Charles Schwab (NASDAQ: SCHW) Corp, Cambridge Place Investment Management, the Federal Home Loan Banks of Chicago and Indianapolis and a number of other investors have brought suits against Citigroup, Inc (NYSE: C) as early as July alleging that Citigroup had made omissions or other misstatements relating to the mortgage investments that it had sold to investors. The New York-based bank disclosed the suit in a regulatory filing on Friday.

The New York-based bank issued subprime mortgages to borrowers, grouped them into pools and then sold them as securities to investors. When the housing market declined and homeowners attached to the notes quit making payments, no one was really sure what value the bonds had, making the securities illiquid.

Investors claim that Citigroup, Inc (NYSE: C) misled them about the quality of mortgage which were placed in the bonds. The investors suing Citi want to make Courts buy-back the investments at full price and to assess other damages. The investors said that Citigroup confirmed that the loans had met certain underwriting standards, but former Citigroup employees have come out saying that more than half of the mortgages bought and sold by the bank failed to meet the company’s internal standards.

Citigroup Inc. (Citigroup) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2009, Citigroup had approximately 200 million customer accounts and did business in more than 140 countries. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL), and Special Asset Pool (SAP). In April 2010, Barclays PLC acquired Italian credit card business of Citibank International Bank plc. In May 2010, the Company announced the creation of a new Collateral Management Services unit within its Securities and Fund Services business.

Shares of Citigroup, Inc (NYSE: C) traded up 3.70% during mid-day trading on Friday.

Citigroup, Inc (NYSE: C) Sued by Investors over Toxic Mortgage Bonds was created by and is property of American Consumer News.

The Better Business Bureau (BBB) has built a solid reputation upon its eight foundation standards;

• Build Trust

• Advertise Honestly

• Tell the Truth

• Be Transparent

• Honor Promises

• Be Responsive

• Safeguard Privacy

• Embody Integrity

Clearly if some unscrupulous party had intentions of projecting an image of trust and safety, there can hardly be a better organization to use in its ruse and this is exactly what has happened.

Lottery scams are probably the most popular type of fraud because they have been around for decades. The latest trickery involves a scheme that attempts to steal money from unsuspecting victims by claiming that they have won a monetary prize from the BBB.

In keeping with the textbook lottery scam format, the con artist contacts the victim either by email or by phone and then identifies themselves as a representative of the BBB. In some instances the victim is given the real name of a BBB employee and referred to a website biography so the victim is put at ease.

They are then informed of the fake lottery or prize and told that they need to send some money to cover taxes or transmittance fees to claim the rest of the money.

So far this scam has defrauded at least one unsuspecting person of approximately $80,000.

In a statement issued by the BBB, the President and CEO, Steven Cox reminded members of the public that “Many people are struggling in the current economy and when someone tells you that you’ve won millions in a lottery, it can seem like an answer to prayer” however he cautioned that the BBB has never and will never operate a lottery or award any type of prize.

The BBB is an organization that accredits businesses according to established principles and standards and simply put, its stamp of approval or rating is the only thing the BBB is primed to bestow on its customers.

To avoid becoming the victim of a lottery scam in the name of the BBB or any other company it pays to remember some basic tenets;

• You should never have to pay money to receive a prize.

• You should always check the story out completely using only reputable sources.

• The receipt of a check followed by the request for money to fund the remainder of the prize winnings is a sure sign of a scam.

We would all love to be on the receiving end of a lottery win, however the chances of this kind of windfall are far and few between. Use caution and common sense to avoid being the next victim of unscrupulous con artists.

Better Business Bureau Lottery Scam was created by and is property of American Consumer News.

The Better Business Bureau organization is warning consumers about a new scam that has been showcasing the organization’s own name in order to steal thousands from unsuspecting consumers who are led to believe they have won a lottery prize. The scammers are posing as representatives and employees of the BBB have been using phone and email contact to solicit the money. Consumers are being asked to wire money to the so-called organization in order to collect their prize. Many victims do not realize they are being scammed because the con artists are using the real names and biographical information from BBB employees, which were likely obtained from the organization’s website. When consumer do a search for a BBB employee, the names and information are often consistent, making the scam appear more believable.

As more people are struggling to make ends meet and many more are still looking for work, a lottery win is a tempting offer. The Better Business Bureau is hoping to get the word out that by no means are they associated with a lottery. The company is also supplying consumers with a list of tips to help thwart scammers from getting consumer information. These tips include:

Gut Instinct is Usually Right
Many people will receive a warning from their subconscious about situations that do not feel right. As the old adage goes ‘if it looks too good to be true, it probably is.’

Money Doesn’t Bring More Money
Any situation that asks for money in exchange for a free prize or cash prize should be avoided. Victims are often easily convinced that just a few bucks will net a few thousand bucks. However, once the money is sent via a wire transfer, there is no way to track it or get it back.

Don’t Cash Checks
Scammers have been using the fake check for years to dupe consumers. Even popular sites like ebay and craigslist where people sell to other people have brought on fake check schemes. Typically a check is sent to the victim as payment for an item or with instructions to cash the check, retain a certain amount for themselves, and wire the rest back. In the case of online sales, the check is made out for more than the amount of the item purchased with instructions to ‘keep the rest’. Once a victim deposits the check into their own account, they become responsible for the money. When the check bounces or is identified as a fake, the victim has usually already used funds from the check to wire to scammers, leaving them responsible for the cash. Essentially, victims are sending money to scammers they don’t have in their own pockets. The checks being used look incredibly real.

Double-Check Red Flags
Even if a solicitation appears to be from the most reliable of companies, contact the company directly to inquire about the claim. If contacted by phone, hang up and contact the organization back by dialing the number yourself. Anyone on the phone can say anything they want to convince you of falling for the scam. One phone call to the company being represented may save you from financial ruin.

BBB Warning Public About Lotto Scam was created by and is property of American Consumer News.

While there is appropriate concern over donating money to unethical funds, it should not stop those who wish to provide financial assistance. It just means that donators take extra precautions when it comes to who they hand over cash. There are plenty of legitimate resources for donating money that will make it to the right place.

Even the Better Business Bureau is sending out recommendations and reminders to help people perform due diligence checks on organizations including:

Online Donations
Spam emails and message will no doubt be swirling the net over the next few days. It can seem simple to click a link and donate while the opportunity is right in front of you but be cautious about the emails and their real source of origin. It may say Red Cross but you can’t always be sure from an email message. Go directly to the web site of the organization and donate online there. Otherwise you risk not only the loss of your money but subject yourself to malicious viruses affecting your PC.

Consider the Source
Your favorite gossip blogger may be pushing a particular site or organization hard core but never rely on third-party information or allow yourself to be swayed by another’s opinion. You are still under obligation to do your own research to find the best way to donate

Research the Organization’s Endeavors
Find out if the fund you are donating to has a crew on-site that is legitimately offering aid to victims. Unless a team is in the area, you can’t be sure that the money will be used to help those in need or just line the pockets of good marketers.

Is the Money Direct?
There will be organizations that set up shop to raise funds for other groups. Skip the middleman and go directly to the source to ensure your full amount is being put to good use and percentages off the top is not going back to some other place.

Donate Only What You Can
While it is unfortunate there are many victims in need, it is important you don’t become a person in need because you’ve donated more money than you can afford. Even if your offering is small, it is still helpful. Be realistic about how much you can donate at one time and don’t short your own financial security.

Haiti Relief Brings About Scams was created by and is property of American Consumer News.

Before you click on a security message that for all intents and purposes appears authentic, understand that this is how scareware can increase the chances of your computer getting a virus. Although the messages appear legitimate you will likely be unable to click on a link that actually takes you to the “real” site it is representing. Once the pop-up appears on your screen it is very difficult to close or escape the message. Often you will be prompted to run a scan or receive a message that you have a virus. It is imperative to use caution whenever you see a security message as criminals have become very efficient at duplicating legitimate anti-virus programs. Avoid clicking on anything that appears within the pop-up and immediately shut down your computer. Upon restarting your computer, initiate your own anti-virus protection and run a scan to locate malicious software that may be installed on your computer.

Victims of this scam could risk identity theft or other financial problems associated with passwords or personal information falling in the hands of the wrong person. It is estimated that scareware has cost individuals or companies over $150 million according to the FBI.

In addition to closing your browser and restarting your computer, you should make sure you have current and up to date anti-virus protection on every computer. Do not assume every security message is legitimate and carefully research any problems before trusting a “pop-up”. Use your own judgment and extra caution when online to avoid being the victim of malicious advertising scams. If you are a victim or experienced anti-virus pop-ups, file a complaint at www.ic3.gov to help the Internet Crime Complaint Center help others avoid becoming a victim.

Consumers Warned Of The Dangers Of Malvertising was created by and is property of American Consumer News.

Twenty-nine percent of American consumers have at one time or another been the victim of negative option marketing practices. When a consumer accepts an offer for a free trial or sample of a product they are often unwittingly agreeing to a subscription or further purchases which will be charged to their credit card. If a merchant does not clearly disclose the fact that future charges will result from the “free” offer unless the consumer cancels their subscription or membership, they are using deceptive marketing practices. In most cases the consumer finds out too late once they see charges on their account they did not authorize and it is often difficult to receive a credit for these charges through the merchant. The only recourse is to turn to the credit card issuer and dispute the charges. This is where Visa plays a role in reducing unauthorized charges.

Visa acknowledges these practices occur and they currently monitor their payment network in search of merchants who have an abnormally high number of disputed charges. This is the first sign that a merchant is not on the up and up. Once spotted, Visa contacts the merchant instructing them to take action to reduce the level of disputed charges. If the merchant does not comply they will lose the Visa acceptance privilege.

Removing merchants that use misleading if not fraudulent advertising from the network of merchants allowed to accept Visa is one way Visa account holders will be protected. The following tips can help all consumers avoid unauthorized charges and how to fix them should they occur.

• Pre-checked boxes- Look for pre-checked boxes when you are signing up for a free offer or trial service. In many cases of negative option marketing, the box authorizing further charges is already checked and you have to “uncheck” the box to prevent future charges.

• Read the fine print- Make sure you read the fine print and any terms and conditions before agreeing to receive an offer. Most merchants disclose the fact they will be charging your account, however that information is often buried beneath a lot of other information. You have to read any available information to ensure you are not authorizing charges to your card.

• Review your bill- Many people take for granted the fact that the only charges on their bill will be for items they purchased. It is imperative you review each statement every month. Otherwise you could be paying for unauthorized charges without even knowing they are there. Should you find any unauthorized charges, contact the merchant first to try to settle the issue. If you have no success going that route, take the matter up with your credit card issuer. Never allow unauthorized charges to go undisputed.

The best way to avoid unauthorized changes on your credit card is by paying close attention to who has access to the information. Few things in life are truly free, therefore sometimes it is just better to avoid these offers in the first place. If you are required to enter credit card information to get something for free, you can bet you will be charged for something somewhere down the line.

Visa To Monitor Merchants With History Of Unauthorized Charges was created by and is property of American Consumer News.

H1N1 Scams
Everyone has taken a moral responsibility to not be apart of the spread of the H1N1virus.  To this end enterprising scammers have preyed on the innocence of people and have contacted them in a variety of ways scaring them to purchase cures.  However, after submitting to sending money no cure is forthcoming and of course the money is lost.

Weight Loss Trials
Who doesn’t want to loose weight?  Products claimed to be endorsed by Oprah and Rachael Ray were at every click of the mouse.  Trail offers for acia or resveratrol weight loss were too good to be true.  They didn’t deliver literally.

Friends or Family in Distress Call
This one is dubbed the “Grandma Scam”.  The so called “Grandma” is contacted by the scammer who claims to be a family member travelling outside the country and requires some dough to pay a lawyer or post bail.  “Grandma’s” are targeted only because scammers will prey on the easiest victim that they can find.  Financially stable seniors are usually forthcoming with money for their grandkids.

Lottery Scam
Imagine getting a call from Publishers Clearing House stating you won their million dollar lottery.  You would be in heaven! Until that is, you had to wire $1,000s of dollars back to a non-descript bank account.  Using the Publishers Clearing House name added credibility to the scam.  Others were not as clever and just made up fictitious information to convince some consumers that they could collect if only they would pay money via a wire transfer into the scammers pocket first.

Job Hunter Scam
Double digit unemployment numbers offered these astute scammers the perfect opportunity to prey on a growing demographic.  Posing as a job placement/recruitment officer, scammers would require all job applicants to pay a fee to be considered for a job.   The only thing is that there were no jobs just fees!  The second part of this is the scammers would try to access personal information such as bank accounts and social insurance numbers for the purposes of evaluating potential employees.

Keep your eyes open, enterprising individuals will try to make the most of your money.

More Scam Alerts – Top 10 Scams of 2009 was created by and is property of American Consumer News.

Loan Scam

One young woman wanted to secure a loan from an online source.  As she was considered a high risk, it was difficult for her to get the money from conventional sources.  She went online and found a business in Baltimore that just so happened to specialize in high risk loans.

She happily completed the application complete with private Social Security numbers.  She was very excited to have been approved for the loan and was told the money would be coming soon.  She was then asked to make monthly payments as collateral and then the scammers topped up the account with fees. 

Becoming suspicious when the money was not forthcoming, she contacted local law enforcement.
 
Mystery Shopper Scam

Another savvy consumer became wise when he got an invitation to become a “Mystery Shopper”.  A legitimate business where companies higher a ‘secret shopper’ to pose as a customer to record how customer service and products are displayed and then report back to the corporation.  Recording things like how long before you were acknowledged, how long you have to wait in line and if they check in the lower rack of the shopping buggy can be assessed.

This scam however, was no such thing.  In a legitimate situation you do the analysis and then submit the review and any receipts before getting paid.  This was not the case.  And this sceptical person was given a check for $2,980.00 to do a $100 shop at a variety of retailers, fill out an evaluation and then mail it back.  The second step in the scam was to wire $2,000 via Western Union to a New York bank to check to see if Western Union was conducting themselves in a proper fashion.  This is what prompted the consumer to involve the police and shut them down. 

Some Mystery Shopper scammers are even developing relationships by establishing trust through a series of smaller paid audits before asking for the larger Western Union transfer.  The big hole is that once you pass on the money you are on the hook for it. 

Remember that if it is “too good to be true, it usually is”.

Consumers Beware – This is The Holiday Scam Season was created by and is property of American Consumer News.

Largely, consumers feel that DIRECTV has been practicing unfair tactics for new sales. The complaints also claim that DIRECTV is deceptive in their advertising of low cost services. The ads which tout small prices fail to explain the many hidden fees buried in the small print of the service contracts.  Attorney General McKenna states that the fine print as measuring in at 5.5 points on the bottom of the advertisement and argues that even with the assistance of a magnifying glass, consumers could not substantiate the true nature of the ‘deal’, which involves a two-year contract, monthly services charges that increase, and a near $500 penalty for canceling a contract early.

Other issues uncovered by the Attorney General’s office against the California-based DIRECTV include:

Not-So-Free Stuff

DIRECTV offers in their advertising ‘free’ installation and upgrading of equipment or channels. The ‘free’ items are typically promotional offers that when expired, become paid subscriptions or rental fees.

A Cheaper Route

DIRECTV offers a package priced at $29.99 a month but fails to mention it is only available to consumers who set up automatic debits and who meet financial stipulations.

Contract Extentions

DIRECTV did not disclose to customers that each time a new accessory or upgrade is added, the length of the contract is extended.

Protection Problems

DIRECTV charges customers $5.99 a month for their Protection Plan that covers repairs to equipment. Some customers were initially unaware that they were paying this additional fee but learned that canceling the services cost them an additional $10.

Credit Check Charges

For consumers that fail to provide Social Security numbers or do not meet eligibilty requirements after a credit check, had to pay up to $300 in deposit funds to acquire service. If cancellation occurs early, the deposit is used and customers received only a partial refund of whatever money remains.

In addition to the state of Washington, California customers have also filed a class action lawsuit against DIRECTV. This lawsuit addresses the company’s practice of debiting the amount of cancellation fees from a customer’s bank account without the consent of customers.  Washington states Attorney General is seeking from the court a ruling that would change DIRECTV’s business practices while providing costumers restitution for their losses, as well as have the court impose civil penalties for their actions.

DIRECTV Leads Competition in Complaints was created by and is property of American Consumer News.

The FBI’s press releases states “Within the last several months, the FBI has seen a significant increase in fraud involving the exploitation of valid online banking credentials belonging to small and medium businesses, municipal governments, and school districts. In a typical scenario, the targeted entity receives a “spear phishing” e-mail which either contains an infected attachment, or directs the recipient to an infected website. Once the recipient opens the attachment or visits the website, malware is installed on their computer. The malware contains a key logger which will harvest each recipient’s business or corporate bank account login information. Shortly thereafter, the perpetrator either creates another user account with the stolen login information or directly initiates funds transfers by masquerading as the legitimate user. These transfers have occurred as both traditional wire transfers and as ACH transfers.”

The money that is transferred from one account is typically then moved into the accounts of others in the know but often into the accounts of the unsuspecting. Criminals who are looking to transfer funds into an account will often use work-at-home propositions to lure individuals into doing the crime for them. The job advertisements are often planted on respected job boards. The general idea of the job entails processing payments for a company. The job seekers agree to receive wire transfers into their own bank accounts and then forward the stolen money to accounts oversees using services like Western Union.

The FBI advises consumers to keep their computers updates with anti-virus software and install a personal firewall. Consumers can visit this website to learn more about the proper software and prevention measures that can be taken to prevent risk. It may also be beneficial to speak directly with your bank about precautions and security measures needed when conducting banking online.

Consumers are also advised to report suspicious activities involving their bank accounts to the Internet Crime Complaint Center. Consumers who have been solicited to work at home on jobs that require transferring funds or sending money overseas should also file a complaint with the center.

FBI Warns Consumes of Cyber Scam Robbing Bank Accounts was created by and is property of American Consumer News.

Did you know that many banks currently process your charges out of order? Most will process the largest transaction first, which decreases your account balance faster, and therefore has the potential to cause multiple overdraft penalties. CBS 13 featured a news segment on this practice (http://cbs13.com/video/?id=63174@kovr.dayport.com) with specific examples from customers of Bank of America. These people’s statements show that several days worth of transactions are processed in a different order – according to the amount of the transaction instead of the date the transaction occurred. So while you (and most other customers!) would expect your transactions to be processed chronologically by date, you think you have more money available than you really do. Where you think you may be right on target, or perhaps just a few dollars overdrawn for your last transaction – after the bank re-orders your transactions so the largest transactions are deducted from your balance first – you run out of money in your account balance much sooner than expected and end up with a number of overdraft fees (of about $35 each, on average).
The policy of re-ordering your transactions is not limited to Bank of America however. It seems to be more of an industry standard. In fact, banks report the total for overdraft fees in 2009 at an estimated $38.5 billion.

Some people respond to this practice by saying it’s the customers fault for spending so close to their available balance and they deserve to be hit with multiple overdraft charges. Other people think this is entirely unfair, and should be illegal. Why should a bank have the ability to re-order your transactions? Some banks support the policy by saying they place the highest priced transactions first because they assume they are the most important – like your mortgage, rent, or car payment for example. Should a bank be able to decide which of your transactions are more important to you and clear them based on those assumptions? Or should they just clear them chronologically?

Hopefully the Overdraft Protection Act of 2009 will be passed and will address these banking policies.

Possible Regulations of Bank Overdraft Policies Upcoming was created by and is property of American Consumer News.

Consumer Reports’ Money Adviser recently weighed in with some tips and pointers to help you get the most money for you unwanted gold. Money Adviser says that the TV buyers of gold are a “joke”, and will never pay you close to full retail price because they have to pay for all of the advertising that they’re buying and then make a profit after that.

The reality is that most of these ads in the newspaper and on television that promise to pay you top dollar for gold will only pay you about 20% of the daily market for the value of the gold! Ouch!

Fortunately, there’s a reasonably easy way to determine what the real value of the gold is in your jewelry. First, start by determining the carat of the gold, which is typically stamped directly on the gold. Then, use a kitchen scale to determine the weight of the jewelry. Once you know the carat of the gold and the weight, you can use an online calculator which will convert determine what the gold you have would be worth at the most current market value.

Money Adviser suggests that buyers go to jewelry stores and pawnshops are a better way to go, but warns against going to any dealers that will refuse to tell you how much they’re paying for the gold. Often times, if they aren’t up front about what they’re paying, they are hoping to lure you in for a low-ball offer.

Finally, Money Adviser reminds us that jewelry’s greatest value is for the design and its sentimental value, not the value of the gold contained in it.

How to Sell Unwanted Gold Jewelry Without Getting Ripped Off was created by and is property of American Consumer News.

There is a vicious email virus going around that can drain your bank accounts if you incorrectly open the file contained in it or click on the link that sends you to a malicious webpage. All of this is done by sending out an email pretending to be from IRS. 

The reason that this has been a particularly bad virus is because the perpetrators are changing the ‘fingerprint’ (binaries as they are called in computer terms) of the file several times per day which makes detection by virus software almost impossible. It is a moving target and that is the most difficult to detect and stop from spreading.  This underscores the need to be ever vigilant when surfing the Internet and opening simple email messages that are sent to you.

Watch and Be Over Cautious

You should make sure that before you go surfing on the Internet that you have updated virus, spam and spyware software installed and functional. Then, watch where you surf and be overcautious before you click on links to sites that you are unsure of their origin.

Question First Attitude

The old adage “shoot first and ask questions later” is so out of sync with today’s consumer needs – especially when it comes to Internet activities. But, the standard activity by users is to click first and ask later. Avoid that at all costs.

Use Common Sense

Would the IRS really contact you via email and tell you that you have a problem with your taxes? Come on now, that one is pretty obvious. But even so, there are other more dangerous things that can get you. For example, an email that might contain a Trojan virus from someone you know. You probably would drop your guard if you saw their name in the ‘from’ field.

Use your email responsibly and keep your guard up at all times. Even though most virus companies are very good at what they do, they are a reactionary business. They do not get pre-release notice on viruses that are coming out next. If you use these tips it will help you prevent from becoming a victim – something you don’t need now or ever.

Consumers Beware- Worst Email Virus Ever was created by and is property of American Consumer News.

The Las Vegas police department has a special automotive theft unit that keeps track of the number of automotive-related arson claims that they receive each year. According to a recent Wall Street Journal article, In 2007, when gas prices began to spike pretty heavily, the number of claims began to jump. In 2008, the rates climbed by 6% nationally. In some harder-hit areas such as Michigan, New York, Indiana, the number of arson rates increased by 15% between 2007 and 2008!

Why are some people so quick to destroy their vehicles and collect on the insurance money? Why not just sell the vehicle they have to reduce the amount of leverage that they have? It turns out that in many of these situations the owners of the vehicles owe more on their vehicles than they are worth and would actually have to cover the difference if they tried to sell their vehicle.

The Wall Street Journal article interviewed a number of different people, including James Quiggle from the Coalition against Insurance Fraud, an industry-backed group. He probably had the best quote in the article, “They look at this as their own personal stimulus package”. Quiggle continued, “the economy is stretching people to the breaking point and some of them are willing to risk criminal conviction.”

Insurance companies will need to avoid car insurance scams to maintain profitability during as the Unites States comes out of the recession. They will continue to see higher claims as people try to get somethin for nothing.

Instead of finding a way to get some extra cash, some consumers are deciding that ditching their vehicle, reporting it stolen, collecting the insurance money and paying it off with those funds is a better way to go. This way, they will be free from responsibility to the vehicle and the automotive company and their credit scores will not be damaged. You might not think that protecting one’s score would be that important, but apparently to some people, it is.

If you’re in a situation that you have a vehicle that you can’t afford anymore, just sell the vehicle. If you owe more on it than it’s worth, just borrow the difference by getting a small loan through a local bank or credit union or through sites, so that you can get your vehicle sold with a clear title.

Car Insurance Scams on the Rise was created by and is property of American Consumer News.

The reason for that these schemes work for the criminals is that there is a lag between the time in which the check is deposited and when it clears the system all the way back to the originating bank. In this manner the bank into which the check is deposited “loans” the money on the genuine-looking check to the one who is cashing or depositing it.

Then the victims do what they are told and forward on the lion’s share of the check to third-party perpetrators. Once the original check bounces and comes back through the system, those who deposited the check are liable for the full amount.

The checks look real. Banks often cannot tell if the checks are real or not. This compounds the problem. Added to this is the fact that banks are required to make the money available to you in 5 to 7 business days. This means that you can take the money out or move it even though the original check is still working its way through the system.

What to watch out for. If you are ever approached by someone who wants to give you a check to deposit from which you pay them a lesser amount and allow you to keep the rest for your trouble, then you should be instantly suspicious. Anyone who does business in this manner has something to hide.

Other tactics include an announcement that you have won a lottery and a check is being sent to you but you need to pay out taxes on the amount. Cash grants are issued via check but there is a processing fee. You have a buyer of something that you are selling and they ask you to take a check for payment and return the overage to them.

Who to contact. Contact your local police agency in order to alert them to what you have witnessed – especially if you have become a victim. You will want to file an official police report that can be used in your defense. This will also alert authorities that the scheme is occurring in the area so that others can be warned about its existence. Then, contact your bank and let them know about the situation, too.

Unfortunately, these fake check schemes are operated for either Canada or other countries around the world, so it is almost impossible to pursue and prosecute those responsible. The best method in protecting yourself is to heed the tips above and question the motives and intentions of those who make these kinds of offers to you. You can also visit www.fakechecks.org to give you additional advice on this topic.

Watch for Fake Check Schemes that Cost You Money was created by and is property of American Consumer News.

Unscrupulous practices. The one issue that comes up consistently is their apparent lack of action once they have begun to take your money. The job of a debt settlement company is to negotiate a settlement amount (lump sum) with your individual creditors so that they can be paid off in full. That activity needs to be on-going while you are building up cash in order to pay off the account balances. Be sure to get any offers in writing from the debt settlement company that they claim to have worked out with your creditors.

High fees. This type of debt relief comes with a price: high fees. These charges are collected up front because of the nature of the type of settlement that they offer. Once a creditor is paid off, you no longer need the debt settlement company, so in order to protect themselves, you will have to pay money up front for their services. These charges can be several hundred dollars.

Non-compliance by creditors. Some creditors refuse to work with debt settlement companies because of the questionable ways that they have in dealing with the creditors.

Escrowing funds. Debt settlement companies take your money to pay your creditors and escrow it (put it into their own account) in order to pay the debts off to your creditors. That is all well and good, but when do those payments take place? Once an agreed settlement has been reached it should be right away, but sometimes is not. Questions have arisen as to the ethical practices of allowing that money to sit in the coffers of the debt settlement company as long as possible in order to earn interest before it is paid out.

Asking for more. Debt settlement companies are notorious for asking for more money from debtors. Fees and charges should be known up front and should be clearly spelled out in a signed agreement. This is the only way to combat this type of activity.

If you choose the debt settlement method of dealing with your debts over credit counseling or debt management plans, then be sure to do your homework and check the backgrounds of the companies for which you are considering. A little research can save you a lot of headaches and a lot of money. It is worth the effort.

5 Reasons to be Wary of Debt Settlement Companies was created by and is property of American Consumer News.

Aliso Viejo, CA’s SDS West Corporation and Addison, TX’s Debt Relief USA, Inc. are under fire for using deceptive marketing practices, charging clients outrageous fees, and essentially doing nothing to help consumers financial situations or debt problems. SDS West has advertised their services to included assist with debt negotiations. However, another company, Nationwide Support Services are actually the ones handling the negotiations but clients have no knowledge of this fact. The company advertises that their services are much better than credit counseling agencies and promise to contact every debt to a substantially reduced sum. Enrolling in the program with SDS West, consumer are told to stop making payments to the credit card companies and instead make payments to the Nationwide Support Services account to use for negotiations. Consumers do not know that a large portion of this money will be paid toward the high fees, usually 15% of the total credit card debt. There is an additional monthly maintenance fee of $50 to use the service. This means for consumers that their monthly payments will take months before any of it will actually go towards the credit card debt. The major issue lies in the fact that consumers did not know these things.

Debt Relief USA is alleged to have promised that consumer credit card debt would be reduced by 40 to 60 percent, allowing consumers to be debt-free in less than 3 years. However, Debt Relief USA essentially did not live up to that promise on most customer accounts, causing consumers to leave the program before debts were negotiated and after high fees were paid for the service. Much like the issues with SDS West, Debt Relief USA also charged even more fees upon successful negotiation of the debt amount.

In both cases, deceptive practices further hurt consumers credit scores and their financial situation by failing to negotiate debt and charging excessive fees. Practices like this are getting more common among debt settlement companies who are in the business to get some cash for nothing. Experts recommend that consumers carefully review reports on the Better Business Bureau and research any debt settlement companies before signing on as a client. Some recommend that consumers use credit counseling services instead of debt settlement companies because the fees can be more reasonable and the money management assistance is based on the consumer’s actual financial situation.

Two Debt Settlement Companies Defendants in New Illinois Lawsuits was created by and is property of American Consumer News.

Protect Yourself From Online Job Scams

If you have lost your job or are simply looking to supplement your income there are steps you can take to protect yourself from falling for a scam.

• Do your homework- Before you even contemplate contacting the company or responding to an ad, take a few moments to see if the company has a rating on the Better Business Bureau. If there is a report on the BBB take note to the number and nature of complaints lodged against them (if any) to get a better feel for the type of business you are dealing with. In addition you can also do an internet search on the company looking specifically both a physical address or business listing to ensure they are a “real” business.  Last but not least see if you can find any reviews or comments on forums from other people who may have worked for or with the company.
• Don’t pay upfront- Many of these fraudulent businesses make their money by requiring you to purchase a product that will “teach” you how to make money. Before you can move on to making thousands of dollars per week you will have to pay for their “secret” tips or strategies to increase your income. It is no secret that 9/10 of these programs are scams.
• Why isn’t everyone doing this- If the job entails doing something so simple that anyone can do it, while earning huge amounts of cash ask yourself, “why isn’t everyone doing it?”. If everyone could make hundreds of dollars taking surveys or stuffing envelopes we would not have to worry about a recession.
• What are the job requirements- While there are companies that do in-house training specific to their job most postings that require no experience or worse -no resume are likely a fraud. Who would hire you to work for them and pay you large amounts of money without knowing your background or work experience? The answer: a company that doesn’t intend to pay you at all.
• Use Common Sense- When it comes right down to it, if a job sounds to go to be true-it probably is, avoid wasting your time on get rich quick schemes and invest that time researching legitimate companies that can offer you “real” employment opportunities.

Too Good To Be True- Beware Of Online Job Scams was created by and is property of American Consumer News.

It is not just the lonely or isolated  individuals that fall victim to fraudulent attempts to part them from their money. Many victims of fraud are actually active individuals who are tempted by savvy criminals who offer great-sounding deals. It is important to keep in mind that the people peddling these deals are not just pushy salespeople; they are hardened criminals who make a living separating victims from their life savings. The following warning signs can help you identify tactics that may indicate your loved one is the target of less than legitimate telemarketers.

Warning signs of telemarketing scams.

• Frequent calls from strangers- In most cases these calls will be offering great opportunities to make money or offering valuable rewards. In some cases the caller may ask for charitable contributions. Remind your parents or older relatives that any opportunity that sounds too good to be true probably is and if they really want to donate to charity they are better off contacting the charity of their choice directly.

• Receiving junk mail- We all receive junk mail however if you notice an increase in junk mail for sweepstakes, prizes and free trips it may be a sign the recipient of the mail has been targeted as a potential victim of fraud. In addition to junk mail you should also be on the lookout for cheaply made items such as costume jewelry, beauty products or other items that may represent “valuable” prizes won in return for participating in some of these sweepstakes or contests.

• Money requests-If you or a loved one receive any requests for money or payments to be sent to unfamiliar out of state companies this is a big red flag that should be not be ignored. Scammers often contact victims with offers of claiming money if the victim sends money to help process the payment or claim to be a relative traveling and in need of cash. Any repeated or large payments to out of state locations should be investigated.

• Requests for personal information- Legitimate companies will not contact you via telephone or email asking for personal information such as your social security number, credit card number, bank account number or other financial information. If you or someone you know receive this type of correspondence DO NOT give any information to the caller or respond via email. Always contact your financial institution directly at the telephone number found on your credit card or statement (not a number given via email or caller) if you have concerns about your account.

Steps to prevent becoming a victim.

1. Become familiar with your loved one’s finances. This may be harder for individuals who are active and in charge of their finances however it is important to know how much money they have coming in and from where as well as their regular expenses.

2. Recommend direct deposit of income if this option is available.

3. Encourage your loved one to consult a lawyer before taking legal steps such as deeding a house or assets or changing their will.

4. Make sure your loved one opens and sends his/her own mail.

5. Help your loved one understand the many scams and tactics that are being used to target the elderly so they are better prepared if they are approached by a fraudulent telemarketer.

Protecting The Elderly From Telephone And Mail Fraud was created by and is property of American Consumer News.

That infamous saying “desperate times call for desperate measures” is as true now as it was in the 1600′s. (The phrase is said to have been originated by Shakespeare in Hamlet but it is still not confirmed to my findings.)

More Downside to Current Economy

The damaged economy and price of family wages not keeping up with inflation are forcing some people to resort to the most desperate of measures, namely stealing. Reports in 2008, show that retailers are experiencing a steady increase in shoplifting – and not just by their customers. There is also an increase in employee-related thefts among employers. From money to merchandise, it seems that as more families struggle to make the ends meet somehow, they are turning to acts of desperation to survive. Several chains sited that the thefts are not necessarily luxury items but basic-need items such as baby formula or food.

It used to be that shoplifters and money takers had their own needs in mind such as supporting a drug habit, the thrill of the act, or just the curiosity of seeing if they could get away with it. But for many, the act of stealing is done by families living on the financial edge of a real crisis.

However, that does not make it right, especially because of the effect is has on the rest of us trying to get by on the up and up. Because of shoplifting, retailers are forced to increase prices to make up for the loss. The economy is making it hard for businesses to thrive as well, so most retailers will not eat the loss. Retailers are also having trouble keeping the incidents of theft down because of their own money issues. They are downsizing to save their business and in the process need to let go valuable staff who have been an integral part of securing the store. With fewer store clerks, there is simply more opportunity to stash and dash with the merchandise.

The Tide Rolls On

Another wave of effect that comes back to haunt consumers because of this theft is the organized crime that is involved. Professionals who thieve from other and in turn sell the merchandise online or out of trucks can potentially be a danger to consumers due to the products. Consumers who are happy to get a discount on needed items may find the results to be a risk to their health. For instance, baby formula that is sold illegally may not have been properly handled or stored per instructions, thus making the formula unsafe for an infant to drink. There is also a possibility medications and the like are mislabeled or tampered with before purchase. All of these things can have fatal consequences to an unsuspecting consumer.

No one can force you to give up a shoplifter you see boosting merchandise at the local grocery store but it should give you enough pause when you consider how it will affect your own purse strings. For consumers shopping online or buying items from a questionable source, you need to think twice about saving a buck.

Vicious Circle Hits Us All in the Wallet was created by and is property of American Consumer News.

There are several ways to assess the reliability of an online loan provider. What you may think doesn’t matter may be the little things you should really be paying attention to and looking at carefully. Here are a few tips for checking out the lenders on the web.

Company Standing

With the convenience of the internet, a quick search can reveal reviews and critiques by fellow consumers who have done business with the company previously. In addition to hearing feedback from strangers, you can also check with family, friends, and the Better Business Bureau to see if anyone has complaints about company service.

Company Website

While it may be a pop-up advertisement that caught your attention in the first place, you definitely don’t want to be inundated with pop-ups while reviewing the website. Make sure that the pages of the company site load quickly and efficiently and that the information content makes sense to you and is complete. Be wary if there are a lot of error messages with page loads or if written information seems incomplete.

Company Privacy

Obviously there will be plenty of your personal information disclosed during a loan application. Check out the privacy policy on the website. A huge red flag should be thrown if there isn’t one on the site. If there is a policy posted, review it for content and sensibility.

Company Profile

Check out the About Us or Profile page of the company on the website. Look for the company history, mission statement, and staff profiles. Not all companies will have the same information but there should be some information that provides you with background information. If not, you have to wonder what the company is hiding and why they are not sharing more about themselves when they expect you to tell them everything about yourself.

Company Application

Many online lenders offer you an initial form or application to complete in order to gauge approval potential. If you feel uncomfortable with the information being asked of you, you probably should trust your gut instincts and look for other loan alternatives.

Company Offers

If you have solicited information from other companies, it is important you read all of the fine print, including the fees, interest rates, and terms. This should be one of the most important pieces of information for making a decision. Compare at least 3 company offers before making a decision. Do not just go with the first company that gives you an approval or you could end up in a financial nightmare.

Company Communications

Once you have made a decision to move forward with the loan process, pay attention to how the company representatives treat you. If it is not easy to reach the company staff or you find it difficult to deal with the employees, you should consider moving on to a different company. After all, you will have to deal with these people for a long period of time and it is your money and personal finances that are affected by the loan so you must take control of the situation.

How to Thoroughly Check Lenders on the Web was created by and is property of American Consumer News.

Auction Deals

Who doesn’t love a good auction?  After all, eBay continues to be one of the top 5 websites based on the number of daily visitors.  Auctions get people all excited, and people who are excited are more likely to pay more.  You’ve probably seen things on eBay selling for more than what you can buy the same item for at the store… or wondered why someone would pay as much or more in shipping as what they paid for their item.  The typical cause is last-minute bidding from people who want the item.  As the time for the auction comes to an end, watchers start trying to outbid each other in a fast-paced environment and often end up overpaying.

Rebates

Rebates that you actually receive are a good deal, but studies have sohwn that less than half of all rebates are ever redeemed successfully!  When you see items being sold with “rebates”, make sure you aren’t choosing a particular brand just for the rebate – chances are you can get the same item with a different brand name for a lower price, and without having to wait and hope the rebate shows up.  Companies offering rebates make it difficult for consumers to receive them.  For example, you may only have 10 days to send your rebate form and receipt in after your purchase, or they may give you a short window of time that doesn’t start until three weeks after the purchase date for redemption! 

Sometimes consumers get their rebate checks, but forget to cash them before they expire – which is money lost.  Other times, rebates are mailed in envelopes that look exactly like all of the junk mail that you get, so it’s possible people are just throwing them away unopened.

Credit with 0% Interest

How many times have you purchased something on a credit card or store credit offer just because you can get 0% interest?  Researchers from MIT have conducted studies of people buying with cash versus people buying with credit and foudn that the credit card group always paid more for the same items as the cash group; and that they spend far more money than they would have if they had to pay cash.  Another downside of paying with plastic is you tend to forget exactly how much you spent… until the bills start coming in, that is.

Mid-Range Products

Have you ever shopped online at a website that offers several similar products of different price ranges on the same screen?  Companies can actually exploit a consumer’s general preference for the mid-range item by presenting a more expensive item next to the one they are really trying to sell.  So if the company has three types of cameras, one a cheap model, one in the mid-range, and a very high-end model; consumers will naturally select the mid-range camera more often than either of the other choices.  Compare products based on their features and what you actually need rather than based on price comparisons alone to be sure you aren’t being swayed unknowingly to the middle priced item.

When a Bargain isn’t Really a Bargain was created by and is property of American Consumer News.

Many people opt to hire a professional moving company to help assist with the big furniture, the heavy lifting, and the transportation. However, consumers who are desperately in a hurry to get the job done are often the target of non-upstanding companies who promise one thing and deliver nothing.

Here are some ways to help prevent being the victim of a moving scam.

Go Beyond the Phone Book

There is probably a lot of listing in a local phone book for moving companies but the phone book won’t give you very much information about the reliability or the pricing for a moving company. Use the internet to read other consumer reviews if there are any available and contact the Better Business Bureau in your area to get information about any complaints against the company.

Request Estimates from Several Companies

While it may be a bit of a pain and time-consuming task, it would best to get an estimate of moving costs from at least three different companies. Compare the prices from each. If any appear to be similar, you may have to ask for some references to make the final decision. It is also important that you do not take the lowest price because of the low price. Make sure the estimate is complete and includes all of the services you will require during the move.

Get it In Writing

After choosing a company, do not do another thing without a contract that spells out all of the details of the move. Make certain the charges match the estimate and that no hidden costs have been slipped in while you were not looking. Especially keep your eyes open for fees regarding normal moving materials such as packing supplies, protective coverings, and the like. They should have all been included in the original price. A contract is also important because it provides proof of the move. Otherwise, a moving truck could drive away with your stuff ad you may have a hard time proving what happened.

Inquire About Damage

Sometimes the most professional movers can break some of your items. What matters most is the claims process that allows you to get back money for the damages. Before approving any contract, make sure you understand how their claims process works.

Don’t Pay Everything In Advance

Some moving companies will require a down payment in order to initiate the moving process. If a mover requests the entire amount, or at least a large portion of the cost, upfront before the move has been completed, it should throw a big red flag.

Prevent Being Scammed During a Move was created by and is property of American Consumer News.

 The controversy involves car dealerships scamming the consumers who use their old vehicles as trade-ins for a new vehicle. Typically, a consumer who wants to reduce the cost of the new vehicle will trade in their old vehicle to receive a monetary discount off of the price of the new car. The dealership will take over ownership of the old vehicle and pay off any remaining balance of the consumer’s loan. The dealership can then make a profit by selling the used car to other consumers.

 However, the deal becomes a scam when an unsavory dealership fails to pay off the loan. Instead, the car is allowed to sit on the car lot until it is ultimately reposed by the loan company. When the vehicle is repossessed, the loan becomes defaulted and the consumer is left to deal with a huge negative credit situation.

 So, what do you do to prevent the same thing from happening to you? As cliché as it sounds – GET IT IN WRITING. Make certain the dealership has created a document or added an amendment to the standard purchase agreement, outlining the terms of the trade-in for the old vehicle. Many consumers worry only about the numbers and payment amounts they see on a vehicle purchase agreement and fail to read the fine print. Before stepping off the car lot, make sure you are aware of what is contained in the agreement and what you are signing. If you do not agree with any piece of information contained in the agreement, clear up the matter before signing and before leaving. Once you drive off the lot, you will be held responsible for whatever the agreement states.

 If you plan to use your old vehicle as a trade-in, be prepared before you even go to the lot. Research the value of your car so you will know what a fair trade-in price will be before you start negotiations. Take a peek at the dealers reputation through online reviews and through the Better Business Bureau to make sure nothing shady has gone down in the past.

 It would also help to pre-qualify for an auto loan so you will know exactly how much you can afford to pay, before getting yourself involved in another credit nightmare by missing payments. The more prepared you are going in, the less the likelihood you will get scammed. When you consider the small amount of time it takes to prepare yourself to make a large purchase such as a vehicle, versus the amount of time, energy, and money it would take to put up a legal fight, you’d be wise to do your homework first.

Vehicle Scam: Don’t Fall For This Trade-In Trick was created by and is property of American Consumer News.

Rapport is a “next generation consumer desktop security solution”, which is used to protect consumers from both online identirty theft and malware threats, including phishing, pharming, man-in-the-middle attacks, keyloggers, man-in-the-browser attacks, screen-scrapers, and session hijacking. Through ING DIRECT, the Rapport software is offered free and can be downloaded directly from the ING DIRECT website.

The Rapport software has been designed to compliment existing desktop security products, even when a computer is already infected by malware threats. The software essentially creates a secure pipeline for he information exchanged between customers and ING DIRECT’s website. The software prevents all information from being stolen, prevents fraudulent transactions from being made, and can protect consumers from entering personal information into look-alike websites.

Chief Information Officer of ING DIRECT, Rudy Wolf states “We work very hard to ensure the costumer information and savings are secure. Our strategy of adding and changing security layers with minimal customer impact is critical.”

The CEO of Trusteer, Mickey Boodaei adds “ING DIRECT is taking a leadership role in addressing the need for additional layers of desktop security software, such as anti-virus, anti-spyware, and desktop firewalls, to protect consumers from sophisticated attacks aimed at online banking users.”

ING DIRECT offers many other services and high-value products including the Orange Savings Account, Electric Orange, Orange CD’s, and the Orange Mortgage programs for consumers nationwide.

For more information about Trusteer, Inc, you can visit the Trusteer website to learn more about their services for online business security

ING DIRECT Offers Increased Consumer Protection Free was created by and is property of American Consumer News.

Here are some of the places you may find a deal kept under wraps:

Restaurants – Going out for a meal but not feeling particularly ravenous? Ask your waiter about the rules for ordering a lunch portion of a dinner entre. You will get the same great food, just a smaller portion, for a less expensive price.

Competitor’s Coupons – Many retail stores do not openly advertise they will accept competitor’s coupon codes unless you first ask about it. This allows you to save on the products you want in the stores you want to shop in. The worst thing that can happen is the store will tell you no. You can also check for online coupons for any given reailer. Often you’ll find deals that aren’t published in the store’s regular weekly ads.

Room Service – When staying at a hotel, ask the front desk if room service provides a menu for children. Many times the exact same meal listed on the kid’s menu is the same size as the adult portion, only for a cheaper price.

Supermarket Rewards – Many consumers opt to register for their local grocery store’s reward programs, which can frequently save money on specially advertised prices, only good for members. However, with busy lives, some people will forget to bring the membership card to the store with them each time they shop. Check with your local grocery’s customer service center for the rules of the membership. Some will accept the receipt from the purchases made without the rewards card and will reimburse you for the amount of the discounts you would have otherwise received. Supermarkets may also offer free merchandise if the price listed scans incorrectly but again you may have to speak up to get the full refund.

Online Only – Before going shopping, check out the company website for the stores you plan to visit. Some may offer special coupons or deals that can only be found online. You may not have to speak out to get these discounts but you do need to do a little bit of homework beforehand.

There are probably many more discounts available if you take the time to ask about them. This may be especially true for local mom and pop stores, who want to keep their loyal customers to keep coming back. For example, in a town close by, a local gas station offers a 20% discount on gasoline to customers who pay cash and mention the special deal. Everyone who does not directly ask for the discount will not receive it. Keep your eyes and ears open for some great deals and when you find them, make sure you open your mouth.

Speak Up to Get A Deal was created by and is property of American Consumer News.

So what do you do when you are hit with such fees? Here are some tips to help you deal with fees the right way.

• Approach the company representative in a calm, collected manner. It is a good time to remember grandma’s old cliché “You get more bees with honey than vinegar”. Being respectful when approaching the company make allow you to explain your side of the situation and actually be heard. Express your dissatisfaction with the fee and give the representative a chance to work with you. Oftentimes, customer service agents are able to use their discretion to remove fees. If you go in on the attack, chances are you will get nowhere fast.
• If you can’t get anywhere with the associate, ask politely for a manager for additional assistance. If you get transferred, be just as respectful when explaining your side of the story. Do not scream and demean anyone. If you get your message through, ask for a written confirmation of the conversation and be gracious with your thanks.
• If you find you can not get results from the company directly, locate a consumer-advocacy group who can counsel you on the next step. If the situation means enough to you to fight a little bit, you may end up not only helping yourself, but also many other consumers who haven’t used their voice.
• As a final step, you should contemplate filing a complaint with the Federal Trade Commission online at http://www.ftc.gov/ or by phone at 877-FTC-HELP. The FTC can help assist consumers who feel defrauded on some level if the company was not upfront and clear about the fees.
• Finally, consider the amount of time you want to or have invested into the fighting of the fees. If it has taken 30 minutes or more to deal with the situation, you are essentially costing yourself more time and money – Yours!

To Fight or Not to Fight: The Ridiculous Fee was created by and is property of American Consumer News.

Unless you are aware of the weight of your favorite products, you may not have noticed the difference. Consumer experts advise that in order to judge the true cost of what you are buying, you should always read the labels on the packaging and read the unit cost for each item which can be found on the price label on the shelf. For example, the unit price of paper towels will tell you what you are paying for each individual towel. It is a better gauge to determine what you are really paying than just looking at the total price, especially if you haven’t noticed the size decrease. Saving at the grocery store is difficult enough and with less product for more money it is now more important than ever to read labels and really understand what you are paying.

Of course, each company has their own reasoning and defense when asked about why the size of their products has become smaller. Most cite “keeping up with the competition”. The reality for the consumer is that you may be glad the prices aren’t increasing without knowing about the differences in product size. Do not be afraid to take a little notebook along to the grocery store with you and jot down different product information that you can review later. It will also help you to monitor prices in the future.

IT’S TRUE! SIZE REALLY DOES MATTER was created by and is property of American Consumer News.

1. The Post Office: The Post Office is a common place where scams can be run. It has nothing to do with the people there, it is simply the way the Post Office was set up to be accommodating to the general public. Here are two common scams and what you can do to protect yourself.
   1. Stamps: If a letter has too many stamps on it, the post office will happily offer a refund of excess postage. Unfortunately, that means that if too much postage is purposefully put on one item, anyone can take that item to the Post Office for a refund in cash. Again, it is an easy scam to pull off and can be easily hidden if a company sends out a lot of marketing mail or bills.

<!–[if !supportLists]–>· <!–[endif]–>Protect Yourself By: Keeping track of how many stamps your bookkeeper has at any one time and how many stamps are given out to other employees. This can be done by simply keeping the stamps in your own desk. If you have a postage machine and cannot monitor stamps given out, take items to the Post Office yourself or give those items to someone in the office who has no access to the machine. This way, there is some accountability in the office and offers some protection to you.

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1. 2. Money Orders: In case you were not aware, the Post Office does offer money orders for sale. Unfortunately, this means that an embezzling bookkeeper can take any check written to the Post Office and have it turned into a Money Order made out to themselves. That money order is as good as cash and can be put into any bank account without a Small Business Owner ever knowing.

<!–[if !supportLists]–>· <!–[endif]–>Protect Yourself By: Demanding to see receipts from the Post Office immediately. The Post Office always gives a receipt when it makes a sale, no matter what. If a money order is purchased from the Post Office, that money order is going to show up on the receipt. By reviewing receipts every time someone goes to the Post Office, you will know immediately if any money goes astray.

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2. Payroll Taxes: Using Payroll Taxes to embezzle thousands of dollars is one of the most common ways a bookkeeper can steal. It is so simple and so easy, that many people do this year after year without ever getting caught. What they do is pay too much in taxes every single pay period, whether to themselves or a ghost employee. Then, at the end of the year, they file for a refund and get back thousands of dollars instantly.

<!–[if !supportLists]–>· <!–[endif]–>Protect Yourself By: Having your accountant review and/or file the payroll taxes every quarter. Specifically ask them to check for this kind of fraud since accountants don’t look for embezzlement unless you ask them too. If the taxes are too high, an accountant will let you know.

3. Redirected Payments: This is where things can get a bit tricky. Bookkeepers, good or bad, are in charge of writing checks. If an embezzler is smart enough to not forge a check, then an embezzler is also smart enough to get a Small Business Owner to sign a check for them. However, if a signed check gets to the person or company its supposed to get to…well, that is another story. It is very easy for an embezzler to get a Small Business Owner to sign a check to a company, and then deposit it into a different account.
   1. Consider this: You have a Citibank Business Credit Card. You charge on it every month and therefore, every month a payment has to be made. Once a month like clockwork, your bookkeeper comes to you with a check for payment. You think nothing of it and sign it never suspecting possible foul play. You also don’t notice if an account number was or was not listed on that check. Once you’ve signed that check and let it leave your sight, an embezzler could then put their own Citibank credit card number on the check paying off their own credit card instead of yours. Then, they would make the minimum payment on your card so that you would never suspect anything is wrong since you can still charge on your card. This can be done with any number of payment checks whether to credit cards, banks or even the IRS. Even if there is an account number on the check, it may not be yours…afterall, do you have all your account numbers memorized?

<!–[if !supportLists]–>· <!–[endif]–>Protect Yourself By: Always be the first to look at the mail…especially bank statements and credit account statements. If listed payments are less then what you remember making, you have an excuse to go and find the check. If checks have account numbers crossed out and new ones written out, you will be the first to know by simply opening your bank statement first. Anything that has white out or has been crossed out should set off alarm bells. Check these items closely right away to catch an embezzler as soon as theft occurs.

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While there are many other ways that embezzlers steal, this is just a few of the most common ones. Also check out the other articles in this series about Protecting Your Small Business from Embezzling Bookkeepers. Part 1 will teach you how to protect your Checking Account, Part 2 lists ways to stop Credit Card and Identity Theft fraud, and Part 3 discusses Ghosts in the Company. 

Protect Your Small Business from Embezzling Bookkeepers Part 4: Common Scams was created by and is property of American Consumer News.

Natural Don’t Mean Nothin’ – Just because the package says natural, eco-friendly, or non-toxic, it doesn’t mean it has to be. Such terminology is not government regulated so anyone can add them to a product. Words like organic and phrases such as “post-consumer recycled content” accompanied by the certified symbol are what you should be seeking.

Don’t Accept a Promise As Written – It may say that if you use Product A, you will reduce pollution in your neighborhood by 50%, but do you really think it is possible? Go with your gut and common sense. Companies will tend you promise those things you want to hear most.

Research Before You Shop – If you are serious about buying all-things eco-friendly, take the time to research the various places such as books, magazines, and websites like Consumer Reports’ http://greenerchoices.org/ where you will find information about what to look for in products.

Think About Your Own Habits – You may be buying greener products but are you committing to the changes of lifestyle that go along with it? Do you recycle all materials you use at home each and every time? Do you purchase products in bulk to reduce the amount of packaging materials involved? Do you use rechargeable batteries and other products that eliminate disposal of potentially hazardous wastes making their way to the local landfill?

Being green is more about accommodating your lifestyle to meet the needs of a healthy environment and promoting your own good health and choices. Making a commitment to change will have a great impact on the environment as a whole if you take the necessary steps. There are many simple things that can be done by each and every person that would have an effect on the environment. Take the time to read up on the subject and begin practicing it in your every day life instead of waiting for someone else to do it first.

How To “Go Green” And Mean It was created by and is property of American Consumer News.

GHOST VENDORS

Ghost vendors are basically companies that you pay for goods or services you did not receive. Since bookkeepers often find vendors to help keep a company afloat, it is very easy to convince a business owner that a check to a vendor is a valid payment. As a business owner, it is your job to know if that expense is legit. Checking with your state to see if a business is valid is not going to guarantee your protection. You have to do more.

Consider this: It costs less then $100 to get a Fictitious Business Name…a name which is then filed with the state and requires little or no back up documentation to acquire. Once someone has a Fictitious Business Name, they can then open a Business Checking Account in that new company’s name. It takes no more then an hour to get both legal products, and an embezzler is then able to deposit checks into that account immediately. The bank with the embezzler’s account is not going to know if the check they are cashing is valid or not, nor will they know if the signature is truly yours. All they care about is taking care of “their customers.” Therefore, it falls on your shoulders to protect yourself.

Protect Yourself By: Being obnoxious and paying late. Even Ghost Vendors submit invoices, and there should be an address on that invoice. If there is one, drive by the address and see if there is a business sign posted anywhere out front. If there is not an address, or there is a PO Box, then do not sign a check paying that vendor unless that vendor is willing to come to you in person to collect that check. If they are in collusion with your bookkeeper to embezzle you of funds, they will be less willing to face you then your bookkeeper would be. If your bookkeeper harasses you to make the payment and claims that the vendor is harassing them, tell your bookkeeper to forward the vendor’s calls directly to you. A good bookkeeper will be relieved to not have to deal with angry collectors, and any other response then relief should tell you that something is wrong.

GHOST EMPLOYEES

Ghost Employees are basically people you pay every pay period who do not really work for you or your company. Obviously, if you are a small company, it is going to be harder to slip a Ghost Employee’s paycheck across your desk, but, the larger the company, the easier it becomes to add ghosts. An embezzling bookkeeper will not only deduct the payroll taxes from this person’s check to make it look like a valid paycheck when you sign it, but they will also pay payroll taxes out of your account to hide the embezzlement from your accountant.

Consider This: A carpeting company I once worked with had many flooring installers who worked “in the field.” Many of the installers would hire assistants that they would pay from their own pockets in the beginning, but over time, they would ask the business owner to add the employees to the payroll. The owner would do it sight unseen, thus making it very easy for an embezzling bookkeeper to slip in a few more ghosts without the owner’s knowledge.

Another way embezzlers add Ghost Employees is to cut checks to their friends and / or family. That person may not even be aware it’s done if the embezzler has access to their checking account. Any deposits made into a joint checking account would easily be explained away as “The Embezzler’s Paycheck.” (This is common between an embezzler and their spouse…the check being written in the spouse’s name, and the spouse never seeing that check.)

Protect Yourself By: Getting to know all of your employees and insisting on seeing them “on the job. ” The less involved you are, the easier it is to embezzle from you…and an accountant will not catch this kind of fraud unless you pay them thousands of dollars to investigate it. If you do not like an employee or do not feel that they are actually working for you, fire them immediately. It is better to pay towards unemployment then worry that an unfit employee will drive customers away, or get hurt “on the job” and cost you thousands.

While most people might think their bookkeeper is “totally trustworthy,” it is blind trust that makes you an easy mark for embezzling funds. Since accountants do not look for embezzlement unless you request it and are willing to pay thousands, it is your job to be involved no matter how busy you might be. By simply popping in for a “random” company checkup, you will keep your bookkeeper on their toes enough to make sure that they do not want to steal from you. It’s good advice for anyone no matter how long you’ve worked with your bookkeeper since many bookkeepers steal for years and never get caught until they quit.

Don’t forget to read Part 1 and Part 2 of this series regarding Checking Account and Credit Card and Identity Theft fraud. Also check back next week to learn about common scams bookkeepers use to steal thousands.

Protect Your Small Business from Embezzling Bookkeepers Part 3: Ghosts in the Company was created by and is property of American Consumer News.

One of the first things we noted involved the special service deal. Some of the items that appeared to be included in the special were in fact, not included at all and we were changed separately for parts. The receipt also claimed that several services had been performed but in reality, they were not. For example, when we arrived home, we noticed a rear brake light was out on the car. According to the receipt, the service technician checked all of the lights. We also noticed that the complimentary vacuum service we usually received was noted on the receipt as being declined by the customer, which was not the case. There were other things that were just wrong. We are not the complaining type but we took issue with the manager because so much seemed to be incorrect.

While the manager listened, in the end he did nothing more than pull a technician from a job in progress to have him vacuum the front floor of the car. Not only was it unnecessary, it was really embarrassing and we left still unsatisfied with a normally pleasant experience. When we have had our vehicles serviced at the same location in the past, we never thought twice to look at the receipt and make certain everything we paid for was completed. Now, we wonder about all the times in the past. Was it a case of one shotty employee to lazy to do the job right or it is the norm to just breeze through a computer service record?

Sadly, when we feel comfortable with a person or a place, we tend to let our guard down and that’s when we get taken advantage of. Regardless how much your respect the company or the person, you should always make it a point to protect yourself. Don’t get too comfortable and take for granted that things are always on the up and up. Just check to be sure everything is right before you leave and double check whenever you still have unanswered questions.

VERIFY SERVICES ARE COMPLETE BEFORE YOU MAKE THE PAYMENT was created by and is property of American Consumer News.

To protect yourself from identity theft and credit card fraud, you need to implement the following strategies and always consider those cards to be at risk. This second article in it’s four-part series goes over seven things you can do to help stop credit card fraud:

1. Fill out your own credit applications. This is especially important for SBOs (Small Business Owners). Too many times, SBOs trust their bookkeepers to fill out all their credit applications. They naively hand over their social security numbers and business ID numbers because they trust their employees not to steal from them. Although some of these numbers a bookkeeper does need to know when handling your bookkeeping, your social security number and corporation number should be kept under wraps. Once they have this information, they can fill out any number of applications without your knowledge and easily forge your signature. A new creditor will not know if your signature is a forgery. Therefore, if you must have a bookkeeper fill out your information, have them fill out everything EXCEPT for your social security number, and other business related numbers, and sign all the applications yourself. By doing so, you lessen the chance of new credit being opened in your name (or your company’s).
2. Pull your credit report every few months. Even if you keep your ID numbers to yourself, you should still check your credit and business credit reports every three months. By doing so, you will see if there are any new accounts that should not be opened, and you can have them shut down immediately. You can also report to the credit agencies that no other accounts can be opened without speaking to you first.
3. Write “Check ID” on the back of the card. Many people make the mistake of never signing their credit cards. They assume that not signing their cards prevents embezzlers from forging their signatures. In actuality, by not signing your cards, someone else CAN sign them in your place. Retailers are often trained to only match signatures on receipts to signatures on cards. If the signatures appear to be the same, they do not need to ask for ID. By writing the words “Check ID” on the back of your card, any theft that occurs with that card is not your fault or responsibility. It becomes the fault of the store that failed to ask for your ID, thus giving you more rights should you need to pursue reimbursement in a court of law.
4. Use PO #’s with Employee Initials. If you cannot help but give out cards to employees to make business purchases for your company, make sure to encourage the use of Purchase Order numbers (PO #s). Many business cards will prompt retailers to ask for PO #s, which will show up on the receipt and your credit card statement. By having the employee list the PO # as the first two initials of their name, and the year, month and day of the purchase, you will know exactly who made the purchase and when by simply looking at the PO number. Not only is it easier to track and verify which employees made what purchases, but it assigns responsibility and accountability for every purchase thus reducing the risk that an employee will steal from you and be able to blame it on someone else. (An example would be EB70214 for a purchase I might make on Valentine’s Day of 2007. Be sure to include the year to avoid duplicate PO #s year after year.)
5. Check your Credit Card Statements: This is incredibly important for anyone, whether business owner or credit consumer. By looking over statements, you will catch any fraudulent charges instantly. Most credit companies only allow you to dispute fraudulent items within 30 days of receipt of statements. By not looking over the statement immediately, you are giving up your disputing rights and may get stuck with any fraudulent charges that have occurred in your name. So go over these statements carefully and contact your creditor immediately if anything is on there that should not be.
6. Keep your credit cards locked away. Just like locking away your checks, you should always lock away your credit cards. By doing so, you greatly reduce the chance that anyone can get hold of your cards and make unauthorized purchases. However, you still need to look at the statements for these cards since people can memorize or save credit card numbers and make purchases online without identity verification.

These ideas are simple, but effective in stopping credit card theft. Although many people would say to also shred credit card applications, this really does not protect you since applications can now be filled out online. Only by protecting your important ID numbers and watching statements can you add Identity Theft off before it causes too much damage.

Check back next week for the third article in this series about Ghosts in your company. Believe it or not, they do exist in the business world. Also, check out Part 1 of this series regarding how to protect your checking account.

Protect Your Small Business from Embezzling Bookkeepers Part 2: Credit Cards and Identity Theft was created by and is property of American Consumer News.

This article is the first of a four-part series on protecting yourself from bookkeepers. It is not written to make anyone point fingers or fire their bookkeepers. It IS written to protect SBO’s and to teach them the most common ways that bookkeepers steal. By simply changing up your involvement in your books, you can stop embezzling cold and make it incredibly difficult to be robbed.

Here are ten examples of how I might steal from you if I were your bookkeeper, and ten simple strategies on how to protect yourself from my machinations:

1. Always Open Your Own Bank Statement: If I am your bookkeeper and I am stealing from you, forging your signature is the easiest way. Stealing checks out of sequence and signing them to myself will soon net me thousands of your money in a very short period of time. If I were doing this, guess what I’m going to do when you give me an unopened bank statement. I am going to find the “evidence” and destroy it. In other words, I’m going to find the checks I wrote to myself and tear them up. You will never know the difference because the check will be out of sequence, and the only way for you to find out is if you spend thousands of dollars to have my bookkeeping entries audited. By opening your own statements and thumbing through the checks, you are going to catch every forged check before I get a chance to do anything about it.

2. Lock up Your Checkbook: Not only is this good advice for protecting yourself from bookkeepers, but from other unscrupulous employees as well. By making your bookkeeper and employees ask you for a check whenever they need money, it keeps you involved and your employees accountable.

3. Always Insist on Seeing Voided Checks or Voiding Checks Yourself: If I am your bookkeeper and I am determined to steal from you, I am still going to be eyeballing those checks and waiting for my opportunity even though you are locking the checks away and looking at the bank statements. One common way for me to do this is to get you to sign a check to me for “cash” to cover expenses, and then I say, “I had to void the check.” In actuality, I did NOT void the check. I pocketed it and I will cash it the next time I go to the bank. You write me a second check, and I cash that one too. When the check comes in on the bank statement, you think nothing of it because you write me checks for “cash” or “reimbursed expenses” all the time. It’s also your signature on the check…nothing out of place and nothing that alerts you to a problem because you just assume that you are looking at the same check “again” when you come across the second one. By insisting on seeing the voided check, I would have to write “Void” on it to prove that I am not lying. If Void is not written on it, then you need to write “Void” across it before you sign a second check. This way, I can’t dig it out of the trash later and cash it. (And yes, you DO want to keep even the checks you void in case you ever get audited. The IRS will ask to see voided checks as well as cashed ones.)

4. Never let anyone but a partner be a signer on a checking account. If you have your bookkeeper as a signer on your checking account, go tomorrow and take them off immediately. If I am a signer on your check, that means I don’t need you to be with me to walk into your bank and drain your account. And guess what…the first time you ever piss me off enough to quit, that’s what I’m going to do. I will either write a huge check to myself and cash it right after I get my last paycheck, or I will walk into the bank, wipe you out, and disappear off the face of the Earth. Sucks to be you…cool to be me. I’m in Barbados toasting your naiveté while you are struggling to keep your business open. Cold hearted? Absolutely. Unfortunately, if your bookkeeper is a signer, you set yourself up for it. Get them off your account TODAY.

5. Never sign a check for a person or a company you are not familiar with. If I am a true embezzler, then I am going to “collude” with my family members and friends to rob you blind. How do I do this? Simple. I write checks to my family and friends and tell you that it is a vendor. You think nothing of it and sign the check. My friend/family member cashes the check and gives me the money, and I give them some cash for doing it. It all looks legitimate to you, and of course, I’m going to make it look legitimate before handing the books over to an accountant. Be wise. If you don’t know the person or the company, DON’T SIGN THE CHECK. Let the person or the owner of the company show up in front of you with proof that they did the work before you pay them. Most people will not want to lie to your face, although some will. Always ask for proof, and always make them come to you.

6. Get a Deposit Stamp AND STAMP EVERY CHECK THAT NEEDS TO BE DEPOSITED: Another common theft practice is for a bookkeeper to open a company with a name similar to yours. For example, if your company’s name were “Smith’s Distributing,” as an embezzler, I would open an account called “Smith’s Distinguished Products.” Now, every check that comes across my desk where the payee has written “Smith’s Dist.” is now fair game. I can deposit that check into my dummy account, and I mark the corresponding invoice paid. If you purchase a deposit stamp with your bank name and account number along with the words “For Deposit Only,” that badly written check CAN ONLY be deposited into your account. In this manner, you can save time looking over all the checks and worrying over every deposit, while also keeping those checks where they belong. IN YOUR BANK ACCOUNT!!!

7. Get Carbon Copy Deposit Slips: Get carbon copy deposit slips and only give one booklet to your bookkeeper each month. While they still can be conniving in the way they make deposits, it helps you keep track of how much money should have gone into your bank account and who’s check was deposited. Instead of check numbers, put down customer names on the deposit slips, and you can quickly and easily see who paid you, when they paid you, and when that money should have gone into your account. When the bank statement comes in, grab the booklet of copies and match your deposits up really quick. Anything that’s missing will alert you to possible theft and make you watch your bookkeeper that much closer.

8. HAVE THE COMPUTER WITH YOUR BOOKKEEPING FILES AUTOMATICALLY DO A DAILY BACKUP IN THE MIDDLE OF THE DAY TO AN EXTERNAL HARD DRIVE. Not only will this save any “original” data entry that your bookkeeper has done, but it will give you copies that are easy to go through should you suspect embezzlement. By handing your backup over to a professional fraud examiner, they can tell you fairly quickly if something “is not kosher.” Make sure your hard drive has a password that only you know, and when your bookkeeper splits, you won’t be high and dry with a wiped out computer and missing files.

9. DEMAND TO SEE BANK RECONCILIATIONS: If you do not know your bank balance, this is a big warning sign that something is not right. Bank reconciliations usually take no more then half an hour to complete. If it’s been months since I (as your bookkeeper) have given you one, I am either not a very good bookkeeper, too busy to focus on what should be a priority, or I am stealing from you and I don’t want you to know how low your bank balance really is. By giving a bank reconciliation to you each month, you can look and see which checks and deposits have cleared and which ones are still outstanding, and you will know if too much money is going out and why. Make sure you demand these and make sure you give your bookkeeper the time to do them.

10. Keep copies of all reports from your bookkeeper. If I am stealing from you, I am going to doctor my reports. Period. However, I am not going to doctor original reports that I am showing you because you will notice at the time that something is missing. For example, if I give you a copy of the check register right after writing 20 checks, you are going to notice if there are gaps in the check number sequence, and if there are voided checks. You are going to want to know why. I will give you an explanation (one that you will believe) and I will probably want that report back. Afterall, it really IS a bad idea to have your business’s financial information lying around. However, the next time I give you a register, I might have changed names or amounts on old checks and you won’t notice because you sign too many checks to remember everything. By keeping originals, you can occasionally pull out the old reports and compare them to new reports to make sure nothing has changed. It will alert you immediately if something is different, and it serves as excellent backup should your bookkeeper ever pull a “Delete-And-Bail” on you.

So now that you have some fabulous strategies on protecting your checking account, look for Part 2: Credit Cards and Identity Theft now published on American Consumer News.

Protect Your Small Business from Embezzling Bookkeepers Part 1: Checking Account was created by and is property of American Consumer News.

Recently Consumer Reports did an extensive write-up of the value of purchasing a warranty for high-definition televisions. Previously Consumer Reports was neutral toward extended warranties on some electronics purchases, but in their December issue they issued a resounding statement that HDTVs are extremely reliable and there’s just no reason to get the extended warranty. Their report states that there’s only a 3% chance that any given HDTV will need a repair during the first 3 years of ownership.

When the salesperson prompts you abuot an extended warranty, they’ll give you an amazingly smooth and convincing presentation to get you to take it, but just say no, no, and no. Many stores require their sales persons to get three objections from the customer before they leave you alone about it. Some have gotten so bad that salespeople will tell you the item is out of stock so that they can have the inventory to sell someone who will purchase a highly-profitable extended warranty.

Consumer Reports also researched the quality of high definition televisions and found that Panasonic is the most reliable brand for LCD and Plasma televisions. They found that Dells are the most likely to need repair! They also reported that the top two selling brands of HDTVs are Vizio and Olevia They make many 32” and 37” LCD’s at very inexpensive prices. They work well with HDTV over the air or HD cable services like Time Warner Digital Cable.

Don’t Buy a Warranty on Your Next HDTV Purchase was created by and is property of American Consumer News.

It might sound like a good deal at first- after all, saving 15% on the $100 order you have waiting to be rung up would let you keep $15 in your pocket!  Why wouldn’t you want to save $15 on today’s purchase?!

There are a number of reasons why you should think twice before signing by the “X” on a retail credit card application.  First, retail store branded credit cards offer some of the highest interest rates in the credit card industry.  While most credit card issuers calculate the interest rate for cardholders based on the individual’s credit history and credit score, many retail store cards are just offered with higher interest rates- at times, the state maximum.  If you save 15% off the day’s purchase, but any charges made on the credit card from that moment on are receiving a 22% interest rate- is that really a good deal?

Even if you do happen to find a retail credit card with a reasonable APR, it doesn’t guarantee that the rate will stay reasonable.  Card issuers have the right to raise your rates pretty much whenever they want, for whatever reason they want (unless it says otherwise in the cards terms and conditions).  Some  of the most common reasons credit card interest rates get increased:

• You were late on another credit card or loan payment
• You have too high of a balance on another credit card account
• Too many credit inquiries in a short period of time

Before you sign the application for your 15% savings, really consider whether or not you need another credit card, whether the $15 you save today is worth having an additional credit card account on your credit report, and how you typically make payments on your accounts.  If you pay them off religiously each month in full, you can usually avoid interest fees all together within the grace period- just keep in mind that not all credit cards offer the grace period and you could still end up paying interest or finance charges on each purchase.

Sometimes Saving 15% on Your Purchase is Not a Good Deal was created by and is property of American Consumer News.

My fiancé went shoe shopping a while back, and I believe she went with one of her friends. They went down to Sioux Falls and planned on going to this shoe store that they’ve never been in before since it was having a big sale, even after the discounted prices, the shoes were still nearly $50.00. I’m blessed to have a woman in my life who’s very frugal, and she promptly left there and went somewhere less expensive.

Be wary if you see advertisements that say that you’ll get a 20% savings off the original price. It doesn’t matter that you’re getting a percentage off if the original price was a rip-off. All that means is that you’re not getting as ripped-off as you were before; it’s still not a good deal.

Quite often companies will use sleazy marketing to make their products look like a better deal than they actually are. Infomercials for products that are supposed to save you time, money, and effort are major offenders in this area. They’ll sell a spray bottle of some magic orange cleaning substance for $19.95 even though it only cost them $2.00 to make, and then give you a “deal” by giving you two bottles of magic orange liquid instead of one of them. This means is that you’re only paying a 500% markup instead of a 1000% markup.

Companies will also tell you that a product or service has a suggested retail value of something much higher than it is. Then they will sell you the product at what they really wanted to sell it for, and then let you think that you are getting a deal, because then you paid less than the rip-off suggested retail value price. Automobile companies and jewelry companies are big offenders here. Fine jewelry will always appraise for a few hundred dollars higher than what it will actually sell for. The $1000 engagement ring I bought on Blue Nile appraised for $1400.

Be aware of the deceptive marketing techniques that companies are using to try to make you think you are getting a deal when you’re not. These deceptive practices happen on a very regular basis; don’t fall for these shopping shenanigans.

“On Sale” Does Not Mean Cheap was created by and is property of American Consumer News.

Here’s how it works. You’ll have to sign-up for an account with a mutual company such as Vanguard, Schwab, T. Rowe Price, or Fidelity to buy into the fund. You can contribute to such a fund as you please, and the company will manage your money for you so that as you get closer to retirement, your investments get more conservative so that you are sure not subject to volatility in the market as you grow near retirement.

This sounds good in theory, but there are a couple of problems with these funds that make them undesirable. The first problem is that you are paying twice for mutual fund management fees. First, you’re paying the fee to have the targeted date retirement funds it self, and then you’re paying another fee for the mutual funds inside of the targeted date retirement fund. Having such high expense ratios can really be detrimental to your returns over a long period of time.

A lot of these funds also invest far too conservatively. If you invest in good mutual fund you can probably average 12% to 15% over a long period of time if the money is in a tax sheltered account such as a Roth IRA. If all of your money is in fixed income at age 65, your money won’t continue to grow, and you probably won’t end up leaving an inheritance. The reasoning they have such conservative investments is that one should want to minimize risk after retirement, however if you’re investing over a long period of time, you should have a few million dollars by retirement, and you can handle the volatility in the stock market because you’re only using a low percentage of your money each year. This way your money will continue to grow after your retirement and you’ll have a nice big juicy inheritance to leave to your family or worth charities.

There are a couple of investment firms which are an exception to the above statement. T.. Rowe Price’s retirement fund is a lot more aggressive than others and your money will continue to grow upon retirement. It gets conservative as you grow older, but not nearly as much as Vanguard’s and Schwab’s offerings.

Another issue with these funds is that they don’t assume your entire nest-egg. The whole idea of these is to manage the risk you are taking as time goes on. If you have some paid for real-estate and some cash reserves, you don’t need to be as conservative as people who are wholly reliant on their mutual fund for income. The percentages the mutual fund company gives your for asset allocation are not personal at all, and could very well be wrong for you.

You really should just avoid these funds all together. As much work as it is, you should take the effort and come up with some good growth stock mutual funds to invest in and fund them to retirement and beyond. It takes some work, but it’s worth the while.

The Problem with Targeted Date Retirement Funds was created by and is property of American Consumer News.

For the uninitiated, credit card arbitrage or the “balance transfer game” is where people sign up for a number of credit cards with introductory offers that have interest rates of 0% for a period of time. They transfer this balance to a high-yield savings account earning 5%, make their payments, and when the introductory rate comes to an end, they pay the balance in full and pocket the difference. This seems simple enough and like an easy way to make a few bucks here and there, but when you delve deep down into it, it’s really just not worth our time.

The first problem with the balance transfer game is that you are for all intensive purposes walking a tight-rope. If you do everything exactly right and don’t miss the slightest thing, you could come out alive, but there are so many things that could go wrong. You could accidentally forget to make a payment, end up paying a balance transfer fee you didn’t see, pay unintended interest because of the way that the credit card company calculates interest. You could find yourself in an emergency and end up using that savings up and find yourself with high-interest credit card debt. Your variable high-interest savings APR could decrease. There’s also the possibility that the credit card company “lost” your payment and you end up paying a late fee, you could have missed something in the fine print. You have to be extremely careful, and if you mess up the slightest thing at all, your whole scheme has failed.

There’s also the damage to your credit score. When you borrow money your debt to income ratio increases. In addition your percent of balance used increases, as well as the number of applications for new credit. Your credit score is going to take a fairly significant hit while you play this game. If you plan on borrowing money for a car, a home, a small business, or anything else during the period of you participating in credit card arbitrage, it’s just not worth it at all.

Even after all of these mitigating factors, you really just don’t end up making all that much money. Let’s say that you got $10,000 on a credit card at 0% for one year. You dotted all of your I’s and crossed all your T’s. Under the best case scenario you made $500 by putting the money in a high-yield savings account. Of course you have to pay taxes on that money, so it’s probably closer to $350 that you actually made. After doing the research on the cards, signing up for a savings account, reading all the fine print, making monthly payments, taking care of the taxes, it’s just not worth your time.

Real wealthy people don’t bother with such games, rather they use their knowledge to invest and create businesses that earn real income of substance. Forbes recently did a survey of the 400 wealthiest people in America, and 75% of them said the best way to build wealth is to become and stay debt free.

Don’t Bother with Credit Card Arbitrage was created by and is property of American Consumer News.

1. Universal Default Provisions – Even if you are making your payments as agreed with one credit card, but happen to be late on another payment or if your credit score happens to go down a bit, the credit card company could jump your interest rate by upwards of an additional 20%. You could be paying around 14% for a decent credit card, but if another bank thinks you missed a payment on an entirely different loan, your rate could jump upwards of 35%!

2. Very Few Pay Their Cards Off – According to PBS Frontline, there are 35 million Americans who only pay the minimum payment on their credit cards. These people could be paying for their everyday purchases and associated finance charges for decades before paying it off. By federal law, the banks only have to require you to make a minimum payment which takes care of all the fees per the month and one percent of the principal balance. Paying this minimum amount will cause many Americans to pay three or four times what they should have for a product

3. There’s No Maximum Interest Rate – Credit card companies specifically state in just about every card holder agreement that they can change your rate as they please and without notice. Most major banks reside in states that have no usury rate either, so in theory they could charge you whatever rate they pleased without telling you and it would be entirely legal to do so.

4. Credit Card Debt Correlates to Bankruptcy – When people file bankruptcy, more often than not they have extremely high credit card balances which are just beating them up financially. They get into some sort of mess and charge everything to their credit cards, making the problem worse. There is a statistical correlation between having high credit-card debt and filing bankruptcy. The Motley Fool states that 1,300,000 credit card users filed bankruptcy in 2005.

5. Late Payment Fiascos – In 1996, the Supreme Court made a ruling which eliminated restrictions on late fees that could be charged to consumers. Now at most major credit card companies if they even think that your payment is late by an hour, they will charge you a fee of $30, $40, or at some places even $50. Some major banks have even been accused of intentionally not depositing checks which came in on time, and then charging their customers undo late-fees.

6. American’s Are Up To Their Eyeballs in Credit Card Debt – According to the Motley fool, Americans have borrowed a total of $1,700,000,000,000 in consumer debt. Statistically, the average American carries $8,562 in credit card debt, and there was a total of $50,000,000,000 charged in finance charges annually.

7. Most Rewards Programs Aren’t Worth It – A lot of banks try to lure consumers into getting credit cards with rewards programs that are supposed to give consumers an incentive to use their credit card. However the money used to give out the rewards doesn’t come from thin air. Consumers are paying for their own rewards through finance charges and membership fees whether they are realizing it or not. With one of Wells Fargo’s rewards programs, you have to spend $5000 a year just to break even with the rewards program membership fee.

8. Credit Cards Only Serve One Purpose – If you haven’t figured it out yet, the credit card exist for one reason and one reason only—to put you into more debt. No one wants to have huge amounts of debt, so why make use of a tool that’s only purpose is to get you into debt? The best way to get out of credit card debt is to never get into it in the first place.

9. Statistically You Spend More With Credit – A Dunn and Bradstreet study stated that if you pay with a credit card, you will statistically spend 12%-18% more on your purchases as opposed to paying with cash. When you pay cash, you feel the money leaving you and it hurts; with credit cards that’s not the case. If you use a credit card, you will spend more money whether you realize it or not.

10. You Can’t Outsmart the Credit Card Industry – Credit card companies spend millions of dollars each year figuring out consumer habits and behaviors so that they can separate you from your money. They know how people act and how people think, and statistically will make money off of you. A lot of people think they are getting rich of the credit card industry through rewards points and arbitrage games, but the reality is that they’re not making much at all and are adding all sorts of risk into their life. Credit card companies can easily absorb these cost, because knows that statistically they will make much more money from people than they lose to a couple of people here and there not making the industry any money.

Don’t just accept the first Credit Card Offer that comes along. It is important to do the research and Compare Credit Cards to find a Credit Card that meets your needs. And always look at a Credit Card’s fine print before signing the dotted line.

Ten Facts the Credit Card Industry Doesn’t Want You to Know was created by and is property of American Consumer News.

Make Sure There’s a Business Model – If you were to do a Google search on making money online, you’d find a lot of websites which claim they’ll show you how to make all sorts of money on the internet with next to no work. Remember that money has to come from somewhere, and the only way actual money will come in if there’s some sort of real business model. What’s the product or service? Who’s the customer? Why would people want this product or service? How will I advertise this product or service? All of these are very important questions that need to be answered before signing up for anything.

Don’t Pay Anything Up Front – Many websites and companies online ask for an upfront fee before you can begin your online business venture, in nearly all cases, this is a major sign of a scam. If it were a viable business model, wouldn’t a company be happy by taking a percentage of your profits? If you pay a start-up or up-front fee, you’re starting from the hole, and usually you’ll never dig yourself out of it.

Don’t be a Guinea Pig – When someone tells you that you will be “getting in on the ground floor”, you should probably run far away. The only thing that means is you’re signing up to be a part of an unproven business model. Since there are already plenty of ways to legitimately make money through the internet, why would you risk being part of something new and unproven to make real wealth.

Independently Verify Information – A lot of sites which are scams will show you testimonials of “people” who made use of their product or service and made lots of money. In nearly every case, these are fake! Do some searching online and see what other people have to say about the business or company you are signing up with. Are their claims accurate? What do other people have to say about them?

Look For Past Successes – If what you are looking at is a legitimate business model, there’s a very good chance that other people have made good money with it. You should find people who are involved in what you’re considering getting involved with and see what it really takes to do well in that business. You should seek records and proof that people are actually making money through the system.

Don’t Try to Get Rich Quick – If you are looking at a potential online business, and you hear claims that you’ll make all sorts of money with only vague mentions of doing barely any work, head for the hills. There’s no shortcut to anyplace worth going. If you keep chasing one get rich quick scheme after another, you’ll never make any money at all. Just stay away from these sites. If it has to deny being a get rich quick scheme, chances are it probably is.

There is money to be made on the internet, but it involves work. There are no magic pills which allow you to make money on the internet without any effort. Don’t fall for the excellent marketing that these rip-off sites provide. Follow these tips and tricks, and avoid getting ripped-off.

How to Avoid Get Ripped-Off When Trying to Make Money Online was created by and is property of American Consumer News.

Some people try to live off of their Social Security income, but a lot of people aren’t willing to give up the luxuries that they’ve been able to have when they did have an income, so they look for other options. Some people choose to work in a part-time job for extra income, but there are those who think that they should be able to retire regardless of whether or not they did a good job saving for retirement or not. In most cases these people borrow money to finance their lifestyle, and one of the growing ways to pay for life throughout one’s golden years is through what is called a reverse mortgage. They’re some of the worst financial products on the market, and you should avoid them.

Essentially, a reverse mortgage is a loan which is available to senior citizens (people of age 62+ in the United States) that is used to liquidate the home equity the person has, but allow them to stay in the home until they sell it or pass away. Typically the loan money taken through a reverse mortgage comes on a monthly basis, but there are also instances where a lump sum is given. The borrower won’t make any payments until he/she moves or dies, but when the person is no longer in the house, the balance will be due in full.

The idea of creative financing seems like a reasonable and creative way to pay for one’s retirement until you look at it a little bit deeper. When you look at the numbers of a reverse mortgage, you’ll find that the fees and interest rate are some of the highest available on the market for any type of mortgage. Chances are you’re a lot better off just getting a regular mortgage if you think you must absolutely borrow money on your home to live.

There is also a lot of fraud in reverse mortgages. Senior citizens have long been preyed upon for financial scams; often time’s senior citizens could be on the very raw end of a deal and have their home taken from them! You personally might not be hit with some sort of reverse mortgage fraud, but given that this is a very highly targeted method of taking money from seniors, one shouldn’t even bother risking it.

Reverse mortgages are never a really desirable option. If the only wealth that you have is your home equity, it might just be time to sell your home. Most seniors will never do this because they are unwilling to face the reality that they cannot afford their home, and instead will try to keep up their lifestyle by borrowing money, because it’s the seemingly easy way out. Of course in doing so you’re throwing money away in fees and making sure that your family does not have any sort of inheritance!

It’s time to face the facts, if you find yourself in such a situation, you really can’t afford to retire. Take on a part-time job for some extra income, and consider moving into a smaller house or into a nice apartment, because as you get older, you really won’t be able to keep the house up and too much of your life will be invested in one piece of property. Stay away from reverse mortgages, they’re not the answer.

The Reverse Mortgage: A Wolf in Sheep’s Clothing was created by and is property of American Consumer News.

As eBay’s popularity grew and the number of online auctions increased dramatically, PayPal grew as well. In October of 2002, eBay Inc. bought out PayPal and since then, most of PayPal’s major competitors have gone out of business. Currently PayPal handles over forty billion dollars in transactions each year, and has seemingly nothing to stop it.

PayPal keeps growing and growing, but there are a few dirty little secrets that the company does not want you to know about. Before you do any business with eBay’s subsidiary PayPal, be very aware of these questionable policies that PayPal has in regards to your money.

Have you ever made a purchase only to find out that the product wasn’t as described and that you really got a bad deal? If you paid with a credit card, you place a simple chargeback and get your money back, but not with PayPal. If you read their terms of service, you will find that it says, “PayPal reserves the right not to dispute a chargeback even if the seller has provided some evidence, particularly if PayPal believes the dispute is not likely to be successful.” Since PayPal is a credit card processor, they have the right to issue all the charge-backs they please, however it seems that PayPal is much more interested in its short term profit margins rather than taking good care of its customers. The reason PayPal discourages charge-backs so much is because the fewer charge-backs they place, the better interest rate they will get from the processing bank and thus will make more money for doing so. Even if your account has been stolen and unauthorized charges have been made against your account, too bad. In their terms of service, you agree to waive the right of filing charge-backs against unauthorized transactions.

It doesn’t stop there; PayPal claims to have a great “seller protection policy” in order to take good care of its customers. When you look at the terms needed in order to meet the policy, you will find that it’s almost impossible to be covered under their seller protection policy. The policy only protects the first $5000 in contested sales per year, and that is only if both the buyer and the seller in the US, the UK, or Canada. In addition, the seller has to have a verified business or premiere account, send to the exact address on PayPal, ship the item in seven days, have tracking information and get a signature upon delivery. When all is said and done, their seller protection policy covers an extremely small fraction of all PayPal transactions.

PayPal has been sued by its customers at least twice. In March of 2002, two account holders sued PayPal for being in violation of the EFT Act, mostly regarding dispute resolution service policies. In an out of court settlement PayPal gave the members of the class action lawsuit $9.25 million and agreed to change its business practices, but denied any wrong doing. In August of 2002, PayPal was sued again for having extremely difficult to follow arbitration practices and mishandling of accounts. The judge ruled in favor of the claimants against PayPal

If you ever want real customer service from PayPal, good luck. They hide their phone number on their website so that they don’t have to pay as many customer service representatives. Instead they offer an email form that you can fill out to get help. Even if you do happen to find a warm body at PayPal, you won’t get all that much help. If they think any of your actions are somewhat questionable, PayPal can do whatever they want with your money. They are the judge, jury and executioner. Even if you’re a perfectly upright seller, and someone pays for one of your items with a stolen credit card, your PayPal account is flagged for “criminal behavior” and all the money in the account is confiscated.

When all is said and done, there are just too many red flags brought up by this company to consider doing business with it. If you’re just a buyer, chances are you’ll be fine most of the time. If you ever have a problem with the service, you’ll probably be on your own. It might be one of the easiest ways to make payment online, but with terms of service like these, no thank you.

The Problem with PayPal. was created by and is property of American Consumer News.

If you were to take a few minutes and dissect some of the financial advertisements and read all of the fine print, you’ll realize that most of them are very deceptive. They prey on the fact that most people will never take the time to research a financial product in depth, and instead will only look at the quick talking points provided in the advertisement.

It only gets worse from there. If you’ve ever listen to a financial call in show, such as Suze Orman or Dave Ramsey, you’ll realize exactly what I mean. People call in with six figures in credit card debt wondering where they went wrong. There are those who buy into overnight tape sets and end up with 10 rentals with no equity that aren’t cash flowing themselves. Of course this is just the worst of the worst, but the majority of Americans have similar financial problems, but just haven’t gotten so bad that their stack of financial cards has not fallen apart yet.

When we move beyond anecdotal examples and begin to look at statistics, we find out the exact same thing. Americans actually have a negative savings rate, meaning statistically you are going to spend more money than you make. Whatever happened to living on less than one makes? The typical American family also has a good five figures in consumer debt. A good chunk of this debt is credit cards and high interest financing that is just beating people up financially. These are some of the worst financial products available, but yet people buy into them every single day.

What happened? America is thought to be the wealthiest country in the world, yet most of us cannot handle our own money. It seems that people are just too busy to be concerned and take the time to keep good control over their money. Of course there are a few of us here and there that are very intentional about what we do with our money, but we are the exception rather than the rule.

When living beyond our means is a way of life Debt becomes almost inevitable. Find out if a
Personal Loan or even multiple Debt Consolidation can ease the burden. Debt consolidation only works if you also change your spending patterns and end the behaviors which got you into your financial mess in the first place.

America’s Culture of Financial Stupidity was created by and is property of American Consumer News.

Payday loans won’t put you in any better of a financial situation, they’ll only hurt you even more, because now you have to pay ridiculous amounts of interest on your own money. There are always alternatives available, and you should never accept that a payday loan is a viable option. Here is a list of alternatives to payday loans if you absolutely need the money to eat and buy gasoline for your car until the next paycheck.

Family – You’ll have to swallow your pride for this and just about every option, but you’ll be able to put food on the table and have gas in your car so that you can go to work. Your family loves you, and probably will be willing to help you if you ask and have a genuine problem that’s out of your control, such as a medical bill, a job loss, or an automobile accident.

If you have a history of financial misbehavior and have not learned your lesson, chances are you will find little sympathy from your family. It’s understandable if you’re in such a situation once, but when you keep doing bad things with money over a long period of time, you shouldn’t expect sympathy from your family.

The Local Church – There’s a biblical mandate that churches should help the poor and the widows, and most do so. If you’re a member of a local church, there’s a very good chance that they will help you. If you walk into a church that you’ve never been to before, there’s a pretty good chance they’ll turn you away. There’s so much fraud in this area, most congregations are hesitant to help random people off of the street. If there’s a church in the same denomination as yours, but not in your hometown, they might be willing to help you as well.

The Food Pantry – Most communities have food pantries to stop starvation. You’ll probably feel a bit ashamed to have to go to this length, but at least you will have food in your stomach. The food probably won’t be your favorite, and you might have to eat a lot of soup during the week, but you’ll have food in your stomach, and that’s better than getting a payday loan.

Friends – Getting help from friends is very similar to getting help from your family. They’ll have a lot of compassion if you’re genuinely in a sticky situation that’s out of your control. If you’re just out of money because of continued bad choices with money, expect little sympathy.

Sell Stuff – Chances are you have some stuff that has a value, this could be a television, a computer, a bicycle, a CD collection, or something else. Chances are there’s a pawn shop somewhere in town or someone who would buy some of your items. You might not get the best price for them, but at least you’re not borrowing money at 400% interest.

None of these are perfect options, but they’re all better than payday loans. Just please don’t borrow any more money. Don’t borrow money at the time you can least afford to pay the money back. There are always options, even if they aren’t the easiest to do emotionally. A payday loan might seem like an easy way out today, but a month from now, they’ll beat you up even more financially. They’re just not the answer, there’s always an alternative.

Alternatives to Payday Loans was created by and is property of American Consumer News.

One of the most common types of these sub-prime loans is called a payday loan. There are even companies that offer payday loans through the internet. They’re extremely easy to get. Essentially, you will give the finance company a post-dated check for the amount of your paycheck, and the amount of money that they will give you in cash is a bit less than the amount of the check you give them. A week or two later, your paycheck comes and they cash the check.

The idea seems simple enough, but many people have accused payday lenders of preying on the lower class. When you look at the mathematics of payday lending, you can see why. Quite often the interest rates that they charge are anywhere from 400% to 800% on an annual basis. This is much more than any normal person would think is reasonable to pay. There was even a recent piece of legislation which prevents these companies from being near military bases, because so many servicemen fell into the payday loan trap. Their debt to income ratio would become so high that they were deemed a security risk because they would be more likely to accept a bribe!

We know that payday loans are not the best financial product out there, but are they ever a good idea? What if you need money to put gas in your car or to pay for groceries? After all, you have to eat and drive to work! Is it okay to get a pay day loan then? Many people would think of this as a justifiable situation, and this is how most payday loans begin.

When we look a little bit closer, we find out that payday loans are really never the solution, and here’s why. Let’s say that it’s the 5th of the month, and you had an automobile accident or some other such emergency and are now out of money until the 15th. You need to eat, so you go get a payday loan for the $1000 paycheck you would be getting on the 15th. You get $900 from the payday loan place on the 5th, but now that money has to last until the end of the month. So instead of having $1000 from the 15th to the 30th, you now have $900 from the 5th through the 30th. Chances are there’ll be a lot of month left when the money’s all gone. Of course you have to eat, so what do you do? You go get another payday loan for the 1st, and it becomes a vicious cycle.

There’s the fundamental problem with payday loans. You don’t need your paycheck sooner, you just need more money. A payday loan will never do this for you, in fact you will have less money with all of the fees that you are paying. There is no situation where a payday loan will solve your money problems, ever!

So what’s the alternative? It’s the 20th of the month, there’s mo money for food, and your car is running out of gas. You have hungry mouths to feed and you have to get to work, what do you do? There are always options. A pay day loan might seem like the easy way out, but this is not the case. Instead consider searching for some temporary extra income. You can do this by having a garage sale, selling some stuff, doing day-labor type work, temp work, and the like. If it comes down to it, ask your church for some help, or your family. Don’t borrow money; because the last thing you need right now is another loan. There are people out there who will help you. If you really need food, go to the food pantry.

There are options out there, but don’t let a payday loan even come onto the radar of consideration. They won’t solve your short-term financial problems, and will only put you deeper into debt and give you another payment to worry about.

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Are Payday Loans Ever a Good Idea? was created by and is property of American Consumer News.

The difference between the different fuels that are available is the percentage of the gasoline which is made up of octane. Essentially, gasoline is a mix of two types of hydrocarbon change, octane and heptane. Octane is 8 carbons long, whereas Heptane is only 7. Octane can be better compressed than heptane, thus making it seem as if having a higher percentage of octane would be beneficial. If the gasoline that you have has an octane rating of 87, this means that 87% of the fuel is octane, and 13% of the fuel is heptane.

With the confusing chemistry aside, should we fill up our cars with higher octane gasses? The answer to this question is no. In theory a slightly higher octane gas would be better for your car, but in reality you won’t notice much of a difference. Cars were designed to run on the regular grade of gasoline just fine, and if you get the higher grade, chances are it’s just going to go to waste. You will not recoup the cost of the higher gasoline by increased fuel economy and less automobile maintenance. It’s just not worth paying the extra money. The one exception to this is that if you have a very high class car which is designed to take premium.

If you previously fell victim to this myth, don’t feel bad or be dismayed. Exxon-Mobil and other major oil companies make 11 digit profits from us each year, and have gotten really good at doing so. Their marketing machine has made us think that premium gas is somehow better, just don’t fall for that myth again.

Usually you will pay ten cents more for the silver version of the gasoline and twenty cents more per gallon for the gold version of the gasoline. That is of course unless you live in a strange place like South Dakota which requires 10% of the silver gasoline to be highly-subsidized Ethanol which makes the silver gasoline cheaper than regular gasoline.

Quit Wasting Money: Stay Away from Premium Gasoline was created by and is property of American Consumer News.

Anyway, the person continued his message by telling me that as someone who studied e-commerce in college, I should know that all of the big schools talk about how important Quixtar is. He also told me that it was approved by the BBB and it’s a real ‘business’ that offers tax benefits. He then went on to start typing in caps lock and told me how much he made so much more money than his girlfriend. He blabbered on about how great Quixtar was and told me to do my research.

Seriously, I don’t know what it is about Quixtar IBO’s, but it has to be some sort of a modern day cult. Even people who work for the tobacco industry aren’t this weird and uptight about their business. Certainly not all Quixtar IBO’s are like this, and there are a lot of normal people out there that get involved in these things, but there’s a very small outspoken percentage that thinks God sent them on a mission to convince the world that Quixtar is a worthwhile “business adventure.”

There are people that frequently search for new articles written about Quxitar, and if they don’t like what they hear, they comment about how wrong the author is and tell them to get their facts right. Of course 95% of the time, the facts are right to begin with. There are several blogs that have no other purpose than to tell the “truth” about Quixtar and refute anyone who thinks that it’s not the single best way to wealth. It’s really quite creepy. Not even major corporations that actually have a legitimate business model go that far in public relations campaigns.

There are some members of Quixtar that just take it too far in trying to convince others proving their business model. Some of the members exhibit cult member like behavior, it’s really quite creepy.

The Quixtar Cult was created by and is property of American Consumer News.

The Terms – Store credit cards often have some of the worst interest rates and terms when it comes to credit cards. They sucker you in with the 10% off rate and have to make up for it some how. They do this by giving you some very bad terms on your card, usually more than a 20% interest rate. The national average is around 12% or 13%! Some of the worse store credit cards go all the way up to 28%! It just doesn’t make sense to save the 10% the first time, only to give them 28% for as long as you us the credit card.

Personal Behavior – Let’s face it, most people don’t pay their cards off every month. You’ll rationalize that you’ll pay off the balance as soon as the bill arrives, but more often than not, that just doesn’t happen for whatever reason. This is why they can get away with giving out that 10% discount. They know that statistically most of the cardholders won’t pay off their balance in full each month. A small percentage might be beating the system, taking the discount and paying their bills of every month, but this is surely a slim minority.

Credit Score – A percentage of your score is based on your applications for new credit. When you sign up for a store credit card, the company will perform a “hard credit pull” meaning that your score will temporarily drop for the next six months or so. In addition, if you happen to go over the very low limit that usually comes with store credit cards, your “pays as agreed” status on your credit report could go away quite quickly.

Late Fees – A recent study from R.K. Hammer Investment Bankers stated that 35 percent of the income that credit card companies make comes from late fees. This is a $50 billion dollar a year industry, they are making some serious money on late fees. You might think that you’re going to pay your bills on time, because statistically that’s not the case. You’ll get dinged $30 for a late fee charge and a hit on your credit score.

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Stay Away From Store Credit Cards was created by and is property of American Consumer News.

Only Worrying About the Monthly Payment – A lot of people are under the mindset that they will always have a car payment, so they only worry about the price of their monthly payment. Don’t fall for the myth that you will always have a car payment. Save up, pay cash, and upgrade when you have the money.

Trading In Your Existing Car To The Dealer– A lot of people trade in their car to the dealer because it’s a lot easier selling their current car separately. However you will take a major hit because the dealer will only pay you a wholesale price, and chances are you can sell it for 20% or 30% more than what the dealer is willing to offer you.

What Test Drive? – Every now and then a person generally knows what kind of car they want, they find one for a good price and have already driven a similar car, so they don’t think they need a test drive. You never know what kind of quirks a car might have, so you should always test-drive it for at least 15 minutes or better yet more.

Finance at the Dealership – If you’re going to finance your vehicle, don’t finance it with the dealership. Shop around at a number of different banks to see which can get you the lowest rate. If you don’t, it’s up to the care salesman to decide what kind of loan you’re going to get. This way you can also focus solely the price of the vehicle, and not just the terms of the loan.

Not Having the Car Checked Out – Always have your car checked out by an independent auto-mechanic to make sure everything is on the up and up when you buy it. Don’t end up buying a car that appears to work just fine, but has some several mechanical problems that aren’t apparent when driving the vehicle. This happens a lot more than you think, so be sure to have an independent auto mechanic check out your vehicle before buying it!

Of course these are just a few of the many mistakes that people make when they buy their next vehicle. If you know of any more, be sure to let us know by commenting below!

5 Mistakes to Avoid When Buying a Vehicle From a Dealership was created by and is property of American Consumer News.

Basically, they will write a check to pay of all of your consumer debt, and then give you a new loan for all the checks they wrote. Usually these debt consolidation loans are second mortgages, which allow them to offer interest rates of about 8% or 9%. There are a number of problems with these type of loans, and are really just not worth your while.

The biggest problem with them is that they do not change your behavior. Debt is not the problem, rather debt is the symptom. The problem is that you are spending too much money, and getting a debt consolidation loan does nothing to stop your overspending habits. So you pay off your credit cards with a debt consolidation loan, and end up just going back into debt because you have a bunch of credit cards with a zero balance and a huge spending problem. It’s just not the solution to your financial problems.

Most of the time you won’t even get the great loan that they present to you in the advertisements. That’s the teaser rate for people with the best credit, but if you have all sorts of debt and need a debt consolidation loan, you probably won’t have the absolute best credit score and will get a less than decent loan. Often times there will be a number of hidden fees which they will use to get a lot more money out of you than you had expected.

Another problem with the loan is that your debt will moved from an unsecured loan to a secured loan. Before they could only yell and scream at you if you didn’t pay your debt, and eventually sue you after many years. Now since it’s a second mortgage, if you don’t pay your debt, then they can take your house from you. You are adding collateral where there was none before.
The solution is simply not debt consolidation, rather the solution is getting very intense on paying on your debts, and eliminating them. Taking care of a few points of interest really won’t do anything. You think you did something, but in reality, you did not. Don’t bother with debt consolidation.

The Problem with Debt Consolidation was created by and is property of American Consumer News.

The Lottery: Just Say No! was created by and is property of American Consumer News.

A lot of people are stuck in the idea that they will always have a car payment. People make statements such as, “I’m always going to have a car payment, so why not upgrade to a better car?” It’s almost as if people believe that they have to owe money on a car, and if they didn’t, they’d have no idea what to do with the money. People have seem to forgotten there is a way of life which does not involve a car payment at all. It can be done.

Most of the time it just does not make sense to purchase a new car, unless you are a millionaire. New cars, trucks, vans and other vehicles lose over half of their value in the first few years of ownership. Most people simply cannot afford to take this hit on a regular basis, especially if you purchase a new vehicle every two or three years. You are losing such a high percentage of your net worth, that you are severely injuring yourself financially.

Instead of getting stuck in a world of automobile payments, here’s an idea. Sell your car that you owe money on. Buy a $1000 or $2000 car. Save up your $300 payment, and in 10 months, you could have a $5000 car that you owe free in clear. In another 16 months, you could own a $10,000 car free and clear. At this point you would have a very nice paid for vehicle.

So you have a $10,000 car free and clear, and no car payment. You’re doing pretty good. Just imagine what you could do with that car payment. It’d be pointless to go through all of the mathematics and show how much that money saved over a long period of time would be, but it is definitely a lot of money. You could do a lot with $300 a month, at least something better than paying it to the bank for an automobile loan.

Don’t Buy That New Car was created by and is property of American Consumer News.

There are all sorts of variations of these ‘get rich quick’ schemes. There are people who will try to tell you to buy real estate with nothing down and rent it out. There are those who will tell you that you’ll be a billionaire with your eBay empire. And who could forget the classic multi-level marketing guru’s at Amway and Quixtar? They are all over the place! They will give you a bunch of wild claims about how they make tens of thousands of dollars by working just a few hours a week, and it’s all because they bought into that great late night cable program’s system.

Here are the facts. If these wealth building systems were so successful, do you not think that their creator’s would be doing their very own programs to make a lot of money? Instead they are pitching tape sets on over-night cable. They just do not work. The expectations are never met up to. You would have to work at minimum full time on any of the products to be even mildly successful.

Here’s how to really get rich quick. It’s really not that hard to figure out, and it can be done. I did it when I was 19 years old and will graduate totally debt free with quite a bit of money for someone my age. You can do it in three steps too. The first step is to work hard. The second step is to spend as little money as possible. The third step is to invest your savings responsibly. How hard is that? The old mantra “live on less than you make” works. That’s the magic pill. It’s not complex or something incredibly wonderful and new, but it works. There’s no way to get rich quick that doesn’t involve hard work. Do smart things with money and you will have a whole lot of it!

Save Your Money: Why Get Rich Quick Doesn’t Work was created by and is property of American Consumer News.

So let’s say you do the right thing and decide to go buy some life insurance. If you walk down to your insurance person and tell them you would like to get a policy, 70% of the time they will try to sell you whole life insurance (also called cash value, universal life and variable life), even though these products are really a bad product to buy! They pitch their whole life plans because they make a much higher commission than if they sold you some good old fashioned term insurance. Term insurance is always a better by than whole life insurance!

Let’s take a look at an example. If a 30 year old non smoking man has $150 a month that he can invest in life insurance and shops around to find the best rate, he’ll probably be able to buy around $200,000 in whole life insurance which will pay his family in the event of his death. The insurance agent will also tell that gentleman that his policy will build cash value which can be part of retirement savings! Sounds like a great deal, huh?

If the same man were to purchase term insurance, the policy would probably cost around $10-15 a month for a 20 year level term policy! If this man were to invest the other $135 a month into a savings account over the course of twenty years in a very nice mutual fund, he would have $133,549 in his mutual fund if it averaged the 12% rate of return which the stock market has averaged since inception.

If he put it in his cash value plan, he would earn anywhere from 2.6% to 7.4% depending on which type of whole life insurance that he gets, according to Kiplinger’s Personal Finance Magazine. Instead of being able to invest that money for the full 20 years of the term, instead the first three years are eaten up by commission and fees, so he would only have 17 years of savings. Let’s say the man got an average of 5%, which is pretty decent for whole life, he would have $43,270 in his cash value, a whopping $90,000 less than if he had taken the term insurance and invested the rest into quality mutual funds inside of a retirement account!

But there’s a dirty little secret with whole life insurance. If that man were to die, they would pay his family the value of the policy, $200,000 and keep the cash value that was built up inside of it! What kind of savings plan keeps your money after you die? Doesn’t sound like much of a deal to me!

Whole Life Insurance is a Rip-off, 100% of the Time! was created by and is property of American Consumer News.