Last week Ford disclosed that sales for its previously most popular vehicle, the F-150 truck, slide down 40%.  The market analysts said that was a huge decline and Ford’s stock dropped to the $4 plus level.

So what did Ford do?  Ford did what is does best.  Ford ramped up the marketing and my July statement offered me another special deal.  This time, Ford offered to sell me a brand spanking new F-150 at the special employee discount rate.  Yes, the car that no one is buying is now on sale because, again, I am special.

Ford has at least 3 price levels.  Sticker,  Employee and Friend.  The employee and friend rates are no-dicker prices that Ford will sell a particular model without the need to haggle over price.  You give the dealer your code and you get the special price at a sizable discount off of the sticker price.  As a matter of fact, I bought my last car as a friend of Ford by using a code supplied by my buddy Bob, who worked for Ford at the time.  Now, Ford was offering me a special deal previously reserved only for employees if I bought the flagship model.

The lesson to learn is that no matter how good the deal sounds, it is usually not about you, it is about the seller.  Ford wants to make me think I am special by offering a special price on a vehicle that has fallen out of favor with the general public.  Send me your tired, your poor is a great slogan for our country, but it is not as effective in marketing when the buyer knows to beware.

That is the trend in some states.  Connecticut recently passed a bill allowing gas stations to give a discount for cash purchases.  That means then when you pay with a credit card, no only are you going to pay interest on that purchase, but you are paying more than a cash customer right from the beginning.

Other states also allow discounts for cash.  A merchant can’t charge more than the regular price for a credit purchase, but he can charge less than the regular price for a cash purchase.  (Even the lawyer in me can’t see that difference!)

Could the economy shrink even further if we wean ourselves from the addiction of credit and start paying for everything in cash?

The Fair Debt Collection Practices Act (FDCPA) defines the term "Debt Collector"  to include "…any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another…" 

Debt Collectors are prohibited from the following actions:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts.  This does not include a Credit Reporting Agency.

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Failing to "meaningful disclose" the caller’s identity.

The Federal Trade Commission is concerned about identity theft and has developed a program called "Deter, Detect, and Defend".   Today, let’s talk about detering a thief.   

1.   Personal information should stay confidential and should never ever be given out over the phone, the mail, or over the Internet, unless you are positive that you are dealing with the correct person.

2.  Keep your personal information confidential and safe at home or at work.   Your personal information should not be in your purse/wallet, being carried about town with you.

3.  All financial documents should be shredded once they are no longer useful to you, and you are ready to throw them out.  

4.  Don’t put your social security card in your wallet, don’t write it on a check, don’t provide it over the phone, don’t put it in an email.

5.  Read every bill that comes to your house, especially credit card statements, and look for those suspicious charges.

6.  Go to www.annualcreditreport.com and get a copy of your free annual credit report.   Look for strange creditors whose names you don’t recognize. 

Part Two of this series will deal with Defending Yourself Against An Identity Thief. 

When I asked why that happened?  Their responses were both the same: I have no idea.  The card had not been used lately, and there was no abuse.  So, it must have been either one of two things that can be happening that I could think of: 

First, the banks are starting to close down credit lines before they become a problem, or second the lenders underwriting the department store cards are requiring the retailers to start monitoring their existing credit lines and tighten up the available credit lines now, in an effort to stop the bleeding.  I actually laughed a little at this.

It seems that the retailers are working on more than selling their wares these days.  As Americans are tightening their belts and losing more of their hard earned dollars at the grocery stores and the gas stations, it seems that Americans now have to worry whether the credit card that they kept just for emergencies will have an available balance at the time that they need the available credit the most.

Likewise, the reduction of their outstanding credit lines is going to ding their credit scores and make any future credit more expensive.  So, the retailers are going to have to find ways to keep the consumers coming to their stores.

The big question is:  Is it really worth it to the retailers, or do they even have a choice?  I  cannot answer this question at this time, but it seems like an extreme measure.  Unless there is an underwriter behind the scenes calling the shots, why would a retailer take the risk of shutting off a consumer who has been good to them, has not abused the credit given, and was a good customer. 

Usually, a creditor would be more worried about the receivables and how many loans are 30 days past due, 60 days, etc.  Here, it seems like they are taking a pre-emptive strike that will not only harm the consumer but kill the existing relationship between the consumer and loyalty to their brands. 

I can tell you that neither consumer that I spoke with will ever hold that store’s cards anymore, and both feel that they were treated very badly.  I am willing to bet that we see more of this in the future.

A common trick of spoofed websites is to use the legitimate website name but mispelled.  (Example:  www.eebay.com)  If you are lured into a phishing scam, you may provide account ID’s, passwords, credit information, et cetera before you realize that it is a scam.

If you are a victim of phishing, you should contact the legitimate company named in the fraudulent email.  You may also want to notify the Internet Crime Complaint Center and forward the email to spam@uce.gov. 

If you suspect your identity may be compromised, place a fraud alert with the three credit bureaus. When you place an alert, you are entitled to a free copy of your credit report. After that, take advantage of the free annual reports the bureaus are required to give all consumers. Stagger your requests so that you get a report every four months.

This access flows from settlement of multiple class action suits against TransUnion for selling consumer’s personal data in violation of federal law.

Details and sign up are available on line.

To help protect yourself from pharming, you should always take advantage of security features provided by your online banking site.  In addition, keep your confidential information private. Your bank or credit card company won’t call or e-mail to ask for your account information.  Monitor your bank and credit card transactions for unauthorized use.  If you conduct business online, use your own computer. A public computer is less secure.

If you suspect your identity may be compromised, place a fraud alert with the three credit bureaus. When you place an alert, you are entitled to a free copy of your credit report. After that, take advantage of the free annual reports the bureaus are required to give all consumers. Stagger your requests so that you get a report every four months.

Also, consider making an identity-theft report to the police and get a copy. File a complaint with the Federal Trade Commission.  Close accounts that have been tampered with. Contact each company by phone and again by certified letter. Make sure the company notifies you in writing that the disputed charges have been erased. Document each conversation and keep all records.  

As a consequence, banks are taking steps to reduce the risk of default from this increased usage, according to an Associated Press, AP, article, Cardholders hit twice as credit limits lowered, appearing on MSNBC.  How are banks reacting?  By lowering the credit limit on tens of thousands of card accounts, limiting balance transfers and by increasing the interest rate on accounts with a higher predictability of default, according to the AP.

The Office of the Comptroller of the Currency, OCC, requires banks to provide consumers 15 days notice before changing the terms of a cardmember agreement.  That leaves little time for consumers who are preciously close to the new limit to adjust their spending habits or acquire funds to pay down the balance.  Ironically, or by design, the lower limit coupled with the increased reliance on credit cards pushes consumers closer to the credit limit.  Cross over that line and banks impose additional overlimit fees and higher default interest rates pushing consumers closer to a credit card collection lawsuit.

Default, as well as a reduction in available credit causes a lowering of the credit score.  Part of the FICO score measures the use of available credit.  A high debt to credit limit ratio results in a lower score.  That lower score makes it more expensive to borrow money or could result in loan denial based on the lower FICO score.

The AP article warns consumers to pay attention to any notices from the bank and to prepare for these changes.

Protect yourself from identity theft via spyware by keeping system and browser software up to date and settings to the highest security level you can tolerate. Install anti-virus, anti-spyware and firewall protection, and keep them up to date as well. When possible use hardware firewalls, often available through your broadband connection router.  Don’t open e-mails from strangers. Spyware can be hidden in embedded attachments and graphics files.  Don’t open attachments unless you know who sent them and what they contain. Never open executable attachments. Configure Windows so that the file extensions of known file types are not hidden.  Don’t click on pop-ups. Configure Windows or your Web browser to block them.  Don’t keep passwords, tax returns or other financial information on your hard drive.

If you suspect your identity may be compromised, place a fraud alert with the three credit bureaus. When you place an alert, you are entitled to a free copy of your credit report. After that, take advantage of the free annual reports the bureaus are required to give all consumers. Stagger your requests so that you get a report every four months.