A master mechanic told me that any inspection should now include putting a probe inside the door. Apparently that will show water damage. (Illinois Consumer Attorney Dan Daneen)And consumer attorney extraordinaire Joanne Faulkner of New Haven, CT, ...


Ways to Spot the Flood Cars They Will Try to Palm Off on You

A master mechanic told me that any inspection should now include putting a probe inside the door.  Apparently that will show water damage. (Illinois Consumer Attorney Dan Daneen)

And consumer attorney extraordinaire Joanne Faulkner of New Haven, CT, reports:

"Consumer Reports has suggested tips for identifying cars that may have spent time underwater. A buyer or mechanic should look for these telltale signs:
  • Caked-on mud and a musty odor from the carpets. New carpets in an older vehicle may be another red flag.

  • A visible water line on the lens or reflector of the headlights.

  • Mud or debris trapped in difficult-to-clean places, such as gaps between panels in the trunk and under the hood.

  • Rusty exposed screws under the dashboard. Unpainted metal in flood cars will show signs of rust.

  • Rubber drain plugs under the car and on the bottom of doors that have been removed. That may have been done to drain floodwater.
Also keep in mind that parts from the scrapped cars could well end up in yours, as in a situation where a body shop cuts corners in a collision repair by using parts from a scrapped car instead of new parts. A fender or hood that spent time immersed in fresh water might not be a problem, but a transmission that took a salt water bath could well turn up with bearing or seal failure."


The Story of an Oregon Consumer Who Won a Battle Over a Flood-Damaged Car - most popular story on MoneyGeek.com (19-21 Sept.)

‘Flood Cars’ Sneaking Onto the Market After Hurricanes

Andrew Shawcroft was pleased with the new car he bought from an Oregon dealership in 2015: a 2004 Nissan Murano that he paid for with $12,000 in cash. What the 27-year-old high school teacher didn’t realize was that it had all the signs of a “flood car” – a vehicle transported from the East Coast soon after Hurricane Sandy whose electrical system was so badly damaged a mechanic would later find it was in danger of exploding.

“The car only had about 65,000 miles on it so it seemed like a good deal,” Shawcroft recalls. “During the test drive, it was fine. But during a five-hour trip soon afterward, the cruise control didn’t work and the key fob didn’t either. And two weeks later, it broke down completely.”

Shawcroft, who won an arbitration hearing against the dealership, was one of hundreds of thousands of Americans hoodwinked into buying a flood car after hurricanes Katrina, Sandy, Rita, Andrew, and Hugo. Now, in the aftermath of the massive flooding that accompanied Harvey and Irma, federal officials are warning that a new wave of flood cars are likely coming, and that car buyers had best beware.

“Flood cars are a huge problem,” says Rosemary Shahan of Consumers for Auto Responsibility and Safety (CARS). “There’s no way to make them safe. They’re basically rotting from the inside out and are loaded with bacteria and other contaminants that can cause serious health issues. But they will soon be popping up all over the country, including dealerships that will sell some of them as ‘new’ cars.”

Last week, the Department of Justice issued an advisory warning about auto fraud after hurricanes Harvey and Irma. In a September 14 memo, the agency said that it is anticipating “a high volume of flood-damaged automobiles” to be sold by unscrupulous dealers.

“After past hurricane events, authorities reported truckloads of flooded vehicles being taken out of the impact zone where they were dried out, cleaned and readied for sale to unsuspecting consumers in states that do not brand flood vehicles,” the DOJ reported. “Due to Hurricane Harvey and Hurricane Irma, as many as 1 million flood-damaged automobiles could potentially be passed on to unsuspecting buyers in the coming weeks and months.”

Flood damage from the hurricanes damaged thousands of vehicles, ruining their electrical systems and making airbag sensors prone to failure, the agency warned.

Consumers may buy flood cars labeled as “new” or “certified” — sometimes with factory warranties or extended service contracts — and think they are protected, Shahan said.

“They are in for a rude awakening,” she said. “When problems arise, the manufacturers and extended service companies won’t honor the warranties or service contracts, because the flood damage makes them void.”

In many cases, Shahan says insurers, who should be scrapping the cars, instead arrange for them to be towed away and auctioned off to the highest bidder. That amounts to fraud, she said. “It’s quite clear they will be resold fraudulently.”
How to avoid buying a flood carThe Department of Justice advises consumers to find out about a vehicles’ history before making any purchase decisions.

First, check for visible signs of a flood car – Consumer Reports advises looking for the smell of must or mildew (or a heavy detergent smell from someone trying to disguise it), a visible water line on headlights or tail lights, debris or caked-on mud in the engine or rusty unpainted screws under the dashboard.

Next, look up the car’s Vehicle Identification Number, or VIN – its unique identifier – on the National Motor Vehicle Title Information System (NMVTIS). Run by the Bureau of Justice Assistance, the system is designed to prevent concealment of flood damage and other damage in the vehicles’ history. Car insurance companies are required to report to NMVTIS about vehicles they have written off as total losses.

For a few dollars or less, consumers can use an approved provider such as VinSmart or VinAudit.com to check the DOJ’s system to look up crucial information on the vehicle they’re planning to buy, including its title, recent odometer reading and the history of its “brand” – a label used by states to identify a vehicle’s current or past condition. Consumers can protect themselves by avoiding cars labeled “junk,” “salvage,” or “flood.”

“If the car shows up [as a total loss] on the NMVTIS, you don’t need to look further,” says Shahan.

The NMVTIS database won’t reveal all problems, however. It doesn’t include vehicles with major damage below the threshold of “total loss.” Lesser levels of damage, which can also affect safety, may be revealed on other databases like Carfax Inc., an online commercial service that supplies vehicles’ service and repair history. Then again, Carfax may not reveal whether the car is damaged or even a total loss, unless an insurer has voluntarily reported it.

“Reporting to Carfax is voluntary, so insurance companies don’t have to report the car’s history to it,” says Shahan. “All databases have gaps, so it’s important to get an inspection from a good mechanic, too.”

The Nissan that died in two weeksShawcroft is a case in point. Before he bought his Nissan Murano, he looked up the car’s history on Carfax and had seen nothing to worry about. Then two weeks later, it died on Highway I-5 as he was driving it to Portland for a wedding. Stressed and overwhelmed, he ended up missing the rehearsal dinner.

A mechanic he’d known for a long time inspected the car and told him it had so many problems, he couldn’t even give him an estimate for repairs.

Shawcroft contacted the dealership that sold him the car and the dealer offered to take the car back for $2,000 – a $10,000 loss to Shawcroft. Further investigation showed the car had been bought at auction, had its engine replaced and was full of exposed wires and broken tubing, giving it the potential to explode and catch on fire while in use.

Shawcroft’s case went to arbitration, and he and his attorney, John Gear, prevailed in a hearing.
The dealership had to pay for the car, court fees and attorney’s fees for a total of about $30,000.

Shawcroft feels like he had a narrow escape. Not everyone in his situation is so lucky, he says.

Diana Hembree is senior editorial director of MoneyGeek.com, specializing in insurance issues and a regular contributor to Forbes.com. Co-writer Steve Evans is a regular contributor to MoneyGeek whose work has appeared in Benzinga, Yahoo Finance, MSN Money, and other outlets.


What to do about the Equifax Hack that Puts You at High Risk of ID Theft

Where can you find unbiased, objective advice about ways to minimize the damage and risk from Equifax's outrageous computer security negligence and its lengthy cover-up afterwards?

Equifax's gross misconduct means that nearly every adult with a credit history is at risk of identity theft. In this free article, the National Consumer Law Center offers key advice for consumers, with specific steps that can be taken to minimize the risks-freezes, thaws, fraud alerts, credit monitoring, and more.

Key Steps to Minimize Risk After Equifax Data Breach

by National Consumer Law Center
September 18, 2017

Determining Whether the Client Has Been Affected

It is very likely that any client with a credit history is one of the 143 million adult Americans whose personal information was exposed in a data breach at Equifax, one of the three major nationwide credit reporting agencies. Equifax has stated that from mid-May through July hackers accessed people’s names, Social Security numbers, birth dates, addresses, and in some instances, driver’s license numbers.

While it is safest to assume that a client has been affected, one way to try to verify this is to go to the Equifax site, www.equifaxsecurity2017.com to see what Equifax says. The site is far from a model of clarity and there are media reports indicating the site is not working properly and questioning its reliability. To use the Equifax site, click on “Potential Impact” at the top of the page and enter the last six numbers of a Social Security number and last name. For most people, the site will respond: “Based on the information provided, we believe that your personal information may have been impacted by this incident.”
The site also mentions enrolling in “TrustedID Premier”—the client need not enroll. TrustedID Premier is a credit monitoring service that is only initially free and that does NOT fully protect a consumer. The site also initially had an arbitration clause, which has since been removed, but there has been significant confusion over the issue. The client can just exit the site.
Risks Implicit in the Data Breach

The hacker’s access to this personal information raises various risks for clients. Perhaps the greatest risk is that an identity thief will take the consumer’s Social Security number, name, address, and birth date, and use this data to open credit accounts in the consumer’s name, sometimes called “new account” identity theft. While a consumer ultimately is not liable for the charges on such unauthorized accounts, resolution of the matter will not be pleasant.
The unpaid credit charges can damage the consumer’s credit report and it may take significant effort to clean that up. The consumer could be subject to debt collection calls and even debt collection lawsuits. If the consumer defaults on such a lawsuit, wages and bank accounts can be garnished. The best measure to prevent new account identity theft is a credit freeze, discussed below.
Another risk is that unauthorized persons might gain access to certain of a consumer’s existing accounts using the hacked information, and direct the business to take certain actions. As a result, consumers should pay careful attention to their existing accounts—reviewing statements, noticing if monthly statements do not arrive, and accessing their accounts online to watch for fraudulent transactions.
Another risk is an identity thief with the consumer’s Social Security information may file a tax return in the name of the consumer, seeking a large refund, and directing that refund to a prepaid card held by the thief. The client filing the legitimate tax return as soon as possible may preempt a scam filing that is submitted later to the IRS. Clients in Florida, Georgia, and the District of Columbia, or who have been previously approved by the IRS, can obtained an Identity Protection PIN from the IRS.
A Credit Freeze Is Recommended to Prevent Identity Theft

The strongest measure a client can take to prevent an identity thief from opening a credit account in the client’s name is to request a credit freeze A freeze prevents creditors from accessing the client’s reporting file or credit score. Creditors that rely on a credit report or score in granting credit are likely to refuse to offer credit if they cannot obtain a report or score. However, a credit freeze does not prevent a thief from making charges on existing accounts. As discussed above, the client should pay close attention to those.
Because a creditor could seek a report from any of the three major national reporting agencies—Equifax, Trans Union, and Experian—the consumer must place a credit freeze with each of the three reporting agencies. Click on the below links to file online or call the below numbers to place the freeze:

  • Equifax—1-800-349-9960 or 1-800-685-1111.
  • Experian—1-888-397-3742
  • TransUnion—1-888-909-8872 or 1-800-680-7289
Fees vary from $5 to $10 for each reporting agency, based on the client’s state, but Equifax states it will waive such fees for now.
There have been reports of consumers having difficulty obtaining freezes due to technical issues with the credit reporting agency websites. Unfortunately, the only advice is for clients to keep trying.
Very Important:

The reporting agency will send a confirmation letter with a unique PIN or password. The client will need to retain the PIN or password in a safe place, because the client will need the PIN to lift the freeze temporarily or permanently.

A freeze does not affect a client’s credit record or credit score, prevent the client from obtaining a free annual or other credit report, or prevent existing creditors or debt collectors from seeing the client’s file. The freeze though will require the client to take an extra step before the client applies for new credit, a new job, an apartment rental, or new insurance.
This extra step is called “thawing” the freeze, either for a specific time or for a specific creditor or other business. Thawing or lifting the freeze usually costs $5 or $10 for each agency. The client will have to thaw the freeze for all three agencies unless the client knows which agency the creditor, employer, landlord or insurer will contact.
If the client takes no steps, the freeze can last forever (seven years in a few states). This may be a good thing, because there is no time limit for when an identity thief will use the client’s Social Security number obtained from Equifax.
A Fraud Alert Is a Lesser Alternative

A fraud alert works somewhat like a freeze, but instead of freezing the account, the fraud alert requires a creditor obtaining the consumer’s credit report or score to take steps to verify the consumer’s identity, such as by calling the consumer. Fraud alerts rely on the creditor’s vigilance, whereas freezes automatically deny access to the creditor, which is why freezes are considered stronger. Fraud alerts also apply not just to applications for new credit, but to requests to issue an additional credit card or increase the credit limit on an existing account.
Three types of fraud alerts are available. The below links provide more information on fraud alerts for each, including links to online forms and phone numbers to apply for fraud alerts with each of the three nationwide reporting agencies:
All three types of fraud alerts are free and the client only need contact one of the three nationwide credit reporting companies. That company is required to refer the fraud alert to the other two credit reporting companies.
Credit Monitoring Is Not the Best Option

Clients can purchase credit monitoring services, but these are costly (in response to the data breach, Equifax until November 21 is offering a monitoring service free for the first year). Moreover, credit monitoring alone is not as effective as a freeze. Credit monitoring is supposed to identify new accounts opened in the client’s name or attempts to open an account, but it only does so after the fact and it does not always work successfully. In addition, like freezes and fraud alerts, creditor monitoring does not help to spot fraudulent charges on existing accounts—the client should be advised to carefully review statements on these existing accounts.

Instead of paying for credit monitoring, clients can do this themselves simply by obtaining for free and then reviewing their credit reports. The client has a right at annualcreditreport.com to obtain a free annual report from each of the three national reporting agencies. Stagger the requests every four months from a different agency, and the client can have a continual snapshot of the client’s credit file. In some states and in some circumstances, additional free reports are available, allowing for even more frequent self-monitoring. Requesting a fraud alert also entitles the client to another free report.

Even if an attorney has the client’s authorization to pull a credit report for the client, the client should always be present when applying for the report. The website for security reasons will ask personal information that the attorney is unlikely to know.
Some credit monitoring or identity theft prevention products also allow a consumer to “lock” their credit report. While a “lock” may share some features with a freeze, state laws provide consumers with the right to freeze their credit files, and in some states a violation of that state law is privately enforceable. It is unclear the legal status of a “lock” or even how the “lock” works.

REMEMBER, People!  "Money never calls you on the phone"

Remember the rules to teach your clients, family, friends:  
  1. Money never calls you on the phone.
  2. If you think you found an exception, see 1 above.
HUD has released the following statement:
“It has come to our attention that the Housing Discrimination Hotline has been getting calls from the public about a group using a scam that shows them calling from 1-800-669-9777 (the Discrimination Hotline). HUD has received over 30 calls from the public at this time. One scam tells the person to send $300 to them and that HUD will send them back $9000.  If you receive a phone call related to this from the public, or if you receive such a message on the answering machine, you have been contacted fraudulently

Please report this to the FCC

Thank you for your assistance with this.

HUD appreciates your help in protecting the public from fraud.

HUD hopes that you will want to continue receiving information from HUD.

HUD safeguards our lists and do not rent, sell, or permit the use of our lists by others, at any time, for any reason.”


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