Sowing Wealth

Beware of the Stimulus Scam

Heard on the radio today about a new scam that's going around. Let's just call it the stimulus scam. Here's what's happening: people are getting e-mails from the IRS telling them they are eligible to receive a stimulus check. To claim it they need to click on a link and provide their Social Security number.

You can imagine what happens next, their identity is stolen. This is so unfortunate because there are a lot of people who don't understand how the stimulus package will be executed. In fact, they don't seem to know that it hasn't even been approved yet. Otherwise, the scam could never work.

From what I understand it is working. Please don't fall for such a scam. You should be very careful to never heed any e-mail that asks you for personal information that you will provide by following a link in the message. That is a huge red flag.

If you get such an e-mail you should always contact the company by telephone and ask about it. Or, log into your account to see if the same message is waiting for you within your account. Chances are very good there will be no such message. Neither the government, nor financial institutions send out messages like this.

Pay Attention to Breach Letters

Identity theft as a crime seems to be on the decline as systems become more secure to foil would be thieves. However, it doesn't mean it's not happening and you shouldn't be always vigilant. The fact is that security breaches are still happening at firms that aren't so secure.

Most organizations that experience a security breach will notify all customers whose data has been compromised. This is a courtesy letter you should pay attention to. Let's say one of the department stores where you have a credit account sends you such a letter. You should be extra aware of that account for the near future looking for any funny charges.

You may even want to go the extra step and put a freeze on your credit at the three major credit bureaus: Equifax, Experian, and TransUnion. A freeze means that any merchant that wants to open an account for you must contact you first because there's a lock on your account. This seems silly if it's you that wants to open a new account, but it's good if it's not.

Last thing to think of is that you should be looking at your credit reports from the three agencies once per year. You can get one copy of your report from each agency free once a year. Get one every four months so you're never taking up too much time between looking at each one. Mistakes on credit reports are common and you can fix them if you know they're there. This is the official site to go to for a free report: https://www.annualcreditreport.com/cra/index.jsp 

Be Aware of this Phishing Scam

There's a popular scam going on now whereby the crooks send you fake email saying that your bank has been taken over by the US Government and that you should verify your account by providing certain information. I read about this scam in the latest issue of Kiplinger's Personal Finance Adviser.

The Federal Trade Commission posted some sample text, "We recently purchased ABC Bank. Due to concerns for the safety and integrity of our new online-banking customers, we have issued this warning message...Please follow the link below to renew your account information."

Remember that ANY email asking you to follow a link and give personal information about an account is almost certainly false and intended to con you. If you get such a message you should always phone the company that supposedly sent it to you and ask them about it. Or, log in to your account online the way you usually do to see if there's a secure message in there asking you to do the same thing. Be sure to always send the fake emails to the company that supposedly sent it so they can take action against the perps.

Lastly, you can also send fake emails involving the government to spam@uce.gov or reportphishing@antiphishing.org. The latter is a consortium of businesses and law enforcement agencies and you can probably send them any type of phishing email.

Make Sure You Have the Proper Insurance Coverage

There are so many collateral effects from the financial crisis that it's hard to keep up with them all. California is especially hard hit because we are in danger of having the state run out of money by early March if they don't balance the budget soon.

KGO Radio reported today another of the effects: uninsured motorists on California roadways. Roughly 15% of motorists on the road are uninsured on average. Because of the economic downturn this number is expected to rise in 2009. Imagine that it could be nearly 1 in 5 cars on the road uninsured. That's very dangerous for you if you're only carrying liability insurance and you have an accident with an uninsured motorist and it's their fault. Why? They probably won't be able to pay you for the damages and your liability policy won't help you.

Get Uninsured Motorist coverage if you don't have it. Make this a priority. If you already have such coverage, then take the next step and get an umbrella policy. This is insurance that kicks in should you cause an accident with serious injuries and your existing policy coverage is exhausted. The umbrella policy would then kick in to continue to pay out for the medical needs of the injured passengers. I have such a policy through GEICO and was amazed that it would cost me less than $300 a year for one million dollars of coverage.

Talk to your agent about your current coverage and what you should get to fully protect yourself out on the streets. Not having the right insurance can cost you much more than a bad investment. Much more. I can't stress this enough.

Do Your Savings Exceed FDIC Limits?

In the past the FDIC insured most savings accounts to $100,000. Recently due to the economic crisis the limit's been raised to $250,000. This should be enough to cover just about anyone, but not everyone. Moreover, the increase is temporary. Therefore, if you have more than 100k in a savings account you could be at risk in the future if your bank were to fail.

What's the solution? CDARS (www.cdars.com) This is a new system whereby the depositor has their money spread out over multiple institutions to obtain FDIC coverage on every last dollar. CDARS is the answer for the person with too much cash on their hands and an unwillingness to set up multiple accounts on their own. What a nice problem to have, right?

I'll keep this post short since I know I'm not the target and most of my readers aren't either, but just in case...CDARS. 

The Hidden Inflation Sapping Our Purchasing Power

I often purchase Colombo sourdough sandwich rolls to make my daughter's favorite pizza bread. I was pleased to see them on sale at Safeway today. When I got home and started fixing dinner I wasn't as pleased. I noticed the rolls are significantly smaller than they used to be. Coincidentally the Wall Street Journal just reported today about food companies lowering the volume of food they sell while keeping the price the same. Get it?

This is inflation the government is not able to measure. It's insidious really. Kellogs has admitted to reducing some of their packages. General Mills admitted to reducing the size of the standard box of Cheerios while keeping the price the same. Nothing cheerful there.

I recommend you protect yourself by being wise to tactics like this. In the skies airlines are being very overt about charging extra for this and that. You're mad but at least you're seeing it and are able to shift your spending if you're not in agreement. It's when the company doesn't tell you what they're doing that your purchasing power is secretly weakened. You're paying more and don't even know it. Shop with both eyes wide open is all I can say today.

Dangerous ATMs

Just read recently that ATM crime is on the rise. As if we don't have enough to worry about we can't even safely get money from our own accounts anymore! Here's what's happening - thieves are putting a device over the slot of the ATM, which then reads your mag stripe as the card is inserted. I believe it's called a skimmer. They also put an overlay over the keypad so they can get your PIN code. Unbelievable.

It seems that the ATMs that are most likely to be tampered with are the ones that are not connected with banks. For example, some stores might have ATMs on the sidewalk in front. Be really wary of using these ATMs. Also, if you see a sign on an ATM telling you to use the one next to it instead, that's a tip-off that the one you're being directed to has probably been tampered with. Stay away. Note that this is also happening at gas stations where people frequently use debit cards.

I read that you may be able to tell if the slot has a skimmer on top of it if you stick your finger in the slot slightly and it jiggles. Hardly a reliable test, but perhaps worth a try. You can be assured of safety if you go in and pay for your gas, or go in to the bank to get cash. You may also want to pay for gas with a credit card as it affords more protection than a debit card against fraud - see my last post for more information on this subject.

Just goes to show that you must always be vigilant to safeguard your money and your identity.