Financial Self Defense

When a company has to recall a product, it’s never pretty. Organizing refunds, exchanges, and other considerations for customers takes time. Meanwhile, the customers just want the product they bought to work as advertised!
That combination of confusion and frustration creates the perfect opportunity for scammers to make an opportunistic buck. There are a number of ploys that criminals will use to steal money or information while using the cover of a product recall.

1) Discounted cellphones
If you’ve been following technology news, you know the Samsung Note 7 phones became so hot, they were melting on the inside. Samsung issued a product recall, stating you could just take your phone to your carrier’s store and exchange it for a new one.
Not everyone thinks that’s such a great deal, though. Either they’re not the original purchaser of the phone, or they bought it online and are having trouble getting the exchange. To recoup losses, they sell it online.
In the days after the product recall was announced, thousands of Note 7 phones went up on auction sites like eBay. They were selling for as little as half their market price. Getting 50% off a smartphone might sound like a good deal, especially when the seller promises the ability to trade it in for a phone of your choice. But buyer beware. There’s no assurance that second-hand buyers of the phone are eligible to participate in any refund program.
Before you buy a steeply discounted product, check to make sure there’s no recall on it. A quick online search should be all you need to see to it that the potential deal you’re getting isn’t going to blow up in your hands. If it feels too good to be true, it almost certainly is.
2.) Fake rebates
Sometimes, companies decide the best way out of a jam is to just write checks. They’ll compensate everyone who bought their product for the damages they caused, and move on to the next product. That’s been the strategy that car maker Volkswagen has employed in the wake of its emissions scandal.
Any time there’s money changing hands, scammers will be there trying to take advantage. In this case, it’s people trying to buy the recalled vehicles for less than the buyback price and hoping to turn a profit in the interim. In other cases, scammers have just posed as representatives of a company issuing a recall and pumped product owners for bank information so they could supposedly deposit the refund directly.
When getting a refund for a recalled product, only deal with the company directly. There are never processing fees or any other costs associated with getting a refund from a company, nor would any company refuse to send a check rather than making a direct deposit. If a product you recently purchased is being recalled, be proactive. Find out what steps you need to take to get your money, and take them. Then, you can safely ignore anyone who calls you with special instructions.
3.) Telephone number swaps
With large-scale product recalls, getting information from a company can be a headache. After all, everyone else who bought the same product is calling at the same time, and likely for the same reason. Long hold times can be a serious drain on your nerves and patience.
That was the thinking of a group of scammers after a major Toyota-issued recall. The scammers sent out an official-looking email instructing Toyota owners to call a number exactly one digit off from the official Toyota help line. Calls to this line were put on hold with a recorded message saying that all operators were busy. The message went on to explain that there was a premium help line available to recall participants. There was a $5.95 per minute charge attached to it, but that information went by so fast, many callers didn’t even hear it. Worse yet, people who called that fake premium helpline were then asked for personally identifiable information, like Social Security numbers.
Here, too, the best way to avoid being hooked in a scam like this is to do your own research. Find the company’s phone number yourself and call. Sure, you might have to wait on hold a while, but the alternative is to put yourself in jeopardy from scams like this one.
YOUR TURN: How do you deal with the frustration of a product recall? What tips do you have to keep your cool and keep yourself safe from scams like these? Let us know!
SOURCES:

Feeling Stuck In Your Car Loan? Might Be Time To Shop Around!

Bills are a lot like bad weather. They’re going to come anyway, so you might as well not try to fix them, right? For some bills, that’s the case. For others, though, you can make a big difference in your monthly budget with a little legwork.
One of the bills you can change is your car payment. Refinancing your vehicle loan can lead to a lower monthly payment, a shorter term, or both! It depends on a wide range of factors, including the value of your vehicle, how much you owe on your current loan, and your credit standing.
If any of these factors have changed since you bought your car, you owe it to yourself to check out your refinancing options. Let’s look at some common life changes and when they might be cause to look at refinancing. Read on to learn about three scenarios where refinancing makes sense for your car or truck:
 
1.) Your credit improves
One of the biggest factors in determining your auto loan status is your credit score. When your lender is building a loan package, a credit report is pulled as a central part of that process. That number helps define your interest rate, whether or not you’ll have to pay a premium for insurance, and what other fees your lender might charge.
It’s worth keeping a copy of the credit report your lender pulled. That can let you see if your credit score has improved. It can take as little as nine months of steady repayment to boost your credit score, and that could result in a cheaper loan if you refinance.
If you didn’t have much experience with credit when you purchased your vehicle, refinancing can do you a world of good. Interest rates as high as 18% are common for borrowers who have little to no credit history. Having even a few months of solid payments on your side can cut that rate in half or more.
2.) You didn’t shop around before you borrowed
Many people feel railroaded throughout the car-buying process. They pick a car they like, then they are told what the price is, what the monthly payment is and everything else. It may seem like the choice of lenders for your car loan is predetermined.
Dealers tend to have a smaller range of lenders with whom they work exclusively. Those lenders know they have limited exposure to competition, so they can charge slightly higher fees and interest rates. By doing your own comparison shopping, you can save quite a bit on both the loan and any ancillary insurances or warranties you may have purchased. Dealer rates tend to be 1 to 1.5% higher than those offered at smaller lenders, like credit unions.
If you’ve never shopped around for a car loan, it’s definitely worth doing. By getting multiple offers, you can ensure you’re getting the best price available for your loan. Try to do your shopping inside a 15-day period. Otherwise, the multiple checks on your credit could negatively impact your credit score.
3.) You need to change your monthly payment
You may be in a much better financial situation now than when you bought your car. You may have a better job or more security. You may have paid off credit card or other debt. All of these things free up how much you can pay per month.
Most people don’t go into the refinancing process looking to increase their monthly payment, but you can save yourself money in the long term by committing to a faster repayment plan. If you can afford to pay more per month now, you can pay off the balance on your car faster. Shorter term loans usually also have lower interest rates, since the lender assumes less risk in making the loan. Once the car is paid off, you’ll have all that money to devote to other saving or spending priorities.
On the other hand, if money is tight, it might be a good idea to refinance into a longer term. While you might end up paying more in interest, you can reduce your monthly payment and save the money you need right now.
Your Turn: What do you do to save money on your car payment? Let us know your best tips and tricks in the comments, and don’t forget to stop by AbbeyCU to find out how refinancing can improve your financial life!

SOURCES:

Safety First: Preparing For Hurricane Season

Living close to the ocean is usually a wonderful thing. The views are breathtaking and recreation opportunities are never far away. But there’s a danger associated with coastal living: hurricanes.
Statistics show that 97% of hurricanes in the Atlantic occur between June 1 and Oct. 15. This is according to researchers from the National Oceanic and Atmospheric Administration (NOAA). In the Pacific, that date range runs from May 15 to Nov. 30. Like it or not, hurricane season will soon be upon us!
There’s nothing you can do to stop them from coming, but you can take steps to minimize the damage in situations like this. There are two big factors that influence survival and property damage: planning and swift action on the advice of emergency personnel. If you live in an area affected by hurricanes or similar natural events, the worst thing you can do is not prepare for them.
Here are four ways to yourself for hurricane season. Keep safe with strategies like these!
1.) Plan your evacuation
The most important things you can protect during any disaster are yourself and your family. The best way to do that is to get to higher ground, away from the dangers of wind and water. Having a plan for your evacuation helps you do just that.
Your plan should include where you’ll go, how you’ll get there and where you’ll stay once you’re there. Expect hotels and other shelters to reach capacity in a hurry, so try to find friends or family you can stay with. Have at least two routes planned in case one becomes blocked due to traffic or weather.
Don’t forget your furry friends. Many shelters will house dogs and cats in an emergency. If you can’t take them with you, have a plan for where they’ll stay until the weather returns to normal.
2.) Stock your shelter
If you don’t live in an evacuation zone or have facilities in your house to weather the storm, make sure you have adequate supplies in case power, water and other essential services are cut off for extended periods of time. The Federal Emergency Management Agency (FEMA) has a list of supplies that should be included in your disaster preparedness kit. Topping the list are clear essentials: one gallon of water per person for three days, three days (nine meals) of non-perishable food, a flashlight and a first-aid kit.
One item that may escape notice is a crank-powered or battery-operated radio. Look for a weather-band radio that includes a cellphone charging port. This can help keep you connected in the event of an extended power outage.
Being financially prepared is important, too. If power or communication services are out, your debit and credit cards may not work. Have enough cash around to pay for a hotel stay or a week of groceries. Just ensure that cash is in a secure location where it can’t be easily lost or stolen.
3.) Prepare your home
There are several steps you can take around the house to minimize hurricane damage. Remove dead or dying limbs from trees on your property. Reinforce gutters and downspouts to minimize the threat of water damage.
Also consider reinforcing the windows and doors, including the garage door. Installing shutters or tracking hardware to facilitate the addition of reinforcements can not only provide you with peace of mind, they can add to the resale value of your home.
4.) Check your documents
In emergency situations, the last thing you want to be worried about is whether your insurance will cover damages. Review these documents with your agent at least once a year to make sure you have the coverage you need. Also, make sure you keep an itemized list of valuables in your home. Take pictures wherever possible.
While you’re securing documents, be sure to get copies of all your important identifying information. It may be smart to keep originals of documents, such as your Social Security card, birth certificate, the deed to your house and hard copies of your insurance policies in a secure location, like a safe deposit box. Trying to get duplicates of these in the aftermath of a storm can be challenging.
No one can do anything about the weather. All we can control is our response to it. Make sure you and your family are prepared for the worst, and weather the storm in safety!

Your Turn: Are you a storm survivor? What tips did you use to keep yourself safe? What do you wish you had done differently? Share your wisdom in the comments!

 

SOURCES:

Is unlimited data worth it? Q and A

Q: I’m shopping for a new phone plan for my family. Is an unlimited data plan a good option?
A: On paper, unlimited data seems like a great deal. You can use your smartphone as much as you want and you’ll never be charged for overages. Something about the word “unlimited” makes the plan seem more valuable. You’ll never have to worry about exceeding your data caps again.
However, cellphone companies are starting to take advantage of the power of that word. T-Mobile led the charge with a $70 per month (plus taxes and fees) unlimited data plan. AT&T and Verizon both followed suit with $100 and $85 per month (again, plus taxes and fees) unlimited plans. No matter what carrier you use, you’ll likely have the option to sign up for unlimited data.
Once you drill down a bit, though, unlimited data plans aren’t all they’re cracked up to be. Before you lock yourself into an expensive long-term contract, ask yourself these questions. You might end up saving some money!
1.) How much data do I actually use?
The average smartphone user needs between 2 and 3 gigabytes of data each month. That includes email, some web browsing, and occasional music streaming. If you don’t use your smartphone for business and usually use Wi-Fi for video streaming, this is probably a fair estimate of how much data you use. We frequently overestimate our data usage. Streaming 35 hours of Pandora music, for example, takes up just under 1 gigabyte.
Of course, you don’t need to estimate. You can go back through your old bills and calculate your average monthly data use. That will take into account your specific habits and the habits of your family.
If your usage is more in line with the average, a 3-4 gigabyte plan will be plenty of bandwidth for your phone. These plans are usually about 30% cheaper than the comparable unlimited plan, which is a significant savings. According to one analysis, the savings of an unlimited plan won’t become apparent unless you’re using more than 10 gigabytes per month.
Of course, for a family of four, you need to take into account everyone’s data usage. The average family of four consumes about 12 gigabytes of data each month. That can be enough to make the unlimited plan worthwhile.
2.) Could I change my data usage?
If you find yourself regularly busting through your monthly allotment of data, an unlimited plan can seem very attractive. However, it might be smarter to change your habits instead of changing your plan. Making just a few changes can let you keep a more affordable plan and stay within your data limits.
If you’re a regular Spotify user during your morning commute, download your playlist to your phone using Wi-Fi and listen data-free. Lower your video streaming quality, especially if you use an app like YouTube for music. You can also set your phone to only download system and app updates when connected to Wi-Fi. Making these changes might make staying with a lower cost plan more realistic.
3.) Can I rely on smartphone data exclusively?
There may be people who just can’t kick the data habit. Maybe you use your cellphone extensively for business, or maybe you live in an area that doesn’t yet get high-speed internet. If that’s the case, there might be other cord-cutting strategies you can use to reduce your total monthly expenses.
If you don’t use the internet much at home, but need your data on the go, it might be worth considering cutting your household internet and relying on mobile data all the time. Wireless hotspot devices that broadcast a Wi-Fi signal and use your mobile data subscription are available for around $50.
If you consider this path, note that no company is really unlimited. Expect to see slow-downs in service after you’ve used 20 gigabytes in a month. If there’s a lot of internet use in your household, you might bust that cap pretty quickly.
Whether an unlimited data plan is right for your circumstances or not depends on how much data you use now, and how much that data use can be curtailed. If there’s no way around an unlimited data plan, there may be other ways to really get the most out of your service.
Your Turn: Have you looked into an unlimited data plan for your family? What do you think? Is it a good deal?
SOURCES:

Financial Self Defense

Beware Unsolicited Help: Trouble With Tech Support Scams

“Any sufficiently advanced technology is indistinguishable from magic,” wrote noted science fiction author Arthur C. Clarke. Our computer technology is certainly advanced enough that, to many, it looks like magic. As a result, the kind of wizardry that those with technical savvy can perform can be simply baffling.
That confusion is exactly what some scammers have come to rely on for making their money. The Federal Trade Commission is warning about a range of scams featuring phony tech support. From fake phone numbers to malware-loaded scanning software, these schemes all have one goal: compromise your technology to steal personal information and money.
Even if your tech skills are legendary, these scams are set up to push your buttons. If you want to browse the internet in peace, you need to be vigilant. Watch out for these three tech support scams.
1.) Yahoo phone support
Data breaches always have two sets of victims. There are the people who were immediately affected, and then there are those who are victimized in the confusion following the breach. Yahoo’s data breach appears to have found a new group of the latter.
Scammers have created a variety of replica sites that convincingly look like Yahoo help sites. Some of these detail common account problems and then offer a phone number for “Yahoo Customer Care” or something along those lines. If you call, one of several things might happen: You might be asked for credit card information to pay a support fee. You might be asked to allow remote connections to your computer. Or, you might be asked for account information, including your username and password.
Regardless of what the scammer requests, the help they provide is bogus, and the damage they can do is very real. Yahoo is very clear: It will never charge for tech support, nor will its employees ask for your password or to remotely connect to your computer. Most other internet platforms follow similar rules. While pay-for-support lines do exist, they’re increasingly rare in an era of video tutorials and widespread internet access. Of course, you should never allow anyone you don’t absolutely trust to make a remote connection to your computer.
2.) Spyware scanners
Most commonly, this scam begins with a banner ad. A flashing icon on any ordinary webpage claims to have discovered infected files on your computer. A list of suspicious-sounding file names flash past, including some that are actually on your computer. The ad will inform you that you need security software and provide you with a download link.
As with many other downloadable software offerings, what happens next is largely a mystery, but it’s most likely going to go badly. The piece of software may log your keystrokes so a hacker can steal your passwords. It could also allow remote access to your computer, allowing the scammer to riffle through your personal information. It could also be “ransomware,” which encrypts all information on your computer until you pay a fee, which can sometimes be pretty hefty. Some of these scammers even have the gall to charge for the download!
The best way to protect yourself here is to be proactive. Don’t download files from websites you don’t explicitly trust. Get a reliable anti-virus software and a malware scanner, and run them regularly. That way, you can confidently ignore pop-ups that claim your computer is infected.
3.) Inbound tech support
The FTC has also reported an uptick in unsolicited “tech support” calls. These scams usually start with a call from an unknown number. If you answer, the caller will tell you he’s detected a problem with your computer. You’ll be instructed to provide him with remote access so he can fix it. The person on the phone will even walk you through the steps.
Once the scammer has control of your computer, he’ll do any of the things described in the previous scams. Worse yet, it’s incredibly hard to reverse this process. You may end up losing your computer in the process!
No tech support company will call you about a supposed monitoring of your computer. If you get an unsolicited call from an unknown number about your computer, just hang up. Better yet, report the number at donotcall.gov.
Despite how advanced it looks, technology isn’t magic. It operates by a predictable set of rules. Learning just a little bit about how it works can help keep you safe.

SOURCES:

 

What To Do After Getting A Raise

Q and A

Q: This is the year I finally got that raise! What should I do with the extra money?
A: Beyond the money, getting a raise is a rewarding recognition that the work you’re doing for your employer is valued. It means you’re on the right path in your career. This should be one of many such events in your life where your hard work and dedication finally pay off.
Let’s not overlook the money, though. This can be a real boon to your financial stability. You could look back a year from now and see how much better off you are with a little more budgetary breathing room. It’s also possible that the money can blow right through your checking account, leaving you worse off than you were before you got the raise.
The difference between these two outcomes is planning. If you don’t have a plan for your new income, it can be difficult to resist the impulse to spend lavishly because you “deserve” it. Making a plan to invest your new bounty responsibly will keep you honest and ensure you spend in ways that match your values. Here are three steps to making a plan for your post-raise finances.
1.) Stay off the treadmill
If you started from the bottom, you probably remember a time when you had little in the way of luxuries. You went to work, came home, ate whatever was cheap and went to bed. As you started to pull yourself up, you might have added the occasional luxury: better food, a nicer car, some entertainment or comfortable furniture. While the added luxury might have been a thrill at first, it probably soon became nothing more than the new normal.
This is what psychologists call the hedonic treadmill. With greater salary comes greater lifestyle expectations. It’s impossible to get ahead if you’re always chasing the life you think you “ought” to have.
In a sense, all you’re doing by getting a raise is turning up the speed on the treadmill. You’re not actually making more progress toward your goals. To do that, at any level of income, you need to spend prudently, not emotionally.
So, when your first paycheck comes in, avoid thinking about things you “deserve.” Try to keep your non-discretionary spending, or the amount of money you have to pay for basic goods and services, the same. If you want to take your family out to dinner to celebrate, that’s fine. If you want to buy a new luxury car to reflect your new status, that’s just running faster on the treadmill.
2.) Fix the basics
There are three very obvious places to put your newfound money: paying down debt, building an emergency fund and saving for retirement. If you don’t have an immediate plan for your new income, you could do much worse than putting your money in one of these three places. This isn’t a flashy way to spend your money, and it won’t make you happier in the short term. However, it will make your life easier in the long run.
Depending on the timing of your raise, you may need to make some paycheck adjustments. While you’re increasing your 401(k) contributions, you might also want to withhold a little extra in taxes. Your old withholding was done assuming you would earn your old salary all year. If you don’t bump up your withholding a little, you might end up with a nasty surprise at tax time. That’s another reason to make tax-deductible investments in your retirement accounts. You’ll get to keep more of your hard-earned raise!
3.) Save for your values
Getting a raise is a great time to pull out your dream list. What would you do if money was no object? Would you take a trip to Tahiti? Start a small business? Whatever your dream is, you probably need some capital to get it started.

Fortunately, you’re about to get some more capital each month thanks to your hard work. The best way to get to your “money’s no object” goals is to save a little bit each month. You can do that with the nice bonus offered by your raise. In the long run, you’ll be happier with the investment in your future than you will with the little luxuries you might be tempted to splurge on today.

Your Turn: We all want to make more money. What would you do with a little extra money each month? Let us know in the comments!

SOURCES:

Q & A: How To Be The Host With The Most Without Draining Your Account

 Q: It’s my turn to host my family for the holidays. How can I entertain the crowd without spending a fortune?

A: Hosting a holiday meal is one of the stressful parts of any holiday. Sure, it’s great to help everyone get together under one roof as part of a fantastic tradition. On the other, though, feeding many people can put a serious strain on your budget. With holiday gifts to buy, a strain like that really can’t come at a worse time!

 

Fortunately, it’s possible to be a great host and a great saver at the same time. It’s not easy, but you can put on a great holiday meal without breaking the budget. Try these 3 handy tips to save this year!

 

1.) Plan

If there’s a law written in a personal finance stone tablet, it’s “always make a plan.” It doesn’t need to be detailed, but it should identify your needs for a project and how you intend to meet them. For a meal, that should include both what you intend to put on the table and anything else you need to make your guests comfortable.

 

Obviously, the earlier you start making your plan, the better off you’ll be. Having a plan in place lets you take advantage of the rotating grocery specials. You can incorporate more seasonal produce, meaning you’ll cook a better tasting and more nutritious meal at a better price. The plan also lets you make a budget for your holiday meal spending while not having to put big shopping trips on credit cards. The memories of a wonderful family meal should stick around for years; a debt to pay for it all should not!

 

2.) Delegate

The sheer volume of tasks that go along with hosting a holiday meal can quickly get overwhelming. Beyond the meal, you need to clean and tidy up, decorate, and make sure your house is stocked with essentials, like hand soap and toilet paper. Even listing all the steps involved can get exhausting!

 

That’s why it’s important to recognize the tasks that need your individual attention and separate them from the tasks that can be done by someone else. While you may be doing most of the cooking, outsource the meal planning to a family member. Give them the guest list and ask them to help you come up with recipes that will satisfy the crowd. You can also get kids involved in making and placing decorations, which may help get them in the holiday spirit as well. While it’s likely too imposing to ask guests to bring toiletries as part of a potluck, you may be able to fold that shopping into your ordinary shopping and avoid extra last-minute trips.

 

By delegating responsibilities, you make the task of putting together a wonderful time more manageable. This decreases the temptation to find a quick, easy and potentially expensive, solution at the last minute. Budgets tend to explode most often when there’s a serious time or energy crunch. Avoid that crunch by getting help wherever you can.

 

3.) Substitute

While everyone loves a nice holiday roast, cuts of beef big enough to serve an entire family can easily cost $200 or more. Instead, look for seasonal specialties, like spiral cut ham. You can also get good prices on turkey breast or whole chicken, both of which can easily feed an army without draining your checking account. If you have the time, slow-cooking cheap cuts of pork (belly or shoulder) can make ham or bacon that’s tastier than what you get at the supermarket, but for a lower price. It will cure in the fridge for several days, and then needs to be cooked. A smoker is best for this process, but a standard grill can work in a pinch.

 

You can use the same home cooking ingenuity to save on side dishes. One of the best ways to feed lots of people without breaking the bank is to use root vegetables, which are cheap and filling. Rubbing parsnips, potatoes, sweet potatoes or carrots with salt and pepper before throwing them in the oven for 40 minutes on medium heat can turn ordinary produce into delicious sides. Serve these instead of more expensive, less nutritious, canned or frozen vegetables.

 

Finally, don’t forget to substitute other people’s cooking for your own. Guests like to feel included in the preparation process. Ask your guests to bring desserts or sides, while you focus on getting your main dishes ready. This will save you both time and money.

 

Don’t forget that the best things about the holiday are free. Time spent with friends and family, telling stories and making memories, is more important than how much food you put on the table. Your guests will remember the shared experience of the holidays more than what was on their plates, so focus on being gracious and calm while making your guests feel welcome.

 

Happy holidays!

 

Your Turn: What’s your best holiday budget survival tip? Do you have any go-to tips or tricks that saves on costs? Let us know how you host with the most (without spending the most) in the comments!

Tags:  hosting, saving, holiday, Thanksgiving, Christmas, food costs

SOURCES:

http://www.foodnetwork.com/recipes/homemade-bacon.html
http://www.goodhousekeeping.com/life/money/advice/a19540/budget-friendly-holiday-cooking/
http://money.usnews.com/money/blogs/my-money/2015/11/12/6-ways-to-save-money-on-holiday-meals
http://christmas.organizedhome.com/get-cooking/frugal-feasts-save-money-holiday-meals

What Happened at Wells Fargo?

 

1

Tags:  Wells Fargo, Banks, Banking, Member Experience, credit unions, shareholders

The financial services industry is based on trust. When a company abuses that trust, the whole industry seems off kilter. While the details about the extent of the recent fake account scandal are still coming to light, we know enough to start painting a picture of what was going on inside the bank. Here are a few common questions about the scandal and what to do if you’ve been impacted by it.

 

What was going on inside Wells Fargo?

As a commercial bank, Wells Fargo generates revenue from each customer account. It could do this in a variety of ways: fees, low balance penalties or other charges. Whatever the cause, the bank made a little bit of money on each one. In an effort to maximize its revenue, the company established a sales quota for each of its sales teams. Individual salespeople and team managers were therefore under heavy pressure to meet an unrealistic goal and open new accounts.

Somewhere along the line, someone inside the organization decided the only way to meet these goals was through fraud. Eventually, fraud became a widespread corporate practice. It became standard procedure to open fake accounts using an existing customer’s information and then charge fees for services they never wanted or agreed to.

Worse yet, the company began actively silencing those who attempted to put a stop to this wrongdoing. Over the course of eight years, about 5,600 employees were fired for reporting this activity to the Wells Fargo ethics hotline or attempting to discuss it with human resources. Many of them were effectively blacklisted, preventing them from working in financial services again.

After this information became public, Wells Fargo CEO John Stumpf was forced to resign. All evidence suggests that he was aware of the situation and did nothing about it. The bank has been fined millions of dollars and is also being asked to issue refunds to many of its victims.

 

What can I do if I was a victim of fraud?

Most of the people who had fake accounts opened in their names have already been given a refund. While money can’t make up for the inconvenience or the sense of betrayal that occurred, those refunds are being issued automatically to most of the people who were affected. Wells Fargo is conducting an internal review to uncover the extent of the damage, and it’s extended its search back to 2009.

If you’ve done business with Wells Fargo, it might be a good idea to get a list of accounts that have been opened in your name during your time as a customer. You can do this by getting a free credit report at annualcreditreport.com.

Those hoping for a day in court will likely be disappointed. Several victims of the scam attempted to form a class action lawsuit against the bank, but the case will likely be thrown out. Wells Fargo account opening agreements specify that any disagreements must be settled through arbitration, and the court has previously held that this applies even to accounts that were opened through fraud.

 

Why did Wells Fargo do this?

Part of what set up Wells Fargo for failure was the profit motive at the heart of its business model. As a corporate bank, Wells Fargo has a first obligation to its shareholders. Any obligation it might have to its account holders is secondary; it only needs to maintain enough good will to keep customers coming back. That creates an inevitable conflict of interest between the desire to maximize profits with the safety and trust of customers.

Credit unions, on the other hand, are not-for-profit institutions owned by their members. Our shareholders and our account holders are exactly the same people. Our board consists of volunteers from within our community, not individuals seeking a payday. That allows us to always put the interests of our members at the forefront of what we do.

If you’re tired of a bank that treats you like a cash machine, maybe it’s time to give [CREDIT UNION] a try. We offer the same services that commercial banks do, but with a model that’s based on putting members first. For more information about [CREDIT UNION], call or stop by any of our branch locations, or click here to check out the many services we offer.

 

YOUR TURN: Have you ever been mistreated by a bank or other company? What did it do or could it do to regain your trust?

 

Debt Consolidation: Not A Silver Bullet, But Still A Good Idea

bills

Tags:  Debt Consolidation, refinance, personal loan, credit card debt, interest rates, financial stress

 

If you’re up to your eyeballs in debt, the one thing you may wish for more than anything else is a blank slate. If you had a chance to wipe your slate clean and start over, things would be different. Of course, barring a winning lottery ticket, nothing is going to make that much of a change overnight.

 

There is, however, another option you can take for getting your debt under control. You can use a personal loan to refinance your existing debt. That means you’ll have one monthly payment at one interest rate instead of the stress caused by a bunch of smaller bills coming due on different days of the month.

 

Of course, this isn’t a solution for everyone. Let’s take a look at the questions you might ask yourself before you take on a debt consolidation loan.

 

1.) Have I fixed the debt problem?

 

Think long and hard about why you’re in debt. For most people, it was a medical bill, the loss of a job or some other temporary hardship that got them behind with charges they couldn’t completely pay off right away. If that describes your situation, the fact that you have a job or have paid the medical bill means you’ve solved the problem that caused the debt in the first place.

 

If, on the other hand, you accumulated debt by overspending on credit cards, a debt consolidation loan may not be the answer just yet. There are other steps to take first, like making a budget you can stick to, learning how to save and gaining responsibility in your use of credit. Getting a debt consolidation loan without doing those things first is a temporary solution, that might actually make matters worse in the long run. You’ll have room on credit cards again, which can make the impulse to go spend pretty strong. Give in, and you’ll be back in the same position you were before, except now you will have even more debt.

 

2.) Can I commit to a repayment plan?

 

If you’re struggling to make minimum monthly payments on bills, a debt consolidation loan can only do so much. It’s possible that the lower interest rate will make repayment easier, but it’s also possible that bundling all of that debt together could result in a higher monthly payment over a shorter period of time. Before you speak to a loan officer, figure out how much you can afford to put toward getting out of debt. Your loan officer can work backward from there to figure out terms, interest rate and total amount borrowed.

 

If you’re relying on a fluctuating stream of income to repay debt, like a second job or financial windfalls, it may be difficult to commit to a strict repayment plan that’s as aggressive as you like. Instead, what you can afford on a monthly basis may be nothing more than the sum of your current minimum payments. You can still make extra principal payments on a personal loan, so your strategy of making intermittent payments will still help. You just can’t figure them into your monthly payment calculation.

 

3.) Is my interest rate the problem?

 

For some people, the biggest chunk of their debt is a student loan. These loans receive fairly generous terms, since a college degree should generally result in a higher-paying job. Debt consolidation for student loans, especially subsidized PLUS loans, may not make a great deal of sense. You’re better off negotiating the repayment structure with your lender if the monthly payments are unrealistic.

 

On the other hand, if you’re dealing with credit card debt, interest rate is definitely part of the problem. Credit card debt interest regularly runs in the 20% range, more than twice the average rate of personal loans. Refinancing this debt with a personal loan can save you plenty over making minimum credit card payments.

 

4.) Will a personal loan cover all my debts?

 

The average American household has nearly $15,000 in credit card debt. That’s a big chunk of change. Add on $28,000 in auto loans, and it’s easy to see why debt is such a problem for most households.

 

The caution with personal loans for debt consolidation is to make sure you can bundle all of that debt together. If you have more than $50,000 in credit card debt, it’s going to be difficult to put together a personal loan that can finance the entire amount. Instead, it’s worth prioritizing the highest interest cards and consolidating those instead of trying to divide your refinancing evenly between accounts. Get the biggest problems out of the way so you can focus your efforts on picking up the pieces.

 

Debt consolidation doesn’t work for everyone, but it can do wonders for many people. The ability to eliminate high-interest debt and simplify monthly expenses into one payment for debt servicing can change a family’s whole financial picture. The only way to know if a personal loan to consolidate debt is right for you is to sit down with a loan officer to go over your situation. Gather your account statements and your paycheck stubs and head to Abbey Credit Union today!

 

YOUR TURN: What’s your secret weapon in the battle against debt? Any tips and tricks that helped you get a handle on what you owe? Let us know!

 

Share Certificate Shopping – How To Keep Your Money Spinning

Share Savings Certificates are an excellent savings option. They’re NCUA-insured, which gives you peace of mind in knowing your deposits are secure. They’ve got a better dividend rate than a savings account and they’re generally safer than the stock market.

 

Before you lock your money up, though, there are some questions you might want to answer about your financial priorities. It’s not all about the rate – there are many other things to consider.

 

1.) What am I saving for?

 

You can’t control the dividend rates that financial institutions are offering, but you can control the term of your investments. Think about when you might want to make withdrawals. It’s far from the end of the world if you’re wrong, but you will have to pay a small penalty to withdraw your money before the certificate matures.

 

If you’re saving for a rainy day fund, you might need that money very quickly. It’s best not to lock yourself into a long-term commitment since you’ll need the flexibility. A short-term certificate, like one for 6 months, has very small penalties associated with early withdrawal. Waiting a few months to finish paying for an emergency expense is far more doable than waiting a few years.

 

If you have a more flexible goal, like a vacation or a house, consider a longer-term certificate. A 5-year term earns a better dividend rate, and you can postpone your vacation or house hunt until you have the money to pay for it. A long-term certificate also keeps you from making an impulsive decision. If something seems like a “good deal,” you need to weigh the penalty of early withdrawal against the potential savings.

 

2.) What are the penalties?

 

Penalties for early withdrawal make it difficult to impulsively take money from the account, but they’re not a deterrent if the money is needed for an emergency situation. However, like most factors about certificates, they can vary from institution to institution. Generally, the penalty is expressed as a number of months of earned dividends. For short-terms, those under one year, the penalty is between one and three months dividends. For longer-term certificates, penalties can range from 6 to 24 months of earnings. Occasionally, institutions may include a flat fee as well.

 

Pick a term that aligns with your need for flexibility. If flexibility is important to you, choosing a certificate with lower penalties will allow you to make withdrawals if needed. If you’re confident that the money you’re saving won’t be needed before the term of the certificate, ignoring penalty terms might allow you to secure a higher dividend rate.

 

3.) What kind of certificate is right for you?

 

The language surrounding certificates can be somewhat confusing. Between jumbo, bump-up and liquid certificate options, it can be difficult to figure out which one is right. Here are some of the more common types.

 

A Jumbo Certificate is a certificate account with a higher minimum deposit. Financial institutions offer these to attract large investments. Jumbo options usually begin with minimum deposit requirements of around $10,000. There are no downsides, other than having your money locked up for the term of the certificate. These are sometimes also called high-interest certificates, because they tend to carry a higher dividend rate.

 

A Bump-up Certificate is one that enables you to take advantage of rising dividend rates. At some point over the life of the term, you’ll be given the option to change the dividend rate. If you buy a certificate at 1.5% and, after 6 months, the institution is selling the certificate at 3%, you can “bump up” your rate to 3%. These certificates often come with slightly lower initial dividend rates to reflect the risk the institution is taking by being flexible about dividend rates in the future.

 

The opposite of a bump-up certificate is a Callable Certificate. This option lets the institution pay back the deposit early and avoid paying dividends on the remaining term of the account. If you buy a Callable Certificate at 3% and, after the “call” period is over, the institution is selling certificates at 1.5%, they can pay back your principal with the dividends you’ve accrued to that point. Since you’re taking the risk of falling dividend rates, these certificates usually come with slightly higher rates.

 

Similar to a Bump-up Certificate, an Add-on Certificate provides you with an opportunity to make an additional deposit at some point over the term. While you don’t get back dividends on this amount, you will earn dividends on the new amount going forward. Add-on Certificates provide you with additional flexibility to add to your savings over time.

 

A Liquid Certificate is like an Add-on Certificate in that it allows you to make a limited number of withdrawals over the course of the term without paying a penalty. These accounts usually have a minimum deposit and may have a certain amount of time which must pass before withdrawals can be made without penalty. These accounts are a great way to combine the rates of a certificate with the flexibility of a savings account, but dividend rates will be lower than with other more fixed-term accounts.

 

4.) How important is dividend rate?

 

The temptation when shopping for certificates is to jump at the highest dividend rate you can find. A better rate will mean more money, all else being equal. The problem is that all else is seldom equal.

 

A tenth of a percent of a dividend rate is not likely to make much of a difference over the course of the term. Most institutions are going to have rates clustered around the same rate, so other considerations should come first. Look at the terms of service, the level of support and the flexibility provided by the certificate before looking to earn another miniscule quantity of dividend.

 

Most importantly, you need to deposit your money with an institution you trust. Certificate agreements can be cumbersome documents, and many institutions might use that density to hide a clause that can cost you. Doing business with an institution that’s there to help you is the best move for your money in the long-term.

functions.php