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As the Equifax breach has developed recently, another issue has come up, namely the arbitration provision within its website, which has caused consumer outrage and confusion. So, why does this provision matter? If consumers want to get their credit frozen, or check to see if they were affected, surely Equifax wouldn’t add insult to injury to the consumers who are suffering from its mistakes. Certainly, it would appear to be bad business to do so, or at least, unwanted attention. However, Equifax cannot be said to avoid adding insult to injury. Instead, Equifax has implemented that arbitration provision, and later removed it. So again, why would Equifax implement this provision? What impact might it have on the consumer? Why might this be important for businesses everywhere to observe?

What is the arbitration provision?

The arbitration provision that had insulted many consumers was attached to Equifax’s offer of free credit monitoring. In exchange for the service being performed (after the security breach) Equifax demanded that consumers settle any dispute with them through arbitration. In general, arbitration is a private and less costly way to settle disputes outside of the courtroom. While the results of the arbitration may be binding, it gives broader latitude to discovery, time, and may be faster and less formal than a formal trial.  While Equifax later clarified this provision would not apply to the current breach, however, nevertheless consumers were upset at the revelation.

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Let us move on to the ways to protect ourselves in the future by using a credit freeze or fraud alert.  These options can protect your personal, private, and confidential information after a security breach and effectively add extra protection against identity theft. We have discussed them briefly in the past, although now, it seems appropriate to dive into further analysis. What are credit freezes and fraud alerts? How do they add more protection against identity thieves? What other actions might someone take to create additional safeguards?

Credit Freeze

The first and most basic way to prevent harm from identity theft is through a credit freeze, also known as a security freeze. A credit freeze is more or less what it sounds like–i.e., it “freezes” your credit where no lender can get access to your credit unless the consumer decides to lift it. Even then, the freeze cannot be undone without a pin number issued at the time of the freeze.

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Equifax presents an interesting question to consumers. Somehow, an entity that no consumer may have had an actual interaction with has their information, and had leaked it out onto the world. For example, names, phone numbers, credit card numbers, social security numbers, addresses, e-mails were collected and released to unauthorized individuals. They may not have given consent, at least none they could remember. Yet, the information was with Equifax. How did the breach occur? What exactly is Equifax? How did it obtain your personal information? And perhaps most importantly, what comes next?

What is Equifax?

Equifax is a credit reporting agency. The purpose of entities like Equifax (as well as Experian and TransUnion) is to collect and share credit information on consumers. The credit reporting agency tells businesses which consumers are worthy of credit. Effectively, it is a way to outsource due diligence that may otherwise be more costly or time consuming for the business to perform on its own.

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You may have been considering legal actions due to a recent internet scam. Or, you may be wondering what other options you may have for dealing with the issue outside of the legal sphere. Naturally, legal recourse may provide financial or equitable remedies (e.g., temporary restraining orders) but usually there are limits. For example, damages may continue unless action is taken to stymie the leak or prompting the need for another lawsuit to remedy the new situation. So, what are the risks of an internet scam? What can someone do to prevent those risks? When should someone take the step to prevent additional harm?

What can possibly go wrong?

Internet scams can lead to situations like identity theft, credit card fraud, or other financial crimes, all using information that the individual may or may not have given the scammer. Depending on the scammer’s motive, this information may be used for embarrassment of the target or for financial gain.

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So, despite your best efforts, you may have been cat-fished, doxed or otherwise victim to an online scam. Your information is probably now out into the Internet and a stranger that you may have trusted now has personally identifying information. So, your next question may be “well, what comes next?” Naturally, there are certain measures that a person can take to freeze credit, change phone numbers, or otherwise make information unavailable. However, the real question, and the more frightening one to a person may be: “When might I need an attorney?” Naturally, the actions they take may result in damages, and in some cases, the actions of the scammer are against the law, and may provide civil remedies. That said, there are different factors that may make hiring an attorney a prudent act compared to other scenarios. What are these factors? Who might you recover against? What might make you want to use legal actions to protect yourself?

What are the online scam factors?

In any online scam, there are five factors that generally come into play:

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Now that we’ve discussed Catfishing as a scam, let’s go into further detail regarding the motives.  Like any scam, there must be some benefit to the scammer. This benefit is the primary motive for anyone to commit a catfishing scam.  Previously, we mentioned that among other things, the perpetrator may ask for photographs, or for some information to “verify” a person’s age, or to enable their transportation to be “closer” to their target. So, what are the major risks to these actions? What exactly does a catfishing perpetrator want to get from a victim? How might the information provided be used against you?

For Financial Information

The more dangerous elements of catfishing tend to prompt for, as we discussed before, a financial component. This would include asking for money–to get transportation to the person’s location, clothing, or whatever reason the scammer may present–or for credit card information. In the case of the latter, this is usually done in conjunction with asking the individual to sign up through a different, new dating site compared to what the potential victim may be using, and generally to “verify” the age or identity of the person involved.

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If you have been online, it is possible that a person has attempted to “catfish” you. However, you may not have been able to adequately understand it because you were not looking for the telltale signs. It is a type of an online scam, like phishing, meant to take advantage of the insecurities and loneliness of the targets. So, what is catfishing exactly? Furthermore, if you do fall to a catfishing scheme, how can you recover? Better yet, how can one protect against catfishing attempts?

What is Catfishing?

Catfishing is typically done through email or online dating websites. However, they are not exclusive methods. It can also happen on Facebook, Twitter, or other forums that allow people to interact. It involves a person promising companionship or intimate relations, and later on makes demands.  It may involve requesting photographs, confidential information, credit card information, or money. This is akin to the old “Nigerian Prince” scheme where an individual would ask for a certain amount of funds to secure funds that would later be sent to the victim. Ultimately, presuming that the culprit succeeds, then he/she takes and uses personal information to conduct financial crimes.

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Now, aside from Bitcoin and other digital currencies spawning from video games and consumer-oriented companies, it’s important to be aware that there are other types of digital currencies or so-called “cryptocurrencies.” These operate more similarly to Bitcoin in how they generally lack a centralized system that assigns value (compared to other digital currencies like virtual item trading where the items are managed by a company) and has a similar mining protocol allowing individuals to mine the currency.  Indeed, even Bitcoin had a “split” changing from one cryptocurrency to two. Why are there even alternatives? What features does one cryptocurrency have on the other? How should one evaluate the choice to enter a cryptocurrency market?

Bitcoin’s Split

In order to make Bitcoin more accessible, the system administrators for Bitcoin and other individuals prominent in the community underwent a “split” of the currency, as well as other changes to increase the speed of transaction verification. Due to the limits put in place to make Bitcoins scarce and limit the supply, the effective limit had placed a curb on growth. In response, some users chose to take a split after starting in August of this year to create a new cryptocurrency working mainly on the same system as Bitcoin, but with the ability to convert it to “bitcoin cash” and a faster mining and verification process. This would mean that Bitcoin cash would have a lower face value than Bitcoins, as they would be more plentiful. However, this would also make it potentially less secure as the blocks would grow in maximum size, and it would have a shorter history compared to Bitcoin.

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The legality of certain virtual currencies can be murky.  While some currencies, like Bitcoin, can be readily traded for goods and services, however, other virtual currencies remain where regulation is more questionable. To that point, the curators of digital economies have hired economists to better model the value of these digital commodities, creating a sort of virtual currency by accident.  However, the ecosystem behind these virtual currencies has exploded and led to new questions regarding their use and potentially illicit activities. So, what are these virtual commodities? How did they gain value? What is being done to curtail the murkier aspects?

What are these virtual currencies?

A good example of these virtual currencies comes courtesy of Valve, a company that both creates and distributes video games. For the purpose of creating more income for some of their “free-to-play” games, random prizes are given out, and can be earned in-game, and later resold via its platform. These items generally have no in-game function, and merely provide an aesthetic value. For a select few Valve games, these items can then be exchanged between players, or for currency in Valve’s store. In essence, the items can function much like tickets in an arcade, or more concerning, poker chips in a casino. Other games have similarly created digital currencies that can be shifted easily from a “real” currency to something that can be used (though not necessarily benefit) the person in game.

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Bitcoin is a cryptocurrency that has been in the news and in conversations recently for various reasons. While not all retailers will take Bitcoin, and there are fairly good reasons not to, but the cryptocurrency has really taken off.  However, despite how much the word “Bitcoin” is used, the nature of the virtual currency provokes a sort of air of mystery. Unless one researches how to find or buy it, it remains a type of investment that is more exotic than what is commonly available to consumers. Why is Bitcoin so expensive? How does one find and buy a Bitcoin?

Why is Bitcoin expensive?

To properly explain Bitcoin, it’s important to restate one of the fundamentals of economics. The value of a commodity is determined by supply and demand. When it comes to currency specifically, this translates to “the more common and easily- obtainable the currency is in the market, the price will become less in the market.” This is what’s referred to as “inflation.” The purchasing power of a currency goes down because there is more of that currency.

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