Posts Tagged ‘Debts’

If You Have Taken a Payday Loan, Watch Out For Scammers

August 29th, 2011

Beware of payday loan collection scams

The latest disaster, hurricane Irene, will cause yet another national expense and will no doubt lead to new and unexpected financial hardships in some areas. As it is, many of us in this tight economy are living from paycheck to paycheck. Payday loans can be a helping hand for people living close to their means when unforeseen expenses occur. As usual the scammers are out there, circling like vultures and ready to take advantage of those already financially stressed people with threatening phone calls, trying to bully them into paying non-existent debts.

Lenders are bound by laws

Legitimate payday loan companies offer small, short-term loans for people who wish to borrow against their next paycheck. However, when collection becomes an issue, these lenders are bound by laws. They are not allowed to harass their debtors, nor can they threaten arrest or jail.

Scammers

In February, Maria Brown of Houston, Texas, contacted authorities reporting scammers. “They contacted me and really had me believe I was going to jail for check fraud,” Brown said. She had taken out payday loans before the calls, and the scammers seemed to have access to those applications. They sounded legitimate because of the information they possessed about her. Brown realized she was being scammed.

Warnings

Consumeraffairs.com warns of a North Carolina caller described as “having a thick accent” who has been harassing North Carolina consumers for “a couple of years now.” The man uses abusive language and threats to frighten consumers into paying phantom debts with their credit cards. Arizona’s Attorney General’s office reported a similar scam in May. Callers claimed to be from fictitious law firms or government agencies and threatened legal action if the victims didn’t pay money owed on payday loans.

Watch out for these companies

Scammers claim they represent real companies that they are not actually affiliated with, or they may use fictitious company names. Beware of callers who say they represent Morgan & Associates, Federal Bureau of Investigators, DNR Recovery, DNI Recovery, Legal Accounts Association, Department of Law and Enforcement, Cash or ACS.

Fair Debt Collection Practices Act

According to the Fair Debt Collection Practices Act, debt collectors are not allowed to threaten arrest if you can’t pay. There is no law in the U.S. that allows arrest for unpaid loans. Collectors are also not allowed to harass, annoy or threaten any kind of violence. It is also a crime to falsely represent oneself as a lawyer.

What to do if targeted

Consumers who receive these calls should never verify personal information over the telephone. Ask for written proof of the debt, which is something legitimate collectors are required to supply. Suspicious consumers may also wish to check their credit report to be sure there have been no unauthorized credit card purchases or loans taken out in their name. Report any suspicious or threatening calls to the Federal Trade Commission, the Better Business Bureau and your state Attorney General’s office.

Tags: debt collectors, Debts, Fraud, Payday Loans, Repayments
Posted in Advance Cash Loan, Economy, Finance, Identity Theft, Loans, Payday Loans | No Comments »

How I Cleared My $10,000 Credit Card Debt in a Year

June 26th, 2011

Like many Americans, I had a ton of debt that seemed to pile on month after month.
Between credit cards, car payments and suchlike, my debt situation was hopeless. One Visa card had a $1,250 balance and another $5,000. I had a MasterCard with a $1,250 balance and a Discover Card with about $2,500. Enough! I decided to take steps to eliminate my debt without having to make more money. All it needs is a little sacrifice and discipline. Here’s what I did to all but eliminate my debt within one year.

What Is Necessary
I cut the coffee shops in the morning and made my own cuppa. The saving, to my amazement: about $4 per day or $28 per week, for a total of $1,456 a year. I used this to pay off the $1,250 balance on my Visa and even had a couple of bucks to spare. I could have saved that amount by brown-bagging as well.

Downgrading
We went from a two-car family to a one-car family. We sold the car that had payments and kept the one that was paid off. As our car payment was $450 per month that meant we saved an astounding $5,400 in one year. Include the money we saved on insurance at $70 per month or $840 per year, plus what we saved on gasoline at $25 per week or $1,300 per year. In total our downgrade saved us $7,540 for the year. Goodbye Visa Card No. 2 and Discover Card! It was inconvenient, sure, but it saved us tremendous amounts of money each month that we could apply to our debt. We are now back to two cars again, both paid for.

Cash Is King
My new motto is, “If I don’t have enough cash to get something I want, then I don’t need it.” This can be hard as credit cards allow you to make purchases that you otherwise couldn’t. However, they catch up with you, and bring debt.

Top of the Line
You don’t always have to have the best of the best. My cell phone is nice, but not too nice. I also ended my long-term contract with a major cell carrier and now use a prepay service. While my phone doesn’t do all the latest and greatest things, it still makes calls and texts, which is really all I use it for anyway. Besides, not having the “newest and greatest” cell phone is saving me over $80 per month or $960 per year. Nearly enough to pay off my MasterCard.

What’s important
When cutting debt you need to decide what is important. With a little sacrifice and discipline, I have been able to get rid of almost all my debt in one year’s time and sock away a few bucks. At the end of the year I paid off $9,956 of debt. Now, I use my credit cards only to secure a hotel room or a car rental, and I’ve learned the value of what is important over what is wanted. What’s more, I did this without making any additional money; actually it feels like I make more since I actually get to keep some of it now.

Since I’ve cleared my debt I’ve started a new business with a little help from a business incubator.

Tags: Cutting costs, Debts, Getting out of debt, saving money
Posted in Credit Cards, Economy, Employment, Finance, Money, Personal / Internet | No Comments »

Start Saving When You Are Young: You Can Always Spend the Money Later

June 7th, 2011

Saving money doesn’t have to be complicated
I swelled with pride when my 19 year old grandson told me he had opened a savings account and of course I made a donation to start it rolling. This marks his arrival at adulthood, I thought. He has no debts either.

Income-based repayment plans
That’s the concern for Brandon Smith, who recently graduated with a degree in journalism together with $98,000 in student loans. NPR asked personal finance expert Beth Kobliner what advice she might give Smith and other young adults. And she started her answer with one practical point. “There’s something called income-based repayment plans,” Kobliner tells Morning Edition host Steve Inskeep. “So, basically you pay back your loans as a percentage of income, and after 20 years, if you’re going into a relatively low-income job, your loans disappear completely.” Another idea is for students to consider debt when they’re looking at colleges and fields of study, says Kobliner, the author of Get a Financial Life.

Start Early
There have been several initiatives to teach financial literacy to young people. But it can be hard for students to find time for the programs and to absorb what they teach. “You can be in information overload and you say, ‘There is so much out there. I have no idea where to turn, so I’m just going to ignore it all,’ “Kobliner says. And while new technology, like budget-tracking software, can help, it doesn’t guarantee better results.

Back to basics
“I think we have to go back to basics,” Kobliner says. “We have to look at the very old-fashioned notions of, ‘Hmm … we shouldn’t spend more money than you have.’ “
She says that another thing to keep in mind when researching options for saving and investing is where all of the data come from. “Is it being sponsored by a bank?” Kobliner asks. “Is the website that’s offering it to you getting money back from what you’re clicking on?”

Forget about calculating
Don’t worry so much about learning how to compute interest, or amortization. “You just have to know that, ‘Gee, I want to pay 5 percent rather than 10 percent,’” she says.

Retirement
Another thing young workers should begin planning is their retirement. And Kobliner says they should start when they’re 21. “I think that sounds frightening to some,” she admits. “As soon as you have even a little bit of money, I’m a real advocate of putting money into something called a Roth IRA,” Kobliner says. “And, if you need it, the money you put in, in an emergency, you can get it out.”

Save, save, save
The key to saving whether for an emergency, or for retirement, she says, is “basically, starting as early as possible.” If you never need the money you saved when young, that’s great. But if you do need some extra cash in midlife for some unforeseen emergency, it will be there. Saving is a win-win deal!

Tags: Debts, Emergency cash, interest rates, Retirement, Savings
Posted in Economy, Employment, Finance, Money | No Comments »