To comply with the 3-Day Cooling Off Rule, a seller must inform a buyer of his/her right to cancel the sale and receive a full refund within three business days.

Be aware that there are situations in which the Cooling-Off Rule does not apply:

* You made the purchase entirely by mail or telephone.
* The sale was the result of prior contact you had at the seller’s permanent business location.
* You signed a document waiving your right to cancel.
* Your purchase is not primarily for personal, family or household use.
* You were buying real estate, insurance, securities, or a motor vehicle.
* You can’t return the item in a condition similar to how it was when you got it.
* You bought arts or crafts at a fair, shopping mall, civic center, or school.

Remember, if you paid by credit card and are having difficulty getting your refund, you may also be able to dispute the charge with your credit card company under the Fair Credit Billing Act.

Source: Federal Citizen Information Center

To Do

If you know you’re going to be late with a car payment, contact your creditor right away. It’s easier to try to prevent a vehicle repossession than to dispute it later.

• Many creditors will work with customers they believe will be able to pay, even if a little late.
• You may be able to negotiate a revised schedule of payments.
• If you can reach an agreement to change your original contract, get it in writing to avoid questions later.

If your vehicle is repossessed:

• your creditor may decide to keep it as compensation for your debt or resell it in a public or private sale.
• you may be able to buy back the vehicle by paying the full amount you owe (usually, that includes your past due payments and the entire remaining debt), in addition to the expenses connected with the repossession, like storage, preparation for sale, and attorney fees.
• check with your state consumer protection agency. Some states have laws that allow you to “reinstate” your loan. This means you can reclaim your car by paying the amount you are behind on your loan, plus your creditor’s repossession expenses.
• a creditor may not keep or sell any personal property found inside the vehicle.

Source: Federal Trade Commission

• Some credit cards are sold with a very small credit limit and large fees. The consumers soon learn that they are almost immediately over the limit, and additional over limit fees, late fees and increased interest rates quickly become financially burdensome.
• Some credit card companies start consumers with low rates of interest, but raise the rates, sometimes tripling them, even if the consumers make every payment on time. The small print in the agreement allows the company to raise rates if the consumer has other credit difficulties or loss of credit standing not connected in any way with the credit card payments.
• Some companies charge $25 to $50 for a “gold card” with a large credit limit. These are not regular credit cards but only limited-use cards that can only be used to purchase overpriced goods in a catalog, often requiring the consumer to pay partly in cash for the products.
• Take the time to read the credit card agreement very slowly and carefully – - then read it again. If you don’t understand it all, and they are almost impossible to understand, ask questions.

Source: CA Office of the Attorney General

Take precautions to avoid serious fees and penalties if there’s a glitch when you deposit a convenience check into your checking account or send it to pay a bill. Before you write a check, make sure that it will not put you over your limit for cash advances. Also find out what the current limit is in case your credit company reduced the amount you may borrow on your card through cash advances and you forgot or did not notice.

“If the convenience check puts your card balance over the new limit, your card issuer may not honor the check,” said Luke W. Reynolds, Chief of the FDIC’s Community Outreach Section. “The returned-check could trigger overdraft fees from your bank, returned-check fees from others and over-limit fees from your card issuer.”

His recommendations: “Understand when your card company might not honor a check. Consider calling your card company to verify your understanding of its policies,” Reynolds said. “In addition, you may want to call your credit card company again after you deposit the check into your bank and before you spend any of that money, to make sure the card issuer has honored the check.”

Source: FDIC

Consumers in several states are also entitled to a separate, second additional annual free credit report under state law, by calling each of the three bureaus (Experian, Trans Union and Equifax) directly. Those states are Colorado, Georgia, Massachusetts, Maryland, Maine, New Jersey and Vermont. Here is a good FTC page explaining your free credit report rights, and for those who don’t like putting personal data on the Internet, explaining how to get reports under federal law by mail or phone.

Source: U.S. PIRG

What You Need to Know

When negative information in your report is accurate, only the passage of time can assure that it will be removed. A consumer reporting company can report most accurate negative information for seven years and can report bankruptcy information for 10 years.

If you get an offer to repair or fix your credit, how can you know if it’s legit? Here are some signs that should set off alarms in your head – and make you put the offer in the trash:

* The company wants you to pay for credit repair services before they provide any services.

Fact: Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the credit repair services they promised.

* The company doesn’t tell you your rights and what you can do for yourself for free.

Fact: The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. This investigation doesn’t cost any money.

* The company recommends that you don’t contact any of the three major national consumer reporting companies (Equifax, Experian, and TransUnion) directly.

Fact: Under the Fair Credit Reporting Act (FCRA), the consumer reporting company and the information provider (the person, company, or organization that provides information about you to the consumer reporting company) must correct inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider in writing.

* The company tells you they can get rid of most or all the negative credit information in your credit report, even if the information is accurate and current.

Fact: Any credit repair company that claims to be able to legally remove accurate and timely information from your credit report is lying. There’s no easy fix for bad credit. Improving your credit takes time and a conscious effort to pay your debts.

* The company suggests that you apply for an Employer Identification Number to use instead of your Social Security number so you can invent a “new” credit identity – and then, a new credit report.

Fact: If you follow illegal advice like this, you may find yourself in hot water. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, or to get an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.

Source: Federal Trade Commission

These are almost certainly a scam whose purpose is to obtain personal and financial information — such as name, Social Security number, bank account and credit card or even PIN numbers — from taxpayers which can be used by the scammers to commit identity theft. The e-mails and calls usually state that the IRS needs the information to process a refund or stimulus payment or deposit it into the taxpayer’s bank account. The e-mails often contain links or attachments to what appears to be the IRS Web site or an IRS “refund application form.” However genuine in appearance, these phonies are designed to elicit the information the scammers are looking for.

The IRS does not send taxpayers e-mails about their tax accounts. Additionally, the way to get a tax refund or stimulus payment, or to arrange for a direct deposit, is to file a tax return.

Note: this is not a comprehensive list. These are only the changes that Pension Rights Center are aware of, based on corporate press releases, news reports and other sources. This list does not include changes that have been made through the collective-bargaining process.

Source: Pension Rights Center

If you remember or learn of new information about the crime, contact your case agent or coordinator. You may also input the information at the online Victim Notification System. It’s important to report any address changes during an investigation or prosecution.

If your case is indicted, the U.S. Attorney’s Office will contact you. You have the right to be apprised of the continuing status of your case, to provide a victim-impact statement, to request restitution, and to learn about a defendant’s release from prison. Coordinators at each office will serve as your liaison throughout the process to answer questions and address your concerns. Some rights may be available only if your case is accepted for prosecution.

What You Can Do About Financial Losses

Collect and save paperwork related to your loss. If an arrest and conviction is obtained, the judge will consider requiring the offender to pay you for certain losses (called restitution). You may be asked to provide verification of your loss amount.

Some losses may be tax deductible. Consult a qualified tax advisor or the Internal Revenue Service to see if they qualify.

You may be able to recover losses through a civil lawsuit against the perpetrator of the crime. Your state or local bar association lists attorneys who specialize in this area of law and can determine if your case is appropriate for civil action. Small claims courts in the county where the crime occurred may also be of help.

Getting Your Money Back

The sentencing judge may order a convicted defendant to pay restitution to victims of certain crimes. For some federal crime, it is mandatory for convicted defendants to pay restitution. However, it’s possible you will never receive meaningful restitution from convicted defendants with no money or limited potential to make money, particularly in fraud cases with many victims. Regardless, the federal government will work earnestly to ensure that any assets owned by a sentenced defendant are considered for court-ordered restitution.

What You Can Do to Address Financial or Credit Problems

Some victims experience severe financial losses, rendering them unable to meet financial obligations. If your personal or financial information is stolen, your credit and your immediate finances may be affected.

Consider these options:

* Contact your creditors and a nonprofit credit counseling service, who may help you reduce or modify your payments, or to limit access to your accounts.

* Be alert. Con artists may contact victims, claiming to help recover losses for a fee, or may sell your name to other fraudsters. If called, contact your case agent or one of the agencies listed to verify the company’s legitimacy.

We will make every effort to ensure you are accorded the rights described above. Most pertain to events that occur after an arrest or indictment for a crime, and it will be the responsibility of the prosecuting U.S. Attorney’s Office to ensure you are accorded your rights. You may also seek the advice of a private attorney with respect to your rights.

To find your nearest Postal Inspector, click here.

Source: U.S. Postal Inspection Service

To Do

If you get a sales pitch from a debt relief firm, pay attention to the details. Stay away from any company that:

1. Promises that unsecured debts can be paid off for pennies on the dollar. The truth is that there is no guarantee that any creditor will accept partial payment of a legitimate debt. Your best bet always is to contact your creditor directly and as soon as you are having problems making payments.
2. Requires substantial monthly service fees and demands payment of a percentage of what they’ve supposedly saved you. The truth is that most debt relief companies charge hefty fees for their services, including a fee to establish the account with the debt negotiator, a monthly service fee, and a final fee – a percentage of the money you’ve supposedly saved.
3. Tells you to stop making payments to or communicating with your creditors. The truth is that if you stop making payments on a credit card, expect late fees and interest to be added to the amount you owe each month. If you exceed your credit limit, expect additional fees and charges to be added. Your credit score also will be hurt by not making payments.
4. Claims that creditors never sue people for not paying their unsecured debts. The truth is that creditors may have the right to sue you to recover the money you owe. And sometimes, when creditors win a lawsuit, they have the right to garnish your wages or put a lien on your home.
5. Claims that they can remove accurate negative information from your credit report. The truth is that no company or person can remove negative information from your credit report that is accurate and timely. It’s illegal.

Source: Federal Trade Commission

Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.

Taxpayers may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion. However, proceeds of refinanced debt used for other purposes (for example, to pay off credit card debt) do not qualify for the exclusion.

If you qualify, you claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attaching it to your federal income tax return for the year.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other tax relief provisions, (for example, insolvency), may be available. See Form 982 for details.

If your debt is reduced or eliminated you will receive a year-end statement, Form 1099-C, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

The IRS urges borrowers to examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS Web site at IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. Taxpayers may obtain a copy of this publication and Form 982 either by downloading from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

IRS TAX TIP 2009-44

Source: IRS

Don’t Get Hit by a Pitch.

• “We can stop your foreclosure!”
• “97% success rate!”
• “Guaranteed to save your home!”

These kinds of claims are the tell-tale signs of a foreclosure rip-off. Steer clear of anyone who offers an easy out.

Don’t Pay for a Promise.

Don’t pay any business, organization, or person who promises to prevent foreclosure or get you a new mortgage. These so-called “foreclosure rescue companies” claim they can help save your home, but they’re out to make a quick buck. Some may request hefty fees in advance – and then stop returning your calls. Others may string you along before disclosing their charges. Cut off all dealings if someone insists on a fee.

Send Payments Directly.

Some scammers offer to handle financial arrangements for you, but then just pocket your payment. Send your mortgage payments ONLY to your mortgage servicer.

Don’t Pay for a Second Opinion.

Have you applied for a loan modification and been turned down? Never pay for a “second opinion.”

Imitations = Frustrations.

Some con artists use names, phone numbers, and websites to make it look like they’re part of the government. If you want to contact a government agency, type the web address directly into your browser and look up any address you aren’t sure about. Use phone numbers listed on agency websites or in other reliable sources, like the Blue Pages in your phone directory. Don’t click on links or open any attachments in unexpected emails.

Talk to a HUD-Certified Counseling Agency – For Free.

If you’re having trouble paying your mortgage or you’ve already gotten a delinquency notice, free help is a phone call away. Call 1-888-995-HOPE for free personalized advice from housing counseling agencies certified by the U.S. Department of Housing and Urban Development (HUD). This national hotline – open 24/7 – is operated by the Homeownership Preservation Foundation, a nonprofit member of the HOPE NOW Alliance of mortgage industry members and HUD-certified counseling agencies. For free guidance online, visit www.hopenow.com. For free information on the President’s plan to help homeowners, visit www.makinghomeaffordable.gov.

Call 1-888-995-HOPE for free personalized guidance from housing counseling agencies certified by the U.S. Department of Housing and Urban Development. The Homeowner’s HOPE™ Hotline – open 24/7 – is operated by the Homeownership Preservation Foundation, a nonprofit member of the HOPE NOW Alliance of mortgage industry members and HUD-certified counseling agencies.

Total Mortgage Fraud Suspicious Activity Reports (SARs) in Fiscal Year 2008: 63,173, with more than $1.5 billion in losses
- So far in fiscal year 2009: 28,873 SARs (February 2009)

Total FBI Mortgage Fraud Task Forces/Working Groups: 65

Pending FBI Mortgage Fraud Investigations (February 2009): More than 2,000

Cases opened in Fiscal Year 2008: 734 (compared to 295 in Fiscal Year 2003)

Successes in Fiscal Year 2008: 560 indictments/informations; 338 convictions

States with Significant Mortgage Fraud problems in 2008**: 1. Florida, 2. Nevada, 3. Michigan, 4. California, 5. Utah, 6. Georgia, 7. Virginia, 8. Illinois, 9. New York, 10. Minnesota.

Source: FBI

The telephone survey of 2,000 adults conducted for CFA by Opinion Research Corporation December 4-8, 2008 revealed that the most common fake check scams are those involving sweepstakes/lotteries (66 percent), grants (36 percent) and work-at-home opportunities (35 percent). In the sweepstakes and grant scenarios, the consumer receives a check or money order with instructions to wire a portion of the money to pay taxes or administrative fees. In the phony job offers, consumers are asked to process payments for a foreign business or make purchases as a mystery shopper and wire the remaining money to their employer minus their “pay.” Another popular variation of the scam is the “overpayment,” where the scammer offers to buy something the consumer has advertised for sale, sends a check or money order for more than the asking price, and tells the consumer to wire the extra to someone who will arrange for shipping.

“The check or money order is phony, and so is the person’s story,” explained Grant. “Unfortunately, the consumer usually doesn’t learn that until after sending the money.” Federal law requires financial institutions to give consumers access to the money from checks or money orders they deposit quickly, usually within 1-5 business days, but just because funds are available doesn’t mean the check or money order is good. It may take weeks for the counterfeit to be discovered. When it is, the consumer is on the hook to repay the bank, credit union, or check cashing service.

Compounding the problem is consumer misunderstanding. Fifty-nine percent of the respondents in CFA’s survey incorrectly believe that when you deposit a check or money order, your bank confirms that it is good before allowing you to withdraw the money. The number goes up to 70 percent among young adults age 18-24, and 71 percent of people with incomes under $25,000 and who did not complete high school. More than 40 percent of those surveyed do not know that they are liable if the checks or money orders they deposit or cash are counterfeit. Fifty-two percent age 18-24 and half of Hispanics incorrectly said the person who gave you the check must pay the bank back.

Source: Consumer Federation of America

Fraudulent foreclosure “rescue” professionals use half truths and outright lies to sell services that promise relief and then fail to deliver. Their goal is to make a quick profit through fees or mortgage payments they collect from you, but do not pass on to the lender. Sometimes, they assume ownership of your property by deceiving you, the homeowner. Then, when it’s too late to save your home, they take the property or siphon off the equity. You’ve lost your home to foreclosure despite your best intentions.

If you think you may be facing foreclosure, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to recognize a foreclosure rescue scam. And even if the foreclosure process has already begun, the FTC and its law enforcement partners want you to know that legitimate options are available to help you save your home.

How the Scams Work

Foreclosure rescue firms use a variety of tactics to find homeowners in distress: Some sift through public foreclosure notices in newspapers and on the Internet or through public files at local government offices, and then send personalized letters to homeowners. Others take a broader approach through ads on the Internet, on television, or in the newspaper, posters on telephone poles, median strips and at bus stops, or flyers or business cards at your front door. The scam artists use simple and straight-forward messages, like:

• “Stop Foreclosure Now!”
• “We guarantee to stop your foreclosure.”
• “Keep Your Home. We know your home is scheduled to be sold. No Problem!”
• “We have special relationships within many banks that can speed up case approvals.”
• “We Can Save Your Home. Guaranteed. Free Consultation”
• “We stop foreclosures everyday. Our team of professionals can stop yours this week!”

Once they have your attention, they use a variety of tactics to get your money:

Phony Counseling or Phantom Help

The scam artist tells you that he can negotiate a deal with your lender to save your house if you pay a fee first. You may be told not to contact your lender, lawyer, or credit counselor, and to let the scam artist handle all the details. Once you pay the fee, the scam artist takes off with your money.

Sometimes, the scam artist insists that you make all mortgage payments directly to him while he negotiates with the lender. In this instance, the scammer may collect a few months of payments before disappearing.

For More Information

To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government’s portal to financial education.

UC Berkeley said it was notifying the people affected about possible identity theft or fraud.

The server breach began on October 9, 2008 and continued until April 9, 2009, when campus network security administrators found messages left by the hackers, according to the university’s website.

The databases breached by hackers contained health insurance information and “non-treatment medical information,” such as immunization records and names of physicians patients may have seen, the university said.

Investigators believe the attack was launched by hackers based overseas – who accessed a public website and bypassed security to access databases stored on the same server.

The victims of the cybertheft are current and former UC Berkeley students, as well as their parents and spouses who had UHS health care coverage dating back to 1999; and some Mills College former and current students back to 2001.

The hackers may have stolen information related to health insurance coverage and some medical information such as one’s immunization history, UHS medical record number, dates of visits or names of providers seen or, for a student participating in UC Berkeley’s Education Abroad Program, certain information from his or her self-reported health history.

University officials are advising individuals to place a fraud alert on their credit reporting accounts. The campus has set up a website, datatheft.berkeley.edu, to assist these individuals with contact information for key resources, and it has established a 24-hour Data Theft Hotline, 888-729-3301, to answer their questions.

Source: UC Berkeley

“This is a victory for every American consumer who has ever suffered at the hands of a credit card company,” said Dodd.  “My bill that the Senate passed today will insist on consumer protections that are strong and reliable, rules that are transparent and fair, and statements that are clear and informative.  I want to thank President Obama for working with me to get this over the finish line, and I urge my colleagues in the House to act quickly to pass this bill so we can get it to his desk as soon as possible.”

Among other provisions, the Credit Card Accountability, Responsibility, and Disclosure Act would:

· Protect consumers from arbitrary interest rate, fee and finance charge increases and prohibit universal default on existing balances
· Prohibit interest charges on paid-off balances from previous billing cycle (also known as a double-cycle billing ban)
· Require payments to be applied first to the credit card balance with the highest interest rate
· Protect students and other young consumers from aggressive credit card solicitations
· Ensure that payments are fairly allocated to the account with the highest interest rate first
· Require greater disclosure of rates, terms and billing details by credit card companies
· Establish tougher penalties for companies that violate the law

May 15: Fruit of the Loom–a Berkshire Hathaway ( BRK.A – news – people ) subsidiary–pink-slips 80 in Alabama.

May 12: Applied Materials ( AMAT – news – people ) posts quarterly loss and increases previously announced job cuts by 300.

May 11: Dell ( DELL – news – people ) slashes 260 jobs in North Carolina and blames the economy.

May 7: Cummins ( CMI – news – people ) idles Indiana plant that supplies Chrysler and lays off 610 workers.

May 7: DuPont ( DD – news – people ) adds to December job cut of 2,500 with another 2,000-employee cut.

Here is the latest layoff tracker figures for America’s 500 largest public companies furnished by Forbes.com. Click here to view the list at Forbes.com

The bill, sponsored by Rep. Carolyn Maloney (D-NY), represents an unprecedented effort to level the playing field between card issuers and cardholders. It would ban some of the most abusive industry practices including retroactive interest rate hikes on existing balances, double-cycle billing, and due-date gimmicks. Credit card companies would be required to provide 45 days advance notice of any impending rate hike, giving consumers time to pay off their balances and shop for a better deal.

“The average credit card debt among American households has more than doubled over the past decade,” said Rep. Luis Gutierrez, Chairman of the Subcommittee on Financial Institutions and Consumer Credit. “Today, the average family owes roughly $8,000 on their credit cards.  Meanwhile, as Americans struggle to make ends meet, a growing share of the industry’s revenues come from deceptive tactics, such as universal default terms spelled out in fine print — the terms and conditions of which can be changed at any time for any reason with 15 days’ notice or less. The Credit Cardholders’ Bill of Rights responds by applying common-sense regulations that reward hard work and responsibility rather than high-flying finance schemes.”

Under the measure, consumers would be given new protections against misleading, often incomprehensible, contract terms. Companies would be required to alert consumers 21 days before their bills are due, preventing due-date schemes. Cardholders would be shielded from being unfairly penalized for paying on time and empowered to set lower credit limits. The bill also would restrict fees charged when customers pay by phone and generally ban credit cards to minors under age 18.

The House also passed a number of amendments to the Credit Cardholders’ Bill of Rights that would strengthen consumer protections in the bill.  Some of those amendments include:

* Student Credit Cards:  Set underwriting standards for students’ credit cards, including limiting credit lines to the greater of 20 percent of a student’s annual income or $500, without a co-signer and requiring creditors to obtain a proof of income, income history, and credit history from college students before approving credit applications. (Reps. Slaughter, Duncan, Hastings, Alcee, Johnson, and Christensen)

* Troops and Disabled Veterans:  Restricts credit card companies from making adverse reports to credit rating agencies regarding deployed military service members and disabled veterans during the first two years of their disability.  This would ensure that if a servicemember misses a payment while serving in a combat zone or recovering from a grievous service-connected injury, a poor credit rating would not prevent them from starting a business or purchasing a home.  (Reps. Teague, Nye, Boccieri, and Kissell)

* 6-Month Promotional Rate:  Requires a 6-month period for a promotional credit card rate before the standard rate may be increased. (Rep. Perriello)

* Choice on Over-the-Limit Fees:  Requires credit cardholders to opt-in to receiving over-the-limit protection on their credit card allowing the credit card company to charge an over-the-limit fee.  (Reps. Maloney and Watson)

* Fair Allocation: Requires credit card issuers to allocate payments over the minimum to the portion of the remaining balance with the highest outstanding APR first, and then to any remaining balances in descending order.  (Reps. Gutierrez , Peters and Edwards (MD)

* Minimum Payment Disclosure:  Requires credit card issuers to provide information to credit card holders regarding minimum payments including a minimum payment warning statement (“making the minimum payment will increase the interest you pay and the time it takes to repay your balance”) on all monthly payments and the total cost to the holder of eliminating the outstanding balance in 12, 24, and 36 months. (Reps. Price, Miller (NC), Moran, Quigley, Lowey, Stupak, and Sutton)

Source: House Financial Services Committee

The measure was introduced by Reps. Brad Miller (D-NC), Mel Watt (D-NC), and Barney Frank (D-MA), and approved by a vote of 300-114.
“Our economy will eventually recover and we will again have a healthy housing market, but we’re in for a tough spell. This legislation will ensure that the reckless, predatory mortgage practices that started this crisis will not happen again,” said Rep. Miller.

“My joy at House passage of this important bill is tempered by my belief that we could have avoided the major credit and economic meltdown we are now experiencing had we passed this legislation when Rep. Miller and I originally proposed it 6 years ago. Unfortunately, the alarms we raised were not heeded and millions of consumers, indeed our entire economy, paid a heavy price,” said Rep. Watt.

The legislation counters the trend toward irresponsible lending by establishing a simple standard for all mortgages: lenders must make sure that borrowers have the ability to repay the home loans they are sold. The bill also requires that all mortgage refinancing loans benefit the consumer, and it bans predatory schemes that “steer” borrowers into higher cost loans.  The growth of exotic, “no-documentation” loans, along with borrowers who deliberately misstated their income to qualify for a loan, were key factors in the recent subprime meltdown.

In addition, H.R. 1728 encourages a return to sound underwriting practices by prohibiting mortgage lenders from relinquishing all responsibility for the bad loans they make and sell to Wall Street. Under the measure, lenders will now be required to keep “skin in the game” and retain a 5 percent stake in any home loan they make and sell. Also, for the first time ever, the large secondary mortgage market will bear responsibility for bad loans they purchase and securitize, bringing accountability back to every level of the mortgage lending chain.

According to the Center for Responsible Lending, 2.4 million Americans risk foreclosure in 2009, and that number could rise to 8.1 million over the next four years.  Mortgage lending reform is a critical part of efforts in Congress to reform America’s financial system and prevent a future crisis of this scale. If Congress had enacted these long overdue mortgage lending reforms, which Democrats have been advocating since 1999, the subprime lending meltdown could have been avoided altogether.

• Estimate and compare cost of attendance estimates at over 5,500 colleges and graduate schools.
• Understand and explore your funding options based on a combination of savings, scholarships and grants, and student loans.
• Forecast estimated repayment costs if student loans are part of your paying-for-college plan.
• Share plans with family and friends for feedback and discussion.

You can find it here at the SallieMae site.

The expression “red flag” signals “Danger: Be alert to problems ahead.” For millions of consumers every year, identity theft is more than a threat — it’s their reality. The economic, psychological, and emotional harm to victims can be devastating. But businesses often bear the biggest part of the monetary damage from identity theft.

It’s everyone’s responsibility to do what they can to fight identity theft. But businesses and organizations that offer credit or other financial services can be the first to spot the red flags that signal the risk of identity theft, including suspicious activity indicating that identity thieves may be using stolen information like names, Social Security numbers, account numbers, and birth dates to open new accounts or raid existing ones.

Under the Red Flags Rule, which went into effect on January 1, 2008 *, certain businesses and organizations are required to spot and heed the red flags that often can be the telltale signs of identity theft. To comply with the new Red Flags Rule — enforced by the Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) — you may need to develop a written “red flags program” to prevent, detect, and minimize the damage from identity theft.

Are you covered by the Red Flags Rule? If so, have you put into place the new procedures the Rule requires?

Who Must Comply

Although every business or organization with an ongoing relationship with consumers should keep an eye out for the possibility of identity theft, the Red Flags Rule applies only to “financial institutions” and “creditors.” To determine if your business or organization is covered by the Rule and required to develop a written identity theft Program, you’ll need to answer two questions:

1. Is your business or organization either a “financial institution” or “creditor,” as those terms are defined in the Rule?
2. If so, do you have “covered accounts”?

A “financial institution” is a bank, savings and loan, credit union, or other entity that holds a “transaction account” belonging to a consumer. A “transaction account” is an account that allows the owner to make payments or transfers. Examples include checking accounts, savings accounts that permit automatic transfers, and share draft accounts. Another example would be a brokerage account that allows consumers to write checks.

Your business or organization is a “creditor” if you regularly:

* extend, renew, or continue credit;
* arrange for someone else to extend, renew, or continue credit; or
* are the assignee of a creditor who is involved in the decision to extend, renew, or continue credit.

Under the Rule, “credit” means an arrangement by which you defer payment of debts or accept deferred payments for the purchase of property or services. In other words, payment is made after the product was sold or the service was rendered. Some examples of creditors are finance companies, automobile dealers, mortgage brokers, utilities, and telecommunications companies. Even if you’re a non-profit or government agency, you still may be a creditor if you accept deferred payments for goods or services. However, simply accepting credit cards as a form of payment does not make you a creditor under the Rule.

If you determine you’re a financial institution or a creditor, the next step is to see if you have “covered accounts.” There are two types of covered accounts. One is an account used mostly for personal, family, or household purposes that involves multiple payments or transactions. Examples include credit card accounts, mortgage loans, car loans, margin accounts, cell phone accounts, utility accounts, and checking or savings accounts.

The other is one for which there is a foreseeable risk of identity theft. For example, one type of account that should be considered for coverage because it may be vulnerable to identity theft is a small business or sole proprietorship account. In determining whether you have such an account, consider the risks associated with how the accounts may be opened or accessed — i.e. what type of interaction and documentation is required — as well as your experience with identity theft

If your business or organization is a financial institution or creditor, but does not have any covered accounts, you don’t need a program. But if you have covered accounts, you must develop a written program to identify and address the red flags that could indicate identity theft.

How To Comply

The Rule doesn’t tell you specifically what your red flags program must look like. Instead, it gives you flexibility to implement a program that best suits your business or organization, as long as it meets the Rule’s requirements.

Your starting point for developing a program is the Guidelines issued with the Red Flags Rule, available at www.ftc.gov/os/fedreg/2007/november/071109redflags.pdf. (The Guidelines are on pages 63773-63774 of the document.) The Guidelines list the issues you must consider in developing and maintaining a program appropriate for your business or organization. You also should draw on your own experience and knowledge about identity theft risks in developing your program.

There are four basic steps to designing a program to comply with the Rule:

1. Identify relevant red flags;
2. Detect red flags;
3. Prevent and mitigate identity theft; and
4. Update your program periodically.

In addition, your program must spell out how it will be administered. The program should be appropriate to the size and complexity of your company or organization, as well as the nature of your operations.
Identify Relevant Red Flags.

Under the Rule, financial institutions and creditors with covered accounts must develop a written program to identify the warning signs of identity theft.

The Guidelines describe the following categories of warning signs — red flags — that your program must identify and address:

* alerts, notifications, or warnings from a consumer reporting agency;
* suspicious documents;
* suspicious personally identifying information;
* suspicious activity relating to a covered account; or
* notices from customers, victims of identity theft, law enforcement authorities, or other entities about possible identity theft in connection with covered accounts.

Once you’ve identified the red flags that are relevant to your organization or business, you must establish policies and procedures to detect them in your day-to-day operations.

For example, you may spot red flags when you verify a consumer’s identity, authenticate customers, monitor transactions, or verify requests for changes of address. Some red flags may seem harmless on their own, but can signal identity theft when paired with other events, say, a change of address coupled with the use of an address associated with fraudulent accounts.
Prevent and Mitigate Identity Theft

Your program must include appropriate responses to your red flags to prevent and mitigate identity theft. These responses could include monitoring an account, closing an account, not opening a new account, contacting the consumer when you spot a red flag, or a combination. Sometimes you may determine that no response is necessary. In other cases, certain events — such as a recent data breach, a phishing fraud that targeted your business or organization, or another suspicious activity — may raise the risk of identity theft and require specific preventive actions.

Update Your Program Periodically

Because identity theft threats change, your program must describe how you will update it to ensure that you are considering new risks and trends.
Administering Your Program

No matter how good your program looks on paper, the true test is how it works. Your program must describe how it will be administered, including how you will get the approval of your management, maintain the program, and keep it current.

According to the Rule, your program must be approved by your Board of Directors or, if your business or organization doesn’t have a Board, by a senior employee. The Board or designated senior employee also must approve any material changes to the program. Your program should include staff training as appropriate, and provide a way for you to monitor the work of your service providers. The keys are to maintain oversight of the program, keep it relevant and current, and ensure that all necessary members of your staff — from the boardroom to the mail room — are on board. A program that stays in a filing cabinet isn’t a good program.

Penalties for Noncompliance

Although there are no criminal penalties for failing to comply with the Red Flags Rule, financial institutions or creditors that violate the Rule may be subject to civil monetary penalties. But there’s an even more important reason for compliance: It’s just plain good business. It assures your customers that you are doing your part to fight identity theft.

Have questions about how health care providers can comply with the Rule? Email RedFlags@ftc.gov.

* On October 22, 2008, the Federal Trade Commission issued an Enforcement Policy statement that delays enforcement of the Red Flags rule until May 1, 2009 (http://www.ftc.gov/opa/2008/10/redflags.shtm). Although the Rule is in effect, the FTC will wait until May 2009 to enforce it. This does not affect enforcement of the address discrepancy and credit card issuer rules. Nor does it affect compliance for entities not under the jurisdiction of the Commission.

Source: Federal Trade Commission

United States Senate

Washington, DC 20510

Dear Senator:

Binding mandatory arbitration clauses are forcing the elderly and those with disabilities and their families to waive their constitutional right to seek redress in the courts when a nursing home resident suffers harm. These clauses are typically buried in contracts signed by families during one of the most stressful events in their lives – entrusting the care of a vulnerable loved one to strangers – and the clauses effectively compel family members to consent that they will waive the legal rights of a loved one if she or he is injured or dies from neglect or physical abuse while in the facility. The contracts are presented on a take-it-or-leave-it basis, and leave families in the impossible situation of having to sign a contract or forgo nursing home care altogether, a decision that most families are not in the position to make. The undersigned organizations urge you to support the Fairness in Nursing Home Arbitration Act of 2009 (S. 512/H.R. 1237), which would invalidate pre-dispute mandatory arbitration provisions in nursing home, assisted living, and other long-term care facility contracts.

Sixty percent of nursing home admissions are from a hospital and occur after a medical emergency, such as a stroke or broken hip. Individuals are often pressured to accept the first available bed without any opportunity to evaluate the care provided or consider other possible options, and research conducted at Brown University shows that hospitals are more likely to place African Americans in the worst nursing homes. When they unknowingly sign away their right to sue the facility, most families have had no experience with the severity of injuries their loved one could suffer if the facility neglects its responsibility to protect them – such as pressure sores that lead to infection and amputation of limbs; suffocation on bedrails and other restraining devices; physical and sexual assault; renal failure from dehydration; malnutrition; and death from fires in unsprinklered buildings. Some courts have even enforced arbitration clauses included in contracts signed by nursing home residents who were illiterate or had advanced dementia.

Countless government studies show that in spite of improvements in nursing home regulation and enforcement, state regulators still under-cite the seriousness of deficiencies in which residents are harmed; levy fines that are little more than the cost of doing business; and allow facilities to operate year-after-year with serious, repeat problems. Assisted living is poorly regulated in most states, although assisted living residents often have physical and mental disabilities similar to those of nursing home residents.

Mandatory arbitration clauses only further this crisis by serving to protect providers from accountability for bad care. By allowing the provider to pick the arbitration company with which it routinely does business and the rules of the arbitration, the system is set up to heavily favor the provider and leave the family with little or no hope of obtaining justice for their loved one.

Families should not be required to sign a contract containing a pre-dispute mandatory arbitration clause as a condition of admission nor participate in an arbitration process that they have little or no control over, especially when the dispute involves the suffering and death of their parents and other loved ones. The Fairness in Nursing Home Arbitration Act would end the practice that forces many to do so.

Sincerely,

National Organizations

Alliance for Retired Americans

Alzheimer’s Foundation of America

American Association for Justice

American Federation of State, County, and Municipal Employees

Assisted Living Consumer Alliance

Communications Workers of America

Consumer Federation of America

Center for Justice & Democracy

Center for Medicare Advocacy

Citizen Works

Consumer Action

Consumers for Auto Reliability and Safety

Consumers Union

Hartford Institute for Geriatric Nursing

Homeowners Against Deficient Dwellings

Home Owners for Better Building

Leadership Conference on Civil Rights

National Academy of Elder Law Attorneys

National Consumer Law Center (on behalf of its low income clients)

National Employment Lawyers Association

National Association of Consumer Advocates

National Association of Local Long-Term Care Ombudsmen

National Association of Social Workers

National Association of State Long-Term Care Ombudsman Programs

National Women’s Health Network

NCCNHR: The National Consumer Voice for Quality Long-Term Care

National Senior Citizens Law Center

Neighborhood Economic Development Advocacy Project

Public Citizen

Service Employees International Union

U.S. Public Interest Research Group

State Organizations

Alabama

Long Term Care Ombudsman Program of Jefferson County

Central Alabama Aging Consortium

Arkansas

Arkansas Advocates for Nursing Home Residents

California

California Advocates for Nursing Home Reform

Foundation Aiding The Elderly

Long Term Care Services of Ventura County

Ombudsman Services of San Mateo County

Riverside County Long Term Care Ombudsman Program

Delaware

Delaware Long-Term Care Ombudsman Program

Citizens for Long Term Care

District of Columbia

Office of the D.C. Long-Term Care Ombudsman Program

Florida

ACTION: Advocates Committed to Improving Our NursingHomes

FANHI: Family Advocates for NursingHome and HomeCare Improvement

Georgia

Georgia Office of the State Long-Term Care Ombudsman

Idaho

Idaho Long Term Care Ombudsman program

Illinois

Illinois Citizens for Better Care

Illinois Office of the Long Term Care Ombudsman

Indiana

Indiana Long Term Care Ombudsman Program

Long Term Care Ombudsman, Area 12

United Senior Action of Indiana

Kansas

Kansas Advocates for Better Care

Kentucky

Barren River Area Development District Area Agency on Aging

Kentuckians for Nursing Home Reform

Kentucky – Barren River District Long Term Care Ombudsman

Kentucky Protection & Advocacy

KIPDA District Long-Term Care Ombudsman Program

Nursing Home Ombudsman Agency of the Bluegrass

Louisiana

Advocacy Center

Louisiana Long Term Care Ombudsman Program

Maryland

Manor Care Chevy Chase Family Council

Montgomery County MD Long Term Care Ombudsman Program

Voices for Quality

Massachusetts

Massachusetts Advocates for Nursing Home Reform

Wynn Gerhard, Managing Attorney, Elder Law Unit, Greater Boston Legal Services, on behalf of our clients

Ombudsman Program, Consumer Advocates for Better Care of

Montachusett Home Care Corp.

SeniorCare, Inc./Long Term Care Ombudsman Program

Michigan

Citizens for Better Care

Michigan Campaign for Quality Care

Minnesota

ElderCare Rights Alliance

Families Against Nursing Home Abuse, Albert Lea

Mid Minnesota Legal Assistance

Office of Ombudsman for Long-Term Care

Missouri

Missouri Long-Term Care Ombudsman Program

St. Louis Long Term Care Ombudsman Program

New Hampshire

New Hampshire Office of the Long-Term Care Ombudsman

New Jersey

Bergen Regional Medical Center Long Term Care Family Council, Paramus NJ

New Mexico

New Mexico Long Term Care Ombudsman Program

New York

The Coalition of Institutionalized Aged and Disabled

FRIA, The Voice and Resource for Eldercare with Dignity

Long Term Care Community Coalition

New York State Ombudsman Alliance

North Carolina

Friends of Residents in Long Term Care

North Carolina Long Term Care Ombudsman Program

Ohio

Dayton Long Term Care Ombudsman Program

Ohio Office of the State Long-Term Care Ombudsman

Oklahoma

A Perfect Cause

Oklahoma Long Term Care Ombudsman Program

Pennsylvania

CARIE

Pennsylvania Long-Term Care Ombudsman Program

Rhode Island

Rhode Island Long Term Care Ombudsman Program

South Dakota

South Dakota Advocates for Nursing Home Reform

Tennessee

Tennessee State Long-Term Care Ombudsman

Texas

NHVC, Inc.

Texas Advocates for Nursing Home Residents

Vermont

Regional Long Term Care Ombudsman, Vermont Legal Aid, Rutland

Virginia

TLC 4 Long Term Care Residents

Washington

Alzheimer’s Association, Western and Central WA Chapter

Resident Councils of Washington

Washington State Long Term Care Ombudsman

Wisconsin

Coalition of Wisconsin Aging Groups

Wisconsin Long-Term Care Ombudsman Program

Wyoming

Wyoming Long-Term Care Ombudsman Program

Source: Fair Arbitration Now

Washington, DC – Americans widely oppose corporations using mandatory binding arbitration clauses in the fine print of consumer and employment contracts, according to national polling of likely voters conducted by Lake Research Partners.

Forced arbitration clauses are hidden in the fine print of everything from cell phone, home, credit card and retirement account terms of agreement to employment and nursing home contracts. Just by taking a job or buying a product or service, consumers and employees are forced to give up their right to take their case to court if they are harmed by a corporation.

The poll results bolster already heightened scrutiny by lawmakers of credit cards, mortgages, and other common consumer and employee contracts. The bipartisan Arbitration Fairness Act (H.R. 1020) was introduced by Rep. Hank Johnson (D-Ga.) in the House of Representatives and will be introduced in the Senate by Sen. Russ Feingold (D-Wis.) today. The measure will ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers. The Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237), introduced by Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) and Rep. Linda Sanchez (D-Calif.), would eliminate forced arbitration clauses in nursing home contracts.

“The findings show clearly that Americans strongly oppose forced arbitration, and they see the Arbitration Fairness Act as a remedy. Not only is there real intensity to this view, but it traverses traditional partisan divides,” said Lake Research Partners President Celinda Lake. “Forced arbitration clauses – which are buried in the fine print of employment and consumer contracts – are another example of corporations taking advantage of ordinary Americans. The public supports the Arbitration Fairness Act because equal justice under the law is a core American value.”

The poll shows that:

• Six in 10 likely voters support the Arbitration Fairness Act – including majorities of Democrats, Republicans and Independents;
• 59 percent of likely voters oppose the use of mandatory binding arbitration clauses in employment and consumer contracts;
• Two-thirds of respondents cannot remember ever reading about a forced arbitration provision buried in the fine print of employment terms or agreement for goods and services; and,
• More than 70 percent of respondents believe they could take their employer or a corporation to court in the event of a dispute, unaware they could be subjected to mandatory binding arbitration.

The results were unveiled today at a press conference in Washington, D.C., organized by the Fair Arbitration Now Coalition, which represents consumers, employees, homeowners and franchise holders. The groups range from Public Citizen, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association for Justice to the National Consumer Voice for Long-Term Care, Home Owners for Better Building and the Leadership Conference on Civil Rights.

“The Arbitration Fairness Act does not seek to eliminate arbitration and other forms of alternative dispute resolution agreed to voluntarily after a dispute arises,” the groups wrote last month in a letter to lawmakers. “Its sole aim is to end the unscrupulous business practice of forcing consumers and employees into biased arbitrations by binding them long before any disputes arise.”

More than 50 consumers, employees and advocates lobbied lawmakers today to pass the Arbitration Fairness Act. They came from Alabama, California, Georgia, Iowa, Louisiana, Maryland, Michigan, Minnesota, New Hampshire, Ohio, Pennsylvania, Tennessee, Texas and Virginia to speak about how forced arbitration makes it nearly impossible to hold companies accountable for wrongdoing.

“One of our indelible rights is the right of a jury trial,” Johnson said. “Guaranteed by the Constitution, this right has been gradually ceded by citizens every day as they purchase a new cell phone, buy a home, place a loved one in a nursing home, or accept a new job. Once used as a tool for businesses to solve their disputes, arbitration agreements have found their way into employment, consumer, franchise and medical contracts.”

Added Feingold, “Americans are sick and tired of a system that so strongly favors big corporations over consumers and in this case robs them of their constitutional right to their day in court,” Feingold said. “Americans are often given no choice but to give up their rights if they want to sign credit card agreements, cell phone contracts, job applications or other basic contracts. It’s time for Congress to side with consumers and employees and end this practice of forced arbitration, which stacks the deck against the people Congress is supposed to represent.”

Members of Congress will hear from people like David Kurth, of Burlington, Wis., whose father William died in 2005 due to severe neglect of care while in a nursing home facility. When the Kurth family tried to hold the nursing home corporation accountable in court, they were told that another family member had signed a forced arbitration clause. A judge agreed and said the case could not be heard in court.

“Nursing home corporations are using arbitration clauses as liability shields to insulate them from their own wrongful conduct,” said Kurth at today’s press conference.

The survey reached 800 adults nationwide, 18 years or older, who are likely to vote in the 2010 elections. The overall margin of error is +/-3.5%. The poll was commissioned by The Employee Rights Advocacy Institute For Law & Policy and Public Citizen, and funded by The Public Welfare Foundation. Pollsters Celinda Lake and Daniel Gotoff of Lake Research Partners are also available to discuss the poll results. Please see media contacts above to arrange any interviews.

Link: Fair Arbitration Now

Family wealth in the United States continues to take a beating as its housing market and financial markets suffer from the 16-month-and-running Bush recession. Household wealth in our country dropped sharply after reaching an $81 trillion peak in June 2007. By the end of December 2008‚ – the last full quarter for which data are available and one full year into the current recession – about $15 trillion in private family wealth had evaporated.

This is the sharpest relative wealth decline in more than 50 years. Between June 2007 and December 2008, inflation-adjusted personal wealth fell by 22.8 percent – the fastest decline since the Federal Reserve began collecting this information in 1952. And what a drop it was. The previous record for an 18-month decline in wealth – between March 1973 and September 1974 amid the first oil price crisis – was only 12 percent.

Our financial markets and the U.S. housing market continue to plummet since the end of last year, which suggests that family wealth continues to decrease as well. This is an extremely serious crisis that deserves public policy attention. Private wealth serves critical functions in a free-market economy that relies heavily on individual initiative. Private wealth is the primary insurance against a range of economic risks.

The more private wealth a typical family possesses, the less a family has to worry about the basic life necessities and can focus more on long-term economic growth. A family that has the basic necessities covered is better situated to send kids to college and to let them choose a degree that suits their abilities. With a store of private wealth, family members also can more easily switch jobs to match their particular skills. And a family with enough wealth is in a better position to let their creative spirits take hold and start a new business.

In short, everyone in society wins when families have enough stored wealth to enable their members to gain more skills and apply those skills most effectively in their job or by starting a business.

So how did we as a society allow such massive losses of wealth? And how can government policy help ensure that it doesn’t happen again? Let’s first consider some of the microeconomic causes of today’s private wealth crisis. First and foremost, price declines in housing and financial assets wreaked havoc on family wealth, but the losses might not have been so severe if the personal saving rate in the United States had not fallen to historic lows. Families simply did not prepare for the eventuality of bear markets by saving more.

Second, the growth of wealth slowed after 2001 due to an unprecedented debt boom. Sharply higher debt levels meant that wealth rose more slowly than assets, leaving families with even less of a buffer if anything went wrong. This rising leverage – measured by the ratio of debts to assets – was driven by the upswing in asset prices, mainly housing prices, though the stock market also saw healthy gains during most of this period. While leverage during an upswing in asset prices means that families can invest in an asset with little of their own money at stake, the opposite is true for a downturn in assets. When asset prices fall, what little equity stake a family has in an investment – primarily its home – is quickly wiped out. This was especially true during the past boom, when leverage increased rapidly just before the crisis.

The lack of financial diversification became a third factor that contributed to the massive loss of family wealth, accompanied by increasing leverage. Families went deeper into debt to afford ever more costly homes, leaving little or no money saved outside of their home. A drop in housing prices thus took a much bigger hit on total family wealth because homes had become a much larger share of total family wealth than was the case in the past.

Lack of diversification also left those families with investments outside their homes more exposed to a crash in the stock market. Since the stock market bull run started in 1983, individual investors in equities have not rebalanced their portfolios appreciably into other financial assets besides houses as stock prices rose and fell before rising higher again amid the next stock market bull run. As a result, the share of families’ financial assets, especially those held in retirement account, was increasingly invested in stocks, either directly in brokerage accounts or indirectly through mutual funds. When the crisis struck, families stood to lose more of their total assets as a share of a fall in the stock market than was the case before, when families were better diversified.

Policymakers need to address these problems facing average American families trying to accumulate enough private wealth to invest in their futures. The first order of business is to help families reverse their very low levels of savings by investing in more assets. Families also should be encouraged to diversify their assets to avoid losing too much in a market downturn. And finally, public policy should help families avoid excessive leveraging. Borrowing to get ahead in life can be a useful tool to build wealth. After all, you are buying assets with somebody else’s money. But the debt levels prior to the Bush recession were clearly unsustainable. Public policy should put the mechanisms in place now to prevent a similar situation from recurring.

By Christian E. Weller, Jessica Lynch | April 23, 2009

AmericanProgress.org

The 401(k) Fair Disclosure for Retirement Security Act of 2009 will help workers shop around for the best retirement options by requiring simple fee disclosure on the investment options contained in their employer’s 401(k) plan. Current law does not require all fees workers pay to be disclosed; and even for information that is available, it can be difficult for workers to find and evaluate.

The bill was introduced on Tuesday, April 21, 2009 by Rep. George Miller (D-CA), chairman of the full committee, and Rep. Rob Andrews (D-NJ), chairman of the subcommittee.

Chairman Miller’s Interview with 60 Minutes

Steve Kroft’s story about retirement insecurity, especially among those 55-65 years old, ran on 60 Minutes last Sunday. Mr. Kroft highlighted some of the concerns about 401(k)s as the primary source of retirement income. In doing so he interviewed Chairman Miller about the hidden fees in many 401(k) programs.

“There clearly has been a raid on these funds by the people of Wall Street. And it’s cost the savers and the future retirees a lot of money that would otherwise be in their account, independent of the financial collapse,” Rep. George Miller [D-CA] said.

Congressman Miller is chairman of the House Committee on Education and Labor, and a staunch critic of the 401(k) industry, especially its practice of deducting more than a dozen undisclosed fees from its clients’ 401(k) accounts.

“Now you got a bunch of economic wizards jumping in and taking money out of your retirement plan, and they don’t wanna tell you how much, you can’t decipher it in simple English, and they’re not interested in disclosing it, or having any transparency about it,” Miller told Kroft.

“And most of the people that look at their 401(k)s have no idea that these fees are being taken out?” Kroft asked.

“No. Where would you find it? Where would you find these fees in this prospectus? You can look on any page you want, and when you’re all done reading it, and you will find some of the fees and the commissions here, but you won’t find them all, and I’ll bet you won’t find half of ‘em,” Miller said.

There are legal fees, trustee fees, transactional fees, stewardship fees, bookkeeping fees, finder’s fees. The list goes on and on.

Miller’s committee has heard testimony that they can eat up half the income in some 401(k) plans over a 30-year span. But he has not been able to stop it.

“We tried to just put in some disclosure and transparency in these fees. And we felt the full fury of that financial lobby,” he said.

David Wray, a lobbyist for the 401(k) industry, says he favors disclosing the fees, but his partners in the financial industry don’t.

Asked if he thinks most people know these fees exist, Wray said, “I think they know that there are fees. They don’t know exactly how large they are.”

“Why do you think the financial services industry is opposed to fee transparency?” Kroft asked.

“I don’t know that they’re opposed to it. I think the issue is that…,” Wray replied.

“You don’t think they’re opposed to it?” Kroft asked. “You’re a lobbyist in Washington, right? You know they’re opposed to it. …George Miller hasn’t been able to get a bill to the floor.”

“I think they want to keep the systems as simple and not make changes. They like the way things are. And whenever you push people out of their comfort zones, you know, it’s an issue,” Wray replied.

“I mean, they’re comfortable with the situation because they’re making a ton of money or they have made a ton of money,” Kroft said.

“Well, and their systems are set up in certain ways. You know, this is gonna be a big change,” Wray replied.

So far, 64 people have contacted Irving Irving School District to say they are identity theft victims. Hundreds of others could be unaware that they are potential victims. Irving ISD mailed letters to current and former employees to inform them of the security breach, but 472 of those letters were returned unopened because they were sent to old addresses.

Some teachers are angry that the district did not notify them more quickly. Others are afraid to speak out.

Authors: Christian E. Weller, Amanda Logan

Middle class economic security is taking an ever harder hit as economic conditions worsen.

America’s middle-class families are still struggling. With the current economic downturn, economists, policymakers, and pundits alike now recognize what many middle-class families have long been feeling: that their financial security is in decline. Although economists so far have not officially announced the beginning of a recession this year, the sharp downturn in economic growth certainly has made things worse for families who have been struggling for years with massive amounts of debt, declining incomes, and rising prices.

For the past two years, the Center for American Progress has calculated a number of middle-class financial security indicators to measure how many families have the financial resources for a spell of unemployment, for a medical emergency, for both, or for an unspecified economic emergency equal to three months of their income. Our figures demonstrate the financial and economic roller coaster ride that America’s middle class has been on.

The trends since 1989, the first year for which we have data, showed an increase in middle-class security through the 1990s. After 2000, however, the situation deteriorated very quickly—all of the gains in middle-class economic security were erased within a few years. We have now updated the figures to reflect the trends for 2006 and 2007 and to include more accurate data for 2005 than we had before. All the measures we tracked either decreased further or stayed at their already low levels from 2005 (See chart on page two). Data to 2008 is not available, but there can be no doubt that with worsening economic conditions middle class economic security is taking an ever harder hit. The new data underscore that:

• The sharpest deterioration in middle-class financial security is associated with the cost of a medical emergency. We estimate that only 33.9 percent of families had enough wealth in 2007 to cover the cost of a medical emergency, down from 35.0 percent in 2005 and 43.7 percent in 2000 (See table on page 3). This deterioration comes as a result of less wealth and higher costs of medical emergencies.
• Drops in personal wealth have contributed to the decline in middle-class financial security. Because house prices started to fall and debt continued to rise in 2007, we also observed the share of families who could weather an unspecified emergency equal to three months of income decrease to 29.4 percent in 2007, from 30.5 percent in 2005 and 39.4 percent in 2000.
• The share of families who had enough resources to cover a spell of unemployment has declined since 2000. In 2007, 44.1 percent of families had enough wealth to cover a spell of unemployment, little changed from 44.0 percent in 2005 but still down from 51.0 percent in 2000. Unfortunately, the 2007 data likely reflect only a temporary respite from decline since the labor market has substantially deteriorated in 2008, beyond the time series data presented here.

Rising middle-class financial insecurity after 2000 is the result of several factors. Incomes have fallen as a result of the weakest job growth since the Great Depression, flat wages, and declining benefits. At the same time, prices for necessary items, such as food, energy, housing, and transportation, have all risen sharply. Finally, personal wealth has been decimated, first by the mortgage boom, which allowed more families to build wealth by purchasing homes but also required them to take on higher debt levels, and then by the bursting housing bubble, which of course depleted the value of those home investments, and then by much weaker financial markets.

Providing America’s middle class with more financial security is a tall order. It will require serious efforts to ensure that incomes rise in a growing economy, and that families can build wealth in preparation for inevitable emergencies and to invest in their future. It will also require investing in more energy efficiency and alternative fuels so that energy price shocks do not throw families for a loop. And it will require progressive health insurance reform.

In the pages that follow, we will detail the deteriorating financial health and well-being of the American middle class, describe the public’s clear awareness of the problem, and then point out briefly in our conclusion the variety of progressive policy alternatives to help restore middle-class vitality and with it U.S. economic vigor.

Download the full report (pdf 4.3 MB)

The fellowship covers the costs associated with completing Accredited Financial Counselor® training and testing. Upon successful completion of the program and required practicum, the participant will be awarded the Accredited Financial Counselor® designation from AFCPE®.

Many employers such as credit unions, financial aid offices, and community housing agencies need well-trained, ethical and caring financial counselors to meet the increasing demand for financial counseling services. Military spouses can fill this need while building a rewarding career that is flexible to the demands of the military family lifestyle.

Applications are only accepted online at www.nmfa.org/fellowship and must be received by midnight EDT April 30, 2009.

“I’m furious, I’m outraged, and I’m disgusted,” said Chicago Teachers Union President Marilyn Stewart upon learning of the data breach. The personal information had been downloaded to two laptop computers belonging to consultants.

“How could your employer, the person you trust, let this happen to you?” asked teacher Caryn Block.  Teachers were also extremely upset that they weren’t told of the breach until almost nine hours after the theft occurred.

Businesses of all sizes must develop and implement written identity theft prevention programs under the new “Red Flags Rules” that becomes effective May 1st. I’ll have more on this later this month.

The video notes that consumers who use their bank account carefully and avoid overdraft fees will likely find it costs less than not having a bank account.

The 17-minute video was produced by a cooperative effort of the Federal Reserve Banks.  Both English and Spanish versions are available for viewing online here.  Instructions for ordering a DVD are also available on the site.

For more information, contact the Public and Community Affairs Department of the Federal Reserve Bank of Boston at (800) 409-1333.

Millions of consumers get taken by these types of scams every year. So if you’re ready to test your skills, click here to be taken to the quiz.

“Taxpayers should be wary of scams to avoid paying taxes that seem too good to be true, especially during these challenging economic times,” IRS Commissioner Doug Shulman said. “There is no secret trick that can eliminate a person’s tax obligations. People should be wary of anyone peddling any of these scams.”

Tax schemes are illegal and can lead to problems for both scam artists and taxpayers who risk significant penalties, interest and possible criminal prosecution.

The IRS urges taxpayers to avoid these common schemes:

Phishing

Phishing is a tactic used by Internet-based scam artists to trick unsuspecting victims into revealing personal or financial information. The criminals use the information to steal the victim’s identity, access bank accounts, run up credit card charges or apply for loans in the victim’s name.

Phishing scams often take the form of an e-mail that appears to come from a legitimate source, including the IRS. The IRS never initiates unsolicited e-mail contact with taxpayers about their tax issues. Taxpayers who receive unsolicited e-mails that claim to be from the IRS can forward the message to phishing@irs.gov. Further instructions are available at IRS.gov. To date, taxpayers have forwarded scam e-mails reflecting thousands of confirmed IRS phishing sites. If you believe you have been the target of an identity thief, information is available at IRS.gov.

Hiding Income Offshore

The IRS aggressively pursues taxpayers and promoters involved in abusive offshore transactions. Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks, brokerage accounts or through other entities. Recently, the IRS provided guidance to auditors on how to deal with those hiding income offshore in undisclosed accounts. The IRS draws a clear line between taxpayers with offshore accounts who voluntarily come forward and those who fail to come forward.

Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans. The IRS has also identified abusive offshore schemes including those that involve use of electronic funds transfer and payment systems, offshore business merchant accounts and private banking relationships.

Filing False or Misleading Forms

The IRS is seeing scam artists file false or misleading returns to claim refunds that they are not entitled to. Frivolous information returns, such as Form 1099-Original Issue Discount (OID), claiming false withholding credits are used to legitimize erroneous refund claims. The new scam has evolved from an earlier phony argument that a “strawman” bank account has been created for each citizen. Under this scheme, taxpayers fabricate an information return, arguing they used their “strawman” account to pay for goods and services and falsely claim the corresponding amount as withholding as a way to seek a tax refund.

Abuse of Charitable Organizations and Deductions

The IRS continues to observe the misuse of tax-exempt organizations. Abuse includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or income from donated property. The IRS also continues to investigate various schemes involving the donation of non-cash assets, including easements on property, closely-held corporate stock and real property. Often, the donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and new definitions of qualified appraisals and qualified appraisers for taxpayers claiming charitable contributions.

Return Preparer Fraud

Dishonest return preparers can cause many headaches for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Taxpayers should choose carefully when hiring a tax preparer. As the saying goes, if it sounds too good to be true, it probably is. No matter who prepares the return, the taxpayer is ultimately responsible for its accuracy. Since 2002, the courts have issued injunctions ordering dozens of individuals to cease preparing returns, and the Department of Justice has filed complaints against dozens of others, which are pending in court.

Frivolous Arguments

Promoters of frivolous schemes encourage people to make unreasonable and unfounded claims to avoid paying the taxes they owe. The IRS has a list of frivolous legal positions that taxpayers should stay away from. Taxpayers who file a tax return or make a submission based on one of the positions on the list are subject to a $5,000 penalty. More information is available on IRS.gov.

False Claims for Refund and Requests for Abatement

This scam involves a request for abatement of previously assessed tax using Form 843, Claim for Refund and Request for Abatement. Many individuals who try this have not previously filed tax returns. The tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses Form 843 to list reasons for the request. Often, one of the reasons given is “Failed to properly compute and/or calculate Section 83-Property Transferred in Connection with Performance of Service.”

Abusive Retirement Plans

The IRS continues to uncover abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs). The IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to IRAs as well as transactions that are not properly reported as early distributions. Taxpayers should be wary of advisers who encourage them to shift appreciated assets into IRAs or companies owned by their IRAs at less than fair market value to circumvent annual contribution limits. Other variations have included the use of limited liability companies to engage in activity which is considered prohibited.

Disguised Corporate Ownership

Some taxpayers form corporations and other entities in certain states for the primary purpose of disguising the ownership of a business or financial activity. Such entities can be used to facilitate underreporting of income, fictitious deductions, non-filing of tax returns, participating in listed transactions, money laundering, financial crimes, and even terrorist financing. The IRS is working with state authorities to identify these entities and to bring the owners of these entities into compliance.

Zero Wages

Filing a phony wage- or income-related information return to replace a legitimate information return has been used as an illegal method to lower the amount of taxes owed. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer also may submit a statement rebutting wages and taxes reported by a payer to the IRS. Sometimes fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any of the variations of this scheme.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are many legitimate, valid uses of trusts in tax and estate planning, some promoted transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the promised tax benefits and are being used primarily as a means to avoid income tax liability and hide assets from creditors, including the IRS.

The IRS has recently seen an increase in the improper use of private annuity trusts and foreign trusts to divert income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering into a trust arrangement.

Fuel Tax Credit Scams

The IRS is receiving claims for the fuel tax credit that are unreasonable. Some taxpayers, such as farmers who use fuel for off-highway business purposes, may be eligible for the fuel tax credit. But some individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim, potentially subjecting those who improperly claim the credit to a $5,000 penalty.

The FTC is providing a telephone number (1-888-600-4804) for consumers with non-bank cards to call for their estimated pay-off information. Information is available in both English and Spanish. For consumers who prefer to use the Internet, the Commission also has posted on its Web site a calculator that provides the same information. To access the FTC’s on-line calculator, consumers should click on http://www.ftc.gov/creditcardcalculator. For Spanish-language consumers, information is available at http://www.ftc.gov/calculadora. The FRB, which is responsible for implementing the Bankruptcy Act, developed the telephone program and calculator.

John Anthony Miller, 51, of San Clemente, pleaded guilty to mail fraud in relation to the Ponzi scheme, as well as bribery, passport fraud and identity fraud charges resulting from his attempt to procure a fraudulent passport and flee the country after his scheme collapsed.

From 2000 through November 2008, Miller operated a Ponzi scheme through his Newport Beach-based investment companies, JAM Jr. Enterprises and Forte Financial Partners. Miller promised investors “guaranteed” annual returns of between 10 percent and 18 percent per year, telling investors that their money would be invested in foreign currency trading, oil wells, real estate and other vehicles. During the course of the scheme, Miller provided investors with monthly account statements that falsely represented they were earning the promised returns. In fact, Miller had never earned any real profits from his investment activity and, in the pattern of a typical Ponzi scheme, used money from some investors to make Ponzi payments to other investors.

Over the course of his scheme, Miller defrauded more than 200 people out of more than $15 million, taking millions of dollars that his victims has initially invested in IRA retirement savings accounts.

Miller is scheduled to be sentenced on July 20. As a result of his guilty pleas to the four charges, Miller faces a statutory maximum sentence of 47 years in federal prison.

Customers of a telecommunications firm received an e-mail recently explaining a problem with their latest order. They were asked to go to the company website, via a link in the e-mail, to provide personal information—like their birth dates and Social Security numbers. But both the e-mail and the website were bogus.

It’s a real-life, classic case of “phishing”—a virtual trap set by cyber thieves that uses official-looking e-mails to lure you to fake websites and trick you into revealing your personal information.

It’s also an example of an even more mischievous type of phishing known as “spear phishing”—a rising cyber threat that you need to know about.

Instead of casting out thousands of e-mails randomly hoping a few victims will bite, spear phishers target select groups of people with something in common—they work at the same company, bank at the same financial institution, attend the same college, order merchandise from the same website, etc. The e-mails are ostensibly sent from organizations or individuals the potential victims would normally get e-mails from, making them even more deceptive.

How spear phishing works. First, criminals need some inside information on their targets to convince them the e-mails are legitimate. They often obtain it by hacking into an organization’s computer network (which is what happened in the above case) or sometimes by combing through other websites, blogs, and social networking sites.

Then, they send e-mails that look like the real thing to targeted victims, offering all sorts of urgent and legitimate-sounding explanations as to why they need your personal data.

Finally, the victims are asked to click on a link inside the e-mail that takes them to a phony but realistic-looking website, where they are asked to provide passwords, account numbers, user IDs, access codes, PINs, etc.

Criminal gain, your loss. Once criminals have your personal data, they can access your bank account, use your credit cards, and create a whole new identity using your information.

How to avoid becoming a spear phishing victim. Law enforcement takes this kind of crime seriously, and we in the FBI work cyber investigations with our partners, including the U.S. Secret Service and investigative agencies within the Department of Defense. But what can you do to make sure you don’t end up a victim in one of our cases?

Keep in mind that most companies, banks, agencies, etc., don’t request personal information via e-mail. If in doubt, give them a call (but don’t use the phone number contained in the e-mail—that’s usually phony as well).

• Use a phishing filter…many of the latest web browsers have them built in or offer them as plug-ins.
• Never follow a link to a secure site from an e-mail—always enter the URL manually.
• Don’t be fooled (especially today) by the latest scams. Visit the Internet Crime Complaint Center (IC3) and “LooksTooGoodToBeTrue” websites for tips and information.

This is eight days earlier than in 2008, and a full two weeks earlier than in 2007, for two reasons: (1) the recession has reduced tax collections even faster than it has reduced income, and (2) the stimulus package includes large temporary tax cuts for 2009 and 2010. Nevertheless, Americans will pay more in taxes than they will spend on food, clothing and housing combined.

In the study, Tax Foundation Special Report No. 165, “America Celebrates Tax Freedom Day,” Tax Foundation staff economist Josh Barro traces the course of America’s tax burden since 1900, examines the composition of today’s tax burden by type of tax, and finally calculates a Tax Freedom Day for each state.

Tax Freedom Day by State

Residents of Alaska will bear the lowest average tax burden in 2009. Because of their modest incomes and extremely low state-and-local tax burden, we estimate Alaska’s Tax Freedom Day for 2009 to be March 23. Louisiana, Mississippi, South Dakota and West Virginia round out the five states that we project will experience Tax Freedom Day earliest in 2009.

The residents of Connecticut will celebrate last, as usual, working until the 120th day of the year, from January 1 to April 30, before earning enough to pay all their taxes. Because Connecticut’s income per capita is higher than in any other state, its residents pay extraordinarily high federal income taxes. Nearby states New Jersey and New York are second and third, respectively. California and Maryland round out the top five.

In collaboration with other government agencies and the Suicide Prevention Resource Center, which is administered by SAMHSA’s grantee the Education Development Center, Inc., the guide outlines the risks that unemployment and other forms of economic distress (foreclosure, severe financial losses, etc.) can pose to health.

Based on a review of the scientific literature published in the last 20 years, the guide notes that although these economic problems may affect individuals differently, for many people economic hardship contributes to increased risk for a variety of conditions including:

• Depression
• Anxiety
• Compulsive Behaviors (over-eating, excessive gambling, spending, etc.)
• Substance abuse

On a positive note, the guide also provides individuals and communities with practical steps that can be used to get through these tough periods and achieve restored health and productivity.  In particular the guide provides:

• Important information on identifying the warning signs of depression, suicidal thinking and other serious mental illnesses.
  
• Effective steps to help manage emotional distress, such as through exercise, strengthening connections with family and friends, and developing new job skills.
  
• Resources for getting help – such as the National Mental Health Information Center
  http://mentalhealth.samhsa.gov/databases/ for information on where to access help on a wide range of mental illnesses, and the National Suicide Prevention Lifeline http://www.suicidepreventionlifeline.org/ or 1-800-273-TALK (8255) for those in crisis.  The National Suicide Prevention Lifeline is operated by SAMHSA’s grantee Link2HealthSolutions, Inc, under a cooperative agreement.

“The guide is a quick and easy tool that people can use to better manage their emotional wellbeing,” said SAMHSA Acting Administrator Eric Broderick, D.D.S., M.P.H.  “By helping people remain resilient, we can help promote the overall recovery of our nation.”

The Department of Health and Human Services (SAMHSA is an agency with the Department of Health and Human Services), the Department of Housing and Urban Development, the Department of Labor, the Department of the Treasury and the U.S. General Services Administration all collaborated in this effort.

For further information on mental health or substance abuse issues please visit SAMHSA’s website at http://www.samhsa.gov.

To be eligible for modification in bankruptcy, a mortgage holder must contact the lender regarding modification through the President’s Homeowner Affordability and Stability Plan – and consider such modification – at least 30 days before a bankruptcy case begins. If a bankruptcy court reduces a mortgage’s principal and the value of the home later rises, the lender is entitled to receive a portion of the net proceeds from sale of the property. The bill waives the current requirement for budget and credit counseling when homes are in foreclosure, protects homeowners from certain fees incurred while a bankruptcy is pending, and permits bankruptcy courts to wave penalties on homeowners who pay their mortgages in full ahead of schedule. The legislation allows the Federal Housing Authority (FHA) to pay insurance claims on FHA-insured mortgages that are modified in bankruptcy. The FHA is also authorized to carry out its own mortgage modification program.

The Helping Families Save Their Homes Act includes modifications to the Hope for Homeowners Act designed to increase participation in the program that are paid for with TARP funds. A separate provision provides safe harbor from legal liability to mortgage servicers that modify loans.

The Senate version (S. 61) is pending.

To see how each member of the House of Representative voted, click here to view a summary provided by themiddleclass.org.

While there’s no clear way to know, in just four questions, The Financial Industry Regulatory Authority (FINRA) Scam Meter will help you tell if an investment you are thinking about might be a scam.

To access the ScamMeter, click here.

Many states have laws that let consumers “freeze” their credit – in other words, letting a consumer restrict access to his or her credit report. If you place a credit freeze, potential creditors and other third parties will not be able to get access to your credit report unless you temporarily lift the freeze.  This means that it’s unlikely that an identity thief would be able to open a new account in your name.  Placing a credit freeze does not affect your credit score – nor does it keep you from getting your free annual credit report, or from buying your credit report or score

Credit freeze laws vary from state to state.  In some states, anyone can freeze their credit file, while in other states, only identity theft victims can.  The cost of placing, temporarily lifting, and removing a credit freeze also varies.  Many states make credit freezes free for identity theft victims, while other consumers pay a fee – typically $10.  It’s also important to know that these costs are for each of the credit reporting agencies.  If you want to freeze your credit, it would mean placing the freeze with each of three credit reporting agencies, and paying the fee to each one.

You can find more information about credit freeze laws specific to your state by clicking here, including information on how to place one.

To watch a 10-minute educational video at SafeHarborTV.com that provides an overview of identity theft and outlines the steps consumers can take, click here. Once there, just scroll to the bottom of the page and click on the video provided by the FTC.

You can apply for retirement benefits online at www.socialsecurity.gov or you can call the toll-free number, 1-800-772-1213. Or you can make an appointment to visit any Social Security office to apply in person.

Depending on your circumstances, you will need some or all of the documents listed below. But do not delay applying for benefits because you do not have all the information.

Information Needed:

• Your Social Security number;
• Your birth certificate;
• Your W-2 forms or self-employment tax return for last year;
• Your military ­discharge papers if you had military service;
• Your spouse’s birth certificate and Social Security number if he or she is applying for benefits;
• Children’s birth certificates and Social Security numbers, if you are applying for children’s     benefits;
• Proof of U.S. citizenship or lawful alien status if you (or a spouse or child applying for benefits) were not born in the United States; and
• The name of your bank and your account number so your benefits can be deposited directly into your account.

Right to Appeal

If you disagree with a decision made on your claim, you can appeal it. For an explanation of the steps you can take, ask for The Appeals Process (Publication No. 05-10041).

You have the right to be represented by an attorney or other qualified person of your choice. For more information, ask for Your Right To Representation (Publication No. 05-10075).

Full Retirement Age

The “full retirement age” is 65 for people who were born before 1938. But because of longer life expectancies, the Social Security law was changed to gradually increase the full retirement age until it reaches age 67. This change affects people born in 1938 and later. Check the following table to find your full retirement age.

“Workers are shouldering more work due to layoffs, and finding it difficult not to be distracted by future uncertainties,” said Dr. Richard A. Chaifetz, Chairman and CEO of ComPsych. “We have seen a record number of calls for on-site counselors due to layoffs as well as requests for ongoing stress management counseling.”

Employees were asked: What is your work atmosphere like right now, in light of the economy?

• 16 percent said “panicky”
• 39 percent said “somewhat worried”
• 23 percent said “business as usual”
• 14 percent said “cautiously optimistic”
• 8 percent said “very hopeful”

The Social Security Administration is hoping that most of the boomers will apply online, which takes less than 15 minutes. However, we all know that there are millions and millions who won’t or can’t take advantage of that technology. “We just don’t have the infrastructure to handle that workload in the traditional fashion”, said Social Security Commissioner Michael J. Astrue.

Already facing a long-term financial crisis as fewer workers finance their own retirements, the administration paid out $614 billion to 50 million retirees and their dependents, disabled workers and survivors in 2008.

According to the agency, an online application process has been available since 2000, but in the past applicants still had to mail or deliver paper documents with their signatures and copies of birth certificates or W-2 forms. The process should be paperless for the majority of cases.

To use the new program, go to socialsecurity.gov and click on “Applying Online for Retirement Benefits.”

Right now, on the Web and in e-mail, scammers are telling consumers they can help them qualify for a payment from President Obama’s economic stimulus package.  All they have to do is provide a little information or a small payment.

E-mail messages may ask for bank account information so that the operators can deposit consumers’ share of the stimulus directly into their bank account.  Instead, the scammers drain consumers’ accounts of money and disappear.  Or bogus e-mail may appear to be from government agencies and ask for information to “verify” that you qualify for a payment.  The scammers use that information to commit identity theft.  Some e-mail scams don’t ask for information, but provide links to find out how to qualify for funds.  By clicking on the links, consumers have downloaded malicious software or spyware that can be used to make them a victim of identity theft.

“Web sites may advertise that they can help you get money from the stimulus fund.  Many use deceptive names or images of  President Obama and Vice President Biden to suggest they are legitimate.  They’re not,” says Eileen Harrington, Acting Director of the FTC’s Bureau of Consumer Protection.  “Don’t fall for it.  If you do, you’ll get scammed.”

Some sites suggest that for a small sum of money – as little as $1.99 in some cases – consumers can get a list of economic stimulus grants they can apply for.  But two things can happen: the number of the credit card the consumer uses to pay the fee can fall into the hands of scam artists, or the $1.99 can be the down payment on a “negative option” agreement that may cost hundreds or thousands of dollars if the consumer does not cancel.

“Consumers who may already have fallen for these scams should carefully check their credit card bills for unauthorized charges and report the scam to the FTC,” Harrington said.

“Our office has gotten phone calls from people who recently lost loved ones, saying they’re calling us back because we supposedly called them to request personal information such as a deceased’s birth date, address and Social Security number,” says Corey Ealy, director of Vital Records for the Indiana State Department of Health. “But we never call citizens to collect information for death certificates. We are receivers of this information, not solicitors of it.”

This is true of every other state in the country, says Celine Clark of the National Funeral Directors Association, which represents some 20,000 members, who typically collect information for death certificates and file it with the appropriate agencies.

“It’s the funeral director who gets the doctor to complete the medical portion of the death certificate,” Clark says. “The funeral director gets the personal information of the deceased—name, address and Social Security number—from the family and files the death certificate at the county courthouse, and then gets it filed with the state health department.”

In the Indiana cases, the scammers apparently read obituaries and then called the grieving families.

Here’s how to protect yourself:

• Don’t include details such as the deceased’s birth date (use only the year) or addresses, including those of family members in obituaries.
• Never give a caller, or e-mailer, any personal information about the deceased.
• Mail copies of the death certificate to all three credit-reporting bureaus—Equifax, Experian and TransUnion
• Have the credit issuers cancel the accounts right after the person dies.
• Check the deceased’s credit history at https://www.annualcreditreport.com four to six weeks later to ensure no fraudulent accounts have been opened.

Posted in Fraud, Identity Theft Tagged: Fraud, Identity Theft, Scams ]]> http://safeharbortv.wordpress.com/2009/03/22/grief-on-top-of-grief/feed/ 0 vickysamuel http://safeharbortv.wordpress.com/2009/03/21/move-over-madoff-you-may-have-company-coming-over-2/ http://safeharbortv.wordpress.com/2009/03/21/move-over-madoff-you-may-have-company-coming-over-2/#comments Sat, 21 Mar 2009 13:54:45 +0000 Vicky http://safeharbortv.wordpress.com/?p=616 ]]> Bernard Madoff’s longtime accountant was arrested on fraud charges Wednesday as authorities blamed him for failing to make the most basic auditing checks that would have exposed an epic fraud that cost investors billions of dollars.

In a complaint unsealed Wednesday, federal prosecutors accused David G. Friehling, 49, of New City, N.Y., of securities fraud and other offenses for failing to conduct audits and deceiving investors as he provided audit services to Madoff’s investment services business. A state-licensed certified public accountant, Friehling and his firm were retained by Madoff from 1991 to 2008.

David Friehling is the first person to be arrested in the scandal since Madoff turned himself in, and his prosecution signals that the government is intent on bringing Madoff’s associates to justice as they try to figure out who helped him carry out the fraud.

Prosecutors say the 49-year-old Friehling essentially rubber-stamped Madoff’s books for 17 years, serving as Madoff’s auditor from 1991 through 2008 while operating from a discreet building in suburban New York.

Authorities said that if Friehling had done his job, Madoff’s financial statements would have shown his company owed tens of billions of dollars to his customers and was insolvent.

“Mr. Friehling’s deception helped foster the illusion that Mr. Madoff legitimately invested his clients’ money,” said acting U.S. Attorney Lev L. Dassin.

Source: Yahoo News