llinois Attorney General Lisa Madigan is fired up … and if you are involved in identity theft or consumer fraud, you are directly in her sights.
“We have been hard at work, investigating for-profit colleges and the debt college students are incurring, and you can bet we are not close to being finished with this yet,” Madigan said as she sat down with AdVantage News for an interview.
The attorney general is the civil lawyer for the state. Each year, the office takes in about 200,000 issues related to consumer fraud. A mediation unit evaluates the complaints, and when they see an increase in the same complaint against the same institution, they may open an investigation.
“I don’t sit in my office wondering what company I am going to go after next,” Madigan says. “This stuff walks in the door to us.”
For the last several years, Madigan’s office has fought for the underdog, targeting mortgage scams. She brought the first state-level investigation and lawsuit against Countrywide (at the time, the largest subprime lender in the country). She also made educating the public about their rights with foreclosure and mortgage issues a priority.
Higher education scams
In the last couple of years, Madigan says her office is being flooded with complaints about student loans.
“Homeowners started coming to us in the late 1990s and early 2000s, and we started investigating and bringing lawsuits,” she says. “Now, we are seeing some of the exact same problems with people and their student loan debt. We have been focused the last couple of years on issues regarding higher education, and about 50 percent of those complaints are coming from students or former students of for-profit colleges.”
For-profit colleges often are poorly accredited and extremely expensive compared to accredited colleges. Madigan says all too often, students fall victim to these institutions, racking up tremendous debt while also finding the degree is not as valuable as promised.
“Westwood College, which we are suing, has a criminal justice program at a cost of $75,000, and then, many jobs do not recognize their degree because it is not fully accredited,” she said. “You can go to any number of community colleges throughout Illinois and get a fully accredited degree for somewhere between $6,000-$10,000.
“The impact this is all having on the economy is really starting to be felt. People aren’t going out and buying furniture. They can’t go out and buy a car.”
While many for-profit colleges may be “legitimate,” Madigan says, for those looking for a school it is caveat emptor. Students should ask about the type of accreditation offered (regional accreditation is ideal; national accreditation is widely open for interpretation).
Bargain shopping when looking for a school doesn’t hurt, either.
“Your state institutions and community colleges are a much better deal than many private colleges and for-profit colleges,” she said. “Then ask yourself, what kind of a degree do you want to pursue, how much does it cost, and are you prepared to handle the debt that accumulates?”
Scams targeting seniors
“Seniors continue to be one of the biggest targets for scam artists,” Madigan says. “Believe it or not, romance scams are used with seniors. For instance, some of these people will read the obituaries and then go after a widow who is lonely and target her savings.”
All too often, seniors also are uneducated on what information to volunteer over the phone and the right questions to ask. Madigan spoke to seniors Tuesday at Senior Services Plus in Alton and warned them of the dangers of identity theft and consumer fraud.
The rest of us
Every single person in the country needs to make protection a priority when it comes to credit, the attorney general says. Many of the complaints her office receives involve those who have debt (whether college, credit card, or mortgage debt) and try to make arrangements with the servicer without feeling like they are getting anywhere.
“When people are calling their servicer, they are being pushed heavily to get current on their payments, but they are not being told what their options are, such as the income-based repayment programs or consolidation programs,” Madigan says.
When her office was investigating mortgage and lender practices, Madigan often found those same institutions also were practicing discrimination in lending.
“We found that if you were an African American earning more than $100,000 a year, you were still more likely to be put into a subprime loan (a higher-cost loan) than if you were white and earning less than $35,000 a year,” she said.
As a direct result of her work regarding the lenders, Madigan sits on the Department of Justice Residential Mortgage-Backed Securities Working Group. This helps brings money back into the state, both directly for consumer relief and for pension fund systems. Madigan says her office has brought in more than $2.5 billion for relief for homeowners in Illinois alone.
Two years ago, the fastest-growing consumer fraud complaint involved higher education complaints. This year, it is identity theft (a 1,600 percent increase over last year), largely due to data breaches. According to Madigan, it is the consumer’s responsibility to be proactive.
“You can’t throw up your hands and do nothing,” she says. “Since 2006, we have helped 35,000 people in Illinois remove over $26 million in unauthorized charges to their credit. It is a huge problem.”
What you can do to protect yourself
“It is not a matter of if; it is a matter of when,” Madigan says. “You have to be diligent. You have to fight back.”
She advices putting transaction alerts on credit and debit cards, reading bills regularly, and get a copy of one’s credit report.
“Your liability on debit cards is very high, and it kicks in a lot faster than credit cards. The bottom line is companies are not doing as much as they can to protect your information.
“You get one free copy of your credit report every year. We have seen situations where people have taken car financing and mortgages in someone else’s name. The criminals aren’t paying the bills, and you don’t find out about it until you need your credit.”
“These are legitimate and they are free,” Madigan says.
For more information, visit the website at www.illinoisattorneygeneral.gov.
Madigan’s identity theft unit can be reached at (866) 999-5630.
The attorney general, a Democrat rumored by some to be a prime candidate for future president of the United States, was careful not to reveal too much about her plans for her political career, although she did speak briefly about the upcoming election season and her own re-appointment as attorney general.
“It is going to be fun,” she said, laughing. “I have worked so hard for the people that I don’t think I will have a problem, but I take it very seriously. I love being able to stand up and fight for the little guy.
“I love doing this for people, and I love what I do.”