H&FF Radio: Sure-fire tips to get off most junk mail lists

WASHINGTON (12/21/07)—Tired of the onslaught of junk mail clogging your mailbox and inbox? There are steps you can take to get off those lists, and one of Sunday's HFF Radio show guests will tell you how.

Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

• "How to Stop Getting Junk Mail You Don't Want," with Pat Kachura, senior vice president for corporate responsibility, Direct Marketing Association, Washington, D.C.;
• "Kids.gov--The Official Kids Portal for the U.S. Government," with Mary Levy, director, Federal Citizen Information Center Consumer Information and Outreach Division, Washington, D.C.;
• "Building Credit With a Secured Credit Card," with Linda Sherry, director of national priorities, Consumer Action, Washington, D.C.;
• "Ways to Lower Your Utility Costs," with Mike Wilson, marketing and communications coordinator, Eastern Illini Electric Cooperative, Paxton, Ill.; and
• Listener E-mail Questions.

Home & Family Finance is a resource center for personal finance information at the Credit Union National Association. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, makers of cheddar cheese; and Visa. For more information, read "Start an Energy Diet: Save Money Around Home" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer Brief

FRESNO, Calif. (12/27/07)--Thinking of buying or trading a gift card on an online auction site? Think twice: That discounted card for sale may not be legitimate, and the person trying to unload it may be a con artist. It's estimated that 2% to 30% of all cards sold on secondary sites are fraudulent. The National Retail Federation recommends you buy gift cards directly from reputable retailers, although one site--PlasticJungle.com--recently beefed up security measures and reimburses customers for losses (FresnoBee.com Dec. 13)...

Store returns more complicated, restrictive

BOSTON (12/26/07)--Despite a decrease in holiday gift returns, more retailers are ratcheting up their return requirements, largely to curb abuse by serial returners (Bostonherald.com Dec. 17).

Many returns are legitimate, but too many consumers abuse easy return policies, and some criminals who steal merchandise try to return items for store credit.

Because of the abuse, everyone pays. When you return items, some retailers now use your driver's license to see if you're on a "blacklist" of serial returners.

If you exceed the retailer's return limit, the store won't allow you to return the item. Some stores don't disclose their return limit, and others do so inconspicuously on signs and on the back of receipts. An example of a return "cap" may limit you to five returns within any 90-day period with a receipt, or cap the amount at, say, $300 without a receipt.

Between 4% and 6% of holiday gifts make it back to the return counter each year (National Retail Federation Dec. 11). But as gift cards continue to increase in popularity, the tide is turning: 64.3% of consumers didn't return anything last holiday season, up slightly from 62.4% in 2005. The use of gift receipts also has helped reduce return headaches.

If you think you'll be standing in the post-holiday return line, keep these pointers in mind:

• Organize receipts. This is still the best route to a hassle-free return. If you don't have one, or if you lost it, ask whether you can have merchandise credit. However, you may get credit for the lowest markdown price within the past 30 days or so.
• Return sooner rather than later. You can take advantage of extended store hours immediately after Christmas.
• Check time restrictions. Check state laws--you may have a choice of a repair, replacement, or refund.
• Ask about restocking fees. It's best to know store policy before you finalize the purchase.
• Don't open the box. Try to keep all the original packaging, all parts, and tags. Some retailers will reject the return if the item isn't in the original package. If you know you'll be taking the item back to the store, don't use it or play with it.
• Know where to complain. If you run into problems, start with the store manager or retailer's customer service department. If those avenues don't work, file a complaint with your state attorney general's office or local consumer protection agency.

For more information, read "'Tis the Season for Trouble-Free Shopping, Returns" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer Brief

MADISON, Wis. (12/20/07)--Tempted by 0% deferred financing for large purchases? Unless you're disciplined and know you'll pay off the entire amount before the stated period, you might be better off putting the purchase on a low-interest credit card or taking out a personal loan. Neglecting to pay off the balance in time--even if your final payment is received just one day late--means you'll be socked with high interest charges back-dated to the date of purchase. If you decide to go the 0% route and the stated period is one year at 0% interest, divide the total purchase amount by 11 and make 11 monthly payments before the 12 months are up. But if you're not sure your budget can handle those payments, just say no to 0% financing (Credit Union National Association Center for Personal Finance) ...

Creative gifts: Meaningful, unique and cheap

McLEAN, Va. (12/19/07)--With less than a week until Christmas, shoppers are scrambling to purchase last-minute presents. But an unsure economy is forcing many gift-givers to look for less expensive items and ideas (USA Today Dec. 13).

One way to save: Put on your creative hat and make your own gifts or provide a service for the special people in your life. The Credit Union National Association (CUNA) Center for Personal Finance suggests:

Volunteer your time. Shovel snow or rake leaves for an elderly or disabled neighbor, or baby-sit for a friend.

Heat up your oven. Get your hot pads ready and bake someone's favorite holiday pie, frost cookies with nieces and nephews, or provide a home-cooked meal for those who aren't up to doing it themselves.

Hit the trails. Instead of worrying about individual gifts this year, take the family cross-country skiing or enjoy a day at a local park.

Scrap it up. Present someone with an assortment of homemade greeting cards or a ready-made scrapbook or journal.

Smile, you're on camera. Consider making your own calendars, beach towels and mouse pads. With today's technology, it's easy to go online and make creative gifts using favorite family photos.

Help the needy. Instead of exchanging names this year, pool your resources with siblings and friends and provide gifts and food for a low-income family in your community.

For more nontraditional gift ideas, read "Avoid the Red, Save More Green This Holiday Season," in Home & Family Finance Resource Center.

courtesy of cuna.org

Watch for phish bait when shopping online

NEW YORK (12/17/07)--Online shoppers beware: Phishers are baiting their hooks this holiday season and hoping you're too busy to take some necessary precautions (The Wall Street Journal Online Dec. 5).

Be careful in the coming weeks as scam artists try to trick you into divulging personal information:

• Watch for financial institution look-alikes. If the e-mail asks you to verify a transaction by clicking on a link or using a phone number that appears in the e-mail, exercise extreme caution. Instead, call the phone number on your credit union or credit card statement to verify that the request is legitimate.
• Watch for charity look-alikes. Scam artists send bogus e-mails that seemingly come from charities, hoping to lure you into giving personal information as they tug at your heart--and purse—strings. To make sure you're accessing a legitimate charity, go to Charity Navigator's website at charitynavigator.org.
• Use caution with unfamiliar companies. If you've never heard of the company, check its reputation with Better Business Bureau at bbb.org to see if complaints have been filed against it. Look for the company's address and phone number on the site for contact information if something goes wrong with your purchase.
• Use caution when using auction and classified-ad sites. The National Consumers League cautions consumers that classified-ad and e-commerce sites--such as eBay and Craigslist--are particularly risky, generating a large proportion of consumer complaints each year.
• Beware purebred puppy ploy. Some unscrupulous merchants are tempting their victims with promises of free--or low-cost--purebred puppies if the buyer pays the shipping. In this scam, any money you send goes right into the so-called seller's pockets, and the dog never gets delivered.
• Don't wire money to a stranger. If the seller insists that you send your payment by wire service, that's a big red flag. Steer clear.
• Check account balances frequently. Online banking allows you to access your accounts 24/7, making it easier--and faster--to detect fraud as soon as it happens.

For more information, read "Stay Safe When Shopping Online" and "Online Banking Makes Money Management Simple and Safe" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer brief

YONKERS, N.Y. (12/13/07)--If you want your Parcel Post package delivered in time for Christmas, you'd better hurry--it needs to be mailed by Dec. 14. Procrastinators pay extra for other options. Mail your items First Class by Dec. 19, Priority by Dec. 21, and Express Mail by Dec. 22. Consider a Priority Mail Flat Rate Box for $8.95--there are two sizes from which to choose, and you can send a package weighing no more than 70 pounds anywhere in the U.S. To avoid shipping charges on goods you purchase, seek out retailers that offer local in-store pickup for online orders. Some retailers post coupons online at http://www.shopping-bargains.com and http://www.judysbook.com, and others offer free shipping for orders of a certain size (Consumer Reports Money Adviser December) ...

Don't fall for subprime credit cards

McLEAN, Va. (12/12/07)--In an effort to improve their credit history, many consumers are unknowingly signing up for subprime credit cards--often with disastrous consequences (USA Today Dec. 9).

Targeted to young adults with no or little credit history, as well as to those with a tarnished credit history, issuers of subprime credit cards--referred to as predatory by some critics--are taking advantage of vulnerable consumers who can least afford the excessive fees.

How excessive? In one example, with a low credit limit of $250, some applicants were socked with an array of fees that totaled $178, leaving the user just $72 to spend on that card during the year. Instead of improving their credit history, victims are sinking deeper in debt.

The National Consumer Law Center, Boston, issued a warning to consumers on Nov. 1 that these high-fee, low-credit predatory credit cards are merely a way for some issuers to extract as many junk fees as possible from consumers desperate for credit.

What should you watch for?

• Low limits. If the card carries an unusually low line of credit--say, only a few hundred dollars--that's the first clue it may be a predatory credit card.
• Phrases that may not sound like fees. In the fine print, look for phrases such as account maintenance, account set-up, program, participation, and activation fees.
• Fees that put you over the limit. Excessive fees--which add up quickly--reduce your available balance right off the bat. Cardholders who don't deduct those fees from their available balance increasingly are slapped with over-the-limit fees.
• "Good-guy" claims. The issuer may make the claim that it's going out of its way to help users get out of debt trouble and give credit to subprime borrowers. One issuer justified its predatory credit card by stating that its "mission" is to bring affordable banking services to minority communities. And with millions of cash-strapped homeowners facing foreclosure, claims like these may sound enticing.

Looking for an alternative? Get a secured credit card, says Susan Tiffany, director of personal finance information for adults at the Credit Union National Association's Center for Personal Finance. "You'll have to deposit money with your credit union or other reputable lender, and then use that line of credit to build a good credit history. Repay purchases in full and on time each month. Then after a time, say six months to a year, apply for a traditional unsecured card with a higher limit."

courtesy of cuna.org

Energy audit can light the way to greater savings

McLEAN, Va. (12/11/07)--Unless you have an extra $1,000 lying around, you might want to read this. The $1,000 is almost how much the average U.S. winter heating bill is expected to be for October 2007 through March 2008, according to the Energy Department (USA Today Nov. 30).

Of course the amount of your bill depends on where you live. If you live in the Northeast and use heating oil, your bill may be as high as $1,900; if you live out West and use natural gas, your bill may only be $600.

Regardless of the amount, you might reduce your energy expenses by taking advantage of an energy audit--either hiring a professional energy auditor or performing one yourself.

If you decide to go it alone, the Energy Department suggests keeping a checklist of areas you've inspected and listing problems that you've found. Here's what you should check:

• Lighting. Try to maximize the use of daylight. Task lights illuminate only the area you need to light. Shut off lights you're not using and install motion detectors in your garage and other areas where you might forget to turn lights off. Consider switching to compact fluorescent bulbs--they're more efficient and longer lasting than incandescent bulbs. It's estimated that a compact fluorescent bulb that makes as much light as a 100-watt incandescent bulb would save about $63 during the bulb's 4.5-year lifetime--assuming the bulb is on six hours a day.
• Insulation. Inspect insulation in the attic, walls, and basement. Make sure that insulation isn't blocking the attic vents and that the water heater, hot water pipes, and furnace ducts are insulated.
• Heating and cooling equipment. Inspect equipment annually or as often as the manufacturer recommends. Check filters and replace as needed--most likely every month or two. Have professionals clean equipment annually. If your furnace is older than 15 years, consider replacing it with one that's more energy-efficient. Insulate ducts or pipes that travel through spaces that aren't heated.

For more information, read "Start an Energy Diet: Save Money Around Home" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer brief

SAN FRANCISCO (12/6/07)--High gasoline prices are pushing the standard Internal Revenue Service (IRS) mileage-rate deduction for business-related driving to a new all-time high in 2008: 50.5 cents a mile, up from 48.5 cents in 2007. Other variables affecting the rate increase include vehicle maintenance, repairs, registration and insurance. Remember that the standard mileage deduction only is for companies using four or fewer vehicles; other companies use the IRS standard as a benchmark to set their own reimbursement rates. If you plan to claim a deduction for medical or moving expenses, the rate--calculated differently than the rate for business driving--will drop to 19 cents a mile, from 20 cents a mile in 2007. And if you plan to claim a deduction for charitable-related driving, your rate will stay the same in 2008 at 14 cents a mile (http://www.marketwatch.com Nov. 27)...

Flex your money smarts and use up your FSA

McLEAN, Va. (12/5/07)--Don't get so caught up in the holiday hustle and bustle that you forget to use the remaining dollars in your flexible spending account (FSA). Now's the time to consider purchasing cold medicine, pain reliever, and extra contact lenses if you have money left in your account (USA Today Nov. 27).

FSAs let employees set aside pretax dollars to pay for things not covered by insurance such as certain over-the-counter (OTC)/drug store items, co-payments, and eyeglasses.
The catch: If you don't spend the money by the end of the year--or, in some cases by mid-March--you forfeit the money and it goes back to your employer.

Check the list at fsafeds.com/forms/OTC_QRG000.pdf to see what items qualify. Simple things such as ointment and bandages qualify, so give the list a good look or you may miss out. Generic brands of items also might be eligible. OTC items purchased to treat a general medical condition that are not preventative or cosmetic in nature are eligible expenses to claim. No toiletries are allowed.

For other ideas of how to tie up 2007 using sound money management skills, get registered and join the Home & Family Finance Resource Center's Financial Fitness Challenge.

courtesy of cuna.org

Free tools check for dangerous websites

McLEAN, Va. (12/3/07)--Surfing the Web is risky--click on one corrupt site and sophisticated cyberthieves could hand you a sentence of life with spam and malware. Fortunately, just as we dive into the heaviest online shopping time of the year, free tools are available that take some of the guesswork out of surfing the Net (USA Today Nov. 26).

Using color-coded icons, these free products flag search results and rate the safety of websites:

• McAfee Site Advisor. The color-coded search results are based on automated safety tests combined with feedback from volunteer reviewers. A red icon warns you the site may contain spyware, spam, viruses, or online scams. A yellow icon indicates the site is questionable. And a green icon indicates the site is clean. Mouse over the icon for more details.


• Scandoo. The analysis is less detailed than that of Site Advisor, and it won't block sites that are questionable, but Scandoo's advantage is that you can flag sites using one of 26 different Web category filters, such as nudity (pcworld.com).

Jason Masterson, information technology analyst at Credit Union National Association, Madison, Wis., leans toward McAfee Site Advisor. "It can be used as a 'browser plug-in,' and it integrates well with both Internet Explorer and Firefox," he said.

For more information, read, "Stay Safe When Shopping Online" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer Brief

McLEAN, Va. (11/29/07)--If you plan to go somewhere for the holidays but haven't gotten around to making travel arrangements, you still might achieve that long-awaited getaway--for a price. You might have a tough time finding reasonably priced airline tickets, but a number of travel packages still are available to popular tourist destinations such as the Caribbean. New York also is a popular destination this year. The city will celebrate the 100th anniversary of the New Year's Eve ball drop in Times Square. And some cruise lines still are offering package deals for travel over the holidays. Websites to visit: http://www.tourscan.com, http://www.carnival.com, and http://www.marmara-manhattan.com (USA Today Nov. 16) ...

courtesy of cuna.org

Reduce tax bill next spring with simple tuneup now

WASHINGTON (11/28/07)--As 2007 draws to a close, it's time for a tuneup--a money tuneup, that is. Implementing simple tax planning strategies now could save you big bucks come tax time next year (Kiplinger.com Nov. 1).

A year-end tuneup is good advice for anyone, but it's particularly important if you've experienced a change in circumstances during the past year: marriage, divorce, death of a family member, job change, purchase or sale of a home or business, or other major event.

When it comes to reporting income and deductions, it's all about timing and techniques to reduce your overall tax bill. Not all techniques will be relevant to your situation, so seek the advice of a tax professional. And remember that some strategies won't reduce your taxes if you're subject to the alternative minimum tax (AMT).

• Prepay some 2008 bills now. You'll be able to write off the deduction earlier. Common examples include paying state income taxes or property taxes early, and paying your January 2008 mortgage bill before Dec. 31.
• Pad your retirement account. Employees can sock away up to $15,500 of pre-tax salary in a 401(k)--it grows tax-deferred until you withdraw it in retirement. Workers age 50 or older before the end of the year can contribute an additional $5,000 a year. And you can contribute $4,000 this year to an individual retirement account (IRA) or $5,000 if you're age 50 or older.
• Sell off loser investments. If you have significant capital gains in 2007, sell some losers and use that amount to offset capital gains (PR Newswire Nov. 7). If your losses are larger than your gains, deduct--up to $3,000 in any one year--the capital loss against other income, such as salary. Then carry over additional losses into subsequent years when you can use them to offset future capital gains.
• Energize it. There's still time before Dec. 31 this year to install energy-efficient storm windows and doors for a tax credit of 10% of the costs ($500 maximum credit), or a high-efficiency air conditioning system or water heater for a $300 tax credit ($500 lifetime cap). And there's a tax credit of 30% of the cost to install solar panels, solar water-heating equipment, or a fuel-cell power system in your home ($2,000 maximum credit).
• Buy classroom supplies. Teachers and teacher's aides can deduct up to $250 of the cost of certain items used in the classroom--books, supplies, software and other computer equipment. Hurry--this deduction expires at the end of the year unless Congress extends it.
• Spend down your health-care flex account. Not every company grants an extension to March 15, 2008, to spend 2007 flex dollars. The use-it-or-lose-it provision means unspent dollars go to waste, so schedule eye exams, prepay orthodontia bills and stock up on prescription and certain over-the-counter drugs. Check with your human resources department for a list of accepted charges.
• Keep receipts for charitable donations. All monetary contributions--regardless of the amount--now require documentation such as a canceled check or a receipt from the charity. New Internal Revenue Service rules went into effect in October 2006.

Finally, if you anticipate a large refund, consider cutting back on withholding, which will put more money in your paycheck now. Use Kiplinger's withholding calculator at Kiplinger.com/tools/withholding/ to run some numbers.

For more information, read "Credits and Deductions Save You Tax Dollars" and "Preparation Softens Blow of Alternative Minimum Tax" in Home & Family Finance Resource Center.

courtesy of cuna.org

Shrinking credit card float: One more reason to pay bills online

KANSAS CITY (11/27/07)--Call it the case of the shrinking grace period. Call it sinking the float. Call it deceptive. But whatever you call it, it's probably going to result in more consumers paying their credit card bills online (KansasCity.com Nov. 10).

More credit card issuers are shortening the grace period--the time in which you have to pay the bill before the interest-rate clock starts ticking--from 30 days or 25 days down to 20 days in some cases. That means your payment, if sent by snail mail, may not reach the issuer in time to avoid late payment penalties and possibly higher interest rates. Keep in mind, too, that you often rate a grace period only if you carry no balance.

With late fees climbing to all-time highs of around $39, and late payments triggering higher interest rates even on other forms of credit held by the card holder, consumers need to be on guard, monitor bills, and read the fine print on notices sent by issuers. Experts warn that some issuers hope you slip up and miss the due date, resulting in higher profits for them.

If you have a tendency to cut it short, there are two alternatives:

• Pay the bill when you get it. A 20-day grace period gets even shorter if it takes the bill two or three days to reach you.
• Pay the bill online. Avoid the snail mail shuffle that could cost you plenty in late fees and higher interest rates. Arrange for payment to be made two or three days before the due date and avoid the snail-mail shuffle altogether.

For more information, read, "Online Banking Makes Money Management Simple and Safe" in Home & Family Finance Resource Center.

courtesy of cuna.org

Weak passwords invite fraud

MADISON, Wis. (11/26/07)--Don't even think about shopping online this holiday season until you're sure you have a strong password. Without it, you unwittingly leave yourself open to identity theft, says the Credit Union National Association (CUNA) Center for Personal Finance.

If you're typical of many computer users, you have a weak password--one that's easy for hackers to crack. One example is any word in the dictionary; con artists have written software programs that search every word in the dictionary to uncover the key that can open your files.

Another no-no is using personal information, such as birthdays or names of family members and pets. And using consecutive keys on the keyboard, such as qwerty, is a gift that keeps on giving for identity thieves.

The key to a strong password, according to Microsoft, is to use a variety of characters and make it both random and lengthy. The greater the variety, the better:

• Combine letters, numbers and symbols. Each character you add increases your protection from fraud. A password without symbols needs to be considerably longer to have the same degree of protection as an eight-character password with symbols.
• Randomly capitalize some letters. Sprinkle them throughout your password.
  Stray from typical symbols. Don't forget about punctuation marks, slashes, dashes and brackets--symbols not on the upper row of your keyboard.
• Use a phrase or sentence to help you remember. Here's one example, "My #1 dog is a cross between Boxer/Lab," becomes the password "m#1diacbB/L." Remember this phrase and you won't forget this seemingly random combination of letters, numbers and symbols.
• Avoid easy-to-guess passwords. This includes your login name, sequences (123456789), or look-alike characters (M@ddie).

Finally, take time to check the strength of your password. Use Microsoft's online tool at Microsoft.com (search "password checker") to see how your password stacks up.

For more information, read, "Stay Safe When Shopping Online" in Home & Family Finance Resource Center.

courtesy of cuna.org

Figuring a safe withdrawal rate in retirement

McLEAN, Va. (11/19/07)--If you're close to retirement, you're probably crunching--or thinking about crunching--numbers to figure out how much money you can withdraw in retirement so you won't outlive your resources. But if you don't follow general guidelines, you may come up short (USA Today Nov. 9).

You don't know how long you're going to live, but you can count on this: Fixed income won't keep up with inflation, most individuals can't live on Social Security alone, and fewer than one of five retirees is drawing a corporate pension now--and that number is decreasing. With longer life spans, we need to spread our limited resources over a longer period of time.

What should you keep in mind when calculating a safe withdrawal rate?

• Life expectancy. Check the charts and add five or 10 years, taking into account your health and family history. Use this to determine how long you want your money to last.
• Don't ditch stocks in retirement. A recent study by T. Rowe Price came to the same conclusion as a study conducted by William Bengen, CFP (Journal of Financial Planning 1994) that analyzed historical data: The allocation mix that yields the greatest success at the time you start taking withdrawals is about 50% stocks and 50% bonds. Stock allocations less than 50% and more than 75%--either too conservative or too risky—are counterproductive.
• Start out small. If you want your money to last 30 years, studies reveal that you can withdraw 4% of your portfolio during your first year of retirement. A 3% or even 3.5% withdrawal rate is considered safest, while an initial 5% withdrawal is considered risky, and 6% or more is considered gambling with your nest egg.
• Use inflation to calculate subsequent withdrawals. After the first year, don't use the withdrawal rate to compute how much you withdraw. Rather, use last year's figure, plus an inflation factor.

For more information read, "Tapping Your Retirement Nest Egg," in Plan It: Retire Ready Toolkit.

courtesy of cuna.org

Holiday tips for savvy shoppers

NEW YORK (11/13/07)--It pays to prepare early for any holiday shopping season, but this year--with several economic pressures on consumer spending--it's critical that you know how to budget and spend wisely (CNNMoney.com Oct. 22).

What's different about this year? Retail profits--particularly in the next few months--may be affected by falling home prices in some markets, subprime mortgage and credit market meltdowns, consumer product recalls, and a recent decline in store traffic (CNN Money.com Aug. 28).

High prices at the pump are to blame for fewer trips to the stores, according to surveys by ShopperTrak, which monitors retail traffic and sales. And some retailers also are blaming weather problems for weak clothing sales.

Savvy shoppers should pay attention and look for deals as retailers sort out this year's challenges.

• Hold off on TV and computer purchases. That's the advice from retail analysts who believe the deep discounts on those items won't show up until the last two weeks before Christmas.
• Check out "doorbusters" before you head to the store. Store employees may tell you whether the item is expected to sell out within a few hours after the store opens. Call and ask how many units of the item you wish to purchase are available for sale. You may decide not to join the line that forms at 4 a.m. on Black Friday, the day after Thanksgiving.
• Hold on to expired coupons. Some retailers may honor them anyway, particularly if they're worried about lower-than-normal sales at year-end. It doesn't hurt to ask.

If you want to spend more time shopping online than in the store, follow advice from the Federal Trade Commission:

• Know the seller. Make sure you can find the physical address and phone number in case you have problems or questions. Remember: Legitimate sellers don't ask for personal or financial information in e-mail or pop-up messages.
• Know the bottom line. What's the total cost, including shipping, and can you find the product description? Read the fine print. If you see words such as "refurbished" or "close-out," you may be in for a let-down.
• Know the return and refund policies. Each seller can set its own policies, and they may not be in your best interest.
• Keep a record of online transactions. Print the product description, price, receipt, and any correspondence.
• Use a credit card for online purchases. You have federal protections with credit cards that you don't have with other forms of payment. Always read your statement carefully to check for unauthorized charges. Never type your credit card number in an e-mail message; payment information should be sent on secure sites, so look for a lock icon on the browser's status bar or a URL that begins "https."
• Read the privacy policy. It tells you how your personal information will be collected and used. If you can't find it, shop elsewhere.

Happy Shopping! courtesy of cuna.org

Parents key players in keeping kids safe online

McCLEAN, Va. (11/12/07)--If your kids are spending countless hours online, keep closer tabs on whom they're chatting with to help protect them from predators (USA Today Nov. 8).

So long to Barbies and Hot Wheels--kids are flocking to the Internet to use social networking sites in their spare time. In fact, some 93% of youth are online (Pew Internet & American Life Project Oct. 24).

Child predators often spend weeks and sometimes months getting to know kids online and gaining their trust--a process known as "grooming," so parents need to be vigilant. If you're among the 68% of parents who say they have house rules about which websites are off limits, enforcing consequences if those rules are broken shows you mean business.

The Federal Trade Commission, Washington, D.C., offers advice:

• Keep the computer in a room that your entire family uses so you can keep an eye on your child's use.
• Visit your child's sites yourself to see what's really out there and what they have posted.
• Tell kids what information should be kept private. Explain that they should never give out personal information such as name, age, school, address or credit card information without your permission. Encourage them to pick user names and passwords that aren't too personal.
• Show kids how to use privacy settings on social networking sites. This way they can limit who can view their online profile.
• Tell kids to post only information that they'd be comfortable with you and others seeing. Remind them that once they post information, it's out there, and they can't take it back. Deleting the information from their site does nothing--older versions still may exist on other people's computers and still could be circulated.
• Encourage kids to trust their gut instinct; if they feel threatened by someone or something online, they should tell you.
• Watch for changes in your children's behavior or if they have trouble sleeping.

For more information read, "Keep Kids Safe Online," in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer brief

NEW YORK (11/8/07)--When you sell your car, make sure you sign the title transferring it out of your name before handing over the keys. If you don't, you could be slapped with parking tickets--or worse--incurred by the next owner. Some shady used car lots don't transfer titles. Instead, they sell the car to someone with poor credit who can't make the payment. Then they repossess it, then sell it again. Take precautions: If you sell to a dealer, sign the back of the title to clear yourself of any liability. Some states require the dealer to sign the title. Then photocopy the front and back of the title for your records. Alert the Department of Motor Vehicles (DMV) that you've sold the vehicle, either by a form supplied by DMV, or by letter, return receipt requested (http://abcnews.go.com Oct. 22)...

Gift cards: More options, more fees

NEW YORK (11/7/07)--If you're the recipient of a gift card this holiday season--and experts say more than 75% of all consumers are expected to receive at least one card--be sure to investigate whether there are hidden fees or expiration dates (Business Week Nov. 5). Visa just announced it is launching a service to let consumers personalize cards with photos and engraved messages. Visa hopes to get a bigger piece of the gift-card market, which has expanded 20% annually, compared with a 7% annual growth rate for standard credit card spending. The program is new for Visa, which is telling users to go to www.GiftCardLab.com to set up personalized gifts, for a fee.

This program, according to Business Week, will deactivate the gift cards one year from the print date and charge "account closure fees" before returning the balance to the cardholder. Research firm TowerGroup estimates that about $8 billion of card value goes unredeemed by consumers who fail to use the cards. Visa's customization program isn't new. Wal-Mart has allowed customers to personalize its store gift cards since 2005, and other retailers have followed suit. The Federal Trade Commission offers advice on steps to take before you buy gift cards:

• Read the fine print before you buy. If you don't like the terms and conditions, buy elsewhere.
• Ask about expiration dates and fees. This information may appear on the card itself, on the accompanying sleeve or envelope, or on the issuer's website. If you don't see it, ask. If the information is separate from the gift card, give it to the recipient with the card to help protect the value of the card.
• Inspect the card before buying. Verify that none of the protective stickers have been removed. Also make certain that the codes on the back of the card have not been scratched off to reveal a PIN (personal identification number). Report tampered cards to the store selling the cards.
• Give the recipient the original receipt. The receipt is required to verify the card's purchase in case it is lost or stolen.
• Ask about purchase fees. Is there a fee to buy the card or activate it? If you buy the card online or on the phone, is there a fee for shipping and handling? Does expedited delivery cost more?
• Consider fees for the recipient. It might be embarrassing to give a $50 gift card to someone if much of the amount gets gobbled up in fees.
• Check on purchase exceptions. For example, can the recipient use a store-specific gift card at either the physical store or at the store's website? Can an "all purpose" card really be used to buy groceries or gasoline?

courtesy of cuna.org

California fires spark interest in online backups, home inventory

McCLEAN, Va. (11/5/07)--The nightmare recently experienced by California fire victims is a good reminder to not only back up your digital life, but to keep that backup off-site--preferably online (USA Today Oct. 30).

The most common vehicles for backup are still the hard drive, CD, and DVD. But as file sizes increase, it's becoming more difficult to find enough space even on a DVD to hold a large movie file.

The answer: online backup. It's off-site and can't be destroyed by a fire, flood, hurricane, or other natural disaster that hits your home. Online backup services typically require you to download software that then resides on your computer and serves as a virtual drive. You can choose whether you want automatic backups of all files, or you can drag and drop backups of selected files. Your connection speed and file sizes will determine how quickly the backups occur.

Disaster victims aren't the only ones who should think about online backups. Even common power surges can destroy your data, so make sure you have a surge protector strip with built-in batteries to keep your computer running for about 20 minutes after a power failure.

While you're assessing your backup needs, remember to update your home inventory and keep a copy--you guessed it--away from home. The Insurance Information Institute, Washington, D.C., recommends you store a copy of your inventory online and send another copy to a trusted friend, family member, or paid fiduciary in a different part of the country from where you live.

To get started, visit the Insurance Information Institute Web site at iii.org/individuals/homei/.

For more information, read, "Experts' Picks: Home-Inventory Software" and "Disaster-Proof Your Important Papers" in Home & Family Finance Resource Center.

courtesy of cuna.org

Smart decisions upfront prevent future foreclosure

LOS ANGELES (11/6/07)--One out of every 200 households faced a possible foreclosure in the past three months--that's almost 447,000 homes nationwide (Associated Press via USA Today Nov. 1).

Many homeowners are in this situation because they're starting to see rate increases in the adjustable-rate mortgage they took out a year or two ago. The best way to prevent foreclosure is to protect yourself--and your home--before you sign the loan documents.

Make smart decisions now to save your home later (CUNA's Center for Personal Finance):

• Buy a mortgage, not a mortgage payment. Depending on what type of loan you get, an affordable monthly payment now may not be so affordable in the future as rates increase. With most loans, over time, your total monthly payment most likely will go up as property taxes and insurance premiums rise. Also, if you take out a mortgage for an extended period of time--more than the traditional 30 years--interest costs will be higher than with shorter terms.
• Don't overextend yourself. Just because you're approved for a certain loan amount doesn't mean you can afford it. One helpful guideline many lenders use is that your mortgage payment should amount to no more than 33% of your monthly gross income (income before taxes, Social Security, and other deductions). Another guideline is that principal, interest, property taxes, and insurance--plus your total long-term debt load such as car payments, college loans, and installment payments--shouldn't exceed 38% of your gross income.
• Know the details. Make sure you understand your loan terms, including if and when the payment could increase and how high it could go.
• Start an emergency fund. Putting money aside in a special account just for emergencies can help drastically if you or your spouse or partner is laid off, becomes unable to work for a while, or if other unplanned expenses happen. Having enough saved to make a couple of month's worth of mortgage payments could be the difference between being able to stay in your home or losing it.

Talk to the professionals at your credit union. They can give advice about a loan or help with a budget so you can afford your mortgage.

For more information, read "Lenders, Counselors Help Homeowners Avoid Foreclosure" and "What to Do When Your ARM is Due" in Home & Family Finance Resource Center.

courtesy of cuna.org

Car rental alert: You may need insurance after all

BOSTON (10/30/07)--For years, you've made the wise decision not to buy expensive collision damage waivers (CDW) for car rentals if your credit card company already has identical coverage. Now, despite what seemed like good advice, many consumers are finding out the hard way that they're not covered for loss-of-use (LOU) charges (smartertravel.com Oct. 25).

SmarterTravel.com expert Ed Perkins did some investigating, and discovered some gaps in credit card coverage (PR Newswire Oct. 25). Many people believed that if a credit card covers collision damage repair, it also covers loss of use charges. However, some credit card companies require that the car rental company provide a vehicle log for the credit card company's coverage to work. If the car rental company refuses to supply the log, the credit card company can refuse to cover any charges for loss of use, and you're stuck with the bill.

Anecdotes posted on the SmarterTravel Website provide several expensive scenarios. In one, some car rental companies charged LOU at the full, undiscounted, short-term rental rate rather than using the discounted rate on the renter's contract. In another example, the car rental company imposed LOU charges even though there were plenty of other cars in the lot and it didn't lose any revenue while the damaged car was being fixed.

Which companies aren't sharing vehicle logs? Perkins writes that Avis, Budget and Hertz don't share logs with either credit card or insurance companies. Although American Express and MasterCard must have logs to honor their coverage, Visa--according to Perkins--indicated it will try for an equitable solution. And even if you have American Express' Premium Car Rental Protection plan, you'd still need the vehicle log to be covered.

Here's some advice:

• If you want to rent from a car rental company that does provide vehicle logs to credit card issuers, stick with Alamo, Enterprise or National. Others may provide logs--check before you rent.
• Using Visa may give you the opportunity to negotiate coverage for LOU; using American Express and MasterCard won't.
• If you want to avoid financial exposure, buy CDW when you rent, or purchase separate travel insurance that covers rental car damage--you may pay a fraction of what you'd pay the car rental company for the same coverage.

For more information, read, "Research, Plan, and Budget for That Special Vacation" in Home & Family Finance Resource Center.

courtesy of cuna.org

Disaster preparation key for some peace of mind

MADISON, Wis. (10/29/07)--Whether it's fires in California or more floods in New Orleans, each disaster brings another reminder--no matter where you live--to develop a personal or family disaster plan (CUNA Center for Personal Finance).

Don't know where to begin? Check out these resources:

• ready.gov. California residents can access links about evacuation procedures, wildfire preparedness and local resources. Before a crisis hits, click to start a kit, make a plan, be informed, and watch a video.
• redcross.org. Get general tips on protecting your home before a disaster strikes, including what to do when a wildfire threatens your home, what to include in an emergency supply kit, and how to create a family disaster plan. Links can help you find missing loved ones and help you donate to relief funds.
• fema.gov/areyouready/. Access step-by-step, in-depth guides in both English and Spanish to help you prepare.
• prepare.org. This site contains disaster preparedness tips for vulnerable populations: seniors, children, people with disabilities, people with mobility issues and pet owners.

If you wish to donate to relief efforts, call 800-REDCROSS or contact the local American Red Cross chapter. To find the nearest chapter, visit redcross.org.

For more information, read, "Disaster-Proof Your Important Papers" in Home & Family Finance Resource Center.

courtesy of cuna.org

Stopping junk mail, lowering utility costs

WASHINGTON (10/26/07)--Experts on Sunday's H&FF Radio show will offer tips to help you significantly reduce the amount of junk mail and e-mail you get, get a handle on the high cost of utilities this winter, build a good credit record, and keep kids safe on the Internet.

Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

• "How to Stop Getting Junk Mail You Don't Want," with Pat Kachura, senior vice president for corporate responsibility, Direct Marketing Association, Washington, D.C.;
• "Kids.gov--The Official Kids' Portal for the U.S. Government," with Mary Levy, director, Federal Citizen Information Center (FCIC) Consumer Information and Outreach Division, Washington, D.C.;
• "Building Credit With a Secured Credit Card," with Linda Sherry, director of national priorities, Consumer Action, Washington, D.C.;
• "Ways to Lower Your Utility Costs," with Mike Wilson, marketing and communications coordinator, Eastern Illini Electric Cooperative, Paxton, Ill.; and
• Listener E-mail Questions.

Home & Family Finance is a resource center for personal finance information at the Credit Union National Association (CUNA). The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, makers of cheddar cheese; and Visa. For more information, read "Keep Kids Safe Online" and "Start an Energy Diet: Save Money Around Home" in Home & Family Finance Resource Center.

courtesy of cuna.org

How to spot a counterfeit bill

WASHINGTON (10/23/07)--Creating fake money with a PC, scanner, and inkjet printer is easy, but counterfeiters are discovering that the latest, high-tech counterfeit-proof bills from the U.S. Treasury are making fake bills easier for consumers to detect, and punishment is swift (secretservice.gov).

It pays to know how to spot a fake. New $20 bills printed by the Treasury contain three key security features:

1. The number "20" located in the bottom right corner made of color-shifting ink that changes from copper to green;
2. A plastic security strip with the words "USA TWENTY";and
3. A smaller version of President Andrew Jackson's portrait that's visible if you hold the bill up to a light.

The U.S. Secret Service offers advice to protect yourself from counterfeit scams:

• Check for duplicate serial numbers.
• Hold bills up to the light. A counterfeiter rarely can replicate the color-shift ink.
• Be suspicious of bills of larger denominations and those that bear pre-1996 designs; nearly all pre-1996 money has been taken out of circulation and destroyed.
• Take time to make sure the bills you receive look--and feel--legitimate. If the colors are off or the paper is not like papers on other bills, contact local authorities.

If you can't see any of the security features on the new bill, you may be holding a fake. Counterfeiting is a felony handled by the U.S. Secret Service. Anyone facing counterfeit charges could face up to 15 years in prison and stiff fines.

For more information, read, "Catching the Bad Guys: Credit Unions Look Out for Members' Safety" in Home & Family Finance Resource Center.

courtesy of cuna.org

Laddering CDs: Some peace of mind for market volatility

KANSAS CITY (10/22/07)--Given recent ups and downs in the market, are you looking for an investment strategy that gives higher dividends than a regular savings account, is federally insured, and offers predictable returns? Consider laddering your certificates of deposit (CDs) (The Kansas City Star Oct. 13).

Mary Rhodes, director of deposit services at CommunityAmerica CU, Lenexa, Kan., emphasizes that wary investors shouldn't shy away from CDs in today's shaky economic environment--particularly when they consider the benefits of laddering.

Rhodes' recent article in the Kansas City Star explains that laddering CDs helps you insulate some of your investments from recent economic events. She stresses the importance of regularly expiring CD terms so your money is available to you as often as you like, while giving you a stable investment return.

Industry experts agree. In addition to a stable source of income, laddering can help give you more liquidity (Bankrate.com).

Here's an example of how laddering works: If you have $5,000 to invest, put $1,000 each into certificates maturing in one, two, three, four, and five years. Then, one year later when your first certificate matures, you either can cash it in or reinvest that sum in a new five-year certificate. When your two-year certificate matures the next year, you can reinvestment in a new five-year certificate, and so on.

The result: Each year you have a certificate maturing and can opt to take the cash or invest it for five years. This means by the end of the fourth year, all your money is earning dividends at the five-year rate.

Not crazy about tying up your money for long periods of time? For more frequent rollovers, try laddering in three-month, six-month, or nine-month terms. Regardless of the time period you choose, if interest rates increase, you can reinvest each period at the new, higher rate. If interest rates fall, only a portion of your money is locked in at the previous higher rate.

Remember: Structure your ladder to meet your needs, and use the same term for each certificate when you roll it over at maturity.

For more information, read, "Ladder Your Way to Bigger Savings" in Plan It: Retire Ready Toolkit.

courtesy of cuna.org

New law provides financial relief for college students, families

WASHINGTON (10/17/07)--Families with college students finally are getting a break, thanks to new legislation signed into law Sept. 27 that will provide more than $20 billion in federal aid (Kiplinger's November 2007).

The College Cost Reduction and Access Act will offer grants to students who plan to teach, help struggling graduates pay off student loans, and gradually reduce interest rates on federally subsidized loans for low-income students to 3.4% over five years (The Washington Post Sept. 28). It offers loan forgiveness for graduates who have held public service jobs for 10 years and caps payments on federal loans at a certain percentage of the graduate's income.

The lending industry doesn't support the reforms, saying the new law--which slashes federal subsidies to private loan companies--could result in fewer loan benefits for students. One example given by the lending industry was that some borrowers may not be offered interest-rate reductions for timely payments.

Student advocates hail the new law as a victory, particularly given the increase in Pell Grants--need-based federal grants given to low-income students--by $490 next year and $1,350 in the next five years. More students will be eligible for Pell Grants because the income limit increases to $30,000 from $20,000, giving more students help with the high cost of college.

For more information, read "Stay Up-to-Date to Claim Deductions, Credits for College Costs" in Home & Family Finance Resource Center.

courtesy of cuna.org

Small blunders contribute to retirement catastrophes

NORTH PALM BEACH, Fla. (10/15/07)--How many ways can you ruin your retirement? Bankrate reporter Carole Moore compiled nine of them, based on interviews with financial experts across the U.S. (Bankrate.com Oct. 9).

Here are some no-no's when it comes to preparing for your later years:

• Neglect to include inflation in your retirement estimates. Something that costs $10,000 in 2008 will cost $22,628 in 2038, assuming an inflation rate of 2.2% that rises to 3% starting in 2017. And don't forget something else: longer life expectancies. It's likely more people will outlive their resources unless they boost their savings now.
• Buy more house than you can afford. With all costs of home ownership on the rise--property taxes, insurance premiums, and upkeep--you can't afford a fancy estate. Strive to be mortgage-free before you retire, and consider moving so a sizable chunk of your retirement income isn't directed to housing expenses.
• Dip into—or cash in—your 401(k). Cashing in your 401(k) when you leave a job is tempting, but it should be a last resort. Find other ways to pay off credit card debt or other bills.
• Count on a pension. Employees of Lockheed Martin Corp., General Motors Corp., IBM, and others can attest to the fact that promised pensions can go away. These companies--representing the tip of the iceberg--have frozen their pension plans and ceased developing future benefits for some or all of their employees. However, the 2007 Retirement Confidence Survey conducted by the Employee Benefit Research Institute revealed that among workers who have personally experienced reductions in the retirement benefits offered by their employer, nearly two out of five admit they have done nothing in response to these reductions (EBRI News April 11). Set up plan B and set aside your own funds for retirement.
• Count on your spouse or partner's income to always be there. Death and divorce change everything, particularly for those who assume someone else will take care of them.
• Rely on Social Security. There are no guarantees, particularly as the first wave of 3.2 million baby boomers turns 62 next year at the rate of 365 an hour, with 49% of men and 53% of women projected to choose early retirement (USA Today Oct. 8). The strain on the Social Security system is good reason for diversifying your retirement income sources with tax-favored investment vehicles such as 401(k)s and IRAs.
• Save for kids' college at the expense of your retirement. If you do this, you may be working until you die. Instead of letting your kids' college fund have the advantage over your retirement fund, pay yourself first. Consider loans, grants, scholarships, and part-time jobs to get Junior through college.
• Count on good health. You may be in great shape or perfect health now, but aging often brings declining health—even if you eat old-fashioned oatmeal with ground flaxseed and raisins every morning. And don't count on Medicare covering everything: Retirees often are underinsured for the expenses they'll encounter.
• Plan to work indefinitely. Be careful: Some professions have mandatory retirement ages, and age discrimination is alive and well. And don't forget that disability, disease, and other aging conditions may cut your career short.

For more information, read "401(k) Rollovers at Retirement" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer brief

NEW YORK (10/11/07)--Talk is cheap--or, in this case, free--as long as you're willing to sacrifice some privacy. A new Internet phone service made by Pudding Media is free. But there's a tradeoff: Your phone conversations are monitored. Instead of paying for the length of your web-based phone conversation with a service such as Skype, Pudding Media's service is paid for by advertisements related to what you're talking about in your phone calls, monitored by voice recognition software. When you sign up for the service, you'll be asked for your age, sex, language, and ZIP code (The New York Times Sept. 24) ...

Who rules your roost?

SAN FRANCISCO (10/10/07)--Buying a home is an exciting, yet stressful time. And if you're moving into a community governed by an association, know the rules to avoid misunderstandings that could have legal and financial consequences (MarketWatch Sept. 30).

More than 57 million people lived in association communities in 2006, according to Community Associations Institute, a trade group in Alexandria, Va. Of that total, homeowners associations and other planned communities account for 52% to 55%, condominiums account for 38% to 42%, and cooperatives make up the remaining 5% to 7%.

Madelyn, a former condo association president in the Midwest, told News Now there are pros and cons to association living. "It's definitely a pro that there's consensus when things are decided. The majority wins," she said. Her biggest frustration: "There was kind of a good ol' boy network. For example, the cousin of one of the condo owners became the handyman. He wasn't responsible ... you get what you pay for."

Research and do your homework before moving into a community governed by an association. Ask about:

• Exterior items on the home or in the yard. Many associations have bylaws restricting TV antennas, satellite dishes, basketball hoops, clotheslines and fences. Something inside your unit that's visible to neighbors--like a political poster in a window--also falls under the "exterior" rules.
• Vehicles. There often are restrictions on parking boats, snowmobiles, RVs, or collector automobiles at your residence. Make sure you can make other arrangements for storage if this is the case. If you run a home-based business, check on restrictions for parking commercial vehicles or regarding increased vehicle and foot traffic from your clients.

For condo owners in particular, check on:

• Pet or pet-size restrictions. Some associations do not allow pets, or will limit the type or size of animals.
• Landscaping. Know what the association covers and what you'll have to pay for and do yourself. Madelyn said basic lawn care was included in her association's agreement, but when it came to tree-trimming, she had to do it herself or hire someone. Another Midwest condo owner, Mike, ended up paying $2,000 to have overgrown trees removed that he no longer wanted in his yard. They looked awful, but the association wouldn't agree to remove them, he told News Now.
• Age restrictions for owners and guests. For baby boomers looking toward retirement or for those already retired, builders have created housing areas for those age 55 and older. Check restrictions on times and how many grandchildren are allowed to visit at once, and whether they're allowed in the swimming pool and fitness center.

For more information, use the "What Will My Monthly Mortgage Payment Be?" calculator in Home & Family Finance Resource Center.

courtesy of cuna.org

Bundled bills may contain costly traps

SAN FRANCISCO (10/8/07)—If you're trying to save money by bundling your phone, Internet, and cable all in one bill, be on the lookout for costly traps (Consumer Action News Fall 2007).

Despite the convenience of having one bill for all three services, Consumer Action, a nonprofit advocacy and education organization based in San Francisco, recommends caution before you sign a contract for this type of bundled service:

• Watch for time-limited offers. If the package lasts only for three months to one year, the advertised low price may jump 20% or more after the promotion ends. Ask what the price will be when the initial pricing ends.
• Find out if the advertised price is good where you live. If the high-speed Internet service isn't accessible in your neighborhood, don't sign up.
• Find out what happens if you terminate the contract early. Some companies charge an early termination fee up to $250.
• Ask about limitations on long-distance minutes. Some companies offer packages that limit direct-dial calls from your home to 100 minutes a month. Know your calling pattern before signing up for any bundled package that has limitations on minutes. Ask what the rate will be if you go over the limit.
• Read the fine print. Are there restrictions in the contract? For example, if you need to switch just one service in the bundle, will you lose the deal on all the other accompanying services? Also, make sure you understand all the fees and equipment charges on top of the bundle's advertised price.
• Know your customer service options. If you have problems with more than one service in the bundle, will you need to call more than one repair person—and make more than one appointment?
• Be on the lookout for "change of terms" notices. For example, a company may send you a notice telling you that in return for service you need to settle disputes using binding mandatory arbitration instead of the courts. That notice may include a 30-day window for you to opt out of arbitration agreements. If you don't opt out, you give up your right to sue the company in court for any claim of negligence, fraud, or intentional wrongdoing.

For more information, read "State Consumer Protection Agencies Look Out for Your Best Interest" and "Arbitration Clause Denies You Your Day in Court" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer brief

SAN FRANCISCO, Calif. (10/4/07)--If you've had a negative online shopping experience lately, you're not alone. A new survey by Harris Interactive revealed that nearly nine out of 10 online shoppers have experienced problems while making transactions online. Some of the most common problems consumers experienced with retail, banking, travel, and insurance websites: receiving error messages, having problems logging in and navigating the site, receiving incorrect or confusing information, and getting stuck in endless loops that block transactions (PCWorld.com Sept. 17) ...

Price of Halloween costumes enough to scare you silly

WASHINGTON (10/3/07)--It's goblin and ghost time--fun for all. But if you're not careful, what you spend on Halloween can be a trick instead of a treat (National Retail Federation Sept. 24).

Consumers are expected to spend an estimated $5.07 billion on Halloween this year, with the average person planning to spend almost $65--$5 more per person than last year.
Before running out and spending more than you have to:

• Shop around. One frugal mom in Madison, Wis., trying to grant her son's wish to be Davey Jones from the Pirates of the Caribbean, was astonished to find the costume selling for almost $80 on the Internet and at Halloween specialty stores. She found the same costume for $12.97 at a national chain retailer in town. The coveted Black Spider-Man costume ranged in price from $14 to $59.99 for a kid's size seven to eight at different stores. It may be time-consuming, but taking time to comparison shop can save you a lot of money.
• Make your own. Use items around your house to make costumes. Who doesn't have a pair of old funky earrings and a scarf to be a hippie from the '60s? Old bib overalls, a flannel shirt, and a hat can make a farmer. An old bed sheet still makes a great ghost.
• Host a costume exchange. Invite parents and children to your house for a costume exchange party. Kids usually start thinking of what they want to be by early September, so send invites ahead of time and plan for the exchange in early October. Set up a room in your home for the "costume store." Have kids write their names on their original costumes so they get them back after the holiday. Turn the event into a Halloween party. Have the kids bob for apples and decorate pillowcases to use for trick-or-treat bags.
• When possible, avoid Halloween specialty stores. These stores typically have a varied inventory, but because they have only a few months to make a profit, you'll rarely find discounted items. If you must shop at these stores be sure you love what you're getting and check return policies--because the stores are temporary, many are not set up to do returns or exchanges, or even offer merchandise credits.
• Shop after Halloween for next year's costume. This isn't always a win-win situation. If your kids are young enough to not care what they are or you're putting something away for yourself, you might be able to get by. But kids as young as two and three can be very particular about what they want to be. The frugal mom is stuck with a devil costume her three-year-old was supposed to wear this year--he's insisting on being Captain Jack Sparrow.

And, if it's not enough trying to find the perfect costume for your kids, what about your pet? One out of 10 households that celebrate Halloween plans to dress up the pampered pooch as well. Devils, pumpkins, witches, princesses and angels are the top five costumes this year. Miss Frugal Shopper once dressed up her eight-pound Pomeranian as a cat--using a marked-down baby's hat and bib.

courtesy of cuna.org

Coming soon: Do-it-yourself credit file freezes

NORTH PALM BEACH, Fla. (10/2/07)--In an effort to give consumers more control over their credit files and to deter identity theft, two major credit reporting agencies announced plans to grant credit freezes to all consumers (Bankrate.com Sept. 25).

Beginning Oct. 15, TransUnion will give consumers in all 50 states the ability to freeze credit files. Equifax announced it will have a similar plan in place sometime in October, with Experian expected to do the same (Atlanta Journal-Constitution Sept. 21).

The TransUnion plan allows free freezes for identity theft victims. Non-victims will pay $10 each time they wish to place a freeze on their credit file, and another $10 fee to unfreeze the file, all done by telephone and with a personal identification number (PIN).

The plans announced by TransUnion and Equifax won't preempt state laws establishing state-set prices on freezes.

Credit file freezes are different from fraud alerts, which last for 90 days and notify potential credit grantors to verify your identification before extending credit in your name in case someone is using your information without your consent.

In contrast, file freezes prevent third parties from receiving a copy of your credit report or credit score, making businesses less likely to grant credit to the identity thief trying to set up false accounts in your name.

Despite the added protection, file freezes don't prevent identity theft entirely, because of the many types of ID theft perpetrated by thieves.

Thawing your credit freeze won't take much time; credit bureaus can unfreeze your account in as little as 15 minutes.

Guidelines for tapping retirement assets

McLEAN, Va. (10/1/07)--If you're retiring soon but clueless about which pot of funds to tap when, become familiar with a few rules of thumb (USA Today Sept. 24).

Remember: There are exceptions to every rule and each person's situation is different. Combine this general advice with professional help from a trusted adviser to make sure your withdrawal plan is right for you.

• Withdraw taxable money before tax-deferred accounts. This allows tax-advantaged money to continue to grow tax-free and build a bigger nest egg. There are exceptions--for example, if you have a particularly large Individual Retirement Account (IRA)--so consult with a professional about your circumstances.
• Take as much or as little from your Roth IRA as you need--tax- and penalty-free--once you reach age 59 ½ and the account has been opened for at least five years. There's no minimum distribution schedule, and--unlike regular IRAs--a Roth IRA can be used to build up a stash of cash to leave for beneficiaries.
• If you're working in retirement and temporarily in a high tax bracket, consider withdrawing Roth IRA assets before you dip into your 401(k).
• Try to wait as long as possible to take monthly Social Security payouts. The longer you wait, the higher your monthly payouts will be, based on every year you wait up to age 70.
• Avoid the 10% early withdrawal penalty on traditional IRAs by taking substantially equal periodic payments (Alanat News June 1). Annuitize for five years, or until you turn age 59 ½ (whichever is longer), by taking annual cash withdrawals based on your life expectancy as predicted by the Internal Revenue Service (IRS). Visit irs.gov for more information. For example: If IRS actuarial tables predict you'll live another 20 years, you can withdraw 1/20th of your balance the first year, 1/19th of your new balance the second year, and so on. But if you change your distribution schedule, you'll be socked with the 10% penalty (SmartMoney.com).

courtesy of cuna.org

Despite mortgage mess, consider tapping home equity

YONKERS, N.Y. (9/26/07)--Given the turmoil in today's mortgage market, you might not think it's a good time to take out a loan against the equity in your home. But despite the risks, tapping home equity may be a viable--and timely--option for some homeowners (Consumer Reports Money Adviser October 2007).

Higher interest rates and lower home values are reasons cited for not tapping home equity. In some cases, that concern is warranted: If your home value drops, you could owe your home equity lender more money than your house is worth. And if you run into tough times and can't pay back the loan, you could lose your home.

Similarly, it may not be wise to use home equity to consolidate or pay off large credit card bills. Although card rates are about five percentage points on average above a home-equity loan, the lower monthly payment by tapping home equity still might not make sense if it takes longer to repay the new loan, resulting in higher interest charges over the long term. Worse, you might run up new charges on those cards in the meantime.

It makes sense to take out a home equity loan in today's volatile housing market if:

• You've lived in your home long enough to build up significant equity.
• You don't plan on moving soon and can weather a downturn in the housing market.
• You have a stable job.
• You're facing an unavoidable expense but don't have cash to cover it.

Bottom line: Review your budget and understand the difference between luxury and necessity expenses. Tapping home equity for big-ticket purchases like a car may not make sense right now, but using the money to finance household repairs and additions might increase your property's value.

For more information, read "Lenders, Counselors Help Homeowners Avoid Foreclosure" in Home & Family Finance Resource Center.

courtesy of cuna.org

Mileage stickers get major overhaul with 2008 models

NEW YORK (9/25/07)--If you're in the market for a new car, the 2008 models all have an important and long overdue overhaul--located on the window sticker (The Wall Street Journal online Sept. 10).

Until now, all new-car stickers published mileage estimates that were widely recognized as bogus; they were based on driving tests that didn't come close to resembling real-world driving behavior by motorists.

Environmental Protection Agency (EPA) fuel economy tests were based on a top speed of 60 mph, average test speed of 48 mph, temperature of 75 degrees, and no use of accessories such as air conditioning. Even after adjustments to account for discrepancies between test conditions and real life, the estimates were far from accurate, disappointing many car buyers who didn't get the mileage posted on the sticker.

Beginning with 2008 models, EPA is using a more rigorous approach to testing. Tests now take into account high-speed driving, hard acceleration, effects of cold, and the use of air conditioning.

The good news is the posted mileage is more accurate, but that also means the posted mileage is lower than they were for the same car in 2007. Estimates for city mileage are expected to drop by about 12% on average, according to EPA, with highway mileage estimates declining 8% on average. Expect a city estimate drop of as much as 30% for some models. Estimates on a few models won't change much at all. And car makers of large sport utility vehicles--those weighing more than 8,500 pounds--aren't required to display the new mileage estimates on their stickers until 2011.

For more information, read "Trying to Find Happiness With Higher Gas Mileage" in Home & Family Finance Resource Center.

courtesy of cuna.org

Consumer Brief

NEW YORK (9/27/07)--The next time you give out your name and address to a company, count on that information being copied, distributed and backed up--many times. Companies are keeping backups of your sensitive data for years. That could result in your personal information being distributed around the world. Although some databases are necessary and save lives--such as those for medical prescriptions so you don't get two medicines that interact badly--others only increase your risk from company negligence or criminal breach. Even if you've just given your name and address to a company once, it's estimated that information could be copied a thousand times within a year (http://www.Forbes.com Sept. 10) ...

Don't turn homeownership dream into nightmare: Read fine print

BOSTON (9/24/07)--Borrowers who signed but neglected to read their mortgage documents--particularly the fine print--are wishing they had. The American dream of homeownership has turned into a nightmare as more consumers experience higher mortgage payments, huge prepayment penalties and painfully high fees for missed mortgage payments (Boston.com Sept. 16).

A recent HSH Associates survey revealed that only 38% of respondents actually read all their mortgage papers, and 9% admitted they didn't read any of the documents they signed (MarketWatch.com Sept. 11).

Reading, though, doesn't necessarily translate to understanding. Complicated language confuses even those who are in the mortgage or insurance business. Worse, some mortgage ads now are under attack for deceiving consumers by not telling the whole story (Associated Press Sept. 11). Some advertised low rates and payments apply only for a short time and increase substantially after the loan's introductory period, giving consumers a false impression of the true cost of their loan.

Industry experts urge home buyers to be suspicious of very low rates and payments. Ads with deceptive claims have appeared on the Internet, in newspapers, in magazines, in the mail, in e-mail messages, and in faxes. If it sounds too good to be true, chances are good you're not being told the whole story. Low rates and payments often apply only for a short teaser period.

Mortgage experts advise you to carefully scrutinize and understand four key documents during a mortgage closing.

• Truth-in-lending statement. This shows how much you're borrowing, how much the financing will cost over the life of the loan, what your payment schedule will be, what your interest rate will be, and whether there are additional costs such as points and fees.
• HUD-1 settlement statement. This outlines all the settlement costs, such as origination fees and title insurance. Some--but not all--costs listed on this statement are negotiable.
• The note. This contains important financial information, such as interest rate and payment schedule. If you have an adjustable rate mortgage, the note will spell out how your rate will adjust in the future.
• The actual mortgage document. This contains clauses and conditions that--when signed--you agree to but likely will never review. Examples include clauses on hazardous waste, required occupancy of the property and ways to communicate with the lender.

For more information, read "What to Do When Your ARM is Due" in Home & Family Finance Resource Center.

courtesy of cuna.org

Tell College Students NOW How to Use Credit Cards Properly

NEW YORK (9/19/07)--You can't prevent college students from getting credit cards, so the most important message for students at the beginning of the semester is to use those cards wisely. The next most important message: Not having any credit--or having poor credit--has serious long-term consequences (CBS News Sept. 12).

Like it or not, college students get applications in the mail, in bookstore bags and at registration tables. According to Nellie Mae Corporation, 46% of students reported that they obtained their first card during their freshman year. By the time they graduate, 91% of students have at least one card, with an average credit card balance of $2,850.

Telling a college student to avoid credit cards altogether not only will fall on deaf ears, it's not in the student's best interest.

Here's why. If a student uses a credit card wisely before graduation--that is, makes relatively small purchases and pays those charges back on time--chances are good the student will have good credit when entering the real world. Without good credit, the student may get turned down for a job, may not get a loan or insurance, and may not get approved for an apartment or mortgage.

Use these credit tips for college students:

• Shop around. The cards offered on campus may not be the best deal in town. Compare features and look for a card with no annual fee, a reasonable interest rate below 18%, a grace period (the time in which you have to pay the bill before you incur interest), and online account management. Check out cards issued by the local credit union, or go to Bankrate.com, lowcards.com, and creditcards.com for lists of cards available to students.
• Avoid the minimum payment trap. This is the absolute minimum amount you can pay without incurring a late payment fee and to keep your account current. If you can't pay in full, try to pay two to three times the required minimum payment--you'll pay off the balance sooner and save money.
• Steer clear of cash advances. If you use the credit card for emergency money, you'll pay a cash advance fee that's typically 4% of the cash advance amount. That's not all--there's a higher interest rate for cash advances, so you're "hit" twice.
• Don't use credit cards for tuition. Interest rates typically are higher on credit cards than for other education loan options. If you need to borrow money for tuition, use education loans with lower rates, built-in deferment of payments, and consolidation options after graduation.

For more information, read "Ant and Grasshopper Graduate From College" in Home & Family Finance Resource Center.

courtesy of cuna.org

Look for Buyer Incentives and Deals at Crowded Car Lots

Look for buyer incentives and deals at crowded car lots
NEW YORK (9/17/07)--Despite higher interest rates and tougher credit standards, now is a terrific time for people with good credit to negotiate prices on cars at crowded automobile lots (The Wall Street Journal Online Sept. 11).

Industrwide sales have plummeted throughout the year, leaving leftover 2007 models on dealer lots just as 2008 models start rolling in. Bottom line: You win--as long as you do your homework, take advantage of your strong negotiation position during the current glut and watch out for secret markups.

Edmunds.com offers tips for buying a new car:

• Don't get swept away by the incentive. Some dealers offer the best incentives on slow-selling cars, which may not include the model you really want.
• Watch for caveats on financing offers. The best financing incentives often are reserved for car-buyers with stellar credit. If you don't qualify, plan on paying a much higher rate.
• Beware hidden markups. If the dealer arranges your car loan through a finance company owned by the car manufacturer, you may wind up paying a higher rate than the one you qualified for, with the dealer and the finance company--in cahoots--pocketing the difference. These hidden markups could be as much as $5,000 over the life of the loan, according to a recent Consumer Federation of America report.

Finally, get preapproval for a car loan before you step foot on the dealer's lot. Don't give that dollar figure to the dealer until after you've completed price negotiations, and don't be swayed by 0% financing. You may be able to get a better deal by taking the rebate and getting a loan through the credit union.

courtesy of cuna.org

Consumer Brief

NEW YORK (9/13/07)--Need a good wedding or graduation gift for a young adult son, daughter, niece, nephew, or grandchild? Consider giving time with a financial pro. Financial planners are seeing a large increase in the number of clients walking through the door with gift certificate in hand. Experts advise you get buy-in from the intended recipient before you pay in advance. Then back off. Don't hover over the process; your goal should be to get young adults to stand on their own two feet financially--not rely on you (Money September)...

courtesy of cuna.org

Employees' financial woes hurt workplace bottom line

McLEAN, Va. (9/12/07)--Financial worries--mainly from the recent surge in foreclosures and defaults on credit cards--are spilling over into the workplace. The result: An increase in absenteeism and decrease in productivity. The good news, though, is that the problem has opened the doors for much-needed workplace financial education (USA TODAY Sept. 5).

Most workers can't leave financial stress at home--they may bring it to work in the form of anxiety and different degrees of depression, with significant negative effects to a company's bottom line.

Financial education at the workplace is not a new concept but has grown more popular in recent years. Studies during the past decade--by American Express and by Deloitte and Touche--revealed that 85% of employees want to receive financial information in the workplace, and four of workers' top five benefits concerns relate to financial planning. Another study by the Principal Financial Group revealed that more than a third of employees are concerned about being able to pay for basic necessities in retirement.

The workplace is perfectly positioned to host financial education--such as lunch 'n' learn seminars--particularly for busy adults who can't find time to attend evening seminars.

Check whether your employer offers financial education and, if so, take advantage of it. Suggest topics that are of interest to you and your co-workers. If there's no one on staff to facilitate seminars, suggest that your employer or Employee Assistance Program representative contact the local Extension office or Consumer Credit Counseling Service for unbiased financial education.

For more information, read "Lenders, Counselors Help Homeowners Avoid Foreclosure" in Home & Family Finance Resource Center.

courtesy of cuna.org

Kids.gov safe site for kids to surf

WASHINGTON (9/11/07)--After days of summer sun, swimming and relaxing, and with the beginning of a new school year, kids will spend more time on the computer. Take steps to make sure your kids stay safe online. Check out a newly designed family-friendly site from the U.S. government (Federal Citizen Information Center Aug. 28).

Roughly 30 million children use the Internet today, according to the Pew Internet & American Life Project. While the Internet is a valuable resource for schoolwork and learning, parents must use caution about what sites their kids visit--the Internet also is a place where sexual predators and identity thieves lurk and kids bully other kids. Involved parents can minimize the risks to keep their kids safe.

Kids.gov, a website from the Federal Citizen Information Center, Pueblo, Colo., is one site that parents can be sure is safe. The site has links to more than 1,200 Web pages from government agencies, schools and educational organizations. The site features 20 topic areas--from arts and music to space and history--as well as activities for children from kindergarten to eighth grade.

"When it comes to children, parents and the Federal Citizen Information Center share a common goal--to keep youngsters safe while they learn and have fun online," says Mary Levy, director of the center's consumer information and outreach area. "Parents and caregivers can trust that the sites on Kids.gov are safe, educational and fun. We even have a special message, 'Just for Kidz,' put together by the Federal Trade Commission to help children stay safe while they're surfing."

To help keep your kids safe online, CUNA's center for personal finance urges parents to:

• Keep the computer in a busy room so you can monitor your child's use.
• Set clear rules about computer use and enforce consequences for misuse.
• Tell children to never give out personal information such as name, age, grade, school, address, phone number, photos, e-mail address, or credit card information without your permission.
• Keep an eye out for changes in your child's behavior, such as secretiveness, inappropriate sexual knowledge, or difficulty sleeping. Address concerns right away.

If you discover that someone is attempting to exploit, entice, or threaten your child online, contact your local police and the Cyber Tip Line at (www.cybertipline.org) or 800-843-5678.

For more information, read "Keep Kids Safe Online" in Home & Family Finance Resource Center.

courtesy of cuna.org

Use with caution: No-interest loans for medical bills

NEW YORK (9/5/07)--One of the fastest-growing segments of consumer credit stems from high medical bills not covered by insurance. To fill the gap, more doctors and dentists are offering no-interest loans. Before you jump at the option, understand the risks (The New York Times Aug. 30).

No-interest financing--available to the creditworthy--is a tool that allows you to string out your payments for a period of time--say, six, 12, or 18 months--without incurring interest. However, if you don't pay the loan in full by the stated term, interest accrues from the date of purchase.

No-interest loans now are helping many cash-strapped consumers who are stuck with high out-of-pocket medical expenses. However, unpaid loans can carry interest rates of 20% or more, similar to those on a credit card. In one online example, a plastic surgery clinic states: "Rates for our program range from 1.99% APR to 23.99% APR" to be determined by the term for which you apply and your credit standing.

If you apply for a no-interest medical loan, first get a handle on your budget. Agree only to terms you can afford. If you can't afford to stretch medical payments over 12 months, check out personal loan options at the credit union, or look for credit offers for zero-interest loans payable over several years--some of which ultimately may have interest rates of 12% or 13%. However, arrange these no-interest loans at the outset of your medical expense; don't expect to convert a 12-month, zero-interest plan to a multi-year program simply because you haven't paid in full within 12 months.

And in light of the subprime mortgage mess, expect your credit history to be scrutinized more closely if you apply for these or other loans.

For more information, read "Will Insurance Consumers Benefit from Modernization?" in Home & Family Finance Resource Center.

courtesy of cuna.org

Survey: Consumers give high marks to credit union-issued cards

NEW YORK (9/4/07)—When it comes to credit cards, service and low fees matter most, according to a survey released last week by Consumer Reports (CNNMoney.com Aug. 31).

More than 36,000 cardholders ranked the best and worst cards. Credit unions fared exceptionally well, with survey respondents putting credit union-issued cards in the top tier.

At the top of the list was USAA Federal Savings, followed by Navy Federal Credit Union and other credit unions. Cardholders ranked five of the largest MasterCard and Visa issuers as mediocre, citing headaches and other problems with JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC. Together, these issuers control roughly 80% of the credit card market.

Interest rate matters: The top three issuers charged interest rates between 9% and 11%, with the lowest-ranked issuers charging 17%.

Stick with issuers that have a reputation for good service and low fees, and pay attention to your own credit card habits:

• Watch for rate increases. About one-quarter of survey respondents reported that their interest rate jumped to more than 25% because of a universal default clause, which allows an issuer to bump up your rate if you pay late on other accounts in your name—your mortgage, car loan, or other credit cards. If you see an unexpected interest rate increase, check it out.
• Pay on time. Late payment penalties more than doubled in the past 12 years. The average fee is now $28, up from $13 in 1995. The survey reported fees as high as $39.
• Demand prompt customer support. Cardholders gave high marks to USAA Federal Savings and to credit unions for customer service and access to representatives. Survey respondents cited several problems attributed to issuers in the lowest tier: unreasonable waits, difficulty navigating voice systems, and having to make multiple calls to speak to representatives.

For more information, read "Credit Cards: Switch and Save" in Home & Family Finance Resource Center.

Consumer brief

YONKERS, N.Y. (8/30/07)--Americans lost billions of dollars to online threats in the past two years, according to Consumer Reports' "State of the Net" survey, and much of that loss could have been prevented. The survey revealed that 33% of respondents don't use software to block or remove spyware, 3.7 million U.S. households with broadband don't have a firewall for protection, and 8% admit to handing over personal information in conventional phishing e-mails over the past two years. The best advice: Invest in good security software, stay up to date on new threats and viruses, and never open suspicious e-mails. Check software ratings at http://www.download.com (Consumer Reports Sept. 2007) ...

Health insurance shortfalls more prevalent

NEW YORK (8/29/07)--To paraphrase a popular movie released in 1970, health insurance does not mean never having to pay for another medical bill. Three out of 10 Americans with health insurance aren't sufficiently covered (CBSNews.com Aug. 17).

In a survey published in the September issue of Consumer Reports, 16% of respondents said they have no health insurance. And some said that to pay their medical bills, they ran up large debts, dipped into savings and put off home expenses.

Consumer's Union offers tips to make the most of your health plan:

• Know your plan. Study your Summary Plan Description or ask your employer for a list of features covered. Make sure you have good hospitalization coverage—the priciest health care most people use.
• Double-check everything. Even if your operation is covered by your health insurance, make sure that all the attending physicians, such as anesthesiologist and radiologist, are covered as well. To find out if a physician is in your plan's network, check with the insurance company and the doctor's billing staff.
• Exercise your rights. You have the right to appeal health-plan decisions you think are wrong. Look for a guide to state laws and procedures when dealing with health plan disputes.

For more information, read "Will Insurance Consumers Benefit from Modernization?" in Home & Family Finance Resource Center.

courtesy of cuna.org

Avoid the latest scholarship scam

ORANGE, Texas (8/28/07)--For some families, the start of a new school year means having to scrape together funds to pay for tuition; some of these families unwittingly fall prey to student loan scams (OrangeCountyNews.com August 15).

Following a considerable increase in complaints in scholarship, loan, and grant services in 2006, the Better Business Bureau (BBB) warns students and parents to watch for financial aid scams and scholarship scams.

Fraudsters often charge a fee ranging from $700 to $900 in exchange for a "guaranteed" scholarship award. One company, College Money Matters, based in Utah, charged the fee for "insider tips" and promised to get grants and help with the entire financial aid process. The company then issued grants in the form of a check and instructed recipients to deposit the check and wire the "processing fee" back to the company. When it was discovered that the check was counterfeit, the victim was forced to pay the financial institution for the money withdrawn as well as for the processing fee. By this time, the company had disconnected its phone lines and website.

The BBB offers tips on how to determine the legitimacy of a scholarship, loan, or grant service:

• Non one can ever guarantee a scholarship or grant, so if you pay money you will not always get it back.
• You easily can access scholarship information via the Internet, so don't believe promises that you won't find the information anywhere else.
• Parents and students--not a company--are the only ones who can complete federal financial aid information.
• It is never a requirement for a scholarship offer to ask for your credit card or checking account number to hold the scholarship.
• Scholarships never cost any money to receive--they are always free.

For more information, read "Make Up for College Savings Shortfalls" in Home & Family Finance Resource Center.

courtesy of cuna.org

Mortgage mess is spawning ground for fraud

NEW YORK (8/27/07)--A new wave of mortgage fraud--spawned by the recent spike in foreclosures--is affecting thousands of vulnerable homeowners and causing federal and state prosecutors to beef up investigations (The Wall Street Journal Online Aug. 18).

Crooks are taking advantage of financially strapped homeowners by offering so-called foreclosure-rescue deals. A recent FBI report confirms different variations on the foreclosure-rescue theme, but generally, rescue companies offer victims a temporary refinancing or sale. In return for being able to remain in the home, the homeowner agrees to make monthly payments until personal finances improve, although new payments often are higher than the original mortgage payment. As a result, the homeowner still cannot make payments, sinks deeper into debt, and is forced to move or be evicted. The new owner then sells the home and pockets the equity.

The U.S. Department of Housing and Urban Development (HUD) offers tips if you're unable to make your mortgage payment:

• Don't ignore the problem. If you don't take action immediately, you'll fall further behind and likely will lose your home.
• Contact your lender sooner rather than later. Ask about options to help you through tough times.
• Open--and respond to--mail from your lender. Failure to open mail cannot be used as an excuse in foreclosure court.
• Understand your rights. Find and read your loan documents; they state what your lender may do if you can't make your payments. Learn about foreclosure laws and timeframes at your state government Housing Office--each state may have different laws. And go to fha.gov/foreclosure/index.cfm for information about foreclosure prevention.
• Set spending priorities. Can you cut certain expenses to help you make your mortgage payment? Consider cutting back on cable TV, entertainment, memberships, vacations and special clothing. If necessary, delay or reduce payments on unsecured debt--such as credit cards--until you've paid your mortgage.
• Turn assets into cash. Do you have a second car, jewelry or even a whole life insurance policy you can sell to help reinstate your home loan? What about taking on a second, temporary job? Every effort you make to beef up finances tells the lender you're willing to make sacrifices to keep your home.
• Don't pay for foreclosure-prevention help. Expect for-profit companies to offer their services--for a fee. They promise help negotiating with your lender, but the fee may cost as much as two or three mortgage payments. Don't bite. Seek free help from a HUD-approved housing counselor.
• Don't become a victim of a foreclosure-recovery scam. If someone claims to be able to stop the foreclosure process if you sign a document appointing them to act on your behalf, that's a red flag. If you sign, you're probably signing over the title to your home to a complete stranger, and you'll be a renter in your own home. Read and understand the terms of all legal documents; get help from a trusted real estate professional, attorney, or HUD-approved housing counselor.

The Federal Reserve has pulled together several web links for anyone facing foreclosure. Go to federalreserveeducation.org/pfed/foreclosure/ for a list of federal and organizational resources. Go to federalreserve.gov/pubs/foreclosure/default.htm for a list of federal-agency-only resources. And for more guidance, read "Lenders, Counselors Help Homeowners Avoid Foreclosure" in Home & Family Finance Resource Center.

courtesy of cuna.org