FTC Halts Three Debt Collection Operations That Allegedly Threatened and Deceived Consumers via Illegal Text Messages

At the Federal Trade Commission’s request, federal courts in New York and Georgia have temporarily halted three debt collection operations that allegedly violated federal law by threatening and deceiving consumers via text messages, emails, and phone calls. The FTC seeks to permanently end the unlawful practices.

“Legitimate debt collectors know the rules,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “They can’t harass or lie to you, whether they send a text, email, or call you.”

According to the FTC, the defendants used text messages, emails, and phone calls to falsely threaten to arrest or sue consumers. They also unlawfully contacted friends, family members, and employers, withheld information consumers needed to confirm or dispute debts, and did not identify themselves as debt collectors, as required by law.

The defendants in the law enforcement sweep called “Messaging for Money” are known as Unified Global Group, Premier Debt Acquisitions, and The Primary Group.

The FTC’s complaint against Unified Global Group names several companies through which the defendants operated. According to the FTC, the companies at times sent texts to trick consumers into calling them back. The texts included false statements such as, “YOUR PAYMENT DECLINED WITH CARD ****-****-****-5463 . . . CALL 866.256.2117 IMMEDIATELY,” even though consumers had never arranged to make payments to the defendants. The texts failed to identify the senders as debt collectors. The defendants also used deceptive emails and robocalls, and unlawfully contacted consumers’ friends, families, and co-workers about the supposed debts.

In its complaint against Premier Debt Acquisitions, the FTC alleged that the defendants impersonated state or law enforcement officials, falsely threatened consumers with a lawsuit or arrest, and even falsely threatened to charge some consumers with criminal fraud, garnish their wages, or seize their property. In texts, they claimed they would sue the consumers and threatened to seize their possessions unless they paid. In voicemails, the defendants also falsely claimed a “uniformed officer” was on the way to the consumers’ home, and asked them to “secure any large animals or firearms” before the “officer” arrived.

Premier Debt Acquisitions also sent deceptive emails claiming that making a payment would help a consumer’s credit report, but the defendants had no ability to make good on that claim. They also kept trying to collect after consumers challenged the debt or its amount, without investigating the dispute. In one instance, they persisted despite written evidence that the debt was a result of identity theft and a prior debt collector had marked it fully paid. In other instances, the defendants tried to collect a payment even after they had received it, and hounded one person for two years about someone else’s debt.

The FTC’s complaint against the Primary Group alleged that the defendants sent consumers a series of text messages, typically not disclosing that the company is a debt collector.  The defendants threatened consumers with false statements such as “I’m a process server with Primary Solutions, appointed to serve you papers for case [eight-digit number]. . .” and “Please have proper ID and a witness present who can provide a signature. If there’s no reply I’ll have to bring the document to your employer.”

The Unified Global Group defendants are Unified Global Group LLC; ARM WNY LLC, also doing business as Accredited Receivables Management; Audubon Financial Bureau, also doing business as AFB;  Domenico D’Angelo, also known as Dominick D’Angelo; and Anthony Coppola. The Premier Debt Acquisitions defendants are Premier Debt Acquisitions LLC, also d/b/a PDA Group LLC; Prizm Debt Solutions LLC, also d/b/a PDS LLC; Samuel Sole and Associates LLC, also d/b/a SSA Group LLC and Imperial Processing Solutions; Charles Glander; and Jacob E. Kirbis. The Primary Group defendants are The Primary Group Inc., formerly known as A Primary Systems Group Inc., also d/b/a Primary Solutions and PSA Investigations; Gail Daniels; and June Fleming.

The FTC has charged the defendants with violating the FTC Act and the Fair Debt Collection Practices Act.

Learn more about dealing with debt collectors at Debt Collection.

The Commission vote approving the federal court complaints was 5-0. The U.S. District Court for the Northern District of Georgia entered a temporary restraining order against The Primary Group defendants on May 11, 2015. The U.S. District Court for the Western District of District of New York entered temporary restraining orders against the Unified Global Group and Premier Debt Acquisitions defendants on May 12, 2015.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.

CFPB Says Student Loan Servicers Lie About Bankruptcy Discharge

The Consumer Financial Protection Bureau (CFPB) has released a document critical of student loan servicers. Kind of an easy document to write because for the most part student loan servicers suck donkey balls with all their bad information and horrible advice to consumers.

But here are the big items the CFPB says they really, really horrible at getting right.

Misleading consumers about bankruptcy protections: CFPB examiners found that some servicers told consumers student loans are not dischargeable in bankruptcy. While student loans are more difficult to discharge in bankruptcy than most other types of loans, it is possible to discharge a student loan if the borrower affirmatively asserts and proves “undue hardship” in a court. Servicer communications with borrowers asserted or implied that student loans were never dischargeable.

Learn how student loans can be discharged in bankruptcy, click here.

Misrepresenting minimum payments: Bureau examiners found that one or more servicers inflated the minimum payment that was due on periodic statements and online account statements. These inflated numbers included amounts that were in deferment and not actually due.

Charging improper late fees: CFPB examiners found one or more servicers were unfairly charging late fees when payments were received during the grace period. Like many other types of loans, many student loan contracts have grace periods after the due date. If a payment is received after the due date, but during the grace period, the promissory note stated that late fees would not be charged.

Failing to provide accurate tax information: CFPB examiners found cases where student loan servicers failed to provide consumers with information essential for deducting student loan interest payments on their tax filings. The servicers impeded borrowers from accessing this information and misrepresented information on the consumers’ online account statements. This practice may have caused some consumers to lose up to $2,500 in tax deductions.

Misleading consumers about bankruptcy protections: CFPB examiners found that some servicers told consumers student loans are not dischargeable in bankruptcy. While student loans are more difficult to discharge in bankruptcy than most other types of loans, it is possible to discharge a student loan if the borrower affirmatively asserts and proves “undue hardship” in a court. Servicer communications with borrowers asserted or implied that student loans were never dischargeable.

Making illegal debt collection calls to consumers at inconvenient times: Examiners found that one or more student loan servicers routinely made debt collection calls to delinquent borrowers early in the morning or late at night. For example, examiners identified more than 5,000 calls made at inconvenient times during a 45-day period, which included 48 calls made to one consumer.

This article by Steve Rhode first appeared on Get Out of Debt and was distributed by the Personal Finance Syndication Network.

5 Unexpected Steps to Building Wealth

Building wealth isn’t rocket science, but it isn’t always obvious, either. While the foundation of building wealth is in smart savings habits, there are numerous other steps to the process that can both expedite the process and boost your savings potential. So with that in mind, I’m sharing my five most unexpected steps to building wealth.

1. Stop Procrastinating

The longer you wait to start building wealth, the more you stand to lose. Procrastinating on your savings and wealth building plans only keeps you from taking advantage of compound interest. The more time you give yourself to collect interest and then collect interest off that interest, the faster and easier it will be for you to build wealth.

2. Be Open to Taking Risks

The bigger the risk, the greater the reward! While it certainly isn’t the right course of action for everyone, taking a financial risk every now and then can really give your wealth building strategy a boost. Of course, before you decide to invest in that volatile stock portfolio or help to back someone’s business idea, you need to make sure you’re in a place of relative financial stability and can afford the potential downside.

3. Uncover the Fun in Your Work

If you’re the type of person whose job is simply a means to justify an end, it can be difficult at times to really find the joy in your work. That lack of workplace happiness can make it hard to really succeed and could inhibit you from getting more work done or qualifying for a promotion. Try to discover something about your job that you really enjoy doing or, if possible, consider switching to a career path you think you’d enjoy more.

4. Nickel & Dime Yourself

Building wealth starts with saving more money, everybody knows that, but sometimes it can be difficult to find more ways to save. An easy and incredibly helpful way to put a little more away each month is to nickel and dime yourself. Round up all of your purchases and deposit the change into a savings account. You’ll be surprised at how much extra you’ve socked away at the end of the month.

5. Everything’s Negotiable

Whenever you look to make a big purchase (think cars or appliances) or renew a service (cable, phone, etc.) try to see how low the other side will go. You don’t even have to make yourself crazy trying to master the art of negotiation, just make a habit of asking for a lower price. Simply asking the question might just help you save hundreds (or even thousands!) of dollars on a purchase.

Warren Buffett didn’t become a billionaire overnight. When it comes to building wealth, a variety of factors come in to play, but none so important as patience. Providing you take your time, save consistently and stay on the lookout for more savings and investment opportunities, you’ll find yourself a wealthier person in no time.

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This article originally appeared on Credit.com.

This article by Leslie Tayne was distributed by the Personal Finance Syndication Network.

Foreclosures Hit an 18-Month High: Is Your State Struggling?

More than 45,000 homes in the U.S. were repossessed last month, up 50% from April 2014, marking the completion of the foreclosure process for thousands of homeowners. The spike in banks taking possession of housing units drove the U.S. residential foreclosure rate to an 18-month high, with one in every 1,049 housing units in some state of foreclosure in April, according to the latest foreclosure market report for real estate data company RealtyTrac.

RealtyTrac defines a foreclosure filing as a default notice, scheduled auction or bank repossession on a housing unit, so any home with at least one of these filings is included in foreclosure rates. The national foreclosure rate is up 3% from March and 9% from last April, which RealtyTrac attributes to the increase in repossessions, but the spike in repossessions in April is still 56% below its peak during the housing crisis. Repossessions increased in 33 states last month. Here are the states where bank repossessions are spiking.

10. Pennsylvania
Number of homes repossessed by banks (REOs): 1,855
Increase from March 2015: 47.81%
Increase from April 2014: 100.54%

Like in many other states, the Pennsylvania housing market experienced a decline in foreclosure starts (when a foreclosure filing is first made) in April, but it didn’t even out the significant increase in bank repossessions. Overall, one in every 1,064 Pennsylvania housing units is in foreclosure, which is up about 22% from the same time last year. Pennsylvania had the 16th-highest foreclosure rate of the 50 states and the District of Columbia.

9. Texas
Number of REOs: 1,854
Increase from March 2015: 6.25%
Increase from April 2014: 115.33%

Foreclosure starts increased slightly (about 2%) in Texas since last April, in addition to the REO increase, but the state maintains a pretty low foreclosure rate. One in every 1,952 housing units was in foreclosure in April, putting Texas at No. 34 on the ranking of state foreclosure rates.

8. Oregon
Number of REOs: 533
Increase from March 2015: 13.65%
Increase from April 2014: 119.34%

Oregon has a lower-than-average foreclosure rate but still comes in at 19th with one in every 1,228 homes in foreclosure — that’s a increase from last month and last year.

7. New York
Number of REOs: 1,120
Increase from March 2015: 13.48%
Increase from April 2014: 141.90%

In New York, one in every 1,436 housing units is in some state of foreclosure (ranked 22nd), and in April many more homes entered the foreclosure process than exited it. Foreclosure starts increased about 31% from April 2014 to 3,940, compared to the 1,120 REOs.

6. North Carolina
Number of REOs: 1,524
Increase from March 2015: 34.51%
Increase from April 2014: 176.59%

North Carolina is among a few states in which RealtyTrac has changed its data-collection process in the last several months, so the annual increase in repossessions may be lower than it seems, the report notes. Meanwhile, foreclosure starts are pretty consistent with where they were at this time last year. With one in every 1,182 units in foreclosure, North Carolina has the 18th-highest foreclosure rate in the country.

5. Michigan
Number of REOs: 2,906
Increase from March 2015: 82.31%
Increase from April 2014: 198.05%

Foreclosure starts are down nearly 10% from last year but Michigan still has a relatively high foreclosure rate, with one in every 994 units with a filing. It’s the 14th-highest foreclosure rate of any state.

4. Tennessee
Number of REOs: 1,315
Increase from March 2015: 37.41%
Increase from April 2014: 324.19%

Foreclosures are way up in Tennessee — at least, they’re higher than previously thought. RealtyTrac improved its data collection methods in Tennessee, which may have inflated the increase figures. With these adjustments, foreclosure starts increased 463% from April 2014, and the overall foreclosure rate increase 413% to one in every 647 units. Tennessee has the fifth-highest foreclosure rate.

3. Vermont
Number of REOs: 36
Increase from March 2015: 2.86%
Increase from April 2014: 350%

Repossessions may be up, but Vermont has an incredibly low foreclosure rate — in states with lower populations, a shift of just a few figures can result in huge percentage increases or decreases. One in every 6,590 housing units is in foreclosure, which is the sixth-lowest rate.

2. New Jersey
Number of REOs: 1,678
Increase from March 2015: 107.67%
Increase from April 2014: 375.35%

New Jersey has had a top-10 foreclosure rate for months, and April was no different. One in every 594 units is in foreclosure, and there were no data adjustments accompanying that 375% increase in repossessions. The state is working through a massive foreclosure inventory, as it has been for a long time since the mortgage crisis.

1. Montana
Number of REOs: 48
Increase from March 2015: 71.43%
Increase from April 2014: 500%

Despite its massive land area, Montana doesn’t have a huge population. There are only 64 homes in the state with a foreclosure filing, so the 500% increase in REOs doesn’t mean much. Montana has the fifth-lowest foreclosure rate: one in every 7,552 homes.

For homeowners, once the bank repossesses your home, the struggle that comes with foreclosure is in some ways only beginning. Losing your home can be just as (or more) damaging to your emotions as it is to your finances, but it won’t ruin your credit forever. With hard work and patience, working to rebuild your credit after such a massive setback, you may be able to own a home after you’ve gone through foreclosure. Try to focus on reducing your debts and making payments on time so you can help your credit score recover, and track your progress to make sure you’re on the right path. You can get a free credit report summary every 30 days on Credit.com to help you work toward your goals.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

5 Reasons You Can’t Retire Early

Whether it’s friends, family members, old co-workers or even acquaintances, it can be baffling to watch young people (maybe even younger than you!) enjoying retirement. In addition to wondering how they did it, this scenario can also leave us wondering what is holding us back from living the good life.

Since most of us won’t win the lottery or inherit billions, retiring early will likely take some careful planning. While you dream about your new life of traveling whenever you want, relaxing every day or taking more time for your hobby, it’s important to calculate how much you need to save for retirement and take a look at the financial choices you are currently making. If calling it quits (or working for yourself) before age 65 is a serious goal, it’s a good idea to make sure you are avoiding these roadblocks to early retirement.

1. Waiting to Save

Not saving for retirement is probably the No. 1 thing holding you back from retiring early. The sooner you want to leave the work force, the longer you will need your nest egg to last and the sooner you should get started. It’s a good idea to start early and continually increase your contributions to get to your goal. Making your contributions to various retirement saving options automatic can help stave off any temptation to spend this money now.

2. Not Taking Advantage of an Employer Match

If you are lucky enough to work somewhere that has a retirement plan with matching contributions, it’s important to make the most of it. This means putting at least enough money into the company 401(k) to get the full match. Otherwise, you are leaving free money on the table.

3. Carrying Debt

Student loans, mortgages, car payments, credit card debt — it seems there are a million obligations for your money. This may be holding you back from early retirement, since debt can cost you tens of thousands of dollars over the course of a lifetime. The best thing you can do for your financial health is make a plan and pay these debts down aggressively. If you need some extra motivation, crunch the numbers for how much you pay in interest over time versus the returns you could be earning in a retirement account or other investment. Then, once the debts are paid off, continue to aggressively put that money away — into a retirement account.

Also, keep in mind that your credit score can save you money by earning you lower interest rates on the debt you already carry. For example, if you improve your credit, you can refinance your home loan at a lower rate and save money that can then be put toward your early retirement goal. You can check your credit scores for free on Credit.com to see where you stand.

4. Ignoring the Budget

Making a carefully crafted budget is a great first step — but you have to stick to it. It’s important to make sure you are calculating your expenses (now and for the future) realistically. This includes housing costs, utilities, transportation, health care and food as well as whatever extras are important for you, whether it is vacations, eating out, car, home or clothing upgrades.

5. Forgetting About Taxes

When you are ready to take money out of a tax-advantaged account like 401(k) or traditional IRAs, your money will be subject to your regular income tax rate. If that seems obvious, don’t forget about early withdrawal penalty, where you pay 10% on money you take out before age 59½. It’s a good idea to consider and calculate your taxes before you leave your day job without enough money socked away.

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This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.

3 Financial Realities New Grads Have to Face

Go to college, study hard, get good grades, land a job and rake in the money. Sounds pretty simple, right?

Not so fast.

The truth is there are a number of financial realities new graduates have to face in order to be successful with their money.

If you’re thinking about attending college or are already in a program, prepare yourself for these realities now before you find yourself out of college and overwhelmed by your finances.

Here are some situations you might find yourself in after you step off that stage in your cap and gown.

1. The Necessity of Dealing With Student Loan Debt

The average student debt load is now nearly $30,000, according to a report from the Institute for College Access & Success. The report looks at the class of 2012: 71% of them had student loans and graduated with an average of $29,400 in debt.

This is quite a bit of debt – a financial reality of great proportions. And, with the majority of graduates finding themselves with student loan debt, this is a problem worth addressing. Oh, and not only is it a problem, it’s a problem that has become worse over time.

While it’s not reasonable to expect everyone to graduate without debt, it’s certainly worth encouraging them to try and avoid debt. In fact, it’s very possible to graduate from college with no debt, and there are a few ways to achieve that goal.

First, you may want to consider working through college. Perhaps you can get a part-time job while you’re in school to help cover the cost of tuition and books. This can work well if you’re still living with your parents during college when you have fewer expenses.

Second, apply for as many grants and scholarships as possible. You never know what you could get if you don’t apply.

Third, by joining the service — the National Guard, for example — you can earn benefits to help pay for your education. (I wonder how I know that?)

You can also mix and match these ideas to help pay for your college tuition.

College debt can hang over your head for years and years after graduation. Do you really want that weighing you down? Think about all the interest you’d pay on your student loans, not to mention the opportunity cost!

The opportunity cost of paying interest on debt is the value you would have received by putting that money into an investment. Not only would you be paying the interest, but you’d lose the ability to invest and make money off of that money.

However, there is some good news for those of you who are already graduating with student loan debt:

First, you might be able to get a high-paying job. That isn’t always easy, but it’s possible. And what can you do with all that newfound income? You guessed it — pay off your student loans!

Second, if you’re going to become a teacher, you might qualify for teacher loan forgiveness. You can see if you meet the requirements listed on StudentAid.Ed.Gov.

Third, some employers will pay off your student loans under certain conditions. The medical profession has been known to be especially generous in paying off student loans.

Student loans aren’t the only source of grief for many graduates. Sometimes finding a decent-paying job is just as frustrating.

2. The Difficulty of Finding a Decent-Paying Job

Let’s face it: Minimum wage jobs just aren’t cutting it these days.

The federal minimum wage is currently $7.25 per hour. Say you work 40 hours per week, 50 weeks out of the year. That means you’ll make $15,000 per year. According to the United States Department of Health and Human Services, if you have two people in your family unit, you would be below the poverty line at that wage.

But hey, that’s why you went to college, right? So you could get a decent-paying job?

Unfortunately, not everyone does so right after college. I know people (and you probably do, too) who graduated college and are making much less than they originally intended with the degree they now hold. Low-paying and minimum wage jobs aren’t robust enough to handle student loan debt. That’s a problem.

For many people, locating a decent-paying job means searching in some unlikely places. And the competition can be fierce.

The fact of the matter is that it takes time and effort to find a decent-paying job. Many college graduates aren’t prepared for this extra work of finding a good job after they graduate. Depending on their field of expertise, they may even need to become an entrepreneur and start their own company to find decent money.

So if you’ve recently graduated, invest the time necessary to find a job that can support you and your family. Don’t take the first measly job you come across. Set high expectations for yourself and your income.

This is one financial reality you can’t afford to overlook. Also, if you do have student loans you can’t afford, and subsequently fall behind on them, you could severely hurt your credit. (You can see how your student loans affect your credit by getting a free credit report summary on Credit.com.)

3. The Urgency to Start a Retirement Plan

Compound interest is a wonder. But you know what it needs? Time.

When you graduate from college and find your decent-paying job, it’s more important than ever to think about retirement. Why? Because compound interest needs time to grow.

Barbara Friedberg provides a simple chart that displays what would happen if the value of a penny doubled every day for a month. Guess what? On day 31, the doubling of the prior day’s funds equals over $10 million.

Granted, nobody can expect the stock market to have this kind of performance, but it does show the power of compounding interest.

Just in case you missed the point: start investing for retirement as soon as possible! You can make a lot more progress on your nest egg if you start early with time on your side.

Want another reason to start retirement investing early? Many employers are no longer offering generous pensions and are instead encouraging their employees to invest on their own. Even some 401(k)s don’t provide a healthy match! Unfortunately, many employers are more concerned about their bank accounts than their employees’ retirement plans.

That’s why you need to face the financial reality that you are in charge of your retirement. It depends on what you do and the sacrifices you make for the future.

By reducing or eliminating student debt, searching far and wide for a decent-paying job and investing early for retirement, you may be able to face these difficult realities with strength and confidence.

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This article originally appeared on Credit.com.

This article by Jeff Rose was distributed by the Personal Finance Syndication Network.

5 Credit Cards That Won’t Raise Your APR If You Pay Late

When children misbehave, their parents may resort to punishments like putting them in “time out” by having them stand in the corner. And that’s how many credit card users feel when they suddenly have a much higher penalty interest rate imposed due to failing to make a payment on time, slightly exceeding their credit limit or having a check returned.

But now, a major credit card issuer is ending penalty interest rates on one its most popular cards, joining a small but growing number of products that no longer seek to punish customers for what may just have been a single small mistake. Chase has just announced that its Slate cardholders will no longer be subject to penalty interest rates.

Chase’s Slate card has always been especially useful for cardholders who are trying to pay off debt, as it offers 15 months of 0% APR financing on both new purchases and balance transfers, and has been the only such offer for several years with no balance transfer fee (on transfers completed within 60 days of account opening). Slate cardholders receive a standard interest rate of 12.99% to 22.99% depending on their creditworthiness when they applied, which is a variable rate that can change with the prime rate. But starting immediately, for all new and existing cardholders, there will not be a penalty interest rate imposed.

So why the change to drop penalty interest rates? According to Rob Tacey, Chase’s vice president for public relations, “As with the recent addition of the credit score dashboard, we have made enhancements to Slate designed to help cardholders best manage their overall credit health.” Further, Chase cardholders can utilize its Blueprint program, which allows them to avoid interest on some charges by paying them in full, while carrying a balance on others. Blueprint also offers budgeting and goal-setting tools. There is no charge to use Blueprint, and no annual fee for this card.

1. Discover it. This card has never had a penalty interest rate. Currently, the Discover it card is offered in several versions including the it Chrome, it Miles and the new Discover it NHL card which features the logo of your favorite National Hockey League team. Other features common to all Discover it cards include a free monthly FICO score, 100% US based customer service, and cardholders first late payment fee waived. There are no annual fees for these cards.

2. PenFed Promise. PenFed stands for the Pentagon Federal Credit Union, which was created to provide financial services for members of several military, defense, and government organizations, as well as their families and household members. The PenFed Promise card offers a standard interest rate of 7.99% to 16.99% (variable), depending on the applicant’s creditworthiness, and no penalty interest rate. In addition, this card boasts having no annual fees, foreign transaction fees, cash advance fees or late fees.This card was even named the Best Simple Credit Card in America for its easy-to-understand fee structure. To apply, you must be a member of the credit union, which you can be eligible to join on the basis of your affiliation with one of many qualifying organizations, including some military support charities that require just a small fee to join.

3. Barclaycard Ring. This card allows customers to interact with the card issuer and help shape its terms and conditions. Community members propose new ideas and vote for ways to make the card better. In addition, cardholders can ask questions online directly to the three community managers. So not coincidentally, it also has a very simplified structure for its rates and fees. All cardholders receive a standard interest rate of 8% (not 7.99%), which applies to new purchases, balance transfers, and even cash advances, with no penalty interest rate. There is no annual fee for this card.

4. Citi Simplicity. Simplicity lives up to its name by offering no late fees and no penalty interest rates. But in addition, it also offers the longest promotional financing offer available — 21 months of 0% APR financing on both new purchases and balance transfers, with a 3% balance transfer fee. There is no annual fee for this card.

Whenever you plan to apply for a credit card, it’s good to know where your credit stands, since your credit score is a major factor in determining your interest rate. You can get copies of your free annual credit reports at AnnualCreditReport.com and you can check your credit scores for free on Credit.com to see where you stand.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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This article originally appeared on Credit.com.

This article by Jason Steele was distributed by the Personal Finance Syndication Network.

Could This Mortgage Innovation Help You Buy a Home?

Would you buy a home for a discounted price if you had to surrender much of the gains when you sold it someday? That’s the premise behind an innovative new housing strategy called “shared equity.”

It sounds a bit like a hybrid between buying and renting. Buyers who couldn’t otherwise be able to afford a home get a big discount — perhaps $100,000 off the market price — in exchange for giving up a large portion of potential equity gains in the future. The entity that sells the home — usually a nonprofit organization — keeps the rest of the profits, using them to fund other affordable purchases. By essentially capping gains, the model keeps prices affordable for entire neighborhoods, suggests a report issued recently by the Urban Institute called “Homeownership for a New Era.”

“Because such programs recycle subsidies over time, they can cost-effectively promote homeownership for low- and moderate-income homebuyers,” the report says. It examined nine ongoing shared-equity experiments occurring across America. All of them are small — the report covers only a few hundred purchasers. Still, it offers a glimpse into a new housing model that’s being considered across the globe.

“Shared equity programs provide homebuyers with a way of bridging the gap between what they are able to afford to pay in a mortgage and the actual market cost to own a property,” the report says. While models differ, “they all share the same goal of providing homeownership options to low- and middle-income communities with mechanisms in place to preserve the affordability of these homes over time.”

To be sure, shared equity is complex and requires a lot of explanation. Sales prices are tricky to set: They must balance median income on one side with median prices on the other. Set too high and they’ll still be unaffordable. Set too low, and they put the nonprofit at risk. Generally, prices are set at between 60-100% of area median income.

The resale price calculation can be even more complex. Some programs cap appreciation at 1.5-3% annually. Resellers are allowed to keep a portion of the change in appraised value, sometimes only 25%.

There are other drawbacks to the programs. Buyers have less incentive to invest in improvements to their properties, since their capital gains are capped. Some programs add formulas to account for that.

Shared equity applicants are often less-than-ideal buyers, though the Urban Institute says they are often older than the median U.S. homebuyer (36 rather than 31), with a median credit score of 720, which is generally considered to be in the “good” range. (You can check your credit scores for free on Credit.com.) And they have saved an average of $6,000 towards a down payment — another indication that this group might be able to buy in a “normal” housing market. The most common barrier tends to be lower income, though they often work in stable industries. (This calculator can show you how much home you can afford.)

Still, because of their non-traditional makeup, the loans often cannot be resold on secondary markets, meaning nonprofits must keep them on their own balance sheets, which slows growth of the programs.

Similar programs being attempted in the United Kingdom and Spain have had some success. In Spain, shared home ownership is being developed in an attempt to match an excess of housing stock built during the housing bubble with would-be buyers who still can’t afford the empty homes. A report in Fortune magazine recently threw a bit of cold water on those countries’ programs however, which banks on buyers slowly working their way from the discount purchase to full equity ownership. Most buyers don’t, one research project found, frustrating both buyer and private seller.

In the U.S. programs studied by the Urban Institute, nonprofits maintained ownership in the homes, making deed and price restrictions on the property much easier to swallow. The Institute concludes the new model, warts and all, is ripe for further study, as it appeals to a segment of would-be buyers that other low- and moderate-income purchase plans don’t — namely strong buyers who simply can’t afford homes in areas where prices far outstrip incomes.

“Shared equity homeownership provides opportunities to low-income homebuyers that market-rate homeownership and other housing assistant programs simply cannot,” it concludes.

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This article originally appeared on Credit.com.

This article by Bob Sullivan was distributed by the Personal Finance Syndication Network.

5 Identity Theft Facts That Will Terrify You

Identity theft was the number one consumer complaint at the Federal Trade Commission last year. So far in 2015, the data breach problem that drives so many identity-related crimes has gotten worse. The massive compromises at Anthem and Premera alone put a combined 91 million records in harm’s way.

With more information “out there” than we can possibly know, identity theft has become the third certainty in life, right behind death and taxes. And because so many major compromises include Social Security numbers — the skeleton key to not only your financial life, but also your health care and many other aspects of daily life—the damage can be life-changing.

The bottom line: Be afraid, be very afraid.

1. A Billion Records Leaked

According to IBM, more than one billion records containing personally identifiable information were leaked in 2014 alone. An identity thief only needs a few data points like the kind found in many data breaches to tap into your financial life.

2. There Is No Anonymity

Science Magazine reported that “anonymized meta data sets” containing product purchase information were re-identified with the people who made the purchases by looking at Instagram posts and tweets that matched the purchases.

You can do everything right and still get “got.” The fraudsters out there mining the veins of personal data for financial gain are good at what they do. However, if you assume you are going to get got and take some proactive steps – including monitoring your bank and credit accounts regularly for signs of fraud – in many cases you can have a head start when it actually happens. (Keeping a tight rein on your social media posts and making them private can also help give fraudsters less access to you.)

3. Your Medical History Can Be Compromised

With more than 2.32 million victims thus far — 500,000 last year alone — medical identity theft is a crime on the rise. It can cause medical histories to get changed, and benefits fraudulently used by others can bar a victim from getting medical treatments – making it a dangerous crime.

Unlike credit card fraud where liability is often zero, a recent study by the Medical Identity Theft Alliance found that more than 60% of medical fraud victims had to pay an average of $13,500 to resolve the crime.

Your best bet is to check every statement that comes in, and make sure the treatments listed on your Explanation of Benefits summaries sent out by your insurer match the care you’ve received.

4. Your Tax Refund Is Under Attack

Early in the 2015, Intuit, the company behind TurboTax, had to shut down e-filing in several states after the company noticed an uptick in what appeared to be fraudulent tax returns.

Tax-related identity theft is a big-money crime, and the statistics prove it. The IRS stopped 19 million suspicious tax returns last year, and stopped more than $63 billion in fraudulent refunds. A whopping $5.8 billion in tax refunds were paid out to fraudsters. In 2012, the Treasury Inspector General for Tax Administration projected that fraudsters would net $26 billion into 2017.

For now, your best defense is to file your taxes as early as possible to avoid falling victim to tax-related fraud.

5. Even Kids Are at Risk

It’s long been known that children in the foster care system were more likely to become the target of identity-related crimes. This was due to the fact that when children move in with a new foster family, their personally identifiable information moves with them.

A less well known fact is that more than 30% of identity theft victims are scammed by family and close friends of the family. The key in these crimes is of course access to the necessary data. No one knows this better than Axton Betz-Hamilton, whose mother defrauded the entire family — father, grandfather and herself — for almost 20 years.

There are services available that protect a child’s credit. It’s also a very nice graduation present to check your child’s credit, and make sure there isn’t a history there.

While it is impossible to avoid some of the fallout from identity theft after it’s detected, it’s not possible to prevent these crimes. If you detect fraud early, it can be contained. And if you follow the three Ms of identity theft management (note that I didn’t say prevention), you can at least have a little piece of mind during this historic crime spree. Minimize, Monitor and Manage. Check your bank and credit card statements every day online to look for fraudulent transactions. You can sign up for free transactional monitoring alerts from your bank, credit union or credit card company for help in this. Check your credit reports regularly – you can get them for free annually on AnnualCreditReport.com, and you can get a free credit report summary every month on Credit.com – to look for unauthorized accounts or changes in existing account balances. File your taxes early, and keep an eagle eye on your medical insurance benefits. Report any suspicious activity immediately to the respective institution so that you can try to minimize the damage.

Make yourself a harder target and know what to do when you become one anyway.

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This article originally appeared on Credit.com.

This article by Adam Levin was distributed by the Personal Finance Syndication Network.

Court Finds Defendants in FTC’s Treasure Your Success “Rachel Robocalls” Case Liable for $1.7 Million

Universal Processing Services (UPS) of Wisconsin, LLC, a payment processor, and telemarketer Hal E. Smith and his company HES Merchant Services Company, Inc. (HES), defendants in the Federal Trade Commission’s case against a deceptive robocall credit card interest rate reduction scheme, were jointly ordered to pay $1,734,972 to the Commission by a Florida district court. The money will be used to provide refunds to defrauded consumers.

 “The defendants blasted thousands of people with illegal robocalls and lied about helping relieve their credit card debt,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Now they’re out of the robocall business. The court’s decision also shows that it’s bad business for payment processors to help scammers take people’s money.”

The final orders announced today against UPS, which did business as Newtek Merchant Solutions, Smith, and HES follow the court’s November 2014 order granting the FTC’s motion for summary judgment against these three defendants who took part in the Treasure Your Success (TYS) scheme. The rest of the defendants had previously agreed to final orders settling the agency’s charges against them.

The court held Smith and HES liable for 11 violations of the FTC Act and the Commission’s Telemarketing Sales Rule (TSR), based on their participation in a deceptive telemarketing scheme purporting to be a credit card interest rate reduction service that used robocalls to solicit consumers. The defendants failed to disclose the identity of the person(s) responsible for placing the robocalls and unlawfully calling numbers that had been registered on the FTC’s Do Not Call Registry.

In February 2015, the court entered a permanent injunction against Smith and HES that includes 20-year bans on robocalls, telemarketing, and marketing debt relief products or services. It also permanently prohibits Smith and HES from making misrepresentations in the sale or marketing of any product or service, including financial products or services, and imposes the $1.7 million judgment.

The court also found UPS liable for “assisting and facilitating” the TSR violations of the other defendants by providing the interface with the banks to handle credit card payments while knowing (or avoiding knowing) of the underlying TSR violations. Among other things, the court found that UPS had ignored numerous red flags that, if properly investigated, would have led UPS to decline TYS as a client. The court imposed the same $1.7 judgment million against UPS.

After the summary judgment ruling, UPS agreed to a settlement permanently barring the company from processing payments for clients whom it knows or should have known: 1) fall into certain categories that have received close industry attention, such as debt relief services; 2) make misrepresentations to consumers; 3) charge consumers without their authorization; and 4) otherwise violate the FTC Act or the TSR. It also requires UPS to put screening and monitoring provisions in place for use when accepting future clients.

The Commission vote approving the proposed stipulated final order against UPS was 5-0. The proposed stipulated final order was entered by the U.S. District Court for the Middle District of Florida, Orlando Division, and has now been signed by the judge.

The following defendants previously agreed to stipulated final orders settling the FTC’s charges against them:

  • On September 23, 2013, a permanent injunction against defendants Willy Plancher; Valbona Toska, WV Universal Management, LLC; Global Financial Assist, LLC; and Leading Production, LLC banning them from robocalling, telemarketing, and marketing debt relief products or services;
  • On October 6, 2014, a permanent injunction against Ramon Sanchez-Ortega  barring him from robocalling and telemarketing;
  • On November 19, 2014, a permanent injunction and $25,000 financial judgment against Derek Depuydt, UPS’s former president prohibiting him from acting as a payment processor, independent sales organization, or a sales agent for high-risk clients; and
  • Also on November 19, 2014, a permanent injunction against Jonathon E. Warren; Business First Solutions, Inc.; and Voiceonyx Corp. barring them from robocalling, telemarketing, and marketing debt relief products or services.

NOTE: Stipulated final orders have the force of law when approved and signed by the district court judge.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.