A $500,000 lesson in how to fight identity theft

 | The Globe and Mail

Identity thieves once stole a total $500,000 by pretending to be Jennifer Fiddian-Green.

Her story is worth hearing if you want to understand the risks that arise when your personal information is stolen. We’re told endlessly to keep our data private so identity thieves can’t get it. But a data breach at the credit monitoring company Equifax highlights the way people can be vulnerable through no fault of their own.

Ms. Fiddian-Green, a forensic accountant at Grant Thornton LLP, isn’t sure how her personal information was stolen back in 2006. But she does know the thieves were able to secure two mortgages in her name that netted them the $500,000.

In investigating her own case, she learned that the thieves tried to borrow money at 12 or more financial companies. “Ten times, these institutions said ‘no, this is not a good application, get rid of it,'” she said. “But two of them [a bank and a mortgage lender] let it go through.” She realized this only after one of the lenders came looking for repayment.

Equifax has been rightly slammed for its vagueness about how many Canadians were affected by a cyberattack against the Atlanta-based company and the extent to which their private information has been compromised. On Monday afternoon, the company’s website said that only a limited number of Canadians may have been affected, and “it seems” at this point that the information possibly breached includes names, addresses and social insurance numbers.

According to the RCMP, personal information can be used to open bank accounts, apply for loans and credit cards and make purchases, among other things. “If a fraudster is successful in using your data to obtain financing, you could quickly be overwhelmed by the number of accounts and the dollars that are out there,” Ms. Fiddian-Green said.

As a cybersecurity expert, she was able to convince the duped mortgage lenders that they were fraud victims. Now, she has some thoughts on helping others understand identity theft and how to fight it.

To start, people need to understand that the data kept by credit monitoring companies such as Equifax and competitor TransUnion is enough to enable thieves to borrow money or set up accounts in your name. These firms are clearinghouses for data on how people are keeping up with their borrowing – they take in information from financial companies and sell it back to these firms to help with decisions on whether to lend money, and at what rate. You should certainly check your credit file to monitor for fraudulent activity. But there’s also some onus on banks, credit card companies and other lenders to make sure they’re lending to actual customers and not thieves.

Expect to find out by letter, phone call or contact from a debt collection agency if you’re a victim of thieves who have used your identity to borrow money. Ms. Fiddian-Green’s suggested response: “You need to say no, I was not a party to this. I’ll help you figure out the fraud that was conducted on you and your institution using my data.”

Scott Terrio of insolvency trustees Cooper & Co. says people are legally responsible for debts in their name. “But if it’s true fraud, then you’re not legally obliged to pay it. The trick is to prove that it wasn’t you.”

One way to do that is to demonstrate the fraudulent expense or borrowing is not in keeping with your usual pattern of spending. Mr. Terrio notes that credit card companies use fraud detection software that looks for deviations from your usual spending. In the fraud cases he’s seen, banks and card issuers have typically been co-operative in identifying identity theft.

Equifax is pushing a $19.95-a-month service on its website that monitors your credit file and can help detect identity theft. But you can also order a free credit report from both Equifax and its competitor TransUnion. Just google Equifax Canada or TransUnion Canada and “free credit report.”

Some financial firms also provide credit reports to their clients. For example, Royal Bank of Canada clients who bank online can now access their credit score and a credit file showing all their existing accounts and inquiries made by lenders. Scan all of this information for unauthorized activity and contact the firm involved if you find anything.

Even after her experience several years back, Ms. Fiddian-Green says she wouldn’t take Equifax up on its credit-monitoring service. “I refuse to pay to have them tell me they’re taking care of my data.”

Mortgage lenders warn, new rules to dampen home sales in Canada

Excerpted article was written by  | The Globe and Mail

Canada’s mortgage lenders say tougher borrowing rules proposed by Canada’s banking regulator could reduce the volume of home sales in Canada by 10 per cent to 15 per cent annually as buyers find it harder to qualify for loans.

Mortgage Professionals Canada – an industry association representing lenders, mortgage brokers and mortgage insurers – said the economic impact of proposed stress-testing rule changes could result in 50,000 to 75,000 fewer home sales a year in Canada when combined with other mortgage-rule changes announced last year and a recent increase in interest rates.

Association president Paul Taylor said the impact of the change could cascade further as other buyers will still make purchases, but will qualify for smaller mortgages and buy less-expensive homes.

“Essentially, everybody is going to step down a rung or two, which means there will be real pressure on all home prices to also fall by a rung or two,” Mr. Taylor said in an interview.

The mortgage association is the latest group to air concerns about a proposal from the Office of the Superintendent of Financial Institutions (OSFI) to require home buyers who do not need mortgage insurance – those with down payments of more than 20 per cent of the purchase price – to prove they could still afford their mortgages if interest rates were two percentage points higher than they negotiated.

OSFI published the proposed changes in July with a request for public comment, saying it was aiming at implementing the changes in the fall if the plan proceeds.

The Canadian Home Builders’ Association has also voiced concerns about the proposed change, saying Canada could see 20,000 to 30,000 fewer new housing starts annually when combining the proposal with other recent policy changes.

In a submission to OSFI, the builders said a drop in new construction could reduce employment in Canada by between 42,500 and 63,800 jobs annually. Including the impact on resales of existing homes, the total number of jobs lost could be as high as 91,500, the group said.

Builders fear OSFI’s latest proposal has the potential for unintended consequences if it ends up helping to trigger the housing market downturn it is trying to buffer against, said Jason Burggraaf, government relations and policy adviser at the association.

“Our concern is that all these consumer confidence signals that are being put out there could in themselves become a self-fulfilling prophecy,” he said in an interview.

“They sort of pile on top of each other, seemingly without any co-ordination. Each one does its little bit, but it’s eventually the straw that breaks the camel’s back. All of them together especially squeeze the first-time home buyer, who doesn’t have access to a significant down payment for their home.”

OSFI proposed the rule change in July to bring qualification rules for uninsured mortgages into closer alignment with similar stress-testing rules introduced last year for people who are applying for insured mortgages – those who do not have a 20-per-cent down payment. When those rules were rolled out last October, Finance Minister Bill Morneau said they were aimed at ensuring borrowers do not take on mortgages they cannot afford if interest rates climb.

Ontario Real Estate Association chief executive officer Tim Hudak, who represents real estate agents in the province, said last week the latest change must be assessed on top all the other recent policy reforms, including last year’s stress-test rule changes, new foreign-buyers taxes in British Columbia and Ontario, and two recent hikes in interest rates. Mr. Hudak said the cumulative impact “risks capsizing the housing market altogether.”

Both the Canadian Home Builders Association and Mortgage Professionals Canada told OSFI the proposed tougher rules could also increase financial system risk by driving more borrowers to use unregulated lenders who do not have to follow OSFI’s standards.

They also warned the rules could push some consumers away from long-term, fixed-rate mortgages – which have higher interest rates but leave borrowers less exposed to interest-rate volatility – to shorter-term mortgages with lower interest rates that can more easily qualify under the tougher rules. Such a shift could add risk to the financial system as a whole if more borrowers are exposed to short-term interest rate volatility.

Mortgage Professionals Canada urged OSFI to consider a lower stress-test level, suggesting a methodology that would assess mortgage affordability at about 75 basis points – or three-quarters of a percentage point – higher than the negotiated rate.

OSFI has not revealed when it will decide on whether to go ahead with the change as proposed, saying only that it will finalize its guideline after reviewing submissions and expects to set an effective date for later in 2017.

CFIB: EI Insurance rate hike another impediment to small business success

The Canadian Federation of Independent Business (CFIB) is renewing calls for the federal government to reduce the overall payroll tax burden on small businesses, following today’s announcement of an increase in the 2018 Employment Insurance premium rate.

The 2018 EI rate for employees, set by the Canada Employment Insurance Commission (CEIC), is $1.66 per $100 of insurable earnings, a three-cent jump from 2017. Employers will pay $2.32 per $100 of insurable earnings, an increase of four centsfrom the previous year.

“This latest increase means that payroll budgets of every business will increase for six straight years when you take into account that the 2018 EI increase will be followed by five years of CPP premium hikes starting in 2019,” said Corinne Pohlmann, Senior Vice-President, National Affairs at CFIB. “These tax hikes — which come amid the spectre of the federal government’s proposed tax changes — will make it more difficult for small business owners to hire more workers, raise salaries and grow their businesses.”

In a recent CFIB survey of members, Employment Insurance was identified as a “serious” concern for 43 per cent of small businesses; total tax burden, including EI, CPP, and Workers’ Compensation costs, was the top concern.

To reduce the payroll tax burden on small business, CFIB will continue to push the federal government to adopt the following measures:

  • Create an EI tax credit that recognizes the investments that small and medium-sized businesses already make in hiring and training employees;
  • Put in place a permanent, lower EI rate for small businesses (e.g. gradually moving from a rate that is 1.4 times more than the employee rate to a 50/50 split over time); and
  • Implement an EI holiday for hiring youth, as was promised in the federal government’s election platform.

CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region.

SOURCE Canadian Federation of Independent Business 

What to do when a hurricane blows away your vacation plans

By Beth J. Harpaz

THE ASSOCIATED PRESS

What do you do when a hurricane blows away your vacation plans? The Associated Press asked Pauline Frommer of Frommers.com and the Frommer travel guidebook series for advice.

WHERE TO START

Frommer says it all depends on “how you booked that vacation.” If you booked an air-hotel package through Expedia, contact Expedia. If you booked it “a la carte” booking hotel, cruise and airfare separately on your own contact each vendor or company separately.

HOW ABOUT REFUNDS?

If you’re going to a Caribbean island that suffered some damage but the hotel reopens, Frommer says you’re likely not going to catch a break.

On the other hand,  “If you’re going to a place that seems like it’s been blown off the map, like sadly St. Martin, you may have a better chance of getting a refund,” she said.

Often travel providers try to “get you to shift your plans.” Many of the cruise lines are announcing they’ll still go to the Caribbean but just to a different island than originally planned.

“If you’ve already been to those Caribbean islands and you were hoping to see ones that are not currently accepting visitors, you may be out of luck,” she said. There are also cases where seven-night cruises are reduced to four-night cruises and cruise lines seem to be giving money back in those cases.

For cancelled cruises,  “they’re giving not only full refunds but depending on the cruise lines, they’re giving a little extra: 25 per cent off another cruise or 50 per cent.”

Airline policy is. “fluid,” Frommer said, with some waiving change fees for future travel if you rebook before a certain deadline, allowing you to apply the cost of the flight you no longer want to a new destination. But details vary, so contact the airline.

Be prepared to spend time online or on the phone. “Patience will be a real virtue right now,” Frommer said. If you booked through a travel agency, they may be able to make those changes for you. As a last resort, “contact your credit card company. They may be able to duke it out for you.”

HOTELS, HOME RENTALS AND THIRD-PARTY SITES

If you booked a home rental and made a deposit through a site like Homeaway.com or VRBO.com, they “act as the middleman” and “set up lines to help you get through to the individual owners,” Frommer said. “They’re not going to get you your money back but they are trying to facilitate communications. … However they will not step in if you can’t get your security deposit back.”

WHAT? NO REFUND IF WE PAID FOR LODGING IN ADVANCE?

“That’s a lesson we’re all learning,” Frommer said. “It’s in their contracts that usually they’re off the hook for all but the most egregious of circumstances, for example, if it’s a scam and there’s no home there. But with natural disasters, there’s often an act of God clause that means they do not owe you anything when things go horrifically wrong on a huge scale.”

Again, Frommer said, “it all depends on how you booked.” If you made a reservation with no money down, “you should be able to cancel without penalty.” But if you paid in advance for a discount on a hotel booking website,  “you could be on the hook.”

TRAVEL INSURANCE

“The majority of travel insurance policies will cover you in those cases if you’re travelling and the place is unsafe,” Frommer said. But “you cannot buy the insurance after the storm has been announced. Once it’s on the radar, you’re out of luck.”

Insurance may also fail to kick in if the hotel reopens even if the “beach is gone and the trees are down and all of its neighbours are in rubble. … If you can get there and stay there safely, it’s considered your vacation, even if it’s not the vacation of your dreams.”

CAA says 10,000 consumers could be Equifax hack victims

By Armina Ligaya and David Hodges

THE CANADIAN PRESS

TORONTO _ The Canadian Automobile Association says it is informing about 10,000 of its members that they may have had sensitive data compromised by the massive Equifax cybersecurity breach.

The CAA said Thursday Equifax was its partner on the auto organization’s identity protection program, which began in March 2015 and was terminated on July 1, weeks before Equifax discovered the hack on July. 29.

The program required members to register their personal information such as credit cards, banking information and email address, with the option of providing a social insurance number.

The organization says it has been trying since the first reports of the Equifax breach surfaced to determine if it affects any of the approximately 10,000 CAA members who signed up for the program.

It says Equifax has not provided any answers so far. Equifax Canada did not respond to requests from The Canadian Press.

“We value our members’ privacy. Our contract with Equifax explicitly said customer data would be governed by Canada’s privacy law, PIPEDA, and we chose them as a partner because of their then high reputation. CAA did not handle or retain any of the information provided to Equifax,” said Ian Jack, CAA managing director of communications and government relations.

“We are informing the affected members that the data they shared with Equifax may have been compromised, and are writing Canada’s Office of the Privacy Commissioner to express our concern about this breach and to ask that they push Equifax to provide more information to Canadians.”

Meanwhile, Canadians who are worried they might be victims of the Equifax Inc. hack say they are being treated as an afterthought in the wake of one of the largest online data breaches in history.

The company has provided consumers in the U.S. with a website that shows whether they are at risk of identity theft and is allowing them to monitor their files for free for one year.

But the online database does not provide Canadians with accurate information because it is based on U.S. social security numbers. The Equifax Canada website says it costs $19.95 per month for the same monitoring service.

Toronto lawyer Frances Macklin said she is frustrated that Canadians are being treated worse than their U.S. counterparts and questioned why there isn’t a dedicated portal for consumers north of the border.

“We’re equally affected. Just because I don’t have a social security number, I don’t get access to information,” said the partner at Gowlings law firm. “I’m completely bewildered by that.”

Equifax Inc. said last Thursday that a security breach occurred over the summer that compromised the private information of up to 143 million Americans, along with an undisclosed number of Canadians.

But the company has not provided further details, including how many Canadians may have been exposed. Equifax Canada did not immediately respond to requests for comment.

However, Equifax Canada’s customer service agents have told callers that only Canadians who have had dealings in the United States are likely to have had their information compromised in the data breach.

The credit monitoring company’s call centre staff said that Canadians who have Equifax accounts in the U.S. could be at risk of having their data compromised, such as those who have lived, worked or applied for credit south of the border.

Equifax Canada’s website says that “only a limited number of Canadians may have been affected” and it is working to find out how many.

It adds that personal information that may have been breached includes names, address and Social Insurance Number and “the breach is contained.”

Robert Johnson, lead plaintiff in a proposed class action lawsuit against Equifax Canada filed in Saskatchewan, said he is upset that Canadians have only been told that a limited number have been compromised.

The Regina business analyst said he trusted them with his personal information and does not understand why it is taking so long to provide more information about the hack.

Communications expert Warren Weeks believes Equifax could not have handled this issue in a worse way.

“We’re talking about the gateway to all of your financial information in your life,” said Weeks, who is the principal of communication firm Weeks Media Group.

“And Canadians, in specific, don’t know if they’ve been targeted or not or they’ve been impacted or not? I think in 2017, that’s unacceptable.”

Canadian snowbirds will face higher insurance costs even if unscathed by Irma

By Ross Marowits

THE CANADIAN PRESS

MONTREAL _ Canadian snowbirds who were lucky enough to escape property damage from hurricane Irma will still face higher costs as insurance providers jack up premiums and condo associations levy special assessments, say Florida insurance experts.

“We’re probably looking at across-the-board 15 to 20 per cent increase in property insurance costs over the next year,” says Brad Hubbard, the Tampa owner of an insurance agency and an engineering consulting firm specializing in flood risk.

He said the higher premiums could come from greater insurance losses and reinsurance companies determining there is a statistical increase in the risk that future storms will be more frequent and severe.

Hurricane Irma is expected to be one of the mostly costly storms in history with losses estimated at US$20 billion to US$65 billion, including up to US$50 billion in the U.S., according to risk modelling software company AIR Worldwide.

Additional insurance costs will be borne by all insured Florida homeowners, including the estimated 500,000 Canadians who own Florida properties.

Condo owners could also face special assessments if their building sustains heavy damage that isn’t fully covered by insurance or its policy has a high deductible.

“Your condo can be fine but at the end of the year you could receive a bill that says $3,500,” added Martin Rivard, an insurance broker in Boynton Beach originally from Shawinigan, Que.

The situation could be especially acute in areas like the Florida Keys, where 25 per cent of homes were destroyed by heavy winds and storm surge.

Rivard said he’s always amazed by homeowners _ especially Canadians who purchased second residences when they were extremely cheap during the housing collapse _ who decline to take out a policy because of the increased cost.

“I’m hoping that Irma was a wake-up call,” he said in an interview.

The average price of homeowner’s insurance in high-risk wind areas of Florida is US$2,055 or US$1,500 if you buy through Citizens Property Insurance Corporation, a state-run provider. Flood coverage premiums average US$450, providing coverage of $250,000 on the structure and $100,000 for the contents, says the Insurance Information Institute.

Canadians are eligible to buy homeowner’s insurance from Citizens Property Insurance and flooding insurance from the federal National Flood Insurance Programs. Only 16 per cent of Americans purchase flood insurance and less than 10 per cent have no insurance at all.

Canadians were eager to buy insurance after hurricane Andrew devastated southern Florida in 1992, but Rivard said the concern has waned because the state hasn’t experienced a big storm in about a decade.

Renee and Dino Picchioni are relieved their mobile home north of Tampa was spared because they didn’t carry any insurance.

“It’s too expensive to pay for insurance down there for four months out of the year,” Renee said from Windsor, Ont.

Since they don’t own the land where their mobile home is parked, the couple was prepared to walk away if the unit was destroyed.

Rivard expects many others will do the same if their insurance doesn’t cover repair costs.

Realtor Jass Tremblay of Marathon said most of the Canadian customers she knows in the Keys don’t have insurance. While people with a mortgage are required to have insurance that covers wind, they can roll the dice if they pay cash.

Tremblay, a Quebec City native, said she hopes those without coverage would have put money aside so they can face such a disaster.

“Some of them lost everything. They’re probably panicking,” Tremblay said from Deerfield Beach where she holed up during the storm.

Brent Leathwood, a realtor in Sarasota who is originally from Burlington, Ont., said about 80 per cent of his Canadian customers are fully insured even though tougher building codes after hurricane Andrew have helped to minimize damage.

“Canadians tend to be, I would say, sober and pragmatic in their assessments of things and they’re a little less inclined to take big, crazy risks like some of the people in the states are.”

Florida’s insurance system has been strengthened since hurricane Andrew as the number of people living in coastal areas surged 27 per cent between 2000 and 2015, according to the U.S. Census Bureau.

“We feel that we’re in the best position we can be in at this time,” said Michael Peltier, spokesman for Florida’s public insurance provider.

 

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