May’s Tip of the Month focuses on financial coaching and how it can help VLN clients build a stable financial foundation for their future. This tip introduces what financial coaching is, how it can help low-income families, and how to refer clients to this new program. Read more >>
Volunteer attorneys who do not normally practice in Conciliation Court may be unaware that there are two different processes for vacating default judgments entered in Hennepin County Conciliation Court, depending on the amount of time that has passed since entry of the default judgment. This month’s tip provides step-by-step suggestions for how to draft motions to vacate default judgments for each process.. Read more >>
In 2012, there were 12.6 million new victims of identity theft in the United States—about 1 in 20 consumers. Anyone can be a victim, but certain groups are often more adversely affected because they have access to fewer resources with which to take action for protection.
Individuals must be vigilant in opening their mail, keeping track of finances and monitoring their credit cards. Fifty percent of consumers found the fraud themselves by monitoring their bank statements, and credit scores instead of being notified of the fraud by a bank or card issuer.
If a client seeking advice from you has been a victim of identity theft, there are four steps they should consider taking. Not all victims will need to take all four steps.
First, contact credit reporting agencies.
1. Obtain credit report
Everyone is eligible to receive one free report from each of the three major credit
reporting agencies once every 12 months by visiting www.annualcreditreport.com or
calling (877) 322-8228.
Instead of requesting all three reports at one time each year, space out requests every
four months. Each report will have slightly different reporting information, so it’s
important to request each report. The three major credit reporting agencies are:
a. Look for indicators of identity theft: accounts client didn’t open, activity on
dormant accounts, erroneous personal information, or credit inquiries from
companies client didn’t contact.
b. Get fraudulent or inaccurate information removed by writing to both the credit
bureaus and the credit issuers following the instructions provided in the credit
3. Place a fraud alert on credit reports by contacting one credit reporting agency, which
will alert the other two. The fraud alert will ensure that the lender takes additional steps
to verify that the client has authorized the additional credit line, credit limit etc.
a. There are two different types of fraud alert: initial, which is good for 90 days and
renewable, and extended, which is good for 7 years. In order to qualify for an
extended alert, client must have filed an identity theft report (see step three). A
fraud alert can be canceled at any time.
b. Consider a credit freeze, which prohibits the agencies from releasing credit
reports or scores without consumer authorization.
Second, contact the fraud department of companies where the identity thief has committed fraud
1. Ask a fraud investigator to close the accounts that have been tampered with or opened fraudulently, and request a closure letter.
2. Ask for thief’s application and transaction records.
3. Send written dispute including an identity theft affidavit (see below).
4. If collection agencies are involved, contact them: request the amount of debt and the
creditor’s contact information, and dispute the debt.
Third, file an identity theft report with the Federal Trade Commission
1. Submit a report using the FTC’s online form: https://www.ftccomplaintassistant.gov or
by calling 1-877-438-4338.
2. Save the complaint reference number.
3. Whether the client submits a fraud report online or by phone an “Identity Theft Affidavit” will be created from the information provided.
a. If submitted online, print the Identity Theft Affidavit that will be available at the
end of the report.
b. If submitted over the phone, a representative will provide a password and email
a link to print the affidavit.
Fourth, file a police report with local police department or with the police in the community where the identity theft took place
Minnesota law requires police to write reports for identity theft victims. (Minn. Stat. §609.527, subd. 5)
1. Request an appointment for an in-person report filing.
a. Bring to the appointment:
i. A copy of the FTC Identity Theft Affidavit
ii. Any other proof of the theft
iii. A government issued photo ID
iv. Proof of address (lease agreement, utility bills, pay stubs)
2. Request a copy of the official police report.
3. Attach the Identity Theft Affidavit to the police report in order to create the “Identity
Theft Report”. Keep a complete copy.
a. Request an extended alert on client’s credit report.
b. The report can also help to get fraudulent information permanently removed from credit report and prevent a company from collecting a fraudulent debt.
Minn. Stat. § 548.101 will take effect on September 1, 2013 setting new requirements regarding assigned consumer debt default judgments.
A party entitled to a default judgment in conciliation court or district court shall be required to submit admissible evidence on an assigned consumer debt claim when applying to the court for entry of default judgment. Debt buyers will have to present a copy of a written contract between the debtor and original creditor, or, if no written contract exists, present admissible evidence establishing the terms of the account relationship between the debtor and original creditor. Debt buyers will also have to submit admissible evidence establishing that the defendant owes the debt that is the subject matter of the suit and provide the last four digits of the debtor’s Social Security number, if known. Admissible evidence establishing that the amount claimed to be owed is accurate will also be required. Additionally, debt buyers will be required to provide admissible evidence establishing a valid and complete chain of assignment from the original creditor to the plaintiff.
More Notice to Defendant Will Be Required
In addition to the above requirements regarding submission of admissible evidence to prove up their claims, in district court cases debt buyers will have to prove that a summons and complaint were properly served on the debtor; and provide proof that the debt buyer’s attorney mailed a notice of intent to apply for default judgment to the debtor.
Perhaps most notably, Minn. Stat. § 548.101 will require that a new form entitled “Notice of Intent to Apply for Default” be mailed to the debtor’s last known address at least 14 days before any request, application, or motion for default judgment is made with the district court. This essentially gives defendants in assigned consumer debt cases another 14 days to respond to the lawsuit after the initial 20 days given to respond to the Complaint before a default judgment can be entered in district court.
Excluding conciliation court cases and cases in which a hearing is required under court rules, the District Court will determine whether the requirements of Minn. Stat. § 548.101 have been met by a debt buyer plaintiff and may either hold a hearing before entry of default judgment or enter an administrative default judgment. In conciliation court cases, Minn. Stat. § 548.101 will require proof that a debt buyer plaintiff, or its attorney, used reasonable efforts to provide the court administrator with the correct address for the debtor.
For the full text of the new Minn. Stat. § 548.101 see HF 80, which contains other important changes of law affecting consumer debt lawsuits that will go into effect on August 1, 2013.