Debt collectors prey on soldiers and veterans

For Updated: March 22, 2016

By Karen Haywood Queen

Unscrupulous debt collectors have a special affinity for military personnel.

Enlisted service members earn steady paychecks, move regularly and can lose a security clearance if they have excessive debt. They may be overwhelmed with paperwork and stress during and after a deployment. Those issues make them more likely to miss paying a bill, more vulnerable to unlawful debt collection tactics and easy targets for fraudsters trying to collect on nonexistent debts.

“We receive complaints from service members about debt collection issues at nearly twice the rate of their civilian counterparts,” says Holly Petraeus, assistant director of Servicemember Affairs at the Consumer Financial Protection Bureau. “We’ve heard that when National Guard units deploy, debt collectors will call family members and try to pressure them to pay without giving them a chance to call the service member. The worst one I heard about was a debt collector pressuring a recent combat widow to pay them immediately from the death gratuity.”

In a report released March 22, 2016, debt collection complaints accounted for nearly 50 percent of the more than 19,000 complaints the CFPB received from military members. Complaints are up 13 percent from 2014 to 2015. See chart below, “Service member complaints.”

Credit card debt was the most likely cause of those complaints, underlying 30 percent of the debt collection complaints.

“The complaints highlighted in today’s report show that members of the military continue to have serious problems when it comes to debt collection,” said CFPB Director Richard Cordray in a news release. “The bureau will continue to closely monitor complaints from servicemembers to ensure our brave men and women are getting the protection they deserve.”

The debt could be a real bill that slipped between the cracks during a military move. “When you move, you think you’ve paid a final bill,” Petraeus says. “The company says they will tell you if you owe more money — but sometimes they don’t. Then a late charge comes in and they send it directly to collection. In my case, it was a cable company. I went to talk about my current account and they showed me this unpaid debt that had been sent to collection. It was less than $5. Obviously you’re willing to pay it if you know about it.

Phantom debt
Sometimes the supposed debt is one that’s simply not owed. It may have been paid already, discharged in bankruptcy, the result of ID theft, or never owed in the first place. This is a problem that affects not just the military but also civilian consumers.

Or, you may indeed owe the debt, but not to the entity trying to collect it — because a debt broker sold the same portfolio to more than one buyer, says Christopher Koegel, the assistant director, division of financial practices, at the Federal Trade Commission.

We receive complaints from service members about debt collection issues at nearly twice the rate of their civilian counterparts.
— Holly Petraeus
Servicemember Affairs, CFPB

Attempts to collect debt that was never incurred — “phantom debt” — represent 70-80 percent of the debt collection complaints that come into the FTC, Koegel says. Amounts of the bogus debt range from several hundred to several thousand dollars. Sometimes, the scammers inflate the amount of money owed, he says.

Those attempts often appear legitimate because the collector has identifying information about the consumer. “They have a fair amount of personal information about the consumer to help overcome the consumer’s personal skepticism,” Koegel says. “Often consumers who have taken out payday loans may have taken out several. The consumer gets confused and thinks, ‘Maybe I did take out a payday loan a few years ago.'”

In two cases, (FTC versus Cornerstone and Co., and FTC versus Bayview Solutions), debt brokers listed consumer debt for sale on a website that was free, open to the public and contained borrowers’ identifying information including consumer names, addresses, birthdates, contact information, employer names, credit card numbers, bank account numbers and bank routing numbers.

“Anybody, including our investigators, could go on the spreadsheet and see all the information you would need to collect from consumers and ‘create’ a debt,” he says.

“The FTC sued to have that information pulled off the website and make sure consumers were notified of the breach.”

Pay up or else
Even if the debt is real, the debt collector’s tactics could be violating the Fair Debt Collection Practices Act. Making false threats of litigation or any threats of arrest, false claims to be an attorney or law enforcement agency — even spoofing phone numbers on caller ID — are all Illegal intimidation tactics. Debt collectors also sometimes threaten to disclose or do illegally disclose the debts without permission to third parties including family members, employers and — especially tough for service members — military commanding officers, says Christopher Koegel, the FTC’s assistant director, division of financial practices.

You may be going through PTSD. I was really struggling. Companies do prey on us.
— Sgt. Bryan Noyes
Victim of illegal collection practices

“Debt collectors may contact the service member’s chain of command to disclose the debt — something they’re not supposed to do under the Fair Debt Collection Practices Act,” Petraeus says. “They know if the commanding officer gets a lot of calls, he or she is apt to go to the service member and say, ‘I’m getting a bunch of calls about this, fix it.’ Even if they don’t owe it, the service member will pay the debt so it will go away.”

Unethical debt collectors also directly threaten to get the service member’s security clearance revoked, she says. A security clearance is not automatically revoked because of unpaid debt, Petraeus says. “But debt collectors know even the threat is effective,” she says. “Many jobs you cannot do without a clearance. For example, everyone on a nuclear submarine has to have a secret or higher clearance.”

In many cases, the name of the supposed creditor is not recognizable to the consumer. That’s because the original debt holder has concluded the debt is uncollectable, written it off, taken a tax deduction and then sold the debt to a third-party debt collector for pennies on the dollar.

“We’ve had service members says to us, ‘I’d be happy to pay the debt if I could find out who I One veteran’s story
Sgt. Bryan Noyes survived an Iraq deployment from 2003 to 2007 as a forward observer, one of the 10 most dangerous jobs in the Army. “I was usually on top of buildings or right across the street from where the enemy was,” says Noyes, now a district service officer with the Veterans of Foreign Wars in Portland, Maine. “I coordinated movement on the ground, if they needed backup with artillery. We’re an extremely valuable target if the enemy gets us.”

Once he left the Army, he became a valuable target for debt collectors. “When you come out of the military, you’re easily vulnerable to scams,” he says. “You may be going through PTSD. I was really struggling. Companies do prey on us.”

Noyes paid the bills he knew he owed. “I knew I owed those bills because the credit cards were in my wallet,” he says. Other bills were to creditors he’d never heard of and for large amounts he knew he never would have been approved to borrow.

The harassment calls were constant. “I put an app on my phone to count and one day I had 15 messages from the same debt collector,” Noyes says. Debt collectors called as early as 3 a.m. and as late as 1 a.m.

Pine Tree Legal Assistance in Maine helped him resolve the issue, getting three cases totaling $5,000-$7,000 dismissed, Noyes says. “What I tell veterans nowadays is, ‘If you need money, go to your bank or credit union. They know you.'”

How to protect yourself
Petraeus urges service members to take advantage of education and protections they have:

  • The CFPB and Military One Source — a support resource for service members — offer financial planning, counseling and education geared toward soldiers and veterans. The CFPB offers financial coaching for transitioning veterans and other economically vulnerable consumers.
  • Service members who deploy can place an active duty alert on their credit reports to require businesses to take extra steps before issuing credit in their names.
  • Service members also are protected from high interest rates and other predatory practices under the Military Lending Act.
  • The Servicemembers Civil Relief Act protects service members on active duty from certain financial civil actions.
  • Veterans Affairs benefits that are directly deposited into the veteran’s account or issued onto a card are protected from garnishment to collect on debts. The bank must protect two months’ worth of benefits and allow the veteran to use that money. Payments issued on paper checks are not protected; veterans are urged to take advantage of direct deposit to get that protection.
  • The FDCPA protects all consumers, requiring, among other things, that third-party debt collectors send a validation notice within five days of first contacting a consumer about a debt. That information must include the name of the creditor, the amount owed and how the consumer can dispute or the debt.

Federal law says consumers who feel they don’t owe the debt can request a debt verification letter within 30 days of receiving the debt validation notice. At that point, the collector must stop contacting the consumer until written verification is provided.

The third-party debt collector may not even have that information. One study by the FTC showed that only 12 percent of accounts sold to third-party debt collectors came with any underlying documentation, says Lisa Stifler, a senior policy counsel who leads the Center for Responsible Lending’s work on debt collections.

Often, accounts lack key information needed for verification. For instance, 89 percent don’t list the original principal amount; 65 percent lack the date of first default; and 54 percent omit the name of the original creditor, Stifler says. “All of the above are critical pieces of information for debt collection,” Stifler says.

The debt collector, however, may claim the information is sufficient.

“Unfortunately, it’s not always black and white,” she says. “If you cannot get verification, you should not be obligated to pay. Often, though, it takes a complaint to the FTC, the CFPB or an attorney’s intervention.”


Product 2014 complaint volume 2015 complaint volume % changer from 2014-2015 % of all complaints
Debt collection 8,700 8,900 2% 46%
Mortgage 2,500 2,800 10% 15%
Credit reporting 1,600 2,200 35% 11%
Consumer loan 900 1,400 59% 7%
Bank account and services 1,100 1,100 2%* 6%
Credit card 800 1,100 29% 6%
Payday loan 600 500 -2% 3%
Student loan 400 400 7% 2%
Prepaid 100 300 226% 1%
Other financial services 100 200 179% 1%
Money transfer 100 200 73% 0.8%
Total* 17,000 19,200 13% N/A
* Complaints are rounded to the nearest hundred, so percentages (based on nonrounded values) may appear inconsistent with complaint volume
Source: Servicememebers 2015: A Year in Review, released March 22, 2016


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10 warning signs of ID theft and what to do if you suspect you’re a victim of fraud

 For May 24, 2016

By Karen Haywood Queen

You clicked on a spam link without thinking, you left your laptop for a few minutes at a coffee shop, you use the same password for every account, and you even turned off your pesky firewall protection. You know you’re playing with fire. How will you know when an identity thief has stolen your personal or card info?

Be on the lookout for these 10 warning signs of identity theft, and know what to do if any of these things happens to you:

  1. Missing money from bank accounts.
    You see withdrawals from your bank account that you can’t explain. “Someone else has access to your account,” says John Krebs, the Federal Trade Commission’s identity theft program manager.

What to do: Call your bank, explain the situation and change passwords for the account. You may have to wait to get your money restored to your account while your bank investigates the problem.

  1. You stop getting mail.
    “If you’re not getting your mail, that’s a definite red flag,” says Christine Arevalo, director of fraud solutions at ID Experts in Portland, Oregon. A fraudster has likely redirected your bills and other mail to his or her address.

    Post offices are working to prevent this theft by contacting people by text messages, email and U.S. mail to confirm a change of address, Arevalo says. “I just put in a change of address, and all three were utilized,” she says.

What to do: Contact your post office, your credit card company and other billers before payments are past due.

  1. Collectors calling about debts that aren’t yours.
    If debt collectors call you about debts that aren’t yours, someone likely has used your name to borrow money and then not paid it back. If this happens to you, don’t stop at telling the bill collectors to leave you alone, Arevalo says. “That’s a bad idea,” she says.

The FTC’s Fair Debt Collection Practices Act requires third-party debt collectors to send – within five days of contacting a consumer about a debt – a validation notice with the name of the creditor, how much is owed and how to dispute the debt.

What to do: If you think you don’t owe any money, you can send the a verification letter asking for proof, such as a copy of a bill for the amount you owe. You must send the letter within 30 days of the initial contact from the collector. Collection calls and letters must stop until the debt is verified.

Still think the collector has it wrong? You should dispute the debt and file an identity theft report. Also, check your credit reports with the three credit reporting bureaus, Equifax, Experian and TransUnion, or via to make sure there are no fraudulent accounts.

  1. Suspicious charges on your credit cards.
    You notice unfamiliar charges on your credit card bill. A fraudster is likely charging in your name — either with a fake card or online with your credit card number.

What to do: Contact your credit card issuer, tell your creditor about the bogus charges, and ask to get them removed. Then check your credit reports to make sure there are no accounts you didn’t open.

  1. Bogus accounts in your credit history.
    You notice unfamiliar accounts on your credit report. You likely are a victim of account takeover or identity theft.

What to do: Contact each credit bureau, and tell them which accounts on your credit report are fraudulent. You can find a sample letter from the FTC here. Report the ID theft to the FTC. You can also place a fraud alert or credit freeze on your accounts.

  1. A bill from an unfamiliar doctor.
    You received a bill from a medical provider you never heard of for a procedure you never had. That’s a strong sign of medical ID theft. Other warning signs: Your health plan rejects your legitimate medical claims because records show you’ve reached your benefits limit. Or, a health plan won’t cover you because your medical records show a condition you don’t have.
If you’re not getting your mail, that’s a definite red flag.
— Christine Arevalo
ID Experts

What to do: Contact each doctor, pharmacy, laboratory and health plan where the thief may have used your information and tell them about the issue. Contact your employer in case the fraudster is being treated for conditions that would cause you to lose your job

  1. Your government benefits are maxed out.
    If you get a notice that government benefits such as unemployment, food assistance or other services are maxed out or denied and it doesn’t add up, someone may have assumed your identity to collect benefits, Arevalo says.

What to do: Report the crime to the relevant government agency and to the police. Check your credit reports to make sure there are no bogus accounts in your name.

  1. Arrest warrants for crimes you didn’t commit.
    You get stopped for a minor traffic offense and the officer tells you there are outstanding warrants against you for crimes you didn’t commit. Or you are unable to renew your driver’s license because of traffic offenses that aren’t yours. Or you may get a notice for a parking ticket in a city you weren’t in at the time. You may have been hacked by a fraudster who is committing crimes, traffic offenses and/or parking violations in your name.

What to do: Contact the police and the district attorney to report this crime, says Steven Weisman, author of the blog. You’ll have to confirm your identity via photographs and fingerprints. Get a letter from the district attorney’s office explaining that you are a victim of criminal identity theft and that you did not commit the crimes done in your name, Weisman says.

  1. You receive a data breach notice.
    If you get a notice that your information was compromised by a data breach at a retailer, health insurer or other entity, your identity theft risk level just went up.

What to do: Check your credit and sign up for whatever free credit monitoring service is offered in response to the data breach. Most of these services take additional steps that are difficult for the average consumer. “Most will also search the dark Web to see if your information is being sold,” Krebs says.

  1. Tax refund check arrives before you file.
    If a tax refund check arrives before you file your return, that’s an obvious sign that someone has filed a fraudulent return in your name, says Rod Griffin, director of public education at Experian. This actually happened to Griffin. Other signs of tax fraud: You receive an IRS notice that someone used your Social Security number to get a tax refund, or the IRS notifies you that more than one return was filed in your name.

What to do: Contact the IRS and complete Form 14039 Identity Theft Affidavit, notify law enforcement and file an identity theft report with the FTC. If the notice also says you were paid by an employer you didn’t work for, contact that employer and explain that a fraudster stole your identity.

What did Griffin do? “I used Experian’s website to add an initial security alert to my credit reports, filed a police report and notified the IRS of the fraud,” he says. “They then issued a fraud protection number that I had to use when filing my tax return.

Identity theft can happen to anyone. Griffin’s incident had a humorous moment.

“The funny thing is that when I was at the police department I asked the officer if I could have just cashed the check and used it to pay my legitimate taxes. He said, ‘Probably,’” Griffin says. “I, of course, did the responsible, law abiding thing and did not cash the check.”


Four easy ways to increase online security

  1. Don’t automatically click on links in email. Make a rule that you must stand up and stretch first.
  2. Guard your computer the same way you’d protect $10,000 in cash. The data on your device could be worth more than that in the hands of a fraudster.
  3. Change your passwords regularly. Don’t use 1234, your name or birthday.
  4. Turn that firewall back on. The minor hassles aren’t worth the huge blaze you’ll have to put out if you become a victim of identity theft.


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Summer spending: Plan, set budget for more fun, less debt

 For May 16, 2016

By Karen Haywood Queen


Summer means lounging by the pool, enjoying a vacation getaway and, for kids, the fun of being out of school. But then there are the bills to pay: pool memberships, vacation costs, wedding gifts and camps or day care for kids. If you’re not careful, you could find yourself racking up credit card debt to pay for all those expenses.

Ideally, you’ve saved all year to be ready for summer. If not, check out these tips on how to better position yourself for next summer and find last-minute savings now.

Pool memberships
Joining a pool, whether it’s a country club or a private pool, can sink your budget if you’re not prepared. “Pool memberships can be quite expensive,” says Dara Duguay, executive director of Credit Builders Alliance, who lives in Washington, D.C.

If you have all year to plan, see if your favorite pool will let you spread out the cost over 12 months. If not, make your own plan by setting aside money in a special pool account.

As for this summer, if a private pool membership isn’t in your budget, consider a free or a less expensive city or county pool. “For us, the other alternative is the public pools, which are free for district residents,” Duguay says. “They are super crowded. You usually have to sit on the cement because all the chairs are broken. There definitely are trade-offs – but it’s free.”

Day care and camps
For parents of school-age kids who can’t be left alone, summer means scrambling to find reliable, safe, affordable day care or camps. Plan ahead for next year by seeing if you can get discounts by signing up and paying well in advance.

If you’re looking for good day care or camps for this summer, there are alternatives to pricy summer camps and nannies. “There’s a brand new YMCA right down the street from me,” Duguay says. “I enrolled my 7-year-old daughter for a couple of weeks at a fraction of what I would pay for a baby sitter.”

Vacation travelMany churches also offer summer kids’ programs for free or low cost during the mornings or evenings or even all day.

Still need to choose a vacation destination? If you have a travel rewards credit card and have accumulated a fair amount of points or frequent flier miles, you may want to narrow down your choices by seeing choosing a destination that maximizes your frequent flier miles.

Whether you’re paying with cash or points, consider off-season locations such as the Caribbean islands that are popular in the winter, but hurricane-prone in the summer, says Rod Griffin, director of public education for credit reporting agency Experian. To hedge your risk, check to see if you have travel insurance through a credit card that covers weather-related trip delays or cancellations.

Also check for what other kinds travel-related perks and safeguards your credit cards may offer.

If your destination is high-end, compare the price of checking a bag on the plane with the cost of buying liquid toiletries and other items at your luxury destination, Ingram says. “If it costs you $25 to check a bag versus purchasing what is going to go in that bag that would cost you four times that much at your destination, then check that bag and fill it with stuff you buy at home.”

Holiday rental homes
When booking a vacation rental home, you may be able to get a discount by booking next year’s stay as you leave this year. Even if you don’t get a discount, paying part of the rental fee early spreads out the cost.

But if you haven’t booked this year’s beach house yet, you can save money by paying attention to school schedules, says Leah Ingram, author of “Suddenly Frugal.” For example, if your kids get out of school at the end of May, book a rental in an area where school remains in session until mid-June, Ingram says. If your children don’t start back to school until after Labor Day, consider traveling in late August to a state where the school year begins in August.

You may even be able to redeem credit card rewards for vacation home rentals through services such as Airbnb, though the industry has been slow to offer easy rewards programs.

Vacation meals and souvenirs
Many families want to take a vacation from cooking too, Ingram acknowledges. But if you book accommodations with a kitchen, you can save money by eating breakfast at home before heading out for the day and packing a picnic lunch, she says.

When looking for souvenirs, skip the stores on the boardwalk or any place that spells shop “shoppe.” Instead, check out the local Walgreens or other national chain, Ingram says. “They’re likely to have the same touristy tchotchkes at a lower price,” she says.

If your vacation destination is money-saving home sweet home, check Groupon and similar sites for discounts on amusement parks and other local attractions, Griffin says. Don’t overlook free concerts and other events in your area.

Thinking about getting a new outfit to that summer wedding you were invited to? Think twice – everyone will be looking at the bride anyway. If you must have a new outfit and can’t bear to wear the same thing to more than one major event, check out Rent The Runway to rent a dress and/or Poshmark to buy or resell high-end clothing, Ingram says.

Cashing in credit card rewards for wedding gifts may also save you money.

Summer happens. Being prepared for expenses means you can pay those extra bills easily as opposed to wasting your pool time worrying or worse, getting a second job to cover extra bills.

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7 Ways to Make Communities More Livable for People With Vision or Hearing Impairments

Inclusive design and smart solutions prevent isolation and enable independence

 For AARP Livable Communities/Published June 2016

By Karen Haywood Queen

For a person with diminished or no vision or hearing, the first steps to a livable community are literally safe steps. Being able to securely navigate sidewalks, cross streets and ride public transportation are keys to independence and mobility. Public spaces that take the varied needs of visitors into account empower and encourage all sorts of people to get out and about.

Following are some tools and technologies communities can use to help meet the needs of people of all ages and abilities. (When you’re done checking out the helpful solutions, below, learn about some of the Old and New Challenges for People with Vision and Hearing Impairments.)

For a person with diminished or no vision or hearing, the first steps to a livable community are literally safe steps. Being able to securely navigate sidewalks, cross streets and ride public transportation are keys to independence and mobility. Public spaces that take the varied needs of visitors into account empower and encourage all sorts of people to get out and about.

Following are some tools and technologies communities can use to help meet the needs of people of all ages and abilities. (When you’re done checking out the helpful solutions, below, learn about some of the Old and New Challenges for People with Vision and Hearing Impairments.)


Whether someone is vision-impaired, signing as they talk, pushing a stroller or running, it’s tough to weave through an obstacle course of trash cans and sidewalk debris.

In Charlotte, North Carolina, a humorous ad campaign launched in 2013 educated residents about the hazards of leaving trash cans in the sidewalk, says Terry Bradley, Charlotte’s communications manager and Americans with Disabilities Act (ADA) coordinator. The city works with utilities to make sure new poles aren’t placed in the middle of the sidewalk. In addition, the city known for its tree-lined streets has moved away from planting trees in the sidewalk, says Bradley: “We took a unified approach, showing how when you assist any one group, it helps everyone.”

The city of Charlotte, N.C., used humor in an ad campaign telling residents to remove obstructions from the sidewalk so pedestrians can safely navigate the city.


Pedestrian crosswalk signals that talk and vibrate take the guesswork out of crossing the street and are a big step up from the signals that rely on chirps and cuckoos to indicate when a street is safe to cross.An accessible pedestrian signal (APS) provides information in audible tones, verbal messages and/or vibrating surfaces so a pedestrian with vision loss can not only know that the “Walk” signal is on for crossing an intersection, but exactly which direction is safe.

For instance, when a pedestrian pushes the “Walk” button, a voice will come on and, for example, say in New York City, “Now waiting to cross Broadway at West 23rd Street.” When the “Walk” sign illuminates, the button vibrates and a directional arrow lines up with the crosswalk so a visually impaired person can safely step forward. Charlotte, San Antonio and Kansas City, Missouri, are among the many cities installing these types of crosswalk signals.

“It makes such a difference in so many people’s lives,” says Neva Fairchild, an independent living and employment specialist for the American Foundation for the Blind.


Kansas City, Missouri, debuted its new streetcar system in May. Before the official opening kindergarteners from the Children’s Center for the Visually Impaired got a preview test ride to see how easy the system is to navigate.

The KC Streetcar offers level boarding at all of its stops, so it’s friendly for wheelchairs, bicycles, baby strollers and anything with wheels. Kiosks at stops are within ADA reach ranges and have push buttons for contacting a live customer service person. A headphone jack next to the button enables users to have a quieter, more private conversation. Touchscreens on the kiosks scroll with the light brush of a finger.



The quarter-mile Braille Trail in Watertown, Massachusetts, enables people with impaired vision to walk along the Charles River without any help. (That means no companion, guide dog or cane needed.) Instead, a guide wire with different kinds of beads distributed along it indicates the presence nearby of features such as signage and benches.

The guided walk has 10 interpretative displays that are written in both visual words and Braille. A sensory garden contains stone walls that people can climb on and two boats where people can sit. A musical marimba-style bench allows visitors to strike wooden slats to play music. An overlook provides an opportunity to experience the Charles River by fishing or listening to the water flow.

The trail, which is located just two blocks from the Perkins School for the Blind, is part of the Watertown Riverfront Park and involved planning with Perkins, the Massachusetts Department of Conservation and Recreation and local groups.

“It’s really liberating for someone who is blind to have the opportunity, without holding a dog or a cane, to be in nature one-on-one,” says Kim Charlson, director of the Braille and Talking Books Library at Perkins. To further inclusion and counter the marginalization of people who are blind, the Perkins School hosts a website for the sighted called BlindNewWorld.



For people who are deaf or hard of hearing, the ideal sidewalk is nine or 10 feet wide, which is three times wider than the three-foot sidewalks built 50 years ago, says Hansel Bauman, architect and executive director of campus design and construction at the Washington, D.C.-based Gallaudet University, which is the world’s only university designed to be barrier-free for students who are deaf.

That extra width, which exceeds the guidelines in the Americans with Disabilities Act, gives people more room to speak in sign language and watch one another as they walk together, Bauman says.


Detectable warnings, also called “truncated domes” or “tactile paving,” are tiled, bumpy squares that are placed before the edge of the sidewalk to signal that the next steps will be into the street.

Detectable warnings are a standard under Public Rights of Way Guidelines and will likely become the ADA standard in the future, says Meg Conger, ADA compliance manager in Kansas City, Missouri.

“It’s important for someone with sight impairment to know when they’re leaving the sidewalk or right of way and are about to step into traffic,” Conger says.

The bumpy pavement warning is also helpful to people who are speaking in sign language as they walk, says Gallaudet’s Hansel Bauman: “People can sense they’re getting close to the edge of the sidewalk without having to look away from their conversation.”



Theatre Access NYC is breaking through the sound and sight barrier to enable people with vision and hearing loss or impairments to enjoy shows on Broadway, says David LeShay, director of marketing and public relations at Theatre Development Fund.

The group’s website ( helps theatergoers find venues and shows that regularly provide assistive technologies including I-Caption units (handheld closed caption devices), assistive listening devices (headphone units that amplify the sound onstage), open-captioned performances, sign language interpreted performances and D-scriptive audio devices that provide a detailed account of all onstage activity.

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To Recapitalize or Not to Recapitalize: How To Hedge Against Rising Interest Rates

By Karen Haywood Queen/Published April 7, 2015 for ForbesBrandVoice

With the Fed signaling that it may raise interest rates for the first time in nine years, now is the time for middle market companies to explore the pros and cons of recapitalizing, releveraging, and refinancing. Businesses can take advantage of the current low rates while hedging against rising rates.

“Interest rates typically aren’t near zero the way they are now,” says John Merrick, professor of economics and finance at the Raymond A. Mason School of Business at William & Mary. “One would expect that rates would normalize over time. The possibility of the Fed raising rates in the coming year is quite appropriate.”

On March 18, the Fed indicated that a rate increase is possible in June or later this year. Likely, any rate increase will not be steep. “The Fed raises rates in a slow and methodical way,” Merrick says.

Companies that have not already moved to take advantage of lower rates should consider taking action now. Businesses with financing tied to short-term interest rates stand to pay more when interest rates rise.

“The opportunity to refinance at reasonable interest rates is there,” Merrick says. “There’s still time to act but you shouldn’t be waiting for a better opportunity. You shouldn’t be hanging with a big exposure in your funding.”

That logic can also apply to recapitalizing, which reorganizes a company’s capital structure to replace debt with equity, and releveraging, which adds more borrowed capital to existing debt. “I really don’t view adding leverage and recapitalizing as different. They’re just different points along the same continuum,” says Neil Wessan, managing director and head of CIT Capital Markets.

The main advantage of recapitalization or adding leverage is reducing the cost of capital relative to what a company is currently paying, he adds. Since interest rates are low for now, it’s possible for companies to significantly reduce the cost of borrowing.

Hedge Against Rising Interest Rates

Companies looking for flexibility now may consider hedging against rising interest rates. According to Wessan, businesses aren’t focusing enough on the importance of hedging. “Companies should take advantage of relatively cheap mechanisms available to protect themselves today, rather than waiting for interest rates to move,” he says.

Interest rate swaps are one way to hedge against rising interest rates. A company making such a deal enters into derivatives where it “pays a fixed rate and receives a floating rate,” Merrick says. “If interest rates go up, they win on that contract.” That would hedge the company against rising interest rates on the loan.

Even as rates have remained low, terms and conditions of borrowing have loosened in recent years, which means companies that already have good rates may still be able to refinance to obtain better terms and conditions that provide more flexibility.

Whether it’s to make an acquisition, build a new plant, or pay a dividend to shareholders, “The primary consideration should be matching the requirements and plans of the company against what’s available in the capital markets to make it more efficient,” Wessan says.

Knowing When to Wait

Recapitalization, refinancing and adding leverage have many benefits for middle market businesses. But despite pending interest rate increases, there are times when it may be better to hold off.

For example, a company’s current credit situation may mean it does not qualify for today’s low rates. But if the company expects to release a new product soon or anticipates other developments that will improve cash flow, waiting—even with a pending interest rate hike—could be prudent, Merrick believes. Qualifying, even at a higher rate, is better than being turned down. “If they’re having trouble selling themselves to a bank as a good bet, then it may be good to wait until something changes in the company to tell a better story and make them seem much more credit worthy,” he says.

Another reason to wait: if a company is considering a sale in the near future, Wessan says. A company needs to have enough time to spread out the costs associated with refinancing for it to be economical.

Ultimately, the decision to recapitalize or add leverage is an economic one. Wessan notes: “If you can recognize the cost savings in excess of the upfront charges you pay for the refinancing, I think it’s worth considering.”

GE Digital Energy field tests mobile damage app

By Karen Haywood Queen/Published Sept. 08, 2015/Smart Grid Today


Makes predictions based on partial outage data

Helps manage, maximize benefit from foreign crews

GE Digital Energy’s new mobile damage-assessment app could shave one to two days from a two-week, major storm-related outage – saving utilities millions of dollars, John Chisum, utility product line leader for GE Digital Energy, told us recently in an exclusive interview.

The app was released in February, according to the GE website, and this interview was our first inquiry into what it offers utilities that use it.

“Using this application, a utility can start inspecting things in the field a day earlier after a major storm or other event than they could using traditional logistic systems,” Chisum said. “Putting people in the field a day earlier can cut days off recovery time and save multi-millions of dollars.”

For a major hurricane, a full restore might take 14 days without using the app, he added. “If we can restore them in 12 days, we can save the utility millions in revenue stream and the cost of foreign crews.”

“Workers can be out in the field as soon as it is safe,” Chisum said. “This could be within hours of the storm passing, based on safety conditions. A utility could have repair crews staged in a safe location with the app downloaded so as soon as conditions are safe, they could be sent into the field immediately,” he added.

This app offers a simple user interface, a GPS feature and works on any popular mobile device – not just those owned by the utility, Chisum said. During major storm recoveries, mutual-assistance crew members from other utilities can download the app onto their own devices, he added.

As crews check for damage and enter new information, the GPS can identify their location.

Although the app will work with legacy meters, smart meters enhance the performance of the app by offering more real-time data, thus restoring power faster, Chisum said.

The cost to the utility is expected to cost about $1 million for a utility with a million smart meters, Chisum said, though the firm believes he savings from a single major outage could offset the investment. The firm considered a shared-risk model of pricing, where the utility would pay based on how much money the app saved after a storm.

“If you were able to pull one to three days off that event, what would that be worth to you?” he said. “They might save tens of millions of dollars.

“That risk-sharing model could be much more profitable to GE,” but utilities might not have been happy with the bill, Brian Friehauf, GE Digital Energy asset management product line leader, told us. “That’s the tricky part. That’s why we went with a more traditional pricing model.”

Two utilities are field-testing the app to let GE further refine it, Friehauf said. Five utilities expressed interest, but the technology firm limited the rollout and the two do not want to be named at this stage, he added.

GE expects to offer the app more widely by the end of this year, he added.

Many utilities still use manual, paper-based processes, requiring data-entry at the home office to evaluate damage after an outage, Chisum noted.

“Probably 75% of utilities are still gathering data manually to some extent, even if they have a mobile solution for their own staff, because they don’t have devices to give to outside contractors,” he added. “If you’re doing it on paper in the field, a lot of the information has to be re-entered in the office.

“Anybody coming into the area to assist can use the device they brought with them,” he added.

With other apps, when the mutual-assistance people show up, the utility need needs to give them a laptop and credentials and teach them how to use the app. That this is not always a smooth process as some foreign crews are resistant to using another utility’s system.

GE has an older mobile app but use of it has been limited to a utility’s own employees, Friehauf said.

“Crews could download information onto their specific devices, but we couldn’t leverage the devices to mutual-assistance crews.

“It was a tool useful to utilities but it stayed within the utility’s boundaries. This [new app] allows us to perform a much better damage triage assessment.”

Damage prediction included

Information available on that older app is more limited, Friehauf said.

“If you’re doing damage assessment on a company’s existing mobile solution, the information doesn’t come back in a form that lets a utility say, ‘Based on the data we have, there are 50,000 poles we need to replace,'” because older systems typically do not have the ability to predict totals based on a partial collection of data.

Smart meters can help give utilities a more detailed damage assessment, and as a utility installs more smart meters, the overall system will become more adept at providing data, Friehauf said.

During an outage, utilities get good information already from smart meters but it is incomplete, Chisum noted.

Acting on AMI info

“If I have a great smart metering infrastructure out there, I would get the signaling or lack of signaling to know who is out of power. That helps with the outage-restoration process, but there are still some details missing for restoration of the network.

“The automated system can tell me that everyone on the street is out of power, but it can’t tell me about the infrastructure requirements. It can’t tell me if five or three poles are down.”

In an initial damage assessment with the new app, a storm team can walk 10% of the affected area and the app will let them accurately predict total damage, Chisum said. The utility can then order the right number of foreign crews and provide statements to the media about how long it will take to restore power, he added.

It is still the case that “in some cases, mutual-assistance crews are brought in and the utility doesn’t know yet where to put them to work,” he said, “or first responders show up and may not have all the skills and materials to make the repairs.”

Possible scenarios include a bridge needed for access being so small only one type of truck can cross it. “Very often, a large bucket truck that can’t cross that bridge will get sent and then another truck has to be sent. With the app, they will have this information.”

Efficiency for minor outages

Utilities can benefit from using the app in a minor outage not related to a storm, Chisum said. It helps them determine the experience a crew would need to correct it and, again, lets the main office know of any size restrictions on access roads and bridges.

One of the utilities field testing the app had calm-weather days in mind when requesting the app, he added. The utility wanted its workers to get accustomed to using it before a big emergency, he added.

Most of the requested refinements from the early adopters were minor, such as changes to the graphics interface and better usability, Chisum said. The app works now on mobile devices using Apple and Windows operating systems, he added, and Friehauf said that by fall, an Android version will be added.

Other officials can help

A utility could provide the app to police and firefighters to let them share information with the utility, Chisum said. If such government employees saw a utility pole down or other issue, they could let the utility know via the app.

Such information sharing would be one-way only, he added, noting the police and firefighters would not have access to the big-picture data.


Know your fraudster: 8 types of card criminals

The crooks specialize now, from malware coders to mules

Published Jan. 26, 2015 for

By Karen Haywood Queen

You open your credit card bill and see a bogus charge. Yep, you were hacked. You’re not alone – but most likely, neither was the criminal who used your card.

Card fraud is a staggeringly big business: A Federal Reserve payments study released in July 2014 found more than 28 million unauthorized transactions on credit, debit and prepaid cards, totaling $4 billion in fraudulent charges. Behind those numbers are multiple layers of criminals.

“A lot of people assume that the hacker is the person who steals the credit card number and uses it — a single person,” says Jeff Foresman, information security compliance lead with Rook Security in Indianapolis. “But the concept of some guy sitting in his basement doing all this is not valid anymore.”

Until 2003, most online crimes were isolated vandalism — “anti-social self-expression using high-tech means,” according to a 2013 report from Kaspersky Lab. By contrast, today’s cybercrime is a sophisticated, widespread business meant to make money illegally, the report says.

While a few rogues still steal information and use it themselves, most credit card fraudsters are part of a large underworld industry.

Organized crime, much of it based in Eastern Europe and Russia, helps bankroll the criminals involved, says Loc Nguyen, chief marketing officer at data security company Feedzai Inc., in San Mateo, California. An IT specialist working for organized crime gangs in Eastern Europe can make 10 times what he’d make in a legitimate job — or more.

“These are not high school kids — these are highly organized, well-funded organizations,” says Nguyen. “The business of hacking has gone from a mischievous activity conducted by hobbyist developers to an occupation of paid professionals working closely with organized criminals. Just like any company, they have specialists, people who write the code, people who run the equivalent of e-commerce sites and people who buy the card numbers. They have upper management and an endless supply of workers.”

There are multiple ways to get your credit card information and there are different types of criminals who specialize in each. Once they have your info, numerous players stand ready to use it for their profit. The whole industry includes malware writers, several types of thieves who use card skimmers, operators of websites selling card data, credit card counterfeiters and end users: people who buy and shop with stolen credit cards. (To get a taste of life on the lower rungs of this criminal enterprise, check out “‘A day in the life of a common credit card crook.”)

Sound complicated? This guide breaks down the eight professions and their job descriptions.

  1. Malware writers
    Malware authors write the software code that remotely hacks into major databanks to get stored credit card numbers, Nguyen says. Many are young men who are either from Eastern Europe and Russia, or who have connections to people in those areas, he says. Some malware writers are part of organized crime rings, others are freelancers selling code with no idea of who uses it, says Jay Jacobs, managing principal and co-author of the 2014 Verizon Data Breach Investigations Report.

“Someone will create the malware, then they sell it for hackers to use to steal credit card data,” Rook Security’s Foresman says.

The code writers evolve quickly to stay ahead of the good guys. After the 2008 arrest of master hacker Albert Gonzalez for, among other things, stealing credit card information from clothing retailer TJ Maxx, malware writers changed their focus from major companies to smaller businesses, says Jay Jacobs, managing principal and co-author of the 2014 Verizon Data Breach Investigations Report. They began using devices or small programs known as keystroke loggers to capture information typed into the systems of small businesses whose point-of-sale terminals are often open directly to the Internet via third party servers, Jacobs says.

Now the focus is back on major retailers and businesses using programs called RAM scrapers that take payment card information from the merchant’s point-of-sale system while it’s still being processed inside the terminal, Jacobs says.

Because the terminals at large businesses are not directly connected to the Internet, the criminals must work their way through the company’s system to find a part that is connected to the Internet so they can get the stolen data out. That can take time, but the payoff is potentially huge. “Rather than focusing on 10 victims and getting a little data from each, there’s a shift back to multiple weeks targeting a lot of data from one large victim,” Jacobs says.

  1. Phishers and spoofers
    Some malware coders specialize in creating phishing emails designed to get you to give up your personal information. Others perform these duties in addition to writing other kinds of code, Nguyen says.

These phishing fraudsters may work with or separately from spoofers — criminals who create websites that are designed to look like the real thing but are instead run by criminals seeking your personal information, Nguyen says.

“They may have hacked into a database to get your email address ,” he says. That’s why you should be concerned about email hacks such as the one discovered at Home Depot.

Besides targeting consumers, phishers also often target nontechnical employees of banks or retailers that handle a lot of consumer data. The “From” address is spoofed to make it look like it has come from a trusted insider.

  1. Shady clerks and wait staff
    The same guy that’s serving your food may be dishing out your credit card number to an organized crime ring. Gangsters sometimes score credit card information by putting employees of legitimate businesses on their payroll, Jacobs says. “They’ll approach an employee — at a restaurant, hotel, retail chain or anywhere that handles credit cards — and bribe them” to skim customers’ credit card numbers when they swipe the credit cards, he says. “The employee is paid by the number of cards they’re able to skim.”

These employees use small portable skimmers that fit in the palm of the hand and steal your credit card number as they process your payment for the legitimate business, he says.

Working the skimmer scam in person is easier at restaurants where the server takes your card away than at retailers or hotel chains where the employee has to use the skimmer under the counter right in front of you, Jacobs says.

Although many of these workers answer to organized criminals, some work alone, skimming your credit card information for themselves, Jacobs says.

  1. Skimmer installers
    Another brand of criminals mounts hidden skimming equipment anywhere credit cards are swiped. Good targets are unmonitored payment locations, such as gas pumps, vending machines and train ticket kiosks, Jacobs says.

These skimmer installers vary widely in skill and sophistication. Like the shady employee with a skimmer, some operate as part of organized crime gangs and others operate alone.

They may leave a skimmer in one location for a few days, gather a few hundred credit card numbers and then stop collecting data before they get caught. “The longer the skimmers are on there, the more likely they are to get noticed,” Foresman says.

Yesterday’s old-style skimmer installers were often caught when they came back to retrieve the equipment and stolen data. New technology creates wider buffers. Today’s more sophisticated installers use skimmers connected via Bluetooth so they can download stolen data from the safety of the parking lot, the Verizon report says.

Tech savvy fraudsters can also buy skimmers with built-in SIM cards enabling remote configuration, remote data uploading and even tamper alerts that, if triggered, will cache the data and send it out immediately.

Sometimes these skimmers also are paired with cameras or keystroke loggers to capture additional information including your PIN, ZIP code and the card validation code (also called CVV2 or CVC2) that is written but not embossed on your credit card, Foreman says.

  1. Fake technicians
    This con artist looks and acts like a company technician. But beneath the designed-to-fool persona you’ll find a fraudster out to tamper with a legitimate company’s credit card processing machines.

The scenario plays out with someone walking into a store with an authentic-looking work order to replace the old credit card terminal, Foresman says. But this tech guy has no connection to the real processing provider. The new terminal installation comes with an extra feature: a computer chip that copies credit card numbers and sends it out to another online server.

These setups allow fraudsters to get all the magnetic stripe information and PIN numbers from swiped cards, Foresman says. “If I can capture the entire track that’s on the magnetic strip on the back, I can make a new card or overwrite an existing card,” he says.

  1. Counterfeit credit card manufacturers
    These modern day counterfeiters don’t make $20 bills. Instead, they buy stolen credit card numbers and make fake credit cards. All that’s needed are imprint machines, a magnetic card writer and, sometimes, credit card stock — all of which are for sale legally, Nguyen says.

“With less than $1,000 invested, you can have your credit card maker,” he says. “The equipment itself isn’t illegal.”

Sometimes, criminals don’t even need new card stock. Instead, they can take the magnetic stripe data from the stolen cards and overwrite it onto existing credit cards or even onto hotel key cards, Nguyen says.

That’s one reason merchants may ask to see your credit card for a transaction. They want to compare the last four numbers embossed or printed on the front of the card with the last four digits of the account number that the magnetic stripe sends to their system to make sure it matches, he says.

  1. Data sales websites
    The credit card numbers that don’t end up on fake cards often end up on websites offering credit card numbers for sale. Operators of these sites offer thousands of credit card numbers and associated information for sale.

“You can go online and buy 1,000 Visa platinum cards,” Foresman says.

Also for sale are card expiration dates, card validation codes, ZIP codes and PINs, Foresman says. The prices vary from $2 for a single unchecked credit card number to more than $100 for a complete data sets called fullz.

“It’s just like eBay,” Nguyen says. “You go on, put in your search criteria, where you want the card. Do you want MasterCard or Visa? Do you want the PIN and the address? The more valuable the information, the more the fraudsters are willing to pay for it.”

Unattended gas stations and vending machines are more than great places to obtain credit card numbers — they’re also good places to test hot cards and card numbers, he says. If a small purchase goes through, the card is verified.

  1. Shoppers, mules
    At the end of the chain are crooks who buy the fake credit cards or fraudulently obtained card numbers and shop with them, typically for items that then can be resold. They buy big-ticket items at electronics stores such as Apple or major retailers such as Home Depot, Nguyen says.

Grocery stores — because they sell gifts cards that can easily be resold — are another big target. “They want to use cards and get cash out of the system,” he says. “They buy $500 or $1,000 worth of gift cards and go and resell them.”

Spending habits differ by the mode of purchase. Thieves who use the cards in face-to-face transactions tend to spend about $450 in the course of a week, often at supermarkets and home-supply warehouses, according to data compiled by Feedzai.

Those shopping online tend to spend about $900 over five days. They target electronics sellers and discounters, according to Feedzai data. To avoid detection, they have the items shipped somewhere other than their home address, Nguyen says.

Though the latter would seem to be more efficient, it’s all a matter of taste if you’re a criminal. In-person crooks prefer not to have to deal with e-commerce hassles such as fake shipping addresses or proxy servers. “To each their own,” says Nguyen. “The opportunity, or ‘market,’ for fraud is so big that there’s room for all kinds of talents, just like honest professions.”

Sometimes, “mules” are hired to do the shopping — often unaware that they’re part of a scam. These end-of-the-line criminals are the ones who tend to get caught, Nguyen says. “They get arrested, make the news, and then are replaced with other people,” he says.