Payday loans Internet Fraud

This is a follow up on an a story from a week ago, in the Chicago Tribune. Here are the facts:

  • Contract worker at AT&T steals 21,000 employees identities.
  • Gets $70k in payday loans.
  • Payday One and QuickClick are the victimized online payday lenders.

Here’s what’s wrong w/ the article:

The Chicago Tribune reporter blames the bank and the internet lenders. “more restrictions on online payday loans. Some banks also need to tighten their rules, he said. Some allow checking accounts to be opened online without running credit checks or verifying addresses, he said.”

Hello? Anyone home? What about AT&T? Didn’t they give access for all this data to a contract worker?

Obviously, there were some Internet lenders that said “no”, while others said yes. So how does the industry prevent this in the future?

  1. There should be a better way to verify the identity of a bank account. Unless the identity thief opened the online bank accounts in the name of the ATT employee.
  2. Next question: Can you open up an checking account in another person’s name? If so, what banks are these. This is a big red flag.
  3. Payday loans do not affect your credit rating. This article claims that they can. To my knowledge none of the big 3 credit bureaus take this data.

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