Do not be fooled by Scammers pretending to be the IRS

There are three letters, when spoken or printed together that can frighten nearly everyone – IRS. Yes, the Internal Revenue Service is not an organization to take lightly. Even if you are an honest taxpayer who does everything by the book, the thought of a phone call from the IRS can probably send chills down your spine. The IRS is fully authorized to collect tax debt, and there is a valid reason for all of us to take this government agency very seriously.

It is the bit of fear that we all have of the IRS that has given scammers the ability to con people out of their hard earned cash. The scam is usually a variation of someone calling you, pretending to be from the IRS, telling you that you owe them money and then working to bilk you out of your cash. People who get nervous at the thought of an audit or who simply don’t understand how these kinds of scams work wind up getting suckered into forking over their hard earned money.

It is important to know how to identify a tax scam. Here are some tips that should help you to do so with ease…

  • Remember that the IRS does not practice calling people on the phone about tax debts. Instead, they send professional, courteous letters to inform you of these types of issues. They will even follow up with additional letters if you don’t respond, but they should never be calling you on the phone out of the blue.
  • The IRS would not demand that you wire money to take care of tax debt. The phone scammers seek this form of payment quite frequently.
  • The IRS does not threaten to have the police come to take you in. If you get on the line with a phony IRS person who talks about having you arrested, ignore them and hang up the phone.
  • The IRS does not accept iTunes cards or other types of gift/debit cards as payment for tax money that is owed to them. Believe it or not, a lot of scammers demand payment in iTunes cards, and people actually believe them!

As is often the case, many of the victims of these kinds of scams happen to be senior citizens. These scenarios can be quite sad. Here is a story about one such situation that happened recently – “A member of our family was targeted and unfortunately fell for this scam not long ago. Being elderly he didn’t understand that the IRS is NEVER going to call you to demand money. Fortunately for him, the bank teller stopped the transaction when she realized it was indeed a scam.”

Folks – scammers of all sorts love to target older people. If you have older friends and relatives, be sure to let them know about these kinds of scams, and inform them how to avoid them. These calls often come in the middle of the morning or early afternoon. However, there are so many groups working to pull off these kinds of scams that the calls can come in at any time. Many of the people who make these calls have very heavy accents and some have a difficult time understanding English. Not every person who calls that has an accent is a scammer, but it is fair to mention this in an article that is about the most recent wave of IRS phone scams.

Bottom line – even if you do owe money to the IRS they are not going to cold call you. Don’t verify any information, give credit/debit card information, wire money to or purchase any gift cards for any of these types of tax scam telephone calls.

Important Considerations for People Opening Savings Accounts

So you’ve heard all about how important it is to save money. You’ve created a budget that allows you to set aside some of your income every pay period. You even do what you can to trim costs and to avoid making unnecessary purchases. Those are all good things. Keep doing them! Now the time has finally come to decide where to keep all that money you are actively saving. The old timers might have stuffed it under a mattress or put it in a coffee can in the kitchen. These methods are not exactly good for keeping your money safe or earning interest, though. It’s time to take the bull by the horns and open up your very own savings account.

This can be a little tricky, as there are more options today than there have ever been before. We have put together some helpful information to assist you in finding the best type of savings account and the best financial institution to trust with your precious savings dollars.

Don’t be Afraid to Compare and Contrast

As we mentioned, there are lots of options for people who are shopping around to open up a new savings account. Maybe you’ve been doing with the same bank for years, and you feel comfortable with that branch. That doesn’t mean you have to lock yourself into a subpar savings account for the sake of being a loyal customer. Every bank offers different rates on their standard savings accounts. You might find that your local bank offers just .01 percent interest, while another bank a little further from your home offers 1 percent. The obvious choice would be to go with the bank you may not be familiar with, but that is willing to grow your saved money at a faster rate. Take time and look into all of your options and several financial institutions before making your final decision.

Don’t Write off Online Banks

These days, we are seeing online banks that offer much higher rates than traditional, neighborhood branches. Some folks are concerned about security and safety when dealing with online banks. Make sure that you do your homework on any online bank, and choose one that is insured through FDIC. That gives your money the same kind of protection that it would get from any traditional brick-and-mortar bank.

Keep Savings Liquid

When you put your savings into a savings account or money market account that allows withdrawals, you get the kind of flexibility that you cannot get from a certificate of deposit (CD.) A CD has requirements for you to get locked into a rate for a period of time that can range from just a few months to several years. Being locked in like that is not always a good thing when the financial environment is conducive to rising interest rates, like it is right now. There is something to be said for diversifying your savings, and including a CD in your plans may be a good idea. However, as you are first getting started, it is better to use a traditional savings account that will allow you to keep your assets as liquid as possible for the foreseeable future.

Keep up the efforts to learn more about saving money and to put what you learn into action. Take your time and consider some of the information we have shared with you today. That way, you will be more prepared and able to ultimately choose the type of savings account that is right for your needs, and the right bank to help you grow your money over the years.

Pioneering Payday Lender Facing Legal Charges

A lot of people have tried their hand at the payday lending industry over the years, but few can boast of having nearly 20 years under their belts, like Chris Hallinan has. He managed to get rich over the years, ran a tight ship and did it all by providing one short term loan at a time. But now, U.S. prosecutors are getting a case ready to take against this payday lending pioneer. They are collecting evidence on a racketeering case that they think is a sure thing. They intend to prove that Hallinan conspired to evade usury laws, and they say that they have multiple witnesses that can verify these charges. One of the folks the prosecutors plans on calling on is a former partner who is facing a pretty stiff prison sentence, after being found guilty on racketeering charges.

Hallinan is now 75 years old and lives in Philadelphia. He was one of the first in business to offer payday loans via the phone back in the 90s. This business model gave him reign to operate businesses in states that have done their best to extinguish payday advance cash loans. He was the person who came up with the concepts of using the “rent-a-bank” and “rent-a-tribe” methods of operation to avoid the wrath of state regulators. These days, a lot of the payday lending industry has moved online and experts estimate that these lenders make about $16 billion in short term loans annually.

State regulators try very diligently to stop online lending companies, and now federal prosecutors are using racketeering laws that they once used to stop the Mafia. A Pennsylvania grand jury started investigating Hallinan over a year ago. Adrian Rubin is his former business partner and was charged with racketeering conspiracy back in June of 2015. According to Zane Memeger, Philadelphia U.S. Attorney, “Rubin conspired with other people to evade state usury laws and other restrictions on payday loans by engaging in a series of deceptive business practices. Rubin and his co-conspirators reaped tens of millions of dollars.”

In Rubin’s case, there was a party described as ‘Co-Conspirator Number 1.’ According to two of the people the prosecutor is calling upon, this is a direct reference to Hallinan. As of right now, Hallinan has declined to offer a comment. His lawyer, Michael Rosensaft also declined to offer further information. Rubin did not directly address the court when he entered his guilty plea. His sentencing is scheduled for October 28th.

Hallinan got his start in the payday lending industry a few decades ago after he sold a landfill company for nearly $120 million. He was formerly an investment banker and graduated from the Wharton School at the University of Pennsylvania. Currently, he owns a residence in Villanova and a condominium in Boca Rotan.

People have been relying on different types of short term loans, long before folks like Hallinan got started in the industry. These days payday lending locations are very common in the states where this type of lending is legal. President Obama has made no secret of his dislike for this industry, and has given more than a few government agencies marching orders to regulate the industry to the point of possible extinction. With Hallinan being a prime example of how much of a success a payday lender can become, it is no wonder that the government has targeted him for legal action. Anyone interested in the short term lending industry, or followers of how the government is cracking down on prominent names in the payday lending world will surely be watching to see how this high profile case pans out.

Governmental Agency is on a Mission to Shut Down Small Lending Companies

The Consumer Financial Protection Bureau (CFPB) has only been operating for about five years. But don’t let that relatively short track record fool you; this is a governmental agency that is out to get results. As to whether those results are actually good for consumers, though, is up for serious debated. According to the CFPB, new regulations that they are pushing are all focused on helping to protect seemingly “helpless” American consumers from lenders that are out to get them. If we were crafting a dramatic story out of this whole ordeal, the main nemesis of the CFPB would be payday lending companies. However, the new rules that the CFPB is proposing would have a negative impact on payday lenders and other financial service providers that consumers depend on.

Yearly, a wide range of companies provide lines of credit for small dollar, short term loans that traditional banks don’t want to provide. These types of loans include payday advance loans, car title loans and installment loans. All lenders that provide these types of loans are in a very real danger of being shut down, and that means that millions of U.S. consumers will lose what little access they have to emergency lines of credit.

A lot of the businesses that provide these types of loans have been doing so for more than a hundred years here in the United States. These businesses have remained viable because they provide services that really help people. Every day, consumers use small dollar loans to deal with a wide array of expenses, some of which are definitely emergency expenses. These types of credit lines range from small loans people take out to get appliances/furniture, to emergency loans to pay rent payments or to cover vehicle repairs. If the CFPB gets its way, millions of Americans will find themselves out in the cold the next time they need new furniture, have to get their cars repaired to make it to work or even trying to make rent if they are in between paychecks at work.

Even though the folks in charge at the CFPB know that this is a very stark reality, they continue to move forward with their new regulations. This government agency is using the premise (one that is fool of holes) that these types of companies are predators that take advantage of people who cannot make their own financial decisions and who will never be able to pay back the money that they owe. In fact, the CFPB recently outlined their latest proposal, and estimated that the new rules could reduce the revenue of the small dollar lending industry by as much as 84 percent. And you don’t have to be a math genius or financial guru to know that an 84 percent decrease in revenue is the death knell for any type of business. Small lenders are understandably scrambling with these new changes looming on the horizon.

When did it happen that being a small business was a crime in this country? How did it come to be that companies who have been successfully providing financial lifelines to consumers for years have suddenly become the bad guys? The narrative that the Consumer Financial Protection Bureau is pushing (with plenty of support from the Obama administration, mind you) is one that simply has no basis in reality. Millions of people are unable to get financial services from traditional banks. If the CFPB is successful in its bid to effectively shut the doors of small dollar lenders, where are these financially at-risk consumers supposed to turn?

Study Proves that Payday Loans Provide Necessary Financial Services for Millions

We live in a world where it is easy to get inundated with data, facts, figures and opinions. It is without a doubt that the Internet is one of the greatest achievements of mankind. Being able to access nearly any information ever published with the simple click of a mouse has radically changed the way that we all live our lives. As is usually the case, however, there are also downsides to having so much information ready for consumption, on demand. We human beings can really only meaningfully process so much information in a given amount of time. With so much information being available, it is often difficult for people to critically decipher all of the data that they consume.

Such is the case with payday loans and other forms of alternative lending. There have been thousands of articles and op ed pieces written that bemoan the evils of this kind of lending. Some “financial experts” have gone on record time and time again saying that these types of loans trap people in never-ending cycles of debt. As if traditional lenders didn’t do the exact same thing! Here’s the thing, though. Yes, we have lots of information on hand about payday lending, but the vast majority of this information is clearly anti-payday lending, and is not the type of information that people need to make a logical, rational decision about this type of lending.

Recently, a profession with Thompson Rivers University, Dr. Laura Lamb, said that the government will have to offer more incentives for big banks to offer fair services to underbanked customers, or the alternative lending industry will continue to be the only source these folks can depend on for much-needed financial services and loans.

Dr. Lamb did extensive research on payday lending back in 2012. She was a bit surprised to find that even though payday lending customers pay high fees on their loans, and that some payday loan customers do indeed wind up in debt because of the loans they take out, that these payday advance loan lenders were actually providing a service that is very necessary for financially marginalized consumers.

Lamb went on record saying, “If these places were shut down, the people using them would have nowhere to go.” Lamb did a survey that included 105 residents of Kamloops and she discovered that 78 percent of the people in this area that use payday loans made $20,000 or less each year. The money these people get from payday lenders were being used to take care of necessities, like bills, rent, food and medical care. She also found that many of these people had mainstream bank accounts, but that these banks were unable to provide the consumers with the basic financial services they need.

Lamb suggested that her financial literacy survey found no link between a person’s financial know how and their use of payday loans. She went on to say, “People don’t use these places because they’re not financially savvy. They use them because they don’t have any other choice,” said Lamb. “The people who are using them are just digging themselves deeper into poverty.”

Lamb is certainly not someone that people would describe as a supporter of the payday lending industry. However, her findings have proven that these types of lenders offer valuable financial services to marginalized borrowers, services that traditional banks and credit card companies are not willing to offer at the current time. As such, it is apparent that alternative financial providers, like payday lenders, offer vital financial services to millions of people from all walks of life.

Understanding the Very Real Problem of American Debt

Over the past three or four decades we have seen a dramatic shift in the finances of the average American household. People are using credit more than ever which has led to huge amounts of debt. Being as people are now dealing with higher levels of debt than ever before, it only makes sense that some people are having problems related to the debt that they carry around. These problems have been compounded on the tail of the Great Recession, with the average household holing nearly twice the debt that it had prior to the financial meltdown.

The level of debt has begun to go down a bit in recent years, but with high mortgage and student loan balances, people are still having very real problems related to the debt that they have managed to acquire. People from all walks of life are having serious trouble paying off their debts, but lower income households are being hit particularly hard.

Lower income families have seen their financial liabilities grow at a much faster rate than their incomes over the past decade. To put this in perspective, lower income Americans had debt that accounted for nearly 20 percent of their incomes back in 2007. Fast forward to 2013, and we saw those debt levels increase to nearly half of household income levels. And even with all of this troubling information in mind, the average household in the United States still manages to have more assets than debt. However that may not be true for much longer if things keep going the way they have been over recent years.

Because repaying debt is such a concern for so many people, it poses a direct threat to the financial security of millions of families. People are unable to save money, and they are having a very difficult time investing in their children’s economic future and education. The ready access to credit has prevented many people from making savings a priority, which results in big trouble when unforeseen expenses occur.

Of course, without debt, many families would not be able to build credit scores that would allow them to obtain mortgages, get their degrees or even to start new businesses. In other words, as troubling as debt is, our current system depends on a certain amount of debt in order to stay in business. The problem of debt is complex and certainly more complicated than can be sorted out in a single article. However, it is important for Americans to get more educated about debt and how they can responsibly manage the debt that they have built up over time.

This is an area that gets particularly troubling. People do have access to plenty of information about how to be responsible with credit. However, folks are so busy these days that they often don’t take advantage of these resources. It is high time that everyone started to take more ‘ownership’ over their debt; meaning that people need to understand the basics about debt, how to manage it and the very real impact that it can have on their day-to-day lives. Until that happens, we can only expect the problem of American debt to become exceedingly troublesome in the years to come. As the old saying goes, “Those who do not take the time to understand history are damned to repeat it.” There will never be a day when everyone is free, clear and rid of their financial debts forever. However, taking time to get a better handle on how debt affects our lives is something that everyone should commit a little time to.

The Potential Dangers of Mobile Banking Technology

It is easier than ever to manage your finances these days. Now that we have access to lots of different mobile banking technologies, it is simple to pay bills, get cash or just to check your bank balance. As we all know, though, there are good and bad sides to everything. Any time we sacrifice in order to get additional convenience, we wind up losing something. In the case of mobile banking technology, we can end up losing a bit of security when we seek to find even more convenient ways to get access to our finances.

Banking fraud expert, Julie Conroy sums it up like this: “As additional people flock to the mobile channel and transactions multiply, the bad guys are paying attention and deploying more attacks against it.” With Conroy’s statement in mind, it is good to know how to protect yourself from some of the dangers of mobile banking apps and websites. Here are some of the dangers lurking out there that you need to be aware of…

The Danger of Bad Reception

Some people opt to use their phone carrier’s data network instead of wireless to access their accounts. While 3G and 4G can be very secure, the security level drops when you access your financial apps via a lower service range area. In other words, the worse the 4G reception, the higher the likelihood that your data could be compromised. To avoid this threat, try to only access your bank account information or PayPal account when you are in an area that has superior connectivity rates.

Hackers can get into Wireless Networks with Ease

Some people don’t know this, but mobile apps do not always encrypt your information the way that secure websites do. This means that when you use a mobile app to access your bank account on a public or unsecured wireless network, you could be setting yourself up for trouble. Most public wifi hotspots are not very secure, and hackers are notorious for hacking into these networks to steal financial or personal data. If you must use a mobile app to access your bank account, make sure to use your home’s secured wireless network to avoid the potential of becoming a victim of hackers.

Losing Your Phone can Lead to Even more Severe Losses

It used to be that if you lost your cell phone that you would simply be out the cost of the phone. These days, though, with people storing their entire digital lives on their smart phones, losing your phone can lead to serious problems. Studies have proven that about 40 percent of smart phone users don’t use any type of password protection on their devices. If you are one of those folks, and you happen to lose your phone, anyone who picks it up could get immediate access to your sensitive personal and financial information. To avoid this threat, make use of the password protection option on your smart phone.

Waiting to get Money
Even though you are allowed to make instant deposits via mobile banking apps, you may have to wait a bit longer than you are accustomed to in order to access those funds. Banks are always concerned about protecting themselves against fraud. With the possibilities for fraud growing exponentially with the rise of mobile banking apps, banks have to do what they can to stay protected. This means that mobile deposits are subject to longer waiting periods than traditional cash deposits at your local bank branch.

Mobile banking apps are great for giving you instant access to all of your bank accounts. Just be sure that you are aware of some of these potential risks and that you take action to keep your bank account protected.

Payday Lenders out of the Crosshairs in Minnesota?

Recent moves by the Minnesota Legislature – moves that were dead set on imposing reform on the payday lending industry fell by the wayside at the end of 2014. In fact, the proposed reform actually failed to get going at all at the beginning of 2015. This turn of events represents a significant set back for a group of religious and community advocate groups that had their eye on demanding concessions from payday lending companies. These folks believe that when people get small dollar loans for a few weeks that the payday loan customers wind up in a never ending spiral of debt due to loan fees and late fees.

Last year, the Minnesota House, with the DFL pulling their strings, passed a bill that was backed up by the Minnesota Chamber of Commerce. Lobbyists and advocates for the payday loan industry, however, were not able to reach a place of common ground, so the Senate passed. Fast forward to this year and the different parties involved were not even talking about the bill, with no hearings being held to date.

Commerce Commissioner Mike Rothman said, “I’m still committed to this. This goes to my goals for building [family] financial capability. The dialogue [between the industry and consumer groups] got difficult when it came to the interest rate and the number of loans. Families do need affordable credit. It’s troublesome when they are caught in debt traps.”

The group of payday lending companies, led by the successful Payday America company, with 15 locations owned by the same family that owns Pawn America, have pushed back against changes that would effectively limited how many loans a borrower could take out and that significantly lowered interest rates to cap out at only 30 percent. A Payday America executive, Chuck Armstrong, along with Paul Cassidy, a lobbyist for the company indicated that the proposed bill would essentially destroy the Minnesota short term lending industry. The industry has put forth a concession that was to put a common reporting system into place, so that borrowers would not be able to successfully apply for loans if they had existing loans open with other lending companies.

Armstrong said, “We don’t want to keep people in a debt spiral. “Oftentimes it takes more than one loan cycle for a family to get out of debt. Our opponents are manufacturing hysteria.”

Payday lending companies always check to make sure that borrowers have a form of income. Currently, there are no caps in Minnesota to put limits on the volume of rollover loans that a person has, which can have an effect on compound interest rates. With the average payday loan being for roughly $300, the loan fees figure in somewhere around $26.50. Some critics say that this amounts to an APR of over 225 percent. However, it is important to note that most borrowers tend to pay off their loans on time, so the loan fees can only be considered a one-time charge and not a fee that compounds interest on an annual basis.

Even though there is not a lot of action taking place with regards to the proposed sanctions as of right now, payday lenders probably are not completely in the clear in Minnesota just yet. The CFPB still has its eye on imposing reform on the short term lending industry. However, perhaps alternative financial service providers, like payday lenders, can concentrate on simply offering their services to the people who really need them for the time being; instead of focusing on yet another legal fight with parties who seem to have nothing better to do than to limit the financial choices available to lower and middle income households.

Is Chase Slate the Best Balance Transfer Credit Card?

It is a veritable jungle out there for people who are looking for credit cards to use for low balance transfers. As you may already know when you are carrying around a high credit card balance, on a line of credit with high interest rates and other fees, it can be almost impossible to pay those hefty balances off. Transferring your high balance to a card with lower interest rates fees can be a great way to get started on your master plan to becoming free from the chains of too much consumer debt. It is important to choose the right credit card to use for your balance transfer, though.

The Chase Slate has become one of the most popular balance transfer credit cards on the market today. But just because the Slate is popular, that doesn’t necessarily mean that it is the right card for you. We decided to investigate what this card has to offer and now we are going to share our findings with you.

What’s Good about the Chase Slate?

Many credit card companies try to entice you to choose their balance transfer cards by offering you 0 percent interest for a short amount of time. The Chase Slate, however, actually offer people 0 percent interest for 15 months. To make things even better, that longer 0 percent term applies to both purchases and balance transfers. It’s a sure bet that the longer no-interest period that the Chase Slate offers is one of its chief selling points.

Chase Slate also allows consumers to transfer their balances without paying any balance transfer fees. This is a very big benefit, as many credit card companies will actually charge you about 3 percent to move your balances to their credit cards. A 3 percent fee on a $5,000 balance would cost you around $150 if you were to choose one of those cards. Slate charges you absolutely nothing, so you don’t have to tack on any addition debt just for the privilege of switching to a card with more affordable interest rates.

Any Drawbacks to the Chase Slate?

There is no such thing as a perfect credit card. As much as we like the Chase Slate, it is important to let you know that it is a balance transfer credit card that is typically only available to people who have good credit scores. Typically, a good credit score is considered to be one that is higher than 660. People who have lower credit scores may feel like they are missing the boat by not being able to qualify for this particular credit card. However, if you have only had a few minor credit problems, say you missed a payment or two, you should still be able to qualify for a Chase Slate credit card.

People who travel frequently are sure to appreciate that Slate also offers Chip and Pin technology. When a card is Chip-enabled, you can safely use it abroad without any worries. So if you plan on taking a vacation or business trip to another country in the future, you may find that the Slate is the ideal credit card to use while you are traveling.

Be sure to use your balance transfer wisely, regardless of the actual credit card that you apply for. Don’t simply rack up more debt. Use the 0 percent introductory period to pay off as much of your debt as you can. That is the whole point of using a balance transfer, and it will definitely help you to get your finances into better shape for the foreseeable future.

Are Payday Loans More Affordable Than Traditional Loans?

Let’s face it – the media has pretty much vilified the payday lending industry in recent years. Even people who never use the services of a short term lender know that online news sites and other media outlets routinely trash this particular industry. A new study that the Federal Reserve Bank of New York conducted seems to prove that many of the widely accepted beliefs about the payday lending industry are not true at all. In fact, the report actually demonstrates some situations and scenarios where payday loans can actually be more affordable than a traditional bank checking account.

Overdraft Fees are not cheap

The NY Federal Reserve Bank’s report revealed that the median overdraft fee on most checking accounts is around $27 for every returned check. And that amount does not even include the flat-rate fees that banks charge for these types of transactions. If you compare a typical payday loan, where someone gets charged around $15 for every $100 borrowed, it is easy to see that payday loans can certainly be more affordable than overdraft fees.

There is no other way to say it; the cost of bouncing a check or two is a lot more costly than paying the flat rate fees that payday lenders charge. Perhaps that is why so many people are taking out these types of short term loans lately. They know that their banks are taking them to the cleaners for bounced checks, so it makes more sense to get a payday loan to avoid draining their checking accounts. This may not be the case for everyone who takes out payday loans, but there are undoubtedly a lot of folks out there who have caught on to how the banks are raking them over the coals for even the smallest of overdrafts.

The study we mentioned was underwritten by the Community Financial Services Association of America. In the interest of transparency, it is only fair to mention that this group is a trade group for payday lending companies. An industry spokesperson, Johnny Gordon said, “When used correctly and for relatively small amounts, cash advance or payday loans can be both economical and convenient.”

The study went on to prove that payday loans are more accessible to people than traditional checking accounts and bank loans are. Gordon summed it up by stating, “Overdraft and other similar programs require extensive credit checks and comprehensive income documentation.”

One important fact that never gets brought up when people report on the payday lending industry is the fact that millions of people in this country either don’t have access to traditional banks or they choose not to use local bank branches to manage their finances. For these types of people, short term loans are often the best resources available when they are in need of fast cash for emergency expenses or simply to get by from one paycheck until the next one.

Without access to alternative financial services, like those that are regularly offered by payday lenders – both local locations and online lending websites – people who do not do business with the big banks, either by choice or because of their financial situations – would have no way to procure money to take care of their bills and other expense. It is a shame that so many people are working so hard to eliminate these types of lenders that may very well be the only sources of financial services that some families will ever have access to. These are the kinds of facts that need to be reported when people write articles to unfairly target the payday lending industry.