Get a check from the federal government? Watch out for scams

CONSUMER FORUM

By Russ Van Arsdale, executive director, Northeast Contact

Posted Jan. 13, 2013, at 5:41 p.m.

Ever since the federal government said it would stop sending paper checks in favor of using direct deposit, scam artists have been hard at work. With a March 1 deadline for the switch coming, expect crooks to ramp up their illegal efforts.

Scammers call, write or email to phish for personally identifiable information, such as Social Security numbers. Once they have enough information, the crooks can claim a false identity and set up an account to receive federal payments.

The U.S. Treasury Department is getting the word out that the switch to direct deposit will be complete as of March 1. Everyone who receives Social Security, veterans’ or other federal benefits should be aware that many such payments will no longer be made by paper checks.

There are two basic reasons for the change, which has been under way for a number of months. Right now, about 93 percent of all federal payments are directly deposited. The Eastern Area Agency on Aging, or EAAA, estimates 3,200 recipients in Hancock, Washington, Penobscot and Piscataquis counties are still receiving paper checks. Fully implementing direct deposit is expected to save the government $4.6 million a month, or a billion dollars over the next decade.

It’s also intended to make those federal payments more secure. Federal statistics show that more than 440,000 Social Security checks were stolen in 2011, and $70 million in checks were fraudulently endorsed. Direct deposit is expected to cut those figures dramatically.

Dyan Walsh, EAAA’s director of community services, says about 300,000 Mainers use direct deposit. “It’s a safety issue,” Walsh says, “to reduce the chance of anything happening to those payments.”

However, there are still risks. Those scammers are already on the phones, claiming to be government officials and asking people for the information that will help the crooks steal their money. Be aware: Governments don’t call or email and ask personal questions; if someone calls you claiming to be a federal official and wants personal information, just hang up.

Instead, you should take the initiative to make sure your payments are secure. The Treasury Department has launched the Go Direct campaign, explaining and promoting the change at www.GoDirect.org. Information is also available through a toll-free call to 800-333-1795, from 8 a.m to 8 p.m. Eastern time, Monday-Friday.

You can arrange for direct deposit to your bank or credit union account, either by phone or online. Christopher Pinkham, president of the Maine Bankers Association, says people in the industry are ready to answer customers’ concerns, especially about safety.

“It’s remarkable how well [direct deposit] works,” he told me.

Visit your bank or credit union and ask questions directly, if using the phone or email makes you uneasy.

You may opt to receive your payments by way of what’s called Direct Express Debit Mastercard. There’s no charge to sign up for the prepaid debit card, and most services are free. Those who have not arranged direct deposit by March 1 will receive their payments this way.

When making the switch you’ll need your Social Security number or claim number; 12-digit federal benefit check number; amount of most recent federal benefit check; financial institution’s routing transit number, and your account number and type — checking or savings. Work with a trusted friend or relative if you need help.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Protect your credit during holiday shopping

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT

Posted Nov. 27, 2011, at 3:34 p.m.

The last thing you might be thinking about during the holiday season is protecting your credit. However, it may be just the time of year to double efforts to safeguard your good credit.

That message came last week from Anne Head, Commissioner of Maine’s Department of Professional and Financial Regulation. “The holiday shopping season is a prime time for credit and debit card problems — from unauthorized charges to overcharges and identity theft,” she said in a news release.

The commissioner also took specific aim at gift and bank cards. Experts advise consumers to take a close look at the fine print. While gift cards have appeal to many for their convenience, some of them have fees or other provisions that can reduce their value over time. The cards may have limits on where they can be used, and card holders’ options may be limited if cards are lost or stolen.

Lloyd LaFountain III, Superintendent of the Department’s Bureau of Financial Institutions, urges buyers to know all the important terms, including:

1. Any fees that apply during or after the sale that reduce the value of the card
2. Expiration date
3. What to do if the card is lost or stolen
4. What to do if there are problems with the card
5. Where the card can be used
6. How to claim any unused portion of the card

If you don’t find the above information on the gift card or packaging, try to find a toll-free number or website to learn those details.

Department of Professional and Financial Regulation Urges Shoppers to ‘Review the Fine Print’ and Protect Their Credit This Shopping Season

GARDINER — With consumers turning their attention to holiday gift purchases, the Department of Professional and Financial Regulation is encouraging shoppers to protect their credit this season and review the fine print when making bank or gift card purchases.

“The holiday shopping season is a prime time for credit and debit card problems—from unauthorized charges to overcharges and identity theft,” Commissioner Anne L. Head commented. “Additionally, some consumers are unaware of fees and limitations associated with many bank and gift cards.”

Commissioner Head emphasized that state and federal laws provide many protections for consumers, but only if they learn to protect themselves and act quickly. “Save your receipts, and check your monthly statements carefully,” she stated. “Generally, banks and credit unions must refund you for overcharges, unauthorized purchases or unauthorized debit withdrawals, but only if you notify the financial institution promptly and dispute the validity of the charge.

The Department encourages consumers to call their credit card company or financial institution as soon as possible after noticing an unauthorized charge and then follow up in writing. Many consumers contact the store or business where the unauthorized charge occurred, which doesn’t satisfy the requirements of the law. “Contact your credit card issuer directly, and then write to the dispute address listed on each statement, which is generally different from the billing address,” Superintendent Will Lund from the Department’s Bureau of Consumer Credit Protection added. “The institution will provisionally credit your account, and then ask the merchant to demonstrate that the charge was valid.”

Regarding bank and gift cards, the Department’s advice is to read the fine print.. According to Lloyd P. LaFountain III, Superintendent of the Department’s Bureau of Financial Institutions, “many consumers are often unaware that some gift cards have fees and other terms that can significantly reduce their value over time.”

“People purchasing or receiving gift cards should read the terms and conditions. Although they’re a popular and convenient way to give, some cards have drawbacks, such as limitations on where they can be used and few options if cards are lost or stolen,” LaFountain explained.

Whether you buy or receive gift cards, you should read the disclosures to understand important terms and conditions, including:

• Any fees that apply during or after the sale that reduce the value of the card;
• Expiration date;
• What to do if the card is lost or stolen;
• What to do if there are problems with the card;
• Where the card can be used; and
• How to claim any unused portion of the card.

If these disclosures are not stated on the gift card or its packaging, check for a toll-free number or website.

Senate showdown over limiting debit card fees

FairPoint – News channel – Top stories – Senate showdown over limiting debit card fees.

WASHINGTON – A top senator mounted a populist-style attack on banks on Wednesday with a vote pending on whether to block a Federal Reserve plan to lower debit card fees.

Financial institutions and their supporters on Capitol Hill have been fighting a Fed proposal to cap, at 12 cents, the fee stores must pay banks each time a shopper swipes a debit card. Those fees currently average about 44 cents per swipe, transactions that earns banks and credit card companies $16 billion a year, the Fed says.

The battle has pitted banks against merchants, two industries that lawmakers hate to cross because of their influence back home and their campaign contributions.

With a showdown voted slated for later Wednesday, the Senate’s chief proponent of lowering the swipe fees, Sen. Richard Durbin, D-Ill., said that taxpayers had helped banks “in their darkest hour,” a reference to the $700 billion financial industry bailout of 2008. He said banks showed their gratitude by showering huge bonuses on their executives.

“Honestly, are we going to stand here and say we can’t protect small businesses across America struggling to survive?” said Durbin, the Senate’s No. 2 Democratic leader.

In debate on Tuesday, a leader of the drive to prevent the Fed from capping the fees also sought to appeal to everyday Americans, saying he was fighting for jobs and rural America.

“Hard-working folks will get stuck with higher fees” by banks that will have to offset lost revenue by boosting their charges for things like checking accounts, said Sen. Jon Tester, D-Mont. He also warned about more consolidation by the banking industry.

Treasury Launches Pilot Program of Prepaid Debit and Payroll Cards for Fast, Safe and Convenient Tax Refunds

Press Release from U.S. Department of the Treasury

1/13/2011

WASHINGTON – Timed for tax season, the U.S. Department of the Treasury launched a pilot today to offer taxpayers a safe, convenient and low-cost financial account for the electronic delivery of their federal tax refunds. The new account card option provides everyday money-saving conveniences and consumer protection features for Americans with limited or no access to traditional banking services.

“This pilot program will provide low- and moderate-income Americans with a low-cost option for faster delivery of their federal tax refund,” said Deputy Secretary of the Treasury Neal Wolin. “This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures.”

As the next step in this pilot, originally announced in September, Treasury will mail letters next week to 600,000 low- and moderate-income individuals nationwide. The letters will invite these taxpayers to consider activating a MyAccountCard Visa® Prepaid Debit Card in time to have their 2010 federal tax refund direct deposited to the card. Compared to paper checks, direct deposit provides a safer, faster and more convenient way to receive a federal tax refund as well as other regular income.

Also this week, Treasury began a companion pilot to encourage tens of thousands of current and potential payroll card users to direct deposit their 2010 federal tax refund onto existing payroll cards. Nationwide, more than 1.7 million workers use payroll cards to receive and access their wages, often because they do not have bank accounts. Working with ADP, a provider of payroll services, Treasury will highlight the safety, ease and convenience of direct deposit onto payroll cards through tax season communications, including materials distributed with pay statements.

Debit card nightmare: Business owner’s account ‘wiped out’ – Bangor Daily News

Debit card nightmare: Business owner’s account ‘wiped out’ – Bangor Daily News.

BETHEL, Maine — Maryann Jordan thought her debit card was safe. Then, two days after Christmas, she received a call from her bank.

“They told me my account was wiped out,” Jordan said.

Someone had used her MasterCard debit card to spend just over $4,700 in the United Arab Emirates city of Dubai and it triggered a red flag with Northeast Bank.

Her account showed four transactions, including a $2,469 charge at the Dubai airport.

The thief emptied her account of more than $3,000 and ran up her overdraft limit of $1,500.

Jordan still thought she was OK.

After all, card companies promise that customers’ money is safe and will be replaced if stolen.

Then, a bank employee highlighted the fine print of her account. Because the account was tied to her business, the Toe Tappin’ Jazz Dance Studio in Bethel, the bank didn’t have to refund all of her money.

It’s there on MasterCard’s website: Protection does not apply if the card was issued for “commercial, business or agricultural purposes.”

“Everybody ought to know this,” Jordan said. “I did not realize that a personal account was safer than a business account.”

Her bank, Northeast Bank, did return some of the money, agreeing to erase the overdraft limit and fees, she said.

But her $3,000 is gone.