You know you need to know your credit score, but how do you get it without getting shafted?

Credit scores serve as the report card for consumer adulthood in America. But bad grades can cost you a lot more than embarrassment -- they lead to higher interest rates and fewer opportunities.  In one typical scenario offered up by MyFico.com, a 120-point difference in credit score could cost a home buyer with a $300,000 loan about $300 extra every month in mortgage interest, or more than $100,000 in additional interest during the life of the loan. So knowing your credit score is of paramount importance.

You might have heard that Americans will enjoy increased access to their credit scores this year thanks to the massive financial reform bill passed by Congress last year. That's true, but scores are still a long way from being truly free. The Fair Access to Credit Scores Act forces lenders to divulge credit score information to consumers, but only after something bad has happened, such as a rejected application. That's a little like getting your cholesterol numbers from the doctor after you suffer a heart attack. 

It's important to know your score before you apply for a car loan or a home loan, but for the foreseeable future, you'll have to pay for it. Here are five common Red Tape Traps you face getting your credit score, along with information on the right way to get it.

1)      Many Web sites and TV ads say they offer your score for free. None of them are telling the truth. There's no way to get it for free.  With only slight variation, most free score Web sites require users to sign up for credit monitoring services that can cost $150 or more annually. Sure, there are free trial periods, but many consumers report trouble canceling the trial before their credit cards are charged and getting refunds.

2)      Even when you do sign up with a "free" score service, the scores you receive are usually not the "real" credit score used by lenders, but an approximation based on a separate formula.  These imitation scores can vary by 100 points from the FICO score used by about roughly 8 out of 10 lenders.  That means their real value is suspect.

3)      You can buy your "real" FICO score from MyFico.com. But it costs $19.95 for a one-time peek. And you'll have to hunt around for the chance to buy it. The MyFico folks are playing the same game everyone else does, teasing you on their home page with a big link that says "Free Instant Online Access" and entices you to fill out a bunch of forms. Once you do, you are hit with a $14.95 credit monitoring subscription. How any company can justify a home page link that reads "Free Instant Online Access" link, but connects to a final page button that reads "Make Purchase Now," is beyond me. Here's the correct link for a one-time purchase. If you have any doubts at all about your credit health, you should buy your score a couple of months before making a major lending decision.

4) The term FICO score is a bit misleading. Consumers usually have three FICO scores, one for each credit bureau. Each bureau generates a score based on the FICO formula created by the Fair Issac company in the 1960s.Because the information in your three credit reports can vary, the three FICO scores can vary. You must pay $19.95 for each score, but in many cases -- if your three reports contain similar information -- purchasing one of the scores is good enough, says scoring expert John Ulzheimer, president of Consumer Education for SmartCredit.com.  Consumers in the South should opt for an Equifax score; all other consumers should purchase from Trans Union, based on the companies' geographic market dominance, Ulzheimer said.  

For good measure, here's an even more confusing (and relatively recent) development -- MyFico.com users can only obtain two of their three scores, the FICO scores generated using Trans Union and Equifax data. Experian no longer allows the MyFico folks to sell their score, meaning there is no way for consumers to obtain this information prior to a purchase.  Two out of three will have to do. Remember, other services that sell credit scores can only approximate the FICO formula and score. And one final bit of confusion: while most lenders rely on these FICO-based scores, many lenders have their own, proprietary scores. There's no way to obtain them pre-purchase, either.

There are tools which allow you to estimate your score for free, however.  Ulzheimer says consumers can create a "poor man's versions" of their credit score by obtaining their credit reports, then plugging the data into one of the tools offered by MyFico.com or Bankrate.com. The score ranges churned out by the tools are "pretty accurate," he said.

The Fair Isaac folks even offer an iPhone app which offers a score estimating tool. You can read more about it at this link.

5)      Don't confuse your credit score with your credit report. Both are important but are used very differently.  The best truly free way to deal with a potentially bad score before a purchase is to deal with the underlying issues that cause it.  Obtain a copy of your credit report at the only authorized source: http://AnnualCreditReport.com . Then, work to clean up the report one black mark at a time by disputing inaccuracies and paying off past-due balances. Here's an FTC tip sheet on the dispute process.

ADDITIONAL RESOURCES:

What's a good credit score? That's hard to answer: http://www.credit.com/blog/2010/04/whats-a-good-credit-score-these-days/

Will you ever get a free score? http://www.credit.com/news/experts/2010-09-10/the-man-behind-the-fair-access-to-credit-scores-act.html

Herb Weisbaum -- Free Credit Scores (for some): http://www.msnbc.msn.com/id/41159095/ns/business-retail/

Liz Weston -- Free scores for all? Not so fast
http://ht.ly/3TDsp

U.S. government consumer info: http://www.pueblo.gsa.gov/cic_text/money/creditscores/your.htm

Credit score basics from Fair Isaac: http://scoreinfo.org/

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"Five Red Tape Traps" is an occasional series which will focus on answering the most important questions consumer face in the 21^st Century economy. What traps have you found obtaining your credit score? What other basic personal finance questions do you have?  Respond below.

Here's a puzzler: How can a website sell a $10 Walmart gift card for 26 cents and still make money? Or sell an Apple iPod worth $100 for $3.30 and make an enormous profit?

Welcome to the wild world of penny auctions, where nothing is quite what it seems and everything costs money -- even the bids themselves.

Penny auctions have taken the Internet by storm. Ads for electronics products promising seemingly impossible 95 percent discounts appear on hundreds of popular websites.  There are dozens of penny auction sites, with more popping up daily. One site, SkoreIt.com, recently engaged in an aggressive national radio campaign, bringing even more attention to this "new kind of auction."

Penny auctions aren't like eBay or any other real-world auction. Instead, their apparent deep discounts rely on a simple mathematical trick. Instead of one person paying $500 for an Apple iPad, a penny auctions can entice 1,000 people to pay $1 for that iPad. The catch: Only one of them wins it.  The final price -- let's say $35 for the iPad -- is nearly irrelevant.

The concept is not unlike a 50/50 fundraiser, where 100 people might pay $1 for a raffle ticket; one of them wins $50, while the other $50 goes to charity.

Here's one example of how a penny auction works: Participants pay 60 cents for each bid they place, with each bid adding only one penny to the "sale" price. So an item worth $100 that begins at 1 cent and sells for $3.31 had 330 bids placed on it -- meaning the auction house collected $198 in bid fees. The auctions continue until bidding stops, so theoretically, the price could continue indefinitely.

Penny auctions are run by for-profit companies that believe they've hit on a new formula that is entertaining and offers a real chance at deeply discounted merchandise. Of course, paying a little money for a chance at a big prize sounds like gambling, but supporters of the concept say that additional elements they've added differentiate the format from what might otherwise be called an illegal lottery.  Some observers aren't so sure.

Meanwhile, a class-action lawsuit filed late last year against one of the bigger sites, Quibids.com, has shed an unfavorable light on the industry.

An iPod for $2.82?
Facebook pages and advertisements all around the Internet sing the praises of auction sites.  Quibids, for example, hawks itself as "shopping redefined" and places ads promising "up to 91 percent off."

"QuiBids is great!" says one review of Quibids' site, posted on a Web page called "Taj's blog."  "My grandsons wanted iPods for Christmas, but I am out of work. Through QuiBids, I was able to get them, one for as little as $2.82; plus I won $475 in gift cards, one for as little as $0.60!"

But it's not hard to find criticism either.  Some participants say they got carried away and spent more than they should have to win.

"The first auction I won was for an iPod Touch," a user calling himself Puzofan wrote about his experiences using Skoreit. "My kids want one for Christmas. I paid about $40 more for it than I could have gotten it for at Walmart, but once I got so deep I had to keep going. Something to show for my ignorance and money was better than nothing."

But others claim more nefarious things are going on at some auction sites. Carter Jaynes says he won a Walmart gift card at a penny auction site but it was never delivered.

"Too, too fishy," he told msnbc.com.  He also believes the site he used employed shill bidders -- fake users who place bids simply to drive up the price -- a common complaint among users.

In fact, software packages used by some of the smaller auction sites even brag about offering shill bidding as an option.  According to the Web site PennyAuctionWatch, one software maker brags about the power of such "scripts."

"You decide when your auctions finish. Price too low? Use the auto-extend feature. Not enough bidders? Use the auto-bidding feature. Making a profit has never been so easy," the auction site quotes from a virtual brochure selling the software.

Quibids was hit by a class-action lawsuit in its home state of Oklahoma late last year, alleging that the site has frequently engaged in fraudulent and deceptive business practices.  The lawsuit doesn't allege fake bidders or failure to deliver, but instead maintains that Quibids doesn't disclose essential information to consumers.

"QuiBids.com does not tell its customers that they have virtually no chance to come out ahead financially," the lawsuit claims. "While QuiBids.com passes itself off as a legitimate auction house, its business operation is more akin to a casino or a lottery."

In one example, cited in the lawsuit, plaintiffs claim Quibids profits exceeded $12,000 from bidding on a $1,500 HDTV. The winner paid $228.59, but 22,859 bids were purchased by all bidders with a potential value of $13,700.

"The website is deceptive in that it lures people in thinking it's an auction site," said Roger Mandel, lead attorney on the lawsuit. "... In casinos, they have to post the odds. If they want to operate their business like a lottery, then they need to tell people the truth about their chances of winning. ... There should be more disclosure."

Officials at Quibids say the firm takes great pains to inform consumers about the real costs of using the site and the best strategy for winning, and firmly deny its auctions are akin to gambling.

"We call this entertainment retail," said Jeff Geurts, chief financial officer of Quibids.  He says the site runs 15,000 auctions per day, and will soon ship its 2 millionth product to a winner. "We look at shipping products as a measure of our success."

Quibids includes an eBay-like "Buy It Now," feature that gives auction bidders a chance to simply buy items they are bidding on once the auction cost gets too high.  The money spent during the bidding process isn't lost -- it goes into an account which can be used to make Buy It Now purchases.

People who want to buy an item like a new television can join an auction with the hope of getting deep discount on the item, and if they don't win it, they simply buy the item anyway, he said.

"In our setup, there is no way to lose," he said.

Geurts did concede that the penny auction industry suffered several black eyes during the past year, as dozens of new sites entered the category. Shill bidders, undelivered products and software glitches have all marred other sites, he said.

"Any time you can collect money potentially for nothing, you will attract those kinds of people," he said. "Folks came into the space thinking they could make a quick buck. Those have gone out of business now.  Most didn't understand how hard it is to acquire new customers."

BUT IS IT GAMBLING?
Taking people's money and not delivering products is one thing -- fraud. But taking people's money for a chance to save a whole lot of money is another thing -- probably gambling, said gaming law expert Joseph J. Lewczak, a lawyer who consults with marketing firms about sweepstakes and lottery laws at Davis & Gilbert LLP.

"Doing something truly as a penny auction ... there's no doubt in my mind that's an illegal lottery," he said. "But I believe they could be conducted correctly. ... Are there some operators doing things in addition to bidding that means they (satisfy) sweepstakes and lottery laws? It's possible. Those things would have to be analyzed more deeply."

There are three elements to an illegal lottery -- prize, chance and consideration.  In a basic penny auction, all three elements are satisfied, Lewczak said.  The discount is the prize.  There is chance involved, as the auction bidder does not know when an auction will end.  And finally, there's consideration: The bid fees.

Generally, companies that promote their products with sweepstakes -- think McDonald's and its Monopoly game -- get around these rules by offering an alternate, free chance to enter, and by giving something of value to the participant (like a hamburger).

Penny auctions, however, don't offer free entry, meaning they can't use that defense.

But Geurts argues that his auctions are games of skill, not chance, eliminating the possibility that they would be called gambling.

"There is obviously a lot of skill in these auctions," he said. "We could prove it statistically because some customers do better than other customers by employing strategy."

More important, he says the "Buy It Now" feature means users gain something of value -- credit toward buying the item they are bidding on -- in exchange for their entry fee.

"There is no gambling whatsoever," Geurts said. "It's definitely not gambling or a lottery."

For the "Buy It Now" feature to exonerate penny auctions from a charge of gambling, the value proposition must be real, however, and commensurate with the cost.  Most "Buy It Now" prices at Quibids are higher than retail.  Apple products, which sell for the same price at most retail outlets, make for an easy demonstration.  An iPad 3G with 64 Gigabytes of memory sells for $829 at most places.  At Qbids, using "Buy It Now," it's $899 plus $16 shipping.

In other words, a contestant is risking either the loss of all their bids, or paying $70 above retail, for a chance to buy the item at a deep discount.

Geurts says a large number of auction participants -- perhaps more than 1,000 per day -- exercise the "Buy It Now" option, bolstering his argument.

The amount of the discounts advertised on penny auction sites also raises questions.  In a recently closed auction, for example, Quibids sold an iPod Nano for $3. The site claims the retail value was $155, and that the buyer enjoyed a 98 percent discount.  That discount doesn't include the price the buyer paid for the bids, however, which can often exceed the purchase price.  In this case, the winner -- a player named milopicante -- placed four of the final 10 bids, which had a value of $2.40.  It's possible that milopicante placed 20, 50, or even 100 bids in his or her quest for the item.  Including the cost of the bids in the total cost of the item would severely reduce the real discount to the buyer.

But the math used to calculate discounts is complicated by the fact that users can bid on packages of bids -- a Quibids fan can sometimes purchase 50 bids at an auction for $1 or $2 -- dramatically reducing the cost of bids from their standard 60 cents each. These "won" bids are called voucher bids.

"We count voucher bids as if they are free bids for the calculation (of the discount)," Geurts said. "Sometimes the voucher bids are free bids. ... For example, you get seven free bids on your birthday."

Mandel, the class action lawyer who has become the voice of opposition against penny auction formats, said he says he isn't arguing that Quibids or other auctions should be shut down, but rather that they need to be regulated like lotteries or other games of chance.

"I'm not paternalistic guy," he said. "To the extent that casinos are allowed, maybe this should be allowed. But they ought to be upfront about what it is."

Car leasing is back.

If you've watched any major sporting event on television recently, you've seen the evidence.  Advertisements constantly screech that drivers can get a new car for under $300, $250, even $200 per month. Your ears and eyes aren't lying. Edmunds.com says leases accounted for 1 out of every 4 new car purchases in December, the highest level in five years. 

As you might imagine, this development is a mixed bag for consumers.

Leasing was left for dead after the financial crisis of 2008, which took with it several automaker financing subsidiaries. But now, it's springtime in lease-land.  According to Edmunds.com, there are currently more than 40 new car models available for lease for $200 per month or less nationally -- everything from a Honda Civic to a Mitsubishi Outlander. And regional dealers are offering even more "low, low prices." Drivers across the country can even get a Nissan Sentra that sets them back only $139 a month.

"Honda and Toyota have really stepped it up on their lease deals," said Jessica Caldwell, an analyst for Edmunds.com. Both manufactures have products lines that are "late in the cycle," and they are pushing leases in an attempt to stay competitive, she said.

Jeff Bartlett, the online deputy auto editor for Consumer Reports, said leases have returned for a simple reason: "Factories don't build used cars."

Lease deals with tempting low monthly payments are a time-tested way of moving new cars off dealership lots. 

But if those prices are so low that you think there must be a catch, you win the Red Tape skeptical reader award. Leases have always been a complicated affair for consumers. Those low monthly payments come laden with some of the finest small print the auto industry can muster. Despite the pleasing sound of low payments, leasing is usually an expensive way to finance a car. But this new crop of leases have even trickier terms and deeper financial potholes, meaning careless buyers could easily end up with a lemon of a deal.

Marketers who design lease deals spend a long time playing with spreadsheets and data that show certain price points are very appetizing to consumes, said Bartlett.

"The first question is always, 'How much can you spend a month?'  A number that has tested well is $199," he said.

But what does $199 really get you? Not as far as you'd think. Traditionally, car leases have allotted drivers 1,000 miles per month, resulting in leases that look like this: 36 month/36,000 miles, 24 month/24,000 miles, etc.  Overages come with hefty price tags, usually costing drivers at least 15 cents extra per mile. 

Anyone who's ever driven prematurely out of an automobile warranty knows that's not a very generous allotment. But many new lease deals undercut even that miserly mileage limit.

Why 10,500 miles per year?
One new lease being offered by Ford dealers lets consumers drive away with a new Fusion for $199 per month for 24 months -- but they are capped at 21,000 total, or 10,500 miles per year. A consumer who drives that Fusion using the terms of an old-fashioned lease, and returns the car with the odometer reading 24,000 miles, will be handed a $450 bill. Spreading that penalty out across the 24 months makes that $199/month deal equate to a $219/month deal.

That's still not bad, but it's important for consumers to know exactly what they are getting into when they are signing a lease. Nothing is worse than buying a new car and being afraid to hit the road, lest you drive yourself from a good deal to a bad deal. For example, average 15,000 during the aforementioned Fusion lease, and you'll find a $1,350 bill waiting when you return the car.

Luxury car brands like Jaguar, Saab, and Acura have used low-mileage leases for a while, but now they've spread across mid-range car categories, Caldwell said.

Bartlett warned that many new leases also require larger-than-normal down payments ("capital reduction" payments) to arrive at those seemingly magical monthly payments.

"You can end up with some really weird terms," he said. "I've seen more in the last six months, to get those low rates for advertisements there are very high down payments. I've seen some really big numbers ... which send a confusing mixed message to consumers. A person attracted to $199 per month might not have $4,365 to use as a down payment."

Here's one such complicated arrangement. Mini-USA is offering a $199/month deal on its 2011 Cooper 2-door hatchback. Sounds good.  But buyers must show up with $2,727 as a down payment. And they must drive the small car small distances -- no more than 833 miles per month. The punishment for excessive mileage? A not mini 20 cents per mile. Someone who drives the normal 36,000 during that three-year Cooper lease ends up with a $1,200 bill at the end. Drive 15,000 miles per year, and the bill is a whopping $3,000.

Of course, drivers who exceed their mileage have the option of buying their car at the end of the lease, paying the agreed-upon "residual value." But Bartlett said end-of-lease purchases are almost always a bad deal.  

"You always end up paying more for the car than someone would who just walked in off the street to buy it," he said.

RED TAPE WRESTLING TIPS
So should you consider leasing? Despite these booby traps, yes, you should. Just remember that car dealers have invented this genre -- and are now reinventing it --  to make money. They usually have the spreadsheet on their side.

Leases only work well for certain kinds of buyers. The most obvious category: Someone who drives limited miles and relishes the smell of a new car every two to four years. Traveling salesmen and other mobile workers who use their automobile for employment-based travel will find leasing brings with it certain tax advantages -- such as greater and simpler tax deductions.

And Bartlett said there's a new category for leases, courtesy of our shaky economy: Workers who've been temporarily transferred to a new location or who find themselves in transient circumstances, such as recent graduates.

"Let's say a person knows they'll be somewhere new for only a couple of years," he said. "... Maybe they don't want to be obligated for five or six years of car payments to purchase, and they'll need that money for something else. In this economy leases can appeal to someone in a flexible or an uncertain situation. …  It is generally a more expensive way to acquire a vehicle, but sometimes the flexibility it brings is worth it."

So how do you get a good deal on a lease? Ignoring the offers you see or hear in advertisements is a good start. The car you'll buy will always vary from the deal you've heard about --  there will be sales tax and license plates to pay for, let alone floor mats, keyless entry and the sun roof. Add in a few extras, and a $199/month deal becomes a $273/month deal very quickly.

Never acquire a vehicle using with the "how much can you pay each month?" method. Instead, go to your bank and negotiate separate financing. Bring that bank car loan blank check to the dealer, which shows the dealer you can pay cash for the car. Then negotiate the out-the-door price. Once that grand total is determined, ask the dealer to make its best loan offer and best lease offer on the car.

"You want to say, 'I can buy the car for this price, base the lease on that,'" Bartlett said. Working from total price first will always get you a better deal, he said.

When you lease, the total price will be cited as "capitalized cost." Make sure that price is, at most, the MSRP for the car minus manufactures rebates, your down payment and the value of any trade in.

Finally, Barlett recommends something you rarely hear -- lease a used car. Dealers can arrange financing for 2- or 3-year old cars, and so can other lending institutions. While new-car incentives from manufacturers won't be available to sweeten the deal, that loss is more than offset by the traditional 20 percent or so in value that the car loses the day it's driven off the lot. Leasing a used car can be the cheapest way to drive off feeling like a million bucks. For more:

Herb Weisbaum: "Leasing may only look cheaper"

Edmunds.com example of a lease term

An earlier verion of this story contained an error in the hypothetical calculation of the Ford Fusion monthly cost. Msnbc.com regrets the error.

Consumers say the volume of identity theft crimes plummeted sharply last year, according to a survey released Tuesday by Javelin Strategy & Research.  The number of victims fell from an estimated 11 million in 2009 to 8.1 million in 2010, Javelin found in its eighth annual survey of consumers, by far the largest drop in the history of the survey.

The decline reverses a two-year trend of increased ID theft incidents. And it means Americans' odds of being hit by the crime fell sharply. In 2009, 4.8 percent of U.S. adults were victims, compared to 3.5 percent in 2010. Total annual reported fraud fell from $56 billion to $37 billion, the lowest amount in the survey's eight years, Javelin says.

But the data from the survey isn't all good. ID theft victims faced much stiffer consequences last year, the survey found. The average out-of-pocket loss suffered by identity theft victims jumped from $387 to $631 per incident. Meanwhile, the hassle factor also increased. Consumers said they spent an average of 59 hours recovering from a bout of "new account" ID theft in 2010, up from 41 hours the previous year. 

Meanwhile, the survey suggests Facebook and Twitter users should pay close attention to their credit reports.  Consumers who've used social media tools for at least five years are twice as likely to be hit with ID theft as others, the survey found.

The survey results don't prove that overall identity-based fraud is on the wane. The annual telephone survey asks consumers to self-report their incidents and costs, a method that has pitfalls, says Gartner analyst Avivah Litan. Despite the Javelin results, bank data indicate fraud is actually up in many categories, she said.

Still, Javelin CEO James Van Dyke stands by the survey, and says the identity fraud rate seems to be tightly correlated to the health of the U.S. economy.  The two-year spike in ID fraud paralleled the onset of the U.S. recession, increased unemployment and decreased retail sales.

"In simple terms, when people can't buy as much, they are more motivated to commit identity theft," he said. 

The rate of ID theft found in the survey for 2010 -- 3.5 percent -- is almost identical to the 2007 rate -- 3.6 percent --- suggesting the past two years were an anomaly.

"If you took the ugly last two years away, you would see a perfect straight-line decline," he said.

Credit card fraud down, debit card fraud up

The steepest drop in Javelin's study comes from simple credit card fraud, which fell from 65 percent of total cases in 2009 to 57 percent in 2010, suggesting some bank fraud controls are successful. But debit card fraud, which can be more troubling for consumers because of a lower level of guaranteed protection, jumped from 26 percent of the total to 36 percent.

This year's overall drop is dramatic even using the state of the economy – which is it is enjoying no such dramatic turnaround -- as an explanation.

Van Dyke thinks the overall drop in fraud could also be attributed to a decrease in the rate of large data breaches. Consumers who receive a notice indicating their personal information has been lost or stolen from a company they've done business with are eight times more likely to be ID theft victims, he said.

"In the past few years, we've had incidents like the TJ Maxx hacker," referring to Albert Gonzalez, who was convicted of stealing nearly 90 million credit card numbers. "Now we've seen a decrease in the volume of reported breeches."

Consumers suffered more significant financial losses, and spent more time cleaning up the mess,  because criminals are committing more sophisticated identity crimes, Van Dyke suggested. Adding to their headaches, financial institutions that are struggling to find profits are cutting back on customer service, the study found,  making it harder for consumers to shut off potentially compromised accounts. Only 81 percent of financial institutions have a tool that allows consumers to suspend their accounts 24 hours per day, seven days per week, down from 100 percent in 2009.

Despite the positive survey results, Van Dyke said this is no time for banks to pat themselves on the back.

"Something very good has been accomplished," he said. "Technologies are working. A lot of good stuff is going on behind the scenes. But the last thing we want to do is say is, 'It's all great now.' "

Litan, the Gartner analyst, would say just the opposite.

"It really depends on the category as to whether or not it's gone down," she said.  "It's clear that debit card fraud is up substantially in 2010 across all categories measured."

Getting a true picture of fraud losses is a bit like the blind man and the elephant problem -- consumers, banks and merchants all have separate views of the issue, and separate data to contribute. Banks and merchants, meanwhile, tend to keep their fraud loss data close to the vest. But industry data that Litan has seen suggest the picture is far from rosy. 

Counterfeit fraud -- where a criminal uses stolen data to fashion a counterfeit credit or debit card -- is up dramatically, she said.  Some examples from data she's collected: ATM losses per active card went up about 13 percent from 2009 to 2010; mail order/telephone order fraud climbed nearly 28 percent, and signature debit card losses per card rose approximately 36 percent.

While conceding that credit card fraud could be down, debit card data from banks made her skeptical of the $19 billion overall fraud drop reported by Javelin's consumers.

"Fraud data doesn't move that dramatically," she said. 

Other Javelin findings worth noting:

* In 2010, 11 states showed increases in fraud over 2009: Alabama, Alaska, Arizona, Florida, Kansas, Michigan, Nebraska, New Jersey, North Carolina, Utah and West Virginia. Six states showed decreases: California, Colorado, Missouri, Oklahoma, Vermont and Washington

* Friendly fraud -- identity fraud committed by people known to the victim, such as a relative or roommate - grew 7 percent in 2010. And friendly fraud hits the poor harder; it's more likely to affect consumers earning $50,000 or less annually.

* "Change in physical address" was the No. 1 method of account takeover reported by victims.

The Javelin research is sponsored by Fiserv, Intersections Inc. and Wells Fargo & Co.

RED TAPE WRESTLING TIPS

Prior Javelin research has shown that many consumers who receive, "We're sorry we've lost your data," notices don't bother to activate free credit monitoring offers that arrive with them.  Given that such notices increase consumers' potential for becoming a victim by 800 percent, Van Dyke says consumers should take advantage of such offers.

And given the increase in debit card fraud, consumers should make sure they understand their bank's policies on refunds. While many banks extend credit-card-like protections to debit cards -- namely, a waiver of $50 liability and instant refunds -- not all do. It's important to know whether yours does before an incident occurs.

"Banks can be very different under the hood, and consumers should shop around," Van Dyke said.

Once you look, it's hard to look away. The tweets seem to come right from the center of the conflict in Egypt:

"Despite the blood and the pain, spirits here are sky-high. People singing the anthem & waving flags while throwing stones."

"I am ok. I got out. I was ambushed & beaten by the police, my phone confiscated , my car ripped apart & supplies taken"

"They are still shooting at us from the bridge lots injured, yet the gvt pretends it wants dialog."

There are desperate pleas for food, for help finding lost friends, even remote offers of first aid help from supposed professionals. ("Tip: Chest Injuries-unconscious person. Lay on injured side = good lung is higher & work properly")

There is even time for humor among the chaos.

"I kid you not. A group of us are practicing baseball with the stones they're throwing. Bats and all. Fun revolution."

Never before has an extended conflict provided so much on-the-ground information to a global audience. Much has been made of social media's role in organizing the protests within Cairo and around Egypt. But Twitter, Facebook and other social media tools may play an even more important role in spreading the news around the world. Enterprising protesters have even set up makeshift TV channels online, broadcasting live video from cell phones to the rest of the world. Social media might be compared to the use of shortwave radio during the 1950s and '60s, but it is dramatically more immediate and raw.

Despite this unprecedented access to first-person accounts, however, it's not clear whether social media is adding to global understanding or just adding to the confusion. 

Twitter, the main medium for those broadcasting from the center of conflict in Cairo's Tahrir Square, has proven to be a robust tool for instant observations.  But it suffers from the same problem all Web media does: How does an average reader authenticate the source? It's easy to lie about your location, let alone your identity.

But Twitter, with its 140-character limitation, suffers from additional, unique problems.

*Diving into a stream of 140-character missives is like viewing a movie that begins in the middle of things ( "en media res," filmmakers call it) with the intent of disorienting viewers. Hearing from someone tweeting with bloody hands near the museum does no good unless you know who he is and why the museum matters. 

*The problem is compounded by speed. Even filtering Twitter using popular tags like #Jan25 results in a stream of hundreds of posts per minute -- far more than someone could digest.

*Tweets don't necessarily arrive in order -- and when other retweet them, even more confusion ensues. 

C.W. Anderson, an assistant professor of media culture at the City University of New York, lamented this -- appropriately enough -- in a series of tweets on Wednesday.

"The major difficulty in following an event like today's battles in Tahrir Sq. on Twitter: lack of clear chronology; esp. confusing w/RTs (retweets). ...I'm seeing events from hours ago RTd as if current," he wrote.

Other tools have their own reliability issues.

Facebook is full of fake pages; after the Haiti earthquake, numerous fund-raising scams attracted hundreds of thousands of followers. 

There are riveting first person, amateur videos broadcast by services like Bambuser (here's an example) and YouTube's CitizenTube.  But these are usually dark, shaky, and confusing.  Amateur photos are easier to digest, but share in the same authentication problem.

And the sheer amount of data hitting viewers necessarily results in information overload.  Meanwhile, the lightning-fast speed of information spreading has a dark side, which came into focus in the hours about the Tucson shooting spree in January -- it's easy to spread false rumors quickly, which can then take on a life of their own.

Social media also can largely disappear at a government's whim. And the ease of pretending to be someone else through technology can make the situation even more confusing: 

"Please don't respond to my phone or BBM (Blackberry). This isn't me," wrote sandmonkey, a blogger in Egypt who we quoted above as he described getting ambushed. "My phone was confiscated by a thug of an officer who insults those who call."

It can make news consumers wish they had a guide, someone with expert skill at distilling multiple sources of information and making sense of it all.

That's still the stated mission of mainstream media, but it often falls down on the job, said Brian Reich, who studies social media at his firm -- "little m media."  But he's also been disappointed so far in the ability of social media to help people make sense of the conflict in Egypt.

"It frustrates me to no end that even though we have a tremendous amount of information in theory, we keep falling into the same old patterns of how information is disseminated," he said. Many tweeters simply re-post professional journalists' comments, for example. "In a lot of ways we have all these different sources all saying the same thing. It is not any different than it was, except maybe it's even worse. We have more information and less time to process it, and less deep knowledge."

Logging onto Twitter, like many Internet tools, can feel like walking into an enormous party where everyone is talking at once. It's true that when 1,000 people are speaking simultaneously, you can't hear even one . On the other hand, when you walk into that party, you very quickly get a real sense of the buzz in the room. Are people happy, or angry? Are they anticipating something, or getting ready to leave? Are they in danger? Twitter certainly gives long-distance observers that sense about Cairo.

But ultimately, if you want to find out what's going on in that party, you need to talk to three or four people -- the right three or four people who seem to be in the know. That's where old-fashioned trusted recommendations come in.  Following journalists whose names you know -- like Richard Engel (@richardengelnbc)-- is certainly a good first step. Then you can use these trusted sources to help find other trustworthy voices online. U.S.-based columnist Mona Eltahawy (@monaeltahawy), who is one of the rising media stars from the conflict, has regularly pointed followers to friends and colleagues she knows are on the ground in Tahrir Square.

Reich thinks it's this filtering of information -- between raw on-the-ground reports and polished mainstream media reports -- that must evolve to make social media truly useful during a crisis like Egypt. He equated the in-between layer to the role of a television director during a football game.  The network might have 11 cameras watching the game, but it has to be someone's job to pick one camera at a time for people to watch.

"What social media are giving us now are all 11 cameras," he said. "Not only don't we want to watch all 11 cameras, we can't watch all 11."

In fact, experiments with alternate camera views show most viewers hate acting as their own director. 

Reich calls the problem one of information management, and says one job title that's been given to this new layer of filtering is the "convener."

"One of the benefits of digital and social media is an ability to keep up to date with a fluid, dynamic situation," Reich said. "That's great, but there has to be something more than just creating awareness that a situation is under way. Otherwise all that energy - won't have any value."

RED TAPE WRESTLING TIPS
Social media is here to stay. There is a worthwhile debate going on about the amount of credit it receives in altering world events (Macolm Gladwell seems to be fighting the entire Internet on that one). 

But when Sen. John McCain announces a significant change in his foreign policy outlook using Twitter and Twitter language ("@SenJohnMcCain: Regrettably the time has come 4 Pres. Mubarak 2 step down"), you must concede the power of social media.

Following protesters in Cairo as they describe their predicament is ultimately riveting, but it requires the patience of a ham radio operator.  Here's how you can reduce your signal-to-noise ratio:

On Twitter, start by finding journalists and analysts you trust online, and follow them. Then follow their recommendations. 

You can follow popular searches and "hashtags" like #Eygpt and #Jan25 but you will likely be overwhelmed. You are better off setting up a list on Twitter and pouring in people you decide to follow. Here's mine:

http://twitter.com/#!/RedTapeChron/eygpt (suggestions welcome)

Google has set up a very useful crisis page, with links to various on-the-ground tools. It also includes a "Realtime updates" box which neatly gathers related Tweets. It casts too wide a net for my taste, but still a good starting point.

Below is a stream of real-time Tweets from my list.  

Ever get the feeling that the itemized charges on your cell phone bill aren't quite right? A new class-action lawsuit filed against AT&T claims that often, they aren't -- and the mistakes could be costing consumers millions.

AT&T's iPhone data service is like a gas station that "charges for a full gallon when it only pumps nine-tenth of a gallon into your tank," according to a lawsuit filed late last week. The company overstates data downloads by 7 percent to 14 percent, which could lead to overage charges for consumers who aren't signed up for the iPhone's all-you-can-eat data plan, it said.

The suit, filed Thursday in federal court in the Northern District of California, also claims that AT&T sometimes charges consumers for entirely phantom downloads, ringing up charges even when the phone's Internet connection is off. The lawsuit compares this to a "rigged gas pump charging you when you never even pulled your car into the station."

And it claims that the firm's billing software is so out of whack that it incorrectly logs the date and time of data connections, causing some to appear on the wrong month's billing cycle, which also could lead to overcharging.

AT&T said that accurate billing is a priority for the firm, and it intends to vigorously defend itself against the lawsuit.

"In fact, we've created tools that let our customers check their voice and data usage at any time during their billing cycle to help eliminate bill surprises," the firm told Macnn.com

The lawsuit seeks both federal and California class-action status.

Plaintiff Patrick Hendricks, who lives in Alameda County, Calif., subscribes to AT&T's limited data plan for the iPhone, which grants him 200 megabytes of downloads for $15 per month.  He routinely exceeded his allotment, the lawsuit says, leading to excessive fees. Later, he curtailed his usage of the iPhone to avoid fees, unfairly limiting his use of the service.

The lawsuit claims AT&T has broken both federal and state consumers laws, and accuses the firm of committing "unlawful, unfair and fraudulent business practices," through a "rigged billing system."

As proof of unfair practices, attorneys for the plaintiff say they hired an independent consulting firm to run tests on iPhone data downloads. In one case, the firm found a 50KB website was logged as a 53.5KB website.  In another case, a consultant purchased a brand-new phone, turned off all services and still was billed for 35 data transactions totaling 2,292 KB of usage, the lawsuit alleges.

While the overages might only cost customers a few dollars each month, the lawsuit alleges AT&T has enjoyed a big boost to its bottom line through overcharging.

"In the fourth quarter of 2010, AT&T reported its wireless revenues increased $1.1 billion ... from the year earlier quarter," the lawsuit said."A significant portion of those data revenues were inflated by AT&T's rigged billing system for data transactions."

iPhone users -- in fact, virtually all limited data-plan users -- have little trouble finding allegations of billing improprieties online from other consumers.  But because itemized cell phone bills are so mysterious -- some firms even charge extra for them -- and because special software is required to log downloads precisely, there is virtually no way an average consumer would discover small data overage charges.

Systematic telephone service billing errors have a long and storied history. During the 1980s, errors on long-distance bills were so common that an entire industry developed around auditing corporate phone bills for major errors and gaining refunds.  So-called "metering" mistakes remain common.  Just last April, AT&T was forced to appear before the Tennessee Regulatory Authority to explain a computer error that led to overcharges levied against 15,000 state residents. One resident who was paying $25 for unlimited long-distance calling received a surprise $921 bill.

AT&T's wireless business, now called AT&T Mobility, has been the target of class-action lawsuits related to billing before.

Last year, it settled charges that it intentionally degraded service after acquiring rival Cingular, forcing consumers to either pay $175 early termination fees or early upgrade charges. The firm admitted no wrongdoing but agreed to pay millions in refunds to consumers who paid early termination fees during a 12-year span.

And in November, AT&T settled a lawsuit alleging the firm overbilled iPhone users for taxes. Again, the firm admitted no wrongdoing but pledged to refund consumers.

Attorneys for Patrick Hendricks have asked that consumers receive refunds, and also that AT&T be hit with punitive charges for committing unfair business practices.