“It’s gonna cost $100 and I GAIN weight?” (online order scams that look OK @ first)

“Yes, that’s me. Yes, correct. Um wait. I signed up for what? No I don’t want that. Can I cancel? No? What you do you mean I have to go to your website? I didn’t order this. OK, yes. I’ll look for the e-mail”

Now, we’re not in the habit of listening in while our friends take phone calls. But, this one caught our ear. Turns out that a good friend of Consumer Courage ordered some weight loss pill from the internet. The pill is supposedly from some fruit that only grows in southeast Asia. The rind (so the legend goes) is used in cooking and does wondrous things like reducing your appetite; increasing athletic performance and reducing metabolism.

Public service announcement: Now hear this! There’s no such thing as a pill that makes you lose weight. Scammers make their living knowing that most Americans are a) unhappy with how much they weigh; and b) willing to do anything to lose it, so long as it is an easy fix. Wanna lose weight? Eat less; eat right and exercise more. (you’re welcome)

Claims aside, there’s one thing that we all should remember when it comes to dietary supplements – the Federal Food & Drug Administration (FDA) does not regulate them. So, although the label may say something that looks OK (Like “1000 mg Garcinia Cambogia Extract”) you can’t really be sure what’s inside. You ask “would somebody lie about what’s inside a pill bottle just to make money?” (Do we really have to answer that?)

What were they offering?

The order was for a 60-day supply of Garcinia something-or-other. The bottle was only $4.95. “Pretty affordable,” she thought.  There’s no way to tell, but she might have lost weight just because she was taking this awesome fruit extract that was cultivated across the globe, whether it was effective or not.  Unfortunately, she didn’t research the side-effects of this little pill (nausea, diarrhea, kidney/liver problems) until AFTER it arrived at her home and Consumer Courage was lecturing her about its ill-effects.

The phone call that we overheard was when they called her back to offer her a second item – some type of life coach services. All she had to do was used it for 21 days and then call them if she wanted to cancel.  After we lost our [stuff] while she was on the phone, she told them that she wanted to cancel that service right now. “I’m sorry, you can’t cancel over the phone. You have to go on our website after 21 days and then cancel from there.”  When she pressed that she wanted to cancel right then & there, the operator relented “OK, we’ll send you another e-mail to show you where to cancel.” (as of the publication of this post, zero e-mails have been sent to explain the cancellation process).  Two things are going on here:

1) She never signed up for that Life-coach service. She remembered a pop-up that came up while she was ordering. But, she specifically remembers clicking “NO” and having it go away; and

2) Suppliers are never allowed to tell you that you can’t obtain a refund, unless you were told that you couldn’t cancel BEFORE the transaction took place.  In fact, telling you that you can’t exercise any of your Consumer rights is a big No-no in Ohio.

I never agreed to that

This is not the first time that we’ve seen this routine.  Many internet sellers have a scheme where you are tricked into agreeing to buy something else you’ve never heard of. (just one more reason you should be used to looking through your credit card bill line-by-line every month)  The pop-up that jumps onto the screen while you’re trying to navigate the purchase is the one that you have to watch out for. Consumer Courage’s friend never agreed to this service. But that didn’t stop the bad guys from pretending that she did. Since they have her credit card information and her approval to charge the card, they have a plan to charge her for more stuff. We have a sneaking suspicion that the phone call to “confirm her e-mail address” was just them trolling to get her approval to charge her credit card a second time (for way more than five bucks, probably). The fact that she told them “I want to cancel now” is not so relevant to them.

We started Googling this company and added the words “ripoff” and “scam” to the search. What we found was a little unnerving. Many folks had the experience that our friend had – they bought the bottle for five bucks and then watched, helplessly as their credit card statement showed monthly charges. $75.00, then $150.00. At that point it became clear why the bottle was so cheap. If the first charge from “middle-of-the-desert” Arizona was for $150.00 it might flag the fraud department. But, once the vendor is an “established payee” (meaning whoever bought the $5 bottle of pills did not challenge the charge) the credit card folks don’t have a problem if the next charge is for much more money.

I’m sorry you can’t cancel

When the official friend of Consumer Courage hung up the phone, she seemed a little frustrated.

Author’s half-confession: We’ll admit that her frustration may – MAY – have been because we were yelling and gesticulating wildly in the background the whole time that she was on the phone “Tell them you want to cancel! Don’t let them lie to you! They’re scamming you!” Let’s just note that she was frustrated and leave it at that.

There are many reasons in Ohio that a Consumer has the right to cancel a transaction: Three-days to cancel the refinance of your mortgage; Three-days to cancel a Home Solicitation Sale (where they entice you to call them – with an ad or a home visit; or if they’re selling from a hotel conference room); Any sale where they don’t say “You can’t get a refund” in plain language and others. Whatever the reason you have a right to cancel a Consumer transaction, the seller is never allowed to tell you that you can’t cancel.

We can argue whether the seller is allowed to say “you can’t cancel over the phone.  You must go on to our website to cancel.” But, she wanted to cancel a service that she was signed up for because the website misbehaved in the first place. So the instruction to go BACK to the website seemed to us to be an invitation to either “accidentally” sign up for more; or a gateway to let them charge her credit card, until she got fed up.  We’re pretty sure that when they told her to wait 21 days and THEN cancel was because they wanted a chance to hit her credit card for a second charge.  If you’re nervous about a transaction, waiting a while to see what happens is not the best idea.

What do we do now?

To review, here’s where our friend was at this point:

  • She was in possession of a $5 dollar bottle of something;
  • She was signed up for some nonsense that she couldn’t cancel over the phone;
  • She had zero trust for the website that these people ran (or their tactics);
  • Her credit card numbers were in the possession of somebody who didn’t seem to be following any set of rules;
  • She was annoyed because a certain Consumer Courage person wouldn’t stop telling her to “do something about it!”

How do you extract yourself from the extract?

According to the Fair Credit Billing Act, you have 60 days from the time a charge first appears on your bill to dispute it with your credit card company. But these folks are banking on the assumption that you’ll either miss the charge at least once, will wait the 21 days and try to cancel at that point. The assumption here is that these bozos would have charged our friend’s credit card for the life coach program, whether she tried to cancel or not. At that point, it’s not a sure thing that the charges will be reversed. If you call your credit card company’s fraud unit and say “well the first charge was OK and I knew I was signing up for this service, but it’s a scam and I want my money back,” they’re not likely to classify it as fraud and reverse the charges. You might get an instruction on how to cancel by mail in the future and have to consider the $100 they charged you for the life coach as a lesson-learned.

We think the population of folks who get taken for a little bit of cash but don’t bother causing a fuss is where the pill-pushers’ margin lies. Most people that get hit for a hundred or so dollars in this sort of mail scam will go away quietly. (After all, if you live in Ohio and someone in Arizona rips you off for a hundred bucks, it’s gonna cost you way more than that to find an attorney in Arizona to handle the case. So you just let it go.) If they can convince a thousand people to order the $5 bottle of pills and then forget to check if they were hit for a bogus $100 charge, they will make $50,000.

First – do your research

It sounds like a lot to do. But, if you’re ordering something over the web, you should really be doing some research before you click “Confirm order.” This goes double if you’re buying from someone who found YOU. If you’re responding to an ad, how do you know if you’re buying from a real company or from someone who still lives in his mother’s basement; has a modem and a computer; some extra plastic bottles, a label maker and a few 50 pound bags of sugar? Even if your research is just typing “[Company name] ripoff” into Google, you’re trying

Second – cancel anything else they want to give you

Just pay for what you wanted to buy in the first place. There are a hundred ways for the “just cancel if you don’t like it” scenario to go south.  If you don’t want it now, you’re not gonna want it after 30 days – trust us. (we realize that if the company had not called our friend back, she might never have known that they signed her up for the free life coach nonsense).  So you might not always get the chance to say “Thanks, but I don’t want it.”  But, have it in your mind to say NO anyway.

Third – call the credit card company

If ANYTHING feels weird, call your credit card company right away. (We’re sure that you used a credit card, because you’ve been reading Consumer Courage and have heard this before.  Credit cards are the only way you can pay and be guaranteed a chance to fight it later. Check cards, debit cards, money orders….when you use these to pay, the money goes up in smoke). Tell your credit card company what’s going wrong, how you think you’re being ripped off and that you are disputing the charge. You have the right to return anything you bought on the web for a full refund. If the website is silent about a return policy, you can return it. If the website says that they don’t allow refunds, that language must be clear and conspicuous. It can’t be hidden, footnoted or only on the confirmation screen. But, even if you aren’t sure that you have the ability to return it, do it anyway. Unless the item was really expensive, you’re not risking much. And your credit card’s fraud department might rely on the fact that you returned the item and reverse the charge.

Fourth – send it back

Write a letter spelling out a few items:

  • How you think they were dishonest;
  • That you are returning the item;
  • That you want a full refund;
  • That you are reporting them to the Attorney General of your state (and theirs) and to the Better Business Bureau if they don’t credit your account;
  • That they don’t have the right to charge any amount to your account now (or in the future);
  • That they don’t have the right to sell your personal identifying information to anybody or any company;

This is important: send the letter in a letter that has a tracking number.  The post office has many options short of “Overnight for $20.00.”  Ask them.  It doesn’t matter how long it takes to get there, so much as it matters that you can prove that it got there.  Hopefully, you’ll be able to catch knuckleheads like this before they get any of your cash.

Posted by: Mark Wiseman (who has one really nervous friend who is wondering if he’ll tell just who it is who ordered the pills)

 

“Not now I’m on the phone. But you knew that” (How to stop phone hackers)

The reply to this oft-repeated phrase is usually “Oh, I’m sorry.  Let me know when you’re off.”  Although now it might very well be “I know.  But, you should hang up.  Your conversation was over five minutes ago. Now you’re just having small talk.”

I thought this was a private line

According to a recent 60 minutes piece on phone hacking, those calls you are having might possibly be a little more revealing than you wish them to be.  The main point of the segment was that, because of a weakness in the most common operating system for cell phones, it is possible for someone to hack into your phone, gain access to its contents and listen to your conversations.  The only thing they need is your phone number.   It’s a strange feeling as you watch these guys hack into the working cell phone of a U.S. Congressman and tape the conversations that he is having with the reporter.

Your emotions go from:

“Wow.  That’s pretty cool.  He’s being taped using his cell phone;” TO
“Hey. That’s a Congressman.  Being able to hack into his phone is NOT cool;” TO
“Yikes.  What if the President uses the same kind of cell phone?;” TO
“Hey, wait a minute.  I use a cell phone!”

This isn’t your Father’s mobile phone

What’s important is that we change our views of what a cell phone is.  At this point almost everyone has a smart phone somewhere on the family payroll.  Rather than being just a phone, a smart phone is really a computer that also has the ability to function as a telephone.  According to a PEW report, ¾ of all Americans use a Smart Phone.  According to a Federal Reserve report on using mobile phones for financial transactions nearly 90% of the Country has a mobile phone.  Seventy-one percent of those people have smart phones.  A Smart phone refers to a phone that has internet capabilities.  (If your phone only lets you take calls, text your friend and play that grainy black & white version of Tetris it’s not a smart phone)

But when we use a smart phone so much we get a little lazy.  Well, perhaps complacently careless is a better way to put it.  We get so used to taking a call; checking our e-mail; looking for new cat-videos on facebook; checking Twitter; re-checking our e-mail; taking another call; responding to a text; taking another call; re-checking Twitter….that we get careless.  It’s easy to forget that we have a computer in our hands and think of our phone as  a walkie-talkie with pictures.

But, there are two types of information on our smart phones that we should be guarding much more closely.  Your smart phone has: 1) A direct path to every person listed in your phone book and to every person you are connected with on social media; and 2) Your up-to-date credit card information.

What’s the big deal if someone has access to my e-mail and social media accounts, anyway?  What do I care if someone else reads my e-mails?  What you have to worry about is not the emails that the hackers can see; it’s the e-mails that they can SEND.  The bad guys don’t really care if your Aunt Sil sends you that e-mail with a story about someone who had a life-changing experience and asks you to send it along to 10 people that you love.  What they care about is having access to your address book.  This will let them finding that ONE person who will think the email that the hackers sent actually came from you and then try to send you money.

The second type of information on your phone that the hackers love? The number, expiration date, and three-digit secret code on the back of your credit card.  Since we don’t want to re-enter our credit card number into the phone every time we buy something, we usually just click “yes” when it asks if we want the phone to save our credit card info.  And some APPs (like the one we use to buy concert tickets) require us to enter our credit card info into the system just to activate our account.  When we agree to let something be stored in the cloud, we don’t ever really stop to think just where the cloud is.  Most of the time, the “cloud” is not somewhere up in the heavens, it’s a giant building somewhere that contains everybody’s secret info and a million little fans to keep it cool.

So they can hear me talk. Big deal

In the 60 minutes piece they showed you how hackers can get into your phone even while you’re performing every day activities – none of which we would classify as highly (or even slightly) risky. (unless you already consider giving out your phone number to be risky).  According to the hackers that were interviewed for the segment, there is a loophole in the operating system that is used by every major cell phone carrier.  That system – the “SS7” operating system – lets your phone roam; lets the providers exchange billing information; and lets hackers reach into your cell phone rather easily.  All they need is your phone number. (That demonstration starts at about the 2:30 mark and appears to work).  Since it’s a bug in the network, there’s nothing we can do to our own phones to stop it.  And, since it’s the mechanism that lets the cellular carriers give each other money, the guess here is that it won’t be fixed anytime soon.

If the hackers in your neighborhood aren’t swift enough to crack the code of the SS7 loophole, you’re still not out of the woods.  There are a few other ways to hack your cell phone that we learned about from the good folks at 60 minutes.  All of these will expose your cellie (and all the private stuff you have contained thereon) to the bad guys.

  • Ghost WiFi created for Hotel – OK, how many of us hop onto the Wifi at the hotel even before our bags are unpacked?  It makes sense.  The more you’re on Wifi, the less you’ll get charged for data downloads.  Now, how many times have you checked with the front desk to make sure that you signed on to the correct Wifi network?  This is a MUST from now on.  The hacker-guy on 60 minutes created a Wifi that looked so much like it was from the Hotel where the reporter was staying she didn’t realize it was fake and signed on.  Remember, they don’t have to be close to you to create a fake Wifi.  They just have to had access to a place that is close by at some point. (across the street; in the hotel lobby with a hotspot of their own; in the alley behind the hotel; in the room above/below you)
  • Downloading a nasty APP – Finding an APP for your phone that tells you where the next winning lottery ticket will be sold would be great! Downloading it would be another story.  Don’t assume that every APP that is available is verified and safe.  Bogus APPs exist and can cause many headaches.  Have an Android? Check here to see how to find bogus APPs.  The APP store that comes with Apple products contains APPs that most likely have been pre-checked by Apple for viruses & malware.  But, even Apple has some soft spots in its armor.
  • Opening e-mail (or an attachment) from someone you don’t know – This one’s the simplest one.  If you don’t know who’s e-mailing you, don’t open the e-mail.  If you ignored an e-mail that was from someone you know by mistake, they’ll call you and say “Hey, I sent you an e-mail with the winners from the 5th at Belmont this Saturday.  Why didn’t you open it!”

One of the hacker guys made a device that allowed him to hack into the reporter’s phone when he just bumped into her.  There’s no way to keep folks from bumping into you and it is probably not a good idea to treat everyone who touches you in public like they are stealing your lunch.  But if you feel anyone touch your phone (or the part of your outfit that contains your phone), disable the Bluetooth right away. (this is explained below)

Is everything hackable? “Yes”

This point of view is from the interviewee from the 60 minutes segment.  Not an encouraging opinion.  But, one that we can’t ignore (unless we unplug totally and revert to smoke signals).  What we should find heartening is what they term as the greatest weakness in phone security – something they call the “human element.” (we don’t know what that is, but we’re darn sure gonna make sure that our phone doesn’t use it)

What to do to protect yourself:

Here are some ways to prevent your phone from getting hacked by taking charge of the so-called human element:

  • If you don’t know who sent the e-mail don’t open it.  By now your reflexes take your fingers to your mailbox to open each new e-mail automatically.  Resolve to go a little slower when looking at your e-mails and stop if you don’t recognize the sender.  If it’s from a business (your credit card or cable company, perhaps) tap on the “sent by” letters and see if the address actually is from that company or if it’s from [email protected] A strange ‘From’ address is a giant red flag.
  • Don’t open that attachment. E-mails from someone you know that have no text but a link and some short phrase like “thought you’d like this” or “Check this out” are almost always bogus.  An old hacker trick is to send these seemingly innocent e-mails from the box they hacked into and then steal the info from the folks on the receiving end who open the link.  (Another RED FLAG is when you get an e-mail that was also sent to 4 or 5 addresses that start with the same letter of the alphabet.)  Get away from:
    • “Gee I got an e-mail.  That’s so neat. Let’s open it!” and move towards
    • “An e-mail? hmmmm.  Maybe it’s from a hacker.”
  • RED FLAG texts (read: ones you should ignore & delete): Any text from a number and not a name. Your phone will auto-populate the “From” field when you get a text from someone in your contact list. If you get a text from someone who is NOT one of your contacts, it’ll just show the number.  That’s a Red Flag! Ignore it. Delete it. (Unless you’re signing up for a trusted service on the web and they say “We’re going to send you a text as part of a tw0-step ID process.  Open that text and tell us the secret code it contains.”)
    • Also, any text that asks for personal information is bad news. Unless your friend said “I’m gonna text you and ask you for this info” delete it.
  • Spam means spam. Your smart-phone’s e-mail system has a “Junk” or “Spam” box.  It didn’t make a mistake.  If it sent the e-mail to the SPAM box, it’s because it was actually SPAM!  You don’t even need to open the Spam box. (Your phone will delete those messages after 30 days or so).  Since many hackers can access your phone if all you do is open the message, leave it alone.
  • Turn off Bluetooth when you’re not using it. This is an easy one to take care of.  Some devices (like the one we talked about above where the hacker touched the phone in the reporter’s pocket) let hackers use your Bluetooth to listen to you and steal your information.  You should get into the habit of turning your Bluetooth off when you don’t need it.  (Your earbuds do NOT need Bluetooth to operate)
    • In an iPhone – go to: Settings > Bluetooth and toggle it to the off position (it is off when the green disappears)
  • Think about anti-virus protection. Your phone is a computer, not just a phone.  If you pretend your smart-phone is really a teeny-tiny laptop, buying virus software makes a lot more sense.  If your PC or laptop has anti-virus protection (Side note: if your laptop or PC does NOT have anti-virus protection, stop reading this and buy some right away!)…If it does, that same company might let you cover your smart phone with the same subscription.  Call them and ask.
  • Disable “Load remote images”.  Your phone automatically downloads images in e-mails that you receive.  Those images contain little spies that will tell the sender some (harmless) information about you.  It will tell them 1) whether you opened the e-mail; 2) what device is you’re using; 3) how long you looked at the e-mail, etc.  The information is  relatively harmless.  But it’s the pathway that the hackers use to get OTHER info from your phone.  Disabling this feature will add a layer of protection.
    • If you do this, it will prevent you from seeing pictures in some e-mails.  Don’t worry, the e-mail WILL show you where the pic should be and how large it is. If you want to see the picture all you have to do is tap where it says “load all images” inside that e-mail. (This way YOU pick which e-mails send information about you back to the sender).
    • An unintended consequence is that some e-mails might look like they were loaded by a drunk person.  Your phone isn’t broken! It just really wants to see those pictures.  Tap “load all images” if the e-mail is impossible to read.
  • Verify the WiFi address and login info when traveling.  Don’t assume the first Wifi that pops up on your phone is the righteous one.  Out of the house or at a Hotel?  Look at the entire list of Wifi addresses that pop up on your phone before you tap “login.”  If you’re at a Hotel or coffee shop, add the phrase “Which Wifi is yours?” when you are talking to the sales clerk.  Believe us, this conversation is much easier than the one where you run down to the front desk at 2:00 a.m. in your skivvies to make sure that you’re not using a bogus Wifi.
  • There are APPs out there that will scan your cell phone for malware and tell you at any point someone else tries to hack into your phone.  We use “lookout” which is free on the iPhone APP store.  Nothing is foolproof.  The idea is that you are making it slightly harder to hack your phone in many different ways.
  • Crypto-phone – There is an alternative (actually there are more than one).  These are phones that boast “complete encryption technology.”  They work by scrambling the signal that the phone is giving out to protect the phone call and data from hackers or eavesdroppers. (Presumably the congressman in the 60 minutes piece did NOT have one of these)  We don’t (because what we say on our cellie is really not that important).  And because they’re $3500 apiece.

Take a few steps to protect your phone and sleep easier.  (And you might want to cool it with any kind of talk you don’t want the neighbors to hear in the meantime)

Posted by: Mark Wiseman (who worked at a law firm where all the associates were sure our phones were tapped.  Maybe they’re STILL listening!)

If you don’t want to go to school, can you just pay us? (How for-profit colleges rip you off)

The late-night ad is pretty straightforward.  It’s appeal (to the pride of a minority audience) is no coincidence.  Like everything else at the “college,” the advertisement has a purpose.  That purpose (as we shall see) has little to do with providing an education.  With phrases like,

“Hey ladies, they expect YOU to take care of the house and pay the rent
“You can make it better for yourself
“I made all of those excuses myself
“I did it. You can do it, too!

The message is clear – Enroll in school today and change your life!  Make it all better.  Unfortunately, the only thing for-profit colleges excel in is the ability to sign people up to pay back loads of debt. Helping you get a degree is not their main concern.

That commercial is from the late 90’s and serves as an ironic reminder of how the product never works as well as it does on TV.  As it turns out, these “colleges” are more concerned with making money than actually educating students.  These programs were designed to lead potential students into a series of bad decisions that left them worse off than if they had just changed the channel. The advertisements promised a post-degree life that involved a dream job, financial independence and the ability to get your life under control.  What they were really selling was the chance to sign up for overwhelming debt, a deeper financial hole than the one that made you say “enough is enough” and a decade of garnishments.

Public/Private? It’s all college right?

As we’ll see there’s a big difference between “college” that we associate with post-high school education and their for-profit counterparts.  College as tradition has it refers to a non-profit institution that has the mission of educating students and preparing them for life with a post-high school degree.  Most often they are public (think: “state school”).  Many times they are private, but the non-profit versions have missions that require them to consider the students first.   As we will see whether a college is operating for a profit (or not for a profit) makes a huge difference in how they treat students.

Difference #1: For-profit colleges are much more expensive.

This seems strange, especially since for-profit colleges market themselves as THE alternative for folks who have day-jobs.  But, it’s true.  Your dollar will get you many more hours in class if you go to a non-profit college.  Since for-profits are in business to make money, that is their focus.  They (many times) have shareholders; staff who work on commission; CEO’s whose job is to work the system to make it more profitable and bottom lines that serve as the most important numbers in all of their reports.  For-profit colleges can be up to twice as expensive as their non-profit counterparts.

2013 Average costs of college degrees

4-year degree from a for-profit college    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . $15,130
4-year degree from a non-profit college  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . $8,890
2-year degree from non-profit college     .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . $3,264
(According to the College Board’s Trends in College Pricing)

It’s true that non-profit colleges are concerned with bringing money in the front door, as well.  But since they rely on sizable donations from rich alumni they actually TRY to care about students.

Difference #2: What does it matter how much it costs? I’ll pay my bills with that great new job I get, right?………right?

This is the rubber-meets-the-road moment for any student – will she get a job with that fancy new degree that she worked so hard for?  Not surprisingly, getting a BETTER job is the factoid that is hammered home the most in those late-night commercials.  None of them say “Hey, come to our school so you can round out your education! Take some electives and be a hit at parties dropping tid-bits of college-type knowledge!”

What they all say is “Make your life better… or “Get yourself out of that go-nowhere job…  So, it stands to reason that the world would Loooove for-profit degrees.  Unfortunately, having a degree from places like Corinthian, ITT Tech, or DeVry doesn’t unlock as many doors as you would think. In fact, having one of those places on your resume will actually get more doors slammed in your face.  How many more?  According to one study,  if you have a for-profit college on your resume, employers are 25% LESS likely to call you back. (Try putting that on a brochure: “Come study here and be guaranteed to be turned down for a job 25% MORE times than our competition’s grads!”)

Sadly, that’s not the most outrageous thing about the employment prospects from these so-called colleges. Everest College (part of the Corinthian empire) actually found a way to trick their grads into thinking that they had a job.  They paid local employers to hire their grads for 30 days so they could pretend to have better after-graduation employment rates.  (better employment rates qualify a school for more federal student loan money).  Everest was paying local employers $2,000 to hire their grads and then fire them after 30 days.  (if you were giving Everest a report card you would say “Shows initiative.  But, lacks a certain ethical understanding”)

Difference #3: Students first! (Well…money first…THEN students first)

In 2012, a Senate committee published a report on the for-profit college industry.  It was not pretty, if you were hoping for a positive spin on for-profit colleges.  It was also not “short.”  (The report was over a thousand pages and gave our computer the equivalent of a digital asthma attack when we tried to download it)  There were quite a few details about how the for-profit college industry was set up to make money at the expense of all other missions.  One interesting fact about the number of staff they employ?  Of the 30 largest companies that own for-profit colleges, here is the breakdown of two categories of their employees:

• 35,000 recruiters;
• 3,500 employees working in career services

That’s a 10:1 ratio.  For every employee these places have who was hired to help you find a job when you graduate, there are 10 (TEN!) trying to get new students to come to school there.  The implication is clear – once you’re there; once you’ve signed up for the loan, nobody cares what happens to you.

How do we know all of this?

After the Senate report, some of the government watchdog agencies took notice and began investigations of their own.  Luckily for us, when the government sues, the documents they uncover become public.  Many lawsuits ensued – the FTC has sued DeVry University and Ashworth College, and the CFPB has sued Corinthian college

The documents mother lode, however, came from a suit brought by the Attorney General for California.  Although it’s been a few years since these lawsuits started, the California documents have just been made public.  The good folks at Pro Publica were kind enough to go through the documents from the California suit and publish their findings.

What did they find?

Unspeakably shameful stuff.  That’s what.  The information about how Corinthian College operated was cover-your-eyes shameful.  For instance:

In one case, Corinthian recruited homeless students and then helped them get federal loans they couldn’t pay back.  They recruited a homeless couple that was camped out near the school; sold them the idea of FINALLY making their lives better; signed them up for loans; let them stay on campus to start school; kicked them off of campus for not having a place to stay and then started chasing them for the more than $30,000 in student loans they were talked into.

“That sounds like the work of a rogue salesperson!” you say.  Actually, this story follows their written business model for how to attract new students.  How do we know?  Here is a screen shot of the training manual at Corinthian College.

 

Corinthian model students

Remember, their training manual was not given to a psychology grad-student who was hired to help them diagnose issues among the incoming student population.  It was distributed to the salespeople to help them convince MORE people to sign up for their college and borrow MORE money.  What are some of the other transgressions that the California Attorney General sued Corinthian for?

  • They advertised curriculum options that didn’t exist
    • “Sure we have classes that’ll help you get a degree in underwater welding!”
  • They lied about placement outcomes
    • “Of course, you’ll be able to get a job when you leave here.  Almost 90% of the people who get degrees from here are working within 6 months!”
  • They steered students to borrow money from a bank that Corinthian had ties to
    • “We have the perfect bank for you.  They have the best interest rates and won’t turn anybody down.”

Now where have we seen this before? 

  • A company hires salespeople to sell loans to a bunch of borrowers by misleading them about how the loans are going to make their lives better;
  • Salespeople are taught how to take advantage of the borrowers’ personalities and life-struggles;
  • Salespeople are paid based on how many loans are signed;
  • The company that employs the salespeople owns a piece of the bank lending the money so they can get cash when the borrower buys their product AND make money when the loan the used to buy it goes to collections;
  • The company doctors the loans to fool the government into thinking they are performing better than they actually are;
  • Since it takes the government years to get wise and shut them down, the company makes loads of cash, while ruining the borrowers’ lives;
  • Advocates gnash their teeth watching it unfold, helplessly

If you’re guessing that this looks a lot like the mortgage foreclosure crisis, give yourself a star.  Instead of empty houses, the for-profit college boom led to massive student debt.  How massive?  Of the 25 Universities whose students owed the most money in 2000, only one of them was a for-profit college.  By the year 2014,  over HALF of the top 25 schools that had saddled their students with the most debt in the entire country were for-profit colleges.  That’s quite a growth curve – from being non-existent to owning the most student debt in just 14 years.

Where NP students owe money

Editor’s note: the cynics among us might point to the fact that the two highest growth years for for-profit college debt occurred in 2007 & 2008 (which was just after the subprime mortgage market imploded) and think that this is where all of the out-of-work mortgage brokers went.

But, aren’t the students at most of the top 25 schools listed above getting degrees and better lives? (like in our ad) Not hardly.  In the 2013 academic year, students enrolled in for-profit colleges accounted for 10% of the total enrollment nationwide, but nearly 40% of the total student loan defaults.  Suddenly the whole thing is beginning to smell like potato salad that’s been left out at the family picnic for about an hour too long.

How do you watch out for this?

If you are thinking about going to college, spend a lot of time worrying about how much it is going to cost.  Approach it like any other loan (like home repair or a car loan): check & repair your credit for about 6 months beforehand; go to a bank yourself (rather than let the place you’re going to buy the item from suggest a lender); say no to extras and do tons of research.

Ask whoever is trying to sell you the idea of a degree (or the money to pay for it) these questions – and get the answers in writing.  If they refuse to answer so many questions or to give you written answers, think about it this way – you’re going to spend the next 4 years getting this degree and the next 10 years paying for it, the salesperson better be willing to spend the time to talk with you and answer all of your questions.

  • How many of your students graduate?
  • How many of your students have BETTER jobs one year after they graduate?
  • Have you or the company that owns this school ever been sued by the government?
    • Ask for these names in writing so you can ask Mr. Google yourself
  • How many teachers at this school are full-time faculty? How many are part-time?
    • A large number of part-time faculty is a red flag.
  • Does this school have shareholders?
    • Shareholders mean that there are people yelling at the people in charge to make money any way they can. This is bad for students.
  • Is this school a non-profit organization? (Prove it to me)

Everybody wants to improve themselves.  Some people join a health-club.  Some people stop smoking or pick up a musical instrument.  Some people go to college.  If you pick the college option, remember: there is a salesperson at a for-profit college who has the same plan as you.  Only the plan HE has to improve himself sounds like this:

“Convince somebody to go to a college that is really expensive but won’t get him a better job.  Put the commission I get for putting him into a bad loan into the bank.  Feel better off because of the sweet money I’m making”

Posted by: Mark Wiseman (Who had trouble finding the ad at the beginning of this post, because there are so many parody ads on You-tube for the same college.)

“I’m sorry did you say you were a scam artist?” (how to spot phone scams)

If a stranger came up to you on the street and said “Hey, do you mind if I go through your purse while you wait for the bus?”  You would probably hit him over the head with it instead.  So why if that same stranger calls you on your cell while you are waiting for that same bus, will you give him the time of day?  Yes you’ll be skeptical. But, if he plays his cards right, you’ll stay on that call just long enough for him to soften you up and let him through that purse of yours so he can see your checkbook.

Used to be the most you had to worry about when leaving the house to spend some money was buying the wrong thing.  Some folks used to say “don’t buy any wooden nickels,” because the threats you faced were when you actually had to leave the house to buy something.  Today, you don’t have to worry only when go out of your house to make a purchase.  The bad guys have many ways to reach right into your house and come get your money, while you’re still sitting on the couch.

Your cell phone and your e-mail account both provide an avenue to reach you at any time of day or night.  And for some reason, if we get contacted through either of these avenues e-mail or cell-phone, we interpret those communications as if they each contain an inherent hint of credibility.

When we get an e-mail asking us for money (or our password or account numbers) it should be met with the same level of skepticism that we have when a stranger asks us for money in the parking lot on the way to our car after the late movie.  Still many of us will keep reading that e-mail in the hope that this might just be the one chance we’ve been waiting for to make some real dough.  This is why people still fall for the Nigerian prince scam.

The tricks of the trade:

Before we describe some of the scams that are still around it probably makes sense to talk about HOW scam artists work and the tricks they use to knock us off of our game.  It’d be easier if we could just ASK if they were scam artists (much like asking if the new guy to the group is a narc)  Unfortunately, we have to figure it out for ourselves.  Remember: the scammer’s only goal is to get you to make a simple transfer of funds.  All they need is your account numbers.  Be they checking; credit card; savings or debit card.  The only thing they seek is those magical numbers.  Magical because they unlock the moola that is hiding behind the door.  Once they have those numbers, the game is over. They each have a map on their desks that contains their business plan:

  • Locate sucker (by phone or e-mail)
  • Gain their trust
  • Suggest a payment
  • Find the money
  • Get the payment
  • Disappear

Instead of thinking:

“Gee they sound so nice and they seem to know so much about me and what I’m thinking.  They just want to help me. They seem like a friend of mine. I should be nice and try to help them to. After all, why would anybody try to steal from me? I’m a nice person and wouldn’t steal from anybody”

You should be thinking:

“I don’t know who this person is. They could be anybody. They SAY that they have some business with me, but how do I know that’s true?  I’ll bet they are crooks, living in some foreign country laughing at apple pie, Chevrolets and me! I’ll never believe them!”

Here’s how they’ll do it

  • The Lure of the BIG SCORE! – This is really at the heart of every con. Make the person think they’re about to hit it big.  Many of us suffer from the lottery mentality – wishing that you hit it big, but thinking you only have to spend minimal effort (like a dollar) to get it.  Scam artists know this and try to tap into that feeling when they try to con you.
  • Using fear – Oddly, this is just more of the BIG SCORE! idea. The con artist is trying to scare you into thinking that you will lose out on that great thing; or that you will be set up to suffer some great unseen harm if you say “no.”  Sure it’s scary to think that your computer could get hacked, your ID stolen or your house burgled.  But that’s not the reason to say Yes to the person who calls out of nowhere to try and save you.
  • Using mirroring – This is when they listen to what you say and pretend to be just like you.
    • If you mention the dog, they are a dog person;
    • If you mention grandkids, their favorite grandmother just passed away;
    • Whatever city you are in, they just Loooove your college or pro team.
      Being able to process some off-hand comment by someone, turn it around and pretend you have the same thing in less than a second is an art form, to be sure.  Just remember: you’re talking to the artist!
  • Pressure you to act NOW – They know that if you don’t say YES while they have you on the phone during the first call, you will probably not fall for their scam. If you hang up – or just say NO – they have no power.  E-mail scams also contain some pressure to act fast.  That comes from whatever fear they are trying to fill you with.
  • Do a lot of fast-talking – scam artists know that the only way to keep you from being careful is to fill everysinglesecond with the sound of their voice. They figure that if you’re listening to them, you won’t hear your own brain screaming “Ahem…RED FLAG!”  Evasive answers, long-winded explanations, phrases that just don’t sound right, ANY feeling in your gut of doubt or a hint that you don’t trust the speaker should register in your brain as if you’re watching a magician who’s really bad at card tricks. (you’ll gladly watch the trick; but ain’t no way you’re gonna give him a tip)
  • Keep you engaged/won’t let you stop the conversation – Every scammer knows that the victim’s only weapon is to end the conversation/hang up/walk away.  Nobody ever got arrested for hanging up on someone.  Almost every scam victim we talk to says some variation on the phrase “Well he sounded so nice.”

Author’s plea for secrecy: Try not to tell Mrs. Consumer Courage that we’re recommending that you hang up the phone.  She’s the only person we’ve ever seen who will apologize to the person on the other end that she’s about to hang up. (I’ve actually seen this)

  • Change the subject
    • You’ll say: “I want to think this over”
    • They’ll say: “well you have to act now, because this deal won’t be open for much longer”
    • You’ll say: “Can you send me something in the mail?”;
    • They’ll say: “Well, this is how we keep our costs down. We’re only offering this over the phone.”
    • You’ll say: “I’ve read about this. There was an article in the paper about how your product breaks after an hour and a half”
    • They’ll say: “How about this weather!”
  • Can I get this money back? –  No scam is complete until the bad guys get paid. To do this, you need to give them some account number.  What they really want is money that is untraceable.  Your question to yourself if you’re about to make an online (or over the phone) payment is: If I’ve been duped, can I get any of the money back?  Scammers will tell you all kinds of things designed to make you pay, using a method that will not allow you to get your money back if it all goes south.
    • What kind of payments should you worry about?  
    • RED FLAG payment types = anything that acts as instant cash. Once the funds are sent, they are gone for good.  All of these: checking accounts; debit cards; Money Orders; Green-dot cards (any pre-paid debit card) are instant methods and a scammer’s dream.
    • Not so red flag payment types = Most Credit Cards have fraud protection; Pay by mail usually involves a check (so that’s bad). But anytime you’re paying by mail, you have a lot of time to rethink the whole idea (which is good);
  • But “I’ll never fall for that” – Sure you won’t.  But consider this, Consumer Courage had helped people of all ages, incomes, educational levels, racial groups, temperaments and shoe sizes.  Trust us when we say “Nobody is immune to scam artists.”  Strong one day – weak the next; Sharp one day – airheady the next. That’s all part of the human condition.  Trust us, if they get you on a down day, it won’t be pretty.
  • Can you take me to dinner first? – One of your first rules should be: Don’t pay anybody the first time you speak with them. (of course, if YOU started the call this isn’t so important) This is meant for you to refuse to pay anybody who calls you out of the blue.

How to protect yourself

Let’s take a look at some of the most popular scams that are out there.  (They might not all look exactly as they are described here, so don’t get caught up in any one aspect.)

Grandma I’m in Jail!…

  • Target: seniors, or anybody old enough to have grandkids.
  • What happens: grandma answers the phone at 2:00 a.m. and hears “Grandma?” She says her grandson’s name into the phone and the scammer says “That’s right. We have [insert grandson’s name HERE] under arrest. You need to bail him out or he’ll be in trouble.” Grandma gets her checkbook and pays the bail.
  • STOP the SCAM by saying: “Give me your number, so I can call the police.”

Security Department needs to verify account numbers….

  • Target: anyone with an e-mail account.
  • What happens: scammer (pretending to be your bank or phone provider) sends an e-mail asking for your account (or social security) numbers so they can “verify” your information.  You respond to the e-mail with your password, etc and they hack into your computer or bank account and ruin your day.
  • STOP the SCAM by: (1) deleting (or NOT opening) these e-mails; and (2) realizing that no company will EVER use e-mail to get your personal info.

Collecting money on a fake past-due bill….

  • Target: anyone who has bills.
  • What happens: scammer calls you about a fake “bill that is unpaid and about to go to collections,” and threatens to arrest you (or your relative) who owes money.  Lots of stern language and mentions of jail.
  • STOP the SCAM by saying: (1)“send me a letter that proves I owe you this money”; (2)“you can’t arrest me for not paying my bills”; or (3) “give me your number so I can call the local police and the Attorney General.”

Pay a fee to win the Lottery….

  • Target: anyone who wants to win the lottery.
  • What happens: scammer calls and says that you won some far away lottery or contest, but need to pay a fee to get your money. First you pay a small amount. But, since you didn’t win anything, they keep calling back to get more money in larger and larger amounts.  After a while, you keep paying (first out of home, then out of shame)
  • STOP the SCAM by saying: (1) “It’s illegal to charge a fee to claim a prize”; (2) “I’d like your name and phone number to give to the FBI”; or (3) “Send me a letter that tells me exactly what I won and how much I have to pay.”

Can you cash this check for me? My bank is _________________….

  • Target: Anyone with e-mail and/or a bank account.
  • What happens: Someone wants you to do them a favor.  They’ll tell you a sob story about their bank not cashing their check for them (“I bounced a check, now they make me wait” or “there’s a hold on my account but I don’t have time to fix it”)  They will give you a check made out to them that looks very real. (so real, it will actually fool your bank)  All you have to do is cash it and give them their money.  Many times they offer to let you keep some of the money “for your trouble.”  After putting the check into your account and waiting  for it to clear you send them the amount of the money from the check. A week later, your bank says:

“Oops! Even though we told you it was OK, the check you gave us was a fake (yes they can actually do this after telling you that it’s OK) Unfortunately, now you owe us for the money we paid out to cover the check that YOU wrote.  Oh, you can’t find the scam artist? Too bad. You still owe us”

  • STOP the SCAM by: (1) not doing favors that involve you giving people your own money – unless it’s your Mom; (2) practice saying the phrase “Aw. I’m so sorry. I wish I could help you.”

Imposter Scams

  • Target: (mostly) Seniors
  • What happens: Caller tries to impersonate a person of authority, such as: an IRS agent; a bill collector; some government agency looking for payment; a bill collector threatening a relative with jail for non-payment.  You are worried that you (or a loved one) will end up in the slammer, so you agree to pay.
  • STOP the SCAM by: (1) Staying calm when someone on the phone threatens you; (2) ask for them to send you a letter stating whatever story they are telling you; (3) ask for their name, address and phone number so you can give it to the Police or State Attorney General to make sure it’s OK.

Free iPad, iPhone (or some other gadget you’d like but can’t afford) if you would just “help them out and participate in a survey”

  • Target: (mostly) Seniors
  • What happens: Caller (or letter’s author) invites you to participate in a survey to check out this new product/rate this new service.  As an incentive they are offering some big-ticket item. One hint that this is a scam is that the giveaway is expensive.  The survey is just a ruse to get you on the phone to answer some personal questions so they can steal your Identity.
  • STOP the SCAM by: (1) Not participating in any surveys; and (2) if you must, pull the plug once the questions get personal. Promise yourself to never give out your date of birth, social security number or checking account number to someone on the phone. (Especially if it is to “make sure we can give you the free gift!”).

So how do you fight them?

We’re not sure there’s one specific thing to do differently to avoid getting scammed.

  1. Sign up for the Federal Do-Not-Call list.  This will stop a lot (but not all) of the unwanted calls to your house.  You can submit your home and your cell numbers for the list. It’s free.
  2. Be more skeptical than you already are, for starters.  If you are dealing with somebody and you can’t see them, try imagining that they are in Kiev and not some Mom-n-Pop store down the street.
  3. If they have some personal information about you, don’t be blown away and automatically assume that you have reason to trust them.  Realize that if the person calling you has the internet, they can get loads of info about you without trying very hard at all.
    1. Information about you does not equal trust.
    2. Information about you equals internet capabilities and opposable thumbs.
  4. Trip out your home phone and Don’t answer if you don’t know who it is
    • Get voice mail you can hear while the message is being left.  There’s no sin in screening your calls. People who want to scam you will hang up, your daughter will leave a message.
    • Get caller ID.  While it’s true that scammers can fake the caller ID, they are less likely to program the phone to show your Nephew’s number.  They are way more likely to have the number show as “out of area” or “toll free call” or “000-000-0000”  It it’s any of these don’t answer!
  5. You have a dial tone…use it! If you do answer and someone is trying to sell you anything or you feel uneasy for any reason, hang up!  This is not a crime.  Nor can you get into any trouble at all with anyone for hanging up. It’s your phone and your nickel. Don’t be shy!
  6. Don’t pay over the phone, until they send you something in the mail first.  Whoever it is, demand written confirmation of whatever they’re selling, peddling or demanding.  If they can’t afford a stamp, they’re out to trick you!
  7. Do not give out any personal information.  No matter who it is, or what the situation is: if they called you first, they don’t get your info.

Posted by Mark Wiseman (who once had his father hang up on him because he didn’t answer fast enough. Dear old Dad gets an “A” for being a courageous consumer, but a “D-” for making us feel like he really wanted to talk to us)

“My home’s value has fallen and it can’t get up!” (Refinancing your under water mortgage)

So there’s a government program that’s still alive in the fight against the mortgage crisis.  It can be a ton of help, depending on your situation.  But, it’s not for everybody.  (Not because the government doesn’t want to help you, too)  It just happens to be designed for a certain kind of problem that can affect homeowners.  When the program we’re talking about was created, the foreclosure crisis was in full-swing.  Almost from the beginning, there were other programs that were there to help F/C victims (counseling help for those who were defaulting; some bits of money for those who could afford their monthly payments but needed a little to get back on track).  But, the idea of providing help so folks could refinance out of the mess they’d gotten into (by getting into a more affordable loan) was slow in coming.  New loans were not that readily available: credit had tightened up AND there was a well-accepted point of view that people who couldn’t afford their home loans somehow deserved to be having trouble.

Editor’s Note: True, there were people who devised ways to game the system and make money by being dishonest and defaulting on their obligations.  But, those stories were the exception rather than the rule. (and don’t even get us started on the scores of folks who lived on Wall Street and, themselves made oodles of cash whilst shafting the government)

Is there one solution?

Not by a long-shot.  Every home loan situation is different, and the variables – each of which can have a profound effect on somebody’s ability to get (or stay) out of trouble – are numerous.  Employment in the area, neighbors who left their houses vacant, whether any particular loan was securitized or is held by a local lender, whether nationwide servicers think a particular County-wide area will allow them to resell their properties, whether pools of mortgages are sold and to whom…all can determine how many foreclosures will get filed and how long the houses stays in foreclosure.  Same goes with the variables that determine whether a foreclosure ends with the house being vacant or in the hands of some new owner.

Once people are in the soup because they can’t afford their loan or need a new one, they use help in one of a few major ways:

  • Help curing their default;
  • Help stopping the foreclosure;
  • Help determining their options and choosing from a series of bad next-choices;
  • Principal reduction;
  • Interest rate reduction or freeze;
  • Refinance into a new loan.

These all can be had by any borrower working on their own. But, having a non-profit counseling agency holding their hands throughout all of this is the best way for somebody to wind up in the best situation.  Non-profit agencies are needed in this equation to combat two equally unsettling realities for people in default and foreclosure. The first reality is that the lending/servicing community has long-expressed the desire to work through a third-party, rather than converse directly with borrowers in distress.

Author’s note that we’re not kidding: we were actually in a meeting with representatives from Chase who took a bow for creating an 800 number for borrowers to obtain help with their home loans and in the very next breath cautioned “Please don’t pass this out to borrowers.  This is only for the agencies.  We don’t want to get overwhelmed with phone calls. [nervous laughter]”

The second reality that makes housing counseling agencies a necessary tool to help borrowers in distress is the presence of foreclosure rescue-scam operations.  These folks find about foreclosures from public records and then contact the poor saps whose lives are falling apart.  The sales pitch unfolds thusly:

“Don’t you want to keep your house?  We can guarantee that’ll happen.  The banks don’t care about you.  We have over a hundred years of experience dealing with home loans and banks.  We can help you navigate this scary maze.  Since you can’t trust the bank, send your monthly payment to us first.  We’ll index it before we send it along, so they can‘t steal it and make sure you get the credit you deserve.  Don’t bother calling them.  As you’ve probably already found out, calling them is a circus.  We’ll handle all of that for you.”

Foreclosure rescue scammers all operate under the same premise – many people desperate to save their homes will send cash to anybody who talks a good game.  They’re everywhere and (despite being in need of a backhand to the cranium) have a very lucrative business.  The Federal Trade Commission has a whole page devoted to these thieves

What if you haven’t missed a payment?

If you haven’t missed a mortgage payment, foreclosure rescue scammers are probably not on your radar.  But, for most people who need to stay employed to be able to make their monthly payment, the blips on their radar represent upcoming months when their payments are going to get harder and harder to make (or to justify making).  If you’re income is shrinking (or staying the same while your payment is going up) you need a new loan or to seriously rearrange your current loan, rather than find a housing counselor.

The program that we’re talking about is called HARP  and is part of a group of loans that are funded by the federal government to help keep people from falling into foreclosure.  HARP was started to take care of folks whose homes were under water.  (That’s when the value of your house has gone down quicker than your loan amount)  Let’s say you bought a house in 2010 for $150,000.  Unfortunately, once foreclosures got out of hand, houses that would normally be repurchased by the bank started to sit empty.  (Maybe you have a few on your street?)  Once that happened, the banks started to unload those houses for nothing just so they didn’t have to carry them on their books. (After all, banks do not want to be landlords).

Editor’s reminder that we are NOT in a comedy sketch:  I’ve had several actual bankers say this phrase to me “We don’t want to be landlords.”  Our question to them has always been “So why don’t you stop filing foreclosures?”  After all, a foreclosure case tells the world “He’s not paying his bill, let ME have the house.” We’re still waiting on an answer.

So the house next door (and the one across the street) from the place you bought for $150,000 is now being sold for $30,000 to someone who wants to paint everything white and rent it out to some really loud (and seemingly very thirsty) college students.   You currently owe $120,000 on a house that you couldn’t get $50,000 for.  You want to refinance the $120,000 that’s left on your loan so you can reduce the interest rate. But your bank is not in a hurry to do that because their appraiser told them that it’s not worth that much.

In response the Feds have come up with the HARP loan.  Your bank won’t let you refinance.  But maybe they’ll agree to do it if the Federal Government would agree to back the loan.  For these folks, a HARP loan is just what the Doctor ordered.

We can imaging where that phrase came from.  Probably from a time when medicine was one big mystery.  People probably thought if they didn’t listen to the Doctor, they wouldn’t last long.  But now?  Most of us have stopped listening to the Doctor long ago.  Oh, we listen to some bits of advice.  But, we still eat pizza, drink beer, stay up late, eat potato chips, drink pop, don’t exercise regularly…who are we kidding?  I propose that we use a new phrase “Just what the attorney ordered.”  Let’s face it, if you’ve come to the conclusion that you need an attorney and are paying for him (or her) you’re darn sure going to listen to what he has to say.  As I was saying – for these folks, a HARP loan is just what the Attorney ordered.

Who is eligible?

If your loan began as a loan guaranteed by Fannie Mae or Freddie Mac (one of the two main agencies that the US uses to back home loans) you’re in luck.  Here is where you go on the web to see if your loan was a Fannie Mae  or a Freddie Mac loan.   If it was, read on…

What else

The loan has to be at least 7 years old.  If you got the loan after May 31, 2009, you can refinance. (Or switch your interest rate from an Adjustable to a Fixed Rate).  The loan also has to be on your primary residence. (Or, on a second home that only has one residence; Or an investment property that doesn’t contain more than four units)

You only get one bite out of the apple

If you want to refinance your home under HARP, you only get one chance.  If you’ve refinanced (or adjusted your interest rate) using HARP, you can still refi, but your lender can’t use the government’s money to help you do so.  (Unfortunately for some folks a program like this is the only way to refinance.  Since credit has become tighter in the last few years, some people who would otherwise qualify for a new home loan are unable to get one).

Clean payment history

You also have to be current on your home loan.  Instead of making borrowers under this program go through traditional underwriting (submitting bank statements, paychecks, bills, etc.) the powers-that-be decided to focus on the borrower’s immediate payment history as proof that making a new loan would be a good idea.  Borrowers only need to show that they: 1.) have not been late at any point in the last 6 months; and 2.) have no more than one late payment in the last year.   The good news here is that you still have time to clean up your mortgage-paying habits if you want to take advantage of HARP before the end of the year.

HARP is slated to sunset at the end of 2016.  Since it’s only February, you still have a few months to make your payments on time get in under the wire.  If you make all of your mortgage payments on time for the next 6 months, you’ll have the first prong of the payment-history aspect of the program locked up by July.  Then you only have to worry about whether you’ve had any late payment-months when you count back six months from February of 2016.  The point is for you to take a look at your payments in the last 12 months and see if six months of behaving might help.  (Don’t misunderstand us, you should move heaven and earth to make your regular mortgage payment on time ALL the time.  The point of this exercise is to let the folks who aren’t such persnickety payers get their stuff together.)

What’s it worth to ya?

When these loans were first created in 2009, there were some (under water) borrowers who were walking away from their home loans.   “Why should I pay all this money for the house I bought two years ago, when I can buy the Olson’s place down the street for ¼ of that amount?” Some were stuck in loans they really needed to refinance, but the banks wouldn’t touch them because the houses around them were dragging values way down.  So, HARP and HAMP were created.  (If you are wondering about the differences between HARP and HAMP, so are we.  The good news is that the web does not have a shortage of available into on this exact question.  Try HERE  or try looking HERE )  Which is why one of the original prongs for HARP loans was that borrowers needed to have high loan-to-value ratios.  Originally 105% was the highest your LTV could be to get a HAMP loan.  Then it was moved up to 120% and then back down to where it is now.

Does LTV matter now? 

When HARP was created banks would shy away from lending money if a borrower’s LTV was higher than 80%.   HARP was put in place to save those folks who were stuck at high LTVs.  For example: if you owe $150,000 on your home loan, but it’s now only worth $125,000, you’re underwater and have 120% loan-to-value ratio.  This was the perfect loan for a HARP refinance.  (Although Consumer Courage has passed the age where he is allowed to play w/sharp objects, his math skills are not always allowed to leave the house unsupervised.  Keeping that in mind, here’s the LTV tool that the government folks have designed to let you know if you are in the right LTV neighborhood)

As time went by not enough people were using HAMP or HARP.  (As of March, 2014 only 3.1 million had been refinanced using HAMP or HARP, even though estimates peg the number of people who were underwater at around 10 Million.)  Figuring that the requirement that folks be underwater was the problem, the government started to chip away about the LTV rules.

At this point, your LTV only needs to be 80%.  If that seems a little weird, it’s because it is.  Now you can even qualify for a HARP refinance if you owe LESS than what your house is worth – we call this “over water.”  (Actually, no one calls it that)   This wouldn’t be the first government program to help people it was designed NOT to help of course.   Still trying to decide?  Maybe the largest Q & A page ever created (it discusses HAMP) can help you out.

Closing costs are still a thing

Unfortunately, closing costs still exist under HARP.  You can add them to your loan amount.  Although that’s not the best advice.  If paying for the closing costs on a home loan up front is at all possible you should do it.  (This goes for any home loan by the way.)   That’s because once money is rolled into your loan amount it becomes just another thing that you have to pay interest on for the next 30 years.  Loan officers are all-too-happy to let you add to the balance on the loan because their commission is usually tied to the loan balance.

Is it the right time for you to refinance your mortgage using HARP?  That’s up to you.

Posted by: Mark Wiseman (who was lied to by the loan-officer-neighbor he used to sign up for his first home loan.  I would’ve preferred some kind of welcome basket, instead of an ARM that I had to refinance to get out of)

“The Ferrari’s $2. The extras will cost ya” (Should you buy car-rental insurance?)

There’s a Seinfeld episode where Jerry gets to the rental car counter and realizes that they do not have a car waiting for him, even though he made a reservation.  Turns out, not having a car when you go to the rental counter is not the thing that you have to fear the most when you are out-of-town and in need of wheels.  Unfortunately your biggest worry is what to do about the insurance monster.  This ugly thing is in the form of a hefty fee (that is usually higher than the daily rental fee for the car) coupled with a massive dose of self-doubt and second-guessing that will last until you turn the car in on the day you leave.

Author’s note of angst: self-doubt and second-guessing eludes many of the folks reading this, I’m sure.  Some of us though have these feelings as a baseline.  As in “today was great.  I only had a little self-doubt around lunchtime.”

It’s how much?

One of the most important tasks we have when ordering something on the phone or from the net is to verify what the actual final charge will be.  “Can you tell me what the total is again?” should be the last thing out of your mouth when you are ready to hang up from the reservations desk.  That way you can hold the rental car company (or hotel; or cruise; or swanky boat-tour) to their word when you show up and slide your credit card across the counter.  (We asked when we called about the car, we really did.)

  • We were ready to say No when they asked if we wanted to check the “return-the-car-without-gas-and-we’ll-charge-your-card-later” box.  This is when they entice you to give them your permission to fill up the tank with their own gas because it’s more convenient for you.  What they don’t tell you is that this gives them permission to charge you insane amounts for a gallon of gas (3 times the price is not uncommon)  Your best bet for gas is to find a station close to the rental counter and leave yourself an extra 20 minutes or so to get gas at the end of your trip. (But stay away from the stations right next to the airport.  Those people are just thieves with gas pumps)
  • We were not prepared for the extra-authorized-driver fee.  This puppy cost $11.00 per day and is a MUST HAVE if you are not the only driver.  Since Mrs. Consumer Courage was thinking “I might want to drive at some point,” we bit the bullet and signed up for the extra-driver fee.  (We didn’t want that $77.00 anyway).
    • This is probably a good spot to have everybody promise that they will never (EVER) let someone who has not signed the contract as an authorize driver get behind the wheel.  They’re not asking for the names of any other drivers to be nice.  Whichever insurance company is on the hook for any damage to the car will be all-too-happy to say “I’m sorry, we’re not paying your claim because the car was being driven by an unauthorized driver.”
    • Don’t forget to ask the rental clerk if the hotel valet is an authorized driver, by the way.  Most likely they’ll say yes.  Even if you’re not a valet person, when you stay in a downtown area you might not have a chance to park the car yourself.
  • Since our clerk said “You don’t have to worry about tolls.  They are camera-operated, minimal and will be charged to your credit card,” we didn’t ask if there was a state-authorized highway toll-pass that we could put into the car while we had it.  But, some rental contracts have hefty per-toll charges if you do NOT buy the state-run highway toll pass.  Ask about this and say “What’s the cheapest way we can pay for any tolls?”  Have an entire conversation about this and don’t leave the issue until you understand exactly what’s going to happen when you pass through a toll booth, whether you are going to get charged and how to do it the cheapest way you can.
    • Some areas still have toll booths.  But some areas just have cameras that zap your license plate and tack on minimal charges.  You should understand how this works and whether the rental company has a provision that hits you with extra charges after you turned the car in.
  • There are a host of extra fees that the City council wherever you’re going has already planned to stick you with.  Stadium charge; Airport drop-off surcharge and Visitor fee are all examples of legal add-on fees.  You can’t avoid them.  But you can ask about them when you make your rental just to see how much they are and to compare.
  • We didn’t even think to ask if there was a rental counter NOT located at the airport that might be cheaper.  Airport rentals tend to be more expensive because of the fancy taxes we just talked about or just because the rental people jacked up the price at the airport counter.   Make some calls to see how far the next-closest rental counter is.  But finding a cheaper rental counter is half the battle.  It’s only worth it if you can get there and pick up the car for an amount that is less than what you are saving.
    • If your flight lands at 10:30 p.m. and it’s a hundred dollar cab ride to the other place, it might be worth it to use the airport counter. Figure in the cost to get back to the airport on the day you return the car as well.  On the other hand, if there’s a rental place right next to your hotel and a shuttle bus will take you there from the airport you’re in business.
  • We forgot to ask “Do you have discounts for AAA, AARP, etc.”   When you make reservations keep asking the clerk if there are any discounts available or ways to make the rental cheaper.
    • No, we don’t belong to AARP.   But when there’s a knock at the door at odd hours, we realize it’s only a matter of time.
  • “OK sir, do you want to buy insurance for the rental car?” sounds like a simple question but there are a lot of questions to ask.  And a lot of things to watch out for.

Prepare thyself

This is an issue that you should think about before you leave home.  If the first time you consider your options is when you stroll up to the rental counter after a long day traveling, it’s not going to end well.

Editor’s reality check: If you’re travel habits are anything like the Consumer Courage family, you’ll also be tired (because you were up til 2 packing); hungry (because you forgot to eat breakfast and “were not about to pay $8.00 for a ninety-nine cent bagel” at the airport); thirsty (because they treat water like it’s gold bars on the plane) and a little bit irritated at how long you had to wait for your bags.

The point is, you’re gonna wanna make this decision from the comfort of your own home, instead of at the rental counter at 11:30 p.m.  There are several questions that you need to answer to figure out whether you need the extra insurance.

  • What kind of car insurance do you have?
    • How extensive is your coverage?
  • What kind of credit card will you be using to rent the car?
  • What kind of car do you need to rent?

Unavoidable primer on insurance

(As many of you realize by now, digression is not an unwelcome guest for Consumer Courage.  And rare are the times when we take tangential journeys to discuss things-legal.  This one of those times).  There are a few basics about car insurance that we all should know before going any further

  • Collision coverage describes the insurance company’s obligation to pay for damage to YOUR car;
  • Liability coverage describes their obligation to pay for damage to the OTHER guy’s car;
  • Medical payments coverage describes their obligation to pay for hospital and Doctor bills from mishaps that happen on (or near) your car;
    • By the way, this is the cheapest thing to add to your auto-policy and will cover injuries that you can tie to your car.  Ask your insurance company how much this is and give it some serious thought.  Med-pay coverage will pay for some of the things that your health insurance won’t cover and might even cover injuries not caused by an accident.
  • Minimum state-mandated coverage is an amount (usually pretty low) that each state determines is the lowest amount of liability coverage that each driver should have. (there are no minimums for collision coverage.  States could care less whether the wreck you cause will fix your own jalopy)

Most auto-insurance carriers will cover a rental that you obtain.  But here’s the rub: the rental is only covered to the extent that your own car is.  If you signed up for only minimum coverage in your home state you might need to update your policy before you get the rental.  If you have uttered the phrase “my car’s not worth much, so I don’t need to waste money on collision coverage, you shouldn’t be relying on that policy to protect your rental car.

Where were we?…

Oh yeah, your own coverage.  What’s important when you rent a car is not just that you have insurance coverage.  It’s that you have ENOUGH coverage.  If you have the minimum coverage in Ohio and drive a 1992 LeCar (don’t laugh, they’re still out there), you probably don’t need collision coverage at home.  But that $12,500.00 in “liability only” coverage will not fix your rental, leaving you in a bad situation if you get into a wreck.   The first thing you need to do is see how much coverage you have and make the necessary changes it so that it’s fit for a rental.

Let’s do some math.  If you are going to have the rental for a week and the rental company charges the typical amount for insurance, you’re likely to pay $30.00 per day.  The question now becomes, can you update your own auto-policy for less than $210.00?  Remember: if you beef up your coverage for the week that you are renting the car, you can change it back as soon as you get home.  If that happens, the insurance company has to credit you for the amount of unused premiums.  Ask them how much 7 days of the beefed-up coverage will be and if you can reduce the extra coverage when you get home.

Will that be paper or plastic?

When you reach for your credit card to pay for the rental, don’t just grab the one with the most cash-back or the most bonus points.  Reach for the one that will protect you for the rental.  Many credit cards offer supplemental coverage for car rentals as long as you use their card to purchase the rental.  According to the  2015 credit card study by Card Hub  American Express is the best, followed by VISA and then MASTERCARD.

The Discover Card is also mentioned – but only so they can say “don’t use Discover to rent a car.” Discover offers no protection for a rental car.  They may give you loads of cash back at the end of the year.  But they are not your friend when you are standing at the rental car counter.  AmEx is the best because they act as the primary carrier for any mishaps while driving a rental.   This means they will step in first so you might not even have to use your auto-carrier, which is sweet.  AmEx and VISA both have “loss of use” coverage which means that IF you have a wreck, they will pay the rental car company for the time that the car is out of commission while it’s being fixed.  (Loss-of-use is when they charge you the per-day rental cost while their mechanic is taking his good-ole time fixing the bent fender casing from when you dinged the wall at the parking garage.)

There are limitations on how much coverage your credit card provides.  Most of them are time-limited (usually only good for rentals of less than two weeks) and you’re probably not covered for cars rented outside of the U.S.  For some reason which escapes us most credit card rental coverage excludes giant vehicles (Lincoln Navigator; Suburbans; other extra large SUV’s and pick-ups)  Check the list to make sure the vehicle you want to rent is NOT an exclusion.

What should you do before you get on the plane?

Start your research by calling:

  • Your own auto carrier.  Tell them that you’re renting a car, verify your exact type of coverage and see what exactly extends to the rental.  Ask about the types of coverage and whether it is comprehensive enough.  “Can I sign up for this, how much is it and how quickly can I cancel?” should be on the tip of your tongue.  Ask about collision (if you don’t have it), extending liability (if you only have minimum coverage), medical payments coverage (just in case), and loss-of-use coverage for the rental if it has to get repaired.
  • Your credit card company.  Ask them to verify that they will provide secondary car insurance coverage for a rental if you use their card to buy it.  Are there exclusions? Do you have loss-of-use coverage?
  • Is the rental being picked up by your work? If it is, you need to talk to them about insurance coverage.  Your own carrier might not be so happy to pay for an accident if they even THINK that you were out of town on business.  If your work says “Just use your own auto-insurance while you’re at the meeting,” call your carrier and make sure they’ll cover you while you’re on business.  If your insurance company says they won’t, you need to talk to your employer about buying the extra insurance coverage from the rental company.  (Better to have this uncomfortable discussion now, instead of when you are holding a bill for $3800.00 in repairs and a denial letter from your own insurance carrier)

As with most important purchases, the more you plan ahead of time the better your decision will be.  Happy driving.

Posted by: Mark Wiseman (who actually drove to Florida two years ago. The only hang-up was when we drive 2 hours out of our way to find a car-wash….Don’t ask)

Take a seat honey – it’s gonna be a while (how to handle customer service abuse)

We’ve been trying to come up with what constitutes Consumer-hell. Although we weren’t there this morning, we sure were in the Consumer Twilight Zone. We have been planning on going out of town for a wedding. Since the plans that we were scheming with a local travel agent came to naught (THAT experience could be handled in a blog post of its own, entitled “So that contest prize for a free trip wasn’t so free after all, huh?”) we had to adjust to make do in other ways.

Mrs. Consumer Courage (who continually establishes herself as the reasonable member of the family) remembered that we had a age-old uncashed coupon for free travel on an airline that shall remain nameless (mostly so I can skewer them further on in this post). We tried searching for flights on the airline’s website. Unfortunately the closest we came was a message in BIG RED LETTERS to the effect: “We’re sorry, but the dates/times/flights you have requested do not exist.” The strangest thing is when Mrs. Consumer Courage called the airlines she was able to choose from many very agreeable flight choices.

We chose a flight that was convenient and (as it would happen) only slightly more than our coupon’s value. Which meant that we would be flying to our destination (and back) for about Fifty bucks per person.

Author’s note explaining the wanton boasting nature of this comment: we have a hard time standing those who have a constant need to inform the world of what they saved, when they saved it and how much more than you they saved. I’m NOT that guy. But, it is necessary for the point we have to make to tell the world that we’re only spending fifty bucks.

Is that Dot Matrix print?

At this point, it’s probably important to mention when we actually got our coupon. The first long-distance carrier we ever used was Sprint. Our first home phone long-distance contract started in 1988. In late 2004, Sprint sent everyone a letter that said

“Dear valued customer, our rewards program is going belly-up because, by now, every human has no choice but to obtain a mobile phone. Therefore, we don’t really need to have prizes for people to use our long-distance service because we have turned our efforts to fleecing the world with cell phone charges. (air-usage charges; over minutes charges; incomprehensible nameless fees……you understand). Anyway, unless you pick a prize from this list that is way smaller than the list that you signed up for in the next week-and-a-hald , your points will disappear.” (we might have paraphrased a little)

After much discussion, we opted for the two airline coupons. Fast forward a decade. As it turns out, just GETTING the coupon/gift certificate/redeemable prize is only part of the battle. By now, most people know what a con gift certificates can be. (Con’s probably not the right word. Let’s call them a passive goof. Whoever sells them will gladly redeem them. But if you forget – who’s gonna stop you?) Most gift certificates go unused. Let that sink in a while. More than half of the gift certificates ever purchased do not get cashed in. Which means that when you buy a gift certificate for somebody; odds are you are really just making a donation to the store that you WANT your friend to visit. Never was that more apparent than with our airline coupons.

We got them in 2005 – we used them in 2015. I know I know, ten years is a long time NOT to use a gift certificate. In our defense, I realized as soon as we got them that there was no expiration date. So, what’s the hurry? Well, one of the bugaboos with gift certificates is that they only last as long as the company that you buy them from. (Just ask several members of Consumer Courage’s extended family who fell in love with a certain restaurant and bought each other gift cards only to watch them go out of business)

I have to go where?

We made our plans with the help of the customer service lady at the airline. When it came time to book the flight, she said “Well, I can reserve it for you, but I can’t run the coupon. You’ll have to go to the ticket counter at the airport in the next 24 hours.” This didn’t seem like such a hassle. Even though she told us that the counter was open from “8 a.m. until 8 p.m.” I decided to go early in the morning (on my way to work) to get it done quickly. After all, how long could this take?

My first mistake

I showed up at the ticket counter the next morning as instructed.  At the time it didn’t seem so weird that I had to go to the airport to redeem the coupon.  But I soon figured out why it should have set off alarms inside my head.  The first indication that this wasn’t going to be a quick purchase was when the clerk said “Hmmm.  I have to go in the back and get my book.”  She returned with an item that was made (I am sure) before we had the internet.  It was a 3 inch thick binder that contained everything that this airline might ever want their employees to know.  Unfortunately, it quickly became apparent that the tome she had in her hands was insufficient to the task.  That task being: help me buy a ticket on their airline.

Editor’s note of searing irony: that I was having trouble buying an airline ticket at the one location on the planet that has as it’s reason for existence to help people buy airline tickets didn’t make it any easier for me.

What followed was a series of conversations between the clerk who was helping me and the folks on the other end of the line who worked for HER AIRLINE.  (to be fair, it wasn’t ALL conversations that I witnessed.  Most of what I saw was this woman sitting on hold, actually WAITING to be helped by a faceless customer service rep in some far away place)  As much as I wanted to look at her, smirk and say “Not so fun is it?  waiting to be helped on the phone by someone who could be on the moon and in no hurry to help you?  Been there…”   (Just between you and me, if the thing I was waiting on wasn’t REALLY cheap tickets for Mrs. Consumer Courage and myself I would have been a lot less pleasant…)

As it was, it seemed like I was in a sit-com.  Here are some of the things that the I heard the clerk say during the TWO HOURS (!) I sat and watched her be in her own customer service penalty box.

  • [to the rep on the phone] “Yeah, I have no idea what to do either.  No idea”
  • [to another rep] “I know. I haven’t seen one of these things for years”
  • [to too many customers in line] “Can I help you sir?  I not doing anything but sitting on hold”
  • [to her c0-worker] “I’m gonna be another half-hour. AT LEAST”
  • [to me] “It’s not me.  Nobody wants to take responsibility for this. Nobody wants to sign off on this and maybe get in trouble”
  • [to another co-worker] “I don’t know what Sandy’s problem is today.  She can’t get into the supply closet.  Sure, like there’s nothing else to do around here but go get pencils!”
  • [to the rep on the phone] “Oh go ahead.  I’ll still be here.  I don’t have anything else to do this morning” (both of them laughing)
  • [to me] “you see, our system is new and it doesn’t know how to talk to the old system.”
  • [to her co-worker]  “This is so weird.  It will only let me plug in ‘cash’ or ‘credit card’ as the form of payment.  There is no box for ‘coupon.”

You read correctly.  I spent my entire morning in customer servicer purgatory because the geniuses who designed their computer system forgot to put an “other” category in the ‘form of payment’ field.

Editor’s whole other problem:  one of my peeves in this technologically-advanced world of ours is when a company blames the horrible way they treat you on the fact that “our computer system is so big that we have trouble interfacing with the rest of the company.”   The funny thing is: if you didn’t pay your  bill or owe them something or fail to keep alive some benefit that you should have coming – you can be sure they’ll keep track of THAT.

Two hours after I walked into the airport to buy my tickets (and after countless text messages to my wife about how I was considering railing somebody behind the counter) I finally go my tickets.  What happened?  They got “Paul” from the back. (he should be blessed, Mr. Paul)  He banged on the keyboard for 10 minutes and made it spit my tickets out.  “We used to do these all the time, ” Paul said.  Which made me say “Where were you two hours ago?”

What have we learned from this?

  1. Call them anyway.  No matter what the we says.  If you have success if you don’t have success, call and talk to an actual living person.  We can’t remember how many times the web said “we cannot find the item you are looking for” only to be told by a human being that “yes, we do have that item.”  And, every once in while you can get a better deal by asking for a better deal again and again over the phone.  Try the web and then build from the sweet deal you were able to find.
  2. Love that expiration date.  Coupons are nice.  Coupons that you can actually use are twice as nice. You could have the best coupon in the world.  If it’s past the due-date, it’ll have much better use at the bottom of your birdcage.  The first time you get a coupon (gift card, gift certificate…whatever) find the expiration date and write it down.
  3. Use them early anyway.  Have to years to spend that coupon? Great! Use it quickly.  They could go out of business or worse, get a new computer that doesn’t know how to redeem said coupon.
  4. Make sure they can help you.  Have a separate conversation with somebody about how to redeem that coupon.  Pretend you’re Consumer Courage and say  “This has happened to me before.  I had a coupon and they coudn’t redeem it.”  (you can do this. They have no idea who you are”)  Have them do some research about how the redeem process works.  That way, if there is some hidden trouble you’ll get them to figure it our for you sooner.
  5. Do your part right away.  Don’t waste any time.  We shudder to think how long we would have been standing at that ticket counter if we waited til the end of the day as the first rep suggested.  Luckily, since we showed up at the beginning of the day, there was a supervisor there. (and who knows what would’ve happened if Paul wasn’t there to save the day)
  6. Nothing left to do but Smile, Smile, Smile.  This is always good advice.  But when you are trying to get help from customer service, it can get a lot worse.  You should hear how the clerks talk about the people who even have a teensy bit of attitude once they walk away from the counter.   It’s not kind.   You have to make them WANT to give you good customer service.  If you have an attitude, they’ll give up and tell you to come back tomorrow before you know it.  Like we always say “There’s no such thing as Righteous Indignation.  There’s only Indignation (and it isn’t pretty to watch).”

Happy coupon redeeming.  And remember.  The phrase “you have to go to the office to process this transaction. Because my system is not set up for it,”  is code for “Take a sandwich and a crossword…It’s gonna be a while.”

Posted by: Mark Wiseman (who wants a T-shirt that says “I stood in line for two hours and all I got was a lousy blog post”)

“Not so fast bucko” (what might be hidden in that rewards credit card)

So, you were able to make all of the purchases that you were looking for this holiday season? Great! It was tough.  You never thought you would find a hoodie with wizard powers, or a full-body poncho so you could bike in the rain – but there they were. (and so cheap!)  Who could blame you for buying an Ewok costume for your dog?  Although we’re not sure why you just HAD to buy yourself a kit to give yourself freckles. (Not that we’d judge anybody’s gifts, but everyone is happy you did not splurge and get the inflatable slide made just for yachts)
No matter what you bought, when January comes around you’re going to be staring at the business end of a credit card bill with your name on it.  If you’re like most of the rest of us you won’t be able to pay the entire balance off when that due-date arrives.  Most Americans have (not one, but) two credit cards with rolling balances in the $5,000 range and an interest rate a little north of 12%.

What if you can’t play credit card bingo?

Credit card bingo (our term) is when – once your balance gets too high – you transfer your credit card balance to a new card that has a zero percent interest rate for an extended period of time (12 months or longer) so that you can save the monthly interest charges while you pay off the balance.  If you have reasonably good credit you’ll get this kind of offer in the mail pretty often.  It’s worth it, even though those deals always come with a “transfer fee” (usually between 3 and 5 percent of the balance you’re trying to transfer).  Once the transfer is made all you care about is avoiding any interest charges while you pay off the balance.  All you have to do is pretend that your interest-free period is one month less than it really is and divide the amount you have to pay back (the transfer amount) by that number to get your monthly payment. (if you transferred $11,000 and the “interest free period” is 12 months – you have to make 11 payments of $1,000 each)

What if you’re credit is not the best it’s ever been?

Not everyone can even get the zero percent offer.  If that’s the case you have a two-part strategy to pay off your credit card bill.

  • Step #1 – love that due date.  No matter what the interest rate on your credit card is, it is lower than the rate will be if you miss a payment and the default interest rate kicks in.  On the day you get your credit card bill, do either of these: 1) pay the minimum amount right away (so you’re sure NOT to miss the due date); or 2) write on the outside of the bill a date that is 7 days BEFORE the due-date on the bill and pay it by that earlier date.
  • Step #2 – Pay extra every month. Find the minimum payment that is listed on the bill.  Then add whatever amount that you can afford to the minimum payment.  After the CCARD Act of 2009,  the way your bill looked was changed big-time.  It used to be that the banks could list a minimum payment that was LESS than the monthly interest charge.  Many folks thought if they paid the monthly payment they would eventually pay off their credit card bill.  Now the bank has to show you how long it would take to pay the balance if you only pay the minimum payment.  What becomes obvious is that you should pay extra if you ever want to pay that card off.  How much extra should you pay?  That’s between you and your checkbook.  In the meantime find the little box that shows how much interest you are paying every month and use that as an incentive to pay as much extra as you can.

Can I get some kind of reward for transferring my balance?

As a matter of fact…..there are many ways for the bank to make money from their credit card business.  They pay less to the merchant than what you were charged (but collect the whole amount from you); they charge those same merchants a separate fee just to process the original charges; they charge separate fees to you and me (annual fee; late fee); and they charge the consumer interest on any unpaid balance from month-to-month.

How much money in the economy do credit cards account for? In 2014 alone, the credit card industry processed nearly $5 Trillion in payments.  Because issuing credit card is such a booming business, companies are always looking for ways to poach more consumers.  One of the weapons that they use is rewards for consumers who use their card.  Reward cards are so popular that now the majority of folks who have a credit card have one that comes with rewards.  Buy stuff with your credit card (or transfer balances in order to open a new account) and rack up the points!

Which one do I pick?

There are plenty of articles that compare rewards credit cards in an effort to let you know which one is the best.  You can get a card that lets you accumulate points, airline miles, cashback rewards or a combination.  Nearly every card gives you points for merely transferring an outstanding balance from your previous card.  Most of them have a hefty annual fee (the good ones are near the hundred dollar mark) that can be waived for the first year (and any year after that if you call and annoy the customer service rep into waiving it).

Of the articles about “how to choose a credit card” that we found, most of them do not talk about the interest rate; one dares to mention how much it will cost to repay cash advances; one dares to mention collections and one actually spells out the default interest rate.  But that’s precious little reality for our tastes.  If you want to do the research yourself we suppose the first thing you need to do is determine how much time you have.  That way you can decide whether to read about the five things to know when you choose a credit card; the 7 things you need to know; the 9 things you need to know or the 11 things you need to know.  Some articles use graphs, most have a picture of the card (which in itself is interesting as a marketing tactic.  One can only guess how much some bank paid for a marketing study that told them it would result in more customers if they put a picture of a piece of plastic in their marketing materials)

This will cost me how much?

The one tidbit that is missing from most of the articles about rewards credit cards is the interest rate.  We can understand why credit card companies don’t include the interest rate on the cards they are peddling.  The whole vibe of their ad campaigns is that after you use their card, you are going to be driving a new (!) car to the airport so you can score some free (!) tickets to fly to Hawaii where you’ll spend two weeks in the new (!) condo you bought, all on free travel points from the shiny rewards card you signed up for.  But what are those points costing you?

No annual fee v. annual fee

This is not the important consideration that it used to be. Nowadays almost every card has an annual fee.

  • Years ago we would think “an annual fee.  Ha! I’ll just get another card”
  • Now, after years of training to desensitize ourselves to the thought that we are paying a fee for a service we would qualify for anyway, we think “Oh, $50 bucks for an annual fee isn’t that bad. What the heck.”

And so it goes, you can razzlefratz and go off in search of a card that doesn’t have an annual fee, but you’ll be looking for a while.  A great many cards dangle the “no annual fee” idea in their ads. But, they’re really just talking about the first year.  Many of those cards also waive the annual fee if you have the wherewithal to ask.

Our advice: look for a card with no annual fee. Then be prepared to call just before the second year begins and ask if they would waive that fee on a go-forward basis.

Rewards points

You can obtain rewards points in various ways.  Every card gives out points as a function of how much money you spend.  Most will award points for every dollar that you transfer from a competing card when you open your new account.  Comparing them will take some time.  You’ll probably be better off if you make a chart to figure out which one will actually be the most financially beneficial.  Card A might give you more points for each dollar you spend; but less for each dollar you transfer.  Card B might give you more points for transfer dollars, but only if you’ve spent a lot in the 6 months immediately prior to your transfer.  (of course the premise here is that you actually look at several offers and compare them to each other)

You should also factor in this equation what type of rewards you’re looking for.  You can choose to get cash back, airline/travel miles, gasoline, groceries or (as is becoming more popular) a card that lets you spend your rewards for any product you would like.  There is another factor that will not fit into your comparison chart so easily:

How easy will it be to redeem your rewards?

  • Are you signing up for airline miles?  If so, you need to figure out what kind of restrictions the card will put on you when you want to buy a ticket.  Does the card let you travel only on Thursdays at 5:00 a.m.?  Does it require you to stay 10 days wherever you’re going? Will it let you book flights on any website and not just the airline’s own website?
  • Are there restrictions on dates or types of purchases when rewarding miles?  You need to figure out if the card that boasts “earn 50 miles for every purchase” stops awarding you points for every purchase that you make between Thanksgiving and New Years’ Eve; or if you don’t get points for every purchase for an item that you can wear.
  • If the card gives you points to be used to buy gas, it’s important to see if you’re limited to buying gas from a company that only has stations in Wakaluk, Alaska; or if the procedure for redeeming is so convoluted that you can’t figure it out.
  • The rules for redeeming any points are going to be covered in the Terms & Conditions that the new card has on the web.  It’s not a bad idea to take a pass at the Terms to see what the rules are for redeeming the points.  But don’t let your investigation end there.  Common problems that arise for folks who have tried to redeem their points for that same credit card might not be so easy to predict if all you do is read those terms.
  • Cash-back rewards is the most straight-forward to redeem.  Cash might not sound so flashy, if you’re comparing them to flying around the world for free.  But, “wait for a check to arrive” is probably the simplest redemption procedure you’ll come across.

Our advice: Look at the Terms & Conditions to shed light on the redemption procedure.  Then, try Googling: [name of card] and trouble redeeming rewards points, or [airline miles; grocery points; gasoline points, etc] to get an idea how much you can actually count on receiving those sweet rewards.

However easy it is to redeem the points, your most important inquiry is about the

Interest rate

Most of us have a revolving balance on our credit card.  Which means that every month, we are paying interest on the balance due.  Our hope is to one day pay that balance off and get back to the pledge we made back when we got married (“We are gonna pay the entire balance on our credit card every month!”).  But, until that lottery ticket finally has winning numbers (or until we stop using our credit card for about a year or so) we’re stuck paying interest.

  • Intro rate v. regular rate – Every credit card offer shows you what the interest rate will be.  They also have an asterisk next to that number, because the interest rate will change at some point in the future.  Your questions are: WHEN will the interest rate change and HOW HIGH will it go.  If you get a card because the interest rate is 2.2% and don’t mark the date it will shoot up to 19.9% on your calendar with big letters and a skull & crossbones logo, you’ll be disappointed.
  • Variable or fixed – variable rates are still alive & well in credit card world.  If your new card has a variable interest rate, you don’t need to worry so much about how they will calculate your interest rate.  What you have to worry about is that the interest rate is NOT Fixed.  This worry should be enough to make you think about looking elsewhere for you rewards.
  • When you don’t care about the interest rate – If your company is paying the balance on your credit card you’re not so worried about the interest rate (unless the talk around the office is that accounting is famous for not reimbursing for credit card charges for 90 days) Otherwise, don’t sweat it.

This one’s the whole ballgame.  Whatever you do in terms of research, if you can figure out nothing else about that new credit card you have to know what the interest rate is.  There is no quicker way to find yourself in the soup than thinking that your new card has a 5.5% interest rate when the rate is really 15.5%.

Editor’s example of what in-the-soup looks like:

If your monthly balance is $10,000; with a 5.5% interest rate your monthly interest charge will be: $46.00.

If your monthly balance is $10,000; with a 15.5% interest rate, your monthly interest charge will be: $129.00.

If you want to see how nasty interest charges can get and how your monthly payment can be too much to deal with at different balance amounts, click here for a table of sample monthly interest amounts.

So, transfer those balances to a fancy-schmancy rewards card and charge up a storm.  Just make sure that you’re not making it worse for yourself in the process.

Posted by: Mark Wiseman (who also pledged early in his marriage to sell his house, move away for a year, and then move back…..don’t ask)

 

“and a Partridge in a…..” (keep your money safe during the Holiday season)

Consumer Courage has had a devil of a time deciding what to get everybody for the Holidays this year.  We could send everyone a check for eight hundred bucks each month (which is what the Country of Finland has decided to do)  But we’re reasonably sure that the official boss of Consumer Courage would not be in favor of such a development.  Instead, we’re offering our own X-mas grab-bag of advice.  Whatever you’re into; wherever you’re shopping; whatever your finances – Consumer Courage dug into our archives and made a list of all of our posts that have advice that can help you through this season.  (Plus it gives us another reason to include a link to our favorite Christmas song)

Here’s your homework: Print this off and put it next to your shopping list. Chances are one of these posts will be the one you wish you had read before you started braving the cold to get all of those gifts.

The eggnog

For starters, here are some general tips about how to approach the little things that make up your gift-purchases.  What to do with your receipts, how rebates can go wrong, bait & switch, return policies and much more to get you started.

How about some candy before dinner

Your gonna need some money of course.  If you head to the ATM machine, don’t forget that there are inventive folks out there who won’t have themselves a Merry Christmas until YOU use a cash-machine that they have altered to steal your card number and PIN.  It’s called ‘skimming’ and it’s very popular.

Short on funds?  Try using the credit card that has the lowest interest rate.  But remember, however you pay for your December buying binge, do NOT (under any circumstances) take out an auto-title loan.  They’ll give you money alright.  Unfortunately, they’ll either take your car, or your paycheck until you’ve taken out about 12 different 300% loans.

Twenty percent off is hard to resist.  Many retailers offer this if you just sign up for instant credit or a same-as-cash deal.  And why wouldn’t you?  Well….here are a few reasons why that same-as-cash offer is not the best thing ever.

The meat & potatoes

“I’ll NEVER buy anything from the internet,” said foolish younger me many years ago.  By 2015, the idea of refusing to make an internet purchase almost seems silly.  What is even sillier is the idea of not being careful while you are trolling the web for deals. We’ve had two posts about shopping on Cyber-Monday.  Whatever day of the week you troll the net for sweet deals, there are many basics that you should keep in mind.

Where to look to see if the site you’re on has a security certificate, how to tell if you’re buying that fancy coat from an actual warehouse or just sending your cash to a biker-gang in New Zealand, whether you should use just any WiFi, and why it’s important to check your credit card statement AFTER the purchase are just a few of the things you should understand.

Gift cards are awesome.  If you don’t know how long they last or how many people just let them expire, you should probably read this.  If you’re thinking outside the box (or have a teenage daughter) you might try to score some tickets to a concert.  Check out our post about ticket brokers to make sure you spend the show INSIDE the arena and not at the police station making out a report through tears of regret and disbelief.

The fruitcake

We’re working on a new slogan: “Just Say NO to Drugs (and Extended Warranties)”  We haven’t done the research, but we’re pretty sure that nobody has used this before. If you can’t afford that new giant TV, couch or fridge and are even thinking about renting-to-own (RTO) dig our advice on how RTO deals work in Ohio and whether they are a good idea for consumers.

Sometimes you just have to get away.  If you do, keep in mind the basics about traveling in a digital world and how many different ways your private information is at-risk while you’re snug in your bed at that five star resort.    If you’re considering a cruise, you should have some idea about how the rights you have in the U.S. transfer to the far away land that you will be seeing.

The Dessert

Most people don’t have “check my credit report” on their shopping list.  But, since December is a great month to try to steal someone’s ID, maybe you should.  In January you’re going to get a credit card bill that is like a walk down memory lane.  “Oh yeah, I bought that….and that too!  She really liked that one” As you turn the page and see the total make sure you’re sitting down.  Once you can breathe again, dig our post about how to deal with all of those holiday bills.

At some point, you might get a call about a bill that is past due.  Is the call legit? Do you really owe that bill?  Here are two posts that help you decipher whether you actually owe money or are getting scammed by someone who is just pretending that you owe them money.

The after dinner mints

So you’ve got a little extra this year and want to give to charity? That’s awesome.  But, how do you tell if the charity is legit or just some scammer who is trying to make a quick buck from the latest disaster?

When it’s all over and done and your mind turns to next year, try making some consumer-based resolutions for the year to come.

Posted by: Mark Wiseman (whose favorite Christmas tradition involves watching Yukon Cornelius….what an actor)

“Take my car, it’ll be less of a hassle” (What to do if your Smart-Phone’s stolen)

So, you’re walking downtown at night.  The weather’s nice and there are people everywhere.  You have five crisp new $100 bills in your hand. (don’t ask why you are carrying so much money in your hand, you just do) You’re holding five hundos and everyone can see them.  You’re nervous. But that’s good because you’re paying attention to your surroundings.  Every fiber of your being is watching around to see if anyone is coming towards you.  Your spidey senses (yes, in this scenario you have spidey senses) are on high alert.

You can actually feel who is behind you and how close they are.  Most importantly, you have a grip on that money like you’ve never had.  Nothing is gonna pry those bills from your grasp, except maybe a pit-bull. So…….
….when you walk down the street gazing into your phone, why do let yourself become oblivious to the world around you?…

‘Twas last week when Mrs. Consumer Courage and I were downtown walking around.  There was a basketball game about to start so the streets were filled with people.  Since it was 65 degrees AND the beginning of November, nobody was in a hurry to get where they were going.  We saw two (!) cell-phone robberies.  They both occurred in the same fashion:  a woman was looking at her cell phone when a group of teenagers grabbed the phone from her hands and took off.  Two seconds.  That’s all it took.  One of the women was in the middle of a crowd, the other was somewhat alone.  Unfortunately, once someone gets your phone and a three step head-start, there isn’t much you can do.  Giving chase IS an option.  But, when you catch them, how do you tell which one stole your phone? We’ll admit that we didn’t know that stealing cell phones was actually a thing.  Now that we know, what can we do about it?

What you’re risking

Used to be: if you lost your cell phone the only thing that you had to do without was the ability to call someone until you got to the cellular store the next day.  Now, with the advent of the smart phone, much of your life is contained in that little box.   Your e-mails; your contact list; every picture you’ve taken since your nephew’s wedding in 2009, many apps that “remember” your credit card and password so you can make a purchase quickly; other apps that will open instantly because they save your password…way too much personal information to think about.

You can do a lot to prevent someone from taking your phone: don’t take the phone out of your pocket if you’re in public; don’t walk away from your grocery cart if your phone is lying on top of the cereal; don’t leave it on the table in a restaurant and look away; don’t leave the house.  But, thieves are very resourceful.

Is there a Market for stolen phones?

Dig this article about teens who steal phones from one tourist spot in San Francisco and then sell them at ANOTHER tourist spot in San Francisco the same night.   Seems like no matter how much you can get for a stolen phone, there will always be a threat of this happening.  So far Minnesota and California have laws that require the cell phone companies to insert software that will let the owner kill the phone if it gets stolen.  (If you can kill the phone, thieves won’t bother taking them)

Editor’s note that, YES, you should keep reading: While this post is written from the perspective of the iPhone, most of the features described here (screen lock, find my phone, getting your provider to shut off the phone, etc.) are offered by the retailers of the other major smart phones.

Let’s look at what you can do to protect yourself if this does happen…

Things to do when the phone is new (Techie-based preparations)

Luckily, there are ways to make your phone unusable to anyone but you. (If you can’t make it impossible to steal your phone, you sure can make it harder for the thief to use.)  The iPhone has several built-in features that are designed to frustrate the bad guys.  You can make the screen lock if it’s been unused for a certain period of time; have the phone automatically erase if you plug in too many incorrect unlock codes; track the phone as long as it is on and connected to a network.

  • Screen lock: this is the annoying 4 digit (more on some phones) code that you have to enter into the phone every time you use it.  If you think it’s annoying to hit a four-digit code every time you dial, try and imagine how annoying it will be if someone snatches your phone and can get to your private information because you did NOT password-protect it.
    • What it does: tells your phone to lock the screen after a short period of non-use.  The time it takes to freeze the screen can be as long as five minutes.  But that might give the crooks time to get away and THEN start messing with your phone. Ours is set at one minute. Since it will take them at least that long to get away, we hope this will make it that much harder for them to have any access to our phone.
    • Can’t they just change the code once they have the phone? No they can’t.  The iPhone requires you to key in the four-digit code, just to change the code.  Unless they have the code, they won’t be able to stop it from freezing.  If the stolen phone EVER locks, they’ll have to break the code to unlock it.
    • Setting the time-limit on iPhone: Settings > General > auto-lock
    • Creating your own four-digit code on iPhone: Settings > Touch ID & Passcode.
  • Erase Data after ten (10) incorrect attempts to unlock: if they try to guess at your code and they’re persistent, the only thing they’ll do is erase your phone.  The downside to this is that if you try to drunk-dial someone at 3:00 a.m. to tell them that you’re “so over them and they can kiss off” you might end up erasing your own phone by mistake.
    • Enable Data-erase on iPhone: Settings > Touch ID & Passcode > Erase Data

Author’s note of disassociation: To the parents of Consumer Courage who are no doubt reading this post, I have no idea what a “drunk-dial” is. I overheard someone talking about it and thought it sounded funny.  I don’t even know if it’s a thing.

  • Find iPhone: This is a separate app that comes already loaded on the iPhone.  It uses the phone’s internal GPS to locate your phone if it is lost.  The very second your phone gets turned on, the Find iPhone app will show you where the phone is located on a map.  There are some limitations. You have to access the app from another phone (or from the web) and the phone has to be turned on. (if the thief turned it off right away, Find My Phone will be unable to locate it.  But, if the phone is on, you can find out where it is (the APP even puts the phone on a map so you can see how to get there)
    • If they stay in the area and you have a friend close by with a smart phone, you might be able to show the nearest officer where the bad guy is.  (The locator is not hyper-specific though. If the bad guy is on the 23rd floor of a building, the map will just show you the address to the front door)
    • Find My Phone will even make your phone give off a loud sound when it is located.  (If you think you are close, you can make the sound repeat by signing out and then signing right back in to Find My Phone)  If the bad guys did not turn off your phone, you can play the funniest game of Marco Polo ever.
    • You don’t have to be logged in and watching Find My Phone for it to work.  The APP will tell you the last location the phone was used if it gets turned on while you are sleeping.

Editor’s reality check: if this happens and you can locate your phone, for the love of mercy, find a police officer to go there with you.  You’re not Rambo (or even half as tough) Do NOT confront anybody who took your phone….just don’t.

Since you need your Apple ID to turn on Find My Phone, you also need the Apple ID to turn it off. That way the bad guys cannot turn it off, unless they have your apple ID.  Setting up “Find My Phone” is probably one of the first things that you should do when you start using your phone.  (As an aside you can use the Find My Phone APP to tell if the iPhone you bought on e-bay for $38.00 was stolen from somebody else)

Things to do to help yourself (Human-based preparations)

OK fine, I can freeze and maybe find the phone if it gets taken, how do I make sure it does NOT get stolen in the first place?

Keep your phone in its hiding place while you are walking on the street.  Resist the temptation to look at it every 10 seconds and for heaven’s sake do NOT walk around with the phone in your hand.  You might think it’s secure. But remember: the people trying to steal smart phones are looking around for people who are carrying their phone IN THEIR HANDS and staring at them as if the secret to life is about to be revealed on the screen.  Think of it this way: You’re not taking a call while you’re walking on the street downtown; you’re taking a call AND putting $500 in cash into your hand for everyone to see.  (Here are some suggestions for things to do while you are walking instead of looking at your phone: look at a tree; appreciate the architecture; smile at somebody; talk to the people you’re with)

If someone does take your phone (or anything else that they shouldn’t) Scream as soon and as loud as you can!  Since the getaway is very quick, you only have a few seconds to tell everyone around you that the people running away from you just took your phone.  Managing to yell “Ahhhhh.  They took my phone!” can tell everyone to help while they can.

Write down the particulars for your phone.  Each phone has a several numbers that distinguish it from other phones.  Everyone knows (or has a pretty good idea) that their phone has a unique serial number. But few people know that there are other numbers (the International Mobile Station Equipment Identity or IMEI and the Mobile Equipment Identifier or MEID) are also unique to your phone. These are written on the innards of the phone and are impossible to alter.  Take these numbers down and keep them separate from your phone.  (Take a screen shot, e-mail it to yourself and print it off at home) The good thing about these numbers is that your phone company has a record of them.  If you want them to disable your phone, this is how they can do it.  (Beware: This step cannot be undone.)
Locate the IMEI and MEID on the iPhone by going to:  Settings > General > About.

All phones have a Subscriber Identity Module (SIM) card that contains data about the person who is authorized to use the phone. The SIM card tells your company that you are the one who paid for the phone and lets them know that you have their permission to use their network.  Without your SIM card, your particular phone will not have service.  The bad guys certainly know this and know that all they need is a new SIM card to make a stolen phone work.  You can prevent them from seeing or using your personal information. But, if they have one of these little doo-dads (which cost about 5 bucks) they can sell your phone as if it’s just a used phone.  That is why it’s important to have the ability to make your phone company disable that exact phone.  If they use the IMEI and MEID to disable your phone, nothing – not even a magical SIM card that was touched by angels – will make it work.

Make a list of all of your APPs & Passwords

This one’s huge.  If, for some reason the bad guys can get past all of these systems and get inside your phone, they’ll have access to all of the APPs that you’ve downloaded.  One of the great things about that concert ticket APP is that it remembers your credit card from those theater tickets you bought when you downloaded it 2 years ago.  Not only do YOU not have to re-enter your credit card every time you buy great seats; the crook who snatched your phone doesn’t have to either!  If they know what they’re doing (and they somehow get in) they can buy a whole bunch of stuff using the credit card number that you keyed into your phone.  True, the rules for credit cards say that you won’t be on the hook for purchases that you didn’t authorize.  But, why not save yourself the trouble of having to dispute each and every charge separately?

You should log onto the web as soon as you get home and go to the home pages for the apps that are on your phone.  Once you’re there, all you’ll have to do is change your password.  At that point, whoever has your phone will be instantly “logged out” of each of those APPs, preventing them from buying anything.  (Speaking of APPs, there are a couple that specialize in creating a file that keeps track of each of your APPs and the individual passwords that you use – Last pass and Dashlane.  We’re not recommending them one way or the other. But, if you have a ton of apps – and don’t have the passwords all stored in a safe place – they might save you.)

It happened! (What to do AFTER your phone gets stolen)

  1. Scream at the top of your lungs “Hey, those guys right there stole my phone! Help!”
  2. Try “Find My Phone” from your friend’s smart-phone and see it’s in the area.
  3. Call the cops.  Making a police report is important for two reasons: 1) If the “Find my Phone” app dings and tells you that the bad guys are using your phone, the cops will have a place to go to and probable cause to start asking questions; and 2) if there is an insurance claim to be made for the cost of replacing your phone or if there were charges made using any of your accounts, the first thing anybody is going to say is “can you send me a copy of the police report.”
  4. If you want to see what your phone’s manufacturer has to say, Google “My [name of the phone] was stolen.” One of the first hits should be the My-phone-was-stolen page from your phone manufacturer’s website.  (Here is the one for Apple, which includes their “lost mode” and how to access it)  Consumer Reports has great advice for all three phases of this problem – Before, during and after.
  5. Get to the net and change the password on each application that is live on your phone.  (If you can open an APP on your phone without needing to key in your password the APP if “live”)  This includes your mail.  Chances are that anyone who steals your phone will not think to go to your mail APP and start sending the “Help, I went to North Korea with Dennis Rodman and could really use some money wired to me” e-mails to your contacts. But, who wants to take that chance?
  6. Lastly, call your cellular provider and let them know what happened.  Seriously consider having them zap your phone using the IMEI and MEID numbers.

Now go enjoy the outside, keep your phone in your pants and Hey, Hey, HEY….Let’s be careful out there.

Posted by: Mark Wiseman (who never stole a cell phone – but may have been mistook for somebody who threw an egg once)

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