Retailers welcome debit fee limits; banks still object

About the issue
The U.S. Senate voted this week to allow the Federal Reserve to set limits on debit-card transaction costs — “swipe fees” — that financial institutions charge retailers. Current fees typically are 1-2 percent per purchase, according to the Federal Reserve, though some Springfield merchants say fees sometimes approach 3 percent.
What’s next
The Federal Reserve is expected to issue new rules by July 21.
***
Local retailers say they welcome U.S. Senate action this week to limit fees financial institutions charge merchants for debit-card transactions.
The president of the Community Bankers Association of Illinois, however, said the issue probably will be settled in court.
The Senate vote allows the Federal Reserve to set new rules by July 21.
Springfield retailers said debit-card transaction fees, or “swipe fees,” range from 1 percent to nearly 3 percent per purchase, depending on the issuer and type of transaction.
The Food Mart grocery and deli recently set a $5 minimum purchase on Visa debit-card purchases to help cover transaction costs, said co-owner Tony Pirrera. He added that he is not yet certain the congressional action would provide relief for retailers or consumers.
“They’ve made it so complicated. Who knows what kind of charges they’re going to come out with next?” said Pirrera.
The Federal Reserve proposed last fall a flat, 12-cents-per-transaction limit on major banks, but Community Bankers Association president Robert Wingert said fee limits will hurt smaller banks and consumers.
“A lot of the merchants are dealing with debit cards that come from the big banks,” said Wingert. “If you limit it to 12 cents per transaction, merchants naturally are going to drive debit-card business to the big banks.”
Wingert said it costs financial institutions to issue the cards, and banks are liable for losses resulting from fraud.
“Fraud losses are real, and they are meaningful,” said Wingert, who added that he expects there will be a court challenge once the new rules come out.
The president of Community Bank Service Corp., a state association subsidiary that handles financial services for members, said the group has asked Visa and MasterCard to consider shifting more of the fraud-loss risk to merchants.
“What it (12 cents) covers is processing costs. What it doesn’t cover is the cost of the plastic, the cost of fraud and other costs,” said Mike Kelley.
Community banks will either lose money or be forced to raise other consumer fees to compensate if the new limits are implemented.
“Costs would be shifted elsewhere,” said Kelley.
During an appearance Friday at the Trout Lily Cafe in downtown Springfield, U.S. Sen. Dick Durbin, D-Ill., a leading Senate supporter of the limits, said Chase Bank, Bank of America and Wells Fargo alone make approximately $8 billion a year from debit-card transactions.
He noted that the average U.S. fee of 44 cents for Visa and MasterCard transactions compares with just 9 cents in Europe.
“What we’re doing is calling on the Federal Reserve to issue this rule as quickly as possible, so that businesses across America know what the rules will be from this point forward,” Durbin said.
Cafe owner Kate Hawkes said that, by the time she subtracts transaction fees and other costs, she probably loses money on some debit-card sales.
“We have tourists coming through all the time, and the debit cards are killing us,” said Hawkes. “We have a sign on our cash register sometimes that says cash is cheerfully accepted.”
Motorists may already have benefited from the swipe-card controversy, said Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association, which represents the state’s convenience-store industry.
Fleischli said some stations have started giving discounts of 5 cents a gallon when motorists pay cash.
“They are trying to avoid that (fee) cost,” said Fleischli. “It gives the people a savings if they use cash, and it helps the marketers, too.”

Copyright 2011 The State Journal-Register. Some rights reserved

Better Business Bureau Warning: Real Estate Scam That Could Claim Area Renters as Victims

Columbus, GA - June 6, 2011 -A local realtor contacted the owner of an area construction company regarding two properties owned by him on behalf of a client who had seen the following classified ad:


"Stop Renting, AVAILABLE NOW 2-4 Bedroom homes. Take Over Payments. No Money Down, No Credit Check. Call Now."


The properties had been fraudulently listed on a Distressed/Foreclosure list sold to the client for $199.00. The properties should not have appeared on any such list since they had been paid for a number of years ago and have no mortgages associated with them.


The BBB is advising area renters that may have been fooled by this Scam to immediately contact their bank/credit card company to dispute the charges and to also put fraud alerts on those accounts.


OTHER TIPS TO CONSIDER:

• Do not be swayed by "too good to be true" Advertising Claims!
• Deal locally with people that you can meet in person
• Work with a trusted real estate professional
• Distressed Property lists are available locally and are free
• Never give out Social Security numbers, Personal Financial information or send money to people that you do not know
• Check with the BBB for Trustworthy Real Estate Companies

For additional information contact

Leonard CrainPres./CEO BBB Columbus, GA 706-324-0707

Another Advance Fee Scammer Claims Fargo, ND Address

The Better Business Bureau of Minnesota and North Dakota has discovered another advance fee loan company claiming to operate out of Fargo, North Dakota. Last week, our BBB issued an alert on Fraser Brokerage, a company promising consumers advance fee loans over the telephone, a practice which is illegal in the U.S. and Canada.

Earlier this week, Wakefield Financial, another fraudulent online entity offering advance fee loans -- and claiming a Fargo address  -- was brought to our attention. The BBB is confident they are not actually at this address. Two U.S. consumers have fallen victim to this company so far and in each case they wired money to Spain and then did not receive promised loans.

People should be extremely wary of any website that guarantees loans regardless of credit and should also never wire money (or send it via MoneyPak) to anyone they don't know. It is the experience of the BBB that people who pay fees upfront to online entities like this never receive their loans.

Home Buyers, Sellers Tell BBB To Approach Jack Roddy, JMZ And Bagwell Group With Caution

St. Louis, Mo., June 9, 2011 – A St. Louis area real estate investor who buys and “flips” financially troubled property is facing angry criticism from consumers who say he cost them thousands of dollars or severely damaged their credit when home deals went sour.

The Better Business Bureau (BBB) recommends extreme caution when dealing with Jack L. Roddy, JMZ Homes, JMZ Investment Group or Bagwell Group Management Corp. Roddy has an office in New Athens, Ill., but also lists an address in St. Charles, Mo.

A sergeant in the Missouri National Guard who is scheduled to deploy overseas in the next several weeks said Roddy cost his family more than $15,000 and nearly ruined his life when Roddy stopped making mortgage payments on the man’s home in O’Fallon, Mo., and the house slipped toward foreclosure. The guardsman’s wife said the stress “sent me over the edge. I thought we were going to be put out on the street.”

Another consumer, also from O’Fallon, said she stands to lose an $11,000 down payment after a home she was buying from Roddy recently went into foreclosure.

Michelle L. Corey, BBB president and CEO, called the stories from home buyers and home sellers who have dealt with Roddy heart-wrenching. “In many cases, these are people who believed they were making sound investment decisions, only to find their lives turned inside out. It is a real shame.”

Roddy, who said he has been in the real estate business between 15 and 20 years, describes himself on his LinkedIn listing as a multi-millionaire, marketing director of JMZ Investment Corp., CEO of Bagwell Group and a platinum member of the Global Information Network.  The listing describes the Global Information Network as “a private, exclusive, members-only global association of individuals dedicated to achieving financial independence, wealth creation, dynamic health and emotional well-being.”
                                  
In an interview with the BBB from his New Athens office, Roddy blamed his mounting problems on uneducated investors, naïve home sellers and “deadbeats” who stop making home payments.  “I’m tired of babysitting all these deadbeats who don’t pay,” Roddy said.

Other consumers who claim to have had problems with Roddy include:

• Another woman from O’Fallon who says Roddy talked her into transferring ownership of her late father’s home to a trust controlled by JMZ Homes. A lawsuit pending in St. Charles County claims that Roddy and JMZ breached the terms of a contract by refusing to pay the woman $35,000, and failed to pay the debt on the property, “causing the real estate to be subjected to foreclosure procedures.”
• A businesswoman from Arizona who said that a deal with Roddy “took me right to brink of bankruptcy.”  The businesswoman told the BBB she met Roddy at a real estate seminar in Florida. She agreed to invest in a small “fix and flip” house in Pana, Ill.  She said she lost more than $33,000 in the purchase and in an unrelated loan to Roddy. She also said that a family that was involved in a lease-purchase agreement of the home lost $7,000 when water problems made the house uninhabitable.
• A couple who entered into a lease-purchase agreement at the same O’Fallon address where the Army sergeant and his family had once lived.  The couple said they had given Roddy a $12,000 down payment on the house and had put an additional $10,000 of renovation work into the structure earlier this year. Just last week, that family learned that Roddy had missed several mortgage payments on the home and, once again, it was at risk for foreclosure.  “I want to make sure this guy is never able to do anything like this to anybody ever again,” said the husband, who first learned the house was facing foreclosure from a BBB investigator.

Roddy said he ran into financial trouble with the lease-to-purchase homes only after the buyer stopped making payments to him.  But home buyers told the BBB that is not true.  They said they stopped making payments to Roddy only when they learned that Roddy had stopped paying the lenders and the homes were threatened with foreclosure. The national guardsman said he couldn’t justify continuing to invest in a house that he might soon lose to foreclosure.

Two other families – one who transferred ownership of a home directly to Roddy and another who transferred a home to another business that later transferred it to Roddy – said that their credit was damaged when Roddy got behind on mortgages they still held.

Roddy said he could not tell a BBB investigator how many properties he owns and how many are currently in lease-to-buy agreements.

He said he intends to get out of the lease-to-buy business in the near future, but insists he has done nothing wrong. “I didn’t know there were that many people who did not pay their bills,” he said.

Recently, Bagwell group began posting signs reading “Storm Repair Keep Your Deductible” in neighborhoods where homes were damaged in recent storms.
                                                     
The BBB offers the following tips to prospective home owners looking at a lease-to-buy option:

• Determine whether the seller owns the property outright or is making mortgage payments to a lender.
• Beware of deals where the mortgage is not in the name of the seller, but in the name of a third party. If the seller of the property does not own the home outright and somebody else is making payments to a lender, the owner may have nothing to lose by letting the property go into foreclosure.
• Get references.  Contact others who have dealt with the business to determine whether you want to get involved.
• Contact the BBB for a BBB Business Review by going to http://stlouis.bbb.org/ or by calling 314-645-3300.

Contacts: Michelle Corey, President & CEO, 314-645-3300, mcorey@stlouisbbb.org, or Bill Smith, Trade Practice Investigator, 314-645-3300, tpc1@stlouisbbb.org

The BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior. The BBB provides objective advice, free BBB Business Reviews, dispute resolution service, charity wise-giving reports, alerts and educational information on topics affecting marketplace trust. Please visit www.bbb.org for more information.

Filing or Paying a Late Tax Return

Whether paying with a timely filed tax return, or filing late and paying late after receiving a bill from the IRS (and the bill is correct), taxpayers are encouraged to pay the taxes they owe in full.
If taxes are not paid, and no effort is made to pay them, the IRS can ask a taxpayer to take action to pay the taxes, such as selling or mortgaging any assets owned or getting a loan. If effort is still not made to pay the bill, or make other payment arrangements, the IRS could also take more serious enforced collection action, such as levying bank accounts, wages, or other income, or taking other assets. A Notice of Federal Tax Lien could be filed that may have a detrimental effect on a taxpayer’s credit standing. See information about Liens and Levies.

Haven't Filed a Tax Return? Here's What to Do
Taxpayers should file all required returns that are past due now to avoid additional penalties and interest. This section gives information on getting help and documents needed to prepare a return. It is never too late to file.

How Full Payment of Taxes Saves You Money
Paying your taxes in full ultimately saves you more money. Take action now or you may face additional interest and penalties.

Payment Options - Ways To Make a Payment
There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash.

Other Ways to Resolve Tax Debt That Could Save You Money
Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an Installment Agreement, temporary delay, or Offer in Compromise.

What Will Happen If You Don't File Your Past Due Return or Contact the IRS
The IRS will file a substitute return for you, which will not include any additional exemptions or expenses you may be entitled to and may overstate your real tax liability. Once the tax is assessed the IRS will start the collection process, which can include placing a levy on wages or bank accounts or filing a federal tax lien against your property.

http://www.irs.gov/businesses/small/article/0,,id=108326,00.html

Wanting What's Best for Your Children - Ensure Your Family's Future Happiness and Success

Remember, we all want the best for our children. In terms of the life path children will choose, this sentiment has two meanings for the parent. The first has to do with your children's happiness, and their ability to carve out a niche in a field that truly makes them happy. The second is your children's financial stability as an adult; the ability to make choices that will set them up for a relatively comfortable future.

What Makes Your Child Happy?
We've all heard that when it comes to happiness regarding one's chosen profession, it's all about getting paid for something you'd do for free. If you agree with this philosophy, then applying it to your children requires figuring out what they'd do "for free". What makes them tick? What are they drawn to? Where do they naturally excel? So often we can look at other parents and see them living vicariously through their kids. The really hard part is figuring out if we're doing the same thing.

Are your kids involved in every activity imaginable? Do they have somewhere to be (aside from school, of course) every day of the week? Take a step back and ask yourself not only if those questions apply, but does it sound like fun? So much of childhood is about fun experiences. Sometimes it's actually the "fun" part of life where kids learn their most valuable lessons, like kindness, team work, and self-esteem.

No one is saying extra-curricular activities are a bad thing. Actually, when handled correctly, they also teach the aforementioned lessons a child needs to learn. What's important, however, is to think less about where you want your kids to excel and more about where they're inclined and what they enjoy. If you're going to crack down on anything, make it schoolwork. That's something you can make a case for no matter where a child's interests lie.

This attitude, along with attentiveness to the child, is where to begin when trying to figure out how your child thinks. Take notice of the things they like. Are they an athlete or an artist; a musician or a mathematician; a teacher or a humanitarian? Or, do they show shades of a few things? Remember, it's not important that your child does everything with skill. Sometimes, it's more important they just have a good time doing it. Once you figure out the happiness part, guiding them in the right direction gets a little easier.

What Can Help Your Child Succeed Financially?
The second issue that's a part of wanting the best for our kids has to do with financial stability. Everyone's heard the adage, money can't buy happiness, but how many of us truly believe that – at least, to a certain extent? Truth be told, it's not the money that buys happiness as much as it is the peace of mind that comes from financial stability. So let's start there. Let's start with the idea that it's not important for your child to make a ton of money; rather, it's for them to become financially stable. How do we accomplish that?

For starters, it never hurts to begin teaching them about finances at an early age. Get them to understand the idea that money doesn't grow on trees. Rather, it's something you work for, oftentimes really hard. An allowance is a good place to start. Let them deposit their own money in the bank, and show them how to keep track of it. As they get older, don't be afraid to demonstrate things like how to balance a check book. Have discussions regarding some of the pitfalls of credit cards. The point is that it's important to address this stuff, and don't assume that your child is going to learn it on their own. Once a child has an understanding of how to make money, as well as how to hold on to it, you are well on your way.

The next step is helping them figure out what they'll do to earn a living. For this, go back to the first item we discussed, figuring out what makes them tick. If your child wants to be a doctor, chances are that as long as they get into medical school, they're going to be alright. But what if your kid is an artist or a musician – potentially lucrative professions, with the emphasis on "potentially"? This is where having a "Plan B" comes into play.

Support your child's dream with the utmost energy but encourage them to develop a back-up plan, utilizing the very same talents. Musicians, artists, and those with similar talents can teach these subjects, write about them, own businesses pertaining to them, and the list goes on. Whatever the case may be, it's your job as parent to point out the different options.

Good luck to everyone who's a parent, for your job is more difficult than any profession your child will ever choose.
-YOU Magazine, May 2011

Managing your Credit - FAQs - brought to you by BBB

How does a potential credit issuer use a credit score?

Many lenders — and others — use your credit score to help determine whether or not to give you a line of credit. Your credit score can also affect your ability to get a job, rent an apartment, get a cell phone, and even find affordable car insurance.

What goes into creating a credit score?

The most commonly used score, called the FICO score, generally measures five key criteria:

o Length of credit history

o Types of credit lines

o Payment history on those credit lines

o Amounts owed on those credit lines

o New credit lines – how many and over what period of time

In addition to looking at a credit score, what do creditors look for on a credit report?

They look at several things, which ultimately come together to build a financial profile of you. This can include:

o Your monthly and annual income.

o Your monthly payment obligations…including rent, student loans, medical bills, car payments, utilities, telephone/cell/cable bills, etc.

o Are your financial obligations in line with your total income?

o Are your monthly payments in line with your monthly income?

o Do you pay your bills on time?

o Do you have outstanding traffic or parking tickets or other government issued citations?

o Do you have any kind of credit history?

o How many credit cards have you applied for in the last few months?

How do I know if what’s on my credit report is accurate? And what do I do if I find out  there’s a mistake on it?

A federal law allows you to request a FREE COPY of your credit report from EACH of the three major credit bureaus once every 12 months. The only free resource to get a copy of it is at http://www.annualcreditreport.com/. If you find mistakes on your credit report, you should contact each of the three credit reporting agencies to report the error/s, and start the process to correct them.

www.equifax.com

www.experian.com

www.transunion.com

I like having several credit cards to choose from – especially retail store cards. Is there anything I should be aware of with that?

Yes – two things to be aware of:

a) The number of credit applications you submit – even for retail store cards – may show up on your credit report and can be a “red flag” to potential creditors. Any red flag may cause them to deny your application or charge you a higher interest rate on your credit line.

b) Opening several lines of credit may also lower your credit score, because it will reduce the “average age” of your accounts — a key criteria in determining your credit score

What can I do if I have trouble qualifying for a credit card?

There are two possible things you can do:

a) Contact your bank and ask what you can do to get a credit card. One possible option the bank might suggest is to issue you a card with a low credit limit that you can gradually increase as you show that you can pay your bills on time.

b) Another possible option the bank might suggest it to apply for a Secured Card. This product requires you to deposit a certain amount of money into a savings account before you can use the credit card. Most banks who offer secured cards will then match your credit limit with the amount of money you’ve deposited into the account. As you build a strong track record with your bank over time, you can request an application for a general purpose credit card.

What can trigger the bank to increase my APR?

There are a number of things that can trigger an increase in the APR, but the most important one that you should guard against is missing a payment deadline.

What is a “Teaser” rate on a credit card?

A Teaser rate is the same thing as an “Introductory” rate, which is a lower APR designed to  attract credit applicants.  Teaser rates last for a set period of time (all must be honored for a minimum of six months), and then the rate will increase. Read the rules closely so you understand the agreement you are making with the credit issuer.

How can I protect myself from fraudsters attempting to trick me into divulging my bank or credit account information?

Your bank will never call or email you for the purpose of “veriyfing” your account information. They already have it. Also…ignore any threats or expression of urgency you receive by phone or email, indicating that your account will be de-activated if you do not respond immediately and “verify” your information.

I’m behind on my payments, and I’m uncertain if I can catch up on my own. What do you suggest?

o First, call your lender/s directly, by calling the issuing bank’s customer service line. Ask to speak to someone who can explore some repayment options with you. When you get the right kind of banking representative on the line:

􀀀 Focus on what you can do. Be prepared to share some ideas. Sometimes a small change can make a big difference, such as asking to shift your due date to a better time of the month if you’re frequently struggling to make your payments just before your payday.

􀀀 If your issuing bank tries to contact you – respond, and have this type of conversation. Don’t be afraid to talk with the bank, which may be able to make some changes that could make it easier to pay off the debt.

o Make an appointment with a reputable credit counseling agency, if your attempts to negotiate with your lenders have not been successful. There’s additional advice on this step in the next Q&A, immediately below.

How do I find and work with a reputable credit counseling agency?

Interview several agencies.

If you know someone who has used such an agency in the past, ask them for a recommendation. Or, ask friends relatives who they would consider if they needed budgeting advice. You can also find credit counselors in the Yellow Pages, by contacting the National Foundation for Credit Counseling (http://www.nfcc.org) or the Association of Independent Consumer Credit

Counseling Agencies (http://www. aiccca.org) for a list of members or by using an Internet search engine. Further, The CARD Act mandates that issuers provide three licensed and Government approved credit counseling agencies or a toll-free phone number that provides that information on each statement.

What are some good signs of a reputable credit counseling agency?

Here’s a list of seven (7) criteria to look for/ask about.

1. Recognized as a non-profit by the IRS.

2. Required to maintain all proper licenses.

3. Provides review of customers’ income and debts, along with a written plan for reducing and eliminating debt.

4. Disperses the proper payments to creditors at the proper times —typically twice a month.

5. Provides clients with written statements at certain intervals.

6. Offers various educational programs and other ways to help consumers overcome debt.

7. Audits accounts.