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The Ins and Outs of Credit Card Fraud

Credit card fraud may soon be a thing of the past, like dial up problems and floppy discs. The major credit card companies have set an October 2015 deadline to switch from swipe-and-sign cards people have in their wallets to a chip-reading system. This means Americans will have the same credit card protection as nearly everyone else in the world.

The magnetic strip on the credit card will disappear. Instead the card will just have a silver or gold square box on the front of the card with a microchip embedded into it. Instead of swiping the card at check out, the credit cardholder will just slid the chip into the chip reader to make the purchase. No signature needed. How will the purchase be validated? By entering a personal identification number, or PIN.

Data Breach and Credit Card Fraud

You might have received e-mails explaining your personal financial information was hacked. These emails have been sent to customers who made a purchase at a retailer like Target—and even the government. Credit card fraud generates approximately $1 billion dollars for scammers each year.  Visa

Criminal fraud is the act of intending or actually deceiving someone via false representation of a fact. This false representation can be a lie or half-truth. What makes it fraud is the victim relies on the information to his legal detriment. Legal detriment refers to the victim relying on a promise made which alters his decisions and how he assumes liability. In criminal law, there are several types of fraud, including credit card fraud.

Credit card fraud is the act of using another person’s credit card without permission. Typically, this is done by making an unauthorized purchase with the individual’s credit card. Several types of credit card frauds exist. Common types include:

  • Using a stolen or lost credit card
  • Placing unauthorized charges on an existing account
  • Identity theft
  • Using a counterfeit credit card. This is a credit card that is fake, but with the correct information on it
  • Acquiring the credit card fraudulently via the mail
  • Using credit card information to make online purchases

The latter type of credit card fraud has skyrocketed because an individual doesn’t need a physical card to make a purchase, open an account, or obtain other credit cards.

Does credit card fraud only refer to credit cards? No. The term “credit card” is a broad term used to describe a debit card, credit card, or similar type of credit used to:

  • Make a purchase
  • Obtain financial gain with no intention of repayment

What is a Credit Card Fraud Scheme?

As you’ve just read, many forms of credit card fraud exists. In fact, there are more credit card schemes than can be listed here. So it’s important to note that credit card schemes fit into two basic categories:

  • Account takeover
  • Application fraud

When someone hijacks a credit card account, he literally takes over an existing credit card account. He obtains your personal information, then proceeds to become you. He changes the billing information to another address. He subsequently contacts the credit card issuer to report the card missing or lost to obtain a new card. Lastly, he makes fraudulent charges.

Application fraud is different. It refers to someone opening a credit card account in another individual’s name without permission. For example, he could find out enough information about you to complete a credit card application or create fake documents to open an account.

Ways Criminal Access Credit Card Accounts

Data breaches often come to mind when someone realizes she’s a victim of credit card fraud. After all, you hear about companies being hacked all the time online or in media reports. Of course, there are other ways to gather credit card information and fraudulently use it, such as:

  • Obtaining information from a lost or stolen credit card
  • Looking over a person’s shoulder as they make a transaction
  • Stealing from the mailbox
  • Going through trash
  • Making fake phone calls to solicit information
  • Search personal records
  • Sending unsolicited emails to obtain personal information

New Credit Cards

It’s unclear when everyone in the United States will have the new micro-chipped credit card. Target has already announced it can accept the micro-chipped cards. The main reason for the move to get rid of the magnetic strip is to eliminate credit card fraud. The chips are harder to hack. However, credit card users still have to be vigilant to avoid having criminals access the card a different way.

Impact of California’s Drought on Water Rights

California is in the midst of its fourth year of one of the most severe droughts on record. A drought State of Emergency has been called by Governor Brown and imposed strict conservation efforts statewide. While water conservation efforts have been monopolizing the headlines in most local and state newspapers, the fight over water rights, both surface and ground, have been garnering more and more attention.Empty

Riparian rights determine how water is allocated among those who possess land along its path. Typically, the rights belong to landowners whose property the natural waterway runs, whether it’s a stream, creek, or river. In California, riparian rights are determined by a doctrine known as “prior appropriation.” Under this doctrine, the first person to take a quantity of water from a water source for agricultural, industrial, or household use, has the right to continue to use that quantity of water for that purpose.

In mid-June, the state of California reduced the water usage of farmers with rights to California water dating back more than one-hundred years. In an average year, agriculture use in California amounts to about eighty percent of all of the water consumed on the state. Since the drought began, farmers in the Central Valley have had their water usage drastically reduced incrementally each year.

However, this cut could have devastating consequences for farmers who rely on water to feed their crops and support their businesses. Only once in the history of California have people with the most senior water rights been affected by droughts. Farmers have anticipated that this may happen and as a result have been digging new wells for groundwater. Despite the stress it will put on farmers, California has no choice. Litigation is expected by farmers to fight for their most senior water rights as we move into fall with no rain in sight.

Marijuana Could Destroy California’s Water Supply

While there is no doubting that the California drought affects all of its citizens, environmentalists are scrambling to protect precious and valuable ecosystems that are slowly being destroyed by water diverting tactics of marijuana growers. The marijuana industry in California produces up to seventy-percent of the marijuana consumed in the United States.

However, the marijuana industry remains largely unregulated. There are few protections to ensure that illegal water diversions for marijuana growing farms don’t dry up rivers, destroy salmon and steelhead habitats. Although not legal, the debate over whether or not to legalize marijuana is more amplified as marijuana growers develop extensive plots along California’s most sensitive habitats. A single marijuana plant demands substantial water to grow and since this industry is unregulated, most water to feed the plantations is taken illegally. These diversions have drastically reduced many parts of California, including stretches of the Eel River and many of its tributaries affecting salmon and steelhead habitats, as well as affecting the water supply that wildlife in the area rely on. The diversions have become so extensive that even legal water users in the area don’t have enough water because of marijuana poachers.

While legislation regarding water rights and marijuana growing is making its way through the legislature, environmentalists and concerned citizens are hoping for a more expeditious solution to the problem before marijuana growers permanently destroy sensitive habitats forever.

The Right to Lease or Rent Foreclosed Property

The Right to Lease or Rent Foreclosed Property

Who has the right to lease a foreclosed property? One guess might be the owner, depending on the stage of the foreclosure process. Another answer may be the bank or financial institution that owns the property after the foreclosure is complete. According to Earl Johnson, a Goose Creek, South Carolina resident, he had the right to lease foreclosed property. However, police claim the Johnson never owned the house, and that Johnson had conned tenants into renting foreclosed property.

What Was Johnson’s Defense?

Earl Johnson claims he has a legal right to lease foreclosed property that he didn’t own under the Declaration on the Rights of Indigenous People signed by President Barack Obama.

Before focusing on who is right or wrong, let’s define foreclosure. Foreclosure is a process where a county or financial institute takes a property from a property owner and sales it. Foreclosures typically occur after a property owner defaults on a mortgage loan or property taxes. Mortgage holders, usually a bank, sell the property to pay off the remaining debt on the loan or taxes.

The right to lease or sell a foreclosed property depends on the stage of the foreclosure. A property owner can avoid foreclosure via a short sale, short refinance, loan modification, repayment plan, or by challenging the foreclosure. A mortgage holder can sell the property through an auction. In many situations, the former homeowner moves out and the property is left vacant until the bank or county sells it. Earl Johnson

Earl Johnson wasn’t in either category. He never owned the property or was a lender holding a mortgage on it. Yet, he leased the property in question to two sisters, Tina Capreole and Nancy Bowman. They paid Johnson $1200 and moved in on August 1, 2015. A couple days later, a realtor dropped by the property to show it to prospective buyers. That is when the new tenants discovered the man they’d leased the home from didn’t own the property. In fact, the property was in bankruptcy.

Typically, a tenant has some rights in a foreclosure when a landlord defaults on his mortgage or taxes. For example, the Mortgage Reform Act passed by Congress in 2009 gives tenants living in foreclosed property 90 days to find a new place to live. This Act and many other tenant rights weren’t available to the tenants living in the “leased” foreclosed property in South Carolina. The bankruptcy trustee, a court appointee who oversees bankruptcies, told the tenants they had to move because the tenants were living there illegally.

It’s a Crime to Lease Property a Person Doesn’t Legally Own

It’s a crime to lease property without the permission of the property owner. Illegally leasing property that one doesn’t own is a repeatedly occurring scam which occurs across the country. For instance, in 2013 a Florida woman was accused of leasing her neighbor’s foreclosed home to tenants for more than one year. Tenants allegedly paid her about $13,000.

In Goose Creek, Johnson was arrested and charged with:

  • Burglary in the third degree
  • Obtaining signatures under false pretenses
  • Operating a business without a license

Burglary is the criminal act of breaking and entering into a structure for the purpose of committing a crime thereafter. The entry doesn’t require the use of force. Johnson is accused of breaking and entering into the property prior to leasing it. According to the tenants, he even gave them keys to the home and made some home improvements to the property.

Obtaining property by false pretenses is a crime when someone makes misrepresentations or lies to get property. In this case, Johnson is accused of misrepresenting himself as the property owner to illegally obtain the tenants’ rent.

A business license is required to operate a business in a particular area. Failure to have a proper or valid license is a crime.

Is the Declaration on the Rights of Indigenous People signed by President Obama a Valid Defense?

The Declaration is a statement addressing the human rights indigenous people have. It was formally adopted by the United Nations in 2007 and formally endorsed by President Obama in 2010. The purpose of the Declaration was to emphasis the fact that indigenous people have the right to enjoy all human rights and fundamental freedoms recognized in the United Nation’s Charter.

Notably, the United States originally voted against the Declaration when the U.N. initially voted on it. Since the Senate has yet to ratify it, the Declaration isn’t legally binding and not a part of U.S. criminal laws. The Declaration doesn’t create new rights for indigenous people. It is unlikely that Johnson will succeed with this defense.

Sirius XM Radio Settles Unpaid Internship Lawsuit

Sirius XM Radio has entered into a settlement agreement to pay up to $1.3 million to its interns who claim that the company was in violation of U.S. labor laws by not compensating its interns. The plaintiffs had performed work on a number of Sirius projects, including the Howard Stern Show, and stated that they had worked up to 40 hours a week without pay. They allege that this violates the Fair Labor Standards Act (FLSA) as well as the minimum wage law in New York State.

The principal test that courts apply in this type of case is whether internships were created mainly to provide an education to young people in a certain field. This is in contrast to the use of unpaid workers for the same duties carried out by employees. According to federal court papers filed on Monday, August 3rd, Sirius still thinks that it was not in violation of any laws by having an unpaid intern program. However, in an effort to avoid expensive litigation, the company has agreed to make payments to over 1,800 previous interns.

The settlement, which was presented by Sirius, and is pending approval by a judge, was announced one month following rulings made by the 2nd U.S. Circuit Court of Appeals in New York. Previous cases with similar decisions include those against Fox Searchlight Pictures Inc. and The Hearst Corp., in which the appeals court also determined that the legality of unpaid internships is dependent on whether they are relevant to the education of interns.  Paid internsihps

After the Fox case was filed in 2013, many other comparable lawsuits followed, including claims against Warner Music Group Corp., which entered into an agreement in June to pay hundreds of interns over $4.2 million. Prior to that, there were even more substantial settlements by Comcast Corp’s NBCUniversal, Condé Nast, and Viacom Inc.

In the complaint against Sirius, an intern for the Howard Stern Show named Melissa Tierney claimed that for a period of four months, she ran errands, placed orders, collected breakfast orders and carried out other menial tasks for Stern’s crew without pay. Her complaint cited the FLSA, which is explained by the Labor Department using a six-point test to decide whether an internship can be legally unpaid. According to the Department of Labor Wage & Hour Division, if the following six factors are present, then there is no employment relationship under the FLSA, and the Act’s minimum wage and overtime provisions are inapplicable to interns. The six factors are:

  1. The internship resembles training that would be provided in an educational environment;
  2. The internship experience is intended to be for the intern’s advantage;
  3. The intern does not take the place of the usual employees, but is closely managed by current staff;
  4. The employer that gives the training does not benefit from the work performed by the intern; in fact, its operations may be hindered;
  5. The intern is not guaranteed a job at the end of the internship; and
  6. There is an understanding that the intern is not to receive compensation for any work performed during the internship.

Given the fact that many of these factors were not present during the plaintiffs’ internship, the court ruled in favor of the interns. It appears that several large media companies are exploiting interns’ desire to work for them by requiring them to work really hard and to work long hours without pay. Some interns have said that they were even promised a job at the conclusion of the internship, but were never offered a position. In light of the recent settlements, hopefully, large media companies will think twice before taking advantage of interns.

Class Action Lawsuit Survives Against Chrysler for Defective Clutch

Chrysler_logoIn a class action lawsuit against Chrysler, a federal judge ruled in favor of the plaintiffs on Monday, June 15, 2015, when he denied a request by Chrysler Group LLC to dismiss the class action alleging Chrysler of selling Dodge Darts from 2013 and 2014 with defective clutches. He found that the plaintiffs provided a sufficient description of the defect in their complaint. He also found that the allegation that the defect caused the vehicles to be unmerchantable, was sufficient.

Although the judge reduced the size of the class action, he rejected Chrysler’s argument that certain plaintiffs were in violation of Federal Rule of Civil Procedure 8(a) by failing to state a defect in adequate detail in order to permit Chrysler to defend itself. According to the lawsuit, the automaker was aware that the vehicles with manual transmissions had a defective hydraulic clutch system. It is also alleged that although Chrysler knew that the clutch system malfunctioned, and was marked by several problems and safety issues, it concealed the defect from customers and instead, resumed marketing the vehicles as “robust and reliable.”

However, the judge did not side with the plaintiffs completely, for he dismissed the claims of express warranty and a violation of the Magnuson-Moss Act to the degree to which the basis of those claims is a design defect. He ruled in this way because Dart’s express warranties do not include design defects.

The Magnuson-Moss Act states that a warrantor must reveal, completely and clearly, in language that is easy to comprehend, the warranty terms and conditions to the degree to which they are required by the Federal Trade Commission. According to the terms of the Act, any ambiguous statements contained in a warranty are construed against the one who drafted the warranty.
Moreover, under the California Consumers Legal Remedies Act, the judge dismissed the lawsuit’s punitive damages claims concerning Chrysler’s representation of the cars’ safety. The court found that a press release containing a vice president’s depiction of pre-market testing did not demonstrate that an officer or other person in a position of authority approved of Chrysler’s alleged wrongful behavior.

Nevertheless, the judge seemed to be mostly in favor of the plaintiffs, and hopefully, Chrysler and other automakers will be deterred from hiding their vehicles’ defects from consumers in the interest of increasing their profits. Surely, the cost of defending a lawsuit and the resulting award or settlement amount must exceed the price of taking preventive measures to ensure the safety of consumer products.