Consumer Financial Education Forum

How to Retire a Millionaire

It is a given that in order to have a financially secure retirement, one must be intentional and proactive in his or her planning and strategies for that financially stress-free retirement. The earlier in ones career that retirement planning is strategized and implemented is the better the prospects for the desired outcome. There must be a focus on regular and consistent savings, diversified investments, living within ones means, debt avoidance, prudent use of credit and thrift.

Check out this article on 10 steps to retire a millionaire by clicking on the following link:
http://finance.yahoo.com/retirement/article/106000/10-Steps-to-Retire-a-Millionaire

Home Inventory Software for Loss Claims

Homeowners may now be able to provide actual proof of loss in the event of damage to their homes, thanks to a free home inventory software from the Insurance Information Institute (I.I.I.). The institute is a recognized primary source of information, analysis and referral on insurance and seeks to improve public understanding of the subject, such as what it does and how it works.

The I.I.I. publishes helpful pamphlets and books ranging in subjects from 9 Ways to Lower Your Auto Insurance Costs to the I.I.I. Fact Book. You may find information about the institute on their website at: http://www.iii.org/

The free home inventory software may be downloaded at: http://www.knowyourstuff.org/ You may also watch an explanatory video clip of the software here: http://www.knowyourstuff.org/video3.htm

Federal Trade Commission to Host Forum on “Fraud”

With the current economic and financial crisis causing widespread fear, confusion and uncertainty among consumers, many are becoming victims to predatory opportunists who are using fraudulent schemes to separate unwary individuals from their hard earned money, their homes and sometimes all of their life’s savings.

To educate consumers on how to protect themselves from these schemes, the Federal Trade Commission will host a free two-day Fraud Forum on February 25 and 26, 2009, in Washington, DC. The Forum will examine how the FTC can more effectively protect consumers from fraudulent schemes. The first day of the Forum will be open to the public and will provide an opportunity for law enforcement, consumer advocates, business representatives and academics to examine, among other things:

the extent of fraud in the economy and what survey research indicates about fraud victimization rates;
the drivers – economic, sociological, and psychological – that create and sustain fraudulent actors; how new fraudulent actors learn the tools of the trade, and how they target victims;
whether some segments of the population are at greater risk of being targeted by fraudulent actors; whether victim surveys adequately identify the magnitude and types of fraud launched against all segments of the population; what techniques law enforcement has employed to reach these segments of the population; and
which best practices in private industries, such as banking, telecommunications, and online commerce, are best suited to identify fraud and prevent their services from being used by fraudulent actors; which systems adequately track potentially fraudulent activity and whether opportunities exist to use new or improved self-regulatory efforts to combat fraud.

The second day of the Forum will be open only to domestic and international law enforcement officials, and will focus on improving interagency coordination in the battle against consumer fraud.

The FTC invites interested parties to submit requests to be panelists. Requests should be submitted electronically to fraudforum@ftc.gov by November 14, 2008, and should include a statement detailing any relevant expertise in working on or studying fraud, especially the topics specified above, and complete contact information. Panelists selected to participate will be notified by January 16, 2009.

The FTC also invites those interested to submit written comments to fraudforum@ftc.gov on any of the topics mentioned above.

The event is free and the first day is open to the public. Day two will be open only to law enforcement personnel. The Forum will be held at the FTC’s satellite building conference center, located at 601 New Jersey Avenue, N.W., Washington, DC. A government-issued photo ID is required for entry. Pre-registration is not required. Members of the public and press who cannot attend can view a live Webcast of the workshop on the FTC’s Web site.

Reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via e-mail to Carrie McGlothlin at cmcglothlin@ftc.gov or by calling 202-326-3388. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information. Please provide advance notice.

The Federal Trade Commission works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click https://www.ftccomplaintassistant.gov or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.

MEDIA CONTACT:

Office of Public Affairs
202-326-2181

STAFF CONTACT:

Tracey Thomas,
Bureau of Consumer Protection
202-326-2704

Kathleen Benway,
Bureau of Consumer Protection
202-326-2024

How to Deal With Cash in Tough Times

Many are concerned about whether they should cash in their investments and hold on to the cash in tough economic times such as we are currently facing. They are concerned about the loss of their investments and believe that there might be greater safety in converting to cash. Is there wisdom in converting to cash? Here’s a link to an interesting article on the subject:

http://www.nytimes.com/2008/10/09/business/yourmoney/09money.html?ref=todayspaper

Avoiding Foreclosure Fraud

How Your Divorce May Affect Your Credit

Mary and Bill recently divorced. Their divorce decree stated that Bill would pay the balances on their three joint credit card accounts. Months later, after Bill neglected to pay off these accounts, all three creditors contacted Mary for payment. She referred them to the divorce decree, insisting that she was not responsible for the accounts. The creditors correctly stated that they were not parties to the decree and that Mary was still legally responsible for paying off the couple’s joint accounts. Mary later found out that the late payments appeared on her credit report.

If you’ve recently been through a divorce - or are contemplating one - you may want to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits - and pitfalls - of each.

There are two types of credit accounts: individual and joint. You can permit authorized persons to use the account with either. When you apply for credit - whether a charge card or a mortgage loan - you’ll be asked to select one type.

Individual or Joint Account

Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any “authorized” user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.

Advantages/Disadvantages: If you’re not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse’s income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.

Joint Account: Your income, financial assets, and credit history - and your spouse’s - are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).

Advantages/Disadvantages: An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don’t pay them can hurt their ex-partner’s credit histories on jointly-held accounts.

Account “Users”

If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, a creditor who reports the credit history to a credit bureau must report it in your spouse’s name as well as in your’s (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of any other authorized user.

Advantages/Disadvantages: User accounts often are opened for convenience. They benefit people who might not qualify for credit on their own, such as students or homemakers. While these people may use the account, you - not they - are contractually liable for paying the debt.

If You Divorce

If you’re considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it’s important to make regular payments so your credit record won’t suffer. As long as there’s an outstanding balance on a joint account, you and your spouse are responsible for it.

If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.

By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.

For More Information

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Source: Federal Trade Commission

Beware Of Identity Theft!

In the fast moving and highly technological age in which we live, identity theft is also on the increase. With the ease of access to information from anywhere in the world, a stranger can have access to your personal financial and identity information and in a moment either ruin you financially or assume your identity and make your life a real nightmare. Your goal is never to become a victim.

Identity thieves are getting more sophisticated every day. They can steal your mail, get your personal information through e-mail or by phone, capture information on a data storage device, take your purse, rummage through your trash, get your credit report through unauthorized access; the list just keeps getting longer. Once they have your information, they use your name, Social Security number, credit card number, or other personal information to commit fraud or theft. They might:

Run up charges on your credit card accounts
Open new credit accounts or cellular phone service using your name
Open a bank account in your name and write bad checks on it
Create counterfeit checks or credit or debit cards, or authorize electronic transfers in your name, and drain your bank account
Buy a car by taking out an auto loan in your name
Get identification such as a driver’s license issued with their picture in your name
Call your credit card issuer to change the billing address on your account. The imposter then runs up charges on your account. Because the bills are being sent to a different address, it may be some time before you realize there’s a problem.

Problems that result, such as unpaid bills, are reported on your credit report.

To prevent fraudsters from stealing your identity, you need to be vigilant and intentional on how you go about protecting your personal information. Do not:

Leave your pocket book, purse or wallet unattended in public places
Leave, If you are in a restaurant, your pocket book or purse at the table if you need to briefly walk away, unless you have someone who is with you to watch over it until you get back
Share your personal information with others via email
Discard documents in the trash with your personal information without first shredding
Allow your credit card statements and other mail containing financial or personal identifying information to remain in your street-side mailbox for any extended time after delivery. Consider using a post office box for delivery of such mail
Write down pin numbers and other access information to your personal and financial information where others may be able to see.

If you believe that you are the victim of identity theft, report it to law enforcement immediately, alert your financial institutions such as banks, credit unions, credit card companies, etc. Check your credit bureau files and place a fraud alert right away. By being proactive and careful in the protection of your personal and financial information, you may drastically reduce your chances of becoming a victim.

How To Detect Investment Fraud

Deceptive pitches for investments often misrepresent or leave out facts in order to promote fantastic profits with little risk. No investment is risk-free and a high rate of return means greater risk. Before investing, get written information such as a prospectus or annual report. Beware if a salesperson:

Encourages you to borrow money or cash in retirement funds to invest
Pressures you to invest immediately
Promises quick profits
Says that the disclosure documents required by federal law are just a formality
Tells you to write false information on your account form
Sends material with typos or misspellings or not printed on letterhead
Does not send your money promptly
Offers to share inside information
Uses words like “guarantee,” “high return,” “limited offer,” or “as safe as a CD”
Uses the phrase “this investment is IRA approved”
Claims “off-shore investments are tax-free and confidential”

Source: Federal Citizen Information Center

Does Your Debt Collector Follow These Rules?

The Fair Debt Collection Practices Act applies to those who collect debts owed to creditors for personal, family and household debts. These include car loans, mortgages, charge accounts and money owed for medical bills. A debt collector is someone hired to collect money you owe.

Within five days after a debt collector first contacts you, the collector must send you a notice that tells you the name of the creditor, how much you owe, and what action to take if you believe you don’t owe the money.

If you owe the money or part of it, contact the creditor to arrange for payment.

If you believe you don’t owe the money, contact the creditor in writing and send a copy to the collection agency with a letter telling them not to contact you. A debt collector may not:

Contact you at unreasonable times, for example, before 8 a.m. or after 9 p.m., unless you agree
Contact you at work if you tell the debt collector your employer disapproves
Contact you after you write a letter telling them to stop, except to notify you if the collector or creditor plans to take a specific action
Contact your friends, relatives, employer or others, except to find out where you live and work
Harass you through threats to harm you, profane language or repeated telephone calls
Make any false statement, or claim that you will be arrested
Threaten to have money deducted from your paycheck or sue you, unless the collection agency or creditor intends to do so and it is legal.

To file a complaint, contact your state or local consumer protection agency and the Federal Trade Commission.

Source: Federal Citizen Information Center

Options To Consider For Your Banking Needs

When it comes to finding a safe place to put your money, there are a lot of options. Savings accounts, checking accounts, certificate of deposits and money market accounts are popular choices. Each has different rules and benefits that fit different needs. When choosing the one that is right for you, consider:

* Minimum deposit requirements. Some accounts can only be set up with a minimum dollar amount. If your account goes below the minimum, no interest is paid or you are charged extra fees.
* Limits on withdrawals. Can you take money out whenever you want? Are there any penalties for doing so?
* Interest. How much (if anything) is paid and when: daily, monthly, quarterly, yearly? To compare rates offered locally to those from financial institutions around the nation, visit www.bankrate.com.
* Deposit insurance. Look for a sign that says your money is protected by the Federal Deposit Insurance Corporation. Credit union accounts have similar protection from the National Credit Union Administration.
* Convenience. How easy is it to put money in and take it out? Are there tellers or ATM machines close to where you work and live? Or would you receive most of your service via the telephone or Internet? Can you make direct deposits and other electronic transfers?

If you are considering a checking account or another type of account with check-writing privileges, add these items to your list of things to think about:

* Number of checks. Is there a maximum number of checks you can write per month? If you write more, what is the charge?
* Amount of check. Is there a minimum or maximum amount for any one check?
* Account and check fees. Is there a monthly fee for the account or a charge for each check you write? Some accounts only charge a fee if you write more than a certain number of checks per month.
* Holds on checks. Is there a “hold” or waiting period before you can access the money you deposit in your account? There may be a longer hold period for out-of-state checks.
* Overdrafts. If you write a check for more money than you have in your account, what happens? You may be able to link your checking account to a savings account to protect yourself. There could also be high fees for “bounced” checks (from you or written to you). Bounced checks can blemish your credit record so it’s better to be covered.

Checks 21 The new Check Clearing for the 21st Century Act (often referred to as Check 21) allows banks to clear checks electronically instead of exchanging actual paper checks. Banks no longer have to return original checks with your monthly statements or even when there is a problem with a particular check. Check 21 creates “substitute checks” which you can use as legal representations of the originals. Ordinary check images, which some banks have provided for years, are NOT substitute checks. It has always been a good idea to get canceled checks with your monthly statement. Now you will want “substitute checks” each month.Banks usually take at least a day or two to process paper checks, but electronic processing can happen almost immediately. This means you have less “float” time between when you write a check and when the money is actually taken out of your account. This could increase the chance that one of your checks will bounce due to insufficient funds. Having your employer deposit your paycheck directly into your account can help you cope with the change in “float” time. Quicker clearing also means less time to stop payment on a check.

Source: Federal Citizen Information Center