If you are a victim of identity theft or suspect that someone is using your name or personal information to make purchases or get credit, act immediately to prevent or minimize the damage!
First Step: FILE A POLICE REPORT.
The Federal Identity Theft and Assumption Deterrence Act criminalizes fraud in connection with the theft and misuse of someone else’s personal data. Keep a copy of the report for submission to the credit card companies and other creditors for verification that a crime was reported. Call your creditors and explain that someone stole your identity and request that they close or freeze your accounts, then change your login information, passwords and PIN numbers.
Contact the three Credit Reporting Agencies/Credit Bureaus to place a fraud alert and get your credit reports. A fraud alert lasts one year and you’ll get a letter from each credit bureau confirming the fraud alert in your credit file which will make it harder for someone to open new accounts in your name.
Go to annualcreditreport.com to request free copies of your credit reports every twelve months or call 877-322-8228.
Get updates at IdentityTheft.gov/creditbureaucontacts
Review your credit reports and take note of accounts and transactions you do not recognize. Next, report the identity theft to the FTC (Federal Trade Commission) by going to IdentityTheft.gov or call 877-438-4338. IdentityTheft.gov will create your Identity Theft Report and recovery plan.
This report guarantees you certain rights which include:
The Fair and Accurate Credit Transactions Act a/k/a “The FACT Act” provides consumer protections to assist victims of fraud and it includes: Fraud Alerts, Extended fraud alerts, Duty to Honor Fraud alerts, Block Trade Lines, Prevent Re-pollution, Prohibit Selling or Placing for Collection Identity Theft Debt, Notification Duties on Debt Collectors, Access to Business Records, Access to Credit scores, Notification of Negative Information to Customers, Time Restriction on Reinvestigations, Dispute Information with Reporters, New standards for Furnishers, Address Verification and Truncation of Numbers.
CLOSE ALL NEW ACCOUNTS OPENED IN YOUR NAME AND CALL THE FRAUD DEPARTMENT OF EACH BUSINESS WHERE AN ACCOUNT WAS OPENED.
Explain that your identity was stolen, ask the business to close the account and send you a letter confirming that the fraudulent account is not yours, that you’re not liable for it and that it was removed from your credit report. Keep this letter for use if the fraudulent account appears on your credit report later on. Also, keep a record of who you contacted and the date of contact.
REMOVE BOGUS CHARGES FROM YOUR ACCOUNTS BY CALLING THE FRAUD DEPARTMENT OF EACH BUSINESS.
Explain that you are the victim of identity theft, tell them which charges are fraudulent and request that they be removed. Again request from the business, a letter confirming that the fraudulent charges are removed and keep the letter for use should the account re-appear on your credit report in the future.
CORRECT YOUR CREDIT REPORT BY COMPLETING “IDENTITY THEFT LETTER TO A CREDIT BUREAU” FORM AND MAILING TO THE THREE CREDIT BUREAUS.
Include with the letter a copy of your Identity Theft Report, proof of your identity, explain which information on your report is fraudulent and request that the information be blocked. Mail letters to:
REPORT A MISUSED SOCIAL SECURITY NUMBER BY CONTACTING YOUR LOCAL SSA OFFICE.
STOP DEBT COLLECTORS FROM TRYING TO COLLECT DEBTS YOU DON’T OWE.
REPLACE GOVERNMENT-ISSUED ID’S.
You may have to contact additional offices (e.g. Utilities, Telephone, Government Benefits, Checking Accounts, Student loans, Apartment/ House Rentals, Investment Accounts). Maybe even a fraudulent Bankruptcy filing.
Last Note: Go to OnGuardOnline.gov to learn how to avoid internet fraud, secure your computer and protect your personal information!
Can you benefit from the $575 million settlement?
Let’s find out!
September 2017, the announcement by Equifax that a data breach occurred exposing the personal information of 147 million people caused much anxiety in the financial industry and consumers in general. Subsequently, the company agreed to a global settlement with the Federal Trade Commission (FTC), The Consumer Financial Protection bureau (CFPB) and 50 U.S states and territories. It includes approximately $425 million to assist people affected by the breach.
How do you know your personal information was exposed? Go to the look-up tool to check https://eligibility.equifaxbreachsettlement.com/en/eligibility and you can file a claim.
Some benefits from the settlement
Free Credit Monitoring and Identity Theft Protection Services:
Up to 10 years of free credit monitoring or $125 if you decide not to enroll because you already have credit monitoring. The free credit monitoring includes (a) At least four years of free monitoring of your credit report at all three credit bureaus (Equifax, Experian and TransUnion) and $1,000,000 of identity theft insurance (b) Up to six more years of free monitoring of your Equifax credit report. Also, if you were a minor in May 2017, you’re eligible for a total of 18 years of free credit monitoring.
Cash Payments (capped at $20,000 per person)
For expenses you paid as a result of the breach, like: (a) losses from unauthorized charges to your accounts (b) the cost of freezing or unfreezing your credit report (c) the cost of credit monitoring (d) fees you paid to professionals like an accountant or attorney (e) other expenses like notary fees, document shipping fees and postage, mileage and phone charges.
For the time you spent dealing with the breach, you can be compensated $25 per hour up to 20 hours.
Even if you do not file a claim, you can get:
Free Help Recovering from Identity Theft
For at least seven years, you can get free identity restoration services. And if you discover misuse of your personal information, call the settlement administrator at 1-833-759-2982. You will be given instructions for how to access free identity restoration services.
Free Credit Reports for All U.S. Consumers
Starting in 2020, all U.S. consumers can get six free credit reports per year for seven years from the Equifax website in addition to the one free Equifax report (plus your Experian and Trans Union reports) you usually get at annualcreditreport.com.
Please sign up for e-mail updates to get a reminder in early 2020.
THE CLAIMS PROCESS HAS STARTED. YOU MUST FILE BY JANUARY 22, 2020
Answers to some important questions:
FOR ADDITIONAL INFORMATION: WWW.EQUIFAXBREACHSETTLEMENT.COM OR CALL 1-833-759-2982.
BEWARE OF FAKE SETTLEMENT WEBSITES
To be sure you’re going to the right place, start at the (Federal Trade Commission’s) FTC’s page: ftc.gov/Equifax (https://www.ftc.gov/Equifax).
DO NOT PAY TO FILE A CLAIM FOR THESE BENEFITS. ANYONE CALLING TO TRY TO CHARGE FOR FILING A CLAIM IS A SCAMMER!!!
You can also sign up to get FTC email updates about the settlement: (https://public.govdelivery.com/accounts/USFTC/subscriber/new?topic id=USFTC 109)
If you were affected by the breach, you may also receive an e-mail notification after the court approves the settlement. Ftc.gov/Equifax (https://www.ftc.gov/enforcement/cases-proceedings/refunds/equifax-data-breach-settlment)
EASIEST WAY TO SUBMIT A CLAIM IS ONLINE AT WWW.EquifaxBreachSettlement.com OR COMPLETE AND MAIL THE CLAIM FORM TO THEIS MAILING ADDRESS:
EQUIFAX DATA BREACH SETTLEMENT
C/O JND LEGAL ADMINISTRATION
P.O. BOX 91318
SEATTLE, WA 98111-9418
June 1st begins hurricane season!
A weather emergency can force you to leave your home without money, ID’s, debit or credit cards and other important items, so here are some practical steps to begin your financial recovery.
The Association of Certified Fraud Examiners (ACFE) reports that “a typical organization loses a median of 5% of revenue each year due to fraud.” So, what is Your best protection against scammers? Learn the signs of scams that target businesses!
Here are a few of the scammer’s tactics:
Here’s a list of some common scams that target small business:
How Do You Protect Your Business?
According to Credit Builders Alliance, “consumer protection took a big hit in 2018. With a focus on deregulation, rules to protect consumers have been rolled back or delayed and investigations into financial firm’s anti-consumer practices have been slashed, leaving consumers more susceptible to scams and misleading deals.”
To this end, the Federal Trade Commission reports that scammers pretending to be from the federal government are scaring international students into paying them money. The callers typically know the foreign student’s immigration status and the school or program the student is attending. The pretend government official will say there’s a problem with the student’s immigration documents or visa renewal and then will demand immediate payment, often thousands of dollars, for a fee or bogus immigration bond. These callers make threats, including arrest or deportation, if the students do not pay and ask to be paid in cryptocurrency, like Bitcoin or gift cards, like Google Play or iTunes).
The FTC warns that these are scam calls. The federal government do not make such calls, do not make such threats and do not ask for such payments. If you’re concerned about your visa or immigration documentation, call USCIS’s National Customer Service Center at 800-375-5283 or go to ftc.gov/complaint (http://ftc/complaint) if a scammer has contacted you or someone you know.
Additional Consumer Tips for Immigrants
Safe and affordable savings and checking accounts:
Free Business courses: Available in Spanish, Chinese, Russian, Korean, Haitian Creole, French, Bengali and Arabic through NYC’s Immigrant Business Initiative at https://www.nyc.gov/immigrantbusinesses or call 311 and ask for Business Services for Immigrants.
It’s tax season, folks! You know what that means, right? There have been some significant changes that will affect individuals and businesses beginning after December 31, 2017. This month’s blog will review some of these updates.
"The Tax Cuts & Jobs Act” is the biggest federal tax law change in over 30 years. As a result, people are understandably apprehensive and some of us are even a little confused. Before getting started, let’s review some terms to remember:
AGI = Adjusted Gross Income
AMT = Alternative Minimum Tax
HOH = Head of Household
MFJ = Married Filing Joint
MFS = Married Filing Single
NOLs = Net Operating Losses
PSCs = Personal Service Corporations
QW = Qualified Widower
SMFS = Single or Married Filing Separate
Tax Provisions that were eliminated:
The 2018 standard deduction is:
Tax provisions that were eliminated:
THESE ARE THE FACTS AND FIGURES, PLEASE CONSULT WITH YOUR TAX ATTORNEY OF PREPARER FOR ADVICE REGARDING THE TAX EFFECTS OF THE “TAX CUTS AND JOBS ACT” ON YOUR PERSONAL FINANCIAL PORTFOLIO!
Have you been affected by the U.S. government shutdown? Are you experiencing financial difficulties? If this is your case, then read through the various solutions to manage through this difficult time.
Should you consider accessing funds from your 401(k) plan during a financial emergency through a loan or hardship withdrawal to help solve an immediate need, be aware of consequences that can affect your long-term financial security. Let’s look at a few:
Many plans permit loans that you repay through payroll deductions as long as you remain employed. You’re borrowing your own money. Normally the term of a 401(k) loan is five years unless the money is used for the purchase of a primary residence, then some plans will allow borrowing for a 25 year term.
Advantages and disadvantages of borrowing from your 401(k) account.
The plus side:
The negative side:
The IRS allows withdrawals from the 401(k) for certain financial emergencies. However, it’s up to your employer to determine the specific criteria for a hardship withdrawal. These circumstances are:
You should consider a withdrawal from your 401(k) as a last resort!
Companies often prohibit contributions for at least six months after taking a withdrawal and those hardship distributions permanently reduce your account balance. Please remember that taxes are due on the amount you withdraw and will incur the 10 percent penalty if you’re under age 59 1/2. Additionally your plan administrator may follow up after the withdrawal to verify that the funds were used for the purpose indicated on your application.
Finally, you cannot be forced to use your 401(k) money to pay state and local income taxes, property taxes or other taxes, however, a court may order you to withdraw money from your 401(k) to pay child support, alimony and federal income taxes owed.
State and federal laws differ, so seek legal advice to determine which will apply.
Not everyone who applies for credit, gets credit!
The Equal Credit Opportunity Act (ECOA), enforced by the Federal Trade Commission (FTC), prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age or because a person receives public assistance.
Creditors may ask for most of this information when necessary but they may not use it when setting the terms of credit decisions. Other factors, including income, expenses, debts and credit history are considered by lenders to determine creditworthiness. The ECOA provide protections when dealing with people and organizations like banks, financial companies, retail and department stores, credit card companies and credit unions who regularly extend credit to the public. Everyone involved in making decisions to give credit or in setting the terms of credit MUST comply with the ECOA.
Some basic provisions of The ECOA:
When applying for credit, Creditors may not…
When deciding to grant you credit or when setting the terms of credit, Creditors may not...
When evaluating your income, Creditors may not...
You also have the right to…
A Special Note to Women…
A good credit history is often necessary to get credit. This can hurt many married, separated, divorced or widowed women. There are two common reasons women do not have credit histories in their own names: either they lost their credit histories when they married and change their names, or creditors reported accounts shared by married couples in the husband’s name only.
If married, separated, divorced or widowed, contact the credit reporting agencies to verify that all relevant information in in a file under your own name. Credit reporting companies sell the information in your credit report to creditors, insurers, employers and other businesses who use it to evaluate your applications for credit, insurance, employment or renting a home.
**The Fair Credit Reporting Act (FCRA) requires each of the three credit reporting companies, TransUnion, Experian and Equifax to give you a free copy of your credit report, at your request once every 12 months online via annualcreditreport.com or by phone at 877-322-8228.
If you suspect a Creditor has discriminated against you…
For most of us, we live the first 18-21 years of our lives without worrying about where things come from. From the moment we are born we are provided food, shelter, and love. Soon thereafter, we realize we must work really hard and long hours to cover the basic necessities and to buy the things we really want.
Most people spend 20-30 years working before considering retirement. If we are lucky and smart, we’d have listened to the wise advice of saving for retirement by investing some of that hard-earned money. This article touches on some of the options available to saving for retirement.
Here are some options:
Contributions to a retirement account if you are still working after age 70 can enable a senior to access tax benefits and possibly reduce tax burdens. If still earning income, contributing to a ROTH IRA, 401(k) or 403(b) plan, SEP-IRA or a (HSA) health savings account (if not enrolled in Medicare) are tax-advantaged opportunities.
ROTH IRA: Federal tax law allows you to contribute to a Roth IRA when income limits are met and you have earned compensation whether in a regular paycheck or contract work via a 1099. In 2018, working persons over age 50 can contribute up to $6,500 (this includes a 1,000 catch-up contribution) to a ROTH IRA. You may be able to contribute an additional $6,500 for a non-working spouse if your earned income is greater than $13,000. You can’t contribute more than you earn!
Because ROTH IRA contributions are made with after-tax dollars, the money can be withdrawn tax-free without penalties. Any growth or earnings in the account and distributions made in retirement is free from federal taxes. ROTH IRA’s are not subject to RMD’S (Required Minimum Distributions) after age 70 and a half which means the money can continue to grow in the account, generating tax-free earnings.
Another benefit is tax-free ROTH IRA money for your beneficiaries after you die. Please discuss with an estate-planning professional before making the ROTH IRA part of an estate plan.
401(k) and 403(b): You can continue contributing annually to your employer’s 401(k) plan or 403(b) for as long as you’re employed regardless of your age. For employees over 50, the 2018 contribution limit is $18,500 plus $6,000 in catch-up contributions for a grand total of $24,500. Be mindful that your employer may offer both a traditional and a Roth 401(k), however, a traditional 401(k) offer tax deferral and a Roth 401(k) is similar to a ROTH IRA, in that you contribute after-tax income and won’t owe taxes when making withdrawals from the Roth 401(k).
A ROTH 401(k) is subject to RMD’s (Required Minimum Distributions)! Required Minimum Distributions (RMD’s) on both the traditional and Roth 401(k)s kick in after leaving your employer.
A few things to consider when debating whether to contribute to a Roth 401(k) or a Roth IRA:
SEP IRA (Simplified Employer Pension): A tax-advantaged retirement savings plan for self-employed people and small businesses. You are allowed to contribute after age 70 but must begin taking RMD’s once you attain age 70 and a half. In 2018, the annual contribution limit for a SEP IRA is $55,000 or 25% of eligible income, whichever is less.
HSA (Health Savings Account): Annual pre-tax contributions for qualified medical expenses. However, if you are enrolled in Medicare, you are not eligible to contribute to an HSA. The 2018, you can contribute a maximum of $10,900 to an HSA if age 55 or older unless enrolled in a family plan. If over age 65, all withdrawals from your HSA are penalty free and federally tax-free when used to pay for qualified medical expenses.
Becoming debt-free is a noble financial goal!
There are many options for achieving this financial milestone. There’s the good, the bad and the ugly. You may devise a long-term strategy to eliminate debt by paying cash for all future purchases while making on-time, minimum monthly payments until the debts are paid off.
Here are some actions steps you can take:
A DEBT SETTLEMENT PLAN IS NOT A DEBT MANAGEMENT PLAN!
These plans are usually offered by for-profit companies to people with large amounts of credit card and student loan debts. Here’s the plan: The debt settlement company promises to negotiate with their client’s creditors to pay a “settlement” or a portion of the money owed to the creditors to settle the outstanding balances. This is Part 1 of the plan. Part 2 of the plan states that the client must pay a specific amount monthly into a designated account for paying off the settlement amount. This process is usually lengthy and carries a fair amount of risk.
Should your debt settlement company be unsuccessful in convincing the client’s creditors to accept the settlement, your balances may grow even higher with late fees and finance charges because these programs may encourage you to cease direct payments to your creditors while the negotiations are being worked out. Be aware also that there are dishonest debt settlement companies who make promises they are unable to keep, charge large sums of money and in the end you may be worse off than when you started on the debt settlement path.
Before signing with a debt settlement company, you must have some important facts upfront:
Please get answers to these questions in writing and thoroughly review for understanding before signing!
To know whether you are dealing with a debt settlement scam, here are some red flags:
Check out any debt settlement company you may be considering by contacting your state’s Attorney General’s Office or the local Consumer Protection Agency (in New York, DCA/Department of Consumer Affairs). Also check out what people are saying online about the debt settlement company you may be considering by entering the name of the company into a search engine using the word “complaints”.
As stated at the beginning, debt freedom can be liberating, giving a sense of control over one’s finances and imparting financial confidence. However, due diligence is necessary before choosing this strategy for becoming DEBT-FREE!
NYC Department of Consumer Affairs
Bureau of Consumer Frauds & Protection
Denise Garrett is a financial counselor at the LDCENY and has more than 25 years experience in financial counseling and retail banking.