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Consumers Lose Thousands to Fake Credit Repair Scheme

July 21, 2019 - 1:03pm

(TNS)—No doubt, it’s tempting to sign up for a “quick fix” to clean up your credit. Who wouldn’t want to instantly find a way to add 100 or more points to a credit score to qualify for a rewards-packed credit card? Or maybe, finally, qualify for a great deal on a car loan?

But the Federal Trade Commission and others are warning that any company that charges money in advance for credit repair is going against the law.

The federal Credit Repair Organizations Act, which was enacted in 1996, makes it illegal for credit repair companies to lie about what they can do to clear up a clouded credit report, or charge upfront fees before they do the job they promised to do.

Things can go really bad when consumers latch onto ridiculous claims, such as that somehow you can piggyback on a stranger’s good credit to shore up your credit history. Yes, there are even a string of YouTube videos to convince you this is brilliant idea. Some outfits have said things like: “From 620 to 780+ in 3 Weeks? Yes!”

The Federal Trade Commission took action in late June to stop an operator called Grand Teton Professionals that pitched fake credit repair services via various websites, including DeletionExpert.com, InquiryBusters.com and TopTradelines.com. The FTC complaint alleges the defendants bilked consumers out of $6.2 million. Since at least 2014, the FTC claimed, the company and its websites operated an unlawful credit repair scam that deceived consumers across the country.

Don’t Bet Negative Marks Will Disappear
The egregious claims included falsely promising that they could remove negative marks on a consumer’s credit report as well as extracting thousands of dollars in illegal advance fees, according to Gregory Ashe, senior staff attorney for the FTC in Washington, D.C.

Negative marks could be removed in the case of ID theft, he said, such as if someone opened a credit card using your Social Security number. But otherwise, a credit repair outfit cannot remove legitimate negative remarks. Various negative marks, such as a car repossession, would last seven years on your report and then fall off. You can, of course, dispute any errors on your own.

In addition, the websites actually went as far as including terms that would prohibit a consumer from making disparaging comments online about the companies. Somehow the consumer could face a $25,000 charge for making negative remarks.

Really? The threat alone, though, meant some consumers wouldn’t take a chance saying a negative word, according to regulators.

“It’s enough to chill a consumer who believes it means what it says,” Ashe said.

As a result, many consumers said they couldn’t find complaints online about the credit repair sites so they thought it was OK to send thousands of dollars, Ashe said.

Some consumers, though, did reach out and complain to the Better Business Bureau, the Federal Trade Commission and their state attorney general. Such data is gathered and monitored by the Consumer Sentinel Network, an online investigative tool of the FTC. And those complaints helped the FTC in its case.

Ashe said the hope is that others engaging in wrongful practices will take notice of the action against Grand Teton Professionals. (No one answered calls to the company last week. Only recorded music played on the line.)

Consumers Paid Thousands for Nothing
Having bad credit can mean that you aren’t able to take out a loan because lenders don’t want to deal with high-risk borrowers. And when consumers are in a bind, they don’t always think clearly when they see a possible quick fix to their troubles.

Complaints found on the Better Business Bureau site, for example, indicated that consumers paid anywhere from $1,100 to $4,000 to Top Tradelines to piggyback on someone’s credit card accounts to build their own credit history.

“For a fee, defendants offer to register consumers as ‘additional authorized users’ on one or several credit cards or line of credit accounts held by unrelated account holders with long-standing positive payment histories (a practice also known as ‘piggybacking’ credit),” the FTC said in its complaint.

We’re not talking here about the long practice of making a son or daughter an authorized user on a parent’s credit card. That’s a legitimate strategy for building credit. Instead, we’re talking about an outside company cooking up a deal that involves paying someone with great credit to give someone with bad credit a shot as being an authorized user to build up a credit history.

“They almost act like online companies that set up blind dates,” said John Ulzheimer, a credit expert who formerly worked for credit-scoring company FICO.

Like online dating, you’re not always talking about a happy ending, either.

“The reality is making the person an authorized user is a sham,” said the FTC’s Ashe.

The person with a low credit score is not truly an authorized user; they can’t charge anything on the card. So they would be artificially raising a score, not accurately reflecting their creditworthiness and actual ability to pay their bills, if it worked, he said. And it doesn’t always work in someone’s favor.

FICO has known about such shenanigans and long ago took steps to make sure that nefarious authorized user accounts would not have any or much impact on your credit score, Ulzheimer said.

Regular authorized user accounts—say between a parent and a child—would still have an impact, he said.

In general, consumers should limit authorized users on their credit cards to their family members or friends. And even then, Ulzheimer said, a significantly higher credit score isn’t guaranteed as a result for someone with less-than-perfect credit or a younger consumer with little credit history.

“It’s not going to turn FICO 500 into FICO 800,” Ulzheimer said.

Here’s a Legitimate Way to Build Credit
Ulzheimer said he built up his own credit history as a young man as an authorized user on his father’s credit card. And plenty of people do the same.

About 15 percent of consumers opened their earliest reported credit account with a co-borrower, according to June 2017 report called “Becoming Credit Visible” by the Consumer Financial Protection Bureau.

“The credit records of an additional 9.6 percent of consumers were created when the consumer became an authorized user on someone else’s credit account,” the report stated.

Such data would imply that about one in four consumers first acquire their credit history from an account for which others were also responsible. But such usage is less common in lower-income neighborhoods, the report said.

Beware of Some Credit Tips on YouTube
Some pretty kooky claims are being made on YouTube these days, including videos on how consumers with great credit can make thousands of dollars just sitting around in an ugly recliner.

“I can actually make quite a bit of money every week by letting CreditCardCashFlow add people to my credit card,” says Charles from New York on one YouTube video.

The FTC complaint also pointed out that CreditCardCashFlow solicited consumers with long-standing, positive payment histories to add outsiders as authorized users to their accounts. The third party is not able to use the card to charge anything.

“Defendants offer to pay these account holders to add other consumers as authorized users to their accounts, including third parties who are not family members or otherwise in close personal relationship with the account holder,” the FTC complaint stated.

But someone with good credit could still be at risk if their information gets into the wrong hands and fraud is later involved. You’re also taking part in making false statements to lenders.

What Are the Signs of a Scam?
As with most questionable deals, there are many red flags when it comes to fixing your credit. Here are some to watch:

  • You’re asked to pay a fee upfront before any of your debts are settled. Or some outfits require that you pay fees masquerading as “contributions.” It’s illegal to require an upfront fee in order to fix your credit.
  • The so-called credit repair company tries to look like an official government program.
  • There are so-called guarantees to make the debt go away or improve your credit score.
  • There are promises that the company can erase your bad credit or remove information from your credit reports.

“The chances credit repair companies can do anything you couldn’t do on your own are very unlikely,” said Laura Blankenship, director of Marketing for the Better Business Bureau Serving Eastern Michigan and the Upper Peninsula.

One huge problem: It’s not uncommon that the person ends up paying a hefty fee to the credit repair company—and then many still have bad credit or owe money for old loans once the company is unable to deliver its promises.

“Before signing any contracts, it’s important to look at the success rate of the company and research reviews online,” Blankenship said.

You also have the right to cancel your contract with any credit repair organization for any reason within three business days from the date you signed it. Remember, a credit repair organization cannot charge you until it has completed the promised services.

What Are Some Real Ways to Fix Your Credit?
Take time to rebuild your credit by paying bills on time, paying off debt and avoiding taking on new debt. Pay extra close attention to the limits on your credit cards and avoid charging more than 25 percent of the available line of credit on each card. This is true even if you pay off the bill each month.

Get a free copy of your credit report to review—and if necessary, dispute any mistakes. See www.annualcreditreport.com.

You can dispute inaccurate information on your own. You should not have to pay anyone to do this for you. It’s also possible to get a co-signer with good credit on a car loan to get a lower interest rate. Or you may want to see if your landlord will report rent payments to credit bureaus.

©2019 Detroit Free Press
Visit Detroit Free Press at www.freep.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

The Best Places to Retire—No. 1 May Surprise You

July 10, 2019 - 4:04pm

A lot goes into your home and lifestyle in retirement—especially location.

For impending retirees, Nebraska ranks at the top, due to factors like safety and wellness, as well as affordability, according to Bankrate findings released this week.

To determine the nation’s prime retirement states, analysts at Bankrate considered cost of living (highly weighted), along with crime, culture, weather and wellness. Nebraska, at No. 1, had high marks in four of those five. (The exception? Weather.)

According to Bankrate, overall, the top 15 retirement states are:

  1. Nebraska
  2. Iowa
  3. Missouri
  4. South Dakota
  5. Florida
  6. Kentucky
  7. Kansas
  8. North Carolina
  9. Montana
  10. Hawaii
  11. Arkansas
  12. Wisconsin
  13. North Dakota
  14. Vermont
  15. New Hampshire

For affordability—a chief concern for retirees—the highest-ranked states are:

  1. Michigan (Tie)
  2. Missouri (Tie)
  3. Indiana
  4. Arkansas
  5. Ohio
  6. Mississippi
  7. Kansas
  8. Iowa
  9. Kentucky
  10. Alabama
  11. Oklahoma
  12. Tennessee
  13. North Carolina
  14. Nebraska
  15. Idaho

For the best living overall in retirement, the Midwest reigns supreme, with seven states in the top 15. If affordability is the deciding factor, however, both the Midwest and South score, with seven states each. While four states across the Northeast and West are represented in the top 15, when accounting for affordability, the Northeast vanishes, and Idaho is the sole state in the West.

“There are many factors to consider when deciding where to retire,” says Adrian Garcia, Bankrate.com data analyst. “Some people may choose to stay close to family, while others prefer to seek out warm weather or affordable living. It comes down to very personal preferences, so it’s important to weigh all factors and determine what is most important for your happiness.”

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

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Categories: Real Estate

Nothing to Cry About: More Than a Third of Home Sellers Get Weepy Over the Deal

July 2, 2019 - 4:01pm

(TNS)—You’ve heard of seller’s remorse, but seller’s tears?

More than a third of people who’ve sold their homes say they have shed tears over the experience.

Consumers’ polled by Zillow rank peddling their properties as one of their most stressful events—along with getting fired or planning a big wedding.

Zillow quizzed home sellers about the process and found that 36 percent admitted sobbing over the experience. One in five of the people surveyed said they cried five times or more while unloading their property—boo hoo hoo.

“If you’ve ever sold a home before, you know how daunting the process can be,” Zillow’s Jeremy Wacksman said in the report. “Anticipating that stress can be a huge obstacle that keeps homeowners from moving on to the next stage of their lives.

“Our survey found more Americans were stressed over selling their home than planning a wedding, getting fired or becoming a parent.”

The home sellers insist it isn’t crocodile tears.

They say that uncertainty about their home’s sale price, worries that the property wouldn’t sell and pressure to fix up the homes triggered their weeping fits.

With home prices in most neighborhoods at record levels, it could be that some of the sellers were crying all the way to the bank.

Since 60 percent of the folks Zillow talked to were also buying another property, buyer jitters also added to their consternation.

©2019 The Dallas Morning News
Visit The Dallas Morning News at www.dallasnews.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

By and Large a Positive Recovery, Homeowners Say

June 17, 2019 - 4:03pm

According to 66 percent of homeowners, their homes have recovered in value, and at a higher level than prior to recession—this, despite 46 percent who believe their homes were impacted negatively in that period, new research shows.

While there are adverse echoes of the recession today, in the housing market, many have been minimized, according to a Bankrate survey. In the aftermath of the crash, affordability has improved for 23 percent of respondents to the survey; only 11 percent are eschewing homeownership today.

Twenty-one percent, however, believe their homes have not recovered in worth—aligning with the 23 percent who believe their financial outlook overall has worsened. Despite the downturn, 29 percent of Americans have not changed their financial habits since.

“While the current economic expansion is on track to set a record for duration, there will be a downturn at some point. We just don’t know when,” says Mark Hamrick, senior economist analyst at Bankrate. “That’s why it is critically important for Americans to try to save now for emergencies and for retirement while paying down or paying off debt. Don’t wait to prepare until after it is too late, when a financial storm has already arrived.”

Bankrate conducted the survey with YouGov, with 2,740 adults participating.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

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Categories: Real Estate

7 Sneaky Ways Restaurants Get You to Spend More

June 11, 2019 - 3:32pm

(TNS)—We’ve all been there: You go out to dinner with a set budget, having already decided what to order and set aside the perfect amount for a tip. Then, your bill comes at the end of the night and you’ve somehow spent way beyond your limit.

Don’t be too hard on yourself. There’s science behind persuading you to spend more. You can scope out the city’s best happy hour deal, take advantage of online coupons and even save on your first round of drinks at home, but restaurateurs and menu engineers have nearly perfected the psychology of making you spend money during a night out.

Here are some common tactics restaurants use to get patrons to fork over more cash.

  1. Menu Minimalism
    From eliminating dollar signs to adjusting font weights and kerning, there are all kinds of theories for what draws a buyer’s eye on a menu.

Ryan Gromfin, author, restaurateur and founder of TheRestaurantBoss.com, says the most successful menu designs, for restaurant owners, are those that make price the last thing you see.

“Bury the price in the text,” he says. “Put the price in the description, not in the header of each menu item.”

Because numbers tend to automatically look larger than letters, it also pays to reduce the font size of prices so your eye isn’t immediately drawn to them.

Menu engineering, from fonts and lettering to page layout, can influence your choice of meal, but tricking customers isn’t the objective.

“We’re not trying to deceive anyone; we’re not trying to make them solve riddles to figure out the price,” Gromfin says. “I just don’t want it to be the first thing they see. I want them to read a description and fall in love with an item and then see the price.”

  1. Server Enhancements
    Upselling isn’t exactly an industry secret, but it’s important to be aware of the tactic so you don’t catch yourself splurging on something you may not really want.

To encourage upselling, especially on one specific product or special, many restaurant managers will offer incentives for servers. This can include a cash bonus or other reward for the servers who sell the most of that particular item.

Gromfin says the most effective servers offer enhancements not just to pull more money from you, but to actually enhance your meal.

“This is giving people a better experience,” he says. “Don’t ask someone if they want avocado on their hamburger because it’s more expensive; ask if they want avocado on their hamburger because it’s a better hamburger with avocado.”

  1. Details, Details, Details
    The best servers know that adding flourishes to their description of specials can help upsell a guest, but the same holds true for menu designers. For your entree, would you prefer a “100% Angus beef burger on a golden brioche bun with melted American cheese, fresh green lettuce, juicy Roma tomatoes, caramelized onions and tangy, spicy secret sauce,” or simply a “cheeseburger”?

According to a study by researchers at the University of Illinois at Urbana-Champaign, adding descriptive menu labels increased sales by 27 percent and also improved attitudes toward the food and restaurant itself and increased repatronage.

  1. Trojan Horse Menu Items
    Even the most mouth-watering descriptions can be more effective for profits when paired with what Gromfin calls a price juxtaposition or price decoy, which is the practice of “putting something that is artificially substantially more expensive than the rest of your menu and then putting something else directly under it that looks expensive on its own but isn’t when it’s next to the really expensive thing.”

When listed under a $30 steak, the $20 fish entree you were hesitant to order can suddenly seem more appealing to your wallet.

  1. Comfort and Concept
    Once you’ve finished a glass of wine and settled in under a restaurant’s low lighting and comfortable seats, you may be more open and receptive to spending extra time (and money) on your meal.

That comfort level is something that successful restaurants aim to provide their customers through every step in the process, from the moment you enter the restaurant until you leave.

“If I don’t feel comfortable, I’m not going to take a risk on a menu,” Gromfin says. “If I walk into a restaurant and there’s no energy and no vibe and the cashier is fumbling through his words, I’m instantly going into protective mode.”

Not only does your comfort mean more profit for the restaurant; it also means you get your money’s worth.

  1. Heavy-Handed Pouring
    Anytime your table orders a bottle—whether it’s wine or sparkling water—keep an eye on your server’s attentiveness. Excellent service is always a plus, but they likely want you to finish that first bottle as quickly as possible so they’ll have the chance to replace it before your meal arrives. This means a timely refill whenever your glass starts to drain.

The same applies to beer or cocktails, which are some of the most profitable items on the menu. The quicker you finish each glass, the more time a server has to sell you on another.

  1. Visible Desserts
    Dessert-savvy restaurant owners may leave dessert menus on the table for you to peruse throughout your dining experience or even have you walk past a dessert display before you reach your table.

As a result, you’re more likely to approach your experience with dessert in the back of your mind. Throughout your main meal, you’ll be more likely to save room so you can splurge on that strawberry cheesecake or apple crumble. There’s nothing wrong with treating yourself every now and then, but make sure you’re not impulse-buying something that may leave you unsatisfied later.

Gromfin says the real secret to any long-lasting and successful restaurant, both in terms of bringing in revenue and in encouraging repatronage, is exceeding expectations. Any good restaurateur knows that menu engineering and tricky tactics will go only so far if you leave unhappy.

If you have confidence in a restaurant and your expectations are exceeded each time, you’re going to feel better about spending more money. Just remember to be smart about the choices you make so you don’t spend the next two weeks after payday regretting that pricey entree or extra glass of wine.

©2019 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

Millennials Willing to Go Into Debt for Travel Experiences

June 10, 2019 - 4:06pm

(TNS)—People love traveling, whether it’s meant to get away and relax or to reconnect with family and loved ones. However, a new survey reveals that some people are so willing to travel even if it may hurt them financially.

The home-sharing platform Vrbo conducted a survey of American travelers with the help of Ipsos and found that millennials aren’t willing to put off their vacation, even if they can’t afford it.

“Forget what you thought about millennials traveling on a shoestring,” said Karen Fuller, senior director of Global Market Research at Vrbo. “Our results revealed that they are actually the most likely to go into debt for travel, which is consistent with the notion that millennials like to accumulate experiences, not things.”

Comparatively, only 27 percent of Gen Xers and 15 percent of baby boomers were willing to go into debt for travel.

As Fuller explained, millennials are focused on having experiences, rather than material things. This matches up with the survey findings that discovered that 45 percent of millennials will “travel purely for exploration in 2019.”

In terms of Gen X, 20 percent said they’ll travel for a special occasion this year, while 44 percent will travel for a milestone event such as a birthday or anniversary. Baby boomers are the least likely to travel for a hobby or activity such as hiking or skiing, compared to 23 percent of millennials.

©2019 Travelpulse
Visit Travelpulse at www.travelpulse.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

Nearly 6 Million People Can Now Cut Their Mortgage Payments With Refinancing

June 9, 2019 - 1:02pm

(TNS)—The average interest for 30-year fixed-rate mortgages is nearing 4 percent again, ushering the way for millions more homeowners to save money by refinancing.

The recent drop in rates means that 5.9 million people can potentially save money by refinancing their existing home loans and securing a lower rate—two million more than last month, according to a recent report by Black Knight. The combined savings totals $1.6 billion, or an average of $271 per person per month.

The sharp drop in rates comes as a surprise, as most experts were betting that rates would be on the rise, says Mark Hamrick, Bankrate’s senior economic analyst. For borrowers, however, this is an unexpected gift.

“The fact that this swoon in rates has occurred as and when it has underscores the fact that accurately predicting the future of rates is difficult indeed. So, instead of trying to outsmart the market, go with what you know for certain, which is where rates are right now,” Hamrick advises. “Between the pace of the news cycle and economic developments, the environment can change with release of a single presidential tweet. In an uncertain environment, seize upon certainty where you can find it.”

Why Your Credit Score, Income and Debt Matter
Before you spend the time applying for a mortgage refinance, be sure you check your balance sheet and credit first. Applying for a refinance is similar to getting a mortgage in that lenders will consider your FICO score, debt-to-income ratio and employment history when evaluating your application. Your interest rate is a reflection of your financial situation, and banks tend to reward low-risk customers with better rates.

Borrowers want to aim for a credit score of over 740 and a loan-to-value ratio of 75 percent or under to nail down the best rates, says Melissa Cohn, executive vice president at Family First Funding LLC in Toms River, N.J. The income needed for a loan is dependent on the bank’s qualifications; for self-employed borrowers, additional proof of income may be required to meet loan prerequisites.

Homeowners who have improved their credit score since getting their original mortgage should see if refinancing makes sense for them. For every 20-point increase in credit scores, the interest drops about 0.125 percent. So, if someone had a 680 credit score and now has above a 760, this alone will improve their rate by about 0.5 percent, says Daniel M. Shlufman, Esq., mortgage banker at Classic Mortgage LLC in Maywood, N.J.

For folks who are hoping to lock in a better rate but are not currently financially ready to do so, create a financial game plan now for a better position down the road. This includes paying down debt and saving money for an emergency fund (so that credit cards are not the go-to in a pinch).

“Anyone who has owned a home for a modest period of time can attest that unexpected expenses are the rule, not the exception. In addition, life brings its own surprises and added expenses,” Hamrick says. “For young families, that might include the birth of a child and related added expenses. By boosting your own finances, effectively paying yourself, you’ll also be boosting your creditworthiness which can only help one achieve financial goals overall.”

The Best Scenarios for Refinancing
Falling rates might seem like a money windfall if you have a higher interest rate than what’s available today, but make sure refinancing bolsters your bottom line. Expensive lender fees can actually put you in the red if you decide to refinance and the savings don’t outweigh the expense.

Generally, you need a drop in the rates of 0.5 to 1 percent (depending on the monthly savings and the closing costs) to justify doing a refinance, Shlufman notes. The rule of thumb is that the savings should be enough to recoup the closing costs within about 18 months to make a refinance justifiable.

“If the closing costs are $3,600, you would need a savings of about $200 per month on the mortgage payment for a refinance to be worthwhile,” Shlufman says. “The larger the loan, the more likely a refinance will make sense, since most of the closing costs are fixed (e.g., appraisal fee, recording fees, etc.) while the monthly savings will be much greater.”

If You’re Paying PMI, Pay Attention
Refinancing also makes sense is if you have private mortgage insurance, or PMI, and the house value has increased so that there is equity of at least 20 percent. Refinancing into a lower rate not only shaves off interest costs, but also knocks out monthly PMI payments, which are typically 0.5 to 1 percent of the total loan on a yearly basis. For borrowers with a $200,000 mortgage and a PMI payment of 1 percent, for instance, that’s a savings of $2,000 per year or $167 per month.

FHA loan borrowers are another group that can potentially benefit from refinancing into a conventional loan. Since PMI is more expensive on FHA loans, those qualified borrowers might save a small mint by reducing or eliminating their FHA PMI and locking in a lower rate, Shlufman says.

Those who want to reduce their terms and go from a 30-year fixed-rate mortgage to a 15-year loan might be able to ax an additional 0.5 percent from the top, since 15-year loans usually have lower rates. That might also mean larger monthly payments, but overall less interest paid over the life of the loan. Adjustable-rate mortgage holders can also profit from dropping rates; the timing might be right to lock via a fixed-rate mortgage as rates continue to hover around the 4-percent mark.

Finally, folks hoping to tap their equity while reducing their interest rate can take advantage of cash-out refinances. These are low-interest loans that allow homeowners to borrow against their equity by replacing their existing mortgage with a new loan for a higher amount and receiving the balance in cash. These can be useful for people who want to make home improvements, as the interest is tax-deductible.

©2019 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

Smart Homes Offer Convenience but Can Also Compromise Privacy

May 27, 2019 - 4:01pm

(TNS)—You walk into your house and the lights automatically dim, your favorite song begins to play and the air gets slightly cooler. Upstairs, your steam bath is already prepared and your blinds are closing.

This is not a far-off fantasy, but rather the high-end of high-tech homes, also known as smart homes. An all-inclusive system like this, where face recognition sets off a chain of events via embedded sensors and the internet to create the optimal home experience for each household dweller, can cost up to $300,000, says Emil Hartoonian, real estate agent at The Agency in Los Angeles. This type of hardware and internet connectivity is known as the Internet of Things, or IoT.

These futuristic bells and whistles are practically essential for today’s upscale real estate buyer. Along the way, smart-home technology has transformed the way people view their homes: instead of a static entity that’s manually operated, it’s a personalized, automated unit. Customized systems like this usually come with their own server, located in the house, and require professional installers to set it up.

“From the lighting to the sound, to the fireplace and window treatments, you can do all of this on your phone before you arrive,” Hartoonian says. “Once you get used to it, it’s hard to live without it. Buyers most certainly look for it in their next home.”

Millionaires aren’t the only ones benefiting from today’s tech.

Up Your Home’s IQ Game on a Smaller Budget
The off-the-shelf version of customized smart-home technology is budget-friendly and can typically be installed yourself. You can still do things like automate lights and the thermostat with plug-and-play devices that you can buy at Target, Home Depot or online.

Products like the Amazon Echo, Google Assistant and Siri are basically smart speakers that are controlled by virtual assistants. They only require a power source and a Wi-Fi connection. They can do everything from answer questions and provide information (sports scores, traffic updates and the closest pizza delivery) to make calls, send and receive messages and play music. For less than $100, you can essentially go hands-free with tasks you would normally rely on your computer or cell phone for.

Devices like Nest offer comprehensive home-security solutions, which connect home cameras, keyless entries and carbon monoxide and smoke detectors to your smartphone interface. You can set up Nest to unlock your doors from anywhere in the world. Couple that ability with other features like outdoor cameras, and this connected tech can solve real-life problems.

For example, imagine hiring a plumber to fix a leaky pipe. With technology like Nest, you can identify the plumber on your doorbell camera and let them in remotely—and then lock the door once they leave, all from your phone.

Notion, a Denver-based tech company, offers wireless home protection which allows people to monitor water leaks, gun and liquor cabinets, temperature changes and doors opening and closing.

“We realized people wanted to protect their entire home, so we made a device that can monitor eight different things,” says Brett Jurgens, co-founder and CEO of Notion.

Notion offers solutions that can help curb major damage to your home. For instance, there’s a water-leak detection feature. By getting an early warning, a homeowner can react quickly and prevent a flooded basement or first-story ceiling disaster.

Notion leveraged their ability to detect leaks via monitors and notify homeowners to partner with insurance companies, Jurgens explains. The insurance companies Notion teamed up with will give users a discount if they install Notion in their homes. This benefits both the insurance company and the homeowner, Jurgens points out.

Smart, Yes, but What About Private?
The convenience of Siri reminding you about your coffee date or settling a debate about who won the Grammy for best album in 2009 are balanced with security and privacy issues, says David Mazieres, a computer science professor at Stanford University.

He explains that most of the off-the-shelf solutions, like Google Assistant and Echo, mean going through the cloud, which puts users at risk of getting hacked. This can be especially dangerous if you have multiple devices hooked up to one system. If a hacker can gain access to that system, then they can ostensibly control your doors and cameras while collecting private information.

There’s also the risk of mining the data to sell or use it to sell you things. These companies might or might not have privacy policies and they might or might not abide by them, Mazieres says, citing Facebook’s infamous problems with privacy over the past decade as one example of how companies can benefit from and even abuse your private data.

“These companies might reveal things about you that you don’t want revealed. I think a lot of people think they don’t have anything to hide and that works fine until something changes,” he says.

One way people can find out if their connected devices are sharing data is through spy apps, like the one created by Princeton University called IoT inspector. This is an open-source tool that analyzes network traffic to show users whether their Wi-Fi cameras, doorbells, thermostats or any other connected device are sharing information with a third party.

According to their blog, the IoT Inspector has revealed third-party sharing activity from companies like Chromecast and Geeni (a smart light bulb), even when the devices were not actively being used. Chromecast was sending data to Google, while Geeni was constantly sharing data with China-based IoT company TuYa Inc.

Mazieres recommends that consumers weigh the risks and rewards of the technology they’re bringing into their home. For example, an outdoor camera is fairly innocuous as it basically just records street noise; however, indoor cameras and devices that are made to listen to everything that’s said inside your house (even when not in use)—including private conversations—could compromise your privacy with relatively little benefit.

© 2019 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

You May Want to Think Twice Before Moving Back in With Your Parents

May 7, 2019 - 3:59pm

(TNS)—Devin Ward isn’t in a rush.

While seeking a college degree, he worked as a research assistant at the Institute for Social Behavior at the University of Central Florida in Orlando. Ward began to realize that the sociology field he majored in wasn’t really for him. The projected pay was low and he says that he didn’t really enjoy the work.

By the time Ward figured it out though, he was already a senior. Changing his major would likely mean starting over, which wasn’t an option for him.

“I wasn’t going to be able to afford to change to something else,” Ward says, “and I couldn’t afford a master’s degree. So I just stuck with it and then got as creative as possible—as I could—with finding work elsewhere.”

Ward had what he describes as a “solid” full-time marketing job while in school, but was laid off shortly before graduation. Just 24 hours after walking across the stage at commencement, he was headed back home to Tampa to live with his parents.

Two years later, he’s still there. 

Here Comes the ‘Boomerang Generation’
Moving back in with one’s parents is a common phenomenon for today’s generation of young adults, but that move can result in adverse effects, both individually and economically.

Researchers at the Urban Institute found that people who move back in with their parents between the ages of 25 and 34 are significantly less likely to become homeowners 10 years later. Delayed homeownership, overall, has alarming ripple effects.

Ward isn’t the only millennial who has moved home after higher education. A 2016 Pew Research Center paper found that living with a parent was the most common young adult living arrangement for 18- to 34-year-olds, with 32 percent of the cohort reporting so. The study noted that this was the first time in more than 130 years that the phenomena occurred.

These younger Americans moving back home with their parents are often referred to as the “Boomerang Generation.” Not only could the delay in homeownership put individual wealth at risk, but it highlights how the younger generation is grappling with adverse effects of a rebounding economy and threatened by a daunting amount of student loan debt.

Ward says he has around $10,000 in student loans.

“I know it’s not a whole lot,” he admits. “I got very lucky.” After struggling—and failing—to find another solid job, his move back home was a means to stay afloat.

For now, Ward does odd jobs like lawn care or working as a busboy while he shifts his attention to trying to launch a music career. It’s something he says that he’s always been passionate about.

“Realistically, I just can’t afford to live anywhere else right now,” Ward says. He does chip in with utilities and rent, which equals about $200 a month in costs.

How Millennials Are Experiencing Shifting Economic Realities
Why this emerging generation is financially struggling is often vaporized by over-generalized arguments.

Many have heard the avocado toast argument (“If you just spent less on your brunch, you punks could afford a house!”) and have strained their rolling eyes at the experts who say to save 15 percent of our income or accept a doomed financial future (we did the math—it’s not possible to save that much, pay rent and student loans, and still have money to survive while receiving an average income).

To try and place a finger on a single reason as to why the younger generations are moving back in with their parents is a stretch. There’s a long, winding road as to how this generation got here—and it doesn’t solely rely on the student loan debt burden that’s now topping $1.5 trillion.

Wages Haven’t Bounced Back Since the Recession
Although the economy is in one of its longest, strongest stretches ever, economic damage from the Great Recession is still leaving a lasting impact.

Earnings from wages, for example, have lagged during the recovery. According to the Center on Budget and Policy Priorities (CBPP), average hourly earnings of employees on private payrolls “grew modestly” at 2.3 percent annually from 2009 to current day. Once inflation is accounted for, though, it shows a different story. According to the CBPP, real wages (meaning adjusted for inflation) “hardly grew and have failed to keep up with increases in workers’ productivity.”

Dr. Bill Spriggs, AFL-CIO chief economist, says this stall in wages is one of the key reasons why the economy is at risk. With less purchasing power, Spriggs says it’ll be difficult for the economy to “turn,” or achieve new cycles.

“People just aren’t earning enough money to do normal things,” Spriggs says, referring to the traditional, “normal” idea of buying a home. “It’s very concerning because at this point in a recovery, the economy should be far more solid.”

The Middle Class Is Changing
Wealth inequality, Spriggs adds, is playing a major role in the shrinking middle class, which in turn will affect the housing market and economy.

“Around 1991, 1992, half the income and half the purchasing power in the United States was in the middle three incomes,” Spriggs says. “And in a few years, it looks like it’ll be in the top 10 percent. Our economy can’t function the way it used to function.”

Spriggs gives the example of older generations being able to purchase starter homes, renovate them, increase their wealth and then move on to the next major purchase. Now, he says that even starting with small-home purchases is difficult.

Ward still believes in becoming a homeowner, but he knows it’s not going to happen until much later than it did for his parents, who bought a home together when his father was 26 and his stepmom was 24.

“I’m 24 now and there’s no way in hell I could buy a house right now,” Ward says. “I definitely want to down the line, later in my 30s, though. But right now? Yeah, not possible.”

The Impact of Delayed Homeownership
Spriggs says the current trend of delayed homeownership is concerning. He adds, however, that there is no easy fix.

“The biggest solution is to pay workers more money,” Spriggs says. “We need to raise the minimum wage and restore the right for workers to bargain.”

In the meantime, Spriggs says, the government should direct more investment into the “consequences of inequality” by providing more affordable housing.

While delayed homeownership is a major concern right now, there is hope.

Generation Z is already expressing early interest to purchase homes before they turn 30—but that isn’t necessarily an indicator that overall they’re experiencing better economic circumstances. A 2019 survey by Bank of America finds that 59 percent of Americans between the ages of 18 and 23 want to buy a home in the next five years. More than half have already started saving for one, according to the survey.

Like millennials, Gen Z is willing to sacrifice to make homeownership happen. Almost half (48 percent) of Gen Z respondents said they’re willing to get a second job in order to buy a home. They’re also willing to attend universities that’ll leave them with less student loan debt and, yes, move in with their parents.

Generation Z did report one caveat, though: More than 60 percent said they will receive financial help to buy a home, including from their parents.

Ward remains optimistic for his future—and while he’s aware of how putting off buying a home could not only impact his future, but those of others, he’s focusing on what he feels is important to him.

“Our generation is a little bit more about self-actualization and figuring out what we want to do and how to make ourselves happy,” Ward says. “I’d rather think about how I can make my life better and pursue what I want to do. After that, then I can worry about everything else.”

©2019 Bankrate.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

Work and School: America’s Most Affordable Cities

April 14, 2019 - 1:03pm

For recent graduates, young professionals or folks considering career changes, housing affordability could be the deciding factor when it comes to searching for a job. A recent study out of BusinessStudent.com examined just this.

Hosts of the site—dedicated to students and professionals seeking careers, courses, degrees and jobs in business, technology and healthcare—wanted to see which parts of the country and specific cities give business professionals the biggest bang for their housing buck.

Writer Jennifer L. Gaskin reports that BusinessStudent.com researchers compared the highest-quoted salaries from over 100 business-related jobs on Indeed.com to RentJungle.com’s average rent for a two-bedroom apartment across America.

They came up with these five most affordable cities to live and work: Tulsa, Okla.; Lexington, Ky.; Oklahoma City, Okla.; Las Vegas, Nev.; and Memphis, Tenn.

Some other key points from the study are:

  • The average salary among the top 25 most affordable cities is $72,230, and the overall average income remaining after rent is about 81 percent.
  • Texas, the nation’s second most-populous state, is by far the overall leader, with five cities in the top 25. The highest-rated is Fort Worth, where the average worker has more than 80 percent of their income left after rent.
  • The Midwest placed eight cities, including three in Ohio.
  • Anyone considering relocating for career purposes should strongly consider Oklahoma—The Sooner State boasts two of the top three cities, including No. 1 Tulsa.
  • The cheapest average monthly rent, $863, was also in Tulsa, while the highest average rent was in Dallas, at $1,422.
  • Dallas, on the other hand, had the highest average salary at $82,609, while just two hours south, College Station, had the lowest average salary of the top 25, at $55,086.

According to Gaskin, a career in “business” is broad enough that it can mean just about anything. So the site created an index of 127 business careers, tracking the average salaries and how they vary by location. The highest-paying job paid $187,000 on average in the U.S. (Medical Director), while the lowest (Security Supervisor) pays $31,000 per year. The average business job the site tracks pays $75,000 per year.

John Voket is a contributing editor to RISMedia.

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Categories: Real Estate

First-Time Homebuyers Get a Break With Lower Mortgage Rates

April 9, 2019 - 4:42pm

(TNS)—Economic gurus got one part of the mortgage forecast for 2019 correct. We’re certainly seeing a volatile year for rates.

What they didn’t see coming: Mortgage rates tumbled in March, the biggest one-week fall in a decade.

Now—instead of seeing mortgage rates edge closer to 5.25 percent, as some had predicted we’d see in 2019—we’re looking at an average 30-year rate near 4 percent.

The rate drop comes just in time for the spring home-buying season and will make monthly payments less expensive.

“This drop in rates is going to give the housing market a boost,” says Bill Banfield, executive vice president of Capital Markets for Quicken Loans. “It could help to make people come back into the market and consider buying a home.”

Mortgage rates have fallen by a full percentage point since late 2018. Going back four months or so, most forecasts weren’t expecting mortgage rates to drop as low as 4 percent for borrowers, Banfield says.

“This is a surprise to a lot of people,” Banfield says.

The average 30-year rate was 4.1 percent as of late March, the lowest rate since Jan. 2018, according to Bankrate.com data. But rates started to rebound a bit upward in early April. The average 30-year rate went back to 4.29 percent as of April 3, according to Bankrate.com.

By contrast, the average mortgage rate was 5.1 percent as recently as mid-November, which was a seven-year high, according to Bankrate.com. The average was hovering around 4.75 percent as 2018 drew to a close.

We’re talking about some real money here for homebuyers. Take a $200,000 mortgage. The mortgage payment for principal and interest would drop by about $120 a month if your rate is 4.1 percent instead of 5.1 percent on a 30-year mortgage, according to Greg McBride, chief financial analyst for Bankrate.com.

For the mortgage alone, the payment would be about $966 month at the 4.1 percent rate. It’s sort of like getting more than one month free each year.

For a homebuyer who was priced out of the market last spring, the lower rates could help get them back in the game.

Being able to lock in a 30-year fixed rate near, or even below, 4 percent helps put some “wind in the sails of homebuyers from an affordability standpoint,” McBride says.

The 30-year fixed rate mortgage remains the dominant loan for middle-class borrowers, particularly first-time homebuyers.

“This is a very attractive rate, which will lift the key spring home selling season,” says Mark Zandi, chief economist for Moody’s Analytics.

How attractive? Well, it’s just a notch above the record low of 3.5 percent in late 2012. And if you go back 30 years, homebuyers were looking at an average 30-year rate of 11.13 percent in early April 1989, according to Bankrate.com’s data.

To be sure, many younger consumers cannot afford some of the homes on the market now, as prices keep going up in some markets. For-sale signs aren’t flooding the landscape, so the lack of available homes remains a problem. In some cases, too many buyers continue to be chasing too few sellers.

Lower interest rates would make payments more affordable and offset some high prices. But the drop in mortgage rates won’t solve all problems.

“It is not going to take a first-time buyer from a small home to a big home, but it does definitely have a small effect on purchasing power,” says Tim Gilson, associate broker for Keller Williams Domain and the Gilson Home Group in Birmingham, Mich.

But given the competitive nature for some well-priced homes, Gilson says younger buyers may still want to consider the benefits of having a good down payment.

“Cash on hand is the element that will put a buyer in a better position,” he says.

Here are some points to consider if you’re shopping for a mortgage.

Research First-Time Buyer Programs
“Virtually all banks (and some non-banks) have some form of first-time homebuyer programs,” says Keith Gumbinger, vice president for HSH.com.

You might be able to get some sort of subsidy on a down payment, perhaps a reduction on closing costs. Or maybe some lenders offer a mortgage to first-homebuyers through a relaxed credit score or some more wiggle room relating to how much debt you’re carrying relative to your income.

Quicken Loans, for example, notes that you may be able to qualify with a median FICO score of 580 or higher for a Federal Housing Administration loan to get a home or to refinance an existing loan.

Gumbinger says an FHA loan is a favorite of first-time homebuyers, as the U.S. Department of Housing and Urban Development does not use risk-based pricing. In some cases, first-time buyers can find programs that offer a mortgage with down payments for 3 percent or 3.5 percent of the purchase price.

“Some of these changes reflect the reality that first-time homebuyers find it challenging to find an attractively-priced home. A smaller down payment can mean a larger mortgage and higher monthly payments. Many of these programs look to soften that impact,” Gumbinger says.

Flagstar Bank, one of the nation’s largest mortgage lenders, rolled out its Destination Home product in March, which offers the option for a zero-down, 30-year fixed mortgage to consumers who have credit scores of 600 or higher and meet other criteria. There’s no private mortgage insurance involved.

To qualify, the borrower or the property must meet some low to moderate income guidelines. The mortgage can be made for a home in a low- to moderate-income census tract in markets where Flagstar has bank branches. Or a low- to moderate-income borrower can purchase in any tract, as long as it’s a county where Flagstar has a banking presence. The maximum loan amount varies by state. The rate on the Destination Home product will vary based on the market. Recently, the annual percentage rate was 4.756 percent.

“We’re seeing a robust start to the spring with this product,” says Beverly Meek, first vice president and Community Reinvestment Act director for Flagstar.

Flagstar also has a gift program that offers up to $2,500 in certain markets. That gift program can help a buyer overcome the hurdle of a down payment or closing costs, depending on the loan product and other factors.

Consumers need to understand that many different homebuyer programs exist and will vary by bank and non-bank, as well as by state, Gumbinger notes. HSH.com lists a variety of state-backed homebuyer programs.

It makes sense to shop around and talk to different lenders about the mortgage options that might be available to you. Look into options for locking in a low rate, too, in case interest rates shoot up unexpectedly.

A variety of options exist. Quicken Loans has a RateShield product where someone can lock their rate for up to 90 days. If rates dip by the time they commit to a home, the shopper would get that new lower rate. Unlike some other rate locks, Quicken says a purchase agreement is not needed to lock a rate with RateShield, so consumers can shop with more certainty.

Expect a Few More Hurdles
The Federal Housing Administration is toughening up its standards for mortgages made to homebuyers with small down payments, low credit scores and high levels of debt. More than 28 percent of mortgage approvals made in the first quarter of 2019 had a credit score of less than 640.

Lenders expect that there will be some tightening of credit, particularly for buyers at the margin who may be taking on riskier loans. Nearly 83 percent of FHA home-purchase loans made in January went to first-time homebuyers, according to FHA. Just under 40 percent went to minorities.

The tighter standards would impact those who have the weakest financial profiles—FICO scores under 640 with debt-to-income ratios above 50 percent.

Gumbinger notes that loans with the lowest credit scores tend to default at a much higher rate. He says lenders are afraid that if they issue too many loans that later fail, HUD will no longer allow them to write FHA-backed mortgages.

“The FHA change does mean greater scrutiny,” he says, noting that higher-risk applications would go through a manual underwriting process.

“It’s fair to say that some buyers won’t be able to get a loan until their financial profile improves a bit,” he says.

To be fair, a low credit score and high levels of debt going in significantly increases the risk of a loan failure. Consumers don’t want to end up dealing with the “emotionally difficult loss-of-home foreclosure process,” either, he says.

“Better to wait and try again at a later time to help improve the odds of success,” Gumbinger says.

The financial crisis—and housing market crash in 2008—led to greater disclosures for consumers and more scrutiny.

“While there are a number of low-down payment, and even some no-down payment, loan options in the marketplace,” McBride says, “do not confuse this with the wild, wild West days of 2004-2006 when exotic and creative mortgage products got mainstream homebuyers into trouble.”

Step Back and Do More Research
If your budget is tight or your credit isn’t great, it may be best to start out talking with a HUD-approved housing counselor. See www.hud.gov.

Beth Martinez, who works on financial and homeownership education for the Michigan State University Extension in Detroit, says a HUD housing counselor can help a consumer improve a credit score over time by identifying trouble spots. There may be ways to spot errors and figure out ways to reduce or eliminate outstanding debt.

“It can take from a few months to two years to improve a credit score,” she says.

But it could help many entry-level buyers and others get a mortgage.

“Improving a credit score improves the chances of being approved for a mortgage loan and can lower the interest rate that the consumer qualifies for,” Martinez says.

©2019 Detroit Free Press
Visit Detroit Free Press at www.freep.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

IRS Warns: That Windfall in Your Bank Account Might Not Be Yours

April 2, 2019 - 4:41pm

(TNS)—Fraudsters are rolling out a glut of legitimate-looking but fake text messages, emails and social media posts this tax season, according to the Internal Revenue Service. Many look like they’re coming from the IRS when they are not.

“The IRS won’t use social media to contact you,” says Luis D. Garcia, an IRS spokesman in Detroit.

So if you receive a direct message via Twitter from someone claiming to be an IRS representative, don’t fall for it. If somehow you’ve clicked on a link or gone online, make sure you’re dealing with the correct website for the IRS at www.irs.gov, as well.

“There are imitators that pop up,” Garcia warns.

Crooks once again want to steal your personal information, including sensitive tax and financial data.

“Taxpayers should be on constant guard for these phishing schemes, which can be tricky and cleverly disguised to look like it’s the IRS,” said IRS Commissioner Chuck Rettig in a statement.

As part of the IRS annual warning of a “Dirty Dozen” tax scams, Rettig warned consumers that phishing schemes remain a threat. One creative scheme: Crooks are using a taxpayer’s real bank account to direct deposit refunds. The crime ring will file fake tax returns using stolen ID information to generate oversized refunds. To make returns seem more legitimate, the fraudsters are attempting to directly deposit refunds into real accounts so the IRS doesn’t flag the refund as phony.

The IRS first warned of this growing scam in 2018 after discovering more tax practitioners’ computer files had been breached. At that time, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. Now, the IRS is warning of the same scheme again.

Remember, you’re going to be on the hook if you spend that erroneous refund money or hand it over to the crooks.

“Thieves then use various tactics to reclaim the refund from the taxpayer,” the IRS warned.

The crooks may contact tax filers and claim to be from a collection agency or the Internal Revenue Service. The IRS recommends contacting the Automated Clearing House department of your bank that received the erroneous refund money. Then, have the bank return the money to the IRS. See tax “Topic No. 161: Returning an Erroneous Refund” on the IRS website.

By law, interest may accrue on erroneous refunds, so you do need to take action. You’d need to call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.

If you receive a tax refund via a check in the mail, do not cash the paper check for an erroneous refund. The IRS says you’d write “void” on the endorsement section on the back of the check, and then submit the check back to the IRS. The IRS mailing address that you’d use is based on the city (possibly abbreviated) located on the bottom text line in front of the words TAX REFUND on the refund check. Don’t staple, bend or paper clip the check. Include a note stating: “Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check).”

If somehow you cashed that fake refund check, you’re still going to need to go through a process with the IRS to return that money. See Topic No. 161.

The IRS noted recently it also has seen more schemes that target the tax pros, payroll offices and human resources personnel. Criminals might pretend to be a representative from another business asking the recipient to pay a fake invoice, or they might pretend to be an employee seeking to re-route a direct deposit.

Remember, crooks might use some email credentials obtained through a successful phishing attack to send more fake emails to the victim’s contacts. Tax preparers are warned to be wary of unsolicited email from personal or business contacts—especially someone pretending to be a new potential client. You can report phishing emails by sending it to phishing@irs.gov.

Other warnings related to top “Dirty Dozen” scams include:

Is that really an IRS agent calling you?
During the regular tax season, criminals often pretend to be IRS agents or other officials collecting bogus tax bills. The crooks want to steal money or personal information. The Federal Communications Commission issued an alert March 7 indicating that bad actors may be turning their attention to impersonating IRS agents. The scammers often use technology known as spoofing to make your phone’s caller ID display a number that looks like it’s from the IRS to try to trick you into answering.

“These calls most often take the form of a ‘robo-call’ (with instructions to call back a specific telephone number),” the IRS said.

In some cases, deceptive phone calls may be made by a real person. Con artists might even have some of the taxpayer’s information, including their address, the last four digits of their Social Security number or other personal details.

The Treasury Inspector General for Tax Administration, the federal agency that investigates tax-related phone scams, says these types of scams have cost 14,700 victims a total of more than $72 million since Oct. 2013.

Remember, the IRS isn’t going to call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.

The IRS also doesn’t demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe, and the IRS doesn’t ask for credit, debit or gift card numbers over the phone.

Watch out for new twists on phone scams.
The IRS warned recently that criminals are making fake calls from the Taxpayer Advocate Service, an independent organization within the IRS. In a recent scam, crooks spoof phone numbers from the taxpayer advocate office in Texas or New York. It may start as a robo-call, but if you return that call, the fraudsters will request personal information, including a Social Security number.

Protect data, like Social Security numbers.
Despite a steep drop in tax-related identity theft in recent years, the IRS warned taxpayers that the ID theft tax scams remain serious. As a result, tax filers must use security software with firewall and antivirus protections. Make sure security software is turned on and can automatically update. Encrypt sensitive files such as tax records stored on the computer. Use strong passwords. Do not click on links or download attachments from unknown or suspicious emails. Be wary of crooks who might pretend to represent a legitimate bank or credit card company. Don’t routinely carry a Social Security card, and make sure tax records are secure.

“Treat personal information like cash; don’t leave it lying around,” the IRS said.

Stay away from fake 1099-MISC forms.
Con artists may use fake forms to help you get a bigger refund by claiming tax credits that you’re really not qualified to receive. In some scams, people end up claiming income that they’ve never earned. The income shows up on a phony 1099-MISC form.

The IRS is warning taxpayers to avoid getting caught up in scams disguised by debt payment programs involving credit cards and mortgages. Unscrupulous promoters of these scams often argue, according to the IRS, that the consumer needs to use some sort of “bonded promissory note” as a payment method for dealing with credit card or mortgage debt. Then, the con artists may provide a fraudulent 1099-MISC that appears to be issued by a large bank or other financial institution.

It’s not unusual for bad actors to dupe others into making claims for fictitious rebates, benefits or tax credits. Some even file a false return in their client’s name, and the client never knows that a refund was paid to the con artist.

In general, the IRS warns that anyone who prepares tax returns and promises larger refunds than others should be treated with much caution. The same’s true for the friend of a friend who somehow cranks out tax returns that have much larger refunds than taxpayers have typically seen.

“Scam artists can use flyers, advertisements, phony storefronts or word-of-mouth to attract victims,” the IRS said. “They may even make presentations through community groups or churches.”

Remember, if your tax return is somehow rejected by the IRS system when you try to file electronically, a fraudster might have already used your ID to file a phony return to trigger a big refund.

©2019 Detroit Free Press
Visit Detroit Free Press at www.freep.com
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate