Steven Lobdell points out an image on Chase bank's Web site that says "Welcome WaMu customers. We're here for you."

But, apparently not for him. Lobdell is one of a group of former Washington Mutual credit card customers who were abruptly dumped by Chase in recent days. He holds two Chase cards; both were canceled as of July 15.

"It's kind of ironic, isn't it?" he said. "I think Chase is two-faced....We were good enough for Washington Mutual, why not good enough for Chase?" Across the Internet, thousands of former WaMu customers are expressing the same outrage. They say Chase is dumping them as customers, despite their solid payment records.

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JP Morgan Chase & Co. acquired Washington Mutual and its troubled portfolio of credit cards in September, at the height of the banking system collapse. While Chase has recently set about to tidy up the ranks of its credit card holders, consumers are bearing the brunt of the cleaning. Two weeks ago, Chase began forcing some customers to raise their minimum monthly payments from 2 to 5 percent. And now, it's cutting off some customers all together. Thousands of complaints from former Washington Mutual customers can be found on personal finance blogs all across the Web.

Lobdell took a long and winding road to become a Chase customer. He initially opened his credit card with Providian Bank, which was later acquired by Washington Mutual in 2005, which collapsed last fall, and Chase picked up the pieces. 

Lobdell, who had combined balances on the two cards of about $3,000, says he's never been late with a payment and doesn't understand why Chase would cut him off.

 "When I got the letter I called to ask why the account was closed, I was told it was because of information received from the Experian credit bureau," he said. When he looked at his credit report, nothing seemed out of order. Lobdell said he will be allowed to pay off the card at its current rate, but can no longer make charges with it.

24 percent default rate predicted
Chase officials refused to comment specifically about the complaints from former Washington Mutual customers. Spokeswoman Stephanie Jacobson would not say how many card holders were impacted by this latest round of notices, but instead offered only a generic statement saying the bank was reacting to market conditions and new regulations from Congress.

"As a responsible, careful lender, we constantly evaluate the risks and costs of funding credit card loans. We are also evaluating changes required due to pending regulations," she said. "When necessary, we make changes to pricing, terms or credit lines based on borrower risk, market conditions and the costs to us of making loans. These are factors we have always monitored and processes we have consistently followed."

For additional questions, she referred reporters to the company's quarterly statements.

Washington Mutual was one of the nation's top 10 card issuers when acquired by Chase, with about 15 million cards. Still, its operations were dwarfed by the nation's largest issuers, including Chase. Former Washington Mutual consumers have about $25 billion in outstanding credit card loans, compared to Chase's $150 billion.

Lobdell was sure that Washington Mutual customers were being targeted. The letter he received contained the cryptic label "WaMuClosure1" at the bottom of the note.

He's seen notes from hundreds of other consumers in the same spot. "Reading these same stories, over and over, makes one wonder how Chase can get away with this."

A possible reason that Chase would pick on WaMu customers is contained in the company's second-quarter earnings announcement. While Chase said it anticipated losses of about 10 percent on its credit card portfolio, it predicted losses of up to 24 percent from its former Washington Mutual customers. Prior to its collapse, Washington Mutual targeted subprime borrowers, a group that's more likely to default on loans.

Losses of that size would be a shock to Chase's balance sheet. When Chase acquired Washington Mutual's assets for $1.9 billion last fall, it said it anticipated credit card losses in the 8 percent range. 

Lobdell holds other credit cards, so the cancellation does not put him in immediate dire straits. It will mess with his credit report for years to come, however. It now contains two notations that indicate "account closed at creditor's request." He'll get two dings to his credit score because his available credit has shrunk. 

"Now if I try to get a car loan, it's going to show they closed my accounts," he said. 

FICO: Not a negative event
Craig Watts, spokesman for Fair Isaac Corp. – which controls the credit formula – offered soothing words for Lobdell and others in his same spot. Watts says the "closed at creditor's request" notation is not considered a negative event by the credit score formula.

"We see it as the same as if the consumer closed the account," Watts said. In other words, it will not hurt credit scores the same way an account labeled "delinquent" or "settled for less than full balance."

Of course, consumers are advised never to close their credit card accounts, because the loss of overall available credit will hurt their scores – and in this case, consumers have no choice in the matter. So consumers who've had their accounts closed by Chase will see their scores lowered. It's impossible to say by how much, because multiple factors contribute to the score, Watts said. 

To make matters worse, if consumers cut loose by Chase open a new card to replace their lost Chase card, that'll hurt their credit score, too. * "If you go apply for a card, the impact to your credit score is you will lower your score a little bit, but over several months, it will recover," Watts said. His advice to former Chase customers: pay off existing balances instead, and wait to open a new card, if possible. Consumers who are really worried about the impact of losing their Chase account should pay to get their credit score, he advised. 

Lobdell didn't have his score before Chase dumped him so he really has no way of knowing what impact it might have on him, or the price he may pay for credit in the future. But there is good news for him -- he bought a home two years ago, so at least he doesn't figure to be in the market for a home loan any time soon. His mortgage holder? JP Morgan Chase.

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"Hey Peter," the ad said. "Hot singles are waiting for you!!"  He might have dismissed the advertisement, which appeared on his Facebook page, but for one thing.

The woman pictured in the ad was his wife.

The Lynchburg, Va., man had no doubts that his marriage was a happy one, so he figured some other kind of mischief must be at play. There was: privacy mischief.

A brief investigation uncovered this uncomfortable truth: Cheryl Smith's picture had been swooped up by a company advertising with the social media giant and used to generate an advertisement. She had no idea her image could be used that way, and until her husband spotted the ad, she was unaware that she'd become a model for an online dating company.

"Fortunately, he has a sense of humor. Otherwise it could have played out very differently," Smith, 44, said.

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Facebook has a long and tortured history of attempting highly targeted advertising by mining data and usage habits from users.  In 2007, the site began tracking user purchases and sharing the information with other Facebook users.  After a protest, the practice was quickly abandoned. More recently, a flap over changes to Facebook's terms of service led to an online eruption, and another reversal.
In this case, first spotted by Smith on July 13, Facebook blames the incident on the third-party company, which it says was violating its policies.

"The ads that spooked people were from rogue networks that have been dealt with," said spokesman Barry Schnitt. "The ads were removed, some ad networks were banned from Facebook, and developers were warned."

Schnitt wouldn't reveal what company created the Smith ad, but said it had received a warning.

Focus on privacy settings
The Smith incident, which got some traction on blogs and first attracted mass media attention last week from CNBC.com, has again focused attention on Facebook's privacy settings. A hard-to-spot toggle switch now in Facebook users' settings page grants the firm, by default, permission to use consumers' information in advertisements to their friends.  Users who want out of the arrangement must manually switch the setting, called "Appearance in Facebook Ads," to "No One."

But even if her toggle were set correctly, Smith wouldn't have been able to prevent her brief stint as a dating site model, Schnitt said. The toggle only control special "social" ads that are directly under Facebook's control. These ads essentially rebroadcast items that users have already agreed to place on their public wall space.  The most common social ad takes this format: "Bob has recently become a fan of msnbc.com's Elkhart Project. Do you want to become a fan?" Those ads have been on the site for about a year, according to Facebook.

But ads that appear in third-party applications, or in other places on the site, aren't governed by the toggle, Schnitt said.  That means users who are concerned about the Schnitt incident shouldn't bother changing their settings.

Schnitt agreed the Smith advertisement was disturbing, and said the company took it down as quickly as possible. While another "rogue" third party could pull a similar stunt, he said the firm is "aggressively enforcing" its terms and conditions with advertisers.  The site will not permit any ads that mislead consumers or misuse user data or photos.

"We're not going to let people misuse the Facebook platform," he said.

Free comes at a cost
The company is trying to walk a fine line between creating relevant ads, while avoiding ads that are spook or anger its users.

"This is absolutely new territory. There aren't long established policies and procedures for this. So we're going to have to continue to educate people about it," he said.

Ironically, Smith -- who runs CultureSmithConsulting.com, where she is blogging about the experience – gives advice on social media for a living.  She thinks these kinds of incidents are simply part of life for consumers who use "free" Internet sites.

"The fact that it's free, meaning it comes at no financial cost, doesn't mean there aren't other costs associated with it," she said. "This is one of those potential costs."

That's why consumers need to focus extra attention on privacy settings for all free sites they use. It's difficult, if not impossible, to control what information a company may grant to third parties, and whether or not those third parties will follow agree-upon rules.

RED TAPE WRESTLING TIPS
If you still want to change the privacy toggle and prevent your actions on Facebook from appearing in ads to other users, follow this click trail: Settings=>Privacy=>News Feed and Wall=>Facebook Ads. Then select "No one."

Facebook says consumers who think ads are invasive ads should either click on the thumbs down arrow near the ad, or click "report this" and tap out a complaint.

Despite all that's happened in the last two years, home loan offers at ridiculous terms are still falling out of the sky. One fell on me recently, in the form of an unsolicited call to my cell phone.

It was Courtney from "Finance Administrators," a company that she said helps consumers get lower mortgage rates. She said she might be able to "drastically reduce my interest rate without having to refinance." Who wouldn't want to do that? I asked her to tell me more.

Courtney put me on hold. Then, Rick came on the line. Courtney introduced us, saying that I had a mortgage with a rate of 6 percent. Then she hung up and let Rick and I hash out the details. (Neither Courtney nor Rick would tell me how they got my phone number.)

But Rick immediately told me he could get me a home loan in the 2 to 4 percent range. When I expressed incredulity, he said he worked for a serious outfit called the Prodigy Law Group. These were not the loan modification scam artists I'd heard about in the news, he said. These are real lawyers who get relief for people in trouble, said Rick.

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"We work with people who fit a certain criteria," he said. "Hardship programs. People who have a cut in pay. Medical expenses. Or people with a bad loan and are paying only 1 percent interest but it's ready to adjust. Those are considered hardships."

But even if I didn't qualify under those terms, Rick said I still could benefit. "A loan audit," he said. "We look for federal violations. We pursue legal actions against the bank that puts them in a corner. ... Ninety-something percent of loans out there have violations. If you find something wrong you can do whatever you want."

"Decide what side of the fence you want to be on."

Sensing that I had no love lost for banks, he pressed on, putting on a full-court press that would rile anyone frustrated by the recession and bank bailout.

"(President) Obama has given them money and they are just trying to hold on to the cash," he said. "If the banks were doing their job, we wouldn't be doing any business."

He then said I was foolish for continuing to pay my mortgage at my current rate. I'd be better off not making my monthly payments, then demanding a change in terms, he said.

"You probably haven't done any research on this, but if you are the guy who pays the bill and you do everything right, you will pay the higher rate," he said. "If you don't, you will get the 2 percent rate. You have to decide what side of the fence you want to be on."

Rick was suggesting that I engage in a tactic used by credit card settlement companies, explained in a recent column. Basically, firms tell consumers to stop paying their bills, save the money in a special account, then enter negotiations with the lender after some time has passed and negotiate a better deal.

I told Rick a 2 percent mortgage rate sounded enticing, but I'd have to think about it. I asked for his full name and phone number, which he gave me. Then I did some research.

Prodigy Law Group was founded in February of this year, according to its Web site. It's based in Southern California, but the site lists member attorneys across the country. The site also is peppered with warnings to consumers about scam loan modification companies.

Prodigy works closely with a firm named Homeland Support Services, which says it takes inbound calls from consumers looking to refinance their mortgages. The two companies share the same address in Irvine.

In an advertisement placed online under the heading "Legal Jobs Around Orange County," Prodigy encourages salespeople with experience at high-pressure tactics to apply.

"LOOKING FOR CURRENT OR EX CAR SALESPEOPLE … WE HAVE SEEN THESE TYPE OF PEOPLE DO VERY WELL!!! Applicants will be taking all in-bound calls," the ad says.

It makes no mention of experience in the complex mortgage industry. It does promise potential earnings of $4,000 to $6,000 per month, however.

A Google search unearthed a social networking page posted by Rick in which he described himself as a former car salesman.

When I tried to call Rick back to get an idea of the cost of his program, I was told he had been "promoted … or no longer works here." Instead, Ed, who answered Rick's extension, picked up where Rick left off.

He repeated the pitch that he could help me get a 2 to 4 percent interest rate. For a $200,000 mortgage, the fee would be $3,000, he said – payable up front. When I said that sounded expensive, he was ready with a response.

"It is not a lot of money," he said. "It's much less that it would cost to refinance. The money needed to be paid up front, he added, because "this is a law firm, and that's like a retainer fee."

And when I asked how he could get me an interest rate that was below market, he said it was part of a special government subsidy program.

"Let me put it this way. It's like food stamps," he said.

"Never heard of them"

When I spoke with attorney Seth D. Heyman, who founded Prodigy, he disavowed much of what the two salesmen said in their marketing pitches – including the comparison to food stamps. He attributed the disconnect to a third-party marketing effort gone awry.

Heyman insisted the firm doesn't engage in telemarketing, insisted he didn't know either Rick or Ed, and stated that he didn't believe either of them had worked on behalf of Prodigy. He said the firm takes great care to be transparent and honest when marketing to potential clients.

"We require anybody who does intake for use to adhere to a strict set of principles," he said. "We have them sign a very detailed affidavit that they will (not deceive consumers)." And the company never tells anyone who can afford to pay their bills to stop paying their mortgages, he said.

He offered two possible explanations for the sales pitches I received: Either both salesmen were operating as rogue employees of the third-party intake service, or they were engaging in corporate identity theft and had no association with his firm at all.

"Until I investigate and find out who these folks are, I can't comment," he said.

He said the car salesman ad was placed by their "intake" service, Homeland Support Services, and that he was "flabbergasted" by it. The company has stopped asking for car salespeople to apply, he said, adding, "It hurt our credibility."

Heyman said Prodigy helps clients who are in danger of missing their mortgage payment. It does require an up-front payment of $2,000 to $4,000, but many consumers are allowed to pay on an installment plan, he said.

"We are working very hard to provide a legitimate service," he said, adding that he believes Prodigy has helped many consumers.

He acknowledged there are complaints on the Internet about the firm – both about its  telemarketing calls and sale pitches. The firm is in the process of "revising its intake strategy" as a result, he said.

The trouble with law firms and loan modifications

The California Department of Real Estate recently warned consumers that loan modification scams are continuing to morph. Many states have made it illegal to collect up-front fees for modifications -- but there is an exception for working attorneys. So the newest flavor of loan modification scams involves firms that hire a small number of lawyers who do little or no loan work, but give the company legal cover to collect up-front fees. The agency recently sent cease-and-desist notices to more than 200 California firms engaged in the practice.

"Unfortunately, some loan modification business models have claimed lawyer involvement, but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded," the agency said in a statement. "In others, lawyers are just a 'front' or non-participating 'magnet' for business from desperate homeowners."

Heyman said Prodigy Law Group is not similar to those described in the California agency's warning, because attorneys in his firm work directly on consumers' cases and provide real assistance to struggling homeowners. Prodigy is not, in fact, on the list of companies that the state told to discontinue offering mortgage services. Tom Pool, spokesman for the California Department of Real Estate, said he could not comment on the firm.

But in general, Todd expressed exasperation at firms that continue to find ways to trick consumers at risk of losing their homes.

"The list grows weekly. The numbers are staggering," he said. "Regulatory action only gets you so far. Some of these people just need to go to jail. ... I am glad this problem is finally getting the attention it deserves."

The California Legislature is considering two bills that would ban up-front fees even for attorneys for loan modification – even for attorneys. But in the meantime, Todd stressed the need for continued consumer education. He also recommended that people in dire straits contact nonprofit, no-fee housing counselors from a list approved by HUD.

When James received a great credit card offer two years ago – a 4.99 percent interest on balance transfers for the life of the card – he jumped at it.  He used the cheap money to remodel the kitchen of his Los Angeles-area home.

He never expected the new kitchen would turn him into a pawn in a chess match playing out among Congress, bank regulators and credit card firms.

The offer, from JP Morgan Chase had only one obvious stipulation: No late payments. Because the rate was far lower than a home equity loan at the time, James used the credit card for the construction project, borrowing around $20,000. His monthly payments were very affordable - just under $300. Paying the minimum 2 percent each month, he'd pay off the loan in about 8 years.

James, who requested anonymity because he's uncomfortable discussing his personal finances in public –made sure to pay on time each month, jealously guarding the terms of his cut-rate loan. Little did he realize that Chase could find a way to make his life miserable without raising his interest rate.

But Chase recently threw James-- and perhaps hundreds of thousands of other consumers – a huge credit card curveball.  The firm sent letters to customers beginning in late June indicating that minimum payments would be raised from 2 percent to 5 percent. In August, his monthly payment will spike to $750.

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"What they're doing is pushing  decent people into such tough situations," he said.  "I'm between a rock and a hard place."

Around the Web, Chase customers are screaming about the change.

"I'm stuck with a combined monthly payment going from $525 to $1,445," wrote one consumer on a blog devoted to the change in Chase terms.  "I explained that this could possibly force me into default for which Chase would not receive any payment. (The customer service agent's) response? 'Chase obviously factored that possibility into the decision for changing these terms.'"

New world order

Consider this the opening salvo in the new world order for credit card firms. Before Congress passed credit card reform legislation in July, bank lobbyists repeatedly warned that the law would cost them revenue and force them to raise rates and fees on consumers.  The aggressive step by JP Morgan Chase - effectively a 150 percent increase in required monthly payments -- marks one of the first major changes by a card issuer.

Chase spokeswoman Stephanie Jacobson said the change impacts "less than 1 percent of their customers," but would not divulge a precise figure.  Even 1 percent of Chase cardholders would represent nearly 1 million consumers, however.

Chase customers like Daniel Lindenbaum of Coatesville, Penn., say they are being given a Hobson's choice. He said he transferred an $8,000 balance to a Chase card, enticed by a 5 percent interest rate --  and never missed a payment. Nonetheless, his monthly bill will now jump from $163 to more than $350.

"I don't mind paying a little more than the minimum payment every month, but going to over $300 a month when I was paying $163 a month is a big jump for me," he said. "It's not easy to come up with extra cash like that. I called customer service and they … suggested for me to transfer my money elsewhere."

The problem with that, he said, is that he'd have to open a new account with another company and face recently increased transfer fees.  Bank of America, for example, just raised its transfer fee to 4 percent.   And Chase has said it plans to raise transfer fees to 5 percent.

Lindenbaum figured he'd have to pay at least $200 to switch to a new card. He was confused about why Chase would want to drive him away.

"They are still making money off of me each month and if I pay off my balance faster, they will be losing money in interest," he said. "If I transfer my money to another credit card company, they will lose my money all together."

Surprised by marketing success

James said he thinks Chase made the change for a simple reason: It  wants to squeeze consumers who have low-interest loans, force them into a misstep and then rope them into far less desirable loan terms.

"They don't want people to have 5 percent loans out forever and ever," he said. "I don't think they considered how successful their marketing efforts would be."

Jacobson, the firm's spokeswoman, essentially conceded that strategy in an e-mail to msnbc.com.

"Tens of millions of Chase customers have taken advantage of our promotional low rate financing over the last five years," she said. "Most of these loans have been paid back in less than 24 months. However, there have been a small percentage of customers that have not made as much progress in paying down these loans. Our desire is to have these balances paid back in a reasonable period of time."

Bill Hardekopf, who runs LowCards.com, said banks are following through on warnings that credit card expenses for consumers would rise after passage of the Credit Card Accountability, Responsibility, and Disclosure Act.

"From an issuer standpoint, they are looking at their default rates going up, they are in tremendous economic distress and they are trying to minimize their risk as much as possible," he said. "Issuers feel they need to find ways to make up for revenue they are projecting they are going to lose once the legislation takes effect."

Chase told msnbc.com that it would work with consumers who are unable to make their new payments, but James said that's merely an invitation into a lion's den. The only offer he received was a severe change in terms to his account with a much higher, variable interest rate.

When the new federal regulations take effect next year, they will severely limit banks' ability to change rates unless cardholders have variable-rate agreements, so banks are trying to steer consumers away from fixed-rate cards.  Bank of America, for example, recently sent notices to cardholders with fixed rates telling them their accounts will be changed to variable rates starting next month.

James said all these changes seem particularly unfair because through 2007, even as the recession started, Chase was still aggressively marketing the low interest cards.

He said he will be able to make the payments with great difficulty, but he wonders about other consumers.

"I've got to stop my retirement contributions, or maybe even ask for an advance at work," he said. "But I don't know what other people are going to do."

RED TAPE WRESTLING TIPS

Consumers who don't like changes to the terms of their current credit card can attempt to transfer balances to a new card, but the process is full-of booby traps, warns Hardekopf of LowCards.com. But there are still cards worth applying for, he said. Here's what to watch for.

• Transfer fees can turn a good deal into a bad deal. A 5 percent transfer fee on an $8,000 balance means a $400 fee. Consumers can choose to roll that fee into the balance of the card, making it seem relatively painless. That's a mistake, Hardekopf said, because it can wipe out any savings from a new low-interest card.
• The low transfer rate often doesn't apply to new purchases. Until February 2010, consumers who switch cards for a lower rate will see their payments applied to the lowest-rate portion of the balance, meaning consumers tend to swap low-interest balances for high interest balances, leaving them back where they started after they pay off the transfer amount.
• Previously, transfer fees were capped by many banks at $50 or $75.  Not anymore. And the terms on low-rate offers like "0 percent for 12 months" are shrinking – many last only 6 months now.

(NOTE: This story originally appeared on July 9. Gregory Hillman was pronounced dead on July 11 after his parents identified a body found in a nearby river as their son. To read more, click here. Or, visit a Facebook page devoted to him.)

Gregory Hillman is an aspiring musician and architect, a former college student in Portland, Ore., and the third child in a family of four children from the beautiful Connecticut suburb of Darien.  He also suffers from bipolar disorder and other mental health difficulties.

Now, he's missing.

Hillman managed to escape while being transferred from one mental health facility to another last week near North Adams, Mass., just days before he turned 21. He ran off into the woods and has not been seen since. Before the escape, he sent a suicide note to his sister and brother, saying he planned to drown himself in the Atlantic Ocean – leaving his family to fear they are in a race against time to find him.

In their frantic search to find Gregory, the family has turned to Facebook for help. The "Help Find Gregory Hillman," group quickly grew to more than 1,400 members. Hillman is still missing, but there are indications that he's still alive, his sister, Amanda Hillman, said Wednesday.

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"I know that he suffers from pain and anguish that I couldn't comprehend," said Amanda, 25, who lives in Seattle.  "I bet he's frightened and I want him to feel safe coming home."

Hillman's Facebook page may play an important role in the family's quest.  They were able to guess at a few possible destinations for Gregory – Providence, Albany, southern Connecticut, New York City -- and used Facebook to contact friends and friends of friends in each area.  But perhaps more important, the site is crammed with messages from friends recalling the soft-spoken young man with a kind heart, urging him to communicate with loved ones.

"Maddie and I are praying for you and spreading the word so you can be safe and sound,” said one. “I miss you man and I really hope that you will overcome this. Please come home safely. I love you bro."

Others seem emboldened by the unfolding drama to share their own stories of mental health battles.

"I'm not sure if my mom ever told you, but last year I was hospitalized for depression and suicide risk," wrote another friend.  "All my failures had seemed to catch up to me and it felt as if my life was finally at its end. The thing is, it wasn't the end. I got better when I finally switched medication for almost the 10th time. The thing is, life does get better, even when it seems like you're stuck with the worst life has to offer. You just can't give up."

Increasingly, social networking sites like Facebook are playing an important role in missing persons and runaway cases.  The power of the network effect, coupled with viral marketing, dwarfs the impact that old-fashioned "missing" posters could have.

Jennifer Di Nicola, manager for the National Runaway Switchboard, said she routinely coaches parents to turn to Facebook and similar sites when a child goes missing.  For starters, she said, Facebook is the best way to reach friends and acquaintances when time is of the essence.

"It's access to a large group of people all at once. You can't beat that when trying to raise awareness," Di Nicola said.

But Facebook can help in numerous other ways, she said. Some runaways leave hints on their page with possible destinations, through wall posts or other comments left on the site. Facebook can also be used to track down friends that parents may not know about, and perhaps uncover a trusted third party who's in communication with the lost person, Di Nicola said. And Facebook is usually the best source for recent photographs that can be used to help find lost young adults.

"In one instance a volunteer told me about, parents were able to figure out where the youth was based on pictures posted to their Facebook page," she said.  "At least they had peace of mind that the child was safe then."

'Happy Endings' on Facebook

Of course, savvy Facebook users who don't want to be discovered can cover their tracks.  Still, Facebook spokesman Barry Schnitt said the firm has been a part of numerous "happy endings" that reunited lost children and youth with their families. He declined to provide details, citing privacy concerns.

"We've found that runaways often will still check their profile and can be located by tracking their IP address," he said.  Facebook often works with law enforcement agencies to fulfill such requests, he said.

There have been a couple of high-profile stories suggesting social networking can help bring lost loved ones home.

Earlier this year, a teenage Nepali ski racer was found in Paris after someone recognized his picture from a Facebook campaign, according to Reuters news service.  The 17-year-old had wandered away from his team's base in the French Alps and was found two weeks later, hundreds of miles away. He was recognized after more than 400 people joined a Facebook group devoted to finding him.

And last year, Hannah Emily Upp, an elementary school teacher in New York, disappeared for several weeks after suffering a rare form of temporary amnesia. She was recognized while at an Apple store in Manhattan, in part thanks to a Facebook group named "We're Not Giving Upp (on Hannah)."

Attention can be a double-edged sword, however.  Amanda worries that her brother might be spooked if he sees news coverage about him, which could make him be less inclined to step forward. Still, she thinks the volume of loving notes from friends that have appeared on the Facebook group might be the best method for getting her brother to come home.

"I want him to see the outpouring of love from friends and the community and know that we are not here to label him or judge him, we are here to help him and love him and let him work through difficulties," she said. "This is not just his sister and brothers and parents that are looking for him. He has touched a lot of lives."

The Help Find Gregory Hillman page can be viewed by clicking here.

Parents who are trying to locate missing children and young adults can call the National Runaway Switchboard at 1-800-Runaway. Operators offer advice and also provide message relay service, acting as intermediaries for children who are not yet ready or willing to speak directly to their parents.

There's a new reason to worry about the security of your Social Security number.  Turns out, they can be guessed with relative ease.

A group of researchers at Carnegie-Mellon University say they've discovered patterns in the issuance of numbers that make it relatively easy to deduce the personal information using publicly available information and some basic statistical analysis.

The research could have far-ranging implications for financial institutions and other firms that rely on Social Security numbers to ward off identity theft. It could also unleash a wave of criminal imitators who will try to duplicate the research.

Details of the research were published Monday in the Proceedings of the National Academy of Sciences journal and will be explained at the annual Black Hat computer hacker convention in Las Vegas later this month.

The report means companies and other agencies should once and for all stop using Social Security numbers as passwords or unique identifiers, said Professor Alessandro Acquisti, who authored the report.

"We keep living as if they are secure, a secret," he said. "They're not a secret."

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The Social Security Administration says SSNs are issued using a complex process that is effectively random, making them impossible to guess in practical terms.  But Acquisti and fellow researcher Ralph Gross used public lists of Social Security numbers to look for patterns.  They found several. The two say they can guess the first 5 digits of the Social Security number of anyone born after 1988 within two guesses, knowing only birth date and location. The last four digits, while harder to guess, can be had within a few hundred guesses in many situations -- a trivial hurdle for criminals using automated tools.

"Someone filling out credit card applications using a Web site and a botnet could easily succeed (in getting someone's number)," he said.

'Public should not be alarmed'

Acquisti shared the report with the Social Security Administration's office before publication.  He said he could not disclose what steps the agency is taking in response to the research.

The Social Security administration played down the discovery.  In a statement to msnbc.com, Social Security spokesman Mark Lassiter called any suggestion that Acquisti had cracked the code for predicting Social Security numbers "a dramatic exaggeration."

"The public should not be alarmed by this report because there is no foolproof method for predicting a person's Social Security Number," the statement read.

But privacy expert Daniel Solove, a law professor at George Washington University who reviewed the report, called the discovery a "really big deal."

"If you have a password and you can readily figure it out, that's absurd," he said. "This paper points out just how ridiculous it is that we think there's a way to really keep Social Security numbers confidential.  There effectively is no way you can keep them totally confidential. It's just not possible."

How it works

Acquisti said he's discovered simple patterns in the Social Security numbering system. It involves the elusive concept of randomness. To most people, a number is either random or it's not. But to mathematicians, randomness is a sliding scale. Developing perfectly random numbers -- the science of cryptography -- is nearly impossible. Often, software programs designed to create random numbers erroneously spit them out with a faintly distinguishable pattern. With a large enough sample, the numbers begin to form clusters.  Even a small discovery of such a cluster can make an enormous difference to someone trying to crack a crypto code, making predictions of supposedly random numbers an order of magnitude easier.

That's what the Carnegie Mellon researchers found.

A completely random guess at a 9-digit SSN should be a one in one billion chance.  But instead, their newly educated guesses have narrowed the odds down to roughly 1 in 1,000. Making matters worse, because of changes in the way the numbers have been issued since 1988, the numbers are getting easier and easier to guess as time passes. In one example, the researchers said, they can uncover a Delaware resident's 9-digit SSN within 10 guesses about 5 percent of the time.

The SSN is actually broken up into three parts - the first three digits are the "area number," the second two are "group number" and the last four are the "serial number." The Social Security Administration already offers considerable information about the first part of the number.  The area number is based on the zip code used in the application for an SSN.  High population states have many area numbers -- New York has 85, for instance – but many others, like Delaware, have only one.

The other two parts the number, however, are assigned in a way that the Social Security Administration believes it nearly impossible for someone to guess. But the Carnegie Mellon work shows they are not.

He took the largest publicly available list of SSNs -- the agency's master death file, which publishes numbers of the deceased to make them hard to use by imposters -- and sorted the list by state and date of birth.  Immediately, it became clear that the second portion -- the group number  -- was sequentially issued and also trivial to guess. For example, every SSN issued in Pennsylvania during 1996 contains the middle two numbers 76.

That made guessing the first 5 digits of someone's SSN easy in some cases. During a test, the group was able to predict the first five digits of Vermont residents born in 1995 with 90 percent accuracy.

That's important, because there are many ways to determine the last four digits of someone's Social Security number. Some data brokers sell truncated SSNs, with either the first five or the last four numbers visible to the purchaser. And many financial firms use those numbers as a PIN code for verification.

Also, endless customer service operators ask for the last four digits when consumers call for help.  Any agent who knows where and when a caller was born could quickly amass a large set of complete Social Security numbers.

The report contains even more bad news.

The serial numbers -- the last four digits -- can often be guessed using formulas and patterns, he said. It turns out that the Social Security Administration doesn't utilize true randomization to create serial numbers. For example, a graph plotting the numbers issued to Oregon residents in 1996, shown below, shows bands that cluster around certain numbers. In fact, there are five discernable lines.  A truly random issue would show dots scattered throughout the chart.

With additional analysis, Acquisti said, the researchers were able to discern that the serial numbers are issued sequentially, in a way that ties them to the holder's birth date.

"The SSA believes that scheme is so complex that it's sufficiently random," he said. "We show it is way less random than apparently they believe."  As a result, instead of a the four digits yielding a 1 in 10,000 chance in guessing SSNs, he said he can improve the odds to at least 1 in 1,000, and in some cases, far less than that.

The Social Security Administration seems to agree with Acquisti on this issue. In its statement to msnbc.com, the agency said that "for reasons unrelated to this report, the agency has been developing a system to randomly assign SSNs. This system will be in place next year."

Birth dates easy to obtain

For now, an attacker who wanted to guess someone's SSN would still need a birthday and hometown, but these data points are readily available from a number of sources. Many people volunteer such information on social networking sites like Facebook. Voter registration lists and other public databases also include such information, and it is often available for a small charge (or free) from data brokers that operate on the Internet.

There are additional challenges in guessing SSNs for residents born before 1988, because many older Americans did not receive a Social Security number at birth -- so their hometown and their Social Security number application zip code might differ.  But beginning that year -- in a move ironically intended to combat fraud -- the Social Security Administration began forcing many families to order SSNs at birth,  thereby eliminating one more element of chance for a would be SSN-guesser. It's far easier to guess SSNs for anyone born in 1988 or later, Acquisti said.

The formula for issuing the numbers is, in fact, not designed to withstand attacks from cryptography experts or mathematicians.   It was invented in 1936 as a simple numbering system for paper file cabinets.

"This was before there were computers," Acquisti said. "SSNs were never designed for the purpose we use them."

The group is not disclosing the precise formula, because doing so would be akin to publishing the list of all Social Security numbers.  But Acquisti said one "provocative" strategy that government officials might take: Setting a date in the future -- perhaps in three to five years -- where all SSNs are made public, so companies and government agencies stop using SSNs for security purposes.

He called current efforts to protect Social Security numbers from public view "well intentioned, but misguided."

The researchers recommend that the Social Security Administration immediately implement a much more random formula for generation SSNs. But that won't  help the millions of Americans whose SSNs are now easily guessable.  For that, there is only one answer, the report says:

"Industry and policy-makers may need, instead, to finally reassess our perilous reliance on SSNs for authentication and on consumers' impossible duty to protect them," it said.

Econ4u.org seems like a happy place to learn simple lessons about money.  The Web site is full of smiling faces and quick, fun questions like: How long will it take to double your money if you are earning 5 percent interest? (14 years, by the way).

So what's a fun Web site like that doing in the middle of a bitter battle over the payday loan industry, or for that matter, the smoking industry?

Research commissioned by the Econ4u.org's operator, The Center for Economic and Entrepreneurial Literacy, has made its way into newspapers around the country – fewer than 1 in 5 members of Congress have any formal economics training, the organization said after a recent study.  The Wall Street Journal, The New York Times, Bloomberg, Reuters and dozens of papers have all cited the center's research.

Econ4u's owners say the site has a straightforward, noble mission: to "teach important economic concepts."  But while the site offers plenty of useful money basics, there is one oddity: information on controversial payday loans is unusually positive.

And more curious: The man behind the site is Rick Berman, a notorious Washington, D.C., publicist famous for taking up the cause for unpopular industries like alcohol and tobacco. In fact, many believe Berman –- who's known by opponents as Dr. Evil -- was the model for the lobbyist viewers loved to hate in the 2005 movie "Thank You for Smoking."

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The Econ4u.org Web site has appeared as Congress is on the verge of passing legislation that could severely restrict the $25 billion short-term loan industry, which has been under attack for many years. A law proposed by Sen. Dick Durbin (D.-Ill.) – the "Protecting Consumers from Unreasonable Credit Rates Act" – would cap payday loan rates at 36 percent annually, far lower than the current rate of 400 to 800 percent.

Econ4u.org is marketed most heavily in the Washington D.C. area, where it is hawked by bold advertisements in subway cars.  There, its puzzlers are printed on bright orange posters. But one of the fun quiz questions seems to be posed far more often than others:

If faced with an unexpected cash need, which of these options will typically cost the most?

• Bounce a check
• Get a short-term payday loan
• Initiate a wire transfer
• Pay credit card late fee

The *right* answer, the poster indicates, is bounce a check, which can cost twice as much as the other alternatives. A $100 payday loan costs $15, the poster says, far less than the average late fee or wire charge.

By itself, that might not cause the raising of any eyebrows.  But following the poster's instructions to learn more on the Econ4u.org Web site adds a bit more to the mystery.  Listed on the site's "About" page are merely a form for entering an e-mail list and a phone number. The name of an executive, or even a public relations contact person, isn't listed.

A Google search for the phone number unmasks the anonymity quite a bit. The number also appears on press releases issued by the Center for Economic and Entrepreneurial Literacy, belonging to a spokesman named Tim Miller.

Information about Miller is easy to find online. He has also worked for another Berman organization called the Center for Consumer Freedom. It supports industry efforts to oppose laws aimed at limiting access to tobacco, fattening food and alcohol.

Miller, meanwhile, wrote an op-ed piece last year titled "Payday Loans Help Many of the Poor," that appeared in The Wall Street Journal and was reprinted in several newspapers around the country. The letter, in which Miller identifies himself as a spokesman for the Center for Consumer Freedom, makes a case against limitations on the payday loan industry.

"Short-term payday loans are actually cheaper than similar financial products like overdraft fees, credit-card cash advances, or paying bills late," he wrote.

'Ambush education'

In an interview, Miller said that Econ4u.org is published by a nonprofit group headed by Berman that is concerned about the lack of financial education among consumers.  The Center for Economic and Entrepreneurial Literacy is a spin-off of the Center for Consumer Freedom, he said.

"As an organization, we'd like to advocate the need for increased economic education in schools," he said.  "Only three states have mandates for personal finance classes."

Miller said that Berman created the site "as a vehicle for (him) to talk about something that he is passionate about."

The quiz questions are part of an "ambush education" campaign that he said is more effective than traditional methods for teaching money lessons.  Television ads for the site have appeared around the country, he said, but poster ads are primarily appearing in Washington D.C.

"We have a lot of twentysomethings working in town, working in The Hill, that don't have a lot of economic literacy and they are making big decisions," he said.

He rejected the suggestion that the site is a subtle marketing tool for the payday loan industry.

"We have a lot of information on our site. I wouldn't know how we could favor one industry," he said.  Instead, questions involving payday loans simply indicate how bad some consumer other options are. "We're trying to drive home the silly mistakes people make.  Bank overdrafts are as raw a deal as you can get."

Miller said he didn't know where the funding for Econ4u came from, and he directed additional questions to Berman.

'Information isn't unbiased'

Berman's day job is running the Washington D.C.-based public affairs firm Berman & Company. He is best known as the paid defender of unpopular industries. He runs numerous nonprofit groups and media campaigns that target consumer advocacy groups, and has waged campaigns ridiculing efforts of groups that call attention to the dangers of smoking, drunk driving and obesity, among others. He has a celebrated rift with the organization Mothers against Drunk Driving.  Miller described him as a libertarian.

In an e-mail exchange, Berman said he had a policy of not disclosing supporters, but asserted that Econ4u doesn't receive money from the payday industry, and that his PR firm currently does "not have any payday lenders as clients."

He reiterated that Econ4u was merely a labor of love.  He did say that the Center for Consumer Freedom has a "long history of planting its flag in defense of consumer choices and attacking those who want to take them away."

Berman said his PR firm represents businesses against "activist attacks" by making "controversial, but factual, arguments to dispel many of the myths that are out there."

Econ4u.org,  however, is different, he said.  He pays for the site by himself, he said.

He called the lack of economics and finance knowledge among the American population "astounding."

"However, the information I put out isn't unbiased," he wrote. "It reflects the issues that I personally believe need to be addressed. The bank overdraft fees are one of the biggest scams running, and the reason we use that ad in the metro is because it's one of the questions that people seem most surprised by."

'A sock puppet'

The Center for Responsible Lending, a consumer group that has long advocated restrictions on payday loans, isn't buying that explanation.

"It's a PR firm's attempt to put a nice face on payday lending by couching it in terms of broader advice, said Ellen Schloemer, executive vice president of the agency. "They don't disclose who they are. There is no way an average consumer would know this is a sock puppet for a PR firm."

In Washington D.C., interest groups disguised as unbiased research organizations are sometimes called "astroturf" groups.  Schloemer dismissed Econ4u as the work of such an astroturf firm, and for evidence pointed to the keywords purchased by the site from Google's ad service – because keywords are purchased via auction, information about them can be gleaned by market research companies like KeywordSpy.com.  Schloemer pointed to that site's research on Econ4u.org, which shows about nearly 80 of the 97 keywords purchased by Econ4u.org's operators involve some variation of the words payday loan – terms like "instant payday loan", "military payday loan", or "payday loan Oregon" --indicating its owners are principally interested in getting their site in front of people looking for information on payday loans.

Schloemer said she had no problem with the firm taking out advertisements – and conceded that much information on Econ4u.org is useful – but said Berman's group should disclose its identity in the advertisements and on the Web site.

"I have no problem with them trying to advance their views, we do that too.  But it's not fair to consumers who are thinking this is objective advice," she said.  

Berman, however, insists the site is his own personal project, and he plans to work even harder in the future to improve the state of financial education in America.

"Our last round of advertising...was a round of national (public service announcement) focusing on mortgages and basic business economics. And I am exploring getting our information into public schools in D.C." he said.