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Apache is functioning normally

May 2, 2024 by Brett Tams

The most surefire way to get out of debt is to create a detailed budget, prioritize paying off debts with the highest interest rates first while making minimum payments on others, and consistently allocate extra funds toward debt repayment until all balances are cleared. Additionally, consider seeking professional financial advice to explore options like debt consolidation or settlement if necessary.

In the fourth quarter of 2023, the amount of household debt in the United States increased to $17.5 trillion. Although credit cards, mortgages, and loans have several benefits, some consumers have trouble repaying what they borrowed. If you’ve been struggling to get your finances on track, learn how to get out of debt by creating a budget, earning extra money, and adjusting your spending habits.

1. Identify Your “Why”

Everyone needs a little motivation from time to time. Before you start your debt-free journey, it’s important to identify your “why,” or your main reason for getting out of debt. Here are a few ideas to get you started:

You don’t want the stress of making minimum payments every month.
You’re tired of being behind on your bills.
You’d rather put extra money in your savings account than spend it on debt payments.
You want to create a strong financial future for your family.
You need to set aside funds to care for a child with special needs.
You’re tired of arguing with your spouse or partner about money.
You don’t want your kids to have to take out thousands of dollars in loans to pay for college.
You want to travel around the world while you’re healthy enough to enjoy it.

2. Assess Your Current Situation

Before you start making extra payments, review your bank and credit card statements to determine how much you’ve been spending each month. Be sure to include every expense, no matter how small, from snacks to streaming subscriptions.

Once you have a handle on your expenses, make a list of credit cards, loans, and other debts. For each debt, note the creditor’s name, the balance due, and the minimum monthly payment. At the bottom of the page, add up your balances to determine the total amount of debt you have.

3. Review Your Spending Habits

Next, look at the list of expenses from the previous step. Ask yourself these questions:

Are there any duplicate expenses, such as two charges for the same subscription?
Can you eliminate any of the items on your list?
Are you spending more than you earn each month?

The answers to these questions will help you determine how to get out of debt faster. For example, if you’re spending more than you earn each month, your priority should be to increase your income or reduce your expenses to eliminate the shortfall.

As you review your expenses, see if you can identify any spending triggers, which are things that cause you to spend money impulsively. Limited-time discounts, negative emotions, envy, and boredom are examples of triggers that may lead to increased spending.

Once you identify your triggers, work to eliminate them. For example, if you notice you buy something every time you receive a weekly email from your favorite retailer, consider unsubscribing from the retailer’s email list.

4. Make a Budget

If you think budgeting is only for people with lower incomes, think again. Having a budget makes it easier to get your finances on track, regardless of whether you earn $40,000 or $400,000 per year. To create a personal budget, follow these steps:

Calculate your net income from all sources. Your net income is the amount of money remaining after taxes, health insurance premiums, and other deductions are taken from your paycheck.
Add up your monthly expenses.
Subtract your expenses from your net income. If the result is positive, you have some money left over each month. A negative result indicates you’re spending more than you earn.

Here’s an example to help you understand the process:

Cassandra nets $2,247 per month from her full-time job and $325 per month from her side hustle. Her net income is $2,572.
Cassandra shares a two-bedroom apartment with a friend from college, so she pays just $750 per month in rent. She also spends $350 per month on groceries, $218 per month on student loan payments, $150 per month on utilities, $175 per month on public transportation, and $829 per month on clothing, toiletries, entertainment, and other personal expenses. Her expenses add up to $2,472 per month.
After subtracting $2,472 in expenses from $2,572 in net income, Cassandra has $100 left over.

If you have trouble keeping track of your income and expenses, use this monthly budgeting sheet.

5. Find Ways to Increase Your Income

Slashing your expenses is a great start, but if you have a significant amount of debt, you’ll also want to increase your income. The more income you have, the easier it is to pay off debt quickly.

To maximize your earning potential, do at least one of the following:

Apply for a part-time job.
Start a service-based business in your neighborhood.
Sell clothing, accessories, and household items via online marketplaces.
Deliver for DoorDash, Instacart, Grubhub, or Uber Eats.
Become a driver for Uber or Lyft.

If you start your own business or work as an independent contractor, you’ll have to pay self-employment taxes on your net income. To avoid having a large tax bill on April 15, it’s wise to make estimated quarterly payments.

6. Focus on One Thing at a Time

You have a finite amount of resources, so rather than trying to tackle multiple goals at one time, pick a goal and stick with it. For example, if you have three credit cards, focus on paying one of them in full. You can worry about the other credit cards later.

7. Set Short-Term and Long-Term Goals

Learning how to get out of debt doesn’t happen overnight. If you have multiple accounts, it may take several years to pay them all in full. It’s easy to get discouraged if you have to wait years to celebrate an accomplishment.

To stay motivated, choose a mix of short-term and long-term goals. If your long-term goal is to pay off your credit card debt, a good short-term goal might be to pay off one credit card with a $500 balance. Paying off a small debt gives you a sense of accomplishment, helping you stay motivated.

8. Choose a Debt Payoff Method

Once you have your goals in mind, you need to choose a debt payoff method. You can use the debt snowball or the debt avalanche:

Debt snowball: With the snowball method, you pay off your debts in order of smallest balance to largest balance. For example, if you have debts of $500, $750, and $1,000, you’d pay them off in that order. Each time you pay off a debt, you free up more money to tackle the other accounts.
Debt avalanche: To use the debt avalanche method, list your debts according to their interest rates, with the highest rates at the top of the list and the lowest rates at the bottom. For example, if you have a $3,000 loan with an interest rate of 19% and a $1,500 credit card balance with an interest rate of 28%, you’d pay off the credit card debt first, even though the loan balance is higher.

The snowball method gives you a psychological boost every time you pay a balance in full, so some people find it easier to follow than the avalanche method. However, you may end up paying more in interest if you don’t pay off high-interest balances quickly.

With the debt avalanche method, the opposite is true. You pay less in interest, but it also takes longer to pay off each account, which may leave you struggling to stay motivated.

9. Set Up Automatic Payments

Make things easy on yourself by setting up automatic payments for the minimum balance on each debt. If you have extra money, you can always make a second payment later in the month. Automatic payments eliminate the need to remember your due date, reducing the risk of late or missed payments, which can have a drastic impact on your credit.

10. Apply for a Balance Transfer Credit Card With 0% Interest

If you have a good credit score, consider applying for a balance transfer card with a 0% APR. The promotional APR lasts for a limited amount of time, but it could help you pay off high-interest debt much faster.

For example, if you have a $1,000 balance on a high-interest credit card, you can move it to a balance-transfer card with 0% interest for 12 months. Just make sure you pay off the balance transfer before the promotional period expires.

If you don’t have the credit needed to qualify for a balance transfer card, sign up for credit monitoring to help you determine when your credit has improved enough to apply for a new account.

You can learn more about managing debt and other financial topics at Credit.com.

Source: credit.com

Apache is functioning normally

May 2, 2024 by Brett Tams

Credit card debt forgiveness, also known as debt settlement, involves negotiating with creditors to reduce the amount owed on your credit card balances. While it can provide relief from overwhelming debt, it may have significant consequences, including damage to your credit score, tax implications, and potential legal actions from creditors. It’s crucial to fully understand the terms and consequences before pursuing debt forgiveness and to explore other options such as debt management or consolidation.

By the end of 2023, American consumers had more than $1.13 trillion in credit card debt. If you have credit card debt and you’ve been struggling to repay your creditors, don’t panic—you may qualify for some type of credit card debt forgiveness. Here’s what you need to know about this option for managing your finances.

What Is Debt Forgiveness?

Debt forgiveness is when a lender reduces or eliminates the amount you owe. For example, a credit card company may agree to forgive $400 of a $1,000 balance. Credit card debt forgiveness makes it a little easier to manage your finances, as it wipes away some of your debt, leaving you with more money for debt repayment or household expenses.

Debt forgiveness has the following benefits:

When you reduce a credit card balance, you only pay interest on the remaining amount due. As a result, debt forgiveness may help you save hundreds or even thousands of dollars, depending on how much you owe and how long it takes to pay the account in full.
If a creditor forgives your entire debt, you can use the minimum monthly payment to catch up on bills or pay off your other debts faster.
You don’t have to stress about paying back the original balances on your cards.

Ways to Have Your Debt Forgiven

If you’re struggling to make your credit cards on time, you may qualify for one of the following types of debt forgiveness.

Negotiate With Creditors

The easiest way to reduce your account balances is to negotiate with creditors. Depending on how much you owe and how long it’s been since your last payment, a credit card company may be willing to accept a settlement for less than the amount owed. For example, it’s possible to negotiate a settlement of $250 on a balance of $500.

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Before you contact a creditor, calculate how much you can afford to pay. If you only have $300 available, you know you can’t accept a settlement for any more than that. When you’re ready to call, follow these steps:

Explain your financial situation. The information you provide may affect the creditor’s willingness to forgive your debt. For example, if you’re unemployed, a representative may be willing to settle for a lower amount because they know you don’t have any income.
Let the creditor know how much you can afford to pay. Offer a little less than you have available. If the creditor agrees, you’ll have a little cash left over to tackle another debt.
If the creditor agrees to your proposed settlement, ask the company to email you a copy of the agreement. The document should state that the creditor is willing to accept the settlement amount as payment in full.
Pay the agreed-upon amount. If possible, mail a money order so the creditor can’t access your bank account information. Each money order also comes with a detachable receipt, making it easy to keep track of who and how much you’ve paid.

Participate in a Debt Relief Program

If you’re too busy to negotiate or you just don’t feel confident doing it on your own, consider signing up for a debt relief program. This type of program helps reduce the amount of debt you owe, giving you a little more breathing room.

Once you sign up, a program representative contacts each of your creditors and attempts to negotiate a settlement. Just like when you try to negotiate settlements on your own, there’s no guarantee every credit card company will agree to reduce your balance.

Some debt relief providers advise their clients to stop making minimum monthly payments on their credit cards. The reason for this recommendation is that some creditors are more willing to negotiate if you’re already several months behind. However, if you stop making payments, your credit will likely take a hit, as your payment history accounts for 35% of your FICO® scores.

Debt relief may not be the best approach if you want to preserve your credit scores, but if you’re already behind on your credit cards, there’s no additional penalty for signing up.

File for Bankruptcy

Bankruptcy is a legal process that allows you to eliminate some or all of your debts. In a Chapter 7 bankruptcy, also known as a liquidation bankruptcy, a trustee sells some of your assets and uses the proceeds to repay as much of your debt as possible.

To qualify for a Chapter 7 bankruptcy, you must meet one of the following requirements:

Your current monthly income is less than the median income for your state.
You pass a means test designed to determine if an individual is abusing the bankruptcy system.

Under the Chapter 7 bankruptcy rules, you can exempt some of your personal property from the process. For example, there’s a federal exemption of $4,450 for a motor vehicle. If you exempt an asset, the trustee doesn’t sell it.

Chapter 13 is for debtors who don’t meet the requirements to qualify for Chapter 7 relief. If you have regular monthly income, a Chapter 13 bankruptcy allows you to set up a debt repayment plan. The plan lasts three to five years, depending on how much income you earn. Once you complete the payment plan, any remaining debts are discharged.

Filing for bankruptcy has several pros and cons. The biggest advantage is that it gives you a fresh start. Filing triggers an automatic stay, which means creditors must stop their collection attempts while your case is pending.

Bankruptcy also allows you to avoid wage garnishment in the future. Once a debt is discharged, it’s gone forever. The creditor can’t get a judgment against you or start deducting payments from your wages.

The biggest drawback is that filing for bankruptcy hurts your credit. It can also stay on your credit reports for up to seven to 10 years, depending on the type of bankruptcy you file. When you have a bankruptcy on file, it’s more difficult to qualify for loans, credit cards and other types of credit.

Potential Tax Implications of Credit Card Debt Forgiveness

Debt discharged through bankruptcy isn’t considered taxable income. However, if you negotiate a settlement or have a debt relief company negotiate on your behalf, you may owe income tax on the forgiven amount. For example, if a creditor accepts $400 as payment in full for a balance of $1,000, you may have to pay tax on the $600 difference.

You may be able to avoid the federal tax on forgiven debt if you’re insolvent, which is when your total liabilities exceed your total assets. Someone with debts totaling $25,000 and assets totaling $20,000 meets the definition of insolvency.

If you’re insolvent, seek advice from a qualified tax professional. You may need to file Form 982 with your federal tax return. Your state may also impose income tax on forgiven debt.

Alternatives to Debt Forgiveness

Credit card debt forgiveness isn’t right for everyone, but there are a few alternatives.

Debt Consolidation

Debt consolidation allows you to combine several debts into a single loan, making it easier to manage your finances. For example, if you have credit cards with balances of $500, $2,500, and $5,000, you may be able to consolidate them into a loan for $8,000.

Consolidation loans typically have fixed interest rates, so you don’t have to worry about your rate changing from month to month. Additionally, getting a consolidation loan allows you to make just one payment per month, eliminating the need to juggle multiple accounts.

Budgeting

If you don’t have much debt, budgeting may help you pay it off without having to negotiate settlements or sign up for a debt relief program. A budget estimates your monthly income and expenses, making it easier to identify opportunities to save and pay off debt.

Once you create a budget, you may need to reduce your expenses or increase your income. The more you earn and the less you spend, the more money you’ll have available for credit card payments.

Negotiating Interest Rates

Some credit cards come with high interest rates, making it more difficult to pay off the balances. To reduce the amount of interest applied to your balance, contact your credit card companies and ask for lower rates. There’s no guarantee they’ll agree, but it doesn’t hurt to ask.

Balance Transfers

If you have a strong credit history, transferring high-interest credit card debt to a balance transfer card can help you pay off debt faster. Once you transfer your balances, interest doesn’t start accumulating until the promotional period expires, so you can make payments without worrying about how much interest is building up every month.

The no-interest period may expire within as little as six months, so be sure to pay off the balance before the regular APR kicks in.

If you want to make a plan to improve your financial health, get started with your free credit score and credit report card from Credit.com today.

Source: credit.com

Apache is functioning normally

May 1, 2024 by Brett Tams

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.

The term “six figures” refers to any annual six-digit salary that falls within the $100,000 to $999,999 range. Securing a post-graduate degree or attaining a highly in-demand position can help you earn six figures over time.

How Much Money Is Six Figures?

A six-figure salary can range anywhere from $100,000 to $999,999 annually. If a person had an annual income of $500,000, here’s what their payments would look like before taxes and deductions:

Salary Breakdown	$500,000 per year
$240	per hour
$9,615	per week
$19,231	every 2 weeks
$41,667	per month
$125,001	per quarter
$250,002	every six months

Please note that this breakdown doesn’t include taxes, which can vary depending on your state and filing status. This breakdown will also vary depending on a person’s exact salary and not what they’re expected to receive.

What Percent of America Makes Six Figures?

When you remove demographics such as infants, students, and stay-at-home spouses and focus only on full-time workers, around 18% of all earners in the US make at least six figures.

Conversely, the median American household income in 2023 was approximately $44,225. This number will fluctuate when one examines factors like the location, education, and health of certain populations.

How Does Education Affect Earning Six Figures?

Having a higher education can create more opportunities to earn a six-figure salary after college. Postgraduate degrees in Science, Technology, Engineering, and Mathematics (STEM) fields are often requirements for high-paying occupations.

Below are their median salaries, according to the Bureau of Labor Statistics. Keep in mind that median salaries don’t reflect the highest or the lowest paying positions:

Higher education is synonymous with increased student debt, but at least five college degrees are worth the money in the long run. Medical degrees, engineering programs, industrial management studies, and computer science degrees fall under this umbrella.

Can You Make Six Figures Without a Degree?

It’s possible to earn $100,000 or more each year without a college degree by pursuing certain occupations. Roles in this category often require preliminary and on-the-job training, as well as multiple certifications.

Choosing this route can also help you avoid some of the most frequent student loan mistakes, such as borrowing more money than you need and slowing down your financial growth.

Commercial Airline Pilot

The median salary for airline and commercial pilots was $148,900 in 2023. Securing a pilot’s license is the first barrier to entry for this role, though it will take years to gain the necessary experience for the most lucrative positions.

Air Traffic Controllers

The high level of responsibility and focus required of air traffic controllers results in a high compensation of about $132,250 annually. An individual’s performance and personal experience can pave the way for higher wages over time.

Air traffic controllers only need an associate degree to get started, though this role requires extensive on-the-job training.

Police Officer or Firefighter

Police officers and detectives, along with firefighters, can earn larger salaries based on their experience and location. For instance, the salary and benefits for police officers in California total around $117,822 annually and include health and dental insurance.

Hard Labor Jobs

Hard labor jobs often pay very well to compensate for the physical risks and immense technical knowledge that these roles demand. In 2022, power plant operators earned a median salary of $97,570. As technology and energy continue to become more important to society, the demand and compensation for these roles will almost certainly rise.

Athletes and Sports Competitors

World-famous athletes and sports competitors like LeBron James, Lionel Messi, and Naomi Osaka earn millions of dollars each year, but many of their contemporaries also earn fantastic salaries without ever needing a degree. Talented athletes with the proper opportunities earned a median salary of $94,270 in 2022.

Real Estate Agent

Real estate brokers and sales agents can earn six-figure salaries without a college degree. Instead, they will need to invest time and money into securing a real estate salesperson license—which, in California, for example, can cost upwards of $500 once all fees are accounted for.

Real estate agents largely earn income from commissions, so they’ll have to gain experience and build up their network of clients to hit that six-figure mark.

Making Six Figures From Your Investment Strategy

A certified financial advisor is best qualified to help you understand how your investments can grow in the future. A strong investment strategy combined with the proper resources and economic conditions can also help someone earn six figures annually.

Potential investment options include:

Pretax retirement savings plans
Stocks, bonds, treasuries, and cryptocurrencies
Real estate and REITs (real estate investment trusts)

Compound interest helps funds grow exponentially based on the amount you’ve deposited and any additional contributions you add. To see this concept in action, you can use our 401(k) calculator and try out multiple scenarios.

Normally, compound interest accounts can generate 5% to 8% interest each year based on your retirement investments. Jobs that provide employees with 401(k) matching contributions can generate hundreds of thousands of dollars by the time you reach retirement age (around 65 years old).

What Are the Best Ways to Start Earning Six Figures?

Keep these strategies in mind if you strive to make at least $100,000 annually:

Consider earning a postgraduate degree. Postgraduate STEM degrees may pave the way for higher-paying roles after graduation.
Avoid student loans to the best of your ability.
Research vocations that don’t require post-graduate degrees.
Consider attending a trade school or a technical college.

How to Increase Your Income in Your Current Role

You have several options to increase your revenue in your current career.

Consider switching companies every few years. Competitors may pay more for experienced workers from other companies.
Pursue promotions within your current organization whenever possible.

Explore entrepreneurship once you’ve gained enough practical experience and saved up a set amount of capital.

2024 Tax Brackets for Single and Joint Filers

As your salary increases, so will your tax obligations for each year. The Internal Revenue Service disclosed the following income tax bracket structure for 2024:

Percentages	Single Filers	Joint Filers
35%	$243,725	$487,450
32%	$191,950	$383,900
24%	$100,525	$201,050
22%	$47,150	$94,300
12%	$11,600	$23,200

Maintain Strong Credit With Credit.com

No matter how you plan to increase your revenue, maintaining strong credit is pivotal. Good or even excellent credit can help you secure lucrative loans and could even open the door to higher-paying positions. With Credit.com’s ExtraCredit® subscription, you can get reliable updates about your credit score and insight into your credit information with resources, tools and strategies to help you know where to work and progress for credit security.

Source: credit.com

Apache is functioning normally

April 28, 2024 by Brett Tams

Trader Joe’s is a national chain of grocery stores with a bit of a cult following. There are dozens of social media accounts dedicated to Trader Joe’s shopping hauls and recipes using only items found at the store. Trader Joe’s even has its own podcast.

If you’ve never shopped at Trader Joe’s before, it can feel overwhelming. Our guide can help you find the best things to buy at Trader Joe’s and ways to save money.

What you should know before shopping at Trader Joe’s

Trader Joe’s features a large selection of organic and specialty items, as well as seasonal products. Its private label items contain no artificial flavors or preservatives, MSG, genetically modified ingredients or harmful food dyes, according to the grocer’s website.

Seeing few recognizable brand labels on the shelf can be disorienting for some shoppers, but for others like Anna Lisa Abarca, author of “Trader Joe’s 5 Items or Less Cookbook,” the store’s smaller scale simplifies decision making. Larger grocery chains “are a little too big for me. There’s too many choices. I get analysis paralysis,” says Abarca, who is not affiliated with Trader Joe’s.

However, the store’s small profile means you might not be able to get everything on your list, and you may need to visit another store. For Abarca, a second stop typically includes buying baby diapers and some home and personal care items.

Before you build a budget

NerdWallet breaks down your spending and shows you ways to save.

What to buy at Trader Joe’s

Now that you know what to expect, you can make your list. Here are some categories to consider to get the most value.

Frozen food

At Trader Joe’s, the “frozen fruits and veggies are always at a really good price point,” says Abarca, who relies on frozen food to make quick and affordable meals. “You can still make a really good, healthy meal that’s cost effective, and it’s not going to go bad.”

Trader Joe’s frozen food section is also full of perennial fan favorites at lower prices than some other grocers. The Mandarin Orange Chicken, for example, costs $4.99, compared with a similar size bag of P.F. Chang’s Orange Chicken for $7.78 at Walmart, as of this writing.

Cheese

If you are a cheese lover, shopping at Trader Joe’s might offer savings. An 8-ounce block of feta cheese is $3.49, compared with $4.96 at Walmart. A 1-pound wedge of brie costs $7.99 at Trader Joe’s, versus about $9.75 at Walmart.

Wine

Trader Joe’s is known for its “Two-Buck Chuck,” the nickname for its $2 bottles of Charles Shaw wine. Although it has exceeded that price point in recent years, people still rely on Trader Joe’s for lower cost wine. Not every store sells wine, but if yours does, Abarca recommends looking for ones with the “reserve” label because they’re of a similar quality to wines offered at a higher price elsewhere.

Beauty products

Trader Joe’s offers a range of beauty and skin care products, and some reviewers say they compete with more luxury brands. The Daily Facial Sunscreen ($8.99 for 1.7 fluid ounces) made headlines for being a cheaper but comparable alternative to Supergoop! Unseen Sunscreen ($38 at Sephora and Amazon). The Vanilla Lip Mask ($5.99) is likened to the popular Laneige Lip Sleeping Mask ($24 at Sephora and Amazon).

Flowers and greeting cards

Flowers are typically the first thing you see when you walk into a Trader Joe’s store. A seasonal bouquet there is $9.99, less than similar arrangements found at Kroger (about $12) and Ralphs (about $18). Pair it with a 99-cent greeting card (compared with drugstore card prices that typically start around $4.99) and you have a thoughtful gift that’s easier on your budget.

Get more financial clarity with NerdWallet

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How to stretch your dollar at Trader Joe’s

Some of the conventional wisdom about how to save money on groceries doesn’t apply to Trader Joe’s. There are no coupons to apply at the register, there’s no store app, and buying in bulk isn’t an option. But, there are other ways to get more value from Trader Joe’s:

Use online tools for meal planning. Websites like Pinterest can help you find free budget-friendly meal plans, some for which the food costs $50 or less per week, says Traci Williams, a certified financial therapist and clinical psychologist in Atlanta. Searching “Trader Joe’s” or #traderjoesrecipes on social media surfaces tons of posts dedicated to the store’s new products or ways to combine items for fresh meal ideas.

Subscribe to “The Fearless Flyer.” Trader Joe’s free newsletter offers updates on new and seasonal items and recipes. The digital option comes every few weeks while the paper newsletter comes less frequently.

Check your pantry first. Food waste is costly, as is buying duplicates, but there are some solutions. “There are apps that allow you to create meals based on the ingredients you already have,” Williams notes. Cooklist, for one, allows users to scan pantry items, find recipes using those ingredients and create grocery lists.

Leave room for a few impulse purchases. Seasonal items are part of the fun of shopping at Trader Joe’s, but “you can very easily get swept up in all the things you want to try,” Williams says. “Decide ahead of time how many new products you’re willing to pick out. … That way you’re not feeling too restricted by your budget.”

Source: nerdwallet.com

Apache is functioning normally

April 28, 2024 by Brett Tams

People with dementia who live in long-term care facilities are spending a significant portion of their income each month on care, according to an October 2023 study published in the Journal of the American Medical Directors Association (JAMDA). The study found that the median adult with dementia in an assisted living facility spent nearly all of their income (97%) each month on care, and those with dementia living in nursing homes spent 83% of their income each month on care.

Currently, there are nearly 7 million Americans who are living with Alzheimer’s disease, the most common type of dementia, says Monica Moreno, the senior director of care and support for the Alzheimer’s Association, a nonprofit that provides support and advocacy for those affected by Alzheimer’s disease. “We also know that with Alzheimer’s disease, we are talking about a progressive disease that has no cure.”

Consequently, as the disease advances, people need more care, and the burden of how to provide that care — and pay for it — often falls to their families.

“A lot of them have made really responsible financial decisions their whole life, but nobody is prepared for this cost at the end of their life,” says Dana Eble, public relations and outreach manager at the Alzheimer’s Caregivers Network, a support network for care partners. “People didn’t even know they needed to save this much money.”

From estate planning to home tech gadgets, here are some strategies to help you support your loved ones.

Understand the financial and legal picture

Have a frank conversation about finances. What is your loved one’s situation in terms of income and expenses, and how much do they have in savings? How will care costs be covered? And what are their wishes for how they’ll be cared for as the disease progresses?

“Don’t wait to have these difficult conversations,” Moreno says. “Then, when the family is confronted with having to make these decisions, they don’t have to question whether they’re doing the right things.”

Discuss also the estate planning that’s in place — or what needs to be done. A solid estate plan typically includes a will, an advance directive and both financial and medical powers of attorney. If the person you care for can do so, a declaration of a pre-need guardian is also useful, says Colleen Carcone, certified financial planner and director of wealth planning strategies at financial services firm TIAA. This allows someone to name the person they would prefer to have as guardian of themselves and their property if they’re incapacitated.

“Once you do receive that diagnosis, you know this is going to be coming,” Carcone says. “Taking the extra steps to make sure that all of your i’s are dotted and t’s are crossed is going to be super important.”

Reach out to local and national resources

Your local area agency on aging will have information on programs and benefits in your area, such as Meals on Wheels, transportation programs and grocery delivery. Find local locations on the Eldercare Locator search engine at eldercare.acl.gov.

National groups can also be helpful: The Alzheimer’s Association, for instance, has a 24/7 helpline and can connect you to state-specific information. For example, Moreno notes a law in Illinois designed to protect a person living at home if their spouse has been placed in a long-term care facility.

“It allows them to keep a certain amount of income every month, and it allows them to keep their primary residence,” Moreno says. Some of the more devastating stories, she says, come from families who didn’t realize the law existed until after they had spent down all their assets. “These are the types of things families need to educate themselves about,” she says.

If your loved one is a veteran, check with the Department of Veterans Affairs to see what benefits they might have access to. “My dad was a veteran, and he got veterans Aid & Attendance benefits, which was cash aid to help pay for the care,” says Amy Goyer, AARP’s caregiving expert. “That can be extremely helpful.”

Use technology

Dementia is a progressive disease, meaning that your loved one will need more care over time. In the beginning, you can save money on care expenses with technology. This might include things like motion sensors, automatic lights, water shut-off devices, medication dispensers and a system that alerts care partners if their loved one leaves the area.

“In earlier stages of dementia, it may be that you’re just nervous about them, and you need to have your eyeballs on them and actually see them and know what’s going on,” Goyer says. “You can use technology to lengthen the period of time before you have to have someone there in person all the time.”

Move up the care ladder slowly

Out-of-pocket costs for people with dementia are lower if they’re living at home, according to the JAMDA study. At first, providing care at home might mean using a meal delivery service and hiring someone to handle housekeeping and the yard. Then, you may need to hire in-home care for a few hours a day or find an adult day care center in your area.

The daily median cost for adult day health care is $95, according to 2023 cost of care data from Genworth, an insurance company. That’s less than half the cost for a home health aide, which costs a daily median of $207.

“A lot of people still don’t know that adult day care exists,” Goyer says. “That can be a real cost saver. And people can be in an adult day care center — depending on the focus and what their capacity is — pretty far into dementia.”

If you reach the point where your loved one needs 24/7 care, a live-in caregiver may be a more economical option than an assisted living facility or hourly care from an outside source, since room and board make up part of their pay. If there’s an extra bedroom in the house, it’s a viable choice for a loved one who doesn’t need skilled nursing care but who can’t be left alone.

“We did that for a time with caregivers,” Goyer says, “and that saved a little bit of money.”

This article was written with the support of a journalism fellowship from the Gerontological Society of America, the Journalists Network on Generations and the Silver Century Foundation.

Source: nerdwallet.com

Apache is functioning normally

April 26, 2024 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Learn how scammers deceive victims by using AI for voice cloning and learn how you can protect yourself from other AI-related fraud.

How can you protect yourself from AI-driven scams that target your finances?

What new scams are happening as technology advances?

Hosts Sean Pyles and Sara Rathner discuss the alarming use of AI in scams and the future of fraud to help you understand how to safeguard your personal security. They begin with a discussion of AI-driven voice scams, with tips and tricks on recognizing potential fraud, staying informed about scam tactics, and the importance of open discussion to empower against scammer tactics.

Then, scam expert Bob Sullivan, author of “Stop Getting Ripped Off” and host of the podcast The Perfect Scam, joins Sean to discuss the broader implications of AI technology in scams. They discuss the potential for AI to personalize phishing attacks, the ease of creating convincing fake audio, and the importance of skepticism in the face of unexpected calls. Plus: the need for technology companies to embed safeguards, the role of societal learning in approaching unexpected calls, and the importance of verifying any financial requests you receive.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

We already know that our robot overlords are coming, but in the meantime, while they plot, their artificial intelligence skills are being put to use by bad actors all over the world, utilizing technology to bilk people out of their money. That includes using AI to copy someone’s voice and demand ransom for a non-existent kidnapping.

Jennifer DeStefano:

I had a full conversation with my daughter. It was interactive. There was no pause. There was no break. There was nothing that would lead me to believe that it wasn’t her. So when the mom that stepped outside called 911, she came back in and she said, “Hey, 911 tipped me off that there’s a scam where they use AI and they can replicate anyone’s voice.” I didn’t believe it. It gave me hope, but I didn’t believe it.

Sean Pyles:

Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.

Sara Rathner:

And I’m Sara Rathner. And Sean, that clip is as creepy as it gets.

Sean Pyles:

It is, and the story we’re going to hear today is as creepy and as awful as it gets as we wrap up our Nerdy deep dive into scams and identity theft and how to protect yourself from all of it so you don’t lose your life savings. Today we’re going to examine the future of the scam industry and the expanding role of AI.

Sara Rathner:

Yeah, I have to say, and I know you’ve touched on this in several of your interviews already, this is exhausting. I mean, it’s hard to listen to this and not think, yeah, no matter what, I’m screwed. They’re going to get me unless I spend all this time and effort protecting myself. And who has the time for that?

Sean Pyles:

I hear you, Sara, and it’s easy to feel somewhat defeated by all these organized criminals whose sole job is to steal our identities, which technology seems to make easier and easier for them, and to scam us in ways that we can’t even conceive of until it happens.

Sara Rathner:

I mean, I’d rather spend more time taking naps, honestly. I don’t do that enough and I’m really sleep-deprived, which is probably making me more susceptible to scams, honestly.

Sean Pyles:

Yeah, I am totally there with you. But Sara, I think we’ve also provided listeners, you included, with some really practical ways to fully arm ourselves that don’t take an undue amount of effort. And as we’ve been saying, one of the most important takeaways from this series, I think, is for everyone to realize that there is no immunity here. This stuff can happen to anyone regardless of how old you are, how much schooling you’ve had, or how much money you make, where you live. It’s a universal risk, and the more we talk about it, the more power we take away from the bad actors.

Sara Rathner:

All right. Well, the idea that AI is getting in on the action is slightly terrifying. You mentioned our robot overlords at the top of the show, and I guess they’re coming for everybody’s bank account PINs.

Sean Pyles:

If only it were that simple, Sara. AI is being deployed in sophisticated ways to manipulate our emotions, find vulnerabilities in software that we rely on every day, and generally make our lives like something out of that show Black Mirror. So in this episode, we’re going to explore things like how is AI being used in scams, what’s the deal with these AI voice scams and what hellish development might we see next in the world of scams. To start, we hear from a woman named Jennifer DeStefano. She lives in Arizona and had an experience that no one should ever go through, but that provides a window into one of the ways that scammers can reach into your heart and try to pull money from your bank account.

Sara Rathner:

All right. We want to hear what you think too, listeners. So tell us your stories of identity theft or getting scammed or share how you’re working to fight it or recover from it. Leave us a voicemail or text the Nerd Hotline at 901-730-6373. That’s 901-730-NERD. Or email a voice memo to [email protected]. Here’s Sean with our first guest.

Sean Pyles:

Jennifer DeStefano. Welcome to Smart Money.

Jennifer DeStefano:

Thank you so much for having me.

Sean Pyles:

So Jennifer, you experienced an AI voice scam. Can you set the scene for us? What was that day like before you got this phone call?

Jennifer DeStefano:

It was just a normal day. I had two children that were up training for a ski race and I had my daughter, she was at dance, so I was going to go pick her up and then hopefully joining my other two kids later in the weekend. So I went to pull up to the studio and get out of my car to go get her, and I got a phone call and it came in from an unknown number. Originally I was going to ignore it, but knowing that I had two of them that were practicing for a ski race and unknown can be medical, you just never know, just in case I decided to answer it.

When I answered it, I said hello, and I was getting out of my vehicle, so I had all my stuff in my hands. I was walking through the parking lot, so I had the phone on speaker and it was my older daughter crying and sobbing saying, “Mom, Mom, I messed up.” And I said, didn’t think anything of it. She ski raced for a number of years. It was a very familiar phone call. And I said, “Okay. What happened?” And she goes, “Mom, I messed up.” And I said, “Okay. What’d you do?” And then all of a sudden a man came on and he said, “Put your head down, lay back.”

And at that point I thought she got really hurt just being toboggan. So then I started to get really concerned. I’m like, “Wait, wait, wait. What’s going on? What’s happening, Bri? What’s going on?” And then this man gets on the phone as she starts saying, “Mom, help me. These bad men have me. Help me, help me, help me.” The phone, her voice starts to fade off with her crying and sobbing and pleading for me. And this man gets on the phone. He goes, “Listen here, I have your daughter.”

“You call the police, you call anybody, I’m going to pop her stomach so full of drugs and have my way with her and then drop her for dead in Mexico.”And at that point was when I had my hand on the door handle of dance, and I walked inside the room and I just started screaming for help. So fortunately there happened to be three other moms there that know me well. I was asking my younger daughter to get her dad on the phone, call her brother, call anybody. So she actually jumped up and ran over to my younger daughter to say, “Let’s go find your dad. Let’s figure this out.”

Another mom said, “I’m going to go call 911.” She stepped outside to go call the police, and the third mom sat beside me so she could hear everything the man was saying as I was trying to figure out where my daughter was, what’s going on.

Sean Pyles:

And so it’s a perfectly normal day. You’re about to get your kids after a day of them doing their activities, you get a phone call and within 30 seconds your world is turned upside down.

Jennifer DeStefano:

Completely upside down. I had no idea what was going on. I had a full conversation with my daughter. It was interactive. There was no pause. There was no break. There was nothing that would lead me to believe that wasn’t her. So when the mom that stepped outside called 911, she came back in and she said, “Hey, 911 tipped me off that there’s a scam where they use AI and they can replicate anyone’s voice.” She’s like, “It could have been a voice recording.” I’m like, “It was definitely not a voice recording. It was interactive. I was asking her questions. She was responding to me. It was not a recording.” And she’s like, “Well, they can do anything.” I’m like, “But it was her crying. It was her sobbing. I know it’s my daughter. It wasn’t a recording.”

Sean Pyles:

And what thoughts are going through your head as you’re having this conversation with what sounds exactly like your daughter?

Jennifer DeStefano:

I didn’t for a second not believe it. It wasn’t until another mom actually got my daughter on the phone and I talked to her and she reassured me that she was who she really was, and I could finally wrap my head around it. And then I finally believed her and then I knew it was a scam.

Sean Pyles:

How much time elapsed from the time that you answered the phone to when your actual daughter was speaking to you and you were reassured the phone call that you got wasn’t legitimate?

Jennifer DeStefano:

So the whole phone call actually took four minutes, but that’s where time freezes in that panic and fear.

Sean Pyles:

Right. Oh God, that’s heartbreaking. So do you know how the scammers got your daughter’s voice and maybe why they targeted you specifically?

Jennifer DeStefano:

So I had a bunch of different thoughts on that. Okay. She’s done a few interviews related to school, sports, whatnot, but that still doesn’t explain the crying and sobbing. It doesn’t explain that conversation. Her voice recording for her phone is her prepubescent voice, so it’s not her current voice. So I honestly have no idea. That’s where a lot of this, what’s scary is at first it was are they following me? Is it targeted? Do they know something? But then hearing how it had happened to a number of other people in different capacities, and you realize it’s a lot more arm’s length.

They were demanding money to be hand delivered to them. So they were making arrangements to come pick me up in a white van with a bag over my head. I had to have all the cash. They were going to take me to my daughter, and if I didn’t have all the cash, then we were both dead.

Sean Pyles:

God, how much were they asking for?

Jennifer DeStefano:

It was originally a million dollars. And then he came up with a number of $50,000 when I pushed back that that wasn’t possible.

Sean Pyles:

And to this day, it’s unclear why you specifically got this call?

Jennifer DeStefano:

I have no idea.

Sean Pyles:

Okay. And so after the phone call ended, I assume you hung up on the scammer when you realized that your daughter was safe.

Jennifer DeStefano:

So once I realized my daughter was safe, I actually had them on mute and they were furious that I wasn’t making final arrangements for a pickup. And then I picked the phone back up and I called them out and said, you don’t have my daughter, this is a scam and I’m going to make sure that this is going to come to a stop and I’m going to do anything I can to stop you. And I hung up on him.

Sean Pyles:

God, what are you on an individual or maybe even a family level doing to safeguard yourselves? Have you guys established a safe phrase that you might use to confirm your identities?

Jennifer DeStefano:

So we did create a safe word, and then it’s a lot of communication. Where are you? Who are you with? Where are you going? So that way if I do get a phone call or anybody gets a phone call, you can easily put it through the test. Does this make sense? Is this where they’re supposed to be? Is this even possible? Do you know the code word? Do you have some identifiers? If I didn’t know where my daughter was supposed to be, I wouldn’t have been able to locate her as fast as I did. And I had her brother, I had all of her siblings coming together in response to help me as well. So everybody was in full communication. You have to communicate and you have to seek help.

Sean Pyles:

Well, Jennifer, is there anything that you would like to leave listeners with?

Jennifer DeStefano:

Just awareness, have these conversations, sometimes maybe tough conversations, especially with children. But you have to have the conversations, have safe words, know where your kids are at. You have to have these conversations and make sure you safeguard your family.

Sean Pyles:

Well, Jennifer DeStefano, thank you for sharing your story with us.

Jennifer DeStefano:

Thank you so much for having me. I really appreciate it.

Sean Pyles:

Sara. I found this story just heartbreaking. I mean, at least they found out it was a scam before handing over money or before Jennifer offered herself up to scammers. But not everyone is so fortunate. Imagine how hard it is to say no to something like this when a loved one seems to be in jeopardy.

Sara Rathner:

Yeah, there was a piece recently in The Cut written by a journalist who knew she would never, ever fall for something like this. Don’t we all think that? And ended up handing over $50,000 in a shoebox to a stranger in a large SUV. I don’t think anybody ever sees themselves doing that. I’m glad Jennifer DeStefano didn’t let it get that far with the help of friends.

Sean Pyles:

And there’s hope that help will come from more than friends. Earlier this year the Federal Trade Commission proposed new rules that would prohibit the impersonation of individuals. It recently enacted rules that prohibit impersonating government or businesses. This proposed rule would extend to, well, us. The proposal is currently in a comment period, so if you feel so moved, go to the FTC’s website, ftc.gov, and comment.

Well, next we’re going to talk with another journalist, Bob Sullivan, who’s been covering the scam world for years now. He hosts a podcast for the AARP called The Perfect Scam and is the author of Stop Getting Ripped Off, among other books. We’re going to talk about the future of the scam world and how to protect yourself as technology continues to make it easier for the bad guys. That’s coming up in a moment. Stay with us.

Bob Sullivan, I’m so glad you could join us on Smart Money.

Bob Sullivan:

Thanks so much for having me.

Sean Pyles:

So Bob, the first question I have for you is how do I know that you are the real Bob Sullivan and not an AI-generated Bob Sullivan?

Bob Sullivan:

This is an excellent question and I’m glad that you’ve started there. You can’t, really. In fact, I did an episode on my own podcast recently where I had someone clone my voice and rather persuasively introduce the podcast, although family members pointed out to me that there were just little things that didn’t quite sound right. So either I was AI or maybe I had a bad cold or something. But it’s hard to tell, a little nasally.

Sean Pyles:

So in this series we’ve talked about identity theft, identity fraud, and the scam world, and I’m hoping that today you can give us a warning about the future of all of this and the role that artificial intelligence or AI is going to play and in fact is playing. So to start, when did we first start seeing AI being put to use in this way? Do you remember a specific AI-generated fraud or scam where you said, oh wow, this is something new?

Bob Sullivan:

Well, I have to be honest with you and say that I sit here reading emails about scams and fraud all day long, and I have not seen evidence of these kinds of things that a lot of folks are talking about right now, which is voice cloning or deep fake videos being used to fool people. Here’s a couple of things that I am worried about, however. All the data collection that we have, the criminals now have access to it and it’s going to be very easy for criminals to use that data to just really carefully craft their phishing pitches so that they’ll know exactly when you are transactional, for example.

Then they’ll know precisely when you order something from Amazon or what your zip code says about your income, and they’ll know how to attack the right person at the right time with the right message. And that’s the kind of artificial intelligence that I’m worried about, criminals using big data to essentially perfectly hone their crimes. But there’s one other thing that I’d really like to mention that enough experts have told me about that I am quite concerned about it, and that’s this idea of generative AI, where a tool like ChatGPT can engage in conversations and learn.

We have told people forever that one of the ways that they might recognize that they’re talking to a criminal over email or in chat or in a game is bad grammar or sentences that don’t quite make sense, non sequiturs. Well ChatGPT is getting very good at holding intelligent sounding conversations. Let’s start by saying it’s going to probably eliminate the bad grammar problem, but even more than that, imagine a tool that learns along the way just the right things to say to romance someone using a formula that’s been tested in the real world or the right things to say to get someone to follow the instructions for an investment scam.

I think these tools are going to learn how to carry on these conversations in ways that we’ve never seen at large scale, and that’s the kind of artificial intelligence that I’m worried about being used in scams.

Sean Pyles:

Okay. And can you talk us through how these AI voice cloning scams do work, whether they’re pervasive or not?

Bob Sullivan:

Sure. Well, I mean there are services, the fellow who did it on me signed up for a website that lets you do this for $5 a month and the first month is 80% off. So for literally one US dollar, you can upload samples of my voice or anyone’s voice and then generate for a potential scam victim, something that sounds incredibly realistic. I think the one thing that’s important to understand about what’s different about voice cloning, I don’t know if you remember the movie Sneakers, it’s one of my favorite hacker movies.

But in that movie, they basically needed a voice passport in order to enter a highly secure building, and they needed the authority figure to say things so that they could piece together cut and paste style a certain sentence, for example. So one way you might be imagining this works is someone tricks me into saying, my mother is in distress and I need you to send money to this wire account, but that’s not it. Instead, what’s powerful about AI voice cloning is with just a few sentences from me, they can extrapolate my intonation, my pausing and make me say anything.

So you don’t need a whole lot of vocabulary in order to make a really, really effective, almost fully independent voice clone.

Sean Pyles:

Well, I’d like to walk our listeners through some of the ways that fraudsters and scammers are putting this technology to work right now in ways that are shocking even to you. Can you share one or two examples that you know of that will give us a sense of just how bonkers this new era is?

Bob Sullivan:

Well, let me go back to the big data example. Foreign governments and large hacker organizations do have what would look to most people like a credit reporting agency on all of us. They have thousands of bits of data about all of us that they can use against us, and it’s data that they’ve been compiling for years. So they know what your tendencies are, they know where you shop, they know where you are. We never talk nearly enough about the theft of location data. All our cell phones are tracking devices.

And so a criminal could know when you’re walking past a store and send you a precisely timed invitation to either buy something at a discount or even worse to send you a note saying, I was just in Ireland. Bob, there’s a bank in Ireland that suddenly tried to charge a $2,000 charge to your account, say yes or no. And I would believe that message right now because I was just there. Those kinds of highly sophisticated, highly targeted crimes enabled by massive amounts of data that again can be searched now instantaneously, that’s the kind of thing that really scares me.

Sean Pyles:

And those examples are highly specific and individualized, which makes them all the more believable. So it makes it hard to trust anything that’s inbound to us.

Bob Sullivan:

Absolutely. And this is a tragedy because technology enables so many wonderful things. It is a terrible thing that we have all of these dark stories as this gray cloud around tech that’s going to prevent a lot of people from even trying to use it, and it’s going to make all of us feel just a little bit insecure because we know these sorts of bad and dangerous things can happen to us. The best example of this is in the health arena. We’re so far behind in what electronic health records could be in America right now.

When you go to the hospital, you’re laying on a gurney and there’s someone asking you over and over again, are you allergic to penicillin and you just were in a car accident. And that’s ridiculous. But because we are, I mean there’s many reasons, but a big one is we are so concerned about criminals misusing this data or companies misusing this data that we are decades behind where we could be with things like electronic health records.

Sean Pyles:

Earlier this episode, I spoke with a woman who received an AI voice scam call from what sounded like her daughter, and it of course wasn’t her daughter. But after everything settled down, she still doesn’t really understand how these people got her daughter’s voice. Her daughter isn’t really on social media, and this woman is also very unclear as to why she was targeted. So do you know how scammers are capturing people’s voices and why they might choose to target one person over another?

Bob Sullivan:

So I don’t know. I think for the vast majority of young people, it would be fairly trivial to examine a couple of TikTok videos and get enough voice sample in order to fake their voices. There are people who are not on social media and whose recorded voices aren’t in any, say, school websites or anything like that. I think they are few and far between. So I think most people should assume that a criminal could absolutely get enough audio samples of your voice to do this to you. So I can’t speak to that specific instance or why that person was targeted or why that child was targeted.

The only thing that concerns me is I don’t think we should give anyone the impression that this is happening on a widespread basis. It’s not. 99% of these kinds of calls are still being done by just human beings in boiler rooms. Nevertheless, this absolutely can be done. It can be done really inexpensively. And as I just mentioned, all of us are vulnerable to this. You’d be shocked at how much, even if you don’t have any social media, that pieces of your life have been posted by other people.

So it’s out there, and again, it takes very little, we’re talking probably less than a minute of audio in order to generate a fake you.

Sean Pyles:

What do you think we’re supposed to try to do to combat this? I mean, using me as an example, I host this podcast, you host one too. Our voices are out there just waiting for scammers to take a clip and make us say whatever they want, call our loved ones and use that voice to try to get their money. How do we fight that?

Bob Sullivan:

Yeah, you and I are screwed.

Sean Pyles:

Bob Sullivan:

Sorry. But the best, I talked to some other expert about this, so I can’t claim this advice myself, but I think it’s very good advice. At the beginning of the Photoshop era, people saw pictures of pyramids moved and weren’t skeptical of that. We just thought photographs couldn’t lie. I think nowadays for the most part, and certainly not everybody, for the most part, if you saw a crazy picture of Joe Biden riding on a camel or something, that there would be a piece of you at least that would say wait a minute, this might be fake.

There’s now an impulse that things you see might very well be faked. I’m hoping that our level of 21st century digital sophistication gets there quick enough with audio that your parents and my parents will have a predisposition to think if this is a weird phone call from Bob or Sean, it could be fake. And I think that’s the sort of learning curve we all have to go through kind of as a society.

Sean Pyles:

Well, let’s turn to some tactical ways that people can try to protect themselves. Can you tell us about the importance of things like pass keys, biometrics, other ways to authenticate that you are who you are when you get a call from someone or you allegedly call someone else?

Bob Sullivan:

I’m glad you brought that up. When it comes to voice printing in particular, there are these new technologies that are a little bit like image watermarking they’re discussing putting on voices. So you can imagine there being something even inaudible embedded in an audio phone call, which the technology company, the phone company, used seamlessly to verify that you were you, sort of like a Verisign email or whatnot. So there’s people who are working on technologies that would help with this verification. I’m not a fan of putting these really hard things onto individual consumers.

I think it’d be much better if the technology companies were forced to solve these problems because I can’t give my mom advice on how to verify how I might contact her at every platform that ever is going to exist. That advice is going to get outdated almost immediately.

Sean Pyles:

Given that we do live in this world that we are living in, I’m trying to think about ways that I can protect myself and my family. After I began doing research into 21st century scams, I established a safe phrase that if my family gets a call that alleges it’s from me and I’m in a panic, they’ll say, “Hey, what’s the safe phrase?” And I will tell them that phrase, if it’s actually me. And if it’s not, then the scammer’s going to try to divert them some other way, I’m sure.

Bob Sullivan:

I do think that’s great, and I don’t mean to trivialize any of that, but I would like to point out most people in security would say you’ve also created a vulnerability because someone armed with that phrase could easily disarm someone in your family, right?

Sean Pyles:

That’s true. Although the phrase has only been uttered in person when we agreed on what the phrase is. So we’ve tried to keep it as away from recording devices as possible to the extent that we can.

Bob Sullivan:

The only real point in my saying that was none of these things are foolproof. So it’s good to have that in mind. I think the one thing that helps all the time in the end, whatever we’re talking about here, almost inevitably, is a cover story for give me money. All of these, whatever technology we’re using, whatever the story is, in the end, there’s an ask of some kind. And stealing people against the ask is really, really important. And the best way to do that is interruption. The best way to do that is to train everybody in every circumstance, whatever is happening, to stop and talk to an independent third party, whether that be a family member or a financial professional or something.

Your son’s in jail in Europe, he needs bail money immediately, take the 15 seconds to talk to someone not involved in the situation and hear the words come out of your mouth. When you get a phone call you don’t expect, hang up and then go to the company’s website yourself and call the official published number, call the company back. That solves about 99% of these problems.

Sean Pyles:

Well, Bob, I’m asking this of all of the experts that we’re talking with for this series. So I’m going to ask you too, have you ever experienced a scam or identity theft or fraud?

Bob Sullivan:

No, but I’ve certainly been through a bunch of credit card-style identity thefts, but fortunately, knock on wood, nothing that we would consider deeply involved identity theft.

Sean Pyles:

Well, Bob, do you have any hopeful thoughts as we wrap up this series, which has been a bit of a bummer as we’ve talked about fraud and scams and people losing their life savings to technology assisted terrible people?

Bob Sullivan:

Yeah. So I spend all my week talking to people who’ve had their life savings stolen from them in all manner of speaking. It’s hard to stay optimistic. I think there’s a whole bunch of factors coming into play here. We have an aging population, many of whom thankfully have a lot of savings, they’re an easy target. And as I’ve mentioned, we have all of these tools that make it so much easier for someone halfway around the world to steal money instantly in untraceable ways. This has never happened in human history before, so this is the golden age of crime.

However, we are all talking about it now. So that’s really positive. Here’s the most optimistic thing I can tell you. Young people, software designers, engineers inside companies are now getting out of school having taken ethics classes and social impact classes and are starting to push back on their managers when they come up with tools like this. And that’s where the tide will turn is when enough people who have a grandparent who’s been a victim of a scam work at a software company and they say, we have to put this protection into this device before we release it to the world. And I do think those conversations are happening. So I am actually optimistic about that.

Sean Pyles:

That’s good to hear. And is there anything else that you wanted to mention that we didn’t touch on?

Bob Sullivan:

What we find is that a really, really big obstacle to fixing this problem is shame and embarrassment. Many, many people won’t come forward after they’ve been a victim of a crime like this because they feel stupid. I called myself stupid. All the language around scam crimes tends to focus on the individual instead of the system. Well, if you read a news story about a person who fell for a home improvement scam, that just doesn’t sound the same thing as someone who was robbed at gunpoint.

Sean Pyles:

Was the victim of a crime. That’s what happened at the end of the day.

Bob Sullivan:

They’re a victim of a crime, and we work hard on the language that we use to stress that there was a crime. There’s something about if we say, well, that person fell for this scam. Well, I would never fall for that scam. You can sort of put it at arm’s length, and that makes it a little easier to not do anything about the problem. And it takes the focus off the criminal. We kind of think the criminals are clever and sexy. But more than anything, we want to try to get away from the idea of shame because when someone is embarrassed because they are a victim of a crime, they don’t come forward.

The statistics don’t reveal the true nature and breadth of the crime. Everybody will tell you this, all this crime is wildly under reported. So however big the numbers seem to be, they’re at least double what we hear from the Federal Trade Commission and whatnot. And so anything that I can do to relieve the stigma from being a victim of crime like this, I’m all for it.

Sean Pyles:

Bob Sullivan, thank you so much for helping us out today.

Bob Sullivan:

Thanks a lot for having me.

Sean Pyles:

So Sara, after four episodes of hearing from experts and people who have experienced scams, I’m in a state of what I would call bleak optimism. The world right now is rife with scammers and their methods of duping innocent people are evolving at a rapid pace. But simultaneously, I can’t remember a time where scams and fraud were more present in the cultural conversation. Yes, it is fully a tragedy that our means of communication are so compromised that we cannot trust a call from a loved one in what seems like their most dire moment.

That really can’t be overstated. But hopefully the increased awareness of these scams will help people avoid sending money to bad actors and mitigate feelings of shame that people carry after enduring a scam. And hey, maybe one day our government will make some laws that help tamp down on the rampant scams that we’re all facing.

Sara Rathner:

And there’s this saying in journalism, if your mother tells you she loves you, fact check it. Well now you have to. So that’s the world we live in.

Sean Pyles:

If anyone contacts you at all, fact check it.

Sara Rathner:

Yeah. And text them on the side and be like, “Hey, are you calling me from jail right now?” And they’ll be like, “No.”

Sean Pyles:

I think the bottom line for everyone listening is to exercise extreme caution when you speak with anyone online and before you send money to anyone ever.

Sara Rathner:

If somebody is asking you for money and you don’t really know who they are, they are not who they tell you they are. How’s that? How’s that for general rule?

Sean Pyles:

All right. Well, for now, that’s all we have for this episode and this Nerdy deep dive about scams and ID theft and fraud. If you have a money question about any of this or anything else, turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. Visit nerdwallet.com/podcast for more info on this episode and remember to follow, rate and review us wherever you’re getting this podcast.

Sara Rathner:

This episode was produced by Tess Vigeland. Sean helped with editing. Kevin Berry helped with fact checking, Sara Brink mixed our audio.

Sean Pyles:

And here’s our brief disclaimer, we are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sara Rathner:

And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com

Apache is functioning normally

April 23, 2024 by Brett Tams

When it comes to borrowing money, building up your emergency fund, and performing financial transactions, you have more options than ever before. You can open an account with a traditional bank, set up an online bank account, or choose a neighborhood credit union. Best of all, you can have accounts with multiple institutions, maximizing convenience.

As you’re reviewing your options, you may see some claims that credit unions are better than banks. There’s no one-size-fits-all financial institution that works for every consumer on the planet, but there are some reasons you might want to choose a credit union over a brick-and-mortar or online bank.

Why is a credit union better than a bank for some people? Get the answer to this question, plus an overview of how credit unions work.

What Is a Credit Union?

A credit union is a nonprofit organization that provides a variety of financial services. Like banks, credit unions are heavily regulated financial institutions. They typically offer the following products and services:

Checking accounts. A checking account is a type of deposit account. Once you deposit money, you can spend it by writing checks, using your debit card, or making online transfers.
Savings accounts. Savings accounts make it easier to put away money for a rainy day. If you have an active account, you can deposit money and earn interest on it.
Certificates of deposit. A certificate of deposit, commonly known as a CD, is a special type of savings account. When you open a CD, you agree to keep your money in it for a certain period of time. In exchange, the bank pays a higher interest rate than you can get with a standard savings account.
Retirement accounts. Many credit unions offer IRAs and other retirement accounts, making it easier to save for the future.
Auto loans. If you don’t have enough cash on hand to buy a car, you can take out an auto loan from your credit union. An auto loan is a type of installment loan, which means you borrow the money and pay it back in equal monthly installments. The lender earns money by charging interest on the loan.
Mortgages. Most people don’t have hundreds of thousands of dollars in cash to buy a home. If you belong to a credit union, you may be able to take out a home loan. Some loans have fixed interest rates, while others have adjustable rates, giving you more flexibility.
Personal loans. If you need a loan to consolidate your debts, do expensive home repairs, pay for a wedding, or cover other major expenses, you may be able to take out a personal loan from a credit union. With a personal loan, you borrow a certain amount of money and pay it back in monthly installments.
Credit cards. Many credit unions also offer credit cards, which give you access to revolving credit. You use each card to make purchases and then pay back what you borrowed over time. If you don’t pay your full balance each month, you must make a minimum payment to keep your account in good standing.

Banks vs. Credit Unions: Major Differences

One of the biggest differences between banks and credit unions is that credit unions are nonprofit organizations owned by their members. In contrast, a bank is a for-profit institution owned by a group of shareholders.

Nonprofit and for-profit organizations have different purposes. Due to their nonprofit status, credit unions have cooperative structures. Board members and employees are concerned with the financial well-being of all members. Credit unions also have strong community roots.

The main purpose of a for-profit bank is to make money for shareholders. When there’s a profit motive in place, employees and board members tend to make decisions based on what’s best for shareholders instead of what’s best for customers or communities. For example, employees at Wells Fargo opened thousands of fraudulent accounts to boost the bank’s bottom line, hurting customers in the process.

Membership Requirements

Another major difference between banks and credit unions is that credit unions have strict membership requirements. Banks want to make as much money as possible, so they tend to offer accounts to anyone who meets some basic criteria. For example, a bank may open a checking account for any adult who doesn’t have a history of writing bad checks.

Credit unions are member-owned, so they have additional requirements. For example, some credit unions require their members to work for the federal government. Others are designed for members of the military or people who live in a specific geographic area. If you don’t meet the membership requirements, you won’t be able to open an account.

Banks and credit unions are both subject to federal regulation, but they’re not regulated by the same agencies. In the United States, the Office of the Comptroller of the Currency charters all banks and monitors their activities. The National Credit Union Administration oversees credit unions.

Both agencies work to ensure consumers receive fair treatment. Federal regulations also protect bank and credit union customers against deceptive business practices, giving you extra peace of mind.

Why Is a Credit Union Better Than a Bank for Some Consumers?

So, why is a credit union better than a bank in some cases? One of the main benefits is that credit unions operate for the good of their members. If you’re invested in the success of your community, joining a credit union can help you contribute to local development.

Credit unions also tend to offer slightly higher interest rates on certain savings and investment products. As of December 2023, credit unions were paying 2.93% on a five-year CD with a $10,000 deposit. In contrast, traditional banks were only paying 2.02%.

In some cases, a credit union also charges lower interest rates on credit cards and loans. The lower your rate, the less you pay in interest over time. At the end of 2023, credit unions charged an average of 12.72% on credit cards, while banks averaged 15%.

If you join a credit union, you may even save money on fees. Traditional banks need to maximize their profits, so they often charge monthly maintenance fees and fees for accessing certain services. You may also have to meet minimum daily balance requirements to avoid additional service charges.

Many credit unions charge no monthly service fees and have no minimum balance requirements. If you have to make a deposit to open your account, the minimum deposit may be just a few dollars. Credit unions may also offer free checks, free mobile banking, and other free services to their members.

Credit Unions vs. Banks: The Bottom Line

Banks and credit unions both have their place in the financial world. If you’re looking for personalized service, lower fees, and better interest rates, consider joining a credit union. You can always set up a traditional bank account if you want to access additional services.

To learn more about financial matters, check out Credit.com’s ultimate guide to personal finance.

Source: credit.com

Apache is functioning normally

April 23, 2024 by Brett Tams

Discover methods to achieve financial harmony in relationships and why fiduciary advisors are often considered trustworthy.

Sara’s Corner: How can couples equitably share the mental load of managing finances? Can you trust fiduciary financial advisors? Hosts Sean Pyles and Sara Rathner begin with a discussion about the division of financial responsibilities among couples to help you understand how to create financial harmony in your relationship.

Today’s Money Question: Elizabeth Ayoola joins Sean to explain how you can choose a financial professional to work with, starting with an in-depth look at different types of fiduciaries including Certified Financial Planners (CFPs), financial coaches, and financial therapists. They discuss the nuances of fiduciary compensation structures and explain how you can advocate for yourself when selecting a financial advisor to work with.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

Do you know which financial advisors you can trust and which might just be looking to make a buck? Well, this episode will help you sort the good from the sketchy in the world of financial advice.

Sara Rathner:

Welcome to NerdWallet’s Smart Money Podcast, where we help you make smarter financial decisions one money question at a time. I’m Sara Rathner.

Sean Pyles:

And I’m Sean Pyles. This episode, we’re joined by our co-host Elizabeth Ayoola to answer a listener’s question about fiduciary financial advisors. Are they all they’re hyped up to be and how do they compare to other folks looking to make money from giving advice?

Sara Rathner:

I would say the answer to those questions are usually, and they’re better, but I don’t want to steal your and Elizabeth’s thunder.

Sean Pyles:

I appreciate the restraint, Sara, even though you did just say those things.

But anyway, before we get into that, we’re going to hang out for a bit in Sara’s Corner. This is a thing I just made up where we hear from Sara about something that she recently wrote. Sara’s Corner, it’s cozy here.

Sara Rathner:

I mean, I do keep a blanket on the back of my desk chair, so it is cozy here.

Sean Pyles:

Sounds nice.

Sara Rathner:

Yeah. My corner is cozy and also may be full of emotionally fraught conversations because I do really like to write about couples and money, so let’s bring on the fighting.

Sean Pyles:

Yeah, that’s a good combination, I’d say.

So Sara, you recently wrote an article about how couples can share the mental load of money management. So to start, what inspired you to write this article? Are you giving us a peek into the Rathner household?

Sara Rathner:

Maybe a little deep down, but honestly, it’s really about what my social media algorithms are serving up lately, besides baby sleep experts and a little bit of Zillow Gone Wild, which is an account I highly recommend. So fun. You never know when an indoor pool’s going to pop up.

There are quite a few people who are influencer-type personalities who discuss topics like the mental load and emotional labor within families and within households, and it got me thinking about something that causes a lot of fights about who’s handling what task, and that is, as always, money.

Sean Pyles:

So in your article, you write that “Couples can fall into unproductive patterns that can lead to conflict, resentment, and even willful ignorance.” And this goes beyond money in a lot of relationships, and I do feel like this is something that anyone who’s been in a long-term relationship can relate to. So can you give us an example of one of these unproductive patterns and how can they be damaging to a relationship?

Sara Rathner:

One source I interviewed talked about what they called a manager-follower dynamic where one person in the couple is in charge and they delegate tasks to their significant other, and that’s fine at work. At home, it could also be fine depending on the task, but sometimes it could get a little icky, and even if one person is handling 100% of a task, you are both benefiting equally from that labor.

Sean Pyles:

Yeah. That reminds me of friends I’ve talked with who have found themselves in relationships with partners who really want a parent more than an actual partner, and that can be exhausting to deal with.

Sara Rathner:

Yeah, it’s totally fine to divvy up a task and have one person kind of be like, “I’m the point person for this, so if you have any questions about it, come and ask me,” but you’re agreeing to that together. It’s not this automatic, “Well, I’m the more adulty adult here and you act like a child, so I’m going to be your parent.” That’s a really gross dynamic to have in any romantic relationship. If you are in that right now, I don’t know, reconsider.

Sean Pyles:

Yeah, it can really strip away the romance from that relationship.

Sara Rathner:

Yeah, there’s nothing romantic about constantly reminding your partner to pick up their damn socks already. Adults can put socks in hampers, I’m just saying.

Sean Pyles:

That’s very true. Well, the hard thing is that with money, this can be a really easy dynamic to slip into because one person might know more about managing money than the other, so they end up just taking on all the money tasks or they delegate specific tasks to their partner, and if only one person knows about the finances of the household, that can be a very risky situation for both parties in the relationship.

Sara Rathner:

Exactly. And again, it’s totally fine and totally normal for one of you to feel more confident dealing with money. Maybe you’ve just managed your money differently back when you were single, maybe you work in finance. That is normal, but it’s still both of your responsibility.

And the same source that told me about the manager-follower dynamic also said to me that like any task, money tasks are things that you can learn by doing. So even if you are the less confident one in your relationship when it comes to these kinds of responsibilities, you can still grow your skill set. You can learn by doing. And so as you go forward in the future, you can take on more and more tasks with confidence and not fall into that dynamic where you’re constantly relying on the other person to tell you what to do.

Sean Pyles:

Let’s turn to some solutions. You first suggest that couples approach money as equals, which sounds great. Is the idea here that no one person in the relationship should have more power over their finances than another?

Sara Rathner:

Absolutely. The dynamic where one person handles everything and the other person could not be bothered to know the passwords to any accounts is not good. That’s not a healthy dynamic. At best, it’s unfair. The division of labor is, in that case, is putting a lot of that work on only one person’s shoulders, and at worst, it could be a sign of financial abuse. Withholding your partner’s access to finances is sometimes a situation where you are dealing with abuse and that’s something to keep your eyes open about. But even if your partner is totally happy to hand off the work and know nothing of the household finances, they could end up in a really tough spot if your relationship ends, either through divorce or breaking up or even if the partner passes away.

Sean Pyles:

So it might be a good idea for couples that are living together, have a long-term relationship, and have somewhat intermingled finances to even know the logins to each other’s accounts. Is that something that you’ve explored too?

Sara Rathner:

Yeah, you could even use a password manager to do that because you can share passwords with each other very easily or you could be really lo-fi about it and just have a list stored in a secure place like a safe that you keep updated once a year. You definitely want to both be equal partners in access to the money even if you don’t necessarily divvy up those month-to-month or week-to-week tasks equally.

Sean Pyles:

Well, what about actually getting those money tasks done? How should couples determine who does what?

Sara Rathner:

Well, this is where the whole money date thing comes, and we talk about this a lot. Sit down, pour yourself the beverage of choice, a cup of tea, a glass of wine, and have a chat about what bills are due, what savings goals you have, which kid has outgrown their clothes and needs to go shopping because that’s also a financial thing, all those sorts of money-related responsibilities that you have coming up in the next week, the next month, even the next three months. And in that conversation, you can also divide up the tasks.

Sean Pyles:

And it can be helpful to have different types of meetings at different times. Maybe once a quarter you have a higher-level meeting where you think about where you want to be at the end of that quarter or at the end of the year. And then at the beginning of each month, you can think, “Okay, here are the things we need to get done this month,” and then maybe even on a weekly basis, you can think more tactically around, “Okay, we need to get a bunch of whatever thing at Costco this week and that’s going to be a bigger bite out of our grocery budget, so let’s make sure we make room for that,” just so you have different conversations at different levels as you are managing your finances together.

Sara Rathner:

Yes, and I like to think of it in terms of that timeframe. What has to be done in the next few days, what has to be done this month, and then what’s a longer-term conversation?

Sean Pyles:

Well, this reminds me a little bit about how my partner and I manage other household tasks like doing the dishes, for example. In general, in our household, whoever cooks dinner does not have to load the dishwasher, and if you load the dishwasher, you don’t have to unload the dishwasher when it’s clean. And for us, it really comes down to being about balance.

Sara Rathner:

Exactly. And by splitting up responsibilities this way, you’re also acknowledging the labor that the person who cooked is performing. You do the dishes because you respect the work it took for the other person to cook. And in my house, because we have the baby to wrangle, I do most of the cooking. While I am doing that, my husband is handling the child care because I don’t want to stop cooking to change a dirty diaper because that’s unsanitary. So in our home, it’s this acknowledgement of, “You are 100% dealing with a baby and I’m 100% dealing with the cooking, and we have to split this moment up in order for us to get dinner on the table.”

Sean Pyles:

Well, do you have any other advice for how couples, or I guess anyone co-managing a household together, can find a more harmonious way to manage their finances?

Sara Rathner:

So another thing is once you divvy up those tasks during that money date, another really important thing is owning tasks that you agree to take on from start to finish. And this is where we talk about weaponized incompetence and all those psychological phrases that get thrown around on social media when you say you’re going to do something and you don’t do it and you’re, “Eh, it’s too hard.” No, it’s not.

Sean Pyles:

Just do it.

Sara Rathner:

Right. If you show your partner that you’re going to agree to do something and then you don’t do it to an agreed upon level of completion, you’re showing them that they can’t trust you.

So in your money date, not only do you talk about the major overarching tasks that you both need to complete, but you can break them down into subtasks so it doesn’t feel quite so intimidating. So if you’re the one to step up to own a task, that means you take care of it from start to finish, and it doesn’t mean you can’t ask for help if you get stuck. You are still partners, but you are just the one spearheading everything.

Sean Pyles:

Well, Sara, thanks for sharing your insights. I like hanging out in this corner with you. It’s cozy.

Sara Rathner:

I’ll bring a second blanket for next time-

Sean Pyles:

Thank you.

Sara Rathner:

… so we could build a fort together.

Sean Pyles:

I love it. And listener, if you want to check out Sara’s article, you can find a link to it in this episode’s show notes.

And now let’s check in on this month’s Nerdy question, which was what’s the best thing you spent money on this month? Last week, we heard from a listener who spent money on a third opinion from a doctor ahead of a major surgery and was able to find a more effective and less invasive way to resolve their pain. So hooray for taking charge of your own healthcare.

Sara Rathner:

And here’s what another listener texted us. “Hello. My favorite purchase so far is a used grand piano. I paid $4,000 and $1,000 to move it to my apartment on the third floor, no elevator, but it’s the best money I spent.” Wow. “I practice more than four times a week and it’s worth every penny.”

Sean Pyles:

Ugh, I love that this listener is spending money on something that is both a creative outlet and also likely a very beautiful thing to just have in their apartment. And I’m not going to pretend like spending $5,000 is nothing, it’s a significant chunk of change, but I’m willing to bet that they will get some good use out of it and it might just end up that they put some family photos on it eventually after the novelty of having a piano wears off, but still, it’ll be nice to look at.

Sara Rathner:

Also, I’ll say that having lived in a third-floor walk-up apartment, can I just say how impressed I am that it’s possible to get a grand piano up there? Because that was not what the staircase was like in the apartment building I was living in. Maybe you could hoist it through a window?

Sean Pyles:

Yes, I think you do have to do that. You take out the window. Sometimes you have to get a permit from the city. It can easily be $1,000 or more depending on where you are.

Well, listeners, we have so loved hearing from you and all of the great things that you are doing with your money. So to share the best thing that you spent money on last month, text us or leave a voicemail on the Nerd hotline at 901-730-6373. That’s 901-730-NERD, or email us a voice memo at [email protected].

Sara Rathner:

And while you’re at it, send us your money questions too. It is quite literally our job to answer them and we love to hear what situations you’re mulling over. So please tell us and we’ll try and solve these problems together.

Sean Pyles:

Well, before we get into this episode’s money question, we have an exciting announcement. We are running another book giveaway sweepstakes ahead of our next Nerdy Book Club episode.

Sara Rathner:

Our next guest is Jake Cousineau, author of How to Adult: Personal Finance for the Real World, which offers tips to young people on how to get started with managing their money.

Sean Pyles:

To enter for a chance to win our book giveaway, send an email to [email protected] with the subject “Book Sweepstakes” during the sweepstakes period. Entries must be received by 11:59 p.m. Pacific Time on May 17th. Include the following information: your first and last name, email address, zip code, and phone number. For more information, please visit our official sweepstakes rules page.

Now let’s get into my conversation with our co-host, Elizabeth Ayoola, about whether fiduciaries are all they’re hyped up to be.

We’re back and answering your money questions to help you make smarter financial decisions. And this episode’s question comes from Ian, who wrote us an email. Here it is. “Hi, team. I hear fiduciaries being peddled like some kind of miracle cure for financial planning, but I’m curious how being a fiduciary actually works. What is the enforcement mechanism? Is there a licensing body, like for nurses or doctors? What makes a fiduciary more trustworthy than someone who is making a promise that they totally have your best interest in mind? Cheers, Ian.”

Elizabeth Ayoola:

This is a good question to ask, especially if you’re trusting someone with your money. And I really like this topic because I recently covered it in a paraplanner course I’m taking. Sean, I know you’re also in the deep waters of coursework since you’re studying to become a certified financial planner professional, which is a fiduciary role. So you’re going to answer Ian’s question so we can test your knowledge.

Sean Pyles:

That is right.

Elizabeth Ayoola:

Sean Pyles:

A fiduciary is just a fancy term for someone who has an obligation, usually a legal or professional obligation, to put their client’s interests before their own. A fiduciary can be a doctor caring for your health, a family member managing someone’s estate, or in this case, a financial professional who is managing the personal finances of their clients.

Elizabeth Ayoola:

Okay. So in summary, a fiduciary prioritizes you and not their pockets.

Sean Pyles:

That is the idea and the hope, but there’s a little more to it than that, and I really have to hand it to this listener because I appreciate their skepticism about what it means to be a fiduciary because they are touted as the gold standard among financial advisors.

I also think we need to zoom out a little bit and talk about what it means to be a financial advisor because the term “financial advisor” is not regulated. Anyone can call themselves a financial advisor, even the sketchiest, hustle-culture peddlers on TikTok.

Elizabeth Ayoola:

I actually think we could do an entire episode on that, Sean. Right now there’s so many people sharing financial advice, and I’m afraid that people might not be doing enough vetting before taking these people’s financial advice, or even realizing that all advice shared doesn’t have their best interests at heart.

Sean Pyles:

Yeah. And as a side note, I’m not a fan of imposter syndrome, but the personal finance space is one where maybe more people should feel imposter syndrome because there are just too many people online without qualifications or experience telling others what to do with their money.

Elizabeth Ayoola:

I second that. And the wrong advice could really lead to great financial chaos for people, so they should absolutely be scared of sharing inaccurate or misleading advice.

Sean Pyles:

Totally. And if I’m being completely honest with myself, part of why I’m pursuing the CFP certification is to quell my own occasional imposter syndrome because I, as a professional in the personal finance space, want to get as much information as I can and I want to be as qualified as I can be to help others, but that’s just me holding myself to a very high standard that I think maybe other people should hold themselves to as well.

Elizabeth Ayoola:

And that’s why I like you, Sean. Okay, obviously there’s other reasons I like you too, but that’s exactly why I’m doing my qualification also because I want to share accurate advice with people. And I love to answer my friends and family’s finances questions when I can, so I want to make sure I actually know what I’m talking about.

Anyway, so back to our listener’s question. Ian wants to know how being a fiduciary actually works in the financial planning space. CFPs are a fiduciary, so how does that actually work in practice, Sean?

Sean Pyles:

Yeah, that’s a good question because Ian asked about licensing to affirm that someone is a fiduciary, and in the personal finance space, that usually means getting a CFP certification, which is the gold standard of education and conduct in the financial planning space. So please indulge me as I give you a sip of the Kool-Aid that I’ve been drinking during my CFP coursework, and I’ll explain what it means to be a certified financial planner professional/fiduciary.

Elizabeth Ayoola:

Come on. Tell us, Sean.

Sean Pyles:

Okay. So part of becoming a certified financial planner involves intensive education, passing a difficult exam, but then once you are certified, you have to act according to the Code of Ethics and Standards of Conduct that are outlined by the CFP Board. And there are three parts to this fiduciary duty that is also outlined by the Standard of Conduct.

So first, there’s a duty of loyalty, which states that a CFP professional has to put their client’s interests ahead of their own, like we talked about before. They also have to avoid, disclose, and manage conflicts of interest, and they must only act in the financial interest of the client, not themselves or the firm that they work for. They also have a duty of care, which basically mandates that the CFP professional has to be competent and do their best to help their clients meet their financial goals. Also, they have a duty to follow client instructions, where a CFP professional has to abide by the terms of the engagement with their clients.

Elizabeth Ayoola:

Wow, that is a lot, but honestly, it would give me confidence as a client to know that someone jumped through all those hoops for me.

Sean Pyles:

Yeah, and that’s really just scratching the surface, too. And the Standard of Conduct is a big part of why being a CFP is a big deal in the personal finance space.

Elizabeth Ayoola:

But here’s the thing, Sean, our listener, and to be honest, me too, is also wondering about enforcement. So let’s say a CFP professional decides to prioritize them making an extra dollar over what’s best for the client, and I don’t know, let’s say they push them into an investment or some kind of insurance product that isn’t actually a good fit for the client. What happens then? Do they call the cops? What do we do?

Sean Pyles:

The police are not involved in this unfortunately, but there is an enforcement mechanism at the CFP Board. If someone suspects that a CFP isn’t living up to their fiduciary responsibilities, they can file a complaint with the board and the board will investigate, and there are a number of disciplinary actions that it could take, including stripping someone of their certification.

The thing is, the onus is typically on the clients to file the complaints, and that’s part of why hiring a financial professional, hiring a CFP doesn’t mean that you can totally sit back and ignore your money. You still have to be engaged and monitor what’s going on.

Elizabeth Ayoola:

For sure, I learned that the hard way, so I try to learn things here and there. But thanks for explaining that.

I do have another question though. How would the client even know if they aren’t financially savvy or if they have a sketchy history? Are there some telltale signs?

Sean Pyles:

Yeah, this is the really tricky part, right? You’re going to this financial professional because of their expertise, so they probably know more about this topic than you do, and that can make it hard to know if they are BSing you or maybe more likely to violate their ethical duty later on. There are a couple of things that you can do though.

Before you even hire a financial professional, do your due diligence and shop around. I would recommend talking with a few different financial advisors before you decide which one you want to work with long-term. You can think of it like dating in that way. You want to get to know them and feel that you can trust them. And then once you are in this vetting process, I would say turn to our old friend Google and dig into each planner that you’re considering a little bit, like you would anyone that you’re dating. Verify that they actually have the certification that they say they do, and look and see if they’ve had any disciplinary actions that have been marked against them publicly. Also, you can just Google around and see if they’ve done anything else that you find suspicious or weird that you just aren’t on board with.

Elizabeth Ayoola:

Wow. I love those tips, Sean. And I also must say, when you said, “Your old friend Google,” it just reminded me about how long I’ve been in a long-term relationship with Google, but the tip’s definitely way more important. So basically, you’re telling us to put our investigator hat on. So okay, what’s the other thing you think people should do?

Sean Pyles:

Okay, so this might sound a little bit squishy, but go with your gut. If you talk with someone enough, you can probably tell if they aren’t confident in their grasp of the information they’re presenting. And even if they are, you might find that they just have a different money philosophy from you, which can signal that you guys are not compatible. For example, I once worked with a financial planner who suggested that I could take a 401(k) loan to solve a short-term cashflow issue that I had. And I personally happened to think that taking a loan against my own retirement for a problem that was going to work itself out anyway was an exceptionally bad idea, so I decided to work with another financial planner instead from that point on.

Elizabeth Ayoola:

Wow, that advice does not sound good, especially if it was suggested before exploring other alternatives that may not set you back for retirement. And I do understand that some people have to take out a loan against their 401(k), and that’s the only option that they have, but the downside is it might set you back, but I’m glad you went with your gut.

Sean Pyles:

Right. It wasn’t right from my circumstances or how I like to manage my money, and that’s what the bottom line was for me.

Now, so far, Elizabeth, we’ve been talking a lot about CFPs because that really is going to be the primary type of fiduciary that a lot of people looking for financial planning will encounter, but I want to go back to the idea that there are a lot of other people out there giving personal finance advice.

Elizabeth Ayoola:

Mm-hmm. People on TikTok, your nosy friends who are always getting in your business, the people interrupting my YouTube videos with their long-winded ads.

Sean Pyles:

Yes, but also accredited financial coaches and certified financial therapists. Both of those are fiduciaries, but they have different standards of conduct and enforcement mechanisms.

Elizabeth, I know that you have some experience working with financial therapists, so can you give us the rundown on what they do and why someone might benefit from working with one?

Elizabeth Ayoola:

I do, I do have experience with that, Sean. I am a wellness fanatic, that’s just a personal note, so I love the topic of financial therapy and also financial wellness. So essentially a financial therapist can help investors understand their worries and their fears around money. They also help you identify the feelings and the beliefs that you have around your money and your habits. Another way to put it is they help you identify and eliminate your money blocks, which are things getting in the way of you achieving your financial goals.

Sean Pyles:

And financial coaches are somewhere between a CFP and a financial therapist. They help people meet their financial goals, and they might be better suited to help those who aren’t super high-net-worth, don’t have a lot of investable assets. Accredited financial coaches also have a specific focus on diversity, equity, and inclusion, which is really important in the personal finance space, considering the racial and gender financial inequity in this country.

Elizabeth Ayoola:

Absolutely. They’re doing good work and we have a lot of work to do to close the gap, but as a woman and a Black woman at that, I hope we see more progress in coming years.

Sean Pyles:

So we’ve just run through a few different types of fiduciary financial professionals, and here’s my bottom line: if you are getting individualized financial advice, it’s probably for the best if that person is also a fiduciary because you know that that is a stamp of credibility, and it goes way beyond a financial influencer on TikTok telling you to sign up for their class and then peddling some investment account from a company that’s really just bankrolling their lifestyle.

Elizabeth Ayoola:

1,000%. I know me personally, I’m at a point where I’m growing wealth and I’m trying to make the right investment choices so I can see positive growth in the coming years. On that note, I would definitely go to a fiduciary if I was stuck trying to make a tough financial decision.

Sean Pyles:

Yeah. At the least, when you are receiving financial advice from someone, whether in person, on social media, or even on a podcast, I think people should ask themselves three questions: what is this person’s qualifications, how are they getting paid, and why are they doing this?

Elizabeth Ayoola:

I definitely think more people should ask those questions. But Sean, say more about that money part because that’s a big piece of the puzzle too.

Sean Pyles:

Yeah. Well, in the financial planning space, there are three main ways that people are compensated beyond a base salary. They can be fee-only, fee-based, and commission-based.

So when you meet with a fee-only advisor, they might charge you an hourly fee or a fee based on a certain percentage of your assets that they’re managing, maybe 1 or 2%. That’s pretty common. And fee-based is really similar, but there is a key difference, and that is that this advisor might get a commission from products that they sell you, like an insurance product or a specific investment account. And commission-based is exactly that: the advisor makes their money from selling financial products. So you can probably imagine why the commission-based pay structure gives some people pause.

Elizabeth Ayoola:

For sure. And then even if the advisor is a fiduciary, being commission-based could muddy the waters a little bit.

Sean Pyles:

Yeah. And for those who are really concerned about any conflicts of interest in the financial advisor space, fee-only might be the route where they feel most comfortable.

Elizabeth Ayoola:

Well, Sean, thank you for this rundown of what it means to be a fiduciary. Your coursework is courseworking, and I can see the studying is paying off. Do you have any final words?

Sean Pyles:

Yeah. I’d say that if you want a financial professional to help you with your finances, vet them thoroughly, shop around, and remember that at the end of the day, you have to be your own best advocate to get what you want from your money.

Elizabeth Ayoola:

Absolutely. And that’s all we have for this episode. Sean, thank you for educating we the people. Remember, we are here for you and we want to hear your money questions to help you make smarter financial decisions, so turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected], and also visit nerdwallet.com/podcast for more information on this particular episode. And remember to follow, rate, and review us wherever you’re getting this podcast.

Sean Pyles:

This episode was produced by Tess Vigeland and me. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all their help.

And here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Elizabeth Ayoola:

And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com

Apache is functioning normally

April 20, 2024 by Brett Tams

Deciding on a streaming service can be a difficult choice when there are so many companies and plans to choose from. Many households subscribe to popular platforms like Netflix and Prime Video, but there are a multitude of other options including Sling TV, which had about 2 million subscribers as of the fourth quarter of 2023.

Sling TV is a streaming platform owned by Dish Network that has live TV, including sports, and on-demand shows and movies. There are no contracts and you can cancel at any time.

You can stream for free or pay for upgraded services with a subscription. Read on to find out the features each plan offers.

How much is Sling Freestream per month?

As the name implies, Sling Freestream is free. You don’t even need an account to access it, though creating one will give you a more personalized experience like being able to create a favorite watch list.

While shows include ads, Freestream has over 500 live TV channels and a library of 40,000 on-demand shows and movies.

If you’re looking for a no-cost solution for streaming and you don’t mind watching ads, Freestream could be a good choice. If you want the most current live program selections, Sling TV’s paid subscriptions provide that.

How much is Sling TV per month?

Sling TV has several paid subscriptions for live TV: Sling Orange, Sling Blue and Sling Orange + Blue. All of the plans are ad-supported, but include 50 hours of DVR storage so you could record shows and fast-forward through commercials.

Prices vary based on location, and first-month price promotions are common. Input your ZIP code on Sling’s website to see pricing and features available for each plan in your area.

Sling Orange

Sling Orange typically costs $40 per month and comes with 32 channels, including seven sports and family channels like ESPN and Disney that can’t be found on Sling Blue’s plan. You’ll be able to stream on just one device at a time with the Orange plan.

Sling Blue

Sling Blue varies from $40 to $45 per month depending on your location. With Sling Blue, you won’t get the family and sports channels available on Sling Orange, but you will get other channels that Orange doesn’t have like Bravo and FX. You can stream on up to three devices at one time on this plan.

Sling Orange + Blue

Deciding between Sling Orange and Blue may not be a straightforward choice as each includes popular channels that the other doesn’t. Determining which one to go with comes down to what your viewing preferences are and the channels you want.

If you want access to all channels, you can get Sling Orange + Blue for $55 to $60 per month. This plan combines the Orange and Blue channel packages into one subscription. While you’ll pay a little extra for this plan, you won’t have to worry about missing a game on ESPN or not catching the latest reality shows on Bravo because you’ll have access to the full channel lineup.

Sling TV extras

One of the unique features of Sling TV is the ability to create your own add-ons, or Extras as Sling refers to them, to customize your viewing experience. Extras are mini-channel collections that can be added to your subscription.

There are specific offerings available for Orange and Blue plans so you’ll want to check Sling’s website to see which channel collections are available for your subscription type.

Extras range from $6 to $11 per month and include the following categories:

Entertainment Extra: $6 per month for extra entertainment channels such as Paramount Network and MTV.
Heartland Extra: $6 per month for outdoor sporting channels like Sportsman Channel.
Hollywood Extra: $6 per month for movie-focused channels like Sundance TV and TCM.
Kids Extra: $6 per month for children’s channels like Disney Junior and NickToons.
Lifestyle Extra: $6 per month for lifestyle content such as Hallmark Channel and Cooking Channel.
News Extra: $6 per month for national and world news channels like BBC World News and News Nation.
Sports Extra: $11 per month for sports channels like NHL Network and MLB Network.

You also have an option to buy more than one Extra for a small cost savings. For instance, for $13 per month, you can get a bundle that includes four Extras, which is a savings of about $10 per month compared with buying each Extra without the grouped pricing.

For subscribers seeking premium channels, like Showtime or Starz, those can be added for an additional monthly fee. There are currently about 35 premium Extras to choose from, depending on where you live; they range in monthly price from $1.99 to $10.

How Sling TV might fit into your budget

A helpful budgeting method is the 50/30/20 budget, where you allocate 50% of your income to needs and minimum debt payments, 30% to wants, and 20% to savings and debt repayment beyond those minimums.

A streaming service like Sling TV usually falls into the 30% wants category, meaning it would be nice to have but isn’t essential to your survival in the same way that needs are.

With hundreds of streaming services to choose from, knowing how much you can spend in your wants category — and what streaming features you value most — is a good starting point in making a selection.

You could look for ways to save money by reviewing Sling TV’s offerings to see if there are any deals you can score.

For instance, if you don’t want to commit to a paid subscription but Freestream doesn’t quite fit your needs, you could explore purchasing standalone channels. You don’t need a Sling base service to add Extras like Showtime or Starz. Standalone channels start at $3 per month.

You can also take advantage of Sling TV’s promotions, which we’ve seen with $10 to $25 off the first month.

If you need a streaming device, Sling TV currently gives new subscribers an AirTV Mini — a device optimized specifically for Sling — for free when you prepay two months.

Source: nerdwallet.com

Apache is functioning normally

April 14, 2024 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Explore how to protect yourself from identity fraud, understand its emotional toll and learn fraud recovery steps.

How can you protect yourself from identity theft and fraud?

What steps should you take if you become a victim of financial fraud?

Hosts Sean Pyles and Sara Rathner delve into the unsettling world of identity theft and fraud prevention to help listeners safeguard their finances and wellbeing. They begin with a discussion on the various facets of identity theft, with tips and tricks on identifying fraudulent activity, enhancing personal banking security and dealing with the aftermath of having your identity compromised. Then, they discuss the differences between identity fraud and scams, the importance of good cyber hygiene, and the steps to take immediately if your personal information is breached.

Sean also speaks with John Breyault, Vice President of Public Policy, Telecommunications and Fraud at the National Consumers League, about the current trends in identity theft and the forms of fraud that are on the rise in 2024. They cover topics such as new account fraud, the impact of zero-day vulnerabilities on personal data security and the necessity for consumers to stay vigilant with software updates and report incidents promptly.

They also explore how victims can navigate the process of recovering from fraud, including freezing credit reports, changing passwords, and engaging with financial institutions and law enforcement to document the crime and seek restitution.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

This transcript was generated from podcast audio by an AI tool.

Sean Pyles:

So there you are just going along with your life, running errands, finishing work projects, walking the dog, making lunch, paying bills, and then you realize, something is very, very wrong. Someone has gotten into your accounts and stolen your money.

Charlene MacNeil:

August 28th was a normal day. I took my cat to the vet, went and got groceries. That morning, I checked my online banking just to make sure I had enough money to do everything. It just seemed like a normal day and then everything changed that evening when I got that email.

Sean Pyles:

Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles.

Sara Rathner:

And I’m Sara Rathner.

Sean Pyles:

We’re back with our Nerdy deep dive into identity theft, fraud, and scams, and their potentially devastating effects on your finances if you become a victim. As we said last episode, and we’ll continue to reiterate over and over, these crimes do not discriminate. Absolutely anyone can find themselves in deep water with their money situation because these financial criminals have so very many tools and options at their disposal.

Sara Rathner:

Yeah. And, Sean, I think we also want to repeat the message that this doesn’t just happen to you because you’re ignorant or careless. It happens because as our guest last week said, “We have to be 100% right all the time.” We have to be watching our accounts and changing our passwords, realizing we’re talking to someone who’s pretending to be from a bank, etc., etc. And the criminal only has to be right once to get what they’re after. So if they catch you in a moment where you’re tired or hangry, they might just do that.

Sean Pyles:

So the last thing that you should feel is embarrassed or ashamed if you do become a victim of ID theft or a scam. Angry and upset, yes, ashamed, no. The more we all talk about it, the more educated we become and the harder we make it for the thieves and scammers.

Sara Rathner:

Yes. Let’s take our power back.

Sean Pyles:

Yes. So last week we talked about identity theft, how it happens, what to be on the lookout for, and how to protect yourself as much as possible. Today we’re going to look at the next step in that process, which is the identity fraud that happens after the theft.

Sara Rathner:

It’s the credit card opened in your name. It’s the tax return that isn’t really yours. It’s the healthcare account that also isn’t yours that gets the thief medical care on your dime. Listener, we’re going to help you understand what it looks like, how to avoid it, and what to do if it happens to you.

Sean Pyles:

All right, well, we want to hear what you think too, listeners. Tell us your stories of identity theft or share how you’re working to fight it or recover from it. Leave us a voicemail or text the Nerd hotline at (901) 730-6373. That’s (901) 730-NERD, or email a voice memo to [email protected].

Sara Rathner:

So, Sean, where do we start today?

Sean Pyles:

Well, we’re going to start today with a real world tale of identity fraud. We’re hearing from Charlene MacNeil, a mom from Alberta, Canada. She’s got a story about what happened when someone was able to get into her account at BMO Bank, a subsidiary of the Bank of Montreal. Then after Charlene, we’re going to talk with an expert in ID fraud, who’s seen it all in his capacity at the National Consumers Union. Charlene MacNeil, welcome to Smart Money.

Charlene MacNeil:

Hello. Thanks for having me.

Sean Pyles:

Charlene, you experienced a form of bank account fraud. When did you first realize that something was wrong?

Charlene MacNeil:

On August 28th, I had just put my kids to bed and I got an email pop up on my cell phone saying that I had a credit limit alert from BMO and it told me that I had $33 left in my account.

Sean Pyles:

And so that was an indication that you didn’t have sufficient funds or maybe your credit was run up. What were you thinking when you first saw that?

Charlene MacNeil:

I panicked when I saw the $33. It just didn’t make sense. So I immediately went onto my online banking and noticed that my line of credit was maxed to the $15,000 mark.

Sean Pyles:

And what steps did you take once you realized that something was very wrong with your account?

Charlene MacNeil:

I immediately called BMO and just told them the email that I got and she told me that she would cancel my card right away and my account and to go to the branch immediately the next day to file a report of what had happened.

Sean Pyles:

So the next day, did you go in and talk with them about that?

Charlene MacNeil:

Yeah, I went in the next morning and I told her what had happened and she had told me that there was a text message that was sent to me like a one-time passcode, and I tried to think back to the day before because I do get text messages or calls from scammers sometimes, but that summer I felt like I had gotten quite a few, but I just kind of always ignored them, so I didn’t really think much of it. And then when she was looking at my account, she asked me if I knew the company Wise, because she noticed that’s where the money had been sent and I Googled Wise right away because I didn’t know what she was talking about.

And when I Googled it, it said international money sending. So she was, “Oh, that’s a red flag. That’s crazy.” She made me feel like we should be able to get the money back, that she would fill out this report and send it off and it should be okay. What had happened was they took my line of credit money, transferred it to my checking account, and they set up a bill payment to the company Wise, and then they sent out the money that way through a bill payment.

Sean Pyles:

So a slightly convoluted way to get the money that you had from your line of credit over to them essentially?

Charlene MacNeil:

Yes, exactly.

Sean Pyles:

And so it seems like things are maybe going, okay, this was a frustrating experience, but you thought you were going to be able to get your money back?

Charlene MacNeil:

Yeah, I went back to work and I felt relieved. “Okay, that’s done. It should be fine.”

Sean Pyles:

But that’s not what ended up happening.

Charlene MacNeil:

No. Two days later, the teller that had helped me, she called me and started the conversation with, “I have some very unfortunate news. They will not refund that money to your line of credit.” And my heart fell because I was just, “What do you mean?”

Sean Pyles:

And this was $15,000 they said they weren’t going to refund?

Charlene MacNeil:

I had a balance on there before. So really they just took whatever I had left in my line of credit and sent it out, so it was like $9,700.

Sean Pyles:

And what reason did they give you for why you wouldn’t be able to get this money back?

Charlene MacNeil:

They had told me that they tried reaching out to Wise, but the money had already been transferred. So whoever the bill was made out to through the company, they had the money and that’s it. They couldn’t get the money back, but she did say, “If you want, we could escalate this and see if there’s something else that they could do.”

Sean Pyles:

Because there have to be some kind of protections. This was an instance of fraud. You didn’t authorize this transfer of money?

Charlene MacNeil:

No, but as this continued on, they kept saying that I had gotten this one time passcode sent to me August 28th at 4:20 p.m., but I don’t recall entering this six digit code that they’re telling me that I entered. But from their records, it shows I entered the code and that it was all good.

Sean Pyles:

It’s also possible that someone could have somehow gained access to your phone number or gotten that code themselves. Correct?

Charlene MacNeil:

That’s what I am trying to explain to them. I just know that I didn’t enter this code.

Sean Pyles:

So did you end up escalating this then?

Charlene MacNeil:

I did. I escalated it three times and then I finally got a final response just saying that it’s really unfortunate, but we can’t get that money back. And they just kept telling me it’s the one-time passcode and that’s the reason why the money was sent out that I pretty much authorized it to be sent out.

Sean Pyles:

I’m really sorry to hear that. Do you know how the people were able to get into your account?

Charlene MacNeil:

I don’t know. I just have a lot of people just giving me different ideas of how maybe it could have happened. I had a conference in Vegas at the beginning of August and it was on the news that Vegas was having issues with scammers.

Sean Pyles:

Was it an issue with people getting on public Wi-Fi and logging into their bank accounts?

Charlene MacNeil:

That or people also told me that maybe somebody walked by my purse and scanned my purse, but people have told me that too, thinking it’s because of the Wi-Fi.

Sean Pyles:

So I’m wondering, Charlene, how has this experience made you feel about the safety of your money? Have you thought about switching banks, anything like that?

Charlene MacNeil:

I’m very nervous because it blows my mind to think that somebody can get onto your online banking and then move money like that without a signature or maybe voice recognition or something. I shut down my line of credit now and I’m kind of waiting to hear what’s going to happen, but I am really considering moving banks. I wish this almost happened on a credit card because I feel like credit card companies have your back more than the bank.

Sean Pyles:

Yeah. Your story brings me back to a theme which is that fraud, scams, anyone can experience these things and it’s not like you followed a typical playbook of seeing a text message come through on your phone or clicking a link in email and entering your login credentials. You don’t know how someone got your information. It just exemplifies that you could be doing everything right and somehow people could still get your information and still get into your bank.

Charlene MacNeil:

Yeah, exactly. August 28th was a normal day. I took my cat to the vet, went and got groceries. That morning, I checked my online banking just to make sure I had enough money to do everything. It just seemed like a normal day and then everything changed that evening when I got that email.

Sean Pyles:

What do you think your next steps will be?

Charlene MacNeil:

I’m not very hopeful, to be honest. It’s something that I just have to accept. And I mean, I’ve done better the last couple months, but in the beginning it was very difficult. I lost lots of sleep, missed some work. It was very stressful. And you feel like you’re the one that did something wrong.

Sean Pyles:

Well, I’m sorry that you experienced this. I’m wondering if there’s anything that you would like listeners to keep in mind as they try to protect themselves and their finances online?

Charlene MacNeil:

Yeah, I mean it’s so important to be checking your banking probably daily just to make sure everything is going as you think. Be very careful, I guess, on public Wi-Fi. I was actually just on a trip with my family to Mexico and so many people use public Wi-Fi. And I did in Vegas just to load my boarding passes.

I did not check my online banking. I know a lot of people when they hear me say that I was on public Wi-Fi in Vegas. I did not check my online banking, but I was on public Wi-Fi and I guess people can be sitting in that room and gain all of your information. So I don’t know. I don’t want people to be paranoid, but I kind of feel paranoid.

Sean Pyles:

It might not be a bad idea in the year 2024 when if you’re on a public Wi-Fi network, someone who’s also on that can get into your device very easily. That’s the truth of where we are right now.

Charlene MacNeil:

Yes, and I heard once they’re in, then they can be in there for a while. If I would’ve checked my online banking a day or two later, they could have seen me enter my codes. Yeah, it’s very invasive.

Sean Pyles:

Well, Charlene, thank you for sharing your story with us today.

Charlene MacNeil:

Well, thank you for hearing me.

Sara Rathner:

Sean, this just makes me so sad and angry that anybody has to deal with this because it’s just not fair. It’s not a fair fight against these really savvy identity thieves.

Sean Pyles:

It’s really not. And what’s so worrisome to me about Charlene’s story is that she still can’t pinpoint exactly how these criminals got into her account. Again, it just shows that this kind of fraud can happen to anyone, but as tempting as it might be to just throw up your hands and yell, “I give up,” that just feeds the beast and doesn’t do us any good.

Sara Rathner:

Well, I’m looking forward to some advice on how to avoid all of this and anything that we could do to keep it from happening to us, to me, to my loved ones, and of course to our listeners.

Sean Pyles:

Well, our next guest will walk us through some of what happens when you’re the victim of identity fraud and give advice on how to avoid it and recover from it if it does happen to you. John Breyault is Vice President of Public Policy Telecommunications and Fraud at the National Consumers League. That’s coming up. Stay with us.

John, thanks so much for joining us on Smart Money.

John Breyault:

Hey, thanks for having me on the show. I really appreciate it.

Sean Pyles:

So last week we spent some time explaining identity theft and the various ways that bad actors can steal our IDs from us. And today, we’re going to explore what they do with all that information once they’ve got it. So I’d like to start by asking you to explain maybe the difference between ID fraud and scams. We’re going to talk about scams in our next episode, but what differentiates the two?

John Breyault:

Both scams and ID theft, we call fraud, right? It’s a crime where it involves typically a scammer trying to acquire information or funds that they can use for their own purposes. So identity fraud is definitely a subset of fraud overall, but it is certainly one of the biggest subsets.

So we know that, for example, the Federal Trade Commission every year puts out their Consumer Sentinel Data Book. It’s a compilation of millions of fraud complaints that they get from agencies and organizations like mine all over the country. And in 2022, which is their most recent data, they received 5.2 million fraud reports and the number one category that they heard about was identity theft. And so clearly this continues to be a major problem that the biggest enforcement agency out there is hearing about. Definitely identity theft is one of the biggest types of fraud, and one I think we continue to see consumers of every age level, every education level, every demographic be victimized by.

Sean Pyles:

And when you think about specific ways that ID fraud and scams can manifest, what makes them distinct?

John Breyault:

I think what makes each scam distinct is often, number one, what is the entry point for the scammer? Is it one where they have to interact with the victim, say by sending them a link that the consumer clicks on and then provides the data to the identity for the scammer that’s then used to commit fraud? Or is this something where the scammers can commit identity fraud really with no interaction with the victim at all?

We know, for example, that due to data breaches, that’s practically limitless information about almost every American out there on criminal forums on the dark web that can be used to basically commit identity theft as a service. With a few hundred dollars in Bitcoin, you too can hire an identity thief to do things like start bogus credit card accounts in your name or try and get healthcare benefits or unemployment insurance. These are all very common types of identity theft that’s out there, and that doesn’t require any of us to do anything.

Sean Pyles:

So you touched on this a little bit, but John, can you give us a sense of what you’re seeing out there right now? What are some of the most prevalent forms of identity fraud in 2024?

John Breyault:

Yeah, I would say some of the fastest growing types of identity theft is new account fraud. It’s not necessarily a new type of identity theft. We’ve seen scammers using information to create new credit card accounts for decades at this point, but certainly it is returning to its previous position as one of the top types of identity fraud. And it’s happening because the resources that identity thieves were devoting to government benefits fraud is going down. As those pandemic relief programs start to wind down, there’s less money for the identity thieves to steal. And so they’ve gone back to some of the tried and true types of identity fraud.

Sean Pyles:

Is there anything that’s relatively new that consumers should know about that maybe they haven’t really heard about?

John Breyault:

What we have seen over the past year has been a staggering increase in the number of data breaches attributable to what are called zero-day vulnerabilities. And if you’ve never heard of a zero-day vulnerability, that’s okay. Basically what it means is it’s a vulnerability that nobody else has identified. Think of it as having a key to a vault that nobody else has, and until the people who own that vault figure out that you have that key, they have no reason to try and solve the problem or change the lock.

Sean Pyles:

So this could be something like a weakness in our phones’ operating systems that allows a bad actor to get into our phones.

John Breyault:

Yes, exactly. It’s operating systems like Windows. It is browsers that can be hacked. It could be Microsoft Office. Really any software program can have a zero-day vulnerability. And so what’s concerning to us is just the increase in breaches that were attributable to zero days. It’s gone up. I believe the number that the ITRC cited was by more than 100% over the past 12 months.

Sean Pyles:

Do we know why this might be? Is it that software developers are maybe pushing out code a bit faster than they should and they aren’t combing through for vulnerabilities? Or is it that hackers are really zeroing in on these vulnerabilities and trying to exploit them?

John Breyault:

Well, I think that’s the $64,000 question, as they say. We have theories on how that is. One of the more worrying ones is that the scammers have learned how to automate their search for zero-day vulnerabilities using artificial intelligence. And if they’re able to search for these zero days at scale, a very low cost, that is scary because I think AI has revolutionized so many other facets of our economy and businesses and government over the past several years.

It definitely has the potential to do the same thing when it comes to fraud. I think many of us who work on fraud and identity theft on a daily basis, we are thinking of the potential of this as the same kind of potential for supercharging fraud and scams that we saw when the internet sort of became a technology that everybody was using. That’s the kind of scale of the threat that’s out there.

Sean Pyles:

And so when people get notifications on their phone saying, “Oh, you have a new software update to patch a security vulnerability,” this might be something that is being addressed. Correct? And it’s important for people to actually update their phones regularly so that they are having the most secure software possible?

John Breyault:

Yes. Cyber hygiene is definitely one of the lowest cost and easiest ways for consumers to reduce their risk of falling victim to identity fraud because once they are detected, the operating systems and browser makers are usually pretty quick to plug the hole. But that is often dependent on consumers paying attention to those little pop-up boxes that say, “Do you want to update your browser? Do you want to update windows?” And actually taking action. Definitely don’t wait to update. Make sure you do that because it really is one of the easiest ways to reduce your risk.

Sean Pyles:

So, John, walk us through some of the ways that listeners can protect themselves from identity fraud. We heard last week about protections from identity theft. So let’s assume that the theft has already happened and now we have to react to prevent the fraud. What are some first steps here?

John Breyault:

Well, number one, I would say act quickly. We know that identity theft is a crime that often relies on consumers doing nothing. If you know that your information has been compromised, take steps to reduce your risk. For many people, that’s going to start with freezing their credit report. All of the major credit reporting bureaus offer consumers the ability to freeze credit.

Number two, I would say try and limit the damage to the extent you can. For example, particularly if your primary email address has been compromised, that can be the entry point for scammers to take over lots of other accounts, your bank accounts, your social media accounts. So definitely change the password on your primary email account right away and turn on two-factor authentication as well to add an additional layer that the scammers have to get through. They’re going to try and use that entry point.

I would do the same for any financial accounts that you may have linked to that email account. In addition, call the banks and let them know what’s going on so that they can place fraud alerts on your accounts. And then finally, make sure and get a police report. Identity theft is a crime in all 50 states, but consumers, I think particularly if you start to see activity related to identity theft, having that report is often documentation that will be needed to get the kind of help from not just law enforcement, but also from banks and other entities that you’ll need.

I think, unfortunately, we know that local police departments aren’t always super excited to create those reports, so you may have to be persistent to do that, but definitely local police departments is the place I would start. And then work your way up to the State Attorney General and ultimately the Federal Trade Commission.

Sean Pyles:

Related to what you were just discussing, let’s go a step further. So let’s say someone took your information and then fraud happened before you could get to it. Who should you really go to for help? Let’s talk about reporting it and starting to deal with the fallout of fraud.

John Breyault:

Yeah. Once fraud has occurred, typically you still have rights. For example, an identity thief created a credit card in your name and started running a bunch of charges. You aren’t liable for that, but you’re going to need to take steps like have that identity theft affidavit and a police report ready to show to creditors who may wonder why you haven’t been paying your credit card bill that you just opened weeks ago. So definitely I would say getting those reports is going to be one key piece of information to have.

Also, call and talk to the entities who the identity thief is using in your name. Let them know who you are, what’s been going on, and see what you can do to address the fraud. Most of us don’t spend all day every day recovering from identity theft, but most of the financial institutions do have people who are devoted to helping you through that journey. But you’ve gotta keep records of that. Grab a notebook, create a little Word document on your computer, and start logging every communication that you have with those entities so that you can create a paper trail because you can’t just depend on them to know where you are in the process and to ensure that in one place they’re going to quickly try and use that information to commit identity theft in other places as well.

Sean Pyles:

Earlier in this episode, I spoke with a woman who experienced a form of bank fraud. A fraudster got access to her line of credit, and her bank didn’t offer much in the way of resolving the issue. She didn’t get her money back. And I’ve heard other similar stories before. What sort of recourse do people in that situation have to try to recoup their losses?

John Breyault:

Generally, if the consumer victim is not the one who is actually hitting send on the money transfer, whether it’s through a payment app or through a wire transfer from your bank, then you have protections under federal law as well as many state laws. So I think it’s important that if in a case like that where it sounds like the scammer got in because they were able to hack this woman’s credentials that she should have rights. Certainly if the bank seems unwilling to work with her, I would say your next stop should be the State Attorney General as well as groups like the Identity Theft Resource Center, which have great resources and help coach victims through recovering from these identity theft schemes.

Sean Pyles:

Yeah. And your advice just there brings up the idea of jurisdiction. The woman that I spoke with was based in Canada, where they have different rules and regulations than we do in the U.S. So I think it’s important for anyone to be familiar with what laws protect them where they’re living, whether it’s in a different country or a specific state.

John Breyault:

Yeah, absolutely. And I would say a great place to start that journey of learning what your rights are and what laws may apply is the FTC has a great website at identitytheft.gov where you can start to go through their checklist and create an identity theft recovery plan.

Sean Pyles:

Well, one final question. I’m asking this of all the experts that we’re talking with for this series, so I’ll ask you too. Have you ever fallen victim to a scam or identity theft or fraud?

John Breyault:

I definitely have. Fortunately for me, it wasn’t sort of life altering, but what got me interested in working on fraud was a trip I took to Jamaica on vacation where I was in a bar, which probably tells you the first thing that I wasn’t thinking very clearly, but one of the locals came up to me and said, “Hey, if you give me $20, I can get you cheaper drinks at the bar.” And I said, “Great.” And so I gave him the $20 and he turned around, bought some beers for him and his friends and just ignored me.

And I wasn’t about to start a fight with a bunch of guys in a bar in Jamaica. So I just said, “Okay, lesson learned.” Don’t always take what people say to you at face value and listen to your gut before you hand over your money. Unfortunately, in this country we have, when it comes to identity theft and being a victim of fraud, we often have this tendency to blame the victim.

And there’s a real stigma attached to being a victim of fraud. And we often use terms like, “You fell for a scam.” Or people say, “I can’t believe I was so stupid.” Or we use terms like, “pig butchering scams,” which suggest that somehow the victim is the one who’s culpable. I think that that is wrong. If I could have one additional message for listeners of this podcast, it’s show a little compassion the next time somebody tells you their fraud story and recognize that these are people who are victims of organized, multinational, very savvy criminals, and help them work through sort of this crime they’ve been a victim of and encourage them to report it.

Sean Pyles:

Well, John, thank you again for talking with us.

John Breyault:

I appreciate it, Sean.

Sean Pyles:

Sara, one thing that I really want listeners to remember is that the cost of experiencing identity fraud can go well beyond the money loss, which of course can be significant. People who are victimized in this way often suffer mental health consequences. Many feel ashamed or like they brought this upon themselves. So like John said, if you’ve experienced a loss like this, get help. Yes, contact the FTC and your local police, but also think about talking with a loved one or a therapist who can help you process your emotions around this.

Sara Rathner:

Yeah, know that you are not alone. You probably know people who have gone through something like this and you could commiserate with each other. The important thing is to receive nonjudgmental help from people who are on your side and will help you wrap your head around everything that’s happened to you, and you can come out the other side stronger and more determined to protect yourself in the future. Okay, Sean, tell us what’s coming up in Episode 3 of this series. I assume there are more horrors on the way.

Sean Pyles:

Unfortunately, yes. Next week we’re going to walk into the lion’s den of the scammiest people on earth. Imposter scams, romance scams, phishing, vishing, all in the name of parting you from your money.

Speaker 5:

That’s what these scammers try to do. They try to rush you into making a decision by telling you something’s urgent or an emergency like the family emergency scam, where they’ll say, “Oh, this is your grandchild and I’m overseas, and I need you to wire money fast because I’m jail or in the hospital.”

Sara Rathner:

Yikes. Well, for now at least, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at (901) 730-6373. That’s (901) 730-NERD. You could also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate and review us wherever you’re getting this podcast.

Sean Pyles:

This episode was produced by Tess Vigeland. I helped with editing, Kevin Berry helped with fact checking, Sara Brink mixed our audio.

Sara Rathner:

And here’s our brief disclaimer. We’re not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

Sean Pyles:

And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com