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All You Need to Know About Credit Repair

All You Need to Know About Credit RepairCredit Repair

Credit repair refers to the process that an individual undertakes to alleviate him or her from mounting debts. Individual consumers incur these debts, most often, through an overextension of leverage; they simply spend more on credit than they generate through income. 

When this occurs, the interest rates and fees attached to their credit card agreements multiply to the point where the amount owed becomes unmanageable. If a person experiences this, credit repair is a necessity; mounting credit card debts will negatively affect one’s credit rating, which in turn, will impede an individual from obtaining a loan or a credit card in the future.

Types of Credit Repair Procedures:

There are numerous ways to initiate a credit repair procedure, the most basic of which, is to consolidate your loans. This process enables you to pay off your debts through one fixed payment. In addition to consolidation, a basic credit repair process involves the formulation of a stringent budget. 

Individuals often face mounting credit card debts because they don’t budget their money properly. The creation of a budget will ensure that credit card debts remain reasonable.

In addition to personal approaches, an individual can initiate credit repair through the inclusion of a credit counseling agency. These organizations will provide educational resources on how to properly balance one’s debt. A credit counseling agency will also work with the individual’s lenders to create repayment plans that are more feasible.

Aside from incorporating a credit counseling service, an individual can engage in credit repair by filing for bankruptcy. In most cases, filing for bankruptcy is a last resort form of credit repair. That being said, credit card bankruptcy will, in essence, clear an individual’s credit history after a few years. 

As stated before, credit repair is vital for those individuals facing mounting debts, because a poor credit score will prevent an individual from obtaining any source of financing in the future, including mortgages, credit cards with favorable terms, personal loans, leases and in some cases employment. 

Credit Card Bankruptcy Defined:

Credit card bankruptcy is a program that offers a financial resolution or settlement for those individuals who exceed their ability to repay debt obligations through the overuse of a credit card. The individual in these situations exceed their ability to repay their debt obligations as a result of their overextension. 

Credit card bankruptcy is an alternative payment plan used when an individual’s credit card debt greatly exceeds their income or savings. Bankruptcy is a formal/legal way to recreate a fresh financial structure. After filing for credit card bankruptcy the individual possesses the opportunity to discharge certain debt–this simply means that credit card bankruptcy removes the individual’s legal obligation to repay their credit card debts.

Credit card bankruptcy offers legal authority to discharge all debts associated with credit card-use. When an individual defaults on his/her credit card payments, credit card bankruptcy will enable the individual to restructure their repayment obligations. The debt is therefore legally forgiven and for practical purposes disappears.

Types of Credit Card Bankruptcy

Chapter 7: Chapter 7 bankruptcies are referred to as liquidation bankruptcy because the individual’s net worth is liquidated; this in essence ‘wipes the slate clean’ and enables the individual to re-build his or her credit profile. The majority of the individual’s property is sold and all of their debt is discharged in relation to their total net worth. The funds obtained from liquidation are thus used to pay off the outstanding card debts.

Chapter 13: As oppose to liquidating assets, Chapter 13 bankruptcy creates a debt repayment plan for the individual. The individual, through the creation of the repayment plan, will make monthly payments to their local bankruptcy court each month. The bankruptcy court then pays the individual’s debts according to their repayment plan.

How to file for Credit Card Bankruptcy

The process required for filing for bankruptcy is relatively simple. After determining that bankruptcy is the most beneficial course of action, contact a bankruptcy lawyer and initiate a strategy based on your particular credit profile. When you have decided which type of bankruptcy to file for, the lawyer will contact the local court system and develop either a repayment plan or begin the liquidation process.

The Importance of Credit Scores

The Importance of Credit Scores

What is a Credit Score?
A credit rating is a statistical analysis of an individual’s credit history. The credit score is delivered as a number based on the individuals debt vs. credit amount. This number is used by numerous lenders (organizations that distribute loans or credit card companies) to determine whether or not they will award an individual or business with a line of credit. In essence, the credit score is the fundamental statistic used to evaluate an individual or entity’s credit worthiness. 
There are three agencies that will issue a credit rating: TransUnion, Experian and Equifax. The majority of lenders will evaluate the credit score of two of the three agencies; the credit score is distributed in a report, which will detail the prospective borrower’s credit history.
The formula used to determine a credit score is known as FICO. Named after the Fair Isaac Credit Organization (the first company to use credit ratings), this formula will yield a number ranging from 300 to 900. The lower the credit score, the greater the risk of default; an individual with a score that is below 500 is viewed as a risky borrower to most lenders. 
The risk in this sense is tied into the borrower’s ability to repay the loan or pay-off his or her credit card. The credit score, thus acts as a gauge to determine a risk of default; ratings closer to 300 are viewed as extremely risky, while those above 800 are viewed as possessing limited to no risk.


The FICO Calculation:
The FICO score is calculated based on the percentage of an individual’s total credit that is currently being utilized, the amount of time an individual has had an open line of credit, the types of credit lines the individual possesses, the amount of past lines of credit the individual has had, and the number of delinquent payments. 
Each of these variables contains the following percentage weight to determine one’s credit score: Amount of credit currently utilized (30%), the period of time the lines of credit have been open (15%), the types of credit lines open (10%), the size of past lines of credit (10%) and the number of delinquent payments (35%).
In a general sense, a credit score around 500 is viewed as high risk; this score will generally yield a refusal to lend. If an individual obtains a credit line with a credit score around 500, they will be given a line of credit with high interest rates, exorbitant fees and complicated terms. 
A credit score of 800 or above, in contrast, will grant an individual the lowest possible interest rates, small down payments (where applicable) and limited fees. A credit score of around 650 is viewed as safe enough to receive favorable terms; this score will typically be good enough to receive a new line of credit. 
How do I view my Credit Score?
The majority of organization offer online access to your credit score. These websites will offer reports from the leading credit agencies and detail why your score may be low. Given the importance of favorable terms and interest rates it is recommended that you view your credit score to ensure that no mistakes have been made. 
Often times an individual’s credit score will be lowered because of a forgotten debt or miscalculated payment. In order to raise one’s credit score, they must realize the position they are in. As a result of this, paying a small fee to view your credit score is well worth it.  

A Look Inside Debit Cards

A Look Inside Debit Cards

What is a Debit Card?
A debit card, also known as a check card, is a plastic card that allows an individual to purchase goods, services or products from the cash held in their checking accounts. A debit card thus, offers a consumer with an alternative payment method to cash. 
In essence, the debit card is an electronic check that is debited from an individual’s bank account. When purchasing items via a debit card, the funds are electronically removed from the holder’s checking account. As a result, the purchasing power of a debit card is directly linked to the amount of money in the holder’s bank account. 
Similar to credit cards, a debit card is viewed as an expedited payment method. A debit card may be used for Internet purchases or transactions made over the phone and unlike a credit card, the funds are transferred immediately from the holder’s bank account. 
In addition to making purchases, a debit card enables an individual to instantly withdraw cash from an ATM. Merchants may also offer cash back when using a debit card; after the individual makes the purchase, they are given the option to receive additional cash which will be deducted from the holder’s bank account. When using an ATM, the individual must submit their personal identification number. This number is typically given at the time the debit card is obtained. To obtain a debit card the individual must simply go to the bank where they hold an account and have one made for them.
Types of Debit Cards:
There are three primary ways that a debit card transaction can be processed: online debits, offline debits and Electronic Purse debits. Each debit card can conduct the aforementioned payment methods. The majority of debit cards, although issued for individual bank accounts, are distributed by Visa or the MasterCard brand. 
When making an online purchase using a debit card, the holder is required to provide an electronic authorization for each transaction. When making a purchase online, the funds are immediately debited from the user’s account. 
The transaction may be further secured through the request of a personal identification number or an electronic signature. Offline debit cards are used at the point of sale like a credit card; these types of debit cards typically possess a daily limit or a maximum limit equal to the current checking account balance. Transactions conducted with an offline debit card will require 2-3 days to be reflected on the individual’s balance. 
In addition to the aforementioned debit cards, is a payment method, which requires a consumer to load funds into the card account. The available funds are based on how much money was placed into the card. 
Advantages and Disadvantages of Debit Cards:


Advantages of a Debit Card: 
Consumers who are not credit worthy can easily obtain a debit card, which will enable them to make plastic transactions. 
The use of a debit card also forgoes the process of writing a check. 
Debit cards enable individuals to finalize a transaction at the time of purchase—the use of a debit card effectively bypasses the requirement to pay a credit card bill at a later time.
Similar to a credit card, debit cards are accepted by the majority of merchants. Limited identification is also required, making transactions seamless and less intrusive.  
A debit card does not charge interest or fees when a cash advance is obtained; debit cards can be used to obtain cash from an ATM or a Pin-based transaction.
Disadvantages of a Debit Card:
The majority of banks do not limit an individual’s purchasing power based on the amount of available funds in the holder’s checking account. As a result, balances can be overdrawn; when this occurs the user will fall victim to overdraft fees.
In addition to overdraft fees, banks also charge fees for insufficient funds. These fees are typically attached to purchase made with pre-authorization, meaning they were submitted for a future date. 
When a debit card is lost or stolen, because of the minimal identification required at the time of purchase, it is more susceptible to being used by the other party. That being said, if you lose or have your card stolen, simply call the issuing bank (number will be on the back of the card) and have the card cancelled. Additionally, consumer protection laws in these instances will vary depending on the network and financial institution used. 

What Are Interest Rates

What Are Interest Rates

What are Interest Rates?
An interest rate refers to the rate at which is interest is required by a borrower for the use of credit. For example, if a consumer opens a credit line via a credit card from a bank, the individual will be given a set amount of credit and in return the lender will receive interest payments at a predetermined rate for deferring the use of funds and instead offering it to the borrower. Interest rates are typically expressed as a percentage rate over the period of one year and are expressed as the annual percentage rate for credit cards. 
All lenders have the legal authority to charge borrowers an additional fee to access a stream of financing or credit. In a general example, if an individual borrows $100 from a lender, the $100 is considered the ‘principal’ amount of the loan. 
In addition to the principal, the lender will require the borrower to pay an interest payment. In this example, the interest attached to the $100 is 10% or $10. Interest rates therefore require the borrower to pay an additional percentage that is attached to the repayment amount, known as the principal of the loan.
Interest rates are calculated as an annual percentage, even if the terms of the specific loan require a monthly or periodic repayment schedule. Interest rates, when expressed as an annual percentage, enable the borrower to determine if a particular loan’s terms are reasonable.
Types of Interest Rates:
Interest rates can be delivered in a ‘fixed’ or ‘flexible’ form. Fixed interest rates refer to those interest rates that do not fluctuate over the course of the repayment schedule; fixed interest rates remain the same throughout the life of the loan. 
The majority of borrowers prefer loans with fixed interest rates because the repayment terms are more predictable and protected via a formal contract. That being said, because the interest cannot be adjusted, many lenders will charge more for a fixed-interest loan. 
Flexible interest rates, when attached to a loan, will fluctuate based on macro-economic variables such as inflation, the unemployment rate and various borrowing and lending statistics. Lender’s typically tie flexible interest rates with current federal rates, known as the prime lending rate. 
Federal interest rates are those lending rates charged by the federal government to lending institutions, such as banks. The prime lending rate is periodically adjusted by the Federal Reserve Board chairman, based on the previously mentioned economic variables. A lender may charge borrowers an interest rate, which are just a few points above the prime lending rate at the time of the initial loan. If the rate is altered, the interest on the loan may be adjusted. 
Interest Rates and Credit Cards:    
Credit cards, when issued, are attached with interest rates labeled as the annual percent return or APR. The APR is delivered as an annual percentage; the average APR for a credit card is roughly 20%. That being said, credit cards require a monthly payment plan, altering the APR to a monthly percentage. As a result, an individual with an annual interest rate of 20% will possess a monthly percentage rate of 1.667%. 
The monthly percentage rate is multiplied to any remaining balance that is not paid from the previous month’s balance. For example, if the individual has $200 outstanding on his or her credit balance, the 1.667% will be multiplied in decimal form (0.0167) to the $200 to yield the additional fees that the borrower owes. In this example, the borrower will be required to pay an additional $3.34 in the following month’s bill. 

All About The New Credit Card Laws

All About The New Credit Card Laws

Why were new Credit Card Laws implemented?
To ease the effects of the recession and more specifically the credit crunch, President Barack Obama has signed a plethora of new credit card laws that aim to ease the financial burdens experienced by American consumers. These new credit card laws are federal laws, meaning they must be adhered to by all issuing credit card companies, financial institutions engaged in issuing credit cards and various lending institutions in the United States. 
The new credit card laws instituted by President Obama aim protect the millions of American consumers who rely on credit cards. These new credit card laws will aid in effecting one’s budget and will restrict the issuing organizations in regards to how much interest they can charge as well as limit the amount of usage fees and finance charges found in a credit card application. 
The basics of New Credit Card Laws:
President Obama’s new credit card laws will make credit cards more transparent; the terms and fees attached to credit cards, under these new laws, will be easier to understand for everyday consumers. Credit card companies are now required to offer their holders an advanced notice of changes in their credit card terms. Including in these terms are fewer penalty fees, interest payments and late charges.
To prevent the over-extension of credit—one of the predominant factors that precipitated the economic collapse—new credit card laws will make the ability to obtain credit cards more difficult. Prior to 2008, credit card companies would issue credit cards and sources of financing with little regard to the individual’s credit history or rating. 
Those individuals with low credit scores or a lack of credit history would be given a credit card with a high interest rate or APR—issuers would give these cards with a low credit amount as a way to profit off risky borrowers. In addition, debts were commonly packaged and sold as CDO’s—a profitable economic mechanism that eventually failed and fueled the recession. 
As a result of the mass defaults, the issuance of credit cards will be placed under a more stringent scope; those individuals with low credit scores or low-income families will typically be unable to access a line of credit.
New credit card laws will also allow the holder to pay-off their bills immediately. These no credit card laws essentially do away with the month-long grace period that was typically attached to a holder’s credit card bill. 
New Credit Card Laws and Changes to interest Rates:
New credit card laws will do away with retroactive interest rate increases on existing balances. Furthermore, new credit card laws will only allow for interest rate hikes on existing balances under limited conditions, such as when a promotional interest rate ends, the cardholder makes a late payment, or if there is a variable rate of interest attached to the credit card. 
Interest rates on new transactions, under the new credit card laws, may only increase after the first year of the agreement. Significant changes in the terms and conditions of the credit card cannot occur without 45 days of advanced notice. And lastly, in regards to universal default, the practice of raising interest rates on holders, based on their payment records with other unrelated credit issuers is no longer permitted under the new credit card laws.

Credit Card Fraud

Credit Card Fraud

What is Credit Card Fraud?


• Credit card fraud is a fairly broad and wide-ranging term that encompasses both fraud and theft committed in conjunction with credit card use or similar payment mediums. Credit card fraud arises when an individual or business scam fraudulently and illegally steals another party’s credit card information. When this personal information is obtained, the party engaging in credit card fraud will purchase goods or obtain unauthorized funds from the victimized party’s account. 
• Credit card fraud is also held, in regards to a legal interpretation, as being congruent with identity theft; when an individual’s identity stolen, their personal financial information is also usurped, ultimately leading to credit card fraud. 
Types of Credit Card Fraud:
• Stolen Credit Cards: When a credit card is stolen or lost, it remains functional until the holder of the credit card notifies the issuing company that the card is no longer in the holder’s possession. The majority of issuers possess 24-hour telephone numbers to encourage the immediate reporting of lost or stolen cards. 
• Even with such accessible lines; however, it is still possible for a thief to engage in unauthorized purchases on the lost or stolen card until it is cancelled. This access is possible because the only common security measure found on a generic credit card is the signature panel. That being said, other measures are taken to prevent credit card fraud and to ensure that credit cards are used by the actual owner and holder of the card. Common countermeasures to prevent credit card fraud will require the user of the card to enter in some form of identifying information, such as the holder’s ZIP code, to ensure that the card is not being fraudulently used. Requirements such as these; however, will differentiate and vary based on state law—some states, such as California claim that is illegal for a merchant to request a card user’s ZIP code.
• Stolen cards are the most prevalent form of credit card fraud; many people are careless with their credit cards, augmenting the probability of losing or having their cards stolen. Unfortunately when this occurs, credit card fraud is possible due to an individual’s ability to simply walk in a store and use a credit card without restriction or personal information requirements. 
• Compromised Credit Cards: Compromised account information is another common form of credit card fraud. All information concerning a credit card is stored in a number of formats; account numbers are typically embossed or imprinted on the card itself along with a magnetic stripe on the back which contains the date in a machine readable format. 
• The most common forms of credit card will include the following information: the name of the card holder, the expiration date of the card, the verification or CVV code of the card and the account number. When this information is taken, through simple observation of the card, an individual, in some capacity may be able to access the credit line attached to the card. This illegal obtainment of information can lead to numerous forms of credit card fraud, such as “carding.”
• Skimming: This form of credit card fraud is used in an otherwise legitimate or common transaction. Skimming takes place on the “inside” and is typically done by a dishonest employee of a legitimate financial institution or merchant. Those who partake in this form of credit card fraud will procure a victim’s credit card number by using basic methods such as photocopying receipts or more complex means such as using small electronic devices (known as skimmers) to swipe and store numerous credit card numbers.

Discover the Workings of Credit Card Processing

Discover the Workings of Credit Card ProcessingWhat is a Credit Card?

A credit card is an alternative payment method to
cash, which enables a consumer to purchase goods or services on credit. Credit
cards are issued by financial institutions to those individuals who they deem
as fit or credit-worthy. The ability to obtain a credit card and the subsequent
rates or fees attached to the issuance is based primarily on an individual’s
credit history and score. 



The lower the score, the lower chance to receive a
credit card. If a financial institution grants a card to an individual with a
low score, it will invariably be met with high interest rates and complicated
terms.
 

The interest rates and fees attached to the
issuance are dependent on the individual’s expected ability to repay their
borrowed funds. When an individual purchases goods on a credit card they are
required to reimburse the issuing company the amount spent. If the full balance
is not paid each month the interest is applied and carried over to the
following billing period.
 

How does Retail Credit Card Processing Work?

When an individual purchases a good or service
from a retail store with a credit card, they simply slide the card into a
machine. Each credit card is equipped with a magnetic strip on the back. When
sliding a credit card through the machine, the magnetic strip will relay the cardholder’s
information to the retail outlet’s point-of-sale system. This step of credit
card processing enables the cashier to integrate the individual’s information
into their transaction.
 

In addition to using a machine to initiate the
credit card processing through the magnetic strip, an employee at the retailer
can also type the card information (the credit card number on the front of the
card) into their point-of-sale system. This form of credit card processing is
utilized for online purchases or for those transactions that do not involve a
card reader.
 

All retailers that initiate credit card processing
must sign up for a service that is linked with a merchant provider. Seller
transaction credit card processing systems send captured credit card data,
along with the data linked to the transaction, directly to the merchant account
provider. 


The merchant account provider then routes the information to a credit
card network interchange. This intermediary then connects banks and credit card
providers together to finalize the transaction.
 

Network Interchange involved in Credit Card
Processing



The merchant account must first route the
information through the network interchange to the holder’s institution. The
institution then checks the card’s balance against the transaction amount and
either authorizes or denies the payment. 



The next step in credit card
processing involves the credit card provider routing the information back to
the merchant account. When the information is relayed, the transaction will
either be rejected or finalized. In full, credit card processing takes as
little as two or three seconds.
 

Once the authorization for approval or denial of
payment has been received, the merchant notifies the seller of the result, who
then will notify the buyer. If the transaction involved in the credit card
processing is authorized, the merchant account provider sends the transaction
information back through the network interchange to the seller, who then
requests the funds to be transferred from the buyer’s credit card provider.
 

Easy Steps for Credit Card Protection

Easy Steps for Credit Card Protection

What is a
Credit Card?

A credit card is a plastic card that enables an
individual to purchase goods, products or services by way of a credit line.
Financial institutions, such as credit card companies or banks, will offer
credit cards to those consumers who represent an ability, through their credit
rating, to meet the terms of the credit card contract.

It is
crucial to understand the varying interest rates, or APRs, attached to each
credit card. Generally, those individuals with lower credit ratings, if
approved, will receive a credit card with unfavorable terms and high interest
rates.
 

A credit card’s rates are applied to the
individual’s balance at the end of each billing cycle. For example, if an
individual is given a credit card with $500 worth of credit and an APR of 20%
and the individual spends throughout the month, or length of the cycle, the
full amount of available credit, he or she is required to pay the lending
institution the full $500. 

If the individual does not pay the $500 and only
pays the minimum (typically $15) the APR of 20% will be applied to the next
individual’s bill in the form of a monthly fee (.20/12), or .01667. Add 1 to
this figure to reveal 1.016, which is then multiplied by your remaining
balance. Therefore, if you have $485 due next month, you will take $485 and
multiply it by 1.016 to yield a new balance of $492.76. The terms attached to
each credit card will vary based on the issuing institution’s protocol and the
credit score of the prospective borrower.
 

Why is Credit Card Protection Important?

All credit cards contain a 16-digit credit card
number. This number, which is found on the front of the card, signifies the
holder’s credit account. It is this information that enables a merchant to view
the amount of available credit to which the individual has access. With the
advent of online purchases, all a user needs in most instances is to input this
16 digit number, the expiration date on the front of the card, as well as the
CV-2 code found on the back of the card to initiate a purchase. 

As a result of
the minimum requirements for purchase online, a user can initiate a transaction
by copying or stealing a credit card holder’s information that is printed on
the front and back of their card.
 

Crucial Steps for Credit Card Protection

Since your credit card account number is printed
on the front of your card, you must be sure to know where your credit card is
at all times. If you happen to lose your card or it is stolen, a crucial step
to credit card protection requires you to immediately contact your issuing
institution to inform them of the missing card. 

When the bank records that the
card is not in your possession it will close the count rendering the lost card
inactive. The issuing company will then mail you a replacement. The most common
mechanism for fraudulent credit card use is the unauthorized use acquired from
lost or stolen cards.

Another important step of credit card protection
is signing the authorization strip located on the bank of the card. By signing
your unique signature, merchants can compare the signature on the receipt (at
the time of purchase) to the back of the card to ensure that the purchasing
party is indeed the cardholder.
 

Another crucial element to credit card protection
requires the holder to thoroughly review all bills and expenses. Make sure that
your purchases match up with your bill. If any fraudulent activity or
inaccuracies are found on your bill, be sure to report them to your issuing
credit card company.
 

Why Would I Need Credit Counseling

Why Would I Need Credit Counseling

What is
Credit Counseling?

Credit counseling is a process that incorporates
educational courses to consumers regarding appropriate credit card use. The
purpose of credit counseling organizations is to inform consumers as to how to
avoid credit card debt.
 

Credit cards offer consumers an expedited
purchasing process. Available credit liens also enable an individual to
purchase items with a lack of immediate financial commitment. That being said,
credit cards, when used irresponsibly, can create immense problems for their
holders.

With that in
mind, the primary goal of credit counseling courses or organizations is to
establish an effective debt management plan and budget. The creation of a
conservative and long-term budget will enable an individual to properly extend
themselves in regards to their debt to credit ratio.
 

Process of Credit Counseling

Credit counseling involves a negotiation process
with creditors in order to establish the previously-mentioned debt management
plan. An effective debt management plan will help the borrower repay his or her
amount owed through the establishment of a repayment plan with their underlying
creditor.

A debt
management plan is established by credit counselors to offer the borrower
reduced payments, interest rates and fees that were originally placed in their
credit card agreement. All credit counseling organizations refer to these terms
dictated by the underlying creditor to determine interest reductions and
payments offered to the consumers in a debt management plan.
 

Should I hire a Credit Counseling Agency?

A consumer credit counseling service will attempt
to make debt manageable for a consumer, while ultimately keeping these
individuals out of bankruptcy. Consumer credit counseling services operate
under tight regulations due to past discrepancies, where such agencies further
crippled consumers as a result of hefty service fees. 

That being said, if you
or a loved one is facing mounting debts, it is recommended that you seek a
credit counseling service to renegotiate your payment obligations with your
respective lenders to lower your monthly rates through consolidation and to
offer information and knowledge to prevent a similar situation from occurring
in the future.

A credit counseling service will enable the
individual in debt to avoid bankruptcy and to diminish their debts. The credit
counseling industry will achieve these goals without the constant harassment of
creditors demanding repayment. When a debtor agrees to operate under the terms
of a credit counseling service they contact the agent or representative of the
credit counseling service and not the individual in debt.
 

Types of Credit Counseling Services

A number of practices or educational services can
be grouped within the broad field of credit counseling. However, the actual
organizations which promote and establish debt management plans will operate
under a non-profit or profit-based business model. These organizations
typically have existing relationships with credit card companies or financial
lenders.
 

The benefit of operating with a not-for-profit
credit counseling service is found in decreased fees and the fact that
creditors are more willing to offer lower interest rates through a non-profit
intermediary. This characteristic will, of course, fluctuate on a case-by-case
basis, but is essential to evaluate consumer credit agencies based on the fees
and rates they charge. It is highly recommended that you look for a consumer
credit agency that possesses an excellent rating with the Better Business
Bureau.

Rhonda Lee Devries Sentenced in Fraud Scheme

Rhonda Lee Devries Sentenced in Fraud Scheme


On November 27, 2012, the US Attorney’s office for the District of Montana announced that Devries was sentenced to 110 months in prison and ordered to pay $3,811,221.52 in restitution.  She was sentenced for her role in a large bank fraud and embezzlement scheme, credit card fraud scheme, and money laundering scheme.  


Devries was the former vice president of operations for First Security Bank (FSB) in Malta.  All FSB deposits are federally insured.  


According to court documents, Devries had a total of $40,000 in credit card debt by January 2001.  She was able to maintain such a large amount of debt because she transferred the balances to new credit cards.  


She was eventually declined by a credit card company in January of 2001.  However, with her position at FSB, Devries was able to approve a “high limit” of credit debt.  After the credit card company declined, she opened a credit card account with FSB on January 4, 2001.  The account was opened in the name of RI Inc with a limit of $900,000.  


After she opened the first account without detection, she opened a second fraudulent account under the name ADRD on September 14, 2001.  She proceeded to open two more accounts on May 7, 2009 and June 2, 2011 under the names of ADCDED and ABC123.  


By the time the embezzlement was discovered in May of 2012 the four accounts had balances of $1,100,243, $1,087,562, $1,180,329, and $304,493.  Devries was able to avoid detection at FSB using a variety of methods, but she was caught after Fidelity National Information Systems (NIS) reported suspicious activity to FSB in three of the accounts.  


Devries charged a total of $3,672,627 to the four accounts.  


U.S. Attorney Michael W. Cotter stated: “The future of First Security Bank is uncertain, but Devries’ crimes have caused a grievous financial wound.  When a community bank is forced out of business because of external economic forces or internal corruption, it is a sad day for our rural way of life.”


Source: Federal Bureau of Investigation