Avoid Mortgage Scams

The California Department of Real Estate issued a mortgage fraud warning to consumers.

The department is advising consumers look out for mortgage relief, loan modifications, and foreclosure rescue scams perpetrated by fraudsters on financially strapped homeowners.

One prominent tactic used by scamsters and third-party operators is to ask for an up-front fee from homeowners in exchange for promised reduced monthly mortgage payments. When the fee is paid, the con artists do little or nothing for the homeowner.

It is not necessary for consumers to use third-party operators, because they may not enhance a homeowner’s ability to obtain a payment modification.  They might actually hurt their chances of working with the homeowner’s mortgage servicer, said the California Association of Realtors.

Any ads that claim to “stop foreclosure now” and offer “money-back guarantees,” should be considered with caution, the association said.

Third-party fraudsters scan foreclosure notices in public filings and the news media to locate potential victims, according to the Federal Trade Commission.

Avoid Being Scammed in 2012

The American Association of Retired Persons (AARP) has compiled a list of the five most malicious scams consumers are likely to encounter in 2012.
 
The Nigerian letter. In this advance-fee scam, someone unknown to the consumer offers promises of great riches. People in financial distress are usually targeted by scammers trying to take advantage of kindness, generosity, or greed. While this scam is old, new variations make it more effective in trapping the vulnerable and unwary. The questionable plea promising millions of dollars has been replaced by more clever approaches: a foreign business person trying to set up a domestic bank account, a parent trying to raise money to help free a hostage child, or a U.S. soldier trying to ship home war booty to help his dying mother. Data mining now allows the scammers to appear more legitimate by personalizing the messages too.
 
We advise you to not respond to these types of inquiries. Instead, you should delete any e-mails of this type and shred any paper mail.
 
Exploitation through education. With this type of scam, fraudsters offer a “secret” system, manipulating the consumer’s emotions while promising riches or easy success. Middle-agers and seniors looking to change careers are usually targeted. Scammers entice the education-seeking unemployed with promises to get rich quick with the secret plan, win a high-paying job with the streamlined schooling, or pass a test for a chance at a nice government job. Victims don’t learn anything they couldn’t find in their local library, but become burdened with thousands of dollars in bogus tuition and fees.
 
We caution you to avoid making same-day decisions. Any career or education decision merits research and referrals.
 
Exaggerated diagnoses of problems.  Here, fraudsters exploit consumers’ lack of expertise, their trust in authority and any critical need.  Most consumers are cautious when an auto mechanic discovers a previously undetected, but expensive, car repair. The mechanic has personal interest in pointing out the pricey problem. That same conflict of interest now appears in other industries. AARP cited hearing specialists who hawk hearing aids, and financial planners pitching a brand of mutual funds as examples of scams exploiting consumers’ trust.
 
We advise you to separate the diagnosis from the product or service deliverer.
 
Facebook scams. An organization or person who doesn’t know the consumer may attempt to “friend” consumers via Facebook, exploiting the trust of the “safe” social-network environment. While Facebook keeps people connected, the walled-off environment of filtered contacts that consumers have learned to trust has also led them to a false sense of security that scammers take advantage of. Once “friended,” they link out of the safe environment to an external site where they can attack consumers viruses or pitched scam offers.
 
We advise you not to respond to or “friend” any person or organization that you do not know.
 
Phishing. In “phishing,” a false entity asks for information it should already have if it were the legitimate entity. It usually targets anyone with a bank or credit card account. Armed with consumers’ names, addresses and phone numbers, phishers call or e-mail consumers with requests to “verify” other personal information such as Social Security number, credit card information and banking data.
 
We advise that the best defense to these scams is to avoid making quick decisions and divulging any personal information. Discuss any financial decision over $500 with a friend or relative, and take at least 24 hours to mull it over.

Be a Savvy Gift Card Giver and User

You’ll probably give and receive at least one gift this holiday season. Gift cards, a one-size-fits-all way to give a present, have skyrocketed in popularity in recent years. With money tight, it’s more important than ever to be savvy about buying and giving gift cards. And on the flip side, make sure you properly use the ones you receive.

Smart ideas for buying a gift card:

• Consider how your recipient will use it. Gift cards come in two varieties: Retail gift cards are sold by retailers and restaurants and can be used only with those merchants. Bank gift cards display the brand logo of a payment-card network, such as Visa, MasterCard, American Express, and so forth. You can use these national-branded gift cards wherever the brand is accepted.

• Avoid fees and expiration dates. Fees might be charged at the time of purchase or can be deducted from the card after you pay for it. In the store, fee details usually are posted on the gift-card sleeve. Online, look for details posted on the issuer’s website. If you’re buying by phone, ask about shipping and handling fees. Always check for expiration dates.

• Inspect the location and condition of the card. In stores, look for gift cards located safely behind the cashier’s counter or customer-service desk. Don’t buy a card that appears to have been tampered with. For example, make sure the protective sticker is intact and the code on the back has not been scratched off. One form of gift-card theft is to write down an exposed gift card number, monitor it online and, when activated, quickly access and drain the card before the owner becomes aware of it. Online, avoid buying gift cards from auction sites–they may be selling counterfeit cards or cards obtained by fraud.

• Watch the cashier. Make sure the amount you pay is the same as the value of the card. The best way to do this is to watch the cashier scan the card. One popular scam is for a cashier to pretend to activate the card, hand it to you, and pocket your money.

• Investigate the financial condition of the card seller. The card may lose value if the issuer goes out of business or files for bankruptcy. Another possibility is that the issuing business closes a store near the recipient.

• Give a receipt along with the card. If the receipt doesn’t include the card’s ID number, provide it as well. If the card gets lost or stolen, the receipt and ID number help the retailer track where the card was activated and used, and usually will qualify the recipient for a refund or replacement.

Tips for using a gift card:

• Ask the giver for important card information. This includes the original purchase receipt and the card’s ID number. If not obvious, find out where you can use the card, the terms, conditions, expiration date, and fees. Write down or photocopy the toll-free number for reporting lost or stolen cards; keep this information in a safe place.

• Use it soon. This is especially the case if you still have a card you received last year. This helps you avoid possible maintenance fees, expiration, or misplacing or losing the card. Better yet, you can take advantage of post-holiday discounts.

• Think of it as cash. Although some issuers will replace lost or stolen cards, you might not be able to recover any of its value, or might have to pay a fee to do so.

If you have a problem with a gift card–say the value has expired, you are charged a fee, or it’s been lost or stolen–contact the toll-free number of the card-issuing company to see if it still will honor the card or reverse the fees.

Pay Your Fines or Your Credit Score Can Suffer

Maybe you ignored a speeding ticket you got while traveling because you figured you wouldn’t be back in the area soon enough for it to matter. Or maybe you simply forgot about that pesky parking ticket you got while downtown. Whatever the situation, you’d be adding to the millions of dollars in unpaid tickets that municipalities deal with every year.

Now an increasing number of cities are trying a new tactic to get violators to pay up–and if those drivers don’t, their credit scores could take a major dent (TIME Nov. 3).

Many cities are sending unpaid traffic and parking tickets straight to collection agencies. If you continue to ignore a ticket once it’s in a collection agency’s hands, you could lose serious points from your credit score.

And a minor ticket can affect your score as much as more serious types of debt. “For scoring purposes, the credit formula doesn’t make a distinction between a $25 parking ticket you got when your meter expired and an outstanding credit card debt of $25,000,” according to the TIME article.

This could mean higher rates or flat-out rejection the next time you need an auto, mortgage, or other type of loan–even if your credit was formerly spotless.

“Someone with a 680 score could lose roughly 50 points from the addition of a collection of this nature,” said Fair Isaac Corp. spokesperson Barry Paperno in a recent Washington Post article (Oct. 31). “For someone with a 780 score–very, very good credit–the appearance of one of these collections could lower their score by as much as 105 to 125 points.”

So far, a number of large cities and their suburbs have adopted this practice. New York went this route in 2010, in an attempt to collect on $700 million in parking tickets alone. Suburbs of Washington, D.C.,  and Chicago have followed suit.

The best way to protect your credit score? Don’t write off those tickets. Even if you think you can get away with not paying them, the consequences for your credit score could be much more costly in the long run.

Fall Fun!

Trick or treat!

It’s that time of year again. The time when all those cute neighborhood kids (including your own) transform themselves into an unrecognizable motley crew of thieves, witches, and princesses. The time of year when your doorbell rings constantly as one gang after another fill their bags with the treats that are a kid’s dream and a dentist’s nightmare.

Yes, it’s Halloween. It’s the one day of the year just made for kids and the kids at heart. However, for your average American adult, Halloween can be a hassle too. Before the fun begins, there are endless weeks of constant whining for the best costume on the block. Harried parents are dragged from store to store in search of that perfect outfit, trying to strike some balance between the child’s enthusiasm and their holiday budget. For too many kids and parents, Halloween turns into a competition. Too much time, money and nerves are spent on what should be a fun experience.
But this year you don’t have to do that. The point of a Halloween costume is to be fun and original – and original and store-bought are not synonymous. Is your goal to make your child stand out from others on the block? Well, your homemade costume is bound to be a one-of-a-kind collector’s item, specially designed just for one child. Don’t be scared if you’re not a professional tailor. Most people aren’t. You don’t even have to know how to sew. Just visit your closet and start thinking out-of-the-box. Here are a few ideas to get you started.

• The sheet turned into ghost idea never fails. But don’t leave it with slits for the eyes and mouth. Take a few permanent markers and give the ghost some flair. Makeup will bring out the ghost’s haunted eyes and red lipstick can look bloody.

• All you need for a Pipi Longstocking costume are mismatched socks, shoes, clothing and a hanger or pipe cleaner to make Pipi’s braids stand out.

• Draft your kitchen broom as Harry Potter’s Firebolt. Add a black cape, witches hat, glasses, and a zigzag scar to complete the picture. An old cauldron can be used for trick or treating.

• What’s keeping your leotards from becoming animals? Just grab a headband to add assorted ears of your choice and pompoms make super, fluffy tails. Add a dash of face paint and your home zoo is complete.

• Dress your little girl in a leotard or light frilly dress and tights and see if you recognize that famous ballet dancer.

• A piece of cardboard and some paint transform into butterfly/ladybug wings, ready to fly.

• Is a dark suit or trench coat languishing in your closet? Add a badge and you can enter anywhere as the FBI.

• If you have old boxes sitting in your garage, cut holes for your head and arms, and decorate the box to become a jack in the box or a popcorn snacks.

A quick search on the Internet will yield many fun, creative, easy and inexpensive ideas for Halloween costumes too.  Try these DIY costumes.

Just remember, have fun, be safe, and let your children know the good candy has to be “checked out” by you first

What is a Credit Union?

Here’s just a quick overview of what makes a credit union different from that 4-letter “B” word…bank! Cue daunting music, dun dun duuuuun.

College Costs How Much!?

Student Choice, our private student loan provider, hosted a free financial aid webinar on May 11, 2011.  If you missed it, you can view part 1 below!  View the entire webinar in parts 1-6 on Student Choice’s YouTube page.  We will post more information and videos as they’re available, so check back often, or sign up for e-mail updates so you never miss out.

With the average gap in covering college expenses ranging from $10,000-$30,000, every bit counts.  If you need help in bridging the gap between federal funding and the cost of college, MONEY FCU can help!  Visit our student loan center for more information.

Talking to Kids About Money

Part of bringing up children today is giving them all the tools they need to survive and do well in the world and environment in which they live. In the United States of today, that means helping them understand the value of and the concepts of earning, using, saving and investing money.

Parents neglect teaching children about money for several reasons. Sometimes they don’t think it’s necessary. Sometimes they feel that, since they are not “financial experts,” they are not qualified to discuss it.

Robert T. Kiyosaki, in his bestselling book, Rich Dad, Poor Dad, gives the analogy of an agricultural society where children are not taught the basics of farming. Whether we like it or not, money is central to the lives of people in our country today. Therefore, it’s our responsibility as parents to give our children the basic understanding they need. That’s easier than you might think because, whether you realize it or not, you already have all the information that you’ll need.

As your credit union, we’d like to help you with the task of teaching your children the basics of handling money. This article is the first in a series. Follow our blog for more articles that will help you bring financial concepts to the level of a child.

Looking ahead and planning for later, not just thinking about “now,” is a sign of maturity. Explain to your children that just as an ant spends the summer putting away food for the winter, people need to put away some of the money they have now to save it for later. Saving can mean putting away a little money each week to pay for a large ticket item (bicycle, computer, CD player) or so that they will have spending money of their own to use on the family vacation.

Let your children save up for a relatively close purchase so that they can experience the pleasure of being able to buy something on their own after having controlled their urge to just spend it.

If you buy your kids everything they ask for, they will have no appreciation for money. Give them some leeway, together with guidance, in how to spend their earnings, gifts, and allowance. At the same time, know where you personally want to draw the line. What will you buy for them, and what will they have to pay for themselves?

Some children want clothes in excess of what their parents deem necessary. Others are caught up in fads, such as collections and music, and just “have to have” a new item every few days. These are areas of parental discretion and may change as the child grows older. But, whatever you do, make sure there are at least some things your child will have to pay for themselves.

When you teach your child about financial matters, do so in bite-sized pieces. Your goal should be to teach your child just enough to stimulate a genuine desire to learn more. Teach your child to “pay himself first.” by putting away part of his earnings and gifts.

Your child can open two accounts – either at home with you or at MONEY Federal Credit Union.  One can be to save for a large purchase, such as a musical instrument or equipment, and another for the faraway future. When a child accrues enough savings to purchase the object, you have taught him an important lesson: saving is really worth it. You don’t want him to resent the money that goes into savings for some nebulous, unknown future.

When your kids feel comfortable talking to you about money, you’ll have established an important bond that will grow in years to come as your child makes career and investment decisions as an adult.

Say NO To Interchange Rule

How will this new rule affect the average consumer?  Things like free checking, free debit cards, low fees and other amenities will disappear from credit unions and banks alike.  Tell the government NO to this proposed rule!

Visit www.stopthedebitcardrule.com for more information on how to contact your local government.

Banks Play Hide and Seek with Fees

Banks are still hiding their fees from consumers, even the fees mandated by the Truth in Savings Act, says a new study by U.S. Public Interest Research Group (U.S. PIRG). That’s why one of the study’s key recommendations is to “bank at a credit union, not a bank.”

The study found that of more than 392 bank branches surveyed in 21 states, fewer than half obeyed the law in fully disclosing their fees to prospective customers. One in four of banks surveyed provided no fee information at all, said U.S. PIRG. The group also reviewed bank fees online at 12 other banks, said its report, “Big Banks, Bigger Fees: A National Survey of Bank Fees and Fee Disclosure Policies.”

Among the key findings:

• Fewer than half (38%) of the banks complied easily with a researcher request for fee schedules required by the Truth in Savings Act. Only after two or more requests did 55% of the branches provide fee schedules. Nearly one-fourth (23%) refused to comply with the request. Other banks provided “often weighty piles of useless other brochures.”

• Free checking was available at half the banks, and 29% more offered free checking with direct deposit. “The free accounts are widely available at small and regional banks and credit unions, a finding that has also been obtained by others,” said the report.

U.S.PIRG also made these recommendations for consumers:

• Review bank statements and count the fees, especially ATM surcharges and “off-us” fees when making transactions at another bank’s ATM.

• Examine how many fees you pay and shop around. “Look for better accounts. Bank at a credit union, not at a bank. Credit unions are member-owned, lower-cost alternatives to banks and often offer the same variety of service. It’s easier to qualify for membership than most consumers think.”

U.S. PIRG, which is a non-profit, non-partisan public interest advocacy organization, also urged the Consumer Financial Protection Bureau to extend the TIS Act requirements to the Internet by requiring banks to post fees in a searchable Web format and to post the most important savings and checking disclosures required by the act in tabular format.