Friday, October 30, 2009

Credit Card Scam making rounds

Snopes.Com says this is true.

This one is pretty slick since they provide YOU with all the information, except the one piece they want. Note, the callers do not ask for your card number; they already have it... This information is worth reading. By understanding how the VISA & Master Card Telephone Credit Card Scam works, you'll be better prepared to protect yourself.

One of our employees was called on Wednesday from 'VISA', and I was called on Thursday from 'Master Card'.. The scam works like this: Caller: 'This is (name), and I'm calling from the Security and Fraud Department at VISA. My Badge number is 12460. Your card has been flagged for an unusual purchase pattern, and I'm calling to verify. This would be on your VISA card which was issued by (name of bank). Did you purchase an Anti-Telemarketing Device for $497.99 from a Marketing company based in ?'

When you say 'No', the caller continues with, 'Then we will be issuing a credit to your account. This is a company we have been watching and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement, the credit will be sent to (gives you your address), is that correct?'

You say 'yes'. The caller continues - 'I will be starting a Fraud investigation. If you have any questions, you should call the 1- 800 number listed on the back of your card (1-800 -VISA) and ask for Security.'

You will need to refer to this Control Number. The caller then gives you a 6 digit number. 'Do you need me to read it again?'

Here's the IMPORTANT part on how the scam works. The caller then says, 'I need to verify you are in possession of your card'. He'll ask you to 'turn your card over and look for some numbers'. There are 7 numbers; the first 4 are part of your card number, the next 3 are the security Numbers that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the 3 numbers to him. After you tell the caller the 3 numbers, he'll say, 'That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?' After you say No, the caller then thanks you and states, 'Don't hesitate to call back if you do, and hangs up.

You actually say very little, and they never ask for or tell you the Card number.. But after we were called on Wednesday, we called back within 20 minutes to ask a question.. Are we glad we did! The REAL VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of $497.99 was charged to our card.

Long story - short - we made a real fraud report and closed the VISA account. VISA is reissuing us a new number. What the scammers want is the 3 -digit PIN number on the back of the card Don't give it to them. Instead, tell them you'll call VISA or Master card directly for verification of their conversation. The real VISA told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your 3 Digit PIN Number, you think you're receiving a credit. However, by the time you get your statement you'll see charges for purchases you didn't make, and by then it's almost too late and/or more difficult to actually file a fraud report.

Tuesday, May 26, 2009

Dealing with Credit Reports

Someone I know recently wanted to know how to check their credit report. Rightfully scared of all of the potential scams related to getting credit reports they asked me how I would do it. I dug up this article from Kiplinger's to help answer their question.

The article details one person's fight to get a bad mark off of their credit record. Most importantly it shows how to get your free copy of your credit report.
You can get a free copy of your credit reports at the three major credit bureaus -- Equifax, Experian and TransUnion -- once a year at You can also get a free report if you've been denied credit based on information in your report.

Start at the source. As long as the credit bureaus comply with the Fair Credit Reporting Act and verify that they're correctly reporting the information they received from a lender, they consider their job to be done. So your first call should be to the lender. When you have enough information from the lender to correct the mistake, start your challenge.
As always see my disclaimer.

Monday, May 4, 2009

Stand Pat or Sale

I have seen and heard a number of Finance industry pundits recently answering the question of should investors "hold or sale." They normally go through the typical discussion of the investors time horizon and chance the stock prices will recover, etc.

What I find remarkable is that not one of these discussions has suggested the investor consider the quality of the companies in which the investor owns stock. At a bare minimum you should consider whether the companies you invested in are close to bankruptcy or not. If you have invested in highly leveraged industries, banking, automotive you really need to ask yourself if this company going to survive the down turn to participate in the recovery.

Just a few years ago leverage (borrowing money) was a way of producing killer profits, but when credit is hard to come by, that debt can kill the company. As always see my disclaimer, and if you are confused seek professional advice on your individual situation.

Wednesday, March 18, 2009

Rolling over 401Ks

With the sharp increase in people switching jobs or losing jobs in the current economy I have been asked more and more recently about what to do with the 401(k) left with a previous employer. There are 4 major options:
  1. You can leave the 401(k) right where it is in the employer's plan, assuming the employer is still around. However, it is probably a good idea to move it because most 401(k) plans restrict what you can invest in to a small set of mutual funds that may not offer very good investments.
  2. You can take it and spend it. The WORST possible option. Really you should only consider cashing out if you are over 59.5; to pay for medical treatment against some life threatening problems; Tony Soprano is after you. And if Tony is just going to break your legs, you might want to think about going that route.
  3. Roll the 401(k) over into an IRA. This may be the best option.
  4. If you are moving to a new job, you can move the old 401(k) to one at the new company if offered. Restrictions may apply depending on the details of the new 401(k) plan.

The big advantage of IRA's is the vast number of options, however those options can be over whelming. Sticking to the basics what I would do is check out the offerings from Fidelity, Vanguard, TD Ameritrade, or E-Trade.

Each of these 4 companies offer IRA's that will allow you to invest in a very wide range of mutual funds and individual stocks. If you plan to focus on mutual funds in the IRA I would go with look at Fidelity and Vanguard. These two fund companies offer a wide range of mutual funds. Look through the family of funds and go with the company where you most like their funds and policies. It will be cheaper to buy funds in the fund family where you have your IRA than buying funds from other companies.

If you want to take a little more control you should look at on-line brokerages for their low fee's on trades. While there are other online brokers, TD Ameritrade and E-Trade are probably the best known, and the ones I have used in the past. You will want to focus on fees, policies, ease of use, etc. when picking the right one for you. E-trade does offer international trades on foreign stock exchanges, which is a nice advanced feature for a low cost on-line trading platform.

If you still feel overwhelmed, then perhaps a retirement fund of funds is for you. These funds of funds are intended to be one stop shopping for retirement savings. For example if you are 35 you might consider looking at the Vanguard Target Retirement 2035 Fund. The idea is that the target retirement fund maintains a stock, bond, cash balance that "appropriately" manages risk as you approach retirement. Vanguard offers a range of the funds to fit the needs of people at different ages. Fidelity has similar options called Freedom Funds.

There are also more complex IRA options, for example using an IRA to buy real estate. If you are a real estate professional, home builder, or just an experienced real estate investor, that might be a good options for you.

See my disclaimer as I am not a financial professional.

Sunday, January 4, 2009

New 401K Limits

For 2009 the 401K limit is now $16,500, with catchup limits for those over 50 bumping to $5,500 (for a total of $22,000).

That means many people will have free range to save as much as they can. Even at $100K a year this is 16% (or 22%) of income which is a lot for even stingy savers.

The IRA limit raises to $5000, which is good, but many folks myself included think IRA limits and 401K limits should have parity.

For more info:
Read this IRS posting, if you can.
This article at SmartMoney.
Wikipedia also has good articles: IRA and 401K

Sunday, June 8, 2008

Not a CFP

I am not a certified financial planner. Really I'm not a certified anything. How ever as I listen to financial shows and read finance magazines, I realize over the years I've picked up quiet a bit of knowledge about personal finance that some people just don't know. So I hope to share a little knowledge a few times a month.