utilization rates remain consistent at 30 percent, indicating consumers are using credit as a financial tool and managing their debts responsibly.”

Meanwhile, the average U.S. FICO Score now is at 706, reported MyFico.com in September. The average FICO bottomed out at 686 in October of 2009. That mans there has been nine consecutive years of increases in the national average FICO Score.

In a blog post, Tom Quinn, Vice President of Business Development for myFICO, states: “Account-level delinquencies are down by double-digit percentages. We also see substantially lower credit card utilization, lengthier credit histories, and less credit seeking activity. It is no surprise that we’ve seen such a major improvement in the national average FICO Score over the past decade.”

The post Consumers’ Credit Scores are Improving, Despite Taking on More Debt appeared first on eCreditDaily.

Homeowners with incomes between $40,000 and $75,000 who claim the deduction save just an average of $523 in taxes, economists at the University of Pennsylvania found.

Nonetheless, the mortgage interest deduction is a key tax saver for middle class homeowners, with two-thirds of the benefits helping households that earn less than $200,000 annually.

The deduction enables borrowers to reduce their taxable income by the amount of interest paid on a loan (or loans) with a value of up to $1.1 million.

“The mortgage interest deduction has been in existence since the inception of the federal tax code nearly 100 years ago and is a cornerstone of U.S. tax and housing policy,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.

In a press release this week, the NAHB opposed any attempt by lawmakers to reduce or eliminate the mortgage interest deduction to raise tax revenues, saying it is a “a minority view that flies in the face of public opinion.”

However, some academic studies have reported that the deduction benefits the wealthy the most — and doesn’t really encourage homeownership.

The president and the first lady claimed a $47,564 home mortgage interest deduction on their home in Chicago, which they bought in 2005 for $1.65 million, according to their tax returns released Friday by the White House.

The Huffington Post reported that the deduction for the Obamas amount to $13,318 in savings on their federal tax bill, according to an analysis by Michael Gillen, director of the tax group at the Philadelphia law firm Duane Morris.

Despite the one-third of Americans who earn more than $200,000 annually and take the deduction, the vast majority of taxpayers don’t want lawmakers to mess with the tax break for homeowners.

A New York Times/CBS News poll conducted last summer showed that nine out of 10 Americans oppose eliminating the mortgage interest deduction and a nationwide survey of likely voters commissioned by NAHB earlier this year shows that 73 percent oppose abolishing the deduction.

“The American people understand that curtailing or getting rid of the deduction to help lower the federal debt would result in a big tax hike on millions of middle-class home owners and that prospective buyers who are counting on its benefits to lower their monthly mortgage payments would remain on the sidelines,” said Rutenberg.

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AmEx said regulators – the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions – are looking at how its subsidiary, Centurion Bank, has complied with certain consumer protection laws and regulations, “including the way late fees are assessed on charge cards with a lending feature.”

This action by the regulators may include civil money penalties and “require additional refund obligations” to AmEx card holders.

American Express – the top credit card provider by purchases – revealed this yesterday in its annual regulatory filing.

Centurion Bank issues and services AmEx consumer charge and revolving credit cards in the United States, including the Blue, Blue Cash, Blue Sky, Gold, Platinum, and Centurion cards.

New York-based American Express said that it was notified this month by the FDIC on a pending “formal enforcement action,” and that it appears likely that the Consumer Financial Protection Bureau (CFPB) and Utah authorities will take “some type of action against Centurion Bank as well.”

The CFPB was created by the Dodd-Frank Wall Street reform legislation of 2010 to protect U.S. consumers from unfair or deceptive lending practices. It now oversees the biggest credit card issuers.

Moreover, President Obama signed into law in 2009 sweeping credit card reform that included certain restrictions or prior notice requirements on penalty fees.

AmEx said Centurion Bank has made changes to some of its card practices – and established an accrual for late fees it expects to refund.  Additionally, it could be required to make further changes to its card practices to respond to regulatory concerns, AmEx said in its filing.

Throughout its filing, American Express made reference to the expanded reform laws covering the credit card and banking industries.

“The regulatory environment in which we operate has become increasingly complex and robust, and following the financial crisis of 2008, supervisory efforts to apply relevant laws, regulations and policies have become more intense,” American Express said.

Here is the rest of that statement:

“The U.S. Congress and regulators, as well as various consumer advocacy groups, have continued to focus their attention on certain practices of credit card issuers, such as unfair and deceptive business practices, increases in annual percentage rates (“APRs”), changes in the terms of the account, and the types and levels of fees and financial charges charged by card issuers for, among other things, late payments, returned checks, payments by telephone, copies of statements and the like.”

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These mortgages contained “serious defects” and violated FHA underwriting standards, according to the civil complaint filed today along with the announcement of the settlement with the U.S. Attorney’s Office for the Southern District of New York.

Citigroup accepted responsibility for submitting mortgage certifications while “stating that certain loans were eligible for FHA mortgage insurance when in fact they were not,” reads the statement from the U.S. Attorney’s Office.

Operating under the Department of Housing and Urban Development (HUD), the FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. It also helps make homeownership affordable to first-time homebuyers and lower-income families.

The FHA’s insurance fund has been vastly depleted since the housing market collapse, raising concerns that the agency would require its own bailout by taxpayers.

For more than six years, CitiMortgage’s conduct resulted in the FHA incurring losses when certain loans defaulted that should never have been endorsed, authorities said.

“We are pleased that, with today’s settlement, CitiMortgage has accepted responsibility for its conduct and agreed to pay damages in an amount that will significantly compensate HUD in this case for losses to the FHA insurance fund,” said Preet Bharara, the United States attorney in Manhattan.

Since 2004, more than 30 percent of loans originated or underwritten by CitiMortgage have gone into default. CitiMortgage’s default rate soared to more than 47 percent for loans originated in 2006 and 2007, “resulting in foreclosures, evictions, and ultimately depressed real estate values, all to the detriment of the national housing market and the national economy,” reads the U.S. Attorney’s complaint.

Today’s announced settlement of $158.3 million is separate from the estimated $2.2 billion Citigroup has to pay in connection with the $25 billion mortgage loan settlement announced last week by the Justice Department and the nation’s top five mortgage lenders.

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But Mary Miller, Treasury’s Under Secretary for Domestic Finance, conceded that the state agencies faced a challenging task because they had to retool and develop an infrastructure to “reach at-risk homeowners and operate their programs.”

Miller did not mention a very critical report on the Hardest Hit Fund’s progress released this month by the official watchdog overseeing its funding.

Only about 3 percent of the funds $7.6 billion has been used to help borrowers thus far, said Christy Romero, Special Inspector General for the Troubled Asset Relief Program (TARP), in a report released April 12. TARP is the primary U.S. bailout program, part of which has been diverted to fund foreclosure prevention programs.

As of February 2012, two years after the launch of the fund, only $828.6 million has been drawn to assist borrowers – with most of the money “identified for administrative expenses and cash on hand,” according to Romero’s report.

Romero’s report said Treasury could have improved its planning and execution of HHF and increased participation by all stakeholders in the program, including mortgage servicers and the state Housing Finance Agencies.

In a prepared speech today at the National Council of State Housing Agencies, the Treasury’s Miller said the pace of spending on Hardest Hit Fund programs has “picked up momentum in the first quarter of 2012, and we look forward to the full deployment of this assistance to homeowners.”

She did not specify when “full deployment” would be in effect.

For many state agencies, retooling infrastructure “meant hiring new staff and bringing on key partners, such as housing counseling organizations, to help them market their programs and provide intake and eligibility screening services,” Miller said.

Beyond the current approach, Treasury sees the Hardest Hit Fund’s value as an investment in infrastructure and the “longer-term capacity to provide foreclosure relief,” Miller said.

“In addition to selecting and training networks of housing counselors, state HFAs are using these funds to create homeowner portals to apply for assistance and hire underwriters and other staff to review and approve applications,” she said.

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Nearly four out of ten (39.3 percent) have used their debit or check cards most often. Fewer people have used credit cards as their preferred payment method this year – 30.9 percent, compared to 33.8 percent in 2008. More than one-quarter have used cash, and a mere 3.8 percent have relied on checks.

“As expected, shoppers have shown tremendous restraint in buying gifts with the money they already have, not the money they hope to have,” said Phil Rist, executive vice president, Strategic Initiatives, BIGresearch, which conducted the survey for the NRF. “Relying less on credit for holiday purchases will help consumers feel more comfortable about their personal finances again and may make them more willing to spend in the future.”

The survey also found that shoppers had completed 46.7 percent of their holiday buying by the second week of December, less than the 47.1 percent had done so by this time last year. This is the lowest percentage since 2004, when shoppers had completed 46.3 percent of their holiday purchases by the same period.

“Retailers know the final lap counts the most and are planning to emphasize promotions and discounts to bring in last-minute shoppers,” said Tracy Mullin, NRF president and CEO.

Nearly 42 million people (19.1 percent) had not even started their shopping as of late last week, the survey found, while 8.6 percent of shoppers have finished. Adults 65 years of age or older have completed the most shopping (50 percent), with adults ages 45-54 having completed the least (44.1 percent). 

The NRF continues to forecast that holiday sales will decline 1 percent compared to last year. November retail industry sales, which were released last week, showed a decline of  0.8 percent year-over-year.

The survey polled 9,929 consumers, December 1-9, 2009. The poll has a margin of error of plus or minus 1 percent.

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The financial settlement order with Asset Acceptance is the second largest such agreement with the FTC in the agency’s ongoing effort to protect consumers during these tough economic times.

Michigan-based Asset Acceptance, one of the largest debt-buying U.S. firms, misrepresented that consumers owed a debt when it could not substantiate the debt, the FTC said. The company also failed to disclose that debts were too old to be legally enforceable or that a partial payment would extend the time a debt could be legally enforceable, the federal agency said.

“Most consumers do not know their legal rights with respect to collection of old debts past the statute of limitations,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “When a collector tells a consumer that she owes money and demands payment, it may create the misleading impression that the collector can sue the consumer in court to collect that debt.  This FTC settlement signals that, even with old debt, the prohibitions against deceptive and unfair collection methods apply.”

Asset Acceptance, a subsidiary of Asset Acceptance Capital Corp., did not admit to the allegations made by the FTC. Rion Needs, the parent company’s chief executive, said in a statement that his firm is “pleased to have this matter behind us, and to have clarity on the FTC’s policies and expectations of the debt collection industry.”

“As we have already implemented many of the requirements of the consent decree, we now welcome the opportunity to work with the FTC to make these measures the new standards in debt collection,” Needs said in the statement.

The company buys unpaid debts from credit originators, such as credit card companies, health clubs, and telecommunications and utilities providers – as well as other debt buyers – and attempts to collect them.

Asset Acceptance has purchased tens of millions of consumer accounts for pennies on the dollar. It targets accounts that other collectors have pursued and are more than a year past due. The FTC said that in some cases the company attempts to collect debt that is more than 10 years old.

Some of this debt is too old to be legally enforceable because state statutes of limitations cut off the right to sue to collect the debt after a certain period of time has passed, depending on the state and the type of debt.

Many consumers do not know that making a partial payment of a debt may reset the state law’s clock on the collector’s ability to take legal action, the FTC said.

The settlement order requires Asset Acceptance to investigate disputes when consumers challenge the accuracy of the debts.  Asset Acceptance must ensure that it has a reasonable basis for its claims against the consumer before continuing its debt collection efforts.

The order also bars the company from placing debt on consumers’ credit reports without notifying them about the negative report. The U.S. Department of Justice filed the proposed settlement order this week at the FTC’s request.

The FTC’s action alleges that Asset Acceptance violated the FTC Act, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act.

“Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts” provides information about when a debt is too old for a collector to sue.

See the FTC’s nine-count complaint against Asset Acceptance.

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“In our online safety efforts, we learn from and with the most trusted safety organizations in the world,” said Joe Sullivan, Facebook’s chief security officer, in a blog post today. “We regularly invite authors to blog about safety topics from cyberbullying to the importance of ‘Thinking Before Your Post.’ ”
The Safety Center is divided into five main sections: General Safety; Safety for Educators; Safety for Law Enforcers, Safety for Parents and Safety for Teens.
Facebook has had to deal with various safety and security issues, including controversial new privacy policy revisions and an ongoing battle with hackers and phishing emails that overrun user accounts and try to steal passwords.
Scammers also have been creating bogus fan or group pages in attempts of snatching personal information from users, common techniques used in identity theft and credit card fraud cases.
“You’ll see content organized by audience type and by topics such as ‘Addressing Personal Safety’ and ‘Responding to Objectionable Content.’ Parents will find special content in the ‘Safety for Parents’ section with advice from our partner and member of our Safety Advisory Board, Common Sense Media,” Sullivan said.

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The FTC settled charges that the organizers of the scheme deceived more than 13,000 consumers out of $13 million.

“Instead of a reduction in interest rates, consumers, who were already in dire financial straits, found themselves saddled with an additional $995 credit card charge,” the FTC said.

The operation was based in Canada and New York, and utilized telemarketing boiler rooms in Orlando, Florida.  The FTC said the defendants in the case operated under several different names, but often used “AFL Financial Services,” or variations of the name “AFL.”

According to the FTC’s complaint, the defendants – F&F Payment Processing Inc., Bajada Management Group Inc., Baird B. Fisher, Jacqueline M. Fisher, and others –used illegal “robocalls” to promise refunds to consumers if they did not save at least $2,500 as a result of lowered credit card interest rates. But they did not deliver on that promise, the FTC said.

“At most, the defendants sometimes telephoned credit card issuers and attempted to conduct three-way calls among the credit card company, the consumer, and one of the defendants’ so-called financial representatives,” the FTC said. “Often the defendants did not make these calls at all.”

When they did, the calls were unsuccessful. Some credit card issuers refused to participate in the calls.

In addition to banning the defendants from delivering prerecorded messages and selling debt relief services, the proposed settlement also prohibits them from:

• making misrepresentations about any goods or services, including anyone’s ability to obtain a loan modification or improve a consumer’s credit rating;
• misrepresenting the terms of any refund or cancellation policy, affiliation with any government or non-profit program, or that a consumer will receive legal representation;
• violating the FTC’s Telemarketing Sales Rule;
• illegally calling numbers on the National Do Not Call Registry, or abandoning calls without involving a live operator; and
• failing to transmit caller identification, and failing to disclose the seller’s identity and the call’s purpose.

See the FTC’s complaint.

For more information on this type of deceptive practice, read the FTC’s Credit Card Interest Rate Reduction Scams.

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