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Steps You Can Take To Protect Your Financial Information and Personal Identity From Fraud
Financial fraud and identity fraud are one of the fasted growing forms of fraud. The first line of defense to protecting yourself begins with you. Here are some steps you can take to help you protect and fight against financial and identity fraud.
1. Review and Protect Your Information - The first line of defense in financial fraud is to periodically check your credit report to ensure all your information is accurate. Remember there are three credit agencies (Equifax, TransUnion, Experian) which all operate independently. Make sure you check your credit report from all three because they may each have different information.
2. Destroy Credit Card Mail Offers and Old Financial Documents - If you receive direct or pre-approved solicitations in the mail for new credit cards and do not use them make sure you shred or tear them up before throwing them away. In addition, shred all financial papers including cancelled checks, old bank account statements, or any document with your identity.
3. Watch Out For E-mail or Telephone Fraudsters - Never give your personal or financial information out on the internet or phone unless you initiated the contact. This is especially true with giving out your social security or credit card number. Watch out for e-mails from fraudsters that state they need your account information or credit card number to update your account with your bank or an online company like e-bay. Never give out personal information over e-mail! Many times these e-mails will have links for you to click on that take you to a website that looks authentic. However more times than not, it is a scam to get your personal and financial information.
4. Social Security Number ? Keep your social security number in a safe place with other financial documents. DO NOT carry your social security card in your wallet and remember to shred your old social security statements. It is also recommended to not store your social security number on your computer as hackers may have access to it. Never print your social security number on your checks, credit card or drivers licenses.
5. Incoming / Outgoing Mail - Pick up incoming mail promptly and do not send outgoing mail in your residential mail box. Make every effort to keep your mail as securely as possible when it leaves your house.
6. Monthly Bills ? If your monthly bills stop arriving, take action quickly. Notify the company right away. Also, review your monthly statements promptly and if you see charges or items on your bills that you do not recognize get them resolved immediately.
7. Credit Cards / ATMs - Report lost or stolen credit cards and ATM cards immediately. Be sure to carry the 1-800 numbers of your bank and credit card company in your wallet.
8. Age Matters - If you are over the age of 50 you are more likely to be targeted for financial fraud. Therefore, keep this in the back of your mind as you handle your daily tasks and personal information.
Most analysts forecast financial fraud and identity thief to cause financial loss to hundreds of thousands people in the next five years and beyond. While fraudsters are very slick and you can never be 100% safe the steps above can assist in you significantly deterring yourself and family from being a victim.
Finding a Loan With Bad Credit
No matter what your credit history is the simple fact is that at some point in your life you will need a loan. If you have a few black marks on your credit report and you are feeling that your bad credit will not enable you to qualify for loans, do not feel despair because there are banks that will lend to people in your situation.
If you are seeking a bad credit personal loan there are a few things to consider. Since you are looking for a loan and you do have poor credit you should make sure that your loan will be reported to the major credit bureaus. It is important to check that your loan reports to the credit bureaus because this is your chance to improve your credit rating. I mention checking that your loan will be reported because many people will obtain something like a prepaid credit card thinking that this will help build their credit rating when this is actually not a loan, it is actually a debit card that carries a credit card logo.
Finding a lender that offers bad credit personal loans is not a problem because there are millions of people in the same situation as you who have had credit problems in the past but now have a different situation possibly because of a better job and can now afford to make their loan payments but that bad credit rating is still haunting them. Bad credit personal loans are becoming more and more competitive because of the fact that we are living in turbulent times and people have run into credit problems. While this industry is quite competitive and you will find better deals than a few years ago, you will still pay a higher interest rate than somebody with good credit because bad credit personal loans are still viewed as high risk to financial institutions.
Before you apply for a loan you will want to make sure that you can comfortably cover the payment, this is your opportunity to get your credit back on track - dont turn this into a situation where your credit will end up worse than it was. It is important that you pull out your pay stubs and review all your living expenses such as rent, car (gas, maintenance, insurance, etc), food, utilities, clothing and all other living expenses and make sure that you are not going to over-extend yourself. Its too easy to put yourself on the road to financial ruin, always remember to be responsible with your debt load and that banks will lend you money to the point where you will be dependant on loans of the rest of your life - after all thats the banks business is to make money from loans.
I personally have never taken out a loan to the maximum of what a bank will lend as it is almost always too much because they usually calculate your loan on before tax dollars and the fact is you need to live off of after tax dollars.
How to Spot and Avoid Predatory Lending
Predatory lenders promise loans that are too good to be true and pressure borrowers to take them on the spot. Heres a few things you or your family and friends should know about spotting and avoid predatory loans:
How to Spot a Predatory Loan
*Balloon payments.
*High interest rates.
*Monthly payments you cant afford.
*Penalties for early pay-off of the loan.
*Unauthorized refinancing of your loan.
Abusive Practices: 7 Signs of Predatory Lending
1. Single Premium Credit Insurance
Credit insurance premiums should not be financed into the loan up-front in a lump-sum payment. One type of credit insurance, credit life, is paid by the borrower to repay the lender should the borrower die. The product can be useful when paid for on a monthly basis. When it is paid for up-front, however, it does nothing more than strip equity from homeowners.
2. High Fees
The borrower should not be charged fees greater than 3% of the loan amount (4% for FHA or VA loans). Points and fees (as defined by HOEPA) that exceed this amount (not including third party fees like appraisals or attorney fees) take more equity from borrowers than the cost or risk of subprime lending can justify.
3. Prepayment Penalties
Subprime loans should not include prepayment penalties, for the following reasons:
Prepayment Penalties Haunt Many Refinancers
Prepayment penalties trap borrowers in high-rate loans, which too often leads to foreclosure. The subprime sector should provide borrowers a bridge to conventional financing as soon as the borrower is ready to make the transition, though prepayment penalties are designed to prevent this from happening.
Prepayment penalties are hidden, deferred fees that strip significant equity from over half of subprime borrowers. Prepayment penalties of 5% are common. For a $150,000 loan, this fee is $7,500, more than the total net wealth built up over a lifetime for the median African American family.
Only 2% of borrowers accept prepayment penalties in the competitive conventional market, while, according to Duff and Phelps, 80% in subprime do.
4. Yield-Spread Premiums
Brokers originate over half of all mortgage loans, and a relatively small number of brokers are responsible for a large percentage of predatory loans. Lenders should identify -- and avoid -- these brokers and refuse to pay yield-spread premiums -- fees lenders rebate to brokers in exchange for placing a borrower in a higher interest rate than the borrower qualifies for.
5. Steering
Lenders should make sure that borrowers get the lowest-cost loan they qualify for. As Fannie Mae and Freddie Mac have shown, subprime lenders charge prime borrowers who meet conventional underwriting standards higher rates than necessary. HUD found that steering has a racial impact since borrowers in African-American neighborhoods are five times more likely to get a loan from a subprime lender -- and therefore pay extra -- than borrowers in white neighborhoods.
6. Mandatory Arbitration
Increasingly, lenders are placing pre-dispute, mandatory binding arbitration clauses in their loan contracts. These clauses insulate unfair and deceptive practices from effective review and relegate consumers to a forum where they cannot obtain injunctive relief against wrongful practices, proceed on behalf of a class, or obtain punitive damages. Arbitration can also involve costly fees, be required to take place at a distant site, or designate a pro-lender arbitrator.
7. Flipping
Flipping of borrowers occurs through repeated fee-loaded refinancings. One of the worst practices is for lenders to refinance subprime loans over and over, taking out home equity wealth in the form of high fees each time, without providing the borrower with a net tangible benefit.
How to Avoid a Predatory Loan
*Always shop around.
*Ask questions.
*If you dont understand the loan terms, talk to someone you trust to look at the documents for you.
*Dont trust ads promising No Credit? No Problem!
*Ignore high-pressure sales tactics.
*Dont take the first loan you are offered.
*Remember that a low monthly payment isnt always a deal. Look at the TOTAL cost of the loan.
*Be wary of promises to refinance the loan to a better rate in the future.
*Never sign a blank document or anything the lender promised to fill in later.
To get help, contact one of these national organizations.National Organizations for Predatory Lending Issues
-ACORN (Association of Community Orgs for Reform Now)
-AARP
-Better Business Bureau
-Consumer Federation of America
-Consumer.gov (US Consumer Gateway)
-Consumers Union
-Credit Union National Association (CUNA)
-Federal Reserve Board Consumer Information
-Federal Trade Commision, Consumer Protection
-Habitat for Humanity International
-National Association of Attorneys General
-National Association of Consumer Advocates
-National Consumer Law Center
-US Public Interest Research Group (PIRG)
http://www.educationcenter2000.com/national_organizations
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