The Two Most Important Words for Fraud Victims: Zero Liability

When someone steals from you, there’s very little to be happy about. First of all, it’s a stressful situation. On top of that, you have to worry about the value of what you’ve lost, and if your stolen possessions include something like a credit card, cellphone or personally identifying information (PII), you have to be concerned about how much more this thief could cost you. In these situations, these two words might be your best friends: zero liability.

In some cases, consumers may not be liable for any fraudulent activity committed in their name, but consumer protections vary by type of product and the company you got it from. Whenever you realize you’ve become a victim of fraud, act quickly to put a stop to the activity and find out what you’re legally responsible for.

There are different consumer protections for credit cards and debit cards, because they fall under different laws. With credit cards, you can only be liable for up to $50 of unauthorized transactions, but if the card wasn’t present at the time of the transaction (i.e. someone stole your data but not your physical card), you aren’t liable for any of it.

Some credit cards offer zero liability, no matter the circumstances. It’s something to look into when you’re considering getting a new card. Many card issuers have started offering zero liability, but to be sure, you should look at your credit card agreement, says Jonathan G. Stein, a consumer law attorney in California, who works with people on a variety of fraud, debt and identity theft issues.

“I always say, ‘What’s your credit card agreement say?’ and 99.9% of the time, they say, ‘What credit card agreement?’ These days, most people are applying for cards online, and they don’t take the time to read through all the fine print,” Stein says.

Stein says he often sees banks treating credit and debit card fraud the same, even though the consumer protections differ. With debit cards, typically you must report the stolen card within two business days, otherwise your liability could exceed $50. If your statement shows unauthorized purchases, even though your card isn’t missing, and you don’t report them within 60 days of the statement date, you could be liable for all of the transactions.

Stein suggests filing a police report in the event of any unauthorized use of your personal information — including loan fraud and card theft — in addition to notifying the financial institution. Even if your contract with the bank or card issuer says you’re liable for some fraudulent transactions, it doesn’t hurt to try negotiating.

“Generally they (agreements) are set in stone, but banks are willing to waive them for good customers, or if you can convince them there’s a good reason they should,” Stein says.

It’s also important to check your credit reports regularly for signs of fraud — such as new accounts you didn’t apply for, or unexpected higher balances reported on existing accounts. You’re entitled to free credit reports once a year from each of the three major credit reporting agencies. You can also get a free credit report summary from Credit.com, updated monthly, to look for important changes.

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This article originally appeared on Credit.com.

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


6 Mistakes You Make When You Check Your Credit

You may know that if you apply for a credit card, loan, a place to live or perhaps a job, there will be a credit check. But do you know what someone reviewing your credit will find? You can have at least an idea of the answer if you check your own credit first. Doing so won’t affect your credit scores, so that’s not a worry. Still, there are some common mistakes consumers make when they check their credit.

You have the right to one free credit report every year from each of the three major credit reporting agencies. Some people choose to look at all three of them at once; others choose a different one to review every four months. And though federal law doesn’t yet give you a right to see your credit scores (which are derived from information in your credit reports) for free, there are plenty of free ways to do so. Some credit card issuers put your score on your statement or give you access to it online. You can also find free scores online (you can get two of your credit scores for free on Credit.com, updated monthly, with personalized suggestions for improving yours).

So the biggest possible mistake is failing to check your credit at all. But assuming that you do, here are some missteps that could leave you with that “woulda, coulda, shoulda” feeling of regret.

1. Not keeping a credit report copy (in a safe place).

Whether you save a printout of your credit report or keep the information on your laptop (ideally in a password-protected file), if something changes, or you think something is different from what you remember, it’s nice to have past information for comparison. And if you need to dispute something, you’ll be glad you have the copy.

2. Not checking your report with all three bureaus.

Not all creditors report to all three agencies, and the agencies don’t share information. Inaccuracies can creep in, including information that should have aged off and has not, errors introduced by mistyping or same-name mix-ups. If you find an error on one, it’s smart to check the other two to make sure it gets cleared up everywhere it appeared.

3. Not getting the same score every time.

Your credit reports contain the information on which your credit scores are based. But while you have one credit report with each bureau, that data can be used to create hundreds of different credit scores. All credit scores are three-digit numbers that strongly influence whether you’ll be extended credit and on what terms, but that’s where the similarities end. Scoring models can be specific to a certain industry — credit card, mortgage or car loan, for example — and scores can vary, depending on which credit reporting agency was the source of the data. If you are trying to track changes in your credit, comparing anything other than the same scoring model from time to time isn’t very useful.

4. Not looking at the scale on which your score is measured.

Scores are not all measured on the same scale. So a score that is “excellent” on one scale may be merely “good” on another. (Yes, that even goes for FICO scores; the FICO NextGen Score, for example, has a range of 150 to 950, while most FICO score models run from 300 to 850.) So the number doesn’t mean so much without context.

5. Paying when you haven’t used your free reports already that year.

You are entitled to three free credit reports every year (and in some situations or some states, even more). There are times that it makes sense to pay for an additional one. For example, say you plan to make a big purchase and you disputed an item that was likely bringing your credit score down and you want to make sure the report is now correct — it might be worth it to pay for an extra one. However, it’s ideal to make sure you get your free reports before you pay for any further copies.

6. Getting obsessed with tiny changes.

It’s rare for a credit score to stay exactly the same from month to month. Scores fluctuate, and you want to focus on trends, not moves of a few points up or down.

The good news is if you are reviewing your credit reports on an annual basis and checking your credit scores each month, you are already avoiding the biggest mistake — not having a clear idea of where you stand. Doing so will also alert you to changes that could suggest identity theft, which would allow you to limit the damage and get it resolved quickly.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


5 Ways the IRS Scammers Could Have Stolen All Those Tax Returns

Last week, the Internal Revenue Service revealed that a group of organized criminals effectively walked through their front door and used an application on its “Get Transcript” site to pore over the past tax returns of more than 100,000 Americans. According to several news reports, the stolen information was deployed to commit tax fraud, with an estimated take of up to $50 million in bogus tax refunds before the IRS discovered the ploy.

“We’re confident that these are not amateurs,” John Koskinen, the IRS commissioner, told the New York Times. “These actually are organized crime syndicates that not only we but everybody in the financial industry are dealing with.”

But if I may be so bold, isn’t the IRS supposed to be better at this? It is, after all, the chief tax collector for the U.S. government, for Heaven’s sake. It’s frustrating that the government isn’t better, but it’s not terribly shocking that scammers got through, considering the well-practiced foe the agency is facing.

Unless you’ve been sleeping off a fairytale curse, it should not create cognitive dissonance that organized criminal syndicates committing information-based crimes are on the rise. There are myriad reasons for this, and more than a few involve bad habits at the consumer level, but the overarching reason this particular crime wave keeps growing is simple: opportunity. Data security sadly lags behind both innovation and the hordes of increasingly sophisticated criminals who are hell-bent on exploiting human error and other weaknesses in the way personally identifiable information (PII) is collected and stored. Our digital lives are like so many undiscovered pharaohs’ tombs — wildly valuable and poorly protected — waiting to be discovered.

The millions in tax refunds stolen (or yet to be stolen) by the “Get Transcript” scammers was almost certainly made possible by the ready availability of stolen personal data. Sure it was a brazen heist, but it was also a simple one. The criminals drilled through a multiple-factor authentication process that included a taxpayer’s Social Security number (SSN), date of birth and street address (not to mention a host of “out of wallet” questions like “What was your high school mascot?”) — information that can be had from a variety of sources. Here are just a few of the ways the masterminds behind the IRS hack could have gotten the information they needed to walk through the U.S. government’s front door.

1. Buying PII on the Dark Web

The Dark Web may sound like something straight out of a Marvel comic book, but it is very real. While it may not be as big as lore would suggest, and it is to a distressing extent populated with sexual content that is both illegal and an affront to our collective humanity, it also hosts the black markets where criminals buy and sell PII. Ever wonder where all those email addresses, SSNs, phone numbers, ZIP codes, and credit card numbers in the over one billion files that have been compromised end up? It’s a good bet you won’t find them in the magic trunk of the Identity Fairy, but you can find that information on the Dark Web.

2. Social Engineering

Whether you call it social engineering, wetware or the human element, we are often the cause of our own demise — but it doesn’t have to rise to the level of a Shakespearean tragedy. Phishing, spearphishing, vishing (phone-based phishing), smishing (text-based phishing) are different tactics to get consumers to part with their PII. The bottom line here is that if someone asks for your information, make sure you know who’s doing the asking. If you receive a phone call from a company with which you do business, hang up and call them back. Ditto with a cold call from a company or government entity you either think you know or don’t know.

3. Building a Dossier

While identity thieves may buy your information on the Dark Web and start cobbling together a file on you, they can do it more simply by data-scraping the social networking sites that you use. In the same way advertisers use data purchased from Facebook and other social media sites to find male cat owners who only buy organic products, hackers can find out enough about you to answer security questions in the authentication process of many websites and companies with which you do business.

4. Hacking

Why buy the info you need on the Dark Web when some hackers offer it up for free? While some hackers are inspired by profits, others are driven by the desire to publicly shame and embarrass companies by getting access to sensitive information then posting it for the world to see.

Hacked information is a treasure trove for the kind of approach used in the IRS heist. And there is an abundance of free hacked data out there, especially after the recent hack of the country’s second largest health insurer, Anthem, which exposed 78.8 million people, or the breach at Premera Blue Cross, which exposed 11 million people — or the attacks on Target, Home Depot and countless other compromised companies and organizations in recent years.

5. Insiders

This is probably the hardest tactic to defend against: a bad player with access to sensitive information. Employees aren’t always honest, or at the very least not at all immune to making mistakes. Those who are in a moment of personal crisis, for example, can be extorted or bribed to hand over information or leave a room with files open and unsecured for a predetermined half hour.

According to anonymous sources cited by the Associated Press, the “Get Transcript” scammers were located in Russia, but unfortunately in our connected world it matters less and less where any particular crime originates. In a significant number of cases, hackers operate beyond our jurisdiction or under the protection of foreign governments with little incentive to cooperate with us. Ultimately, what matters here is that 100,000 taxpayers had their sensitive data stolen and are now at risk for other crimes, and that millions of our tax dollars went walkabout.

Whether data compromises give rise to breaking news stories or pounding headaches, anything less than a zero-tolerance attitude toward identity-related crimes won’t get us to the place we need to be. It may be true at this moment that there is no way to stop the flow of ill-gotten gains nabbed by criminals in possession of our PII — but the first step is adopting a “no compromise is acceptable” rule, and holding organizations to that standard.

What Can You Do?

As for consumers – now that their data is out there, there’s no telling how it could be further used against them. While it’s impossible to stop every form of identity fraud once your data is in the hands of a criminal, the best thing you can do is monitor for problems and work to contain and repair the damage as soon as you detect it. In terms of your finances, keep an eye on your financial accounts – daily. And check your credit reports at least once a year – you can get them for free on AnnualCreditReport.com – and consider using free monitoring tools that are out there (like Credit.com’s free credit report summary, which updates your info monthly), or any of the number of reputable paid services.

But it’s clear as ever: The focus now must be on stanching the seemingly universal information hemorrhage that’s underway, and denying Cyber Cossacks a piece of our PII.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

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This article originally appeared on Credit.com.

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


Deceptive Mailer Spoofs Department of Treasury for Debt Relief

An amazing reader sent in a new debt relief mailer through my I Buy Junk Mail program.

This one is rather alarming. I doubt the average person would see through what I think is a smoke screen to understand what just landed in their mailbox.

From outside appearances the letter looks like some sort of legal documentation, maybe governmental with the use of the big eagle.

The envelope is even markered Legal and Documentation.

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But the inside of the letter is a doozie in my opinion.

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The letter leads off with a headline that if people didn’t understand or miss the “RE:” would make it appear to be from the Department of the Treasury. As with many of these mailers that I write about, there is just enough to appear to be one thing but a disclaimer it is something else.

And I challenge anyone to determine who the company is behind this mailer. They identify themselves as Assistance Center, can there be anything more generic?

This line sure seems misleading, “This letter is to advise you that, Pursuant to the Department of the Treasury Publication 4681, the IRS is now permitting tax-free credit card debt forgiveness for borrowers who are experiencing a hardship and deemed insolvent.”

This is an IRS process that has been around for years. You can read the official IRS page on this, here.

The next underlined section is both a disclaimer and telling:

“It is important to note that Assistance Center is not a government or collection agency; this is not an attempt to collect a debt. The Assistance Center does not charge a fee for its initial consultation.”

Well there might not be a fee of the initial consultation but they don’t say there are no fees at all. To me that means there will be fees.

Next is an odd line, “You do not need to be late to qualify for this hardship program, however late payments will expedite the qualification process.” What hardship program are we talking about? If it is the IRS publication 4681, it does not say a qualification for income tax on forgiven debt is predicated on delinquency. So is the ever generic Assistance Center calling their pitch a hardship program?

The benefit section of the mailer reads like the typical debt settlement sales pitch and it proclaims the following benefits:

  • An Immediate Reduction of Payments
  • A Reduction of your overall Debt of up to 68% or more
  • Complete Elimination of Your Credit Card Debt
  • Finally put a Stop to Collection Calls and Letters with Debt Satisfaction
  • Get This Debt Paid Off and Restore Your Credit Rating

Wow! So much alleged bullshit here. Let’s go over it point by point:

  • An Immediate Reduction of Payments – But this is typically accomplished by the commissioned sales rep of such marketing outfits asking what you can pay and then setting that as your payment. It is NOT a creditor approved reduction and generally tosses you into delinquency, collections, and potential lawsuits when you pay less than agreed to the creditor. And is the creditor even going to get paid? In most generic settlement program they will stop getting payments so the debt can be attempted to be settled.
  • A Reduction of your overall Debt of up to 68% or more – There is no support to this statement and the Federal Trade Commission really frowns on this sort of claim. See this action against DebtPro 123 by the FTC over similar claims.
  • Complete Elimination of Your Credit Card Debt – Again, this seems like a problematic statement that conflicts with the Telemarketing Sales Rule and limitations it makes on performance claims. For example, how many people who signed up for this program actually eliminated 100% of their debts. Actual performance results of such programs in general paint a much different picture. Click here to see overall results.
  • Finally put a Stop to Collection Calls and Letters with Debt Satisfaction – I think this might be my favorite line of all because guess what, collection calls stop for everyone when the debt is satisfied.
  • Get This Debt Paid Off and Restore Your Credit Rating – Wow! this mailer just landed in a nasty place. It sounds like it has now run into trouble with the Credit Repair Organizations Act (CROA) as the courts just recently ruled in another similar situation. Read this recent article

The following statement in the advertisement is interesting. Earlier the letter said you did not need to be late to qualify for the “hardship program” but here it says you need to call immediately “to avoid any possible legal action from your creditors.” What legal action is a creditor going to take against someone who is current on their bills? The answer would be none.

In closing they say, “You need, and will receive, the full support of our organization to put this behind you for good.” Only one problem with that. If they are so proud and supportive then why not actually disclose who they are and where they are located?

I would advise anyone who gets such a letter to follow my free guide on how to check out a debt relief company. See The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line before you leap. An open and honest company won’t hesitate to answer the questions in that guide.

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


A 5-Minute Guide to Student Loans

You may have heard that college in this country isn’t cheap. Maybe you’ve even encountered this firsthand for yourself, a child or another family member. But knowing that getting a degree is going to be expensive doesn’t mean you know how to pay for it. When you are a student or even parent of a student starting the college search, it’s a good idea to calculate how much you will have to pay in student loans.

The sooner you know what you are getting into, the better decision you will be equipped to make when it comes to which school to go to, which loan to pick and which repayment method to employ. But who has time to research all the different types of loans you can get? Check out the following student loan options and learn the subtle differences that can make a not-so-subtle difference in your final price tag.

Stafford

This primary federal student loan option offers a low origination fee and the same interest rate across the board. That’s right, every student who receives a Stafford loan in the same academic year pays the same rate. However, there are two types: subsidized and unsubsidized. The former is available only to those who qualify for financial need. If you are not able to get subsidized loans, you can get unsubsidized Stafford loans that also have the low interest rate, but the government doesn’t fund any interest payments so interest accrues while you are in school. There are ceilings for both options.

PLUS

These loans are for graduate and professional students, but have a higher interest rate and origination fee than the Stafford loans. They also require a credit check. There is no specific limit for the loan, but the Department of Education says the maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid received. Parents of undergraduate students can also use PLUS loans to help pay for their child’s education.

Perkins

These are another form of low-interest federal loans, but they are offered straight from your college or university. The ceilings vary depending on graduate or undergraduate status and the school itself. It is important to note that not all schools participate in the program and the loans are only extended to students who qualify for financial aid. There are ways to get help paying back Perkins loans as well.

Private

While they generally offer less favorable terms, private loans can help secure any remaining funding you may need after exhausting all the federal loan options. Lenders offer varying rates, often higher than 10%. Your credit score will affect your ability to qualify for private student loans, as well as the interest rates. You may have to start monthly payments even as you are in school, as not all lenders offer deferment. You can check your credit scores for free on Credit.com to see where you stand before you apply.

Repayment

Just as there are different loan options, there are also different plans for paying the loans back to your lender. You can repay as scheduled, where possible. This means that you pay your bill every month until the balance is gone. You can also consolidate all your federal loans and qualify for extended repayment, which stretches out the term up to 30 years. However, this does mean you pay more in interest over time.

With federal loans, you can also consider income-based repayment where you pay back your loans based on how much you make instead of how much you owe. Repayment formulas vary.

Student loans can be a real drag especially during your first few years in the workforce, but the investment in your education can pay off big time in social, emotional and even future financial well-being.

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This article originally appeared on Credit.com.

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


The 20 Hottest Real Estate Markets in America

Spring is generally regarded as the most popular time of year to buy a house, but with that comes a bit of a buyer’s problem: competition. Home prices were up and inventory was down in May from last year, according to a monthly analysis from Realtor.com. Meanwhile, property listings turned over at a much higher rate, contributing to the high-pressure situation that is finding and purchasing the right home.

Many of the places with the hottest markets in May will come as no surprise to consumers — most are in California. Realtor.com determines “hot” markets based on two factors: the median inventory age in the market and the number of views per listing on Realtor.com, and the 20 hottest markets rank in the top 50 in both metrics. Nationwide, a home is on the market for a median 66 days, and in the hottest markets, inventory turns over 8 to 45 days more quickly than in the rest of the country.

Based on data from the first three weeks of May, Realtor.com determined the 20 metropolitan statistical areas (MSAs, as determined by the U.S. Census Bureau) with the hottest markets this spring.

20. Stockton/Lodi, Calif.
April 2015 rank: 38

19. Columbus, Ohio
April 2015 rank: 22

18. Manchester/Nashua, N.H.
April 2015 rank: 31

17. Oxnard/Thousand Oaks/Ventura, Calif.
April 2015 rank: 13

16. Austin/Round Rock, Texas
April 2015 rank: 14

15. Los Angeles/Long Beach/Anaheim, Calif.
April 2015 rank: 15

14. Fargo, N.D./Minn.
April 2015 rank: 12

13. Boulder, Colo.
April 2015 rank: 17

12. Sacramento/Roseville/Arden-Arcade, Calif.
April 2015 rank: 21

11. San Diego/Carlsbad, Calif.
April 2015 rank: 10

10. Detroit/Warren/Dearborn, Mich.
April 2015 rank: 11

9. Ann Arbor, Mich.
April 2015 rank: 9

8. Santa Rosa, Calif.
April 2015 rank: 7

7. Santa Cruz/Watsonville, Calif.
April 2015 rank: 8

6. Boston/Cambridge/Newton, Mass.
April 2015 rank: 6

5. Vallejo/Fairfield, Calif.
April 2015 rank: 5

4. Dallas/Fort Worth/Arlington, Texas
April 2015 rank: 4

3. San Jose/Sunnyvale/Santa Clara, Calif.
April 2015 rank: 3

2. San Francisco/Oakland/Hayward, Calif.
April 2015 rank: 2

1. Denver/Aurora/Lakewood, Colo.
April 2015 rank: 1

These markets have seen tremendous demand and turnover for a variety of reasons. In many of the California locales, economic growth, combined with limited supply and high demand, make homebuying a bit of a mad dash. For places like Detroit and Ann Arbor, the hot market is driven mostly by affordability, in conjunction with economic recovery.

No matter where you’re looking for a home, it’s good to know what you’ll face in terms of competition, so you can better prepare yourself to make an offer when you find a desirable property. Before any of that, it’s crucial you work to improve your credit to the best of your ability and make sure it’s in good shape before house-hunting or applying for a mortgage. The better your credit, the more options you’re likely to have, even in a competitive market. You can check your credit scores for free on Credit.com.

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This article originally appeared on Credit.com.

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


The Gender Gap You Haven’t Heard Of

While many Americans are ill-prepared for a financial disaster, women are far worse off than men, according to a new study by BMO Harris Premier Services. The financial services firm says that men with any emergency savings have an average of $58,061 put away to deal with the situation, compared with only $33,558 for women.

In other words, women have roughly half the emergency savings of men. Let that sink in for a moment.

The “rainy day” fund story is a broken record. Depending on how you count, something like one-third to one-half of all Americans have no savings, and are one paycheck away from piling up credit card bills and heading toward the financial abyss. But the gender gap in savings puts a new face on problem, and hopefully rings some new alarm bells.

I’ve written nearly 100 stories as part of The Restless Project so far, and read thousands of emails from readers. Perhaps the most poignant came from an older, single woman who took me to school about the real problems that keep people up at night.

“How do single people, people who do not have access to another paycheck, survive at all? Half the country is divorced. Millions are older and alone. Tons of people are childless on purpose because they couldn’t afford to have any,” she wrote to me. “If you don’t work for a major company, benefits depend upon the kindness of strangers. It is an unpleasant poverty-stricken future that I face. I will NEVER be able to retire. I will have to work until the day I die in order to survive…. just survive….   and women of age cannot get other high-paying employment because of their age. Double bind, no exit…. Just the ultimate one, and doing so on the job.”

Gender-based income and savings stories are fraught with statistical peril, which I’ll try to tiptoe through here. But when looking through other available data I could find about women and savings, this seems undeniable: The financial position of many women in America is shamefully fragile.

What Research Shows

First, back to the BMO Harris “rainy day fund” study. The firm conducted an online survey of 3,000 Americans and asked how much money consumers had available in an emergency. The amounts that consumers self-reported — which is always a hazard — could have included retirement accounts, though the way the question was asked, it’s possible some consumers didn’t include 401(k) balances, etc., when answering the question. Also, the figure is an average, which means the amounts could be skewed by very large or very small entries. So I went looking for other data to round out the picture.

Neighbor Works America released an emergency fund survey on March 31, and it found that 34% of adults in America — more than 72 million people — said that they don’t have any emergency savings. The figure had grown in the past year, despite the improving economy. And 47% said they’d burn through their emergency savings fund in 90 days or less.

The report broke out data showing that low-income and minority Americans were less likely to have savings, but was silent on gender. Neighbor Works was kind enough to dig up gender data from its study for me, but it was inconclusive. Women and men reported having any emergency fund at about the same rate, and women were only slightly more likely to say they have little confidence they could withstand a financial emergency (35% to 31%).

That doesn’t contradict the BMO Harris findings, however, because it makes no mention of dollar amounts.

And Neighbor Works’ Douglas Robinson offered a logical explanation for the dollar gap.

“While a great many women have been in the workforce since they became adults, their workforce participation rate still lags men, and is often interrupted,” he said. “That would mean that their matched 401(k) would be reduced.”

Other research suggests that’s true. CNBC.com, in an excellent story on women’s readiness for retirement, hit this point on the head: “American women age 55 to 64 with retirement savings have accumulated an average of $81,300 compared with $118,400 for their male counterparts,” according to a Black Rock survey. The story cites similar reserch on “retirement readiness” by the Employee Benefit Research Institute that claims single baby boomer women have a savings shortfall of nearly $63,000, compared to single males, who have a deficit of $34,000.

… And Women Appear to Be Better Savers

What makes this savings gap more painful is that there is some data to suggest women are actually better savers than men. Fidelity looked at its 401(k) accounts last year and found that women in lower-income tiers put considerably more into their retirement funds than men.

“Women earning between $20,000 and $40,000, for example, have saved an average of $17,300 in their 401(k), as of the year ended Sept. 30, 2014. Men in that income range have an average of $15,200 in their account,” reports Bloomberg, in its story about the study.

Critically, retirement savings and emergency savings are not the same thing, though they can end up smashed together in surveys and in consumers’ minds. For younger people, having an emergency fund can be much more important, despite the reality that our our tax code heavily favors retirement savings (actually, our tax code does NOTHING for emergency savings, which is a travesty).

For young adults, there can be understandable reasons to postpone retirement savings — after all, it’s hard to worry about the future when the present is challenging (though it’s unwise, mathematically). But failing to have a personal safety net is a much greater menace. You can’t stand up to an unfair boss when you fear losing your home. You might even be afraid to job hunt. You don’t go to the doctor when you are afraid one medical bill could send you to ruin. Most important, you don’t sleep very well at night when you can’t see even two or three months into the future.

Back once more to the Harris report. The average emergency savings for all Americans, male or female, was $46,000. That’s barely enough to handle a single medical emergency, so there is no gender war over these results. Many Americans’ live far too close to the edge right now, and have been for some time.

But my Restless Project correspondent called my attention to a group she felt wasn’t getting enough attention: “the working poor who cannot get a fair deal….. single women and single women of age.” And she’s right. The numbers, rough as they might be, tell a story that can’t be ignored — women have about half the emergency savings that men do, and that’s an emergency we must deal with now.

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This article originally appeared on Credit.com.

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


I Can’t Afford My Car Lease Anymore. What Do I Do?

Larry’s car lease payment is killing his budget. His monthly payment on the four-year lease for his Hyundai Santa Fe is $725.49. It’s too high, and he wants to know what his options are.

An increasing number of consumers are choosing to lease their vehicles; leased vehicles accounted for 31.4% of all vehicles financed in the first quarter of 2015, according to new data from Experian Automotive. Whether it’s for financial reasons or due to lifestyle changes, though, consumers sometimes find they need to get out of a car or truck lease early.

Here are six options if you find yourself in that situation.

1. Terminate & Pay Off the Lease

Every lease will spell out details for terminating the lease in the fine print — lots of fine print. “It’s complicated,” says Ohio consumer law attorney Barbara Quinn Smith. “The earlier you terminate the more you are going to pay,” she says. And chances are, if Larry had the kind of cash that will be required to get out of the lease he probably wouldn’t have gotten into this situation in the first place.

While terminating a lease early may be an option in the case of a lifestyle change (such as a move to a new city where you can take public transportation), it’s probably not feasible if you’re having financial difficulties, unless you have good credit and can get an unsecured personal loan to cover the difference.

2. Roll Over the Lease Into a New One

Consumers who need to get out of their leases are sometimes able to “roll over” the balance into a new lease or loan. But it’s risky. New cars typically depreciate when you drive off the lot, and if you roll a balance into a new loan or lease, you’ll be even more underwater.

In fact, that’s what tripped up Larry. He rolled $10,000 in negative equity from his previous vehicle into this lease, leaving him with a high monthly payment relative to the type of vehicle he leased.

If you are considering this strategy, try to find a vehicle with monthly lease payments you can afford, even if it’s not your preferred make and model. And be realistic: you aren’t likely to be able to do this again. If you can’t afford the new lease payments, consider another option.

3. Find a Buyer for Your Lease

You may be able to find someone willing to take over the remainder of your lease payments, allowing you to exit gracefully without damage to your credit.

“Most leases are fully transferable,” says Scot Hall, EVP of operations for Swapalease.com. Consumers who assume leases often find these deals attractive for a variety of reasons, including the fact that the original buyer has already made a downpayment so the person assuming the lease usually doesn’t have to, and there may be a short time period remaining on the lease so it doesn’t require a long-term commitment.

If you go this route, you’ll have to find someone to take over the lease (sites like SwapALease.com and LeaseTrader.com can help there) and negotiate a deal. Then you’ll want to run it officially through the leasing company, which will check credit of the new lessee before approving it. Although the average credit score for those obtaining vehicle leases in the first quarter of 2015 was 718 according to Experian Automotive, you’ll likely need a credit score of 680 or above to qualify, says Hall. If the deal is approved by the leasing company, paperwork will be signed and the new lessee will take over all the responsibilities of the remaining lease.

Avoid a “handshake” or “under the table,” deal if you go this route. Not only can it create problems for you if the person driving the vehicle doesn’t make the lease payments, but if the vehicle is involved in an accident or traffic violation, you could be on the hook.

Unfortunately, in Larry’s case, Hyundai is one of the few companies that has restrictions on lease transfers, says Hall. So this option could prove challenging, even if he finds someone willing to take it over.

4. Give It Back

Leased vehicles can be repossessed. Giving back a vehicle without formally terminating the lease is considered a voluntary repossession. Both voluntary and involuntary repos usually appear on credit reports and will hurt credit scores. There’s a bigger issue though: there may be a deficiency (unpaid balance) and the consumer may wind up with a balance in collections, or worse yet, be sued. Do not assume that once you turn in the keys, you’re done.

5. Ask for Help

Before giving back the vehicle, Quinn Smith recommends Larry call the leasing company and see if he can’t work out more affordable terms.

The lessor isn’t required to modify the lease, of course, but if they do it will be cheaper for them than repossessing the vehicle, and they may get more than they would if the lease was included in bankruptcy. In this situation, the lessee needs to be prepared to document the hardship, and it will likely take patience and persistence.

Hall agrees contacting Hyundai is the logical next step in this situation, though he suggests he “provide a detailed account of the reasons why (he) needs out of the lease.”

6. File for Bankruptcy

Bankruptcy may also be worth looking into if you are worried about being stuck with a large debt for a vehicle you no longer have. “In bankruptcy, the car can be surrendered. In a Chapter 7, any amounts owed that exceed the value of the car will be discharged,” says Quinn Smith. “In a Chapter 13 (for those whose income is too high to qualify for Chapter 7), any unsecured amounts are added to the debtor’s payment plan. The lessor may be paid in full or part, or not at all, depending on the terms of the plan.”

If you are concerned that you’re not going to be able to continue with your lease, start exploring your options as soon as possible. Get your free credit reports and credit scores (you can get two of your credit scores for free every month from Credit.com), so you’ll know where you stand and so you’ll have a clear picture of your debts and payments. You can also get free annual credit reports at AnnualCreditReport.com. You’ll have more time and be able to make a better decision if you’re not falling behind and worried the vehicle will be repo’d at any moment.

And by the way, while a $725/month vehicle lease payment is higher than the average of $405 (in the first quarter of 2015, according to Experian Automotive ), it’s far from a record.

According to Swapalease.com, the most expensive monthly lease payment they’ve seen someone assume after being matched with a buyer via their site was for a Ferrari 599 GTB Fiorano. The monthly payment was $6,057.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


Can You Get a New Social Security Number?

Let’s say your identity was stolen and the identity thief opened up dozens of fraudulent accounts, causing you tons of grief and taking months (or years) to untangle the mess. Can you get a new Social Security number and just be done with the records associated with that horrible episode?  Or if your number was exposed in a breach and you feel nervous that it could be misused at some point in the future (and yes, it could), can you change your number as a precaution?

The answer is probably no. But there are circumstances (five, to be exact) in which you can qualify for a new number. They are:

  • a continuing threat of abuse of your number;
  • more than one person was assigned the same number (that is rare, but it has happened);
  • there is a situation of harassment, abuse or a life in danger (as in some domestic violence situations);
  • sequential numbers assigned to members of the same family are causing problems;
  • religious or cultural objections to certain numbers or digits in the original number.

Even if you qualify, you might want to consider seriously the impact of taking this step. In many cases, employment information and medical records will be associated with your former Social Security number. So a new number can create some problems you may not have anticipated.

And if you are changing your number because you were a victim of domestic violence, you may also be changing your name. If that is the case, the Social Security Administration suggests changing your name first. Domestic abuse victims can also elect to have access to Social Security information blocked electronically.

No matter why you want to change your number, you’ll have to go in person to a Social Security office and document your reasons. If, for example, the number or digit sequence is the problem because of a religious objection, you’d need both documentation of the objection and evidence that you have an established relationship with the group that finds it offensive.

In the case of identity theft, just the fact that you have been a victim will not be enough; you would need evidence suggesting that despite your best efforts to put an end to it, the abuse of your number continues.

In any case, you will need documents to show proof of citizenship and immigration status. (Original documents are typically required.) You can get a head start on filling out the forms you’ll need and knowing which documents to bring here.

While it can be difficult to track all potential signs of misuse of your information, checking your credit reports regularly from each of the three major credit reporting agencies can help you catch some instances of fraud that can be committed in your name. Keep an eye out for unauthorized new accounts or collection items, and make sure all information on your reports is accurate and up to date. You can get your free annual credit reports mandated by federal law at AnnualCreditReport.com, and you can get your free credit report summary from Credit.com, which is updated monthly, to watch for changes.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


Can You Refinance Your Home Without a Mountain of Paperwork?

Are you looking to refinance your mortgage but want to avoid all the paperwork that comes with it? Most mortgages require you to provide two years of tax returns and W-2s, 30 days of pay stubs and at least two months of bank statements to demonstrate your ability to repay the note. If you’re buying or refinancing a home, there’s no way around it — you will be subject to the scrutiny of the bank’s underwriter.

However, if you are looking to refinance to reduce your fixed housing costs, these three programs could meet you halfway in terms of the required paperwork. After all, who wants to go through a detailed financial analysis every time you want to save a few hundred dollars a month?

1. Home Affordable Refinance Program 2

If your loan is owned by Fannie Mae or Freddie Mac, and it was taken out no later than May 31, 2009, you’re golden. The role of the Home Affordable Refinance Program (HARP) was to offer homeowners a refinancing option without loan-to-value restrictions. The program still has the same flexible appraisal threshold.

Each mortgage company offering the program must perform an automated underwriting analysis on your loan application. Automated underwriting is the nationwide algorithm lenders use in originating loans sold to Fannie Mae and Freddie Mac. The automated underwriting results determine a loan that is eligible for sale delivery to either entity. If the automated underwriting results reveal your loan does not require an appraisal, you don’t need to obtain one. Additionally, even if you have a debt-to-income ratio as high as 60% (the typical limit for a mortgage is a 45% debt-to-income ratio), this may also fly with your mortgage company.

Note that some mortgage companies have debt-related adjustors built into their origination guidelines, meaning that even though the program itself does not have a debt-to-income ratio requirement, you might still be limited to 45% in the lender’s system and it may mean having to request an exception for approval.

Additionally, if automated underwriting only requires pay stubs and, say, one year of federal income tax returns, you need only that information in conjunction with your mortgage loan application. However, your mortgage company may still require full documentation. For the loan to be considered eligible for delivery to Fannie Mae and Freddie Mac, the only documentation that is required is specifically identified on the automated underwriting result your loan officer has access to. If your mortgage company is still asking you for more financial documentation, ask your mortgage broker to provide a copy of the Desktop Underwriter (DU) — Fannie Mae’s algorithm — or Loan Prospector (LP) — Freddie Mac’s algorithm — results on your application.

2. FHA Streamline Refinance

The Federal Housing Administration insures loans made by mortgage lenders. It insures the lender originating your loan against default and offers homeownership options much more flexible and lenient in comparison to conventional loans. One of the nuances of FHA loans is the ability to refinance from one FHA loan to another FHA loan, called an FHA Streamline Refinance. The program requires no income documentation of any kind, and no debt-to-income calculation or limitation, either. In other words, your debt-to-income ratio could be as high as 70% and the lender is not required to qualify you based on your income-to-debt load. The reasoning here is that the FHA is simply refinancing loans they already insure, minimizing risk.

The FHA reduced mortgage insurance premiums in January 2015, making FHA Streamline Refinances more attractive as the mortgage insurance has been drastically cut. This program specifically does not require an appraisal, unless you’re financing closing fees. If you have an FHA loan on your home that you took out in 2014 or before, there is strong likelihood you would save money with lower mortgage insurance premiums and current mortgage rates.

3. VA Loan Refinance

If you are a U.S. military veteran who currently has a VA loan, you could stand to benefit without mountains of paperwork for a refinance. The U.S. Department of Veterans Affairs guarantees loans made by lenders against default. The Interest Rate Reduction Refinance Loan (IRRL) mirrors the FHA Streamline Refinance where no debt-to-income ratio is calculated and no appraisal is required.

Generally, to be eligible for any one of the three mortgage loan programs you’ll need a 620 credit score or better. Some lenders might offer pricing incentives or credits for better credit scores as well. If you want to know where you stand before you start the process, it can help to check your credit scores – you can see two of your scores for free through Credit.com.

Finally, while it is certainly an inconvenience to have to provide all that financial documentation for a refinance, it could ultimately benefit you to do so anyway by proving you worthy of a lower rate. It’s something to keep in mind.

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This article originally appeared on Credit.com.

This article by Scott Sheldon was distributed by the Personal Finance Syndication Network.