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Online Scams: How Can You Protect Yourself and Your Family?

Online Scams: How Can You Protect Yourself and Your Family?

Dear Carrie: My mother is quite independent and does a lot of her financial business online. I hear about fraudsters preying on seniors all the time and worry about her falling for a scam. How can I protect her?

Dear Reader: It seems there’s no limit to the imaginative scams that today’s fraudsters can come up with. Just when we’ve all become aware of the email from a “friend” purporting to have been robbed in some far-flung place and needing money, there’s the new scam threatening arrest if you don’t pay back taxes or the tech support scam or—you name it. Seniors are a prime target because they’re perceived as more likely to have assets—and perhaps less likely to be skeptical.

But financial fraud isn’t age specific; we’re all targets. When you consider that the FBI’s Internet Crime Complaint Center (IC3) received 269,422 complaints representing more than $800,000,000 in losses in 2014 alone (and it’s estimated that only 15 percent of victims report crimes), you start to understand the enormity of the problem.

So, while it’s great that you want to protect your mother, when it comes to the potential for being scammed, we all need to take heed. My advice would be to sit down with her— and the rest of your family — to discuss best practices for fraud protection both on and off the Internet.

Become Familiar With the Latest Scams

Most scams are designed to defraud you of your money or get your personal information to access that money. Here are a few common frauds we should all be aware of:

—Emails purportedly from government agencies or financial institutions requesting personal and financial information or money

—Calls from familiar sounding charities pressuring you for quick donations by credit card or wire transfer

—Offers of discounted health insurance or low-cost medications

—Goods for sale, such as a car, at below market value, and insistence on a rush sale with payment by wire or to a third party

—Email purportedly from a legitimate collection agency stating that a loan is delinquent and must be paid in full to avoid legal consequences

—Offers for free gifts, vacations or “found money” dependent on some sort of upfront payment, such as a finder’s fee, taxes or delivery charges

—Various investment frauds, including offers of high-yield investments, letters of credit or prime bank notes

—Hot stock tips, especially for “penny stocks,” from unknown callers or e-mails even if they claim to work for well-known brokerage or investment firms

You can find a more complete list of common frauds at fbi.gov. Scam alerts are also posted on ftc.gov. A couple especially of note for seniors are emails supposedly from Social Security and Medicare asking for personal information. Another scam involves the new chip cards where emails, seemingly from credit card issuers, ask you to update account information before receiving your new card. Once you give out the information or click on the link, you’re had!


Review Techniques for not Falling Victim

Scammers are smart and know how to push emotional buttons. While we all hope we won’t be taken in, it happens. So to help protect your mother — and yourself — review the things to do and not do to stay clear of scams:

—Never reply to an unknown email.

—Never click on a link or download information unless you know the sender. Even then you need to be cautious because some links and downloads may contain malware or spyware that can monitor or control your computer use and gain access to your personal and financial information.

—Don’t return a call to a phone number provided in an unknown email, even if it has a local area code.

—Never email personal or financial information such as your social security number, date of birth, passwords. If you receive a suspicious email from a bank or other company requesting such information, contact that company by phone directly. You can report the email to the FBI at www.ic3.gov.

—Make sure you have up-to-date security software on your computer. Create secure passwords, don’t use the same password over multiple sites, and change your passwords periodically.

—Use different passwords for online banking and consider using two-factor authentication, where you enter an additional verification code sent to your phone or a separate device.

—Read your bank, investment and credit card statements.

—Get a copy of your credit report at annualcreditreport.com.

—Designate a single credit card for online purchases and monitor it closely.

And in this age of social media, be cautious about what you put online via social media. Your vacation plans, purchases, identity of family members, birthdays, or special interests can all be fodder for enterprising fraudsters. Also avoid clicking on links on social media sites. You can’t be certain where that link is really taking you.
Stay Informed — and Alert

There’s no way to protect yourself completely, but forewarned is forearmed. Check out the list of Common Fraud Schemes at fbi.gov. Sign up for AARP’s FraudWatch Network (or have your mother sign up). And by all means, if you’ve been the victim of fraud, identity theft or deceptive business practices, file a complaint with the FTC at ftc.gov or by calling 1-877-FTC-HELP (1-877-382-4357).

Unfortunately, in today’s world, we can’t be too trusting or complacent. It’s great to have the convenience of handling our financial business online, but at the same time we must be vigilant in protecting our information and ourselves. If your mother is Internet savvy, she may be more sophisticated than you think about avoiding fraud. But here, too, don’t take anything for granted. Have the conversation now—and check in with her periodically—for both of your sakes.

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is board chair and president of Charles Schwab Foundation and author of The Charles Schwab Guide to Finances After Fifty, available in bookstores nationwide. Read more at http://schwab.com/book. You can e-mail Carrie at askcarrie@schwab.com. This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

DIST BY CREATORS SYNDICATE, INC. (0216-0715)

Photo: An employee of a money changer holds a stack of U.S.  Dollar notes before giving it to a customer in Jakarta, October 8, 2015.  REUTERS/Beawiharta

Paying Down Credit Cards: Go With A Snowball Or Avalanche?

Paying Down Credit Cards: Go With A Snowball Or Avalanche?

By Carolyn Bigda, Chicago Tribune (TNS)

During the holidays it’s easy to add a few inches to your waistline — and to the balance on your credit card.

According to estimates by CardHub.com, which keeps track of credit card trends, total outstanding credit card debt was likely to exceed $900 billion by the end of 2015, up from $872 billion the year before.

Piling on new debt now could be costly, though, if the Federal Reserve continues to increase interest rates this year (which pushes up the rates on credit cards).

So to help you get back into the black, consider these strategies:

Look for zero-percent offers: Many credit card issuers offer a temporary zero-percent rate on balances that you transfer when you sign up for a new card.

You can search for such offers online, but one of the best deals available now is the Chase Slate card, which has 15 months of zero-percent interest on balance transfers and no fees for transfers made within 60 days of opening the card, said Kali Geldis, editorial director at Credit.com, an online resource about credit.

To qualify for the card, you need a strong credit rating, which generally means a score of 700 to 850.

If you’re young and just building a credit history _ and therefore don’t have a mighty score yet — you may have to shop around for other deals.

Geldis said one card to consider is Capital One QuicksilverOne, which has a zero-percent rate through September on balance transfers. The catch: The card carries an annual $39 fee.

“But if you make the most of those nine months of zero interest, it can be worth it,” Geldis said, noting that any additional purchases on the card earn 1.5 percent cash back.

Request a lower interest rate: If you don’t want to switch credit cards, another option is to ask your current issuer for a lower interest rate.

“People with the best credit are always the most likely to get breaks from the banks,” said Matt Schulz, senior industry analyst at CreditCards.com, which lists credit card offers. But, he said, the credit card marketplace is very competitive, so you may have some negotiating power.

“If you’re a 20-something with relatively low balances and a good history of paying on time, it’s definitely worth making that phone call,” he said.

Go with a snowball or avalanche: Once you’ve secured the lowest interest rate for your outstanding balance, the next step is to figure out a strategy for paying off the debt.

If you have multiple cards, you can pick between two options.

With one, the “snowball” approach, you pay off cards with smallest balances first (while still making minimum payments on your other cards). In doing so, you may feel a sense of accomplishment and get the motivation you need to keep paying off your debt.

With the second approach, the “avalanche,” you tackle the cards with the highest interest rate first (again, while making minimum payments on other cards), helping you pay less interest over the long run.

Both methods work well, although if you want to pay off your debt as quickly and inexpensively as possible, you should choose for the avalanche.

And it’s always a good idea to pay more than the minimum on your cards, said Bonnie Sewell, a financial planner in Leesburg, Va. To do so, she suggested picking up temporary work, such as house sitting, dog walking or signing up for odd jobs on Upwork.com.

What about cash you might have received for the holidays?

“My strongest suggestion would be to bank it, so that you slow down your credit card purchases,” Sewell said.

ABOUT THE WRITER
Carolyn Bigda writes Getting Started for the Chicago Tribune. yourmoney@tribune.com.

(c)2016 Chicago Tribune. Distributed by Tribune Content Agency, LLC.

Photo: Computer chips are seen on newly-issued credit cards in this photo illustration taken in Encinitas, California September 28, 2015. REUTERS/Mike Blake

Rubio’s Release Of Credit Card Information Raises More Questions, Paper Reports

Rubio’s Release Of Credit Card Information Raises More Questions, Paper Reports

By Patricia Mazzei and Alex Leary, Miami Herald (TNS)

MIAMI — For five years, Marco Rubio has tried to put behind him the controversy of his spending on a Republican Party of Florida credit card, taking the unusual step over the weekend of making public nearly two years of American Express statements to show how he spent the party’s money.

In some ways, however, the statements, which he previously refused to make public, raise more questions about how Rubio used the card, rather than laying them to rest.

Some big-ticket expenses he rang up on the card — $1,625 at the St. Regis Hotel in New York, $527 for food and drinks at Disney, $953 for a meal at Silver Slipper, the Tallahassee steakhouse — are the kind of eye-catching charges expected for someone doing party business.

But a slew of small charges at gas stations and for cheap meals — at a time when Rubio was struggling with his personal finances — suggest Rubio made the most of the ample leeway and little oversight party leaders gave employees and lawmakers to spend the party’s cash.

The Florida GOP issued corporate cards, intended for business use, during flush years a decade ago. A spending scandal threw the party into crisis five years later, around 2010, when some of the AmEx statements — including Rubio’s from 2007-08 — were made public. Rubio’s presidential campaign released the remaining two years of statements from 2005-06 on Saturday to show Rubio had repaid the party when he misused the card for personal charges.

An analysis by the Herald/Times of the new statements, however, found Rubio spent freely on the sort of items that are difficult to prove — or disprove — as party business expenses.

Rubio, then a fast-rising state lawmaker, spent $3,962 in 83 visits over 22 months to gas stations in Miami-Dade County alone, with some charges for $30 or $40 coming as little as a day or two apart. He spent nearly $1,200 on local meals costing $30 or less each, including 13 charges of $10 or less, mostly at La Carreta Cuban restaurant. Twice he used the AmEx card for flowers, and one time each at CVS, Target, Walgreens and Publix.

“Most (campaign) travel arrangements don’t pay for food when you’re in your hometown,” said Larry Noble, senior counsel at the Campaign Legal Center, a watchdog group in Washington. “If it’s one mistake, that’s understandable. You’re not supposed to be constantly making mistakes.”

Rubio’s campaign had not responded to questions about the transactions as of Tuesday evening. But Rubio has repeatedly said he regrets the personal items he did put on the card. “In hindsight, I wish that none of them had ever been charged,” he wrote in his 2012 memoir, “An American Son.”

The campaign has said that, over the four-year life of the card, Rubio charged about $22,000 in personal items out of about $182,000 — 73 items in all that he repaid. But the campaign hasn’t detailed all the charges, and in disclosing eight Rubio repaid from 2005-06, the campaign also missed others, such as $715.28 for “apparel accessories” at the old Syms department store in New York and $43.07 at Tio Liquor store in Miami.

The Herald/Times found Rubio spent $227 at Family Bookstores, a Christian bookseller. He charged $557 in five visits to Barnes & Noble in South Miami. There’s $1,064 at a Tallahassee Best Buy in March 2005 and $4,390.04 at a Miami CompUSA in August 2006. He made four online payments ranging from $84 to $173 to Sprint over three months.

Of Rubio’s Miami-area gas-stations purchases, two were made at a pair of stations, a Shell and a Citgo, on Jan. 22, 2005 — one for $5.02 and one for $5.03. On Sept. 10, 2006, he charged $47.44 at a Chevron station; the next day, he charged $71.41 at a Hess station. The tiniest purchases were for 73 cents and $1.39 at a Shell station in Miami, both on Aug. 27, 2005.

On New Years’ Eve in 2005 he charged $275 at Ruth’s Chris Steakhouse in Coral Gables. The same day he charged $50 at a Citgo in Miami. How those are related to party business remain unknown.

Republican Party leaders never questioned Rubio’s AmEx bills, paying them in full — if sometimes late. Numerous delinquent charges appear on the records, more than $1,600 in all, and it’s unclear who was to blame. The state GOP has effectively stopped answering questions about the cards, which a half-dozen top lawmakers had, and used, with apparently limited or no oversight. An independent audit commissioned by the party found no wrongdoing; the GOP stopped issuing the cards anyway.

Rubio has said there were times he mistakenly pulled out the card — such as when he paid more than $3,756 for pavers at his West Miami home — but also appears to have knowingly done so, repeatedly. In those instances, which grew in number over the years he had the card, Rubio said he identified the charges and paid them back, though that cannot be fully corroborated by the records now, a decade later.

“The bigger question is, how do you look at all this?” Noble said. “Was the credit card a way to subsidize his life? It may not be illegal, but as a broader matter, when you have control over money that is given and is supposed to be used for one purpose, using it for another purpose raises serious ethical issues.”

The spending questions first arose in Rubio’s 2010 U.S. Senate campaign, when the Herald/Times reported on Rubio’s 2007-08 card statements. Before Saturday, Rubio had refused to release the 2005-06 records, maintaining it was an internal party matter.

His use of the card speaks to broader issues concerning Rubio’s use of political money and his personal finances, which were shaky throughout his rise in state politics and have come back into view as he climbs in stature in the race for president.

Records show he was strapped for cash throughout his time in the state House, even as he landed a $300,000-a-year job at a law firm with interests in Tallahassee. He left office in 2008 with a net worth of less than $8,400 and had more than $900,000 in debt, including two mortgages, a home-equity loan and a student loan.

In 2003 and 2004, before getting the RPOF card, Rubio controlled two well-funded political committees created to boost his bid for House speaker. Typically such committee funds go to helping other candidates, a way of currying favor and showing party loyalty.

But Rubio gave only $4,000 to candidates. The bulk of the $600,000 the committees raised went to office and administrative costs — costs that helped enhance Rubio’s stature. He spent nearly $90,000 on political consultants and $50,000 for credit card payments.

What’s more, Rubio failed to disclose $34,000 in committee expenses, including $7,000 he paid himself, as reported in 2010 by the Herald/Times. Rubio used credit cards to pay for $51,000 in travel expenses that were never specified on his reports, breaking from practice followed by other lawmakers, though state law did not require itemization.

Rubio refused to be interviewed by the newspapers at the time. “None of our donors has ever questioned how the money was spent,” he said in a statement then. “In fact, the only one raising this question is the (Charlie) Crist campaign, which is not surprising given that they are more interested in personal attacks against me than they are in advancing conservative ideas.”

He pressed the state Ethics Commission, which got a complaint from a man who read the stories in 2010, to resolve the case and it did in 2012, clearing him of wrongdoing. Rubio declined to be interviewed by an investigator, who said the “negligence” exhibited by Rubio’s confusion between the GOP American Express and his own MasterCard, and failing to recognize the error on monthly statements, was “disturbing.”

Now that he’s a rising presidential contender, Rubio has dismissed questions about his AmEx spending in similar fashion, calling them unfounded political attacks and turning the criticism into an opportunity to relate to average voters whose financial troubles might be similar to his own in the past.

“I only have one debt in the world, which is my mortgage on the home that me and my family live in in Miami,” Rubio said told ABC’s “Good Morning America” last week. “I obviously don’t come from a wealthy family.”

Photo: U.S. Republican presidential candidate and U.S. Senator Marco Rubio (R-FL) is smiling because he likes to use other people’s money. REUTERS/Brian Snyder

Chip Credit Cards Could Slow Holiday Shopping

Chip Credit Cards Could Slow Holiday Shopping

By Gregory Karp, Chicago Tribune (TNS)

As the calendar flips to November and visions of Black Friday dance in their heads, holiday shoppers using new, more secure chip credit and debit cards will be learning a new checkout procedure.

While the added security might be welcome, new cards could mean more frustration and slower checkout lines during the bustle of holiday shopping.

“The bricks-and-mortar retailers were already fighting an uphill battle against the e-commerce guys, so the last thing they need are more reasons for customers to be ticked off at them,” said Neil Stern, senior partner at Chicago-based McMillanDoolittle.

One Wal-Mart executive said he expects widespread checkout problems and “anarchy” during the holiday season because of confusion over how to use the new cards, which must be “dipped” into the machine and left there for several seconds, as opposed to a momentary swipe.

While Wal-Mart was among the first to install and use new readers for chip cards and has become proficient over the past year, many merchants are just starting that transition and many consumers are baffled.

The timing of the shift “wasn’t necessarily optimal, given that we’re going into the holiday season,” said Wal-Mart spokesman Randy Hargrove, elaborating on recent comments by John Drechny, senior director of payment services at Wal-Mart, during a panel discussion at the Money20/20 payments conference in Las Vegas. “There could have been a better time, off-season.”

Many shoppers have already witnessed the confusion at retailers widely accepting chip cards, perhaps at Target, Wal-Mart or Walgreens.

It involves failed swipes, trying to follow the cashier’s instructions, fumbling with the card while trying to insert it correctly into the reader slot and remembering to remove the card at the end of the transaction.

“I’m a retail consultant, and I still put it in the wrong way and yank it out too soon,” Stern said. “It takes a long time for people to change habits.”

Even without confusion, the so-called push-and-pause method generally takes longer than the swipe. Although that difference can be as little as about 1 second longer, a Wal-Mart spokesman said.

“From a retailer standpoint, it’s really bad because it slows down productivity at the front end,” Stern said.

It will likely be more problematic for retailers whose customers expect a quick checkout, like Walgreens. “People don’t like waiting,” Stern said. “At Macy’s, customers might be a little more patient with the transaction process.”

Credit and debit cards are likely to be a big deal for the holidays, with 76.4 percent of consumers saying cards are their primary payment method, split about equally between debit and credit cards, according to the latest National Retail Federation numbers from 2014. That compares with 21.6 percent paying cash, and 2.1 percent paying by personal check.

Oct. 1 was a soft deadline for banks to issue new credit and debit cards with microchips and for retailers to install readers that can use the new chip technology.

However, it turned out that the Oct. 1 date was more of a starting gun than a checkered flag in the race to add security to card payments. Far from all banks and retailers were ready, and many still aren’t. Most Americans don’t even have the new cards yet, as banks and credit unions have been slow to replace old ones.

Among U.S. merchants, just 27 percent were expected to be ready to accept chip cards by the deadline a month ago, according to management consultant The Strawhecker Group. By the end of the year, that’s expected to rise to 44 percent and not hit 90 percent until 2017, a Strawhecker survey showed. Banks and merchants have said they will likely make the conversion to issue and accept credit cards first and debit cards later.

The good news about the relatively slow rollout is that many consumers won’t be affected this holiday season — if they don’t have chip cards yet or they shop at retailers that don’t accept the new cards.

Meanwhile, Target, which can accept chip cards at all its stores, recently made the bold move to accept yet a different card payment procedure. It started issuing new Target store credit and debit cards, called REDcard, that are more secure because they not only have microchips embedded but require users to enter a personal identification number at checkout instead of signing.

So-called chip-and-PIN is a process used in most other countries that have switched to chip cards, but is not typical in the U.S. so far — a point of conflict between banks that issue cards that require signatures and retailers who want the added safety of PINs.

“We realize that data security is top-of-mind for American consumers, so we wanted to offer them the solution that really is most secure in the marketplace today,” said Target spokeswoman Molly Snyder. “We recognized that would be on the early side, both on the issuance and acceptance (of PIN-enabled cards), and so we put a ton of effort into making sure our team members, people who are engaging with guests on the frontline, are equipped to answer questions. What we’re seeing is that is going really smoothly.”

Target officials might be especially sensitive to security concerns because of the retailer’s massive data breach during the 2013 holiday shopping season, in which some 40 million cards were compromised. The breach likely expedited the change to new card technology in the U.S., which had been sluggish to switch compared to other developed nations, experts say.

Overall, the switch to new checkout habits is a significant change for shoppers, “putting additional financial pressure on financial institutions and confusing consumers, many of whom don’t even know why the transition is happening and have no idea how to use an EMV chip, or ‘smart’ card,” said a report by Chicago-based Arroweye Solutions, which manufactures payment cards and sends them to consumers on behalf of issuers. EMV stands for Europay MasterCard Visa, the coalition that developed specifications for the system in the 1990s.

“It’s still very much a work in progress,” said Arroweye CEO Render Dahiya. “There will be a lot of on-the-job — or on-the-shopping — learning.”

The new cards, with both the new microchip visible on the front and the old black magnetic stripe on the back, are only safer when used with a new chip card payment terminal. Chip cards make every transaction at a payment terminal and ATM unique. Old machines read the old-tech magnetic stripe, and are no safer with the new cards.

While it’s true that avid shoppers of big retailers will be skilled at the new card “dipping” checkout process — and checkout employees adept at helping customers — everything changes during the crush of holiday shopping.

“We haven’t seen it yet when it’s a stress point, and the holidays are a stress point,” Stern said.

The new cards could cause in-store checkout woes on Black Friday and throughout the season, but they won’t affect Cyber Monday and other online holiday shopping. Customers make online purchases with the new cards the same way they always have, by typing in the card number, expiration date and security code. Those transactions are no more secure with the chip cards.

Still, payment-terminal slowdowns alone probably won’t force holiday shoppers to abandon stores for websites.

“I suspect we’re going to see some frustration, but it probably doesn’t elevate to the point of customers saying, ‘I’m not going to the store. I’m just going to do this online,’” Stern said. “More people are going to shop at home, but not because of this. But it’s certainly not going to help physical retailers.”

If shoppers become frustrated enough with chip cards, it might speed adoption of yet another payment method: mobile payments with a smartphone using such services as Apple Pay, Android Pay and Samsung Pay.

“If EMV does slow down the transaction process, if people do leave cards in the machine, then you have a scenario where mobile does become a value-add, if that transaction is quicker,” Dahiya said.

©2015 Chicago Tribune. Distributed by Tribune Content Agency, LLC.

Photo: A chip credit card. (Image Source/Zuma Press/TNS)