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Monday, August 31st, 2009

Identity Theft Crimes — Have You Been Robbed Lately?

Three men have been indicted for what seems to be the largest data breach and identity theft case ever prosecuted.

More than 130 million credit and debit card numbers were compromised by the hackers, according to Reuters.

It's probably a good idea to check your records to ensure you haven't been robbed of your hard-earned money.

Of the men indicted, one (Albert Gonzalez) was reportedly already in jail for prior hacking-related charges.

Sources indicate that the other two men who were indicted were also responsible for five serious data breaches from 2006 to 2008.

With this crime in the news, it's probably good to go over what identity theft is and how you can protect your assets.

Identity Theft: What the Criminals Do

Identity theft can be a devastating crime for its victims, leaving their credit ruined and causing them to lose serious amounts of money and, in some extreme cases, filing bankruptcy.

So how does this crime work?

  • Individual identity theft: When a thief steals the information of an individual or a single company, he or she can use it to make everyday transactions, take cash out of the bank, take out loans or get a job (particularly if the person is not a U.S. citizen). Victims of individual identity theft generally have great difficulty setting their affairs in order after they’ve been targeted.
  • Group identity theft: When hackers target an entire database of personal information, the potential for damage is much greater. In this particular case, the hackers apparently planned to sell the personal information they stole from corporate databases to other criminals.

This particular incident involved data breaches at the card processor Heartland Payment Systems and the retail chains 7-Eleven and Hannaford Brothers, Inc.

Preventing Identity Theft

Information crimes have risen with the popularity of computers and the Internet – but so have protections against them.

For example, the security code on the back of your credit cards can prevent fraudsters from using your info by creating a clay imprint copy of your credit card number (at the checkout, say).

Here are some actions you can take to keep you and your personal information safe:

  • Shred your sensitive mail. While some large-scale identity crimes occur in the digital realm, individual identity theft still results from thieves sifting through sensitive documents in the trash.
  • Guard your numbers like gold: Don’t give out your SSN or credit card numbers unless you’re sure you have to. Whenever you’re asked to give out your SSN, demand an explanation of why it’s needed.
  • Check your credit report: Regular checks of your credit report (at www.annualcreditreport.com) will reveal whether anyone has been using your information besides you. Then you can take steps to stop the criminals.
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Posted in Financial Literacy | No Comments »

Saturday, August 29th, 2009

Consumer Alert: Fake Bill Collectors and Rebate Checks

As you hopefully know, a well-informed consumer is a tricky target for a scammer.

Here’s a summary of are two new scams that have been reported in various parts of the country, and what you can do to protect yourself from them.

Phony Bill Collectors

Reports suggest that scammers are posing as debt collectors and threatening consumers over the phone while demanding payment.

  • Fake agency affiliation: One con artist apparently claimed he was from the “Federal Investigation Authority,” an organization that does not exist.
  • Bogus claims about consequences: Sources indicate that consumers have also reported threats of jail time if they didn’t pay debts – often, debts they no longer owed. NOTE: You cannot be sent to jail for debts. Your home may be foreclosed on, you may have your car repossessed and your wages could be garnished, but debtor’s prison is a thing of the past.
  • Worrisome knowledge of personal information: Perhaps the most troubling characteristic of this scam is that, according to sources, scammers call with a frightening knowledge of the victim’s life: SSN, friends’ names, home address, etc.

These scams can be dangerous for a variety of reasons, the least of which is that scammers might call your work phone and force you to explain an embarrassing situation to your colleagues.

  • Protect Yourself. If you’re called by a suspicious collector:
  • Don’t give out any information. Even if he already knows your digits, refuse to verify any of it.
  • Don’t agree to anything. Demand to see written proof of your debts before proceeding with the conversation.
  • Contact the original company. If you truly still owe a debt, you can find out by calling whatever company the caller names.

Rebate Check Scam

After using a credit card to purchase a number of Snuggies, one consumer reportedly received a check for $8.25 in the mail.

It appeared to be a rebate check, and had the Snuggie logo on the envelope. It was not.

  • Read the fine print. The check in question apparently indicated that, by endorsing it, consumers agreed to a month-long trial membership to “Great Fun,” a discount travel company.
  • Proceed with caution. While that may not seem so bad, the rest might. After the trial month, consumers would be automatically enrolled for full-time membership – at a cost of $150 per year, to be charged to the credit card used for the Snuggie purchase.

If you’ve received one of these checks or been victimized by a similar scam, take action by filing a complaint with the Federal Trade Commission.

Protect Yourself: Never sign a check (especially one you weren’t expecting) without reading all fine print associated with it. If that means finding a magnifying glass, then so be it!

Additional Resources
Fair Debt Collection Practices Act (PDF)

Have you been a victim of a scam? Consider filing bankruptcy.

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Posted in Financial Literacy | 4 Comments »

Friday, August 28th, 2009

Recession Changing the Face of Retail?

After decades of continuous consumption and expanding credit, Americans are now learning a new way to shop.

And many retailers are suffering because of it.

Well, Maybe Not…

According to an article from the Associated Press, U.S. retailers have seen a jump in shoppers who decide against purchasing one or more item before they reach the checkout counter.

It’s apparently happening everywhere from the grocery store to upscale clothing outlets, and it’s affecting retail in two major ways:

  • Decreased consumer spending: When we buy less, companies pull in less revenue. And these days, it seems like no company is immune to the belt-tightening undertaken by the American people. But that’s not the only way abandoned purchases hurt retailers.
  • Increased labor costs: When we leave those iced oatmeal cookies in the dairy aisle, realizing we need milk but only want the sweets, someone has to put them back with the desserts. And, sources indicate, retailers have seen higher labor costs because of all the restocking such behavior requires.

Tightened Credit Means the Revival of Layaway

It’s no wonder that we’ve become more cautious about lugging a lot of stuff to the checkout counter: nowadays, many credit card issuers will deny over-limit purchases rather than allow them to go through and charge a fee.

And, because of the shrunken credit market, many retailers are reporting an upswing in layaway, which allows consumers to make gradual, interest-free payments and pick up items when they’re paid in full.

  • K-Mart shoppers have reportedly taken to buying even low-cost items on layaway, including pencils, notebooks and other back-to-school supplies.
  • Sears Holdings apparently re-introduced its layaway program, which had been defunct for twenty years. Sources indicate that the company will also bring back its Christmas Club savings accounts for shoppers interested in saving money for gifts.
  • Google Insights for Search reports that the search term “layaway” was twice as popular among U.S. users this August than a year ago.

Have you scaled down your spending, but you still can't make ends meet? It may be time to consider filing bankruptcy.

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Posted in Bankruptcy and the Economy | 6 Comments »

Thursday, August 27th, 2009

Can High Testosterone Levels Lead to a Person Filing Bankruptcy?

Ok, ok, maybe it's not that dramatic... but a new study shows that high testosterone may lead to reckless spending.

A recent study by researchers at the University of Chicago and Northwestern University has discovered that men and women may shop differently for biological reasons – and those reasons could also determine how you execute all major financial decisions.

Background: Testosterone & Risky Behavior

Scientists have known for some time that testosterone, the male sex hormone, is linked to risky behavior.

And, when the economy collapsed after what can be considered very risky behavior in speculative financial markets, researchers began to wonder whether financial behavior had any specific link to testosterone levels.

The Study: Business Students Make Decisions

The researchers noted that, while about 57% of male MBA students choose high-risk financial careers after graduation, only about 36% of female MBA students do.

Researchers chose about 500 male and female students pursuing their Masters in Business Administration (MBA) for their experiments.

After measuring testosterone levels in everyone, researchers found that about 90% of women and 31% of men had relatively low testosterone.

Researchers then offered participants a choice between a guaranteed monetary award and a high-risk lottery option with a potential for higher payoffs.

The Findings: Testosterone Leads to Risky Business

Perhaps unsurprisingly, the researchers found that those with higher levels of testosterone (10% of women and 69% of men) tended to choose the higher-risk financial options.

The Lesson: Partner Up for Big Decisions

So what does all this teach you as a consumer? A few lessons.

  • Know thyself. While you may not want to actually check your testosterone levels, consider your history of financial decisions. If you have a past filled with risky moves, consider forcing yourself through a cool-down period before making major money decisions.
  • Partner up. Studies have found that married couples tend to be more risk averse than single people, but even if you’re not settled down, you could benefit from a second opinion. Consult with a levelheaded friend when you’re considering major decisions.
  • Question that gut instinct. It could, after all, just being a hormone flowing through your veins, promising a thrill if you take the plunge.

... purchase the full study

Are you reading this and nodding your head?

If you've been overspending thanks to high testosterone, or if you've just fallen behind on the bills, it may be time to examine whether filing bankruptcy could help you.

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Posted in Bankruptcy News and Events | 9 Comments »

Wednesday, August 26th, 2009

This Week in the U.S. Economy: Bernanke Second Term, Consumer Confidence & Home Prices Rise

The past seven days have been fairly significant for the United States, economy-wise.

Here’s a brief summary of three major stories you should know about.

Ben Bernanke: Nominated for a Second Term

President Obama took a break from his vacation on Tuesday to announce his re-nomination of Benjamin Bernanke as Federal Reserve Chairman.

If approved by the Senate, Bernanke will serve his second four-year term.

Since the economy hit the skids in 2007, Bernanke has:

  • Lowered the main interest rate to near zero and funneled almost a trillion dollars into U.S. banks to mobilize credit
  • Handled the financial crisis with “calm and wisdom,” according to Obama
  • Been criticized by legislators for reacting too slowly when early warning signs of trouble in the mortgage market showed themselves.

Bernanke is a Republican. Read his statement of acceptance.

Consumer Confidence Rises Above Expectations

The Conference Board published numbers showing that consumer confidence in August is up substantially from July. Specifically:

  • The Consumer Confidence Index currently stands at 54.1 ---  in July, it was 47.4 (a level of 90 is required for consumers to be considered “optimistic”)
  • The Present Situation Index rose from 23.3 in July to 24.9 this month
  • The Expectations Index rose from 63.4 last month to 73.5.

Economists look to these numbers in part because the United States has a very consumer-driven economy, meaning that long-term recovery will depend largely on the behavior of the average shopper.

Home Prices Jump in First Quarter

The latest report from the S&P/Case-Schiller Home Price Index shows a 2.9% increase of housing prices in the first three months of the year.

Though a small gain, the move is an important landmark: the first increase in home prices in three years.

This is good news, but not great: home prices are still down 14.9 percent from the second quarter of 2008, but that’s better than where they stood three months ago, at 19.1 percent below.

The rise could be a sign that bad times are over, but may just be a temporary upswing.

--Even though there's some good economic news to report, many Americans are still hurting. If you're having trouble making ends meet, it may be time to think about filing bankruptcy.

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Posted in Bankruptcy and the Economy | 6 Comments »

Tuesday, August 25th, 2009

Bankruptcy and the Bread Aisle

Even families that are particularly struggling in the current economy are still buying bread. It's the most basic kitchen staple.

And how much you pay for that bread is being impacted by the rest of economic happenings. A major bread market player decided to file bankruptcy recently in order to reorganize and offer their loaves at lower prices. According to a story over at CNNMoney:

The added competition, pressures of weaker consumer spending and the ever- constant threat of private-label rivals have also pinched other manufacturers, some of which have responded with promotions and price reductions.

The latest battle was kicked off when Interstate Bakeries Corp. emerged from bankruptcy in February. Interstate are the makers (bakers?) of longtime brand Wonder Bread. During bankruptcy they lost market share, analysts said, and are now trying to recapture it by lowering prices.

The move forced other major bread companies like Sara Lee and Pepperidge Farm to experiment with lower prices.

While the competition puts pressures on the businesses to perform, it could mean good news for anyone who buys bread - which is pretty much everyone.

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Posted in Bankruptcy News and Events, Bankruptcy and the Economy | No Comments »

Sunday, August 23rd, 2009

The Latest in Consumer Protection: Victory for Homeowners

The Fair Trade Commission, the government’s consumer protection arm, basically functions to make sure consumer protection laws are enforced – and we the people aren’t scammed by savvy corporations trying to get around the rules.

Here are the latest ways we’re being protected:

Mortgage Company Agrees to Fine for Violating Opt-Out Notice Rule

Metropolitan Home Mortgage, Inc., also known as Wholesale Home Lenders, reportedly violated the Opt-Out Notice Rule, which requires that:

  • Unsolicited mail loan offers must include two opt-out notices, one short and one long. These are required so that people know they have the opportunity to stop receiving offers.
  • The offers must disclose that information from consumers’ credit reports was used to determine whether they qualified for the loan offers.

The company will pay a $20,000 civil penalty and has agreed to comply with rules in the future.

The FTC will monitor the company to verify compliance.

Victory for Homeowners: This can be seen as part of the government’s efforts to crack down on the deceptive and even predatory practices that many have been deemed a partial cause of the housing market’s bubble and subsequent downturn.

Job-Placement Scam Slammed

The FTC has also taken steps this week to halt a job scam that targeted job seekers across the country by placing ads in local newspapers. The defendants in the case are Career Hotline, Inc. and its head, Susan Bright.

How the scam worked:

  • The scammers placed ads in newspapers across the country that provided an 800 number for interested parties to call.
  • Once they dialed, applicants were asked about their work history.
  • During the conversation, callers were asked to pay a “placement fee” ranging from $89 to $195.
  • Callers were promised a job with an annual salary of at least $25,000 if they complied with the terms of the phone call.

Victory for Jobseekers: Thanks to the FTC, the lucrative and devious world of scamming the unemployed out of their money has just become a bit less profitable.

Get the facts on bankruptcy so you can avoid predatory practices.

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Friday, August 21st, 2009

The Economy: Where Are We At? Unemployment Spikes Again

Just when it seems like our financial troubles are on the mend, the long arm of despair has reportedly grabbed hold of more unassuming citizens.

In a two-week period that started with 48,000 new jobs created and ended with 15,000 new unemployment claims, it’s dizzying to try and make sense of what is happening.

To even try to distinguish a trend would be maddening, but which figure is more indicative of our national presence?

Are we a nation on the rebound?

Or are we a damaged nation burdened with financial struggle and no relief in sight?

15,000 More People File for Unemployment in a Week

Unemployment claims increased by 15,000 to 576,000 for the week ending August 15, according to the recently released Department of Labor's weekly report.

This increase from the previous week's revised figure of 561,000 is more like a teeter-totter of information. It might not be accurate to consider the previous week's 48,000 decrease in unemployment filings an energy swing.

Auto Employees Behind the Unemployment Numbers?

In hindsight, it might be more correct to agree with the spectators of this figure who offered their explanation that the decrease was directly related to an early return of automotive factory employees, and not a spread throughout the general population.

In keeping with this notion, it might also be prudent to consider that the increase of filings by 15,000 may not represent those who are new to unemployment, but rather those who had lost their jobs and assumed they would find another soon enough to not need unemployment.

Which then begs the question:

If newly created jobs are on the rise, why aren’t they being filled by these 15,000 filers?

It is imaginable that this group of unemployed is far larger than most would think; a scary notion, but one that has gone overlooked to this point.

No matter which side of the line is chosen, it’s clear that the turbulence has yet to subside, and the best plan is to stay seated and ride out the storm.

Have you lost your job? Do you have bills piling up? You may be able to eliminate your debt by filing bankruptcy.

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Thursday, August 20th, 2009

Old Bankruptcy Stigma Dropping Off As Celebs Turn to Filing Bankruptcy

Bankruptcy in its simplest form is a recovery and relief task meant to heal and reprise a business or person back to a baseline stable for success.

The problem is it carries such an emblem of failure that the term is most often uttered with lowered eyes and sunken shoulders.

Bankruptcy is not the End of the Road

This is by no means is a final destination or label which should be branded on one’s forehead for life.

It is a sign for redirection, and a chance to start over- or move on.

Even those we idolize have filed bankruptcy.

In glancing at a recent article on Bloomberg.com, there in black-and-white is news that shows even the bright lights of Hollywood, the loud cheers of Shea Stadium or the brotherly love of Phillies fans can't save our stars from having to file for bankruptcy.

Celebrities and Bankruptcy: Dykstra, Baldwin, Trump

In the article, All-Star baseball great Lenny Dykstra is recorded to be filing bankruptcy under chapter 11 due to owing $10 to $50 million.

Then there is Stephen Baldwin, whose failed apprenticeship trials and inability to use his celebrity status to get him “out of here” has led him to filing bankruptcy.

Times are tough, even for our idols and it seems as though they will not be getting easier any time soon.

This economic blunder is even affecting such major banking institutions as JP Morgan Chase.

Bloomberg’s article mentions that “steeply rising filings by consumers are hurting commercial banks. JPMorgan Chase & Co., the second-largest U.S. bank, predicted more losses on consumer loans last month.”

In the same article JPMorgan’s CEO Jamie Dimon was resound in his thoughts of the current state of affairs.

Dimon doesn’t expect the credit card business to formulate a profit in 2009 or 2010.

In fact, the company augmented its loss projection for prime and subprime mortgages.

Not good news for those who lean on such institutions for stability in an otherwise unstable time.

Truthfully, examples of filings by celebrity figures, major business institutions and those who appear to have it all are interchangeable.

Just ask Donald Trump and M.C. Hammer.

The difference now is that more of the country is bound by these ties which otherwise were seen to connect only "the less" than rather than "the more of".

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Posted in Financial Literacy, Uncategorized | 4 Comments »

Wednesday, August 19th, 2009

Bankruptcies Expected to Hit 1.4 Million for 2009

All those who think the economy is on the mend and those in jeopardy of bankruptcy can take a breath of relief, please raise your hands   …    no one?

Well, you would be correct.

Even though there are statements by our current administration that the economy is showing clear signs of recovery, there is still the malignant fact that both personal and business bankruptcy filings are on the rise.

Think Philadelphia

In fact, in a recent article by USAToday and Bloomberg News there is a gargantuan estimation at just how large these figures will reach by the end of the year:

“Bankruptcy filings may hit 1.4 million” by the year’s end.

1.4 million, that’s more than the population of San Antonio, Texas and roughly the population of Philadelphia, PA - the city of brotherly love.

It seems there will be significant love lost as the toll of bankruptcies continues to rise.

As loans continue to remain hard to acquire, jobs continue to be lost and personal debt finds no relief, more folks will be filing bankruptcy.

We Need Jobs to Get Out of Debt

To underscore this point, the ABI (American Bankruptcy Institute) released a statement which many news wires have used in their articles surrounding these facts:

“Personal bankruptcies show no sign of abating after rising more than a third this year and may hit 1.4 million by Dec. 31 as jobs are lost and loans are harder to get.”

When the facts are reviewed, there is a clear sign that relief is far from in sight.

Consider that during the first six months of 2009 the total number of U.S. bankruptcies filed increased 36% year over year.

That’s over 189,000 new personal bankruptcy cases filed in just six months from the previous year. Why is this?

According to ABI Executive Director Samuel Gerdano, it’s because of the increasing unemployment coupled with pre-existing debt.

“Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year," Gerdano said in a statement.

Although these figures seemingly take the air out of our nation’s sails, the even more frightening thing is that they don’t even touch on our country’s business related bankruptcies.

Don't Forget About Businesses Filing Bankruptcy

For the same time period, business filings totaled 30,333. This represents a 64% increase over the first-half 2008 which totaled 18,456 cases.

Segmenting this figure, it was found that chapter 11 business reorganizations increased by 113% (7,396 compared to the 3,470 from 2008), and Chapter 7 bankruptcy business liquidations increased to 20,375 which was a 57% increase over the 13,002 filings from the same 2008 time period.

So it seems while certain figures can be released in an effort to cast a more favorable light on our current economic plight, possibly in an effort to prod consumers to spend more, maybe to encourage employers to get back on the hiring wagon or simply to offer a glimmer of hope for those close to the edge, it cannot hide the facts.

What is failed to be considered in these veiled attempts is that numbers don’t lie and we as a nation are far from separated from the disastrous financial uncertainty which will define this period in our nation’s history.

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