Credit Card Nation' author to speak here

An expert on banking deregulation and consumer finance will be in Cleveland today and Friday to explore the dark side of America's love affair with credit.

Robert Manning, director of the Center for Consumer Financial Services at Rochester Institute of Technology, comes to town fresh from testifying before the Senate banking committee.

The author of "Credit Card Nation" contends that America's standard of living and its place in the global economy are being threatened by deregulation of the financial industry, banks' growing reliance on revenue from fees, aggressive marketing of credit to younger Americans and consumers' will ingness to spend in anticipation of a finan cial boom that never really panned out.

"It's like watching the termites eating away at your house," Manning said in a phone interview. "The house is still standing, but it doesn't take much to push it over."

Deregulation has allowed banks not just to saddle consumers with unhealthy amounts of debt, but also to escape the consequences by bundling and selling off the loans. Manning testified to the banking committee that if housing prices continue to fall, 60 percent of American homeowners could find the gains they made through this traditional investment wiped out.

Congress has opted out of leadership, Manning said, giving banks what they want, to the peril of consumers and the economy.

"Until a lot of middle class people start losing their homes, there's not going to be a lot of political pressure," he said. "If we don't do something about it, other parts of the world will take advantage of it."

Clevelanders will get two chances to hear Manning speak -- and to get a sneak preview of the documentary, "In Debt We Trust: America Before the Bubble Bursts," which is scheduled for theatrical release in March.

"In Debt We Trust" will be shown at 4 p.m. today in Room 157 of the Case School of Law, 11075 East Blvd.

Afterward, Manning will deliver this year's Frank J. Battisti Memorial Lecture in the law school's moot courtroom. The speech starts at 6 p.m.

Manning said he'll examine the effect of banking deregulation on consumers and the economy and how the cost of credit is increasing inequality in America.

Both events at Case are free. Attorneys who attend the lecture can pick up a one-hour CLE credit.

"In Debt We Trust" airs again, at no charge, at the Cleveland City Club, 850 Euclid Ave., at 11 a.m. Friday.

Manning will speak afterward at the club luncheon. Reservations for Friday's noon speech are required by early afternoon today. Seats are $18 for City Club members and $30 for others. Group rates are available. To reserve a spot, call 216-621-0082, or visit www.cityclub.org.

At the City Club, Manning said, he'll examine the consequences the country's credit policies will have on baby boomers, who are facing more financial insecurity than previous generations, and how U.S. reliance on debt could "ultimately hurt America's position in the global economy."

Manning said he hopes the documentary's release will help launch a "Fair and Responsible Lending Campaign" that will unite creditors and consumers on some responsible middle ground.

"I don't believe you can go anywhere," he said, "unless you have both groups working together."

Identity theft drops;

clearing name costlier

Identity theft may be falling, but victims are paying more to clear their names, says Javelin Strategy & Research, which just released its latest identity fraud survey results.

The Federal Trade Commission released its own annual fraud report Wednesday and, like Javelin, found that young adults -- those under 30 -- may be most vulnerable to identity theft.

When Javelin began its surveys in 2003, about 10 million Americans a year were estimated to be victims. In its 2007 report, Javelin says the number dropped to 8.4 million.

Although fraud overall is down, Javelin found:

Simple notices from companies to consumers alerting them to address changes on accounts could head off up to two-thirds of the cases in which identity thieves take over existing accounts.

High-income and low-income victims react differently. High-income victims tend to embrace technology, using online monitoring more. Low-income victims tend to shun online banking and shopping.

The defenses that Internet-based operations have constructed appear to be successful against pedestrian electronic attacks, but they've also forced criminals to become more organized and sophisticated in their attacks.

The FTC report said that credit card fraud was the most common ID fraud reported to it by consumers, followed by phone or utilities, bank and employment fraud.

Javelin makes a raft of recommendations to companies, not least of which is eliminating the use of Social Security numbers as identifiers for employees and customers. (Are you listening, Cleveland Clinic and University Hospitals?) Higher income groups (those with incomes above $150,000) were most likely to be victimized in the last 12 months, the Javelin report says, although they often bear the lowest out-of-pocket cost.

People in the $25,000 to $34,999 income bracket were likely to spend about $858 to clear their names, Javelin found. Those in the $100,000 to $149,000 bracket spent about $709 to clean up after becoming victims of identity fraud.

Consumers of any income level can help protect themselves, Javelin says, by:

Using tough-to-guess passwords that involve number and letter combinations on laptops and PDAs.

Not responding to automated voice-mail messages prompting them to call a number to resolve an account issue.

Avoiding advance fee credit card and loan offers.

Regularly updating computer firewalls and anti-virus and anti-spy ware software.

Avoiding responding to phishing e-mails that request you contact a company through an e- mailed link.

In keeping with past findings, more than half of identity theft victims said they had no idea how their information was obtained. Of the 42 percent who do, the highest average dollar losses were attributed to viruses, spyware and hacking and to phishing, Javelin said.

Javelin's comprehensive report, which includes advice for businesses large and small, is available through its Web site at www.javelinstrategy.com. A leaner consumer version is available through the Web site at no charge.

The FTC report is available at www.ftc.gov.

If you have a consumer problem you haven't been able to resolve on your own, send an e-mail to

sherylharris@plaind.com; write to Plain Dealing in care of The Plain Dealer, 1801 Superior Ave., Cleveland, OH 44114; or call the Plain Dealing help line at 216-999-6344. By submitting a question to Plain Dealing, you are agreeing to have it published in the paper. Because of the volume of calls, Plain Dealing can respond to complaints only through the column.

This story ran on The Plain Dealer on February 8, 2007.