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Consumer Archive

Consumer

Astor case draws attention to elder financial abuse

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NEW YORK (3/1/10)--The trial of deceased philanthropist Brooke Astor’s son continues to raise public awareness about elder financial abuse, as the defendants’ lawyers make a motion to throw out the earlier conviction. Attorneys for Astor’s son, Anthony D. Marshall, and her estate planner, Francis X. Morrissey Jr., believe their clients’ rights were violated when Justice A. Kirke Bartley Jr. did not interview jurors after he received a note, while the jury deliberated, that a juror felt threatened (nytimes.com Feb. 22). Marshall and Morrissey were convicted in October 2009 of charges that involved larceny and conspiracy to defraud Astor, who suffered from Alzheimer’s disease during her final years (cnn.com Feb. 22). The motion draws new attention to the trial and returns the issue of elder financial abuse to the public eye. The number of financial elder abuse victims each year is unknown: Victims are too embarrassed to disclose the crimes or are simply unaware of them, according to the National Committee for the Prevention of Elder Abuse website. It defines financial elder abuse as “the illegal or improper use of an older person’s funds, property, or resources.” What can you do to be proactive against financial abuse of the elderly? Here are a few tips:
* Check in. Maintain positive relationships with elderly friends or relatives by contacting them regularly. This makes it easier to detect when something is out of the ordinary. * Pay attention. The mental state of elderly friends or relatives may make them vulnerable to fraud; signs of neglect often accompany financial abuse. So pay attention to details like their living situation, mental clarity and how well they understand conversation. * Gain insight. A visit to the doctor will give you insight as to whether financial abuse is occurring or whether there are medical reasons for an elder’s behavior. This can also help you determine how susceptible your elderly friend or relative may be to financial abuse.
For more information, read “Senior abuse part of financial reform package” in Home & Family Finance Resource Center.

HandFF Radio spotlights the CU difference

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WASHINGTON (2/26/10)--Sunday's H&FF Radio program covers what consumers and members need to know about credit unions, how the American Opportunity Credit can cut college costs, and what happens to the personal information online companies collect. This broadcast is a special event taped live at the Credit Union National Association (CUNA) Governmental Affairs Conference in Washington, D.C., which ended Thursday. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* "Credit Unions and You--What Consumers Should Know." Debbie Matz, chairman, National Credit Union Administration, Alexandria, Va., presents information about the state of credit unions, what they do to help consumers, and the safety of members’ money. * "Make the Most of Tax Breaks for College Expenses." Kim Lankford, contributing editor of Kiplinger’s Personal Finance Magazine and columnist for Kiplinger.com and the Ask Kim column, Washington, D.C., reviews the American Opportunity Credit and how it can benefit those paying for school. * "Online Threats to Consumer Privacy." Amina Fazlullah, media reform advocate and staff attorney with U.S. Public Interest Research Group, Washington, D.C., addresses what companies do with the personal information they collect, and why consumers should be concerned.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. For more information, read “Getting Student Loans During the Credit Crunch,” and “Step Carefully: Covering Digital Footprint is Key to Web Privacy” in the Home & Family Finance Resource Center.

Converting your IRA Avoid costly mistakes

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NEW YORK (2/24/10)--This could be the year to convert your traditional individual retirement accounts (IRA) into a Roth IRA. But don’t make the expensive mistake of converting without understanding how it will affect your taxes (MSN Money Feb. 11). These common uninformed errors can lead to higher tax bills than you anticipate:
* You think that evenly split conversion income means evenly split tax. It’s true that if you convert in 2010, you won't have to include conversion income on your 2010 tax return. Instead, you can include half the income from the conversion on your 2011 return and half on your 2012 return. But don’t think that because you evenly split the conversion income, the tax will be evenly split as well. Your total tax bill depends on a number of factors, many of them outside your control. * You miss the 60-day rollover deadline. The best way to move the money is by trustee-to-trustee transfer, also called direct rollover. But if your company plan or IRA custodian doesn’t offer this kind of transfer, you’ll probably get a check from your firm, written out to you as the account owner. You have 60 days to place these funds into another qualifying retirement account, including a Roth IRA. If you miss the deadline, the funds become taxable and no longer are eligible for rollover. The fix can be costly and time-consuming, and the Internal Revenue Service (IRS) doesn’t have to accept it. * You don’t take your Medicare or Social Security benefits into consideration. If you’re receiving these benefits and complete a Roth IRA conversion, you might have to pay higher Medicare premiums or have your Social Security payments taxed. Medicare Part B premiums are based on income; if you convert a large amount of money, it could move you into a higher premium bracket. Your Social Security benefits are generally excluded from gross income and not taxed, but depending on how much other income you have, 50% to 85% of your Social Security income can be included in your gross income. That means a higher tax bill for that year.
More traps await the uninformed:
* Income from conversion could affect financial aid for your children; * Some funds are ineligible for conversion; and * Partial conversions involving after-tax money can cost more than you anticipate (same with not taking your required minimum distribution before converting).
These lists are not comprehensive. Address every tax and planning detail with a professional before you make a conversion to save yourself a financial let-down.

America Saves Week helps consumers build wealth

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WASHINGTON (2/22/10)--Americans continue to save in the current economy. The personal savings rate rose to 4.8% at the end of 2009, according to a recent report from the Bureau of Economic Analysis (bea.gov Feb. 1). And yet, with an unemployment rate of 9.7% taking its toll on wallets across the country (online.wsj.com Feb. 16), many consumers are finding it difficult to save. Enter America Saves Week. The seven-day, nationwide program, which began Sunday, helps consumers take action to increase personal savings. The event was established in 2001 by the Consumer Federation of America, Washington, D.C., in response to the nation’s then-negative personal savings rate. No matter your financial situation, America Saves Week is here to help you make the dream of saving a reality. Visit americasavesweek.org and:
* Take action. Sign up to become an American Saver. You’ll create a savings plan, receive advice, and be able to take advantage of educational resources and guides focused on enhancing your financial wellness. * Assess your saving situation. Take measure of your savings plan and use the free resources provided to maximize your ability to save for any circumstance. * Reveal your savings knowledge. Do you know what your retirement readiness rating is? Find the answer to this and other questions by taking the Test Your Knowledge quiz online. * Help your children save. Children can get into the habit of saving early, and often, by participating in the National Savings Challenge at your credit union during the month of April. It’s held in conjunction with National Credit Union Youth Week--April 18 through April 24--and teaches youth the joys and benefits of saving.

HandFF Radio Savings focus of America Saves Week

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WASHINGTON (2/19/10)--To celebrate the first day of America Saves Week, Sunday's H&FF Radio program touts the benefits of saving with a look at the America Saves program, saving tips for upward mobility, emergency savings funds, and Military Saves Week. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* "America Saves Week." Charles Lowery, acting director, Military Saves campaign sponsored by the Consumer Federation of America, Washington, D.C., describes the America Saves program and the importance of year-long saving to individuals and the economy. * "A Penny Saved Is Mobility Earned: Becoming an Early and Habitual Saver Leads to Upward Socio-Economic Mobility." Dr. Reid Cramer, director, Asset Building Program, New America Foundation, Washington, D.C., demonstrates the relationship between savings and movement up the income ladder. * "Military Saves." David Julian, a retired Naval commander representing the defense department, Washington, D.C., shares how the military became involved with America Saves and what military personnel and family members can do to start building that nest egg. * "Build Your Emergency Savings Fund." Robert Pagliarini, president, Pacifica Wealth Inc., Los Angeles, presents a simple--and effective---technique to evaluate your spending and help build savings to cover life’s little emergencies, such as a leaking hot water heater, a flat tire, or junior’s broken tooth.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. For more information, read “Stop Denying, Start Saving to Cope with Infrequent Expenses,” and view the “Investing: Dollar-Cost Averaging” video in the Home & Family Finance Resource Center.

Is this a good time to buy a new car

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MADISON, Wis. (2/17/10)--Car manufacturers have cut production, but dealers are hungry for sales, so it’s still possible to buy a new car at a good price. Here are some things to consider, according to the Credit Union National Association's Center for Personal Finance:
* Be skeptical of low-rate financing. Carmakers’ offers of 0% to 2% financing are often limited to the least popular models. In addition, you’ll typically need a premium credit score--720 or better--to qualify. * Take the rebate. Automakers are likely to continue to offer cash back as an alternative to low-rate financing. In many cases, the rebate is the better deal. That’s because the rebate reduces the amount you have to borrow. A smaller loan, even at a higher interest rate, can cost less overall. For example, with a four-year loan, the total cost of borrowing $18,000 at 6.5% is less than the total cost of borrowing $20,000 at 2%. If you accept a rebate, just be sure you negotiate the lowest possible purchase price first. Run the numbers on the “When a Rebate is Better Than a Low-Rate Auto Loan” calculator in Home & Family Finance Resource Center to see which option makes more sense. * Compare lease vs. loan carefully. Monthly lease payments can be lower than loan payments at first glance, but make sure you compare apples to apples. At the end of the lease, you’ll need to enter another lease or go carless. But at the end of a loan, your payments stop and you can continue to drive the car. For example, to drive a $22,000 car for six years, compare the total cost of two three-year 6% leases ($27,940) vs. one three-year 6% loan ($24,094). * Talk to your credit union loan officer first. Getting preapproved for a loan puts you in a better bargaining position at the dealership because you know how much money you have to spend. In addition, a credit union loan rate is likely to be better than a bank loan rate--on average, 6.4% vs. 6.8% respectively, according to Kiplinger’s Personal Finance (March ).

Take care with text donations

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NEW YORK (2/15/10)--Haiti’s Jan. 12 earthquake triggered a seismic response in cell phone giving to support aid relief thanks to tweets, social networking sites such as Facebook, and TV specials. Within a week more than $25 million was donated to causes via text messages, and the money is still coming in. The Mobile Giving Foundation, a nonprofit that facilitates texted donations, reported processing 10,000 text messages per second at one point (Smartmoney.com Jan. 22). Within days, text-based fundraising became an established--and successful--form of charitable giving. You simply send a single word message to a designated number and your donation is billed to your monthly phone bill. But no matter how quick and easy it is to give by phone, donors still need to do their due diligence to ensure their donations are going to trustworthy charities. The Better Business Bureau’s Wise Giving Alliance offers these guidelines on giving via text:
* Check the number with the source before you send. For example, visit the American Red Cross website to confirm the “text to” number and word to enter to avoid being scammed by a fraudulent site. * Understand the delay. Text donations can take up to 90 days to reach the designated charity. If you want your donation to be received immediately, go directly to the charity website, call, or send a check. * Read the fine print. When you give by text message, you could be signing yourself up to receive future e-mails from the charity. A reputable charity posts its text campaign details on its website so you know what you’re agreeing to and how to opt out. * Research the charity. Is it best equipped to help and use the money for its intended purpose?
Legitimate charities send a text immediately after your donation that verifies you really want to give a specific amount. When you confirm, the amount appears on your cell phone bill, which can serve as your receipt for tax purposes if the charity name and donation are listed. Websites processing donations are working toward better receipt recordkeeping for donors. In the future, expect to be able to use a PIN code to obtain a separate receipt. For more information, read “Get the most bang for your charitable buck this season” in the Home & Family Finance Resource Center.

HandFF Radio reviews tax prep jobs couples and money

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WASHINGTON (2/12/10)--Sunday's H&FF Radio program looks at do-it-yourself tax prep software, industries that are hiring, and--apropos its Valentine’s Day airing--how to talk money with your honey. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* "Save Money With Do-It-Yourself Tax Prep Online Software & Programs," with Andrea Woroch, public relations and communications specialist, Surfmyads.com, Santa Barbara, Calif., Woroch covers software and programs to help consumers prepare their 2009 taxes, and tells where to get discount coupons for them. * "Where the Jobs Are Now,” with Joe Watson, founder, Strategic Hire and Without Excuses, Reston, Va., who describes industries where job hunters can find jobs. * "Get Financially Naked: How to Talk Money With Your Honey,” with Manisha Thakor, author, contributor to National Public Radio's "51%--The Women's Perspective," monthly columnist for military.com, and personal finance blogger on the Huffington Post, Houston, Tex. Thakor describes how to bare all when it’s time for an honest discussion about finance, especially when you and your partner don’t treat money the same way. * "Couples & Money: One of the Toughest Disagreements to Negotiate,” with Sally Connolly, family therapist and University of Louisville instructor in counseling, Louisville, Ky. Connolly provides tips to help couples move from being budget opponents to players on the same team.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. For more information, read “Couples and Money: Reconciling a Spender-Saver Marriage,” and view the “Getting Tax Records Organized” video in the Home & Family Finance Resource Center.

Five tips for the new credit card era

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NORTH PALM BEACH, Fla. (2/11/10)--While the Credit Card Accountability, Responsibility and Disclosure (CARD) Act’s next phase of consumer protections goes into effect Feb. 22 (and the final phase on Aug. 22), loopholes are surfacing. Here are a few ways to stay on top of your credit cards (Bankrate.com Feb. 2):
* Beware the advance notification exceptions. On Aug. 20, 2009, a provision that requires 45 days' advance notification of "significant" terms changes took effect. It applies to fees and finance charges, as well as some rate increases. There are some exceptions. For instance, the law doesn't require 45 days' advance notification for credit limit decreases, or for rate hikes triggered by a 60-day late payment or expiration of a promotional rate. Read notices from your issuers, and verify the rate and credit limit each month when you get your statement. * Don't fall into retroactive rate-hike loopholes. Come Feb. 22, existing balances will be protected from a rate increase in most circumstances. If you miss the due date by two months or more, however, the annual percentage rate applied to that debt can skyrocket. And you can't control the index if you have a variable-rate card, but you can make sure your payment arrives on time. Consider setting up automatic payments. * Weigh the pros and cons of opting out. Along with any required advance notice of a change in terms, issuers must include an opt-out disclosure. Opting out closes the account, but issuers must provide a repayment method "no less beneficial" than either a payment plan that spans at least five years, or a new minimum payment percentage that is no more than twice the previous percentage. * Get permission to go over limit. Under the CARD Act, a purchase that exceeds the credit limit can't trigger an over limit fee unless you have opted in to allow over limit transactions. If you need to go over limit for whatever reason, you can switch on your over limit privileges at any time by making the request in writing, orally, or over the Internet. * Watch for annual fees. Even if your card doesn’t carry an annual fee now, keep in mind that issuers only have to provide 45 days' advance notice before implementing one.
Overall, the best practice is to watch your monthly statements closely and carefully read any communications from your issuer. If you don’t like the new terms on your current card, shop for a new one; credit union cards average one and a quarter percentage point better rates than bank cards. For more ideas, watch the “Build Your Best Credit Score” video in Home & Family Finance Resource Center. Also a survey commissioned by the Consumer Federation of America and the Credit Union National Association revealed that 61% of consumers are aware there are new credit card protections, but most (65%) don't know they take effect later this month and don't understand the specific protections Congress approved last year. Use the CFA/CUNA study resource link for more tips on using credit cards prudently.

Startups strong despite economy

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McLEAN, Va. (2/8/10)--The desire to own a small business hasn’t dwindled, even in today’s economy. About 600,000 businesses are formed every year; roughly half will fail within their first five years. But that reality hasn’t deterred budding entrepreneurs from following their dreams. With can-do attitudes, hordes of potential business owners want to work for themselves (USA Today Jan. 31). Whether you’re pursuing starting a business because of a layoff, you’ve retired from your “normal” job, or have decided to turn your passion into a career, these strategies can help make your small business a success, according to Entrepreneur.com, an online resource for small-business owners:
* Choose your industry wisely. Consider barriers beyond start-up costs such as regulatory hurdles, the need to hire staff or a sales force, and navigating vendor relationships. * Focus on problem, not solution. Many people fall so in love with their product that they become blind to hurdles and criticism. Successful business owners are flexible about finding a solution to a need. * Know when to get help. Don’t try to do something yourself to save money if it’s something a professional can do better, such as drafting legal documents. * Use free or low-cost resources. Take advantage of literature and other resources available on the Internet and in your community about running a small business. Find networking groups that will offer honest feedback about your product or service. Universities and community colleges can offer free or low-cost course work, books, and seminars. * Build credibility. Learn the industry’s nuances and develop relationships with vendors, retailers, and contractors before launching your business. Gather information from industry reports to learn industry best practices. * Apply your strengths. Use knowledge from other jobs and situations when developing your business. You can apply the same business skills in multiple industries.
To learn more, read the “Make the Move to Small-Business Ownership” Turning Point and watch the “Financing Your Small Business” video in Home & Family Finance Resource Center.

HandFF Radio offers info to boost money IQ GI benefits

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WASHINGTON (2/5/10)--Sunday's H&FF Radio program looks at boosting your financial IQ, finding quick money solutions, and transferring GI benefits. Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites. Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* "The Complete Idiot’s Guide to Boosting Your Financial IQ," with Ken Clark, certified financial planner, Little Rock, Ark. Clark describes ways to boost your wealth by becoming smarter about money matters. * "30-Minute Money Solutions," with Christine Benz, director of personal finance, Morningstar Inc., Chicago, offers ways to solve financial challenges in record time. * "Transferring GI Benefits," with Kim Lankford, contributing editor, Kiplinger’s Personal Finance Magazine and columnist, Kiplinger.com and Ask Kim, Washington, D.C. Lankford describes the importance of understanding GI benefits.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. For more information, read “Tough Times Series: Services, Sites Help Veterans Navigate Benefits Maze,” and view the “Use Direct Deposit and Automatic Transfers to Simplify Finances” video in the Home & Family Finance Resource Center.

File or forfeit earned income credit

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MADISON, Wis. (2/3/10)--The Earned Income Tax Credit (EITC) could put as much as $5,657 in the hands of eligible taxpayers, more if they live in a state with a similar state credit. But the Internal Revenue Service (IRS) reminds that taxpayers must file and claim the credit to receive it--even if they owe no tax. The IRS estimates more taxpayers may qualify in 2009 and not realize it, due to changes in their incomes during the recession. In addition, working families with three or more children may qualify to get more money due to recent tax law changes. Single or married, with or without children, you may qualify if you:
* Worked part or all of 2009; * File a 2009 federal tax return; and * Make less than $48,000.
You must have income earned from a job, including wages, salaries, and tips; union strike benefits; long-term disability benefits before minimum retirement age; and net earnings from self employment. Some income doesn’t count toward the credit: interest and dividends, pensions, Social Security payments, unemployment benefits, and alimony and child support. The IRS cautions against these common EITC filing errors:
* Misreporting income; * Filing with Social Security number or last name discrepancies; * Filing as single or as head of household when you are married; and * Claiming a child who doesn’t meet all of the qualifying tests.
These and other errors can delay your EITC portion of a refund or even cause your claim to be denied. For more tax information, view the video “Getting Tax Records Organized” in Home & Family Finance Resource Center.