September meeting: Nuts & Bolts Beyond Money

At our September 16, 2009 meeting, Kip Child, Community Affairs Specialist with the New England Office of the Federal Deposit Insurance Corp (FDIC) spoke to the group about the functions of the FDIC, the Community Reinvestment Act, consumer finance issues, and asset protection.  His PowerPoint presentation, The Nuts & Bolts Beyond Money, can be found here.

Child advised us to be wary of predatory lenders and their scams and to beware of offers for free credit reports which may come with strings attached.  Individuals are entitled to one free credit report annually from each of the 3 major bureaus (Experian, TransUnion and Equifax).  He suggested ordering one report from one of the bureaus every 4 months as an effective way to monitor identity theft.  The site to use to order free reports is  www.annualcreditreport.com.

Child spoke of  FDIC’s  financial education curriculum called Money Smart which is designed to help individuals increase their financial intelligence.  Money Smart is available in two curricula (adult and young adult) and two formats: online or CD.

Ever wonder how much your deposits are insured for? EDIE the Estimator can calculate your FDIC insurance coverage for each FDIC-insured bank where you have deposit accounts. EDIE lets you know in a printable report for each bank whether your deposits are within or exceed coverage limits.

What can one do to preserve a favorable FICO score?  Child suggested that unused credit card accounts not be closed.  The ratio of outstanding credit card balances to available balances is a factor in FICO.  Lenders like to see a higher available balance.  Other credit card advice:  if your  interest rate increases, it is worth calling the credit card company to let them know you may take your business elsewhere.  They may offer to keep the rate unchanged in order to keep your business.

Want to protect your savings and investments?  Child believes that by spreading our financial knowledge through volunteering our time with the lower income community, we all come out ahead.  Educating those most at risk to investment scams and predatory practices, reduces the reliance of the disadvantaged on government services and consequently our overall tax burden.  Consider becoming a EITC/VITA (Volunteer Income Tax Assistance Program) volunteer.   Past tax help sites include the Newton Senior Center,  the Boys & Girls Clubs and the West Suburban YMCA.

December meeting report

Snow and ice didn’t deter our Club (or thankfully, our speaker!) from ramping up our “consumer savvy” last night.  Deb Bloomberg from the Federal Reserve Bank of Boston tested our knowledge of banking, credit, money & identity theft using an entertaining quiz-show format with hand-held voting devices.  Top scorers received souvenir pens, and all of us (for unanimously getting one of the questions right), received currency from the Fed (alas, it was shredded).

Deb handed out two flyers:
Five Tips for Improving Your Credit Score 
Five Tips for Getting the Most from Your Credit Card

Among the things we learned:

• While banks and mutual funds that have to report to the IRS need your Social Security number, most places don’t, so don’t give it out or use it as a driver’s license number.
• For a free annual credit report (but not your credit score) from each of the three credit-reporting agencies, go only to https://www.annualcreditreport.com/cra/index.jsp 
  (other places may try to charge you)
• To take advantage of your rights under the Fair Credit Reporting Act, you must notify a creditor about a billing error in writing.
• If a credit card company practices “universal default,” if you are late on one credit card, the rate on the other can go up, too.  So look for a credit card issuer whose agreement does not include universal default.
• If you deposit a check and the bank tells you the “funds are available,” that means you can use the money (but if the check bounces, the money will be removed from your balance).
• For online purchases, some credit cards offer a service which changes your credit card number (the one supplied to the seller) with each purchase.  This can help prevent identity theft or unauthorized use of your credit card.
• Your maximum liability on a lost or stolen credit card is $50, but on a debit card it CAN be the entire balance in your account (some card issuers have lower limits, and liability is only $50 if you notify the company within the first two days; $500 if you notify them within 2 billing cycles).
• “phishing”–using a fraudulent a email or instant message to lure you into disclosing personal information
• “pharming”–a website designed to look like a legitimate site, again in order to get you to disclose personal information
• “vishing”–voice-mail phishing
• “pretexting”–when an identity thief poses as a legitimate representative to “verify” or get you to disclose personal information
• Most identity theft is perpetrated not by strangers, but by relatives and “friends”!

The Federal Reserve has lots of consumer information available here, and many great brochures available online here.

Another good source for information on identity theft is the Federal Trade Commission’s website.