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Banking

Chase, UPS, and Credit Card Application Fraud

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DebitCardWhile I was spending half the day on Monday dorking around with the latest identity fraud moment, it did occur to me to wonder why on earth a person would apply for a business credit card under a fake name and then fill in the business’s correct address. Wonder-Accountant speculated that the form may have had a mailing address as well as a street address. But if that were the case, then Chase would have sent the letter asking for more information to that mailing address. Instead, they sent it here. I had about concluded that what appeared to be application fraud was really more like a prank when I came across this amazing report, detailing an alleged collaboration between insiders at Chase credit card services and UPS.

Now, I have no way of knowing whether what this guy says is true. But it would explain why the perp would ask to have his fraudulent credit card sent to my business’s real address.

JoshEAC, the post’s author, describes learning that a credit card had been ordered from Chase, supposedly by his wife. After considerable argument, in which a Chase customer disservice representative suggested that his wife was lying to him when she denied ordering a card, he managed to obtain the UPS tracking number for the card Chase claimed to have sent. At this point he began to proactively track the package wending its way toward him via the Brown Trucks. In the middle of the afternoon, he saw that the package had been diverted from home delivery to the pick-up counter at a UPS station. Three hours later, the tracking system reported that his “wife” had changed her mind and asked to have home delivery after all.

And lo! A day or two later Chase calls to inquire about the fraudulent charges being racked up on the “wife’s” new credit card!

Two possibilities presented themselves to JoshEAC: gross incompetence on Chase’s part — altogether credible given the outrageously ridiculous interactions he had with the bank’s customer disservice reps and their supervisors — or organized fraud committed by insiders at Chase and UPS.

If you buy the second scenario, someone on the inside at Chase creates a fraudulent application. He arranges to have the fake credit card sent to the mark’s real address via UPS. He has access to the passwords for this account. The card is shipped off to the mark.

A few hours later, his co-conspirator at UPS arranges to stop delivery to that address and then, shortly afterward, to have the card delivered to her, only this time on the UPS crook’s truck. The card, of course, never arrives at the mark’s home. With the stolen password, the perps start charging thousands of dollars’ worth of merchandise on the hot credit card.

Well. This conspiracy theory could, no doubt, be nothing more than a figment of its author’s imagination…EXCEPT that it explains, to a “t,” why the identity thief would enter my S-corporation’s address on his application for a fraudulent card. Presumably, once the card was diverted through UPS, the crook inside Chase would simply change the address in the bank’s records, thereby diverting the future statements, too. Or set the account not to deliver paper statements at all.

My monthly dues payments to the Scottsdale Business Association are paid by check and deposited to the group’s account at Chase Bank. The checks are printed with my business’s name and address only. That would explain why the perp didn’t have my name. And, since this is evidently an inside job, it explains why the fraudulent account was set up at Chase and not anywhere else.

JoshEAC described this episode in December, 2011. If he’s right, it means that two years later Chase has done nothing to bring a stop to this caper. Whoever’s responsible for it presumably continues to collect a paycheck and at the same time, no doubt, collects payment from “customers” who put him up to issuing fake credit cards.

By now, though, what’s happened is that the thieves have developed the sophistication to realize that small businesses are even more vulnerable to application fraud than are individuals, because the major credit bureaus give short shrift to business credit-card users. Identity-theft protections are set up to serve individuals. As a business owner, I’ve run into a wall — about my only recourse is to report the episode to the police and pray for the best.

Doing battle with Apple consumed most of the afternoon on Wednesday, and yesterday I was in business meetings or teaching all day. I’m out of food and gasoline, today being the first of the month, and so will have to spend this morning driving around the city by way of restocking the larder. So, the soonest I’ll be able to call the police again will be this afternoon, and presumably I’ll miss the guy again, since they’re not in any hurry to deal with this thing.

But if and when I actually meet with a police officer, you can be sure I’ll hand him a printout of JoshEAC’s post.

 

 

ha-HAAA! Bank Account Simpification Accomplished!

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The MAD BUDGETEER has done made budgeting and bill paying one whole lot easier. The bookkeeping simplification I first proposed in a scheme to synch credit-card charge cycles with real-world monthly income cycles worked — I’ve now learned that it’s possible and not at all difficult to use my beloved American Express charge card, with its generous kickbacks and its near universal acceptance, between the first of the month (when my actual budget cycle begins) and the 20th (when American Express’s billing cycle ends and a new cycle begins), and then cover the remaining ten or eleven days with cash dollars.

We have established, in response to commenters’ queries, that for reasons that make no sense to real-world humans, American Express will not change its billing cycle on my credit card to match my personal income-dictated budgeting cycle, which runs from the first to the thirty-first. AMEX’s billing cycle runs from the twenty-first to the twentieth. This means that charges made between about the twentieth of a given month and the first of the following month actually amount to loans against the presumed income of the following month.

And between  you and me, with the Congress we have in office just now, I presume nothing, certainly not where Social Security and investment drawdowns are concerned. I do not want to borrow against next month’s income to pay this month’s costs. Ergo: the strategy of using cash during the ten-day period when AMEX suggests that I take on exactly that kind of loan.

To my mild surprise, it worked. Last month, instead of an $1100 AMEX bill (the amount budgeted for discretionary spending), I ended up with a $950 bill, having paid the difference with pieces of paper dyed green and marked in various symbolic denominations. Paying with a finite amount of cash, surprisingly (considering my profligate habits), worked to limit the amount of spending that happened during that last ten days of the month.

Very nice.

Somewhere in the sporadic discussion of the proposed simplification of my exotic bookkeeping and budgeting habits, Frugal Scholar wondered why I don’t lump all the little “cookie-jar” bank accounts — the one holding money to pay property taxes, car insurance, homeowner’s insurance, Medicare D insurance, and Medigap insurance; the one holding emergency & diddle-it-away savings; the one to pay month-to-month nondiscretionary and routine discretionary costs — into one single no-nonsense account and just stop worrying about whether there was enough, at any given time, to pay the bills. After all, if one ran into the red, one could always pull some more leaves off the money tree over at Fidelity.

Well, thought I: Well, but…but…but?

But why not?

The cookie-jar approach worked well when I had a job and a healthy income was flowing in. Given that healthy income, I inclined to spend pretty much at will. If I really wanted something, what the hell? I’d just buy it! But to be sure enough money was stashed to cover taxes and other crucial bills, I set up an account at the credit union to hold monthly set-asides that would accumulate, over 12 months, enough to pay the property tax, the car tax, the homeowner’s insurance, and the car insurance, all pretty hefty bills. Each month $445 went into that account. To cover surprise bills and whims I couldn’t live without, I opened a second savings account, which collected $200 a month.

Because I didn’t overspend often, at any given time the diddle-it-away short-term emergency account held $1500 to $2500.

Knowing nothing better at the time I was laid off my job, my solution to the need to cover all the regular bills plus Medigap plus Medicare Part D and to disburse income from coming from not one, not two, not three, but four sources was to open yet another account. Of course! A “pool” account to hold all incoming and from which to disburse monthly allowances for living and annual, semiannual, or quarterly bill-paying.

Now we had…what? checking (1), “pool” (2), tax & insurance (3), emergency savings (4)…yes! FOUR FREAKING BANK ACCOUNTS TO KEEP TRACK OF AND RECONCILE! Plus the monthly American Express bill and the monthly Mastercard bill. And of course the accounts for the S-corp. And the Fidelity statements for the regular IRA and the Roth IRA and the brokerage account and the Vanguard funds. And the statements from Northwestern Mutual for….

To coin a phrase: argh.

The credit-card cycle now adjusted to fit my whim, I finally had time to consider this other craziness. It struck me that, where the credit union is concerned, all that’s really needed is a checking account to hold all incoming cash, from which to disgorge money to pay routine bills, and a savings account to hold funds for small emergencies and indulgences.

So. Today the deed was done.

Because I couldn’t figure out how to actually close close an account at the credit union online, and because one of the four freaking bank accounts was a money market account (effort to maximize “dividends”) — which would incur penalties if its balance dropped below a certain threshold — I took the time to drive to the CU and get an employee to help consolidate accounts and close The Deceased.

Good thing, too: A savings account I thought was the main, root account for the credit union membership was really something else, and the savings account I wanted to close was the actual, real root account. Had I tried to do this on my own, I would’ve made another fine mess of things! Even with the CU’s rep riding herd, moving non-emergency funds into a single account while keeping the emergency finds intact turned into a production.

Naturally.

🙄

Lest you think I’m unique in my craziness, the credit union’s teller remarked that a lot of people set up cookie-jar accounts with names like “tax savings” and “emergency savings” and “new car savings” and “pay off loan.” She said some people have a half-dozen such pokes. Here I thought I’d come up with something original…. 🙂

At any rate, the originality or whatever it was is now gone, and as of today I’ve got two, count-’em, (2) accounts: one to hold all incoming funds and disburse money to pay bills, and one to accrue funds to cover unexpected and short-term emergency expenses. The bottom line in the first account becomes irrelevant, at least until it approaches zero: month-to-month budgets will be tracked exclusively in Excel, with little concern to what’s in the bank.

That’s because what will go into the bank on January 1 will be drawdowns from Fidelity and the S-corp sufficient to cover, when supplemented by Social Security, all routine bills for 2014. Teaching income will also go into that account. In lieu of the $200-a-month stash for extraordinary expenses, that $2400 per annum will stay at Fidelity, and the teaching income — which averages out to $320/month when prorated over a full year — will substitute. This actually gives me about $120 a month more in extra spending money than I have now, while reducing drawdowns from retirement savings.

So. Life is simpler. And life is better. Money-wise, that is.

Debit Card Overdraft Fees Pose Hidden Danger for Unwary Consumers

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A new study by the Pew Center has revealed that consumers are continuing to pay high fees for debit card overdrafts two years after federal regulators put rules in place to curb this highly profitable practice. In 2011, banks raked in $16 billion in debit overdraft fees. Astoundingly, that is actually a decline of 16 percent from the 2009 peak.

According to the Pew Survey, one in five consumers paid a overdraft fee at some point in 2011, with the vast majority saying the overdraft was a mistake both in terms of the purchase and in their understanding of how their debit cards worked. The card users failed to understand they agreed to incur such charges at the time their debit cards were issued.

 Debit Card Overdraft Fees Are Voluntary

When the Federal Reserve revised the rules under which debit card overdrafts can be assessed, the fees are allowed only for customers who have “opted in.” The banks responded with alarming and aggressive marketing campaigns that led consumers to believe if they did not agree to be charged overdraft fees, their cards would be rejected more often and thus of less use to them.

Consumers surveyed said they did not understand what they were agreeing to when they signed their debit card contracts, and at least half said they had no memory of signing such an agreement. Another third said they did not even know the overdraft program at their bank existed until they were presented with the fee.

Banks Insist Consumers Want Their Transactions Accepted

Banks respond to critics by saying that consumers would rather pay the overdraft fee and be given access to funds when they are in need of them. The Pew survey, however, found that 75 percent of those who paid an overdraft would rather their transaction had been denied. Younger card users and the working poor are especially hard hit by such fees, which tend to be levied on consumers under the age of 44 who earn less than $30,000 a year.

Another study on debit card behavior conducted by the Center for Responsible Lending found that 60 percent of consumers opted for overdraft protection believing that they were avoiding fees if their cards were denied. Those fees do not actually exist. By the same token, two-thirds of consumers thought the agreements they were signing were protecting them from bounced checks, which are actually covered by completely separate elements of account agreements.

 Federal Regulators Revisiting the Debit Card Fee Issue

These findings, and complaints by consumers, led the Consumer Financial Protection Bureau to open an investigation of overdraft fees in February that will include an examination of how banks are wording the marketing language associated with these programs. If the initial reforms did not go far enough in halting deceptive and confusing language, stronger regulations may result.

The use of debit cards has, for many consumers, replaced the use of checks and physical money. The perception is that when the card is empty, it can’t be used. That may not be true, however, as banks have found a way to earn money from consumers even when their accounts have run dry.

This article was contributed by Suzan Bekiroglu. Ms. Bekiroglu is a published author, freelance writer and editorial consultant for secureloanconsolidation.com. After receiving a Bachelor of Arts degree from the University of South Florida, she faced the mounting obstacle of paying over $24,000 back in student loan debt. Determined to eliminate the debt, she became knowledgeable about money management. She seeks to educate others with tips on managing student loans and other kinds of debt, as well as in general personal finance and money saving tips.

Stress-free Finances: Bank at a Credit Union

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Yesterday morning I e-mailed the credit union to ask about prequalifying for a loan, should I decide to buy the house I’m presently coveting. Though my house is paid off and probably, when sold, will net enough to pay for the adored other house, which is on the market as a short sale, in the present conditions it could take quite a while to sell my house. So I’ll need a bridge loan to get into someplace else.

Forthwith an answer arrived in the mail. The lending overseer there suggested using their online form, but since it’s pretty generic and doesn’t allow me to explain that I will pay off the proposed loan quickly with principal from my sale of my present house, I e-mailed back and asked if we could meet. Once again she answered promptly—and she arranged a meeting with a loan officer at my convenience!

Can you imagine a bank doing anything at a customer’s convenience?

This is one of the reasons I do all my banking through a credit union: customer service is always primo. In fact, you’re regarded not as a “customer” (which in the banker’s mind seems to mean “mark”) but as a “member.” Unlike a bank, a credit union is a kind of co-op. It’s a nonprofit, operated by a board of volunteer directors elected by the members, whose purposes are to encourage thrift, provide loans at low rates, offer banking services to its members, and promote community development.

Credit unions offer the same products banks do—usually for lower costs or even no costs. I have never paid any fees at all for the use of my checking, savings, or money market accounts, for example, and credit unions don’t gouge you for the use of a debit card. Your money is insured by the National Credit Union Share Insurance Fund (NCUSIF), just as FDIC insures your deposits in a bank.

Although membership is theoretically restricted, in recent years requirements have become so broad that just about anyone can join a credit union. Here in Arizona, for example, the Desert Schools Credit Union will accept anyone who lives, worships, or attends schools in Gila, Maricopa, or Pinal Counties or who is a member of the immediate family of anyone who qualifies. Many credit unions accept people who work for or do business with certain entities—I joined the Arizona State Savings and Credit Union before I started working for the Great Desert University, because a freelance contract with the State of Arizona made me a vendor for the state. However, anyone who goes to a public school or college or who works for one is also eligible.

“Members” can also be businesses. My S-corporation has a corporate account with the credit union.

The NCUA has a credit union locator that makes it easy to find an institution near you. Credit unions take most of the hassle and grief out of banking, and by and large employees treat you like a human being, not like a cow waiting to be milked.

True, it can be a hassle to move your accounts out of a bank. However, so many Americans have gotten fed up with big banks that many credit unions now provide simple, step-by-step guides and tools for switching automatic deposits and withdrawals. It’s not very difficult, and the payback in better service and lower fees is so worth it!

Once you’ve done business with a credit union, you’ll wonder why anyone ever goes near a national bank.

The Stress-free Finances Series (A Work in Progress)

What Do You Want?
Cultivate Minimalism
The Budget
Bank at a Credit Union
Deposit and Pay Automatically

Keepin’ the Books, Keepin’ the House

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This weekend updating Quickbooks Online occupied a full afternoon. As with everything else of late, I’ve gone totally lâche with that project. Not, in this case, out of raw laziness but because Intuit seems to discourage users from backing up Cloud-based data onto local computers. Because I couldn’t find instructions for any back-up other than one that would download to an installed Quickbooks program, I’d decided I would enter transactions first in Excel and then, when time allowed, re-key them into QB Online so as to simplify my accountant’s life.

Well. As usual, time did not allow.

So I ended up entering transactions dating back to last May, for The Copyeditor’s Desk’s checking account and for its credit-card transactions. This of course entails creating new “client” and “vendor” entries and a number of other antics. Time-consuming but not at all difficult. The only annoyance is that my iMac is soooooo old it runs at the speed of a galloping snail. Having to wait anywhere from 30 seconds to two minutes for each plug of data to upload eventually will drive you to tear your hair.

At any rate, moments after I contrived a workaround for the download issue (in Firefox right-click to “print frame”, then print to PDF; this will store the entire page—not just a screenshot), what should I find hidden away in an obscure corner but a way to download to Excel (create a Journal report, pulling all your data into one place; then on that page you’ll have an option to download to any of several formats, one of which is Excel).

w00t!

This will obviate the double-dose of work.

I’m pretty pleased with QB Online. That, I suppose, is because I don’t allow Intuit to reach out to my credit union and brokerage accounts. As long as all it’s doing is tracking data, you don’t enter any sensitive passwords. Thus the risk of hacking is low. About all a hacker can do is scramble your data, and if you’re backing up to Excel every time you go online, the world will not end if that happens.

This year I used QB Online only for the corporation’s account, and that at my accountant’s request. It’s very orderly, and because it standardizes the way everything is entered, it allows none of my creative schemes for entering various reminders and comments in Excel. This is good for the accountant, very good. And she can run her software on the data from the Cloud, hugely reducing the cost of tax preparation.

Because my personal accounts are fairly complex—counting the joint account into which M’hijito and I pour cash for the accursed mortgage, I ride herd on five checking and savings accounts and two credit card accounts—in 2011 I decided to try QB only on the relatively simple corporate books. But starting in January, I’m definitely going to take out a second subscription for the personal books. This will hugely simplify the bookkeeping, and especially the tax accounting.

Speaking of the books, despite a budget overrun in discretionary spending (yasss…in exactly the amount of the dentist’s bill for cleaning my teeth), I’ll still come in with $166 to spare this month. This is because nondiscretionary bills drop radically in the winter. Water and electric each dropped almost $100 in November. Lhudly sing huzzah.

If these bills rise much higher, though, I can’t imagine how I’ll get through the summers. One utility company in the West Valley has announced a scheme to raise customer’s water bills by 83 percent!!! That’s a private water company, but I’m sure if it gets away with that, the municipalities will soon follow suit.

LOL! That “$166 to spare” is a relative term: I’m having to draw down $2000± from savings each month to make ends meet. Some of it is reimbursed during the eight months the community colleges pay me an adjunct’s pittance, but that amount is nowhere near two grand and it doesn’t come in when bills are at their highest. So the truth is, every month I’m running in the red, since I can’t afford to use savings while the stock market is jerking around like a weather balloon in a hurricane.

Junk heap, tidied

In the catching up department, I finally got around to cleaning out the storage shed and the hidden corner behind it where pots and junk reside on brick-and-board shelves. What a mess! It took all morning of one day plus half the afternoon on another day to shovel through the debris, clean up the wads of composting leaves, and haul the junk to the garbage can in the alley.

This, in light of the possibility that I might put the house on the market.

As it develops, Gerardo and his sidekick haven’t been doing such a hot job on cleaning up the leaves and pods that sift down there every day from the devil-pod tree. They can’t be too severely blamed—I’ve left a great collection of broken pottery and other priceless collectibles laying around out there, to the extent that the place had begun to look like Dave’s Used Car Lot, Marina, and Weed Arboretum. Old leaves and bougainvillea flowers were packed tight under the boards that form the lowest b&b “shelves,” partly because you couldn’t easily walk around the junk back there to get at the mess.

Six years of dust had accrued inside the shed, which I haven’t seriously cleaned since I moved into this house. Think I breathed most of it in while sweeping it off the shelves in there—this morning the throat still feels like it’s made of sandpaper, and I’m still coughing. Should get up and drop a Sudafed, I suppose. Yuch.

Now, consider this: What happens when you begin to think seriously about putting your house on the market?

Yes. Everything breaks!

Saturday I turned on the oven’s self-clean cycle. Leapt back a half-foot when the thing emitted a jackhammer-decibel BDRDRDRDRDRDRDR! Dayum!

So now I’ll have to get a workman in here to see if that can be fixed. There’s an outside chance it’s a fan. But if its not…well. Satan and Proserpine, in the course of renovating the kitchen, installed a freaking double oven in there. They come as part of a single unit. You can’t just replace one oven. You have to replace them both!

Joy. A comparable 27-inch unit will run around $2,000, plus delivery plus installation plus the 10% sales tax. So we’re lookin’ at a $2,500 hit here.

And where is that hit gonna come from? Yup. Out of retirement savings. Just now monthly disposable/short-term emergency savings contains all of $1,379. So having to buy a new oven will clean that out completely and drain survival savings by another thousand bucks.

The inside of the house will need at least some paint, too. The white trim is filthy and dinged up, the door I put on my office so I could lock it securely never did get painted, and that terra-cotta orange hallway is going to have to be painted a subtler color. Ditto the puce orange accent wall in my office that never got painted over because it’s too much hassle to drag the heavy furniture and navigate the tangle of computer cables. God knows what that’s going to cost.

I…need…a…JOB!

 

Two Serendipitous Money Developments

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Lenten Thanks, Day 7:

I thank God and my lucky stars for my insurance coverage through The Hartford’s reasonably priced AARP program, which has covered almost all the damage from last fall’s hailstorm. The dollar amount added up to far more than I could have paid to repair the air conditioning, the roof, and the eaves.

.

Two other small financial mercies have developed in the past couple of days.

Wellcare, the carrier for my Medicare Part D insurance (that’s the part that covers your prescription drugs, in a half-baked way), decided to inflict coupon books on its customers instead of sending monthly statements. The reason for this expensive extra hassle is unclear; the stated excuse is that it’s somehow cheaper to send one weighty box of shrink-wrapped books than twelve single pieces of paper.

I wasn’t looking forward to this development, because it looked like just another way to try to force people who dislike having to waste money on postage and envelopes to grant the insurance company access to their bank accounts. Wellcare doesn’t like it when you go in from your end to send payments through your bank’s bill-pay system; they want to get your bank account number so they can engross payment from their end at their convenience. Which ain’t a-gonna happen. Several times over the past year I’ve had to hassle with some clueless CSR when the company has accused me of delinquency after my payment had cleared the credit union a month in advance of the due date.

So when this new wad of paper landed in the mailbox, I quietly cursed again. Ripped open the envelope. Dug out a pair of scissors to hack off the plastic that they’d wrapped this stuff in. Read yet another set of complicated instructions for how to fill out yet another set of forms…

And lo! What should I come across but an opportunity to cover the entire year’s premiums in one payment!

Hallelujah! When I signed up, they explicitly refused to accept a full year’s premium with a single payment. Management must have  had a change of heart. Either that or the government is forcing them to offer a full year’s payment option.

They don’t offer any discount when you pay them upfront, the way a normal insurer does, which is annoying. But at least one monthly nuisance is obviated.

Unlike Medicare B and Medigap insurance costs, Part D premiums are not large—only about $23 a month. And they’re only letting people pay through December, so that’s just $230 or so. The cost is low enough that I could easily advance it from the tax & insurance self-escrow savings. When my tax refund arrives in another month or so, I’ll reimburse that account and maybe even set aside enough for next year.

So! That frees up $23 a month from the nondiscretionary budget! Hey! A shirt or a pair of jeans a month from Costco. 🙂

And then yesterday, another small miracle: When I go into my online bank accounts to reconcile this month’s gaggle of transactions, what should I discover but a new tab: “e-Deposit.”

Say what? The credit union’s management has personfully resisted letting customers deposit checks electronically since the idea was a glimmer in some technofinancier’s eye. So what’s this?

Check it out and find yea, verily: they’ve instituted a system that lets you scan checks to disk and deposit them online.

Hot dang!

Naturally, the whiz-bangiest part of the feature, which allows you to use their system to scan and upload in one swell foop, doesn’t work with the Mac, nor does it work with wireless scanner/printers—not even if the printer is plugged into your terminal. However, they have a work-around: simply scan and store as JPEGs and then upload those.

I haven’t tried this yet. We’ll see if it works, as soon as some money arrives in the mail.

Most of my clients insist on sending checks. Google’s automatic deposit function doesn’t work, forcing me to have Adsense send payment as paper checks, too. This is a huge nuisance, because the credit union has few branches. Years ago, they closed the one that was relatively close to my house, so the nearest place to deposit checks is on the the Great Desert University’s west campus, a far piece off my beaten track. To deposit checks, I have to waste an enormous amount of time and gasoline.

Mailing checks to the credit union is out of the question. The last time I mailed a fistful of checks, the credit union lost over a thousand bucks! They finally found the checks, six weeks later, just as I was calling my clients to tell them to cancel payment. Of course, since Google employs no human beings, it was impossible to reach them, so I figured I would just have to write off that one as a loss. Thus the only way to get paper checks deposited safely is to physically carry them to the branch, walk inside, and watch the teller to be sure she manages to get it deposited in the right account (some of them have some real difficulty figuring out corporate accounts). It’s a time-consuming and, at $3.50 a gallon, increasingly expensive hassle.

So, I hope this system works. I’ll be pleasantly surprised if it does—the credit union’s software dislikes Firefox and loathes Apple, and so chances are it will choke on the first JPEGs I send over there. But it’s a nice thought.