Tag Archives: Credit card

Dealing with debt collectors

moneySince the Consumer Financial Protection Bureau started it’s slowly broadened its scope addressing issues with additional financial products. When a consumer runs into financial issues and can’t pay their bills, debt collectors begin their calls. Debts are often sold to third party’s, and collection efforts can be intense. To make sure you are not taken advantage of, the CFPB is empowering consumers with letters you can use to make sure your rights are not violated. 

The Consumer Financial Protection Bureau created five action letters that you can use to reply to a debt collector. The letters will help you obtain valuable information about the claims being made, and empower you so the debt collector can’t take advantage of you. 

If you need more information on your debt, you should send the CFPB’s first letter. It’s called the “need more information letter.” The letter says you are disputing the charges until the collection agency answers specific questions about the debt.

The second letter is the “dispute and proof” letter. It tells the collector to stop contacting you until they show evidence that you are responsible for the debt. This may be an option for you if you don’t want to talk about the debt until you have information that verifies the debt.

The “contact restriction” letter allows you to tell the collector how you would like to be contacted. Under the law, you can’t get calls about a debt at a time or place that the collector knows is inconvenient.

If you hire a lawyer to help with your case, send the “hired a lawyer” letter. That way all future correspondence is with your legal representation.

The “stop contact” letter tells the collector to stop all communication. That won’t cancel the debt, and could be sued for it. It’s something you might want to use if you feel you are being harassed by the debt collector.

If an issue arises with a debt collector related to any consumer debt, including credit cards, mortgages, auto loans, medical bills, and student loans you can file a complaint with the Consumer Financial Protection Bureau. You can file for the collector and the company who you originally held the account.


1 in 5 consumers has a mistake on their credit report – have you checked your report?

Credit card cash registerWe rely on our credit to buy homes, get a credit card, and get a job. A new report by the Federal Trade Commission found five percent of consumers had errors on their report that could lead them to pay higher prices for everyday products like auto loans and insurance. Plus, one in five consumers had an error on at least one of their three credit reports. So, when was the last time you checked your credit report?

“These are eye-opening numbers for American consumers,” said Howard Shelanski, Director of the FTC’s Bureau of Economics.  “The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly.  If they don’t, they are potentially putting their pocketbooks at risk.”

While there are horror stories out there from consumers who disputed mistakes only to have it stay on their account, the Congressionally mandated report by the FTC found four out of five consumers who filed a dispute saw a modification to their report.

A January NewsChannel 5 story I did featuring a Northeast Ohio woman who had her credit report file mixed with another woman’s.

credit reportYou can get a free report through the website, Annual Credit Report. It is the only free site where you can get a report. The other ones you’ve heard of , perhaps because of the catchy jingle on TV, will charge you fees or enroll you in a free trial program. Use Annual Credit Report to access your reports.

You will have to give your social security number, and answer a series of multiple choice questions. This is to prove you are who you say you are so your information is not released to an identity thief.

Look for mistakes and dispute them
Review the reports carefully. You will have access to three reports, one from each of the three credit reporting agencies. If you want to keep tabs on your credit year round, check one report every four months from Annual Credit Report. For example, check TransUnion in January via Annual Credit Report. In May, check Experian through Annual Credit Report. In September, check Equifax through Annual Credit Report. It does not matter which order you check the reports.

If you find a mistake, dispute it. It’s best to start a paper trail of your dispute so print off any online disputes you file. Some attorneys will even suggest you mail a certified copy of the dispute so you have the paper trail.

The dispute process is explained at the end of the credit report.

If you can’t get the problem resolved on your own, report it to your Attorney General or the Consumer Financial Protection Bureau. This is a government agency that recently began regulating and monitoring consumer reporting agencies.

Credit report vs credit score
money angle You will not get your score through Annual Credit Report, and don’t be tricked into paying to get your score. There are dozens of companies that will charge you or enroll you in a free trial to get your score. Be careful with these companies, and understand exactly what you are signing up for before you give out your credit card information.

You may be able to get your credit score for free if a company runs your credit to determine your eligibility for a product. Some companies automatically send it to you, and other times you have to ask. If you are denied credit, the company must give you a copy of the score that made you ineligible for the financial product.

Will consumers pay a fee to swipe their credit card?

Credit card cash registerWill the cost of swiping plastic get more expensive starting this weekend? It depends on who you ask.

On Sunday, January 27, businesses who take Visa and MasterCard can begin imposing a surcharge on consumers who use credit. This new fee for consumers is being called a “checkout fee.” It can only be applied to credit cards, and not debit cards.

The surcharge can’t be more than the amount the business typically pays to accept credit cards. That fee ranges from 1.5% to 3% of the transaction amount.

While stores will have the ability to charge this fee, the National Retail Federation told me consumers don’t need to worry about this fee because the majority of businesses will not pass it on to the consumer. The Retail Federation called it “propaganda from the credit card industry.”

This all stems from a lawsuit settlement involving the retail industry and the credit card giants. The suit is still being debated in court, but these fees would start on Sunday. The retail industry filed the suit to bring down swipe fees. The NRF says the intent was not to pass the charge onto consumers.

“Surcharging therefore would run 180 degrees to the intent of the suit,” the NRF said in a statement. “While there can always be exceptions, merchants in general have no intention of surcharging.” According to the NRF, they don’t know any business that’s passing this charge along.

Business exclusions
Even if a business wanted to pass along the fees, the NRF said that would be difficult due to state and credit card laws.

The settlement won’t trump state law. In ten states, laws prohibit these fees. You won’t have to worry about these fees if you live in the following states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.

The second reason the NRF believes very few stores will charge these fees to consumers deals with the cardholder rules. In a phone conversation and prepared statement sent to me, the NRF said Visa and MasterCard rules require retailers to handle all credit card transactions the same way in all their stores. Therefore, a chain that operates in one of the ten states which prohibits the surcharge, won’t be able to apply the surcharge to any of its stores. The same would apply to regional chains with a store in one of the prohibited states.

Courtesy Visa

Courtesy Visa

However, Visa has a different view on how the state exclusions impact this fee. The Frequently Asked Questions section for Visa states the following, “If a merchant is prohibited from surcharging in one state, Visa’s rules do not prevent the merchant from surcharging in other states that allow the practice.”

I think if a merchant actually did this, consumers would be outraged. Those who live near the state line would simply shop in the other state. This could cause all sorts of problems for businesses and governments who might lose a tax base. I think there is far too much to lose for the big stores to create an unlevel playing field for consumers. Stores are already trying all sorts of marketing techniques to get consumers to spend their money in stores rather than online. This could be a disaster for a store.

The NRF said American Express agreements reduce the number of stores who could charge this fee even more. The settlement says that if you surcharge Visa and MasterCard the same must happen with AmEx. The NRF said the AmEx agreement prohibits the fee.

With all these exclusions, the NRF said very few stores could charge this fee.

I think the most likely candidates for this fee are mom and pop stores where these fees cut too deep into their bottom line. However, the NRF said they don’t even think that will happen because it will be too time-consuming and costly to to re-configure their computer system to accommodate the change. Time will tell. I think at best this will be hit or miss.

Disclosure is key
You will know if a business is charging a checkout fee. For retail stores, there needs to be a sign at the entrance and point of sale. If you are shopping online, the homepage will disclose the fee. The disclosure will have lots of fine print. For the consumer, the most important thing to look for is the amount of the surcharge. Your receipt will also disclose the dollar amount of the surcharge.

The settlement is still pending in court and appeals have already been filed.

If we ever even see these fees, they may be delayed. The stores need to give MasterCard and Visa 30 days notice.

If you see a store charging this fee, let me know on Facebook and Twitter. Would this fee make you shop somewhere else or use cash? Join the conversation by clicking “comment” below.

Will you get a refund from Discover credit card?


Courtesy Discover

If you have a Discover card, you may have a refund on the way. Two federal agencies including the new consumer bureau ordered Discover Bank to refund millions of dollars to more than 3.5 million consumers.

The investigation focused on deceptive telemarketing and sales tactics for “add-on products” like payment protection, credit score tracking, identity theft protection, and wallet protection.

The Federal Deposit Insurance Corporation and Consumer Financial Protection Bureau said Discover’s telemarketing scripts implied that the products were additional free “benefits” rather than ones that would result in a fee. The agencies also said the scripts suggested you would not be charged until after reviewing printed material, however, the government said the purchase was already started. The agencies also said eligibility requirements for some of the benefits were not disclosed.

As a result, the agencies want Discover to refund approximately $200 million to more than 3.5 million consumers. You may be due a refund if you were charged for one of the products from December 1, 2007 through August 31, 2011 and did not make use of the product.

If you are a Discover cardholder, you will see a credit on your account. If you are no longer with the card company, you will receive a check in the mail.

“We have worked hard to earn the loyalty of our cardmembers, and we are committed to marketing our products responsibly,” Discover chairman and chief executive officer David Nelms wrote in a statement. “As always, we will continue to strive to deliver the highest standards of customer service and satisfaction.”

Discover will also change its telemarketing procedures.


Will cash and credit be replaced by mobile payments in 2020?

Will our smartphones take the place of cash and credit in the next ten years? According to a study by “Pew Internet & American Life“, it’s estimated mobile payments will be so mainstream in 2020 they could take the place of the methods we use to pay today. It sounds crazy, but ten years ago did you really think you’d be checking your email while you walk down the street? Technology is moving at lightening speed and who knows what we’ll be using next.

Pew studies show more than a third of smartphone owners use their phones for online banking services like checking an account balance or paying bills.  It’s not just smartphone banking. Research from comScore showed 38% of smartphone users bought e-books, movies, music, clothing, tickets, or daily deals with their mobile device. With services like Google Wallet, you can even pay for certain purchases by just swiping your smartphone instead of cash or credit. Your phone acts like a wallet. More virtual payments systems are in the works.

Personally, I am not a fan of mobile payments. I think the technology is too new and there are still security issues. Checking my email, Facebook, and Twitter on my phone is enough of a security risk for me.

Supporters of mobile payment systems say they are simpler, more convenient, and enhance your shopping experience offering you recommendations and special deals based on your location and previous purchases. I’m not comfortable at this time with the security features to make the switch. The benefits simply don’t outweigh the risks. I already worry about losing my costly phone. I can only imagine my worry if I knew my credit card number was somewhere hidden inside. Even if it was securely contained, I’d still worry.

The question is — will my attitude change by 2020? 65% of the experts surveyed by Pew said most people will be fully using their smartphone for purchases instead of cash and credit by the year 2020. Only 33% thought people would not trust the technology and not use the mobile payment technology.

It will take a lot to get me to make the switch. Pew said the experts it consulted believe the transition will develop generationally with younger smartphone users using mobile systems before older generations. It will be just like computers. The majority of older generations have no interest or use for a computer. I’m in the middle, and it will take a lot of convincing.

Some of the experts said it’s realistic that we’ll make this switch by 2020 because we’ve already moved to digital currency with credit and debit cards instead of cash. That’s a good point, however, a lot of security questions will need to be addressed in eight years. That is an eternity in the technology world, so we’ll see.

Microsoft’s principal researcher, Jonathan Grudin, pointed out that there has to be a financial stake for companies to invest in this technology and infrastructure.

“The driver here will virtually 100% be whether or not the credit card industry decides it can make more money through changing technologies,” Grudin said.

Will we see new fees associated with this technology? There’s already a fee to use a credit or debit card. Businesses pay the charge, but indirectly pass it on to us by factoring it into the cost of products. Some businesses are so fed up with the interchange fees they only accept cash or offer a cash discount.

There is a lot of work that needs to be done on infrastructure and logistics before I’m convinced. One anonymous expert raised the question about battery life. What happens when your cell phone dies? Essentially you can’t buy any more purchases. Maybe it will keep people out of credit card debt. All joking aside, that’s a huge issue. Batteries simply don’t last that long.

As I look back on the past decade, which is my career plus two years, the phones we used back then were huge and often immobile. They were these clunky devices that were permanently fixed in our news car. Now, we walk around and talk, text, and surf on a device that fits in the palm of our hand. We posted news stories on the web, but the Internet was not a huge driver of news like it is today. We got emails, but that was the extent of our viral interaction with viewers. Today, mobile devices are a new platform for television. Facebook and Twitter also drive our news. I never thought the business I got into 12 years ago would be what it is today. In my view, anything is possible in the next ten years. Who knows what my new habits will be — maybe I will be swiping my phone to pay for my purchase.

What do you think will happen in the next decade? Click “comment” and predict the future.

Publicizing your purchase to save money

Retailers are looking for new and creative ways to advertise as mass media shifts from television and print to online. Social media plays a huge role in making nothing — something. Tweets, re-tweets, and shares on Facebook are great ways to expose a new product or service to potentially new customers.  Special promotions are often offered to followers or those who like a page. Now, companies are finding ways for you to make money by sharing their product on social media sites.

When you buy a product online, you’re asked if you want to let others know about it. You can share it on Facebook, Pinterest, Twitter , and other sites. Soon, your news feed will be filled with more than just the news story your friend read, game they played, or the music they listened to. I think it’s a matter of time before our feeds are filled with items people bought at stores as more and more people share their purchases. Their may be good reason to share that purchase — it may earn you cash!

American Express is offering a program it calls “Tweet your way to savings.” However, this takes the marketing to a whole new level because you have to sync your eligible American Express card with Twitter, and tweet special offer #hashtags to get exclusive savings on your card. The savings are great, but is it really such a good idea to link your Twitter account with your credit card information?

To answer that question, it depends how much you value a deal.  American Express says it doesn’t share your card information with Twitter. Instead, the company said a unique identifier is used to link the accounts. That’s one thing to consider.

Also, consider the work you need to do to cash in on the savings. Is it worth it, and are you buying something to simply save money? Only certain companies participate in the promotion. To find the offers, you have to go to American Express’s Twitter page and read the Tweets under the Favorites section.

Here’s a look at some of the current offers: Zappos is offering $10 back on your next purchase, H&M is offering $10 on a $50 purchase, Gulf Oil is offering $5 back on $25 purchase, Whole Foods is offering $20 back on a $75 purchase, and Virgin America is offering 10% off a main cabin ticket. For example, for Zappos you tweet #AmexZappos and you get your statement credit within a few days as long as you meet the minimum purchase requirement.

This is not the first coupon venture for American Express if you link your card to a social media site. In July 2011, I wrote about their “Link, Like, Love” Facebook promotion. It works in a similar fashion in that you link your American Express card to your Facebook page, and based on your interests and your friends interests you’ll get special offers and deals. You can also browse the promotions.

I think this is the wave of the future. It’s the latest way for companies to get their product in front of a broader audience. All, for free.

Other ways to make money online without publicizing your purchase
The linking of my credit card to a social media site, even though they say it’s not shared, makes me a little uneasy. I think I’ll stick with other ways to make money. When I shop online, I look to Ebates or my credit card company to see if they have a special promotion with the company I’m shopping. I seek out the savings when I’m ready to buy rather than buying just because I see a good deal.

On Ebates, I earn cash back if I link to a retailer through the Ebates site.  They don’t credit my credit card because they don’t have that sensitive information. The money comes in the form of a check each quarter. Of course, someone is making money because they’re tracking my purchases. So, that’s not exactly the most private service but it’s nice to get that check in the mail every quarter.

With my credit card company, they already have my personal information and if I link through them to a retailer I earn more points than I normally receive. Sometimes, the offers are 3 and 4x more points than I normally earn.

Both of these money saving and earning options are potentially not as valuable as the $10 offer from American Express’s social media savings programs, but there are no strings attached. Plus, I don’t overbuy because I don’t have to make a minimum purchase. Finally, there are far more retailers participating in these other offers. That may change as the marketing changes as I think American Express is on to a new trend.

For now, I’ll spare my social media connections tweets and Facebook posts about my purchases. Will you? Click comment below and share your thoughts on this new type of marketing.

Google wants your phone number — why?

Google recently changed its privacy policy combing more than sixty policies into one. The updated policy also allows Google to more directly target ads to your specifications. The change only impacts users who log into one of the Google services, but it still sparked criticism. So, imagine the surprise of some users when Google began asking for phone numbers. Several companies ask for your mobile phone number for security purposes, but it’s the timing that may have some users thinking twice and asking what’s next?

Google tells users that a mobile phone number is one of the easiest and most reliable ways to make sure your account is safe. It also allows you access to your account if you forget your password or someone gets unauthorized action.

Google says it will send you a verification code so you can get in your account if you can’t get into the services. You’ll also be notified via text when your password is changed.

Last May, I wrote about Facebook’s request for your phone number.   Their “Login Approvals” process had the same intent of increasing security, but it worked a bit differently. With the Facebook system, if you opt in you get a code sent to your cell phone when you log in from an unregistered computer.

Several years ago, banks added security questions, pictures, and PINS. Which raises the question — why your cell phone. If a question or picture is enough for a bank, why isn’t enough for Google, Facebook, or other companies that request your cell phone?

Companies who request your phone number say that’s more secure than your email or a security question because  you physically carry your phone. Email accounts are constantly being hacked, and remember most banks already have your phone number. It’s usually required when you open an account. If your credit card shows unauthorized activity you’ll get a phone call not an email alerting you.

It seems we continually give up more personal information. Perhaps it’s just another sign of the times. Hackers keep finding ways around security and as a result we have to give up more information to try to protect our personal identities. We can only hope they hold our information in as secure a place as possible as security breaches are common.

Ultimately, it’s your decision if you give a company your cell phone. It’s not required with Google or Facebook. It all depends on how much personal information you want to give up and whether you feel that’s less important than the so-called added security.

Deal or no deal?

Looking for a deal? How about this hot site offering prizes like an iPad for $39.99?

Or, having trouble paying your mortgage? How about a loan modification. The ModExperts offer a guaranteed loan modification.

While I’m always looking for deals, I can assure you these are not deals. They’re scams setup by the Massachusetts Office of Consumer Affairs and Business Regulation to teach you how to spot a fake.  When you click on the offer, you’re directed to a site alerting you that you just fell for a scam site.

Fake sites have cost Americans millions of dollars. Often consumers fall for the so-called “free trial” offers thinking the deal won’t cost them anything. Sometimes, the clock on the “free trial” period starts ticking before your package is shipped making it impossible to cancel in time without being charged.

If you see a price or promise that seems too good to be true, it probably is too good to be true. You’re not going to buy a several hundred dollar iPad for just $39.99 no matter how good a deal site you find. It’s simply too good to be true. Check out the company’s return policy to find out if you can get your money back if there’s a problem.

Finally, use a credit card to pay for your purchase. If there is a problem with the product or service, you will gain added protections.

Financial fitness

Getting in better physical shape is the motto for many every New Year’s. Have you abandoned your workout yet? I promise, getting your finances in shape won’t take as much work and you’ll see results. As all those W2’s arrive in the mail, now is a great time to check-up on what you did in 2011 and make changes that make you a saver rather than a spender in 2012.

1. Check your consumer reports
Did you know there are 10 consumer reports that may contain personal information about you? While your credit report is the most obvious report, there are many others including a report about insurance claims and even your rental history. Even more are being added this year, so get a grip on this before others are added to the mix. A simple mistake on a report can cost you money.

2. Review your budget
Do you even have a budget? If you don’t, consider one especially if you spend more than you save. Put your expenses to paper and you might be surprised at how much you’re really spending on miscellaneous items that you can easily do without.

I use my credit card for most purchases so I can earn rewards, so I just download my purchases for the year. Banks and credit card companies make it easy to do this so you know how much you spent on travel, food, and housing essentials like gas.

If you don’t have an easy way to track your expenses, create a system. Then, track what you spend for two weeks or a month and review your purchases. Were they all necessary or are there things you can out?

Spending too much? Start clipping coupons or shop daily deal sites.  Think it will take too much time? It doesn’t. There are an abundance of coupon sites that do the hard work for you matching up the sales to the coupons. Spend some time on them and you’ll be amazed at how much you can save by organizing before you head to the grocery store.

Finally, begin valuing every cent in your pocket. Go through your house, pockets, and car and collect all the spare change. All that loose change will add up to more than you expect.

3. Earn money to shop
How about earning money for your online purchases? Sites like Ebates allow you to earn cash back at many online retailers. It sounds like a scam, but it’s legit.I get a check in the mail every quarter.

4. Raise the bar on your 401-K
If your company matches, make sure you contribute enough to earn 100% of the match. If you’ve been holding back the last few years so you have more disposable income to cover other expenses, make it a New Year’s resolution to start saving again. What better place than your 401-K. It makes financial and tax sense.

5. Refinance your mortgage
Mortgage rates are at historic lows and refinancing can save you upwards of $100 a month. That’s an additional $1200 back in your pocket and perhaps much more. It’s a good idea if you plan to stay in your home for the next 3 years. That way you can recoup the closing costs you’ll pay to refinance.

Zappos customers on alert after cyber attack – the lesson for all of us

Cyberfraud is always rampant, but what’s next this week? Online shoe retailer, Zappos, is warning customers that their personal data may have been accessed including your email address, name, billing and shipping address, phone number, and the last four digits of your credit card number, and maybe even a scrambled version of your password. Yikes!

The email sent to customers tells you to change your password. The company discontinued the passwords that were stolen in their scrambled form so accounts can no longer be accessed without a new password.

To reset your password on Zappos, you simply submit your email address and they send you a new password. Be warned – the new password doesn’t arrive in your email right away. Zappos says it’s had a large number of requests, obviously, and it may take up to 30 minutes.

Password management
Here’s the problem – if you use your Zappos password on other websites you may be vulnerable on other sites. The thieves dig for more information when they get a few pieces. Sometimes those pieces are enough to steal your identity or at least commit more fraud.

That’s why you are always told not to use the same password on multiple sites, but just like you I am guilty of that. It’s hard to create a different password for every site and remember it. That’s why some security consultants recommend a password management program like KeePass. It’s free software that manages all your passwords so you can use different ones on different sites, and it recommends more complicated passwords so your accounts are more difficult to hack.

Finally, don’t use public computers. There may be software installed on it that can steal your keystrokes. Think it can’t happen to you, think again. Click here to see that story. It will make you resist the urge the next time you are on vacation.

Damage control
At this point, the damage is done. The thieves hopefully won’t be able to unscramble the passwords they got, but who knows.  These attacks are very sophisticated and their capabilities seem limitless sometimes. With the last four digits of your credit card and address it may make it easier for thieves to hack into your another accounts.

Change the passwords on other accounts especially your bank and popular ones like Facebook and Twitter if you think they are similar to your Zappos account.

Also, be on alert and don’t fall for spam or phone calls that ask you to verify personal information.

Related links you may like:
Facebook and Twitter security
Erasing your digital footprint
Online hacking schemes – email and Facebook accounts exposed