scams

6 Ways to Avoid Scams When Selling Your Stuff Online

Paul Michael — Thu, 29 Nov 2018 09:00:12 +0000

These days, selling items you no longer want or things you've made has become easier and more lucrative than ever before. We no longer have to hold yard sales every week, or pay for classified ads in newspapers. With eBay, Amazon, Etsy, Craigslist, and so many other outlets available, you have the world at your fingertips. But of course, the more open you are to sellers, the more accessible you are to scammers. Know what to watch out for, and you can sell your stuff with minimal stress. (See also: How to Protect Elderly Loved Ones From Financial Scams)

1. Don't accept big bills

If you're selling on Craigslist, you have to be very careful with cash transactions. Something scammers love to do is present a fake $50 or $100 bill, and take home an item along with a bunch of change. The seller is left holding a worthless note and down a valuable possession. One way to keep this kind of damage to a minimum is to only take $20 bills and below.

However, $20 bills can be fake as well, so you have to keep your wits about you. There are many ways to detect fake notes, and if the bill has blurry text and lines, no watermark, you likely have a fake. If you're in no mood to become a detective, pick up a fake note detector kit. It costs less than $10 and will pay for itself the first time you detect a phony bill. (See also: 12 Garage Sale Items That Sell Like Hotcakes)

2. Always meet your buyer in a public place

It may be inconvenient for you to meet in a police station parking lot or at a local coffee shop, but your first priority here has to be your personal safety. You have no idea who you're meeting and what they have in mind, even if they sound wonderful via email or over the phone. Some "buyers" lure you in to steal your item, and whatever else you have on you. Some want to cause you physical harm, or worse, and have no intention of purchasing anything. If you ask to meet in a public place and they refuse, that's a massive red flag. If they want you to bring the item to an address of their choosing, you also need to steer clear of that transaction. If you can, bring a friend (or friends) and tell other people where you're going and all the details about the person you're meeting. Most of the time, it's just a regular person looking for a deal. But you really don't want to let your guard down and trust the wrong person.

3. Have evidence of the item's condition

Many people abuse the good will of online sellers to save money. One of the nastiest ways you can be taken advantage of is when someone buys a mint condition item from you, then asks for a return and a refund because "it doesn't work."

For example, let's say someone buys a high-end computer mouse from you, then they say it doesn't work and want a refund. You know it worked fine when you sold it. If it's something that costs more than just a few bucks, have evidence of the item working in the listing itself. Take accurate photos and videos, and record serial numbers. It takes just a few minutes to get this all down, and you only have to store it until the transaction is closed and everyone is happy. (See also: How I Make $800 on Month on eBay Selling Used Clothes)

4. Avoid buyers with brand new accounts

This is not to say that all buyers with new accounts are scammers. This is simply a precaution you should take to avoid getting stung. Scammers tend to get banned by eBay after a few incidents that form a pattern of fraudulent behavior. These people will just keep opening new accounts, doing a few returns for broken items, or "item not as described" before being banned again and continuing the cycle. Luckily, you don't have to weed these buyers out on your own. eBay has settings that let you block certain buyers. (See also: This Airbnb Scam Will Ruin Your Vacation — and Your Budget)

5. Be wary of requests for partial refunds

So, you sold your item and everything seems fine. Then you get an email from the buyer, saying that the item isn't in the condition they were expecting, or it's missing some parts — which you know were included. But they want to keep the item. They'd just like you to refund their money to make things right. If you're asked to do a partial refund, try and get evidence of the problem. If it's damaged, ask to see the damage. If it doesn't work as described, ask for a video. If they refuse, you know something's afoot.

If they do send pictures, you have a few choices. You can say you want the item to be returned, and will fully refund their purchase upon receipt. If they don't want to do that, they're probably trying to get a quick buck from you. Of course, sometimes these partial refund requests are genuine, perhaps due to an inaccurate listing from a new seller, or another mistake. In that case, a partial refund is something you can issue if you feel comfortable.

6. Never ship to a different address than the one on file

When you set up an account on an online selling site, you should enter a shipping and billing address. This is standard practice. If you sell an item, and receive a note asking that you ship to a different address, you should decline. On rare occasions, the person hasn't updated their shipping address from a move, or it's a gift for someone else. Too bad. Don't do it.

When you're asked to ship to a different address, it could be that the account in question has been hacked, or you will be asked for a refund because the item was not delivered to the address on file. It's just not worth it. (See also: Make Money and Declutter by Selling These 5 Unlikely Treasures)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Protect Yourself from a Home Improvement Scam

Paul Michael — Thu, 05 Jul 2018 08:30:18 +0000

From a small task like new sod, to a major job like a finished basement, home improvement projects can become a nightmare if you fall victim to a scam. Even the savviest consumers can get taken for a ride if they don't know how to spot the red flags. So before you commit to any kind of home remodel or upgrade, make sure you know how to protect yourself from the scammers.

Don't get work done that you didn't seek out

This happens all the time, even though door-to-door salesmen seem to be a thing of the past. You'll get a knock on the door and a friendly face will tell you that the recent hailstorm means your roof is in major trouble. Or, their firm is in the area replacing windows, and because so many of the neighbors have signed up, you'll get a great deal. The patter revolves around the same kind of setup, but the result is always the same — they won't go away until you agree to sign something and hand over a deposit.

Now, in all fairness, reputable companies will go door-to-door sometimes as well, but they won't use high-pressure tactics. The scammers will use every trick in the book to get invited inside and throw the hard sell at you. Don't ever get work done that you didn't actively seek out yourself; you're just asking for trouble.

Do your research, and do it well

When you take on any kind of home improvement project, it's not the same as getting a car overhauled or a gadget repaired. This is your home. Your safe space. Before you let anyone near it, let alone into it, you want to know they are reliable and trustworthy. A simple recommendation from a friend or work colleague isn't enough.

You have the vast resources of the internet and a community of clients to tap into, so use them. Start with the Better Business Bureau and Yelp. Get yourself a membership to a site like Angie's List (which is free now) and scour reviews. You may even want to do a Google search for the contractor's name followed by a phrase like "rip-off" or "scam." If there are overwhelmingly negative reviews, avoid them. If there are no reviews, avoid them. You want glowing reviews from at least a dozen people before you commit to anything. (See also: How to Find and Hire a Reliable Contractor)

Get free estimates from multiple sources

If you're any kind of savvy shopper, you won't buy anything without doing a little price comparison. The same applies to a contractor, only this is a much bigger and more important purchase.

Once you have researched the best three firms for the job, ask them to each give an estimate for the cost of the service, and ask them to itemize it as well. Next, compare the estimates side-by-side and look to see who is giving you the best value for money. Remember, this is not about the lowest price but the best investment in your home. The lowest price may come with cheaper materials and no guarantee.

You want to balance cost with quality, and if one firm is giving you everything and more for a surprisingly low cost, investigate it. If it looks too good to be true, it usually is. (See also: 8 Questions to Ask Contractors Before Hiring One)

Make sure this isn't a job you can easily do yourself

You'd be amazed at how many homeowners are willing to pay thousands of dollars in labor for a job that requires just a little research, elbow grease, and $50 in parts. And some unscrupulous contractors are quite happy to do that simple job and charge an arm and a leg for it.

Again, you live in the information age, and it's easy to not only identify a problem, but find multiple online videos and walk-throughs showing you just how to do the work yourself. Anything from replacing a washer to an entire furnace is now something within reach of many DIYers.

Of course, if you're just not comfortable doing any kind of work around the house, that's your call. But it you're willing and able, and can get some help from a handy friend, you could save a whole lot of money. What's more, check the status of the warranty if you're looking at a repair job. You may discover that you don't even need to pay for service. (See also: 10 Things to Know Before You Start a Home Improvement Project)

Get a contract, and get it checked before you sign

A contract is a vital piece of protection for a consumer and you must demand one. Even if it's just a small job costing a few hundred dollars, you should get the project down on paper and get it signed. List everything that needs to be done, the costs you have both agreed upon, any materials that need to be purchased, any permits that need to be pulled (permits offer additional protection against shoddy work), and the start and completion dates.

Ideally, you should have a legal mind look at it, be it a professional or someone who can help you out for free. Read every word, including the small print that can hide traps. You don't want to sign anything that could leave you high and dry. This contract will be your protection should anything go wrong and you need to take it to court.

Don't give more than 33 percent as a down payment

A contractor will ask for a down payment to secure the work, make sure you're serious about committing, and purchase materials. All this is absolutely business-as-usual. But if the down payment starts climbing above the 33 percent mark, you should proceed with extreme caution. Give away too much money at the beginning, and you may never see it or the contractor again.

You should hold off on paying the bulk of the money until the job is completed to your satisfaction, and even then that final payment should only be handed over when you receive something called a lien waiver, stating all supplies and any additional subcontractors have been paid for. Otherwise, you could find yourself getting harassed for extra money. (See also: 9 Home Improvements You Should Always Negotiate)

When possible, choose a credit card over cash payments

Not all small businesses accept credit cards. But if your contractor offers the option, paying with a credit card can provide a degree of purchase protection you wouldn't otherwise have with cash. Should the project have issues, you can call your credit card company and dispute the charges. They employ teams of professionals that will work on your behalf to get this issue sorted. (See also: 12 Times Your Credit Card Has Your Back)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Reasons Getting Rich Quick Is Unlikely and Always Will Be

Denise Hill — Wed, 20 Jun 2018 09:00:26 +0000

We've all dreamed about it: Winning the lottery without even playing. Inheriting millions from a wealthy, great-uncle you never knew existed. Pitching the perfect business idea to the perfect person at just the right time.

But chasing quick riches and instant wealth is an exercise in futility. It's like trying to capture a purple unicorn that lives outside of the castle just beyond the end of the rainbow; it's impossible. It doesn't exist. Movies, books, and social media have sold the idea that getting rich quick is possible. But that is a lie.

The allure of fast, easy money is a mirage that can lure you down a dark path. You risk emotional and financial devastation, as well as wasted energy and resources. And yet, people can't seem to let go of searching for ways to skip work and go straight to the wealth. It is impossible — always has been, and always will be. Here's why.

1. The law of equity (what you put in is what you get out)

The human mind, body, and soul is built for efficiency. Think about what happens when you decide to start exercising. At first, your movements are awkward. You lack coordination and you wear yourself out quickly. But a funny thing happens over time — you adapt. You not only get better at performing the exercises, but your body also adjusts and finds ways to perform the movements more efficiently in order to conserve energy.

The same thing is true when it comes to building wealth. It is natural to look for ways to get as far as you can with as little effort as possible, but there will always be a limit. Working out physically allows your body to adapt by building muscle memory, strength, and endurance. Similarly, as you build wealth, you develop patience, mental strength, and the stamina you need to sustain your money over time. And just like with exercise, getting rich is generally an equitable endeavor — at least initially. You only get out what you put in.

The bottom line is obtaining wealth — or anything of value — is usually attached to hard work, patience, and growth over time. Wealth without work is similar to using crash diets to lose weight. The results are not sustainable and you haven't learned how to properly maintain the changes. You need to consistently work hard and see your progress increase over time.

2. Easy come easy go

There are countless stories of people who come into a tremendous amount of money only to find themselves back where they started shortly thereafter. According to the National Endowment for Financial Education, 70 percent of people who win the lottery or get a big windfall all at once go broke within a few years.

Getting money and keeping it are two entirely different things. When you get something quick — without having to work and sweat for it — you don't value it as much. And what you don't value, you won't protect. One of the biggest problems financial advisers deal with when people get a sudden windfall is that they give too much away to family and friends. And they fail to properly keep track of what they get. When you get money quickly but haven't learned how to properly manage the little you had before, you simply repeat the same cycles but on a much larger scale.

When you aren't used to having, tracking, and managing large sums of money, it's really easy for you to lose it. There are people out there waiting for an opportunity to separate someone like you from your cash. Just like you want a quick buck, so does everyone else. And while your value system may only allow you to go so far to get it, others are far less scrupulous. (See also: Stop! Don't Make These 6 Dumb Mistakes With Your Financial Windfall)

3. A fool and their money are easily parted

Get rich quick schemes are never advertised as such. They are shrouded in mystery and secrecy. And who doesn't love a good secret? Especially one that can make you rich and elevate you above the rest of us mere mortals?

Most get rich quick schemes play on your desire for lopsided outcomes. Again, looking for a way to maximize impact and to gain ground quickly is completely natural and strategic. It doesn't make you a bad person. But it can make you a target.

The best approach to take when it comes to investment pitches and business propositions is to keep it simple. You are not a financial expert nor a business mogul. Don't pretend to be one. If you don't know, you don't know. Not knowing or understanding an investment or proposal is a key indicator that you need to back away from the table.

If it seems to good to be true, it is. If it sounds a little off, run. If it skirts the lines of legality, skip it. You have an internal gut feeling that causes you to pause; pay attention to that feeling. Don't let greed and/or arrogance push you into falling for fool's gold. Scam artists do what they do for a living. It's not a game for them. Humbly admitting that you don't understand the venture and gracefully bowing out can save not only money, but time and headaches as well. (See also: 3 Ways Millennials Can Avoid Financial Fraud)

4. It requires wisdom to build wealth (wisdom takes time)

Luck has very little to do with becoming wealthy. The ability to recognize and capitalize on a good opportunity is not happenstance. It takes wisdom to build and keep wealth. And building wealth slowly and experiencing the highs and lows of money management is what helps you gain wisdom.

You have to be diligent in order to truly be rich. You have to read, study, ask questions, and be willing to learn from others who are where you want to be. Being able to sniff out a con and spot a diamond among rocks takes keen senses, experience, and time. (See also: 5 Surprising Ways the Rich Get Richer)

5. Wealth is not a destination

One of the top reasons that getting rich quick isn't possible is because the concept itself is misguided. What is rich? When is enough, enough? And how do you know you are actually rich? Are you "oficially" rich when you reach millionaire status? Are you rich when you can buy whatever your heart desires? There are famous athletes, actors and actresses, singers, doctors, lawyers, scientist, etc. that make hundreds of thousands of dollars — millions even — but still are broke.

Wealth is a journey, not a destination. It is more than money in the bank and possessing expensive trinkets. You will gain money and you will spend it. You will earn it and lose it. Being rich is when you arrive at a place where you are able to be content with and manage what you have — no matter how much or how little. Being rich is a state of mind and a place of peace that is not greedy and constantly reaching for more. It's a journey of contentment. And that journey doesn't happen overnight. (See also: 5 Reasons Being a Millionaire Is Overrated)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Stop Those Annoying Robocalls

Dan Rafter — Fri, 08 Jun 2018 09:00:18 +0000

Your phone rings, the number on the screen starts with your local area code. Of course you're going to pick up. What if it's the school nurse calling about your children? What if it's your dentist's office calling to reschedule an appointment?

Then you pick up and a recording tells you that you've won a free cruise to Alaska or that you owe money to the IRS.

Yes, you've been hit by a robocall. These obnoxious recorded messages are used by companies to persuade you to buy something you usually don't need. Not only are they annoying, but robocalls can be dangerous, too. Plenty of scammers use them to trick people into giving up their Social Security numbers, credit card digits, or other personal information. Worst of all? These robocalls are increasing, and so are complaints from consumers who have been harassed by those prerecorded pitches and scams.

Fortunately, there are steps you can take to stop at least a chunk of these calls and to protect yourself from any automated scams targeting your phone number.

We're answering a LOT more robocalls lately

The Federal Trade Commission reported that in 2017, consumers filed more than 4.5 million complaints with the commission about robocalls. That ranks as the highest number of complaints in any year, and is a sharp increase from the more than 3.4 million robocall complaints consumers filed with the FTC in 2016.

The most common topic of these robocalls is debt reduction. Robocalls about vacations and timeshares were the second most common, while those about warranties and protection plans came in third. (See also: How to Spot a Hotel Booking Scam)

How to stop them

If the number of robocalls bombarding your phone has increased, you're not alone. How do you stop, or at least slow down, these intrusions? (See also: How to Protect Elderly Loved Ones From Financial Scams)

Register your number on the Do Not Call list

Your first step is to sign up for the National Do Not Call Registry, offered by the FTC. Telemarketers are prohibited from using automated dialers to call cellphones or landlines on the list, unless the owners of these numbers give them consent first.

Unfortunately, listing your number on this list doesn't stop all robocalls. That's because many of the companies or scammers behind these calls won't hesitate to ignore Federal Communications Commission regulations.

Use call-blocking apps

Once you've listed your number on the Do Not Call Registry, it's time to download call-blocking apps that can help you prevent repeat robocalls from the same number. The Mr. Number app is a popular one, and allows you to block any number that has sent you a robocall and calls from known scammers. You can also block calls from numbers not in your contact list.

There are competitors out there, including apps such as Truecaller and Should I Answer. These will help you greatly reduce robocalls.

Wireless providers understand that robocalls are a nuisance, too. So it's not surprising that some of these providers offer their own call-blocking apps. AT&T offers the AT&T Call Protect app that lets you block calls from suspicious numbers and past robocallers. T-Mobile provides its own Scam Block tool that allows cell users to block all known scam calls before they ring up their phones. And Verizon offers its own suite of call-blocking services, including call block, caller ID, and anonymous call rejection.

What to do if you still get robocalls

What if, despite the measures you've taken to prevent them, you still receive a robocall?

First, if your call is coming from a number you don't recognize, don't answer. If the call truly is important, whoever is calling will leave you a voicemail. If you do answer, hang up as soon as you realize you're dealing with a robocall.

Some robocalls will request that you hit the number "1" to speak with a live operator. Never do this. You'll just be connected with someone trying to sell you something or scam you. Others might ask that you press a certain number on your phone to stop receiving calls. Don't press that number, either. You'll usually be connected to another operator who wants to sell you or scam you.

In short, the best way to deal with robocalls that slip through is to never engage with them. Robocallers can't scam you if you don't answer. (See also: 3 Ways to Ban Spam and Stop Junk)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Red Flags to Look Out for When Renting Your First Apartment

Paul Michael — Fri, 25 May 2018 08:30:31 +0000

Are you ready to fly the nest? If it's time to find a new apartment, there are some things to look out for before signing a rental agreement. If you don't know what to be wary of, your first place could put you in financial jeopardy and even physical danger. These are the biggest red flags. (See also: 10 Questions to Ask Before Signing a Lease)

1. A limited selection of photos

If the ad for the apartment features just one or two photographs of the place, don't even bother making a call to see it. Landlords know that great photos help sell a place. It's the first thing any potential renter will look at, and they will scour them before looking at features and price. If there are just a couple of photos, perhaps blurry or only showing one room or the outside of the building, the landlord is hiding something. Either the unit is in awful condition, it's small and dark, or it's got other issues that he or she would rather not talk to you about until you get there; and that's when the hard sell begins. Don't see any place that doesn't show you all the interiors and exteriors in advance.

2. Bars on the windows

You may think it's good to have an extra layer of security, but let's be honest; bars mean trouble. Clearly the apartment is in an area rife with crime, and if the landlord has taken to adding bars to the windows, it's bad. The only reason bars are up is because it's a last resort to prevent break-ins, vandalism, and other crimes. If you see bars, don't even enter the building.

3. The rent is too good to be true

Landlords are in the business of making money. Whether it's just one person renting out one property, or a whole agency renting out hundreds of homes, the end goal is profit. So if you come across an apartment that is priced way under the going rate for that area, be afraid. Be very afraid. It could be a bait and switch, which is illegal — when you call, suddenly that apartment at that low price is no longer available, but there's a similar one that's way more expensive. Or, there's one that's the same price but has fewer rooms and is in an awful neighborhood.

Another reason could be that there is a major problem with the rental unit. For example, it's directly above a loud bar or restaurant, or it's near a high-traffic area that ensures you'll never get any sleep. The price may also be compensating for unusually high utility bills, pest infestation, or significant problems with the structure. The chances are, a super-low price is simply a worm on a hook, and you're the fish being reeled in. Don't bite.

4. Emails coming from different people

When you reply to an ad for an apartment listing, it's fairly common to get a few different reply addresses at first. One could be an auto-responder saying someone will be in touch, or it could come from a third party domain like Craigslist. However, if the email addresses keep changing, and the name of the person you're dealing with is also going through an identity crisis, you have a potential scammer on your hands. Take a look at the domain names, see if the person has a presence on LinkedIn, or if there is a legitimate website linked to that landlord or agent. If they're a ghost, you should steer clear of this property. And if the emails are filled with typos and other errors, that can also be a bad sign. (See also: 6 Ways to Apartment Hunt on Craigslist Without Getting Scammed)

5. The landlord or agent isn't available

If you're having trouble getting in touch with the landlord now, at a time when he or she should be extremely keen to talk to you, imagine how tough it will be when you're a tenant. At this stage in the process, you represent money. They want the apartment rented out, and to be making a profit ASAP. If your emails go unanswered for days, your calls go to voicemail, and you are having to play detective to get any kind of answers, this is not the place for you. It could be a scammer, it could be disorganization, or it could be laziness and apathy. None of these are qualities you want in someone who you'll be relying upon for repairs to the apartment and other issues.

6. Too many things are in need of repair

If you're walking around and everything looks good, but the door on the microwave is dinged up or loose, it's probably just an oversight or something the landlord intends to fix before you move in. Any good landlord will bring it up and assure you the repair will be made. If not, ask for it to be taken care of before signing the lease. However, if you see signs of neglect, and many items that look broken or in a state of disrepair, move on. If the landlord is showing you this, imagine what he or she is hiding from you? It also doesn't bode well for any repairs you may need once you're a tenant. (See also: 13 Things You Must Inspect Before Signing a Rental Agreement)

7. Some doors remain closed on the viewings

Yikes. If there are doors that are locked and the landlord won't show you that area, you have every right to be very suspicious. You're about to live here, and deserve to see every room. That means the closets, the attic or basement, the garage or storage unit, and even the crawl space if you desire. Some landlords will say that some rooms are off limits because they use it for storing maintenance supplies and other personal items. That needs to be considered in the lease, and should be accounted for in the price of the rent. But any landlord serious about his or her business will rent their own separate storage unit.

8. There are funky odors or stains

There's no excuse for this. An apartment should be made "view ready" by the landlord, and if it's not looking or smelling good, you're going to have issues. The biggest concerns are mold and mildew. If you're smelling that damp, musty odor it means the apartment could have some major issues with mold. This can cause structural damage and health issues. You should not be smelling any kind of cigarette smoke unless the listing says "smoking OK," which is rare these days. And look for stains on the walls or ceiling. If you see a fresh coat of paint on one small section of the apartment, ask about it. They may be trying to hide a problem.

9. The tour is rushed and given at an odd time

If you have a landlord or real estate agent rushing you through the tour, or only letting you see the apartment at certain times of the day, you are being deceived about something. Maybe the neighborhood is noisy and dangerous after dark. It could become an all-night party zone. Or, you could get stuck next to horrendous traffic and transportation noises during rush hour. And if you're close to an airport, make sure the apartment is insulated from that noise or you'll regret moving in for the entire term of the lease.

10. You're asked to sign an incomplete agreement

Don't just walk away, sprint! A lease is a contract between you and the landlord, and your signature means you agree to whatever is on it. If the landlord or agent says certain items will be filled in later, you cannot trust what's coming. Maybe they tell you you're getting a discounted rate, but then change their mind. They may say they'll take care of all the utilities, but afterward change that. They may even add in that the security deposit is nonrefundable. When you sign a lease, everything should be completed, and there should be two identical copies — one for you and one for the landlord, each signed and dated by both parties. And if they say you'll miss out if you don't sign right now, it's a pressure tactic that can only lead to trouble. (See also: 10 Questions Landlords Can't Ask)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Losing Your Nest Egg Could Kill You: Here's How to Prevent It

Carrie Kirby — Mon, 07 May 2018 08:31:19 +0000

When experiencing a financial setback, people often say, "At least we still have our health."

Disturbingly, a new study reveals that losing wealth can lead to losing health as well.

A paper recently published in the Journal of the American Medical Association found that people over 50 who experienced a "negative wealth shock," such as an investment portfolio that goes south or a business failure, had a higher risk of death from all causes than folks whose finances did better. In fact, those who lost three quarters of their net worth or more over a two-year period were 50 percent more likely to die during the study than people whose finances did better. In an editorial, a Harvard doctor compared the loss of wealth to a diagnosis of heart disease in terms of predicting an early demise.

How is it that losing money could lead to losing your life? Further research is needed to determine how one thing leads to another, the paper's authors said. However, one perhaps unsurprising connection the study revealed was that people who lose a significant portion of their wealth are more likely to experience "depressive symptoms." The authors also suggest that people who are short on money don't seek all the health care they need, because they worry they won't be able to afford it.

Health care in retirement is likely to cost more than most of us realize, other research shows. You will probably spend most of your Social Security benefits on health care in the form of copays, supplemental insurance premiums, and prescription drugs.

No one builds up a nest egg with the plan to lose 75 percent of it. Yet, this is exactly what happened to a startling 28 percent of subjects in the study. How can you avoid a potentially fatal late-life wealth shock?

Use target-date index funds

These funds, offered by Vanguard and other investment banks, offer a low-cost way to keep your assets at the appropriate level of risk for your age. You simply punch in the year you expect to retire, and you get the right mix of stocks, bonds, and other investment assets. As years pass, the fund managers will rebalance the assets to keep the level of risk appropriate. (See also: Start Planning Now for When Your Target-Date Fund Ends)

Meet with a financial planner to assess your situation

Some people think they have saved adequately for retirement or that their investments are age-appropriate, only to be in for an unpleasant shock down the road. If you haven't done so before, your 50th birthday is a great time to sit down with a planner, assess your retirement savings, and make a plan for protecting it against a negative wealth shock.

Fee-only planners rather than commission-based advisers are great, because you want someone who will recommend the best solutions without any incentive to sell you products that pay them a commission. (See also: 3 Reasons to Be Picky When Hiring a Financial Planner)

Consider long-term care insurance

A common way for older people to lose their wealth is an unexpected long illness or disability. Medicare will only pay for a limited amount of nursing home care. If you are worried that you will lose your nest egg to a lengthy nursing home stay for you or your spouse, it may be worth looking at long-term care insurance.

Beware scams targeted at seniors

They often start with a phone call. Familiarize yourself with the most common scams targeted at retirees, such as Medicare scams, fake retirement investment plans, funeral scams, reverse mortgage scams, and the insidious call from a fake grandchild. (See also: How to Protect Elderly Loved Ones From Financial Scams)

Avoid risky investments

Collectibles, startup companies, and businesses you know little about are all generally outside of the recommended retirement savings plan. Inappropriate investments can be particularly tempting if a family member or other close friend wants you to invest. If you think an investment is really worth consideration, sit down with a planner who has experience in that specific type of investment before committing.

Make sure you have enough liability insurance

Another misfortune that could decimate your retirement savings is an accident that leads to a lawsuit. Check with your insurance agent to make sure you have adequate liability insurance. Agents often advise that you add an umbrella policy, which takes over after you hit the liability limit of your auto or homeowner's policy, at least equaling your net worth. A million-dollar umbrella policy costs about $200 a year. (See also: Beware: Your Insurance May Not Cover These 8 Losses)

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Ways Millennials Can Avoid Financial Fraud

Emily Guy Birken — Wed, 25 Apr 2018 08:30:10 +0000

We tend to think of financial fraud as a retiree problem. After all, older adults are more likely to be sitting on a large nest egg and are often resistant to getting financial help from others for fear of losing independence. Both of those traits make them tempting targets for scammers and con artists.

However, just because scammers traditionally like to hit up Nana and Poppy does not mean that young adults are shielded from the problem. In fact, according to a recently released Federal Trade Commission study, more adults aged 20–29 reported losing money to financial scams in 2017 than did any other age group. The study found that 40 percent of adults in their 20s lost money to fraud, as compared to only 18 percent of people over the age of 70 — although the median amount lost was lower among 20-somethings than among the elderly.

We've done a great job of helping to alert older adults to the dangers of financial fraud. Now we need to make sure everyone else also knows what they need to do to steer clear of scams. Here is what you need to know about protecting yourself from financial fraud.

The most common types of fraud

Of the types of fraud reported to the FTC, the three most common scams were debt collection (23 percent), identity theft (14 percent), and impostor scams wherein the scammer pretends to be either a government official, a loved one in trouble, or someone else the victim knows (13 percent).

Although debt collection was the issue most commonly reported to the FTC, impostor scams were the type of fraud that cost victims the most money. Consumers reportedly lost $328 million total in 2017 to this type of scam.

Each of these types of fraud requires a different protection strategy, and savvy consumers should use all of these approaches to make sure they are covered in case of any type of fraud.

1. Know your debt collection rights

Getting a phone call from a debt collector can be nerve-wracking for anyone, and debt collection scams rely on your natural fear of financial consequences. The best way to avoid becoming a victim of such a scam is to know your rights as a borrower. According to the Consumer Financial Protection Bureau, any debt collector who contacts with a claim that you owe payment is required by law to tell you the following information:

The name of the creditor.
The amount you owe.
The fact that you can dispute the debt.
The fact that you can request the name and address of the original creditor if it is different from the current creditor.

If a debt collector doesn't provide this information when first contacting you, he or she is required to send you written notice that includes this information within five days of that initial contact.

It is a red flag if you receive a call from a debt collector who balks at providing you with this information. In addition, while debt collectors have the right to be persistent and can tell you the potential consequences of failing to pay your debt, intimidation tactics to get you to pay what they claim you owe are also a common scheme from con artists.

You also have the right to refuse to discuss any debt until you receive a written validation notice from the creditor, which must include the amount of the debt, the name of the creditor, and a description of your rights under the federal Fair Debt Collection Practices Act.

Asking for this notice will protect your rights with legitimate debt collectors and scare off any scam artists who are trying to make a buck off your fear. (See also: 5 Things Debt Collectors Don't Want You to Know)

2. Freeze your credit to protect yourself from identity theft

Identity theft is the 21st Century boogeyman, and for good reason. Our information is only as secure as the company that has collected it. No product or service can wholly protect you from the possibility of someone using your identity.

However, you can make it more difficult for hackers and scammers to get hold of your identity by freezing your credit. With this process, you pay a small fee to each credit reporting bureau (which has been waived by Equifax in the wake of their recent data breach), and no one, including you, can open new credit in your name until the freeze is lifted.

This is one of the most effective tools in fighting identity theft, since you take out the possibility of human error. The most common method identity thieves use to steal your information is by calling and asking you. Such a thief will pretend to be from your bank or another institution you trust and will request things like your Social Security number and birth date. Even if you fall victim to this kind of fishing scam, a credit freeze can ensure that the thief is unable to live large on your credit. (See also: 9 Signs Your Identity Was Stolen)

3. Ask for specifics to prevent impostors from getting your money

Impostor scams come in two common varieties: impostors pretending to call from the IRS or another government or official agency, and impostors pretending to be a loved one who is in trouble. In both cases, the impostor will play on your emotions — fear of an audit, fear for a loved one — to get you to wire money to their account.

In both cases, the more specific information you can ask for, the better your chance of scaring off the impostor. For instance, if you are contacted by someone claiming to be an IRS agent, you can request the caller's name, badge number, and callback number and say you will get back to him or her. Then, you can contact the U.S. Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 to find out if your caller is an actual IRS employee who has a legitimate reason for contacting you. (See also: 5 Tax Scams You Should Know About for 2018)

You can use this same strategy for any caller who claims to be a representative from an institution or agency you deal with. If someone calls claiming to be from your bank, ask him or her for a name and callback number, and get in touch with your bank via their main phone number to determine if the issue is legitimate.

Similarly, the loved one impostor scam can be stopped in its tracks by asking the caller (or emailer) to verify certain information that only your relative would know. If you are still feeling unsure, ask for a callback number in this case, too, and contact another family member to find out if there is any possibility your cousin Emma is stuck in a hospital in London before you start wiring money. (See also: What to Do When You Suspect a Scam)

Keep their hands off your money

Scammers, con artists, and identity thieves all have your number. Every single one of us can be vulnerable to their tactics. But knowing your rights, taking your credit out of circulation, and asking for specific details can help you keep your information and your money secure.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

This Airbnb Scam Will Ruin Your Vacation — and Your Budget

Nick Wharton — Thu, 12 Apr 2018 08:30:05 +0000

Recently, I came close to falling for an Airbnb scam in which I would've lost $3,300 on an apartment booking in Lisbon. Fortunately, I realized something wasn't quite right and backed out at the last minute, but there are many people who haven't been as lucky. After a bit of research, I came across dozens of travelers who have fallen for it — one who even lost $30,000 attempting to book a luxury villa for six months. (See also: What to Do About a Terrible Airbnb Stay)

Here's how this particular scam works, and what you should always look for when booking through Airbnb.

The scam

There are numerous ways this scam can occur, but they all start when you begin communicating with the host about a property that seems like a great deal. Perhaps you send them a question via Airbnb, and they ask you to email them instead, as it will be easier or more convenient. Or maybe you've found a property on a different site like Craigslist and you begin with an email conversation. Either way, once you take the communication off the Airbnb messenger, they will begin to hook you in by being helpful and friendly.

They will answer any queries you may have and tell you a convincing story as to why their property is slightly below market value. Once you reach the stage of being ready to book, they will send you a link to the Airbnb listing asking you to complete the booking through the site as it offers protections for both of you. So far so good, right?

When you click the link, you'll be taken to a site that looks and feels like Airbnb, and for all intents and purposes seems totally legit. You'll be able to read reviews of the property and enter the dates that you want to book it for, and even the URL will look genuine. You'll then complete the next stage of entering your dates and making a payment to secure the booking. But if you do, you will immediately lose all of the money.

As a seasoned world traveler, there are subtle differences that I picked up on before paying the $3,000 dollars to secure the property I was interested in, but that many other people might miss. The first red flag was that the property's full address was listed on the property page, but Airbnb only shows the exact address once you've booked and paid. Then I noticed a live chat function at the bottom of the page that I used, but I’m familiar enough with Airbnb that I know it doesn't offer a live chat function. This was clearly not the real Airbnb site.

The best way to avoid falling for this ruthless scam is to always make sure you book directly through Airbnb, either through their secure app, or by manually entering the URL directly into your browser.

Other common Airbnb scams

Here are some other common Airbnb scams to watch out for.

Advance fee scam

This is where someone will offer to give you a discount or something else in return for paying in advance and not using the Airbnb payment method. They'll probably justify it by claiming you'll both save on fees and they'll pass part of that savings on to you. While it may sound great, you'll more than likely lose that money and the payment will be untraceable.

Phishing scam

You'll be sent an email that looks as though it's from Airbnb, asking you to click on a link and enter some personal details such as passwords or payment methods. Scammers will then potentially use this information to gain access to your other accounts. Phishing emails can also contain malware that can harm your computer and also be used to record things like passwords to sites you frequent. (See also: How to Protect Elderly Loved Ones From Financial Scams)

Wire transfer deposit

You'll be offered a fantastic savings on your booking for paying the deposit using a wire transfer service rather than the Airbnb payment process. Once that payment is received, the property will be taken down and you won't receive your money back.

Golden rules for booking Airbnb properties

In order to remove any potential for being scammed on Airbnb, follow these safety rules every time you book.

Keep all communication on the site

Never communicate with hosts outside of the Airbnb messaging portal. If they email you or send you a private number to contact them, this should set alarm bells ringing immediately. If they insist on not messaging through Airbnb, cease contact and report them to Airbnb.

Read all the reviews

Check the reviews carefully and look out for patterns of cancellations or lots of undetailed, poorly worded reviews.

Pay on Airbnb only

Always make payments through Airbnb and never respond to any requests to transfer money via bank transfer, credit card, or anything else. Paying outside of Airbnb will make it more difficult to trace the payment or prove that it was acquired fraudulently.

Look closely at the URL

Double check that you are definitely on the official Airbnb site when you're completing your booking. The best way to do this is to type the site name directly into your browser.

Don't trust cheap listings

Don't trust properties that are advertised at way below market value. While you can find great deals on Airbnb, unfortunately, if it seems too good to be true, it more than likely is. Hosts want their listings to be competitive and priced similarly to other properties in the area. If a property is listed cheaper than it should be and there's not a clear reason why, it's best to avoid the risk and move on.

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Tax Scams You Should Know About for 2018

Kat Tretina — Tue, 30 Jan 2018 09:00:05 +0000

Tax season is underway. While no one really enjoys doing their taxes, everyone looks forward to getting a tax refund. It's no wonder why. According to the IRS, over 80 percent of tax returns resulted in a refund for tax year 2015. And the average refund was a whopping $3,120.

However, all that money makes tax season one of the busiest times of the year for scam artists. Each year, criminals target taxpayers to steal their personal information or their tax refunds.

Most scammers prey on vulnerable populations, such as the elderly or first-time tax filers, but anyone can be at risk. These are the top tax scams you should be aware of in 2018. (See also: Beware These 6 Phony IRS Calls and Emails)

1. Threatening phone calls

A common tax scam involves aggressive phone calls. You'll receive a call — sometimes from a number that shows up on caller ID as from a Washington D.C. area code— and the person on the line will claim to be a representative of the IRS.

They can be very convincing. They may know your full name, your mother's maiden name, and even the last few digits of your Social Security Number.

That person will say you're behind on your taxes or filed a fraudulent return. They may threaten you with immediate arrest, going so far as to say police are on their way to your home. They'll say the only way to avoid jail is by making an immediate payment with a credit card over the phone.

Know that the IRS does not communicate over the phone and does not threaten taxpayers with jail time. If there is a problem with your return, or if you do owe money, you will receive a notification in the mail. If you receive these calls, hang up right away.

2. Information phishing

Similarly, you may receive calls or emails from so-called IRS representatives or tax preparation software companies. They may claim that there's a problem with your return or refund and that they need to verify your information to fix the issue. They'll ask for personal information like your Social Security number, birth date, and place of employment. Then, they use that information to file a fraudulent return in your name to claim your refund.

Remember, the IRS will only send you information through the mail. If you're unsure if an email is real, open up a new browser window and log into your account that way, or look up your tax preparer's phone number and call that person directly.

3. Requests for gift card payments

Another scam involves a call from an IRS impostor who claims that your return notification letter was returned as undeliverable. That person will tell you your bill is overdue and that you must make a payment immediately.

Instead of asking for your credit card or personal information, they'll ask you to send them a prepaid gift card or debit card. Know that the IRS does not accept payments in this format.

4. Identity theft

Identity theft is a serious issue. You may think that canceling and replacing your credit cards is all you need to do, but the problem can be much more involved than you think. Thieves can use your personal information to submit a fraudulent tax return and collect your refund.

If you went through any form of identity theft, or if your personal information was stolen, it's a good idea to place a fraud alert on your credit reports and notify the IRS. If you suspect tax-related identity theft — for example, when you try to file your return you get a notice that your return has already been filed — you'll need to fill out IRS Form 14039, Identity Theft Affidavit, and follow the mailing instructions on the form.

Moreover, it's a good idea to complete and submit your tax return as soon as possible to ensure thieves cannot submit a return in your name. (See also: 8 Reasons You Should File Your Taxes as Soon as Possible)

5. Tax preparer fraud

Fraudulent tax prep "professionals" often advertise their ability to get you the largest refund possible. They do this by falsifying information on your return, such as adding nonexistent dependents, claiming credits or deductions you don't qualify for, and reporting incorrect income. They'll also typically base their rates off a percentage of your refund.

The IRS encourages you to ask your tax preparer questions about anything suspicious or confusing, and to look into their credentials and certifications before agreeing to hand over your return. All legitimate tax preparers should have a PTIN (preparer tax identification number).

It's important to carefully vet your tax professional and to closely look over any forms before signing. Regardless of whether you've been scammed or not, you will still be on the hook for any fraudulent information reported on your return.

Verifying any IRS activity

Some scam artists can be very convincing. If you're not sure whether it's a con or not, hang up or close your email. Call the IRS directly at 1-800-829-1040. You'll be connected with a real representative who can review your account and let you know if there's anything they need from you. They can also help you report any fraudulent activity or scams.

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This article is from Kat Tretina of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Mistakes That Make a Bad Credit Situation Worse

Toni Husbands — Tue, 09 Jan 2018 09:00:07 +0000

While bad credit isn't an indictment of a person's character, it can certainly be a struggle in today's economy. Those with bad credit know that financial life becomes more challenging and can be more expensive in general.

Your credit is officially bad if you're one of 68 million Americans with a FICO score that hovers near 600 or below. The good news is there are practical steps people can take to improve their credit scores. Paying your bills on time and working diligently to pay off debts are good ways to start.

But people with bad credit need to, above all else, be patient. Falling into the lure of quick fixes can lead to the following mistakes and compound your problem of poor credit. (See also: 5 Ways to Improve Your Credit Score Fast)

1. Falling for debt relief or credit repair scams

The Federal Trade Commission released a survey in 2013 showing that of the 25 million people victimized by fraud, an estimated 1.5 million and 1.7 million Americans were scammed by debt relief or credit repair scams, respectively.

Often the disreputable agencies behind these scams prey on people in dire financial circumstances by promising overnight fixes and charging large sums of money upfront before any work has been completed — both of which are illegal.

The FTC warns consumers to avoid working with any debt relief or credit repair agency that sets off red flags. Notable warning signs include a company that:

Insists you pay money upfront to do any work on your behalf.
Requires that you don't contact the credit reporting companies directly.
Suggests you dispute accurate information on your credit report.
Tells you to falsify any information on your applications for credit or a loan.
Will not explain your legal rights when explaining their services.

Cleaning up your credit will be the result of improved financial habits like paying your monthly bills in a timely manner and making more than the minimum payments. These improved habits will need to be consistent over a period of time. Knowing this will help those with poor credit resist the temptation to seek quick fixes and be taken advantage of by predators. (See also: How to Spot a Credit Repair Scam)

2. Not learning how to use credit responsibly

It's understandable that 68 million Americans fall into the poor credit bucket. But, your story doesn't need to stop there. Those with poor credit must take the initiative to educate themselves about the benefits of good credit and to learn what concrete steps are needed to fix their credit.

The largest factors that make up your credit score are payment history (35 percent) and how much you owe (30 percent). Again, paying on time and paying down your balances is the best thing you can do to improve your credit score.

If you prefer to work with a professional, opt for nonprofit credit counselors. To ensure you are working with a reputable agency:

Locate a local service from associations like the National Foundation for Credit Counseling.
Check with your state's attorney general and the FTC to ensure there are no complaints or pending regulatory action against the agency. While a complaint doesn't necessarily signify a fraudulent agency, do your own research.
Make sure you understand what services the counselor performs and know your rights as a consumer before you sign any agreements. (See also: 5 Signs It's Time to See a Credit Counselor)

3. Avoiding the problem and hoping that things will get better

This by far is the worst action someone with poor credit can take. Problems neglected will only get progressively worse and cost more time and energy to address in the future — when avoiding them is no longer an option. Whether you face a lawsuit, a wage garnishment, or are eventually forced to file bankruptcy, financial issues that have resulted in poor credit will eventually bubble up to the top of your must-do list.

It's best to contact your creditors directly if you have trouble paying. Set up a payment arrangement or request a change in the terms of your payment agreement. Changing the due date and requesting an interest rate reduction are simple requests that can often be addressed by customer service representatives. (See also: 4 Ways to Negotiate Credit Card Debt)

Know that burying your head in the sand will not help and is an unproductive mistake that people with bad credit make. Work with the creditor involved or a reputable credit counselor to arrange a workable solution. (See also: How to Rebuild Your Credit in 8 Simple Steps)

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How to Protect Your Retirement Account From a Hack

Dr Penny Pincher — Wed, 08 Nov 2017 09:00:09 +0000

Unlike your bank accounts that are protected by the Federal Deposit Insurance Corporation for losses up to $250,000, there is no such universal protection for your retirement funds. If you get hacked, thieves can gain access to your retirement account and transfer funds into their own pockets.

What would happen if your investment account was hacked and funds were stolen? Many brokerages have customer protection guarantees in case of unauthorized account activity, but customers are responsible for taking certain action before and after the hack to qualify for reimbursement of stolen funds.

Investment brokerage policies vary on the subject of restoring losses from unauthorized activities. In general, customers are responsible for promptly detecting and notifying the brokerage of unauthorized activity, and for showing that the security lapse was not their fault.

Here are steps you can take to protect your retirement account.

Monitor investment accounts

Unlike a checking account or credit card account that is typically monitored fairly closely, a transfer from an investment account can easily go unnoticed for months until a quarterly statement. The first step in getting funds restored to your retirement account after a hack is to notify the brokerage that unauthorized activity has occurred.

Instead of waiting for a quarterly account statement in the mail, you can access your account electronically to check for unexpected activity. Some brokers allow you to set up alerts and receive notifications by email if a transaction has processed.

Protect account access credentials

There are several important security measures you can take to prevent a thief from accessing your retirement account.

1. Set up two-step verification

An easy way to boost the security of your access credentials is to sign up for two-step verification with your brokerage. This means that in addition to your password, you’ll need a one-time numeric code that is sent to you via text message or email when you try to log in. This adds a layer of security; simply having your login and password is not enough for a thief to gain access to your account.

2. Beware of phishing scams

Criminals often send out emails that appear to be legitimate asking for login information. They may also try to trick you into clicking on a link that leads to a fake website designed to capture your username and password when you try to log in. Some internet security products verify that websites are authentic and post a warning when you try to access unconfirmed sites, in order to provide protection from phishing. (See also: How to Avoid Phishing Scams)

3. Don't sign in on a public Wi-Fi connection

Avoid using public computers to access your retirement account, and avoid logging in over an unsecured Wi-Fi connection. You should also avoid reusing the same password for multiple accounts.

4. Don't share your login with anyone

Think twice before sharing your access credentials with others, even companies such as Mint or Personal Capital that use your login to help monitor your account. If a company that has your login information gets hacked, and your access credentials are stolen and used to drain your account, this loss may not be covered by the recovery policy of your broker. (See also: Stop Making These 8 Risky Password Mistakes)

Secure your computer

Hackers can steal retirement account access credentials directly from your computer. Install anti-virus and anti-malware software, including a firewall, to prevent thieves from breaking in. Use a login for your computer to keep others from accessing your files. After a hack, investigators from the brokerage may want to examine your computer to see that you were using reasonable security features when determining whether you were at fault for the hack.

Policies of major brokers for hacked accounts

Account restoration policies in response to unauthorized activity vary by broker. Following are links to policies at major firms so you can check to see what is required to get retirement funds restored after a hack.

In general, you are responsible for monitoring and protecting your own retirement account by keeping your password secure and taking reasonable security precautions on your computer or other devices. If the hack and resulting loss occurs due to breach of the brokerage's computer system, you'll likely get your funds restored based on the policies of most brokerages.

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9 Signs Your Identity Was Stolen

Carrie Kirby — Tue, 03 Oct 2017 08:00:08 +0000

If you get mugged, you know immediately that you're the victim of a crime. But with identity theft, you can be victimized for years before you realize what's happening. And the longer the criminal uses your name, Social Security number, and credit, the more damage is done. (See also: 18 Surprising Ways Your Identity Can Be Stolen)

With the recent Equifax breach exposing the personal information of as many as half of Americans, we could be in for an identity theft epidemic. Keep alert for these signs that your identity has been stolen, so you can stop the damage before it goes too far. (See also: How to Protect Your Credit After the Equifax Breach)

1. Strange bills or statements arrive

It's very important to always open your mail, even if it doesn't look important. A bill or statement from an unfamiliar service provider or credit account can often be the first sign of identity theft.

"You may think it's just junk mail, but you might discover it's an invoice for a surgery in a state where you don't live," warns Ann Patterson, program director of the Medical Identity Fraud Alliance. "That is a very good indication that you've been a victim."

2. Bills stop arriving

On the flip side, make sure you are receiving all bills and statements you normally receive. If one falls off, it could be that a criminal has changed the address on that account, which could help them establish other accounts going to a different address.

If your mail dries up altogether, that's a sign that a thief may have filed a change of address request at the post office — they could be getting all your mail with all the sensitive information found there.

3. Odd charges on credit accounts and checking accounts

Credit card companies have gotten good at alerting customers to fraudulent attempts to make charges, but they can't catch 'em all. Keep a keen eye on your credit card and bank statements. The first charge an identity thief makes may be small, because they're testing to see whether the card is active. There are also scammers out there who make their money by processing many small charges on many credit accounts.

4. Your find yourself getting rejected for things

Your health insurance company rejects your claim because you're over your annual limit — but this was your first claim. You're turned down for a new credit card or your charges are denied at the store. You apply for life insurance and are charged a higher rate due to a pre-existing condition that you don't have. The ATM won't give you any money.

Don't brush off any of these events. It could be a fluke, or it could be a sign that something sinister is going on.

5. You receive suspicious phone calls

A neighbor of mine recently received a phone call that purported to be from her bank. The caller read back a list of recent transactions, which set her mind at ease that the call was legit, even though she knew that caller ID numbers can be spoofed. She was then tricked into sharing a PIN with the caller.

What might be happening if you get a call like that? You may already be a victim of identity theft, with the criminal already accessing your bank account. They may use the information they already know to trick you into giving them more information, or the access they need to start stealing money.

6. You receive strange texts or emails

If you are smart, you've set up two-factor authentication on important accounts. This means that you have asked your bank or other service providers to email or text you before allowing you to sign onto your account or take other actions, such as transferring out money. The text may provide you with a one-time code that you need to type into the website to log in, for example.

If you receive a text or email with a PIN when you didn't request one, this is a big red flag that someone has your login credentials and is trying to take control of your account. Contact the company immediately through the phone number on your statement. And change your password.

7. Creditors and collections agencies start calling you

You got a call from a car dealership warning that your payment is late. The only problem is you didn't recently buy a car, and you have no current car payments. This is a huge red flag. Do not simply write off such calls as errors or wrong numbers.

8. You don't receive your tax refund, or the IRS notifies you that you filed two tax returns

The Department of Justice reports that people have stolen billions of dollars from the U.S. Treasury by filing tax returns using stolen identities, and pocketing the refunds. Just make sure it's really the IRS contacting you, instead of a scammer posing as the IRS. (See also: Beware These 6 Phony IRS Calls and Emails)

9. There are accounts you don't recognize on your credit report

If any of the above warning signs occur, you should definitely request a free copy of your credit report and study it carefully. If there are any credit accounts listed there that you didn't open, your suspicions will be confirmed.

Even if you didn't experience any warning signs, you should check your report regularly, especially in light of the Equifax breach. You can request a free report from each of the three agencies once a year at AnnualCreditReport.com, so if you request one every four months, you'll be able to stay pretty on top of things. (See also: Don't Panic: Do This If Your Identity Gets Stolen)

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How to Help Your Parents Retire

Emily Guy Birken — Tue, 12 Sep 2017 08:00:06 +0000

One of the toughest transitions into adulthood is when you realize that you need to help your parents instead of the other way around.

Add money into the mix, and that can make an already awkward transition feel even more uncomfortable. Money is often a taboo topic in families, and parents sometimes have trouble letting go of the idea that you are a child rather than someone who can help them with financial planning. It may feel easier to just assume Mom and Dad have everything covered for their financial future, and let the chips fall where they may.

But helping your parents prepare for retirement is one of the best gifts you can give the people who raised you. That's because even the most financially savvy planners may run into issues, questions, or problems that they are not sure how to handle. You can help your parents get ready for retirement, and grow closer in the process.

Here's what you need to know about helping your parents retire.

Prioritize your own retirement savings

Most parents know that it's smarter to save for retirement before putting money into the kids' college funds. After all, students can take out loans for school, but there are no loans for retirement. Adult children should prioritize retirement savings over paying for their parents' retirement needs.

It may seem strange to prioritize your own retirement as a part of helping your parents retire, but it's an important first step in financially protecting your entire family. Taking care of your parents' retirement instead of saving for your own means that you will simply be passing money problems from one generation to the next. By putting your own retirement savings first, you are teaching your kids how to responsibly plan for their own financial futures.

Being prepared to have your parents use their assets for as long as they last will also allow you to make the best use of programs like Medicaid, which requires long-term care recipients to have exhausted their own assets before it kicks in. Rather than exhaust your own finances, plan to protect your future retirement so your kids are not left with another tough decision in 30 years.

Introduce the initial conversation

To be able to help your parents retire, you need to know where they stand financially so you can best help them fill in the gaps and prepare for that major transition. If you're lucky, your parents have already looped you in on what they have saved, where it is, what plans they have for the future, and who they trust as their financial adviser to make the decisions. (See also: 6 Things You'll Encounter When Taking Over a Loved One's Finances)

Where it gets tricky is if your parents shut down any money conversations and change the subject to "something more pleasant." If you know your parents will not feel comfortable talking openly about their money planning with you, frame the conversation as an opportunity for you to learn together.

For instance, you might mention that you want to look over your 401(k) information and would love to chat with them about how they handle their retirement accounts. In addition, you could invite them to read a book with you about financial planning so you can use the information as a jumping off point for personal discussion.

Talk about the day-to-day details

Knowing where your parents hope to live and how they intend to spend their time in retirement will give you (and them) a baseline understanding of how much they will need in retirement. Encourage Mom and Dad to talk about how they want their lives to look in retirement. Do they want to stay in place, move closer to grandchildren, or sell everything and live in an RV?

In addition to helping you get a better sense of their financial needs in retirement, these conversations will also help your parents enjoy the anticipation of planning for retirement.

Learn more about Social Security and Medicare

While spending an afternoon navigating Social Security and Medicare's websites is no one's idea of fun, taking the time to determine your parents' eligibility for these programs can help you better understand what to expect from their government entitlements. You and your parents can check out the eligibility questionnaires at Medicare.gov and Benefits.gov to find out what benefits are available and whether your parents qualify.

Meet with a financial adviser

No one expects you (or your parents!) to know everything about the complexities of planning for retirement. Together with your parents, take the time to interview and hire a financial adviser to help with the details of building your parents' retirement.

A financial adviser is also in a good position to help your parents make sure their estate planning is up-to-snuff and that all of their accounts have properly named beneficiaries. Even if Mom and Dad are uncomfortable talking about these issues with you — who wants to think about their own deaths, after all? — having a trusted financial adviser can help make sure they have all the necessary estate planning paperwork in place.

Keep talking

If money conversations are uncomfortable, you might feel like having that single afternoon of financial planning with your parents is sufficient. But checking in with your parents regularly is an essential part of helping them prepare for retirement. This lets them know you are there to help them with any difficult issues or decisions.

Continuing the conversation can also help protect your parents against scams. According to a 2015 True Link Financial report on financial elder abuse, annual losses from elder fraud totaled over $36 billion. By staying connected with your parents and offering to help them with financial decisions, they will be less likely to fall victim to a predatory scammer because you will be there to help sniff out anything untoward.

Paying it back to Mom and Dad

Your parents took care of you throughout your childhood (and maybe a little into adulthood, too). Now it's your turn to look out for them. Give your parents the gift of some help with retirement planning, so they can relax and enjoy the end of their career and the beginning of the next phase of their lives.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Protect Elderly Loved Ones From Financial Scams

Kat Tretina — Mon, 04 Sep 2017 08:30:06 +0000

When I was a child, my grandmother often watched me while my parents were away. One day, I was sitting at the kitchen table while she made a sandwich for me, and the phone rang.

My grandmother answered, and a deep, muffled voice said "Mom? Thank God, I need help." The man, claiming to be my dad, told her he had been stranded and horribly injured, and needed her to drive to his location with money.

My grandmother was shaken, but promised to send help right away. She quickly hung up and tried to get a hold of my mom. Thankfully, my dad was the one to answer the phone, completely healthy and carefree.

I look back and still shudder at what could have happened if my grandmother had driven to where the man told her. It was my first introduction to con artists who take advantage of the elderly, but it continues to be a major issue. In fact, losses from elder fraud cases cost more than $36 billion in 2015, according to a True Link Financial report on financial elder abuse.

Preying on the elderly

The elderly are targeted by con artists because they tend to be less familiar with the latest technology and trends. They're less likely to recognize an email from a fraudulent "bank," for example, asking for personal information. Worse, many seniors are simply lonely and isolated. Scammers prey on that. A kind, friendly voice on the other end of the phone can be convincing. And once a scam is complete, the victims often feel so bad about falling for it in the first place that it prevents them from reporting the crime to the police or even family members. (See also: What to Do When You Suspect a Scam)

How to protect your loved ones

Shielding your elderly parents or relatives from harm can be difficult, especially if they live alone. These four tips can help prevent con artists from successfully targeting them.

1. Have a family code word

Come up with a family code word to use when there's a real emergency. Pick an odd word that has meaning to your family and is easy to remember. That way, if someone calls claiming to be a family member in need of help, your elderly relative can prompt them for the code word to verify their claim.

If my family had a code word and my father really needed help, stating our designated word would have shown my grandmother it was a legitimate crisis. A scammer would have no idea, and would be revealed as soon as they couldn't relay the word.

2. Encourage them to ignore the phone

Many scammers will call just to find out if a person lives alone. Program your loved ones' phones with the numbers of family and friends, and encourage them to not answer the phone if they don't recognize the number.

If a caller leaves a voicemail saying they're with a particular company — for example, a bank or credit card issuer — show your relative how to verify the number by looking up the company online, rather than just blindly returning the phone call. Taking that extra step to check a bank or credit card company's information can save your loved one from falling for a trick.

3. Help monitor accounts

If your relative is comfortable with this, offer to check over credit card or bank statements. Review them periodically for odd purchases. This is not quite the same as taking over your loved one's finances; it's just providing a second set of eyes. If your homebody great-aunt suddenly has charges for a Vegas shopping spree, for example, you'll be able to alert her and help dispute the charges right away.

Some banks will let even you monitor the account, but won't give you access to the funds, which can give your loved ones peace of mind.

4. Check AARP's Fraud Watch Network

Some scams are regional, affecting only certain cities or neighborhoods. And the latest iterations of fraud can evolve over time, preying on the unsuspecting.

AARP's Fraud Watch Network reports on fraud trends both nationally and locally. If you sign up for their alerts, you will receive notifications about scams happening in your area. By getting those alerts, you can warn your elderly relatives and friends about potential con artists and how they work.

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This article is from Kat Tretina of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Expensive Mistakes of the Newly Retired

Mikey Rox — Wed, 10 May 2017 09:00:07 +0000

Transitioning to retired life on a fixed income will undoubtedly have a few bumps in the road. This is a brand-new chapter of life for you, and it's reasonable to expect some challenges ahead. The last thing you want to do, however, is compromise your nest egg with costly, easily avoidable mistakes. After all, you need that money to get you through the rest of your life.

As such, consider these costly mistakes of the newly retired so you don't follow suit.

1. Not balancing your portfolio

Retiring doesn't mean you have to stop investing. You can still dabble in the stock market, but perhaps not as aggressively as you once did. Risky bets could cost you your life savings, which means that you'll either have to go back to work past age 65, or put your hat out on a street corner. Neither of those options sound great in the golden years of life, so it's important to ensure your retirement portfolio is balanced.

"Annuitizing a significant portion of one's retirement income can complement a portfolio of stocks and bonds," says Jim Poolman, executive director of the Indexed Annuity Leadership Council. "Fixed indexed annuities (FIAs) can serve as part of a balanced financial plan because they do not directly participate in any stock or equity investments and [they] protect your principal from fluctuations in the market."

2. Not changing your lifestyle after retirement

Your spending habits as a retiree will need to change if you're going to make it for the long haul. This is especially true if you're not receiving any kind of monthly payments, like Social Security or disability, to help with bills. You can live off what you have in the bank (hopefully; otherwise you shouldn't be retiring yet), but you may have to downsize and rethink your spending strategy.

This means you need to start learning how to save money on everyday expenses, and re-evaluate your budget to find places for cuts. Don't expect yourself to suddenly drop 30 percent or more of your spending. Work your way to it by making small cuts at a time before you retire.

3. Not evaluating risk

When you start saving for retirement, you may have a certain monetary goal in mind — either based on what financial sources have told you, or what you've calculated you'll need based on your lifestyle. But you may not be accounting for the ups and downs of Wall Street and inevitable inflation.

"Revisit your retirement plan to make sure your savings reflect your new needs, and adjust for market conditions," Poolman advises.

4. Spending too much money too soon

When you retire, what you have is what you have. Unless you still have income coming in somehow, you have to mind your money and avoid the temptation to spend it on splurges, especially if you find yourself bored in the first year of your forever vacation.

"Before finalizing your retirement, you must take into consideration that you will only be living on a fixed amount of money," Andrew Fiebert, co-founder of Listen Money Matters, says. "Oftentimes the amount of retirement savings looks pretty large, but retirees must keep in mind that money will have to last a very long time — hopefully a very, very long time."

The enticement to spend your money can be almost irresistible, but discipline is vital. Depleting your money beyond the interest that it earns will hurt the principal and leave you with nothing after just a few years.

5. Loaning money to adult children

I get it — you love your kids. But at what cost?

According to a 2015 Pew Research Center poll, a whopping 61 percent of parents in the U.S. admitted to helping their adult children financially. That may be well and good if you have that kind of disposable income lying around (though it only fortifies your children's reliance on you; learn to say NO!). However, if you already need to cut back because you didn't save enough to live an easy, breezy retirement — which applies to most Americans — providing handouts, the payback of which you may never see, could put you in a financial pickle.

Don't be afraid to cut your grown children off. If you don't have the extra money, neither do they.

6. Taking Social Security benefits too early

The overriding argument against claiming Social Security benefits too early is that you won't receive your full benefit potential. That could come back to bite you later in life.

If you decide to claim Social Security benefits before you reach your full retirement age, you'll receive a smaller monthly payout — up to 30 percent less. If you absolutely need that money before your benefits fully mature, then by all means do what you have to do to survive. You'll be better off, however, the longer you wait.

7. Not taking required minimum distributions after age 70-½

Starting at age 70-½, you must take required minimum distributions (RMDs) from your traditional, SEP, or SIMPLE IRA each year to satisfy rules set forth by the IRS. If you don't, you'll pay penalties.

You can calculate your required RMD by dividing your IRA account balance as of Dec. 31 of the prior year by the applicable distribution or life expectancy. Qualified charitable distributions can satisfy your RMD, by the way, which you would report on Form 1099-R on the calendar year in which the distribution is made. Do good and save yourself the penalties while you're at it.

8. Falling victim to money scams

Scammers love retirees and the elderly. Why? Because they've usually got money to burn, and they're much easier to fool than the average working-age person. Sad, but true.

There are plenty of scams out there, too, and they're getting more intricate all the time — like one where the scammer poses as the victim's grandchild and begs the grandparent to send money. To prevent yourself from being scammed, remember these two major rules: Never provide personal information over the phone or via email, and never wire any money unless you've spoken directly to your family member or friend who is requesting the transfer. (See also: What to Do When You Suspect a Scam)

9. Failing to account for the unexpected

The reality of retirement is that while you'll certainly have more time to kick back and relax, life isn't necessarily going to get easier — and you have to prepare for that. Everyone will die eventually, and it's smart to plan ahead not only for end-of-life accommodations, but also long-term medical care.

You may live a long and healthy life, but eventually you'll need someone to care for you — whether that's in a family member's home or a professional facility — and that will cost money. Hedge your bets by looking ahead and putting those funds aside now. (See also: Is Long Term Care Insurance Worth It?)

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: