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Flood victims Avoid unscrupulous contractors

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WASHINGTON (10/1/08)--Recent flood victims setting out to repair damaged property need to be on guard against a second threat: unscrupulous, unlicensed, and unqualified contractors. The Federal Emergency Management Agency (FEMA) issued a Sept. 19 press release advising consumers to steer clear of any contractor claiming to be authorized by FEMA to do repair work. FEMA does not recommend or endorse any contractors, so these false claims should serve as a red flag. The Better Business Bureau (BBB), Arlington, Va., recommends flood victims not make any repairs until it is known how much aid is available from three sources: insurance proceeds, government assistance, and private funds. The amount of aid available to you from these sources may determine the extent of repairs. FEMA and BBB offer the following tips:
* Secure at least two--preferably three--written estimates. Make sure the contractors are bidding on the same package of repairs, including materials they plan to use, when work will begin and end, and payment schedule. * Do your homework. Call references and ask if they were satisfied with the work. Visit the BBB website at bbb.org for information about local contractors. * Be suspicious of scare tactics. Don’t fall for door-to-door workers who talk about allegedly unsafe conditions on your property and who insist you need work done immediately. * Ask for proof of insurance. If the contractor doesn’t carry general liability insurance and workers’ compensation, you may be liable for accidents. * Make sure the contract is specific. General comments such as “repair siding” leaves you open to fraud, so insist on detailed descriptions of the work to be performed. * Don’t sign until the work is completed. Reputable contractors won’t pressure you to sign documents until you’re satisfied. A down payment of 30% is standard for the industry, and all payments should be by check, not cash.
If you run afoul of a shady contractor, help your neighbors and other potential victims by filing a complaint with your state attorney general and the local BBB.

Money market share accounts at CUs are insured

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MADISON, Wis. (9/29/08)--In the wake of recent financial bailouts and questions over the safety of financial instruments, there’s been considerable confusion over the difference between money market share accounts at the credit union, and money market mutual funds. The most important difference: One is insured and one isn’t. Money that members place in money market share accounts--which are substantially similar to banks’ money market deposit accounts--is backed by the U.S. government through the National Credit Union Share Insurance Fund (NCUSIF). It insures funds up to at least $100,000 for a standard account, or $250,000 if the money is specifically in a retirement account. A similar level of insurance is available through the Federal Deposit Insurance Corporation (FDIC) for bank deposits. In contrast, the money in a money market mutual fund does not carry insurance. The recent Treasury Department proposal, however, would temporarily guarantee money market mutual funds for a year to boost investor confidence. “The Treasury Department’s proposal is currently written to guarantee only those funds deposited on or before Sept. 19,” warns Steve Rick, senior economist, Credit Union National Association, Madison, Wis. “Given recent volatility in the market, it makes sense to place any additional savings in an insured money market share account at depository institutions such as a credit union because of the share insurance up to at least $100,000,” Rick said. Other important points to remember about these financial instruments include:
* Money market share accounts offer higher yields than traditional savings accounts, but usually have higher minimum balance requirements than share savings accounts, and money market share accounts typically allow limited transactions. * A money market share account is just that--a money market share account at a credit union or a money market deposit account at a bank, whereas a money market mutual fund is a collection of short-term debt investments held by that mutual fund. * Despite the associated risks of uninsured money market mutual funds, they’re important savings and investment vehicles for many consumers.
For more information, read “Credit Unions: Safe and Sound” in Home & Family Resource Center.

HandFF Radio guest Where is the economy headed

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WASHINGTON (9/26/08)--Sunday’s H&FF Radio guests offer insight on several timely topics, including shoring up your finances, proper disposal of cell phones, why you need a letter of instruction, and the state of our economy--including where it may be headed. Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America 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:
* “411 On Disposing Cell Phones,” with Philip P. Tumminio, staff attorney, Federal Trade Commission division of marketing practices, Washington, D.C.; * “Letter of Instruction: Don’t Leave Life Without It,” with Mark Cussen, contributor, Investopedia.com, Kansas City, Mo.; * “Five Ways to Bullet-Proof Your Financial Life,” with Jeff Boulton, CEO, Rise Above Debt, Phoenix; * “Establish a Solid Financial Future After the Military,” with Ethan Ewing, president, Bills.com, San Mateo, Calif.; and * “Our Economy--Where We Are and Where We’re Headed,” with Steven Rick, senior economist, CUNA, Madison, Wis.
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; Visa; and Western Corporate FCU and its member credit unions. For more information, read “Tough Times Series: Services, Sites Help Veterans Navigate Benefits Maze” and listen to “Old Electronics Can Compromise Your Identity” in Home & Family Finance Resource Center.

Prepaid debit The push on college campuses

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SAN FRANCISCO (9/24/08)--Because they have high levels of credit card debt, college students are being marketed a new kind of card: prepaid debit. Although prepaid debit cards have advantages for some, they’re a minefield for others (MarketWatch.com Sept. 12). The benefits of prepaid debit cards for college students--or anyone who lacks a good credit history--are clear: There’s a limit on spending up to the amount of money you’ve loaded onto the card. Because of the set limit, it’s impossible to incur overdraft charges. You can add value to the card via direct deposit, cashing a check, or with cash. And there’s no credit check or employment verification (MSNMoney.com March 25). However, prepaid debit cards also have drawbacks. Expect to pay fees for some or all of the following:
* Card activation; * ATM transactions; * Each PIN-based debit card purchase; * Balance inquiries; * Online bill payments; * Declined transactions; * Monthly maintenance; and/or * Lack of transaction activity.
There’s more. Prepaid debit cards carry fewer consumer protections than credit cards when they’re lost or stolen. And the cards don’t help you establish a good credit history because they’re not considered a line of credit. If you’re considering a prepaid debit card, ask the issuer about policies and fees. Shop around for a card with few restrictions and low fees. One card offered by Iowa-based MetaBank charges a $4.95 monthly inactive-account fee if you don’t use it for more than 90 days, and it doesn’t let you use cash or checks to upload more money to the card. Like any purchase, compare before you buy. For more information, read “Tough Times Series: Credit Savvy Is Key to Avoiding Costly Missteps” in Home & Family Finance Resource Center.

Steer clear of hurricane charity scams

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WASHINGTON (9/22/08)--Recent hurricanes spawned a new crop of crooks who created bogus fund-raising operations, according to the Federal Trade Commission. Know how to distinguish bad guys from legitimate charities as you dig deep to help those affected by recent disasters. At first, these bogus charities look legitimate and even may contain similar names to organizations you’re familiar with. Some fraudsters show up at your door, set up a table at the mall, send you an e-mail message, or call you at home. The Federal Trade Commission and Scambusters.org offer advice to make sure your donation dollars benefit the victims rather than line the pockets of scam artists:
* Put up your guard before you pull out your wallet. Crooks time their appeal to coincide with hurricanes and other natural disasters. Don’t be swindled by a look-alike scam. A safe bet--if you want to give to a legitimate charity--is to stick with a familiar organization like the American Red Cross. * Check it out. If you’re not sure whether an organization is legitimate, take time to investigate. The Better Business Bureau Wise Giving Alliance rates more than 600 different charities. Visit give.org or call 703-276-0100. * Ask about administrative costs. The Better Business Bureau suggests giving to charities that allocate at least 65% of your donation to help victims. If administrative costs are higher than 35%, you may wish to donate elsewhere. And if the organization claims to allocate 100% of your donation to help victims, this is a red flag. All organizations have some fund-raising and administrative costs. * Be cautious when giving online. Phishers--who want to trick you into handing over personal and account information online--can create organizations overnight that sound legitimate. Do your research, particularly before providing payment information. * Write a check. Cash is easily lost or stolen, and you should never give credit card or account information unless you’re sure the organization is legitimate. A check provides you with a record of your donation, but make the check out to the beneficiary, not the solicitor. * Get a receipt. Make sure it states that your contribution is tax-deductible.
For more information, watch the video, “Phishing: Don’t Take the Bait,” in Home & Family Finance Resource Center.

A home inspection now could save you money

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WASHINGTON (9/19/08)--A home inspection isn’t just for home buyers. Even if you’ve owned your home for several years, having your house inspected may help you set future repair priorities and plan upgrades--and save money over the long run, according to three of the guests on Sunday’s Home & Family Finance radio show. Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America 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:

* “Going Buggy? Hire a Pest Control Firm,” with Greg Baumann, senior scientist and technical director, National Pest Management Association, Fairfax, Va.; * “Get Your Home Inspected,” with Nick Gromicko, founder and director of public relations, International Association of Certified Home Inspectors, Boulder, Colo.; * “How to Hire a Home Improvement Contractor,” with Renee Rewiski, president, National Association of the Remodeling Industry, Des Plaines, Ill.; * “Declutter and Organize Your Home,” with Marcia Weuve, owner, Impact Solutionz: The Organizing Specialists, Austin, Texas; and * “How to Zap Your Home Electricity Expense: Listener’s Best Money Management Tip,” with Susan Tiffany, director of personal finance information for adults, CUNA, Madison, Wis.

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; Visa; and Western Corporate FCU and its member credit unions. For more information, read “Find a Reliable Pest Contractor” in Home & Family Finance Resource Center.

Half of workers on paycheck-to-paycheck treadmill

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CHICAGO (9/17/08)--Nearly half of workers (47%) say they’re living paycheck to paycheck just to make ends meet, up from 43% last year, according to a recent survey (CareerBuilder.com Sept. 3). The savings situation doesn’t look any better. The Harris Interactive survey, conducted on behalf of CareerBuilder.com, the nation’s largest online job site, also found that one out of four workers isn’t putting any money into savings each month, and one out of three workers doesn’t participate in a 401(k), Individual Retirement Account (IRA), or other retirement plan. Make the most of your hard-earned paycheck:
* Live within your means. To do that, develop a spending plan (budget) and track where your money goes. If you’re spending more than you make, adjust your spending plan by cutting back or cutting out spending leaks. * Save your raise. If you get a 3% cost-of-living raise, allocate the extra income to savings. Then when you get your next raise, increase your disposable income by the amount of your last raise. * Save that extra paycheck. A few times throughout the year you may get an extra paycheck during the month. Allocate it to savings or to your emergency fund for a little cushion when times are tough. * Don’t miss out on employer benefits. Take full advantage of pre-tax spending programs offered by your employer, and make sure you’re getting at least the employer match on your 401(k). Sign up for flexible spending accounts, direct deposit, and retirement accounts. * Change your tax withholding. Don’t give Uncle Sam an interest-free loan, especially if your budget is stretched too thin. Adjust your withholding so you have more cash in your paycheck now. Strive to match your tax payments with your actual tax liability (CNNMoney.com April 3). To use the Internal Revenue Service (IRS) withholding calculator, visit IRS.gov and type “withholding calculator” in the search box. * Work overtime. If the opportunity exists, put in some extra hours or work an extra shift once or twice a month to pad your paycheck.
For more information, read “Tough Times Series: Payday Borrowing Pokes a Hole in Your Pocket” in Home & Family Resource Center.

What Fannie Freddie bailout means for consumers

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NEW YORK (9/15/08)--If you’re about to buy a house, or trying to sell one, the government takeover of mortgage giants Fannie Mae and Freddie Mac may be good news. But if you’re one of millions of homeowners behind on payments or if you now owe more than the house is worth, don’t expect the bailout to bring much relief (The New York Times Sept. 8). The bailout was designed to help stabilize the housing market, push mortgage rates lower and make sure that home loans remain available-- at good rates--to borrowers who have good credit and a down payment (Bankrate.com Sept. 8). “The government’s conservatorship of Fannie and Freddie will reduce the uncertainty in the financial markets regarding the GSE (government-sponsored enterprise) bonds and MBS (mortgage-backed securities),” says Credit Union National Association senior economist Steve Rick. “This will ensure private investors will put up capital funds for mortgages at prices households can afford.” Depending on your situation, you may want to take action now:
* Move on mortgages quickly. There’s no guarantee that the slight drop in mortgage interest rates immediately following the bailout will continue that downward trend. * Choose fixed over adjustable. Home buyers are advised to seek fixed-rate mortgages and stay away from adjustable-rate offerings. * Consider refinancing. If you’re in an adjustable-rate mortgage and have a good credit score, ask about refinancing to a fixed-rate mortgage. If your credit score is low or you’re behind on payments, though, you may not be able to make the switch. * Expect some movement in sales. The buyout is expected to make it easier for people to afford the house you’re trying to sell, which is good news for sellers.
Finally, the bailout is a reminder that during rough and uncertain economic times, it pays to make sure investments are diversified. Well-diversified mutual funds, for example, help spread your risk among a variety of industries--such as financial services, health care, technology, and others--as well as among a variety of funds or securities from small, medium, large, and international companies in different industries. For more information, read “Tough Times Series: What to Do When Your ARM Is Due” in Home & Family Resource Center.

Executive reminisces about CU growth services

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WASHINGTON (9/12/08)--The CEO of a Middletown, Pa., credit union reminisces on this Sunday’s H&FF Radio show about the multitude of changes and phenomenal growth he’s witnessed over the years in the credit union industry. Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America 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:
* “Financially Empowering Women Survivors of Violence and Domestic Abuse,” with Cindy Dyer, executive director, Office of Violence Against Women, U.S. Department of Justice, Washington, D.C.; * “Second Chance,” with Dr. Ludie Green, founder, executive director, Second Chance Employment Services, Washington, D.C. and New York City; * “Life After Second Chance,” with Joe’l, domestic abuse survivor and single working mother, Washington, D.C.; * “Native American Women: Steps Toward Economic Self-Sufficiency,” with Elsie Meeks, president/CEO, Oweesta Corporation, Rapid City, S.D.; and * “The Things I’ve Seen: A Credit Union Veteran Shares His Experience With Credit Union Growth and Service to Its Members,” with Ed Fox, president/CEO, Mid-Atlantic Corporate FCU, Middletown, Pa.
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; Visa; and Western Corporate FCU and its member credit unions. For more information, read “Knowledge, Experience, Action Quell Women's Money Fears” in Home & Family Resource Center.

Survey 63 million households pay bills online

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BROOKFIELD, Wis. (9/10/08)--More than three-fourths of online households pay at least one bill electronically in an average month, according to a recent survey sponsored by CheckFree (Business Wire Aug. 27). The 2008 Consumer Banking and Bill Payment Survey revealed that online bill payments outpaced paper checks for the second year in a row, with an estimated 63.1 million participating households, up from 61 million households in 2007. Reasons cited for using electronic bill pay include:
* Going green. More than half (51%) of respondents cited the environment and paper reduction as the No. 1 reason for paying bills electronically. * Saving time. * Gaining control over finances. * Eliminating hassle of check-writing. * Saving on stamps.
The average Internet-using household pays about 11 bills a month. As comfort level and usage increases, so does confidence in security. The survey found that for households not using electronic bill-pay, concern about security is the key barrier. To stay safe online, the Credit Union National Association Center for Personal Finance, Madison, Wis., recommends these tips:
* Monitor accounts daily. The sooner you discover errors or fraudulent activity, the better. Online banking lets you check your accounts 24/7. * Change passwords frequently. Avoid easily detectable words and phrases such as birthdates, house address, mother’s maiden name, children or pet names, or consecutive numbers. Instead, use “strong” passwords that contain a combination of upper and lower case letters, numbers, and symbols. Or, create a password with the first initials from a memorable phrase: “My #1 television station is Public Broadcasting!” becomes “M#1TVsiPBS!” * Watch for phishers. If you receive an e-mail requesting personal or account information, hit delete. * Look for “https.” Any pages on which you will conduct any financial or personal business should have “https” at the beginning of the address at the top of every page. In addition, you should see a closed padlock on the browser frame—not within the page. An open padlock means the site is not secure. * Protect personal information. Never share personal account information in an e-mail message, unless you’ve signed up for secured e-mail or instant messaging through the credit union. * Shore up your firewall. Go to download.com and install and keep updated a personal firewall and antivirus software.
For more information, read “Online Financial Sites Ask Questions to Protect Privacy” in Home & Family Resource Center.

Consumer group Be diligent in filing disaster claims

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MADISON, Wis. (9/8/08)—If your home was damaged by Hurricane Gustav—or any recent disaster—it pays to be diligent when you file a claim, and know where to go for help if your claim is denied. Expect to pay a larger share of the losses, according to a Sept. 3 press release from the Consumer Federation of America (CFA), Washington, D.C. Insurers have been raising deductibles and imposing other policy limitations following the devastation of Hurricane Katrina in 2005. Some of those restrictions may be buried in the fine print. Know the steps involved to get a fair claims payment from your insurance provider:
* Document it. Start a notebook immediately after you experience any kind of property loss. Include all contacts you make with your insurance company, an inventory of your possessions, repair estimates, receipts from emergency repairs, and receipts from temporary housing expenses. * Double-check your deductible. If you agreed to a $1,000 deductible and your damages are $975, you won’t be able to dispute a claim that’s denied for that reason. * Read the fine print. Look for “hurricane deductible,” which may be a percentage of the value of your home, and which may not have been disclosed to you properly. CFA advises you consult an attorney if you think you’ve been misled. * Look for replacement-cost restrictions. Some policies contain a limit on replacement cost payments if your house is destroyed. For example, you may be restricted to receiving 25% above the face value of the policy if a major storm caused a high demand for insurance payouts, leaving you short if construction costs are higher than the capped amount to which you’re entitled. * File the claim. Contact your agent immediately, separate damaged from undamaged property, make a list of all items that are damaged or lost, and then file the claim. For floods, file a “Proof of Loss”—your official claim for damages—within 60 days of the flood. Go to FloodSmart.gov for more information.
If your claim is denied or if you believe the offer is too low, CFA recommends you:
* Talk to senior staff. If you’ve kept good records, the insurance company will know you’re serious--and you’re in a better position to push for a better offer. * Contact your state insurance department. Share your detailed notes and ask if the state will intervene on your behalf. Find contact information for your state insurance department in the Consumer Resource Handbook at consumeraction.gov/viewpdf.shtml. * Get a lawyer. You may be entitled to additional compensation if the insurance company acted in “bad faith” when determining your award, or if you were treated particularly badly.
In addition, the Federal Emergency Management Agency (FEMA) can answer questions you may have. Visit the website at fema.gov, or call 800-621-FEMA (800-621-3362). Even if you haven’t been a victim of a disaster, check your policy. Determine if your belongings are insured for actual cash value—replacement cost of an item minus depreciation—or replacement cost. Although it costs more, replacement cost allows for the amount it would take to replace items at current prices. You may decide that purchasing replacement cost coverage is worth the extra cost. Talk to your insurance agent. For more information, read, “Use Software to Create Property Inventory,” in Plan It: Retire Ready Toolkit.

Tech-savvy students not so savvy about ID theft

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DALLAS (9/3/08)--Despite a high level of technological know-how, college students and other young adults unwittingly make themselves vulnerable to identity theft. These young adult victims then run into serious financial trouble when they apply for a job, insurance, apartment, or mortgage (DallasNews.com Aug. 18). College students in particular are frequent targets of identity thieves, for good reason. Many students arrive on campus with little or no warning about the consequences of personal data theft. Apartments and dorm rooms provide easy access to anyone who wants to swipe personal documents or Social Security numbers (Channel 3000 Aug. 18). And students flock to enticing come-ons of credit-card solicitors who set up tables during registration and those who fill students’ mailboxes with credit card applications. Young adults ages 18 to 29 make up 28% of all identity theft complaints filed, according to the 2008 Consumer Fraud and Identity Theft Complaint Data report issued in February by the Federal Trade Commission. Take precautions to safeguard personal information:
* Buy a shredder. Shred documents you no longer need and that contain personal information--such as report cards, account statements after reconciling them, paycheck stubs, and housing and class information. * Safeguard your computer. Install a firewall and download updates to your anti-virus protection software. Visit download.com to find free downloads. * Monitor credit reports. This probably won’t make the top 10 of most college students’ to-do lists. However, parents should urge a student to order a free credit report annually from each of the three major credit bureaus and check for inaccuracies and suspicious activity. Order reports from annualcreditreport.com. * Opt out of junk mail. Visit optoutprescreen.com or call 888-5 opt-out (888-567-8688) to rid your mailbox of preapproved credit card and insurance offers. A thief could use these offers to open an account in your name. * Open mail, then file or shred it. Don’t leave mail or sensitive data lying around the apartment or dorm room. Keep Social Security numbers and other important documents containing personal information in a safe, locked place; carry your Social Security card only if you need it for a specific purpose that day. And unless you initiated the contact, don’t respond to e-mails, phone calls, or text messages soliciting your personal identification numbers (PINs), login information, account numbers, Social Security number, or other personal information. * Don’t fall for freebies. Just say “no” to free t-shirts and pizza coupons. To obtain a credit card, talk with professionals at the credit union, not with solicitors at booths on campus. * Be safe on social-networking websites. Simply by viewing a Facebook page, an identity thief can see what you look like and learn your address, place of employment, class schedule, interests, date of birth, e-mail address, and more. Limit what you post and who can access your profile.
For more information, read “Be Cautiously Sociable on Social Networking Sites” in Home & Family Resource Center.