Build a brighter future by saving at tax time

Saving money is not always easy, but having some savings provides people with the security needed to withstand economic shocks and plan for their future. Many people save automatically through a workplace retirement plan or by directly depositing money out of each paycheck into a savings account. But according to the Pew Charitable Trusts, more than 40 percent of all workers do not have access to a workplace retirement saving plan. Many more do not earn enough money to save on a regular basis even if they have access to a savings plan. 

It is clear that consumers recognize that a lack of savings puts them at risk. In the Bureau’s survey of financial well-being in America, which measured how consumers perceived their financial well-being based on a variety of factors in their lives, “disparities in financial well-being (were) greatest between subgroups that had different levels of liquid savings.”

Tax time is one time during the year when lower-income consumers have an increased opportunity to save. According to the IRS, approximately 75 percent of all people filing returns receive a tax refund and the percentage of people with lower incomes receiving a refund is more than 80 percent. For many low-wage workers their tax refund represents the largest lump sum of money they will receive all year.

To make it possible for people to automatically save, the IRS offers tax filers the opportunity to directly deposit their refund in up to three separate accounts. This means they can put some of their refund into their checking account to pay for current expenses and also set some aside for medium- or long-term savings goals. 

About the Bureau’s tax time saving initiative

For the past six years the Bureau has encouraged saving at tax time by offering support to the network of Volunteer Income Tax Assistance (VITA) providers that offer free tax help in communities around the country. The Bureau also offers its tools, training, and technical assistance to the companies in the commercial tax preparation industry. Through this initiative the Bureau has identified a number of practices and approaches used by tax preparation providers to encourage their customers and clients to save.

About the paper

As part of this ongoing initiative, the Bureau is releasing its latest report summarizing results of the 2018 tax season and expanding on information regarding best and promising practices to encourage saving at tax time. In this report you will also find information on:

  • The ways people save and how we can measure it better
  • Update on the Bureau’s promising practices, including a couple employed by VITA providers to encourage saving
  • New tools and resources the Bureau offers to support the tax preparation field

Learn more in the Bureau’s paper “Building a brighter future by saving at tax time.”

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

Hang up on spoofed SSA calls

If you get a call that looks like it’s from the Social Security Administration (SSA), think twice. Scammers are spoofing SSA’s 1-800 customer service number to try to get your personal information. Spoofing means that scammers can call from anywhere, but they make your caller ID show a different number – often one that looks legit. Here are few things you should know about these so-called SSA calls.

These scam calls are happening across the nation, according to SSA: Your phone rings. Your caller ID shows that it’s the SSA calling from 1-800-772-1213. The caller says he works for the Social Security Administration and needs your personal information – like your Social Security number – to increase your benefits payments. (Or he threatens to cut off your benefits if you don’t give the information.) But it’s not really the Social Security Administration calling. Yes, it is the SSA’s real phone number, but the scammers on the phone are spoofing the number to make the call look real. 

What can you do if you get one of these calls? Hang up. Remember:

SSA will not threaten you. Real SSA employees will never threaten you to get personal information. They also won’t promise to increase your benefits in exchange for information. If they do, it’s a scam.

If you have any doubt, hang up and call SSA directly. Call 1-800-772-1213 – that really is the phone number for the Social Security Administration. If you dial that number, you know who you’re getting. But remember that you can’t trust caller ID. If a call comes in from that number, you can’t be sure it’s really SSA calling.

If you get a spoofed call, report it. If someone calls, claiming to be from SSA and asking for information like your Social Security number, report it to SSA’s Office of Inspector General at 1-800-269-0271 or https://oig.ssa.gov/report. You can also report these calls to the FTC at ftc.gov/complaint.

For more tips, check out the FTC’s How to Stop Unwanted Calls and Government Imposter Scams. If you think someone has misused your personal information, go to IdentityTheft.gov to report identity theft and find out what steps to take.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Owners of Business Coaching and Development Service Scam Are Banned

FTC settlement bars defendants from selling business coaching or development services to consumers trying to start an online business from home

The owners of four companies that allegedly bilked consumers trying to start online businesses from home have been banned from selling purported business coaching or development services under court-approved settlements with the Federal Trade Commission. The settlements, which resolve an FTC case brought in the District of Utah, also require the corporate defendants to turn over the remaining funds in their bank accounts to the FTC.

According to the FTC complaint, the scheme took $8.4 million from consumers interested in starting an online business. The defendants bought the contact information of these consumers and then tried to sell them a series of business coaching and related services, each of which cost thousands of dollars. In lengthy phone calls, the complaint alleges the defendants’ sales representatives sold the high-priced services by promising consumers they could make thousands of dollars a month online. In one call, a salesman touting a program that cost $10,000 claimed it was “almost impossible” to make less than $3,000 to $5,000 a month using defendants’ foolproof methods: “[W]e don’t have any students we’ve built the business for that have ever failed. There’s just – there’s literally no way to fail.” The FTC submitted an audio file to the court that contains this portion of the call.

According to the complaint, consumers often received little more than basic information about how to list products on websites like eBay as part of defendants’ programs. As a result, according to the complaint, most of the consumers who purchased these programs did not end up with a viable business, earned little or no money, and ended up heavily in debt.

After consumers purchased the series of business coaching sessions, the defendants often tried to sell them an additional business development program. According to the FTC’s complaint, one way the defendants pushed these sales was by falsely claiming they had special access to lenders who could provide consumers with corporate credit for which they would not be personally liable. Instead of getting business loans, the FTC’s complaint alleges consumers who bought these programs were often subjected to more sales calls from companies that simply helped consumers apply for personal credit cards. In the recording the FTC submitted to the court, the salesman claimed new businesses could obtain a line of corporate credit in three to four weeks. The FTC submitted an audio file to the court that contains this portion of the call.

On Oct. 25, 2018, the U.S. District Court for the District of Utah approved both settlements in the case. One settlement imposes an $8.4 million judgment against defendants Jared Rodabaugh, Vision Solution Marketing LLC, and Ryze Services, LLC. The other settlement imposes a $6.75 million judgment on defendants Justin Larsen, VSM Group LLC, and Specialized Consulting Solutions LLC. According to the FTC’s complaint, defendants Rodabaugh and Larsen are the owners of the corporate defendants. Both judgments will be partially suspended after defendants surrender certain assets, including the remaining funds in the corporate defendants’ bank accounts, to the FTC.

The scheme began in 2014 and was run out of various offices near Salt Lake City, Utah. All the defendants have been prohibited from offering business coaching or development services since May 2018, when the FTC filed its complaint and the defendants stipulated to temporary restraining orders that were entered by the court. Now those prohibitions are permanent.

The defendants in this case called consumers using contact information obtained from two separate operations that were the subject of recent FTC enforcement actions: Internet Teaching and Training Specialists, LLC, or ITT, and Bob Robinson, LLC. In January 2018, the FTC entered into a settlement in the ITT case in the District of Nevada, and in December 2017, the FTC entered into a settlement in the Bob Robinson, LLC, case in the Southern District of Texas.

The Commission vote approving the agreed-upon settlements was 5-0.

The FTC acknowledges the invaluable assistance provided by the Utah Department of Commerce’s Division of Consumer Protection in this case.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Online Student Loan Refinance Company SoFi Settles FTC Charges, Agrees to Stop Making False Claims About Loan Refinancing Savings

Online student loan refinancer SoFi has agreed to stop misrepresenting how much money student loan borrowers have saved or will save from refinancing their loans with the company, in order to settle Federal Trade Commission charges that it deceptively advertised inflated figures for more than two years.

In a complaint against Social Finance, Inc. and subsidiary SoFi Lending Corp., the FTC alleged that since at least April 2016, they made prominent false statements about loan refinancing savings in television, print, and Internet advertisements.

“Student loan debt is a huge problem facing students and graduates across the country,” said FTC Chairman Joe Simons. “Lenders who offer refinancing options must be upfront with students about savings. They cannot make deceptive claims and bury the truth in fine print.”

According to the FTC, one online SoFi ad claimed, “Refinancing student loans saves $22,359 on average,” while another ad told readers to “Start saving on your student loans. Average monthly savings $292.”

The FTC alleges that the average savings SoFi touted in its ads inflated the actual average savings – sometimes even doubling it – by excluding large categories of consumers.

For example, when making lifetime savings claims, SoFi excluded borrowers whose loans have a longer term than the previous student loans those consumers refinanced. Those borrowers therefore would usually end up paying more money – thousands of dollars more, on average – over the lifetime of the loans, the FTC alleged. When SoFi did disclose these exclusions, the disclosures were often buried in fine print.

In addition to misleading advertising, SoFi also misrepresented when consumers would actually pay more under certain refinancing plans. Consumers who visited SoFi’s website and were pre-approved for a loan were often directed to a webpage that displayed the loan options for which they prequalified. The complaint alleges that the web page misrepresented loan options for which consumers would pay more on a monthly basis or over the lifetime of the loan – by falsely stating that consumers’ lifetime or monthly savings would be “0.00.”

The FTC alleges that the deceptive claims made by SoFi violate the FTC Act.

As part of the proposed settlement with the FTC, SoFi is prohibited from misrepresenting to consumers how much money consumers will save or have saved using SoFi’s products and from making any claims about any such savings, unless they are backed up with reliable evidence. Once the settlement is finalized, if the company violates the order, it could face civil penalties.

In conjunction with the announcement of this enforcement action, the FTC is notifying lenders making similar savings claims of its allegations against SoFi, and recommending that those companies review their advertising to ensure that they are not making false or unsubstantiated representations.

The Commission vote to issue the administrative complaint and to accept the consent agreement was 5-0. Commissioner Rohit Chopra issued a separate statement.

The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through November 28, 2018, after which the Commission will decide whether to make the proposed consent order final.

Interested parties can submit comments electronically by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $41,484.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Don’t get swamped buying a flood-damaged car

In the wake of the recent hurricanes, used car buyers should use caution: Storm-damaged vehicles are sometimes cleaned up and taken out of state for sale. You might not know a vehicle is damaged until you take a closer look or have a mechanic check it out.

Here’s what to do:

  • Look for water stains, mildew, sand, or silt under the carpet, floor mats, and dashboard, and for fogging inside headlights and taillights. New carpet or upholstery in an older vehicle may be another red flag.
  • Check for a heavy aroma of cleaners and disinfectants, which is a sign that someone’s trying to mask a mold or odor problem.
  • Get a vehicle history report. Before you buy any car, you always want to check the car’s history. Start at vehiclehistory.gov, which is run by the National Motor Vehicle Title Information System. But to get flood damage information, go to the National Insurance Crime Bureau’s free database, which lists flood damage and other information for cars that were insured. (If the car you’re buying didn’t have insurance, it won’t be in that database.) Of course, there are other reports that have additional information, like accident and repair history – learn more at ftc.gov/usedcars.
  • Understand the difference between titles. A “salvage title” means the car was declared a total loss by an insurance company because of a serious accident or some other problems. A “flood title” means the car has damage from sitting in water deep enough to fill the engine compartment. The title status is part of a vehicle history report.
  • Have your mechanic inspect the car for water contamination.
  • Report fraud. If you suspect a dealer is knowingly selling a storm-damaged car or a salvaged vehicle as a good-condition used car, contact the NICB.

For more tips, check out our used car page.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Spear phishing scammers want more from you

“I’m calling from [pick any bank]. Someone’s been using your debit card ending in 2345 at [pick any retailer]. I’ll need to verify your Social Security number — which ends in 8190, right? — and full debit card information so we can stop this unauthorized activity…”

So the caller ID shows the name of your bank. And the caller knows some of your personal details. Does that mean it’s legit? No. It’s a scam and scammers are counting on the call being so unsettling that you might not stop to check your bank statement.

We’ve started hearing about phone scams like this, which combine two scammer tricks: spear phishing and caller ID spoofing. In a phishing attempt, scammers may make it look like they’re from a legitimate company. And when they call or email with specific details about you asking you to verify the information in full (things like your Social Security number or address)  that’s called spear phishing.

The other nasty wrinkle in this scam is caller ID spoofing. That’s when scammers fake their caller ID to trick you into thinking the call is from someone you trust.

Here’s how you can avoid these scam tactics:

  • Don’t assume your caller ID is proof of whom you’re dealing with. Scammers can make it look like they’re calling from a company or number you trust.
  • If you get a phone call, email, or text from someone asking for your personal information, don’t respond. Instead, check it out using contact info you know is correct.
  • Don’t trust someone just because they have personal information about you. Scammers have ways of getting that information.
  • If you gave a scammer your information, go to IdentityTheft.gov. You’ll learn what to do if the scammer made charges on your accounts.

Even if you didn’t give personal information to the scammer, report the scam to the FTC. Your reports help us understand what’s happening and can lead to investigations and legal action to shut scammers down.

This article by the FTC was distributed by the Personal Finance Syndication Network.

I Helped My Roommate With Bills and Now He Wants to Kill Me

Question:

Dear Steve,

I had a roommate who lived with me off and on for 10 years during the time he lived with me he asked me to loan him money for his small business. He was abusive at times and I felt like he was on drugs but could not prove it. He asked me to borrow him money to pay for products for his business all the while he made the minimum payments on the cards Eventually the debt racked up to over $45,000.

Finally, the debt became too much and I got with National Debt Relief which at the time about 1 month ago, I thought was a good idea. Now my roommate moved out and left me with all the debt. I have been living on Social security for the last 17 years. My check is 947.60 per month and my National Debt Relief auto draft is $632.00 per month. I found out my X roommate was writing bad checks and using drugs so I will never get his help.

My roommate has threatened to kill me numerous times and he has also told me he would tie me up and burn my apartment down. So I don’t want to try to involve myself with him but I can’t continue to pay $632.00 a month for this debt.

Any advice would be appreciated

Donald

Answer:

Dear Donald,

I have no way of knowing if what people ask me is true but your story is so crazy, it probably is.

Given the facts you gave me I would suggest you call National Debt Relief right now and tell them there is no way you can afford to give them the majority of your income each month. That makes no sense. And if any salesperson at NDR actually sold you on a plan under the situation you describe, a manager needs to have a little chitty-chat with them.

Your roommate sounds like a total drug addicted wack job who needs more help than you can give them. I would not be surprised if his business was turning inventory into drugs to feed his apparent out of control habit. If the ex-roommate continues to threaten you, call 911.

The first thing I would do is change the locks on your door and keep that ex-roommate out.

Next, to deal with the debt you have three real options.

Option 1 – File bankruptcy ASAP and legally close the door on this debt you will never be able to repay. Filing bankruptcy will stop collection calls and for the most part, you will no longer have to deal with this debt again.

You can find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

Option 2 – Do nothing. This is the lowest cost solution. You can put your head in the sand, change your phone number, never talk to a collector, and if you get sued there is probably little chance of a creditor collecting if your only income and assets are as you describe. This approach will lead to continued collections and potentially scary notices in the mail for years to come. Of course, it will impact your credit but in your situation, that’s not a horrible thing.

Option 3 – This is a bit of an improvement to the previous option of doing nothing. You can contact HELPS, a nonprofit law firm, who can give you assistance in protecting you from the creditors for a very low price. They specialize in representing lower-income seniors.

Stop Being the Victim

I know that is really easy for me to say but seriously you need to take some control over this situation and stop letting National Debt Relief or your ex-roommate make questionable decisions for you. You need to start taking some control and making choices that are best for you, not others.

My gut reaction is bankruptcy is the most comprehensive way for you to close the door on this financial mistake and will give you the fastest peace of mind. Working with HELPS is the least expensive intervention but can continue the annoyance of dealing with this crushing debt.

Please update me in the comments below with what you decide to do.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

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

My Dad is Going to Lose His Military Pension Over My Student Loans

Question:

Dear Steve,

I just contacted a pro-bono legal service in my hometown to try to deal with federal & private defaulted student debt but I wanted to reach out to you as well to get another perspective.

My dad, a veteran, who co-signed, might lose his military pension if I can’t deal with this. I’m also out of work due to downsizing and I’m not particularly smart about money at all! Help!

Holly

Answer:

Dear Holly,

Federal student loans don’t have cosigners anymore. If your dad is involved in these and they are federal student loans then he would have had to take out a Parent PLUS loan. In that case, he is responsible for the debt, not you. It is true that if he did default on a federal student loan that any government money due him could be garnished. But he would not “lose” his pension.

With federal student loans, you do have the option of income-driven repayment plans which can get you a $0 monthly payment and keep the loans out of default. This is not an option for private student loans.

If these are private student loans then it is unlikely they could garnish his pension benefits if the lender sued, won, and went for a judgment.

If these are private student loans and you have not paid in a number of years, then these loans might be beyond the statute of limitations in your state. That is a defense you’d have to raise as a defense if you were sued over the debt. It is certainly an issue to discuss with the free legal service in your town.

Your father may want to contact HELPS for low cost legal protection regarding the debt.

While I don’t have enough information to give you a step-by-step plan, you have given me sufficient information to know there is a solution that may be able to address your debt situation without letting it spiral to wage garnishment.

I’d recommend you keep your appointment with the pro-bono legal service you connected with and talk to them about the legal ramifications of dealing with this debt if it is private student loans. They may be able to also help you get some clarity on exactly what kind of loans you have.

Please come back and post an update in the comments below after your appointment with them. With more details, I can give you more specific advice.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

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

Smoking out bogus product claims

uitting smoking and losing weight can be enormously challenging. In the quest to kick the habit or drop the pounds, you might be tempted by products promising miraculous results. But take a breath before you buy or try. Those ads could be exaggerations or outright lies that wind up costing you big.

Case in point: The FTC says Redwood, Inc. guaranteed consumers that its TBX-FREE smoking cessation and Eupepsia Thin weight-loss products worked better than others, and that clinical studies backed this claim. In Eupepsia Thin ads, actors (not actual, unpaid users) said they lost a substantial amount of weight using the product. What’s more, Redwood also allegedly enrolled consumers in an auto-pay program, debiting their cards every month without their knowledge or consent.

Looking past the hype is critical in making sure you’re not falling for false promises that will rob you blind. Whether you’re looking to stop smoking, lose weight, or do anything to improve your health, be skeptical about ads promising miraculous results. Most important, be sure to talk to a healthcare provider before you buy – or take – any product advertised with health claims.

To learn more about evaluating health product claims, visit the FTC’s health page. And if you’ve been taken in by false or misleading product claims, report it to the FTC.

This article by the FTC was distributed by the Personal Finance Syndication Network.

College test prep scams are happening

Recently, we heard about scams targeting parents of high school students preparing for college. The scammers claim to be from The College Board – the organization responsible for the PSAT and SAT tests. They call or email you, asking for credit card numbers so they can send PSAT prep materials that the student has supposedly requested. Often the scammers have the student’s name, address and phone number – making them seem more believable. Except your student didn’t ask for materials, and it’s not this group calling.

Here are some tips to avoid a test prep scam.

  • The College Board will never ask you to give credit card, bank account or password information over the phone or via email.
  • Make sure the company offering test prep materials is legitimate. How? Before you give up your money or personal information, research the company online. Search for their name plus the word “scam” or “complaint.” See about other people’s experiences. And talk to someone you trust, like another parent or your child’s school counselor, before you pay.
  • Consider how you pay. Credit cards have significant fraud protection built in – meaning that, if you find out you paid a scammer, you may be able to get your money back if you report it quickly. And if anyone asks you to pay by wiring money or by using a reloadable card or gift card, it’s a scam.

Spotted a scam? Whether you lost money or not, let us know at ftc.gov/complaint.

This article by the FTC was distributed by the Personal Finance Syndication Network.