Money

There has been a recent surge in fraudulent debits (withdrawals) from savings accounts due to this scam.

The Scam

These scammers usually work through phone calls, sometimes prompted by post cards. They tell you that you have won a free prize or that you qualify for a new credit card. At some point you will be asked if you have a checking account and then you will be asked to read off the numbers at the bottom of your check. There may be a variety of explanations for why they need this number such as verification. DO NOT GIVE OUT THIS INFORMATION.

Once a telemarketer has this number they can make withdrawals from your bank account. These withdrawals are called Demand Drafts. Unlike a check, these withdrawals do not require your signature. Once your bank receives a demand draft, it takes the amount on the draft from your checking account and pays the telemarketer’s bank. You generally will not be notified and may not find out until you check your transactions or when you get your bank statement.

How to Protect Yourself

Never give your checking account information over the phone unless you know and have verified who you are dealing with and why they need that information. Be very careful before EVER giving out this information. Companies do not ask for your bank account information unless you have expressly agreed to this payment method.

If someone says they are taping your call, ask why. Don’t be afraid to ask questions.

While many telemarketers will settle for getting your bank account number, in order to legally debit your account they must obtain the following:

• The date that you are giving your oral authorization
• The amount of the draft(s)
• The date of the demand draft
• The payor’s (who will receive your money) name
• The number of draft payments (if more than one)
• A telephone number that you can call during normal business hours

What To Do If You Are A Victim

If you feel you have been a victim of this scam contact your bank immediately. Inform the bank that you did not approve this debit and make sure that you tell them to prevent any further debits from that company. Call the telemarketer, if possible, and demand a refund. If you do not get one, contact your state’s attorney general to report the fraud.

For more information go to:
http://www.ftc.gov/bcp/conline/pubs/tmarkg/debit.htm

There are advantages and disadvantages to leasing or buying a vehicle. Below is a comparison of the two different systems of acquiring a vehicle.

Ownership
When you lease a vehicle, you do not own it. You must turn the vehicle in or buy it at the end of the leasing period. When you buy a car, you own it at the end of your financing term.

Initial Costs
When leasing a vehicle, your initial costs can include a security deposit, the first month’s payment, a capitalized cost reduction (like a down payment), taxes, registration and other fees/charges. When buying a car your initial costs can include purchase price or down payment, taxes, registration and other fees/charges.

Monthly Payments
Monthly lease payments should be lower than the monthly loan payments on a comparable purchased car. This is because lease payments are designed to cover the depreciation costs of the vehicle plus fees, taxes and the profit the leasing agent is looking to make. When you buy a car your payment divides up the entire purchase price of the vehicle, plus interest and other finance charges, taxes, and fees.

Early Termination
On a lease vehicle there is generally a set cost for the early termination of a lease. When buying a car you are always responsible for the entire purchase price of the car and any pay off fee for early payment of a loan.

Returning the Vehicle
When leasing a car, you return it at the end of the lease period unless you wish to buy it then. When buying a car you have the option of selling or trading the vehicle.

Future Value of the Vehicle
When leasing, the leasing company takes on the entire risk for the future resell value of the vehicle beyond any damage or excess miles which you may be responsible for. When you buy a vehicle, the entire risk for the future value of the vehicle is yours.

Miles Driven
When you lease a vehicle there is a limit to the miles you may drive without penalty, (generally averaged between 12,000 and 15,000 a year. Beyond that you will have to pay for extra miles either by negotiating more miles in your contract or paying a penalty at the end of the contract. When you buy a vehicle,. You may drive it as many miles as you like, though excessive miles may hurt the resale value of the vehicle.

Excess Wear or Vehicle Damage
If you lease, there may be penalties from your leasing company for excess wear or damage to your vehicle. If you buy the vehicle, there are no penalties although it may reduce your resale value.

End of Term
When you lease a vehicle, after you finish your payments and any penalties you give back the vehicle or buy it. If you need a vehicle, you will have to arrange to either buy or lease a car again. If you purchase a vehicle, it is yours to keep after the payments are made. You may keep driving it, sell it or trade it in on your next vehicle.

• Before looking for a rental, decide about the size, style and other needs you have for the rental. Also decide on how much you are willing to spend.
• Call several different rental agencies. Get their price estimates. Let them know you are checking among several different agents. Some agencies are more willing to deal when they realize you are a comparison shopper. Always ask for their customer satisfaction phone number if it is a national agency and get your agent’s name. Many agencies have to maintain a high level of customer satisfaction or they face sanctions from the corporate office.
• Even different locations of the same rental agency in the same city have different rates. It often depends on what cars they have available. One agent may be out of cars when one across the city is overstocked.
• Ask your travel agent or the rental car company in advance whether your driving record will be checked. Some agencies will not rent to people with bad driving records.
• Ask if there are additional fees beyond the price quoted to you. Make sure you know what the real price of your rental will be.

For More Information:

The American Society of Travel Agents car rental tips
www.astanet.com/travel/cartips.asp.

FTC’s car rental tips: www.ftc.gov/bcp/conline/pubs/autos/carrent.htm

• Flexibility is a key to good air fares. Be willing to shuffle dates, times, area airports and airlines to find the best price.
• Get on airline e-mail lists. Often they will advertise low fares to certain cities for certain times. If you know of a cheap time to travel, you can plan a trip around it. For a list of airline web sites, go to airlines.com or smilinjack.com.
• It is a good practice to call an airline every week or two once you have bought a ticket to make sure that the airfare hasn’t dropped. You will sometimes be eligible for a rebate, but only if you check.
• It is often cheaper to fly on an actual holiday such as Christmas or New Year’s Day.
• Plan as far ahead as possible. The longer in advance you can plan, the more options will be available to you. Bargain fares sell out quickly.
• Sometimes special discount fares may not award frequent flier miles. Always check on this if you are in a frequent flier program.
• Travel agents generally do not charge fees and often know of discounts that you would not find out about. Not all agents are alike though, talk to friends and find out if they have an agent they would recommend. When dealing with an agent, always ask if they know of a better deal. Ask the agent what the lowest fare is.
• Use discount package web sites such as expedia.com and priceline.com to look for good deals.
• Always ask what the restrictions are to you ticket. Some tickets may look like bargains, but can be quite costly if you miss your flight or need to switch dates.

Buying for too many people can be a real problem in the Holiday season. Not only is it expensive to buy for many people, it is time consuming. Here is a system for reducing the numbers and the hassles of mass gift giving.

Examine your list of people. Is everyone on that list expecting a present? Will they all be giving you a present? This is the season for giving. There is nothing wrong with giving many gifts, but if you can’t afford it and you don’t have time, take a serious look at who you are buying for.

Take a hard look at any out-of-town people you are buying for. Is there another way you can show them you care, such as a phone call or a personal letter?

Set up gift exchanges. If there are many people in a particular group, such as coworkers, set up an exchange so that each person buys for a single other person.

Buy multiples of a single item. Often, when you buy an item in bulk you can get great savings.

Give cards. Remember that you can satisfy many people simply by giving them a card with a personal note. If it still doesn’t feel like enough, include a small item such as a phone card or a gift certificate.

Make a shopping budget and a shopping list. Decide before you go shopping how much you will spend on each person. When possible, decide what you want to buy before you go to the stores. Take advantage of online shopping sites such as amazon.com or target.com or buy.com to peruse merchandise and make decisions before you get into the rush of shopping. You can buy from these sites too, but the important thing is to decide what you want to get each person and to make sure it fits your budget.

It is ok to change your mind if you find a great deal, but make sure it is a great deal. Don’t go out to shop purely on impulse. Always keep track of what you have spent and make sure you are holding to your budget. Remember that if you overspend early you may end up having to buy lesser presents for the people down the line.

Use debit cards whenever possible. Avoid buying on credit. Buying on credit at Christmas is a common practice, but a bad one. Christmas gifts are about love, family and friendship; they aren’t about showing off or sacrificing your future. Only spend what you can afford to spend.

If you do buy items on credit, make sure you have a plan for paying those items off quickly. Remember that it isn’t just the debt that gets you in trouble; it is the interest on the debt. The longer you have to wait to pay something off with interest, the more that item really costs.

Shop early. When you shop during the Christmas season, you are constantly fighting crowds, traffic, and time. While there are some special deals during the Christmas season, it is easier to save money when you can shop at your own speed. Buying in October and earlier also gives you the chance to space your spending over time instead of depleting your finances all at once.

Consider making gifts. Cookies, bread, photo-albums and scrapbooks make good inexpensive gifts. The key is that you give time and effort instead of spending all of your money.

Remember to enjoy the holidays. Don’t stress over gift-giving. You may not be able to get the perfect gift for everyone, but the important thing is to show you care.

Simplify the business of Payment Processing on your website with ACH systems. An Automated Clearing House network is an electronic Funds transfer system that can set up Recurring Billing Programs and make you accounting process easier.

Lending money to family or friends can be problematic. It is usually done with the best of intentions, but it often turns out badly. Here are a few ways you can reduce the downside of loaning money.

• Don’t lend money you can’t afford to lend. Lending money to friends and family is always a risk; don’t risk what you must have.
• Get a signed, written record of the loan. The formal name for this is a promissory note. Make sure there is a definitive plan to pay back the money.
• Do not obsess over how the money is spent. Once you loan the money to the other person, it is no longer up to you how to spend the money.
• Don’t expect special favors. Do not change the way you treat the person you loan the money to and don’t change your personal expectations of them. Do not use the loan to extract favors from the recipient.
• If you are loaning money for a car, make sure you are the lien holder on the title. If you are the lien holder, the item cannot be resold without your knowledge and permission.
• If you are lending money for a house, get a mortgage.
• For any significant loan (over $10,000) check with a tax accountant to determine any tax implications for the loan.
• If the person fails to pay off their debt, you must try to collect using the same methods that other lenders use. Send letters stating the debt and requesting repayment. The reason to do this is for tax purposes. Within certain limits you can write off uncollected debts, but you must make a formal effort to collect the debt first.

Other options:

Cosigning
Cosigning for a loan is often easier than lending money because the collections are left to the actual lender and people feel more obliged to pay off a third party than a relative. The problem is that you are liable for the debt, and will end up having to repay the debt if your friend or family member does not pay it.

Gifts
Sometimes it is better to give money than to lend it. Collecting debts from relatives is never a pleasant task. Note: Large gifts can have tax implications.

Say No
Sometimes it is better to say no, especially if you don’t think the person will pay you back or if you simply cannot afford it.

Make a shopping budget and a shopping list. Decide before you go shopping how much you will spend on each person. When possible, decide what you want to buy before you go to the stores. Take advantage of online shopping sites such as amazon.com or target.com or buy.com to peruse merchandise and make decisions before you get into the rush of shopping. You can buy from these sites too, but the important thing is to decide what you want to get each person and to make sure it fits your budget.

It is ok to change your mind if you find a great deal, but make sure it is a great deal. Don’t go out to shop purely on impulse. Always keep track of what you have spent and make sure you are holding to your budget. Remember that if you overspend early you may end up having to buy lesser presents for the people down the line.

Use debit cards whenever possible. Avoid buying on credit. Buying on credit at Christmas is a common practice, but a bad one. Christmas gifts are about love, family and friendship; they aren’t about showing off or sacrificing your future. Only spend what you can afford to spend.

If you do buy items on credit, make sure you have a plan for paying those items off quickly. Remember that it isn’t just the debt that gets you in trouble; it is the interest on the debt. The longer you have to wait to pay something off with interest, the more that item really costs.

Shop early. When you shop during the Christmas season, you are constantly fighting crowds, traffic, and time. While there are some special deals during the Christmas season, it is easier to save money when you can shop at your own speed. Buying in October and earlier also gives you the chance to space your spending over time instead of depleting your finances all at once.

Consider making gifts. Cookies, bread, photo-albums and scrapbooks make good inexpensive gifts. The key is that you give time and effort instead of spending all of your money.

Remember to enjoy the holidays. Don’t stress over gift-giving. You may not be able to get the perfect gift for everyone, but the important thing is to show you care.

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Simplify the business of Payment Processing on your website with ACH systems. An Automated Clearing House network is an electronic Funds transfer system that can set up Recurring Billing Programs and make you accounting process easier.

Figure out what you owe. Make an accurate assessment of your debts and liabilities. Get a credit report. Make sure your divorce settlement deals with the issue of your debts.

Plan for your new living arrangements. Will you need to get a new house or new apartment? Do you have mortgage payments you need to resolve? If you have a home, you need to decide how you’ll split any equity in that home.

Make a new budget. Figure out what income you will now have and what existing or new expenses you will have to deal with, such as new furniture or appliances or a car. Make a plan for paying off any existing debt.

Be sure to close any joint accounts such as credit cards, merchant or store cards, or any other revolving debt. Separate all debt so that you can avoid negative repercussions should your ex-spouse run into credit trouble.

Be sure that your ex-spouse is making their payments. Often, even if a debt is assigned in a divorce settlement, your name will still be on that debt. If your ex-spouse fails to make the payments, you may still find yourself in financial distress and have your credit rating endangered.

Deal quickly with any issues regarding back-taxes. No matter who that debt is assigned to, the IRS will go after anyone on the tax statement. You might want to hire a tax lawyer to go over this debt.

Try to move forward with your financial health. Start a savings plan. Build your retirement plan. Remember that you are again alone in your responsibility for your economic health.

• Always be sure your credit and debit cards have theft protection through the bank that issues them.
• Be careful when giving out your personal information online. Make sure a site is reputable and your computer is secure and free of viruses.
• Do not count your money in front of an ATM. Go to a safe place first.
• Get online banking and always keep a close eye on your account.
• Immediately report lost or stolen checks, credit or debit cards.
• Never give out personal information online, in person or on the phone until you have verified who you are dealing with.
• Never let a stranger stand close to you at an ATM and always stand as close as possible to the ATM when giving your pin or other information. Use drive-up ATMs when possible.
• Never leave receipts in public palaces. Keep them and dispose of them only at home.