By now, it’s no secret that this country is awash in student debt. In fact, by the time 2012 gets here, we’re scheduled to owe a total of $1 trillion in student loans. And while figures like that have prompted some murmurings of concern, we still seem to be engaging in the same activities that led us up to our eyeballs in educational loans.

Recent investigations into the matter have focused primarily on for-profit universities, including the University of Phoenix and other schools that have campuses around the country and offer online classes to those who aren’t near a learning center.

The latest of these investigations, undertaken by Congressman Elijah Cummings (D – MD), highlights some of the shocking numbers associated with for-profit education:

• The University of Phoenix (the largest for-profit university in the country) gets 88 percent of its funding from the federal government. This money comes as various grants, loans, and veterans’ benefits that students of the university apply for and use to cover the cost of classes.
• More than 20 percent of the school’s students default on their loans.
• The chairman of the company that operates the University of Phoenix earned $6.5 million last year (including bonuses and stock options with his salary).

According to sources, these figures are typical of the for-profit education industry. And what’s really alarming for students and potential students who might enter the for-profit education system is that student loans are almost impossible to discharge in bankruptcy.

Further, studies have shown that six-year graduation rates for first-time bachelor’s students at for-profit colleges are abysmally low: about 22 percent for those who attend physical classes, and as low as five percent for those taking classes online.

In other words, the majority of those enrolled in these programs are accumulating student debt without earning the degree that could boost their income in their life after school. This, of course, makes repaying student loans that much more difficult.

Questionable Enrollment Tactics

Congressman Cummings has sent letters to the heads of several for-profit institutions, detailing the financial imbalances mentioned above and mentioning other problems that undercover investigations have revealed at such institutions.

In brief, the pushy and aggressive (and sometimes deceptive) sales tactics used to get new students to enroll at for-profit universities mimic those used by unscrupulous debt settlement firms and subprime mortgage lenders.

Unfortunately, as is often the case with other areas of finance, most of the consumers of for-profit education are not fully aware of the potential financial repercussions their decision to take on student loans might have.

Hopefully, Congressman Cummings will remain vigilant about this matter. He has requested a response from the education executives before the end of this month.

Bankruptcy filing statistics suggest that medical debts contribute to about 60 percent of bankruptcy filings in the U.S. That’s one reason that many Americans are eagerly awaiting the Supreme Court’s decision on a lawsuit involving payment of medical bills. Here’s the background you need to know.

Background: How Medicaid Works

The case before the Supreme Court involves a challenge to Medicaid, a healthcare system that requires the federal government to provide funding to states to subsidize medical care for elderly, low-income, and disabled citizens.

Federal support, in most states, accounts for the majority of Medicaid funds. States that choose to enact Medicare programs must agree to certain terms laid out by the federal government, one of which is paying enough to healthcare workers that they can afford to provide needed care.

California Cuts Challenged

Despite those laws, California, in efforts to balance its budget in 2008 and 2009, cut Medicaid funding by close to 10 percent in some cases. This was problematic because:

• California did not submit its cuts to the federal government for approval before passing them into law.
• When the cuts were sent in, federal officials denied them for not providing adequate funding to doctors and other healthcare providers.
• Despite federal opposition, California enforced the cuts and now faces a lawsuit brought by hospitals, doctors, and patients.

Everyone who participates in Medicare and Medicaid stands to lose if the California cuts are permitted to go through:

• Doctors would be paid less for their work and may have to turn away patients on Medicaid because treating them would mean operating at a loss.
• Hospitals could lose serious money on performing certain procedures for patients on Medicaid because state reimbursement for those procedures might not be sufficient to cover their costs.
• Patients on Medicaid risk losing access to medical care, because doctors and hospitals may turn them away for fear of non-payment or insufficient payment from the Medicaid system. As it is, sources report that more than half of California’s Medicaid patients (56 percent) cannot find medical care because of reimbursement problems at the state level.

Should the Case Even Be in Court?

In addition to the issue of whether or not the California Medicaid cuts are legal is the issue of whether or not this dispute belongs in the court system. The Obama Administration and California Governor Jerry Brown’s administration have apparently contended that the funding of Medicaid is an issue for the state to figure out on its own, without help from the federal court system.

On the opposite side, the lawyer representing the plaintiffs in the suit has reportedly said that California failed to show how it considered the interests of all parties in its funding cut decision. Rather, he claims, the state simply tightened its purse strings without following correct procedures.

The Supreme Court’s decision could impact the future of Medicaid recipients in California and possibly around the country.

In a victory for consumers, San Francisco City Attorney Dennis Herrera announced last week that Bank of America has agreed to pay $5 million in fines for using an arbitration system for credit card disputes that improperly favored the bank – almost every time.

To understand why this is good news for consumers, a little history may be needed.

What Are Credit Card Arbitration Clauses?

Credit card arbitration clauses are little snippets of legal information (i.e. clauses) in credit card agreements that state:

• Any disputes between consumers and creditors cannot enter the legal system.
• Instead, these disputes go straight to arbitration.
• The arbitration system involves ostensibly “impartial” arbitrators who review the facts of the case and decide in favor of whatever party seems to be in the right.
• According to data analyzed by consumer advocates, arbitrators sided with the creditors in 99.98 percent of all arbitration cases in California (the only state where such data are made public).

Why such overwhelming favoritism of the creditors? Investigations into credit card arbitration cases show that many consumers may not even be aware that their cases are going to arbitration – notices generally come in the mail and consumers may assume they’re junk.

Plus, a consumer does choose to take action has to submit an argument in writing to the proper authorities, provide necessary documentation and outline the desired decision for the arbitrator to make.

Some sources suggest that arbitrators are even trained to favor creditors and penalized for finding in favor of consumers.

What Does the Bank of America Fine Mean?

The fine in this case comes as the result of a lawsuit that was filed in 2008. In the suit, Bank of America was charged with illegal and deceptive practices in its use of the credit card arbitration system. Those practices allegedly included:

• Not requiring debt collectors to show proof that consumers were aware of the arbitration;
• Employing lawyers not legally certified to practice in California;
• Charging consumers inflated fees to cover the bank’s legal costs; and
• Ignoring evidence submitted by consumers to favor their cases.

While Bank of America spokespeople apparently tried to downplay the decision, saying that the bank stopped requiring arbitration in 2009, the fine still translates to good news for consumers. Notably, it clears the path for potential a class-action lawsuit against Bank of America subsidiary FIA Card Services, which was responsible for much of the arbitration.

Bank of America is also now prohibited from working with the National Arbitration Forum, its former partner, for the next five years. These are all tangible benefits for consumers, and the good news continues: the San Francisco City Attorney who brought the initial lawsuit has stated that he may take further legal action against the parties involved in unfair arbitration practices.

If you’re like a lot of Americans, you may have a love/hate relationship with your credit card. You may love its convenience and the fact that it can help you build your credit score. You may love the rewards it offers you when you use it.

But you may hate the way credit card issuers can change interest rates, or the steep fees they charge for various actions or that it’s gotten you into debt. You may hate the offer for credit cards that come through the mail to tempt you.

And if you’ve ever filed for bankruptcy, your relationship with credit cards may be even more complicated: credit cards may have gotten you into debt in the first place, but in your life after bankruptcy you might be struggling to qualify for a card that can help you rebuild financially.

Believe me, I get it. That’s why I’m so happy about this new complaint tracker.

Someone to Listen to Credit Card Woes…Online

The newly active Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, has launched a new web site (help.consumerfinance.gov) and toll-free phone line that lets consumers take action to address credit card problems. It works like this:

• You describe the problem. The first step asks for a brief description of the problem you’re having with your credit card issuer. It could be anything from a disputed charge to a raised interest rate you didn’t expect. The online form asks for the date the incident happened, how much money (if any) you lost, and whether you’ve contacted the company yet.
• You identify what you want to happen. In the “desired resolution” section, you indicate how you’d like the problem to be resolved. This might take the form of identifying what action you want the card issuer to take.
• You provide your information. This section requires your contact information so that the CFPB has a record of your complaint. This may become useful if the CFBP finds a pattern of abuse and needs to take legal action against a credit card company.
• You provide your card information. Finally, users are prompted to enter their card’s identifying information.

If you’re not sure how to begin, you have the option to chat online with someone who can help.

The CFPB form then prompts consumers to contact their card issuer to attempt to resolve the problem. If you can’t work out a resolution, you can contact the CFPB, which will use your tracking number to determine whether any laws were broken.

In the future, the CFPB plans to have similar sites for problems with mortgage loans, student loans, bank accounts and more. Down the line, information from these forms may be used in legal investigations.

In other words: there’s an exciting new consumer protection available. Let’s take advantage of it.

One provision of the consumer protection laws passed in 2009 was the creation of the Consumer Financial Protection Bureau, a government body designed to act in the best interest of American consumers. The CFPB is slated to officially begin its work this summer.

Here’s a look at where the bureau stands and what to expect from it in the future.

Executive Controversy

Before it became officially active, the CFPB was headed by Harvard Law Professor Elizabeth Warren, whom Obama appointed after the agency’s creation. Warren was regarded by many as the likely candidate to head the CFPB when it officially started business, but Obama has nominated instead Richard Coudray, Ohio’s former attorney general.

Still, some lawmakers have vowed that they will not confirm Cordray (or any candidate) as head unless the CFPB’s powers are scaled back.

Planned Consumer Protections

Despite an unfriendly right wing, the CFPB has moved forward with its planned protections, according to a progress report it released on July 18. Here’s a look at what this agency has cooking.

• “Know before You Owe:” This project involves simplifying the forms that explain the terms and conditions of mortgages to consumers. The all-too-recent housing market collapse reinforced a message many consumer advocates had been communicating for years: we need to make the mortgage borrowing process more straightforward.
• Transparency in credit cards: While the Credit CARD Act made strides toward improved credit card transparency, the CFPB still sees room for improvement. Its plans for making plastic more consumer-friendly are not yet clear, but the issue is high on the agency’s agenda.
• Credit score report: Right now, there’s some variation among the credit scores that consumers and lenders can purchase from the various credit reporting bureaus. The financial reform bill called for the CFPB to study why these differences occur and compose a report on suggested changes.
• Supervision of non-bank financial entities: Currently, financial oversight laws are in charge largely of banks. Other financial entities (like debt collectors, debt relief services, payday lenders, etc.) face little centralized regulation. The CFPB could pass rules that other companies in the finance world must follow.
• Training and workforce development: Another one of the CFPB’s future duties will be examining the workforce and devising a plan that would better prepare Americans for the jobs that need to be filled. Ideally, this measure would provide long-term solutions to unemployment problems by outlining the training and skill base that Americans need to complete the jobs that the country currently has to offer.

It’s unclear at this point how long it might take for Congress to approve the CFPB’s nominated leader, or if the Obama Administration will give in to calls for a board instead of a sole leader. But clearly, the bureau isn’t waiting around to start taking necessary action.

Most of the time, it feels like regulators and lawmakers interested in consumer protection legislation are struggling to keep up with all the ways scammers manipulate technology. That’s one reason why the latest credit card scam out there is so interesting: it relies on the decidedly old-school technology known as the pay phone.

I know what you’re thinking: who uses pay phones anymore? But people do, whether because their mobile minutes have run out or their batteries have died. Here’s what to look out for next time you’re in need of a phone in a box.

They Charge How Much for a Pay Phone Call?

The New York Times reports of a pay phone and credit card scam that works like this:

• A person decides to make a pay phone call.
• The person has no change so opts to pay for the call with a credit card.
• After checking the call rates posted on the pay phone wall, the person places the call.
• When the person gets a credit card bill, outrageous-seeming charges show up for the pay phone calls.

Sources note that victims of this scam have reported charges as high as $16 – $20 for phone calls listed at 50 cents to a dollar on the pay phone booth.

One problem, though, is that the company responsible for the outlandish charges, BBG Communications, has reportedly claimed that it is doing nothing wrong, and that is charges accurately reflect the cost of providing their services.

Still, the high unexpectedly high costs have reportedly led to hundreds of consumer complaints, which have in turn led the Better Business Bureau to give the company a rating of F.

Fighting against Credit Card Scams

According to the Times, two lawyers are gathering information as part of a class-action lawsuit they plan to bring against BBG Communications. In the meantime, the Federal Trade Commission recommends taking the following steps to avoid scams of all sorts:

• Proceed with caution: It seems that those who use the pay phone services have the option of getting rate information by following auditory prompts during their calls. If you’re not sure about a new service, get all the information before you hand over your digits.
• Check your bills carefully: Some scams work by charging millions of people small amounts of money month after month. Many of those people never notice the unwelcome charges. To make sure you’re not paying money for services you don’t want or need, check your bill each month and challenge charges that seem incorrect.
• Go with your gut. If a company or situation feels less than trustworthy, see if you can find other options. Many times, our subconscious picks up on warning cues we may not notice with our conscious minds.

The Credit Card Accountability, Responsibility and Disclosure Act (commonly referred to as the Credit CARD Act) passed in 2009 has been lauded as a big step forward for consumer rights. After all, the law took aim at many unsavory practices that had become common on the part of credit card issuers.

But, despite the lawmakers’ best intentions, some of the law’s provisions haven’t been explained with complete clarity in the media. Here’s a look at some important legal loopholes that might affect your next credit card statement.

Balance Increase Notices

Before the passage of the Credit CARD Act, issuers were, in many cases, allowed to increase interest rates arbitrarily and apply the increased rate to all balances on a user’s account. Rate increases can make a small amount of debt snowball and led many a consumer to the bankruptcy court.

The CARD Act changed that – sort of. Now, credit card issuers must issue notice of rate increases 45 days before that change takes effect. BUT:

• The 45-day rule applies to payments: In other words, a credit card issuer must give a consumer notice of a rate increase 45 days before the consumer is required to make the first payment at the new rate.
• Increases applied to purchases start sooner: The law actually permits credit card issuers to begin applying the increased rate to purchases made as soon as 14 days (two weeks!) after the postage date on the notification about the rate increase.

In other words, a consumer has a two-week window after a notice of increase of rate is mailed before purchases on the credit card start coming with an amped-up interest rate. In many explanations of the law’s provisions, this is ignored or misrepresented.

Retroactive Rate Increases

Another much-applauded change the CARD Act introduced was the outlawing of retroactive interest rate increases (that is, of an issuer applying a raised interest rate to balances accumulated before the rate changed).

But in reality, the new law only prohibits retroactive hikes in certain situations. Some exceptions to the rule allow rate hikes for existing purchases.

• Late payments: If a rate increase is triggered by a payment that is 60 or more days late, the card issuer can apply the increased rate to all balances on a consumer’s card.
• Other increases: For the most part, other retroactive increases are prohibited. However, if you’re worried about rate increases, be sure to read any mail regarding your credit card carefully.

Credit Cards & Bankruptcy

It’s no secret that many bankruptcy filers need the court’s protection because they’re overextended on credit. And credit cards are an easy way to take on more debt than you can afford to pay back.

Bottom line: Read your credit card agreements carefully. If there’s any language you’re unclear about, call your bank and ask for an explanation.

Since the collapse of the housing market, it seems like every week brings us a new wave of foreclosure news, much of it shocking or upsetting. Last week, news outlets reported on Bank of America’s improper foreclosure of a couple that had never actually had a mortgage with the bank – they’d paid cash for their home.

Luckily, the situation got sorted out with help from the couple’s lawyer, but it made me wonder: how many other people are facing improper foreclosures without legal help? Turns out, it could be more than you’d expect.

When A Lawyer Is a Good Idea

Consider these foreclosure nuggets I dug up:

• Foreclosures that involve fraudulent or absent paperwork have become more common. Remember the robo-signing scandal of last fall? It seems that careless paperwork for mortgage loans was fairly common during the housing boom. Now, sources note that many foreclosure cases are proceeding without banks providing the necessary documents to back themselves up.
• Judges are getting frustrated. In some states (especially New York, Ohio and Massachusetts), judges overseeing foreclosure cases have reportedly taken to punishing careless banks. Some reports show that judges have even declared that ownership of a property went to the borrower free and clear.
• Homeowners are suffering. Without legal guidance on how to respond to banks’ foreclosure attempts, many homeowners are losing their houses – often without realizing that the banks’ actions may not be legal.

So how can a lawyer help if you’re facing foreclosure? In some cases (like the one involving the attempted foreclosure of the property that never had a mortgage), a lawyer can help a family cut through foreclosure’s red tape.

In other cases, a lawyer may be able to discover a bank’s improper handling of a foreclosure and challenge the proceedings in court. While such action may not always actually stop the foreclosure, it could buy the homeowners some time, during which they could save up money for their next home.

And, of course, a lawyer can help you determine whether or not filing for Chapter 13 bankruptcy might help you keep your home or give you a shot at getting back on track with your mortgage payments.

Life after Foreclosure

Like bankruptcy, foreclosure can leave a serious ding on a person’s credit report. But rebuilding efforts are similar for the two: pay bills on time, take on a little credit when you can and repay it on time, and generally keep the long view in sight.

Foreclosure can be stressful and traumatic, but it’s not the end of the world – in fact, after reestablishing themselves in affordable living quarters, some people find that they’re less financially stressed after they lose their homes than before.

In 2009, the passage of the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) introduced a bevy of new protections for consumer credit cards. But, as many news outlets are noting now, the bill did not provide the same protections for all credit cards.

Specifically, business cards do not enjoy some of the protections that consumer-designated cards do. Here’s why that might be a problem.

Business Credit Cards Owned by Individuals

• Individuals with small business credit cards: Sources note that many business credit cards are marketed to individuals and families and that many American households have business credit cards in their lineup.
• Business cards not covered by CARD Act: Because business transactions are not subject to the Truth in Lending Act, regulators did not include business credit cards under the umbrella of the CARD Act’s protections. The reasoning here was that businesses are generally better able to judge borrowing risks than individuals and so don’t need the same regulations in place.
• Millions of non-business offers: In the last five years, sources indicate that business card issuers have bombarded 12 million American households with as many as 44 million business card offers per month. Just to clarify, that’s households, not business addresses. Some of these addresses could be for individuals who work from home and/or have businesses based in their houses; others may not fit that bill.

Protections Business Cards Don’t Have

The Credit CARD Act limited the following exclusively for individual (not business) credit cards:

• Retroactive interest rate increases: This practice, while no longer allowed for typical consumer credit cards, is still permitted for business cards, which could leave unprepared borrowers on the hook for more money than they were initially responsible for paying. This practice can make a reasonable debt into a difficult mountain to climb.
• Over-limit fees: These fees hit card users when they charge more than their card’s limit. While individual cards might simply deny the transaction, business cards can still permit the purchase but charge a hefty fee.
• Other cost-changing practices: The other protections put in place by the Credit CARD Act (like advance notice of term changes, “summary boxes” of debt and payment terms and others) are not guaranteed on business cards.

Considerations if You Have a Business Card

If you have a business credit card, it’s probably a good idea to take a look at the contract you signed to make sure you’re aware of the terms and conditions. You may also want to apply for a non-business card to use as your primary tool of transaction (though it may benefit your credit score to keep the business card open).

Once you die, your creditors can no longer collect money from you (obviously). But some creditors might try to get money from your family members, even if they wouldn’t have been responsible for paying those debts for any other reason.

Here’s a look at one case and what you should know about the important matters of life and debt.

A Student Loan that Outlived the Student

A story reported by ABC tells a troubling story about a young woman who died at the age of 26 without having paid off her student loans in full. Here’s what happened next.

• Lenders contacted her father. Two of her creditors reportedly forgave the loans the woman had owed as soon as the father explained his situation. The other, though, reportedly continued to request payment from the father for the amount his daughter had left unpaid.
• Not a co-signer: If you’d taken on loans with a cosigner and then filed for bankruptcy (or died), the cosigner would be legally responsible to repay any of the debt that remained. In the case of the ABC story, though, the woman’s father had not cosigned for her loans; despite this, the lender persisted in attempting to collect payments.
• No formal policy: The lender, Wells Fargo, eventually forgave the loan. But, it seems, many private students lenders in the country do not have a formal policy in place to address what happens in the event of a student’s death or permanent disability.

Student Loans in Bankruptcy Court

This story has a sort of very dark humor to it: student loans are notoriously difficult to discharge in bankruptcy court, and have been the target of much scrutiny in recent years, as young adults graduate with tens of thousands of dollars in debt and few opportunities in the job market.

Generally speaking, student loans:

• Are unsecured but non-dischargeable in bankruptcy. Policies that exist to extend the greatest number of financial aid to the greatest number of students also make these loans very difficult to discharge. That’s what makes them easy to get: they’re very difficult to not pay back.
• Can rarely be affected by a hardship exemption. The exception to the no-discharge rule for student loans is the proof of undue hardship. This rule states that if a bankruptcy filer can demonstrate that keeping up with his student loan payments would cause him “undue hardship,” that his financial circumstances are unlikely to change in the near future, and that they are limited because of factors beyond his control, the court may choose to excuse the student loan debt. But the court only grants this exemption in very rare cases.

For those people who are slightly less enthusiastic about consumer rights and personal finance than I am, here’s a quick reminder about how the Consumer Financial Protection Bureau began: When the Obama administration passed the financial overhaul bill in 2009, one provision was that the government needed to create a bureau designed specifically for protecting consumer interests in the financial services industry.

While it’s unfortunate that nobody realized how important this bureau was until after the debacle that was the subprime housing boom and bust and the subsequent (prolonged) recession, it’s good that we’ve now got a CFPB working to protect us from unscrupulous profit-vultures of all stripes.

It’s Our Turn to Speak Up

Now, as the CFPB announced in a recent press release, the Bureau is taking comments and suggestions from the American public about what we think the it should be doing for us.

• Give your suggestions. The CFPB has announced that it is eager to hear from individuals, businesses and anyone else interested in “making financial services markets work better for everyone.” The Bureau wants to develop a policy of openness and communication, and ordinary Americans are invited to pose questions and comments via YouTube videos, email and other readily accessible media.
• Learn about the Bureau and its origins: On one part of its web site, the CFPB offers an animated video describing how the financial crisis happened, what caused it and how the CFPB is working to prevent similar catastrophes in the future. The video also includes explanations about the CFPB’s plans for making sure regular American families are able to trust the financial services they need to use every day.
• Stay up to date. In addition, the CFPB provides links from its web site to social media outlets, so interested consumers can follow it on Facebook, Twitter, YouTube and Flickr.

Speak Up about Your Financial Questions and Concerns

It’s definitely a cliché to claim that knowledge is power, but in this case, knowledge could mean the difference between establishing healthy, stable finances and falling into patterns that could lead you to bankruptcy (or back to bankruptcy, if you’re recovering from an earlier filing).

For personal finance nerds (like me) and anyone interested in matters of credit, debt, bankruptcy, financial management, saving, spending, borrowing and lending (which, hopefully, is you, because these things affect everyone!), the new Consumer Financial Protection Bureau web site is exciting. Take advantage of this opportunity to educate yourself and make your voice heard!

The Texas Attorney General’s office has announced a court order against the now-bankrupt company Debt Relief USA. The order means that the company will have to pay about $3.7 million to customers it cheated out of debt settlement services.

Here’s a look at some of the details of the case.

• Company promised debt settlement services. During its prime, Debt Relief USA reportedly collected various fees and deposits from customers with the promise of settling their debts with their creditors. Some of the money collected was labeled “set-aside” money, and was apparently intended for creditor repayment. But sources note that much of that money might have been collected illegally.
• Debt Relief USA filed for bankruptcy. According to sources, the company entered bankruptcy protection in July of last year, which meant that thousands of its customers who had been making payments into their “set-aside” funds were unable to access their money.
• Texas AG took action. But, as sources report, the Texas Attorney General took on the case and secured a payment of $3.7 million to consumers wronged by the company, with an additional one million to follow once the bankruptcy concludes. (In other good news, victims will not have to apply for refunds, as records for all affected customers and the amount of money they set aside are included in the bankruptcy filing.)

How to Spot a Debt Settlement Scam

While there are reliable debt settlement firms out there, there are also plenty of less-than-trustworthy outfits. Here are some practices that signal a scam (many of which were in place at Debt Relief USA):

• Large up-front fees: Though recent legislation has outlawed the charging of hefty up-front fees, some companies may still try to get away with this. Or, they may disguise such fees as something else…
• Large administrative fees: Charges for “account maintenance,” “negotiation,” or similar services are signs of a scam, particularly if those charges seem overly burdensome.
• Advice to stop paying bills: It’s almost never a good idea to stop paying your bills without at least contacting your creditor and explaining your situation. Companies that advise you to do so could lead you to an unpleasant financial situation.
• Serious pressure to sign up: Some debt settlement scams pay their employees by how many customers they can sign on, so if you’re feeling overly pressured during your initial consultation, get up and walk away.
• A bad BBB rating: Many people don’t think to research companies with the Better Business Bureau, but the BBB’s web site is a great place to start when you’re looking for a place to do business.

Remember: you are the one who most fully be affected by your debt, so take some time to do your homework before you make any major financial decision. You owe it to yourself.

With unemployment rates hovering near 10 percent nationally, more Americans than ever are currently on the job market. And, thanks to all the conveniences of online job hunting, more of us are also running into online scams disguised as opportunities for work.

In an initiative aimed at helping job seekers avoid scams that could cost them serious money (and lead to endless frustration besides), the Better Business Bureau has released a list of red flags that point to fraud. They include the following:

• You don’t have to leave your house: There are some legitimate offers around for making money by working from home, but be cautious when proceeding with such offers. Scammers, it seems, are all too willing to take advantage of the elderly, students and those with disabilities by luring them into false offers for home-based work.
• An employer requests money upfront: Some scam artists have come up with legitimate-sounding reasons why you might need to pay money before you start working: to process fees, to cover a background check, etc. But such requests are almost never legitimate. Before opening your checkbook, research the company that’s asking for cash.
• Salary and benefits seem too wonderful: The wisdom goes that any offer that seems too good to be true probably is, and the BBB suggests people keep this in mind when considering the salary and benefits mentioned in job offers. If a position requires little or no experience but says it has the potential to earn you serious money, watch out for scams.
• The language in the email is off: Many job scams come from people living outside the U.S. who are not native English speakers. This is generally evident in offer emails and advertisements, which can have significant grammar or spelling errors. If something sounds off to you (even if you’re not sure why), make sure to research the company’s background before proceeding.
• You’re asked to check your own credit report: Some potential employers will run a credit check on a person as part of the hiring process, but you should never be asked to do so yourself. Often, requests for you to check your own credit are nothing more than veiled attempts to get you to divulge personal information or sign up for a useless credit monitoring service that could cost you money.
• You’re asked for personal information too soon: Once you’re hired, it’s perfectly normal for an employer to ask for your Social Security Number and even bank account information for tax and payment purposes. But if an employer requests this information before hiring you (or hires you without an interview and then requests the data), walk away. Such requests are almost always scams and can lead to costly identity theft.
• You’re asked to wire money: As a rule of thumb, never wire money to anyone you don’t know – regardless of what they offer you in return.

Even those of us making concerted efforts at improving our finances – by sticking to a budget, regularly checking our credit reports and working to pay down debt – might be hit by the disaster of a lost or stolen wallet. But, as a recent Bargaineering post reminds us, a missing wallet doesn’t have to be a total crisis.

Here’s a look at what you can to do prepare for and cope with being separated from your wallet.

To Do Now: Prepare Your Wallet

If you still have your wallet on you, now is the time to take preventative steps to make sure you can handle an incident that includes losing track of it.

• Pare it down: Remove any items from your wallet that you don’t use every day. This means receipts, your Social Security card, gift cards, etc. This has a double payoff: First, it lightens your wallet, which can make it easier to keep track of. Second, it means if you wallet does go missing, you’ll have fewer items to replace. Losing a gift card is the same as losing cash, so if you don’t plan on using it, keep it at home.
• Keep a spare debit or credit card: If your wallet is gone for good, you’ll have to cancel the debit and credit cards you had in there, so make sure you have an alternate debit or credit card available for emergencies. Keep it out of your wallet so you don’t end up trapped without access to your money.
• Have a system for special occasions: If you enjoy going out with friends (especially if drinking will be involved), get a small purse or backup wallet you can fill with only essentials: driver’s license and cash. Some people prefer to bring a card, but cash can limit both your nightly spending and your losses from a thief. Now, one night’s carelessness doesn’t have to be a disaster the next day.
• Make a record: Whether you choose to photograph everything in your wallet, or make lists of all your pertinent documents (with numbers) and store it in a safe place, it’s important to know what you have before you lose it. This will make your recovery efforts clear-cut and efficient.

Dealing with a Missing Wallet

So your wallet’s gone. If you’ve taken the steps above, you’re in (relatively) good shape. But there are still some things you need to do to make sure your finances don’t take a hit. If you don’t have proper protections big charges could lead to credit score problems or even, in rare cases, bankruptcy.

• Check your list: If you don’t have documentation of the important things in your wallet, brainstorm a list as soon as possible. Consider checking a recent bank statement to jog your memory, if necessary.
• Make some calls: Go through your list and call all banks and credit card issuers to inform them of your missing wallet. In this case, it’s better to be safe than sorry. Cancel any working cards to ensure you’re save from fraudulent charges. While many cards have built-in protection, if you keep them off you won’t have to fight for your credit later.
• Replace your license: It’s important to get a new government-issued ID, so call your state’s DMV to alert them of your missing license, and go to get a replacement.

A recent article from the Wall Street Journal notes that Bank of America has plans to cut its no-frills free checking accounts. That is, if you’re an ordinary consumer who doesn’t keep vast amounts of cash in your checking account, you could see the end to free checking. Here’s why.

Who’s Really Paying for Your “Free” Checking

As the system currently stands, many banks offer free checking accounts to any customer who’s interested and has money to deposit. Sources note that these accounts have been popular in the last decade with middle-class Americans and lower-income Americans using banks for the first time. But:

• Banks must pay: It reportedly costs a couple hundred dollars per year for a bank to maintain a customer’s checking account, and banks aren’t doing that maintenance for free out of the goodness of their heart.
• Banks collect fees: One of the reasons free checking accounts have become so pervasive is that banks are able to subsidize these “free” accounts with fees they charge – for overdraft protection, for over-limit automatic transfers and for other violations of the terms of an account. What happened, then, was that the customers who frequently incurred fees on their accounts essentially paid for both their accounts’ maintenance and that of people who incurred no such fees.
• The Credit CARD Act limits those fees: Because the consumer protection legislation passed last year, banks are now limited in what fees they can charge, how much those fees can be and how many times they can hit individual accounts. This means that banks no longer have a reliable source of income to finance the “free” accounts.
• The banks must charge: In order to comply with the Credit CARD Act and continue making a profit, Bank of America (and likely other banks) will soon charge a yearly fee for customers interested in having checking accounts there.

Not All Bad News

The WSJ article indicates that there might yet be hope for people who enjoy their free checking accounts and are less than enthusiastic about paying for something they used to get for nothing. Apparently, customers who have debit or credit cards linked to their accounts or who use online banking services with a certain frequency will still be able to get their checking without paying.

A Side Note

The free checking model works the same way as credit cards do: credit card users who are considered “transactors” (that is, they use their cards to make purchases and pay the balance in full each month) essentially get free short-term loans from their card issuers.

These free loans are subsidized (i.e. paid for) by card users known as “revolvers” (that is, those who let their balance carry over from month to month and end up making interest payments).

Be sure to read all mail from your bank carefully in the coming months to see if any changes in terms will be applied to your accounts.