Month: February 2014

Mansion tax ‘could hit directors’ ability to get loans’

An employers’ lobby has warned that a mansion tax — one of Labour’s most divisive policies — threatens to damage British business. The Institute of Directors (IoD) claimed that if the tax was introduced it could impede directors’ ability to secure bank loans.

If it comes to power, Labour would introduce the levy to fund a new lower 10p rate of tax. The Liberal Democrats have also proposed bringing in a mansion tax but the Tories have ruled it out.

James Sproule, chief economist at the institute, said banks often insist that directors seeking business loans put up their homes as collateral.

Folsom PD: Store employees foil ID theft attempt

Employees at Folsom Bike at 7610 Auburn-Folsom Road said a female shopper raised suspicioun as she went on a shopping spree with a newly approved credit card.

Watch report here: Folsom police: Alert clerk nabs identity thief

Yoli Wooldridge, 35, of Roseville is charged with ID theft, burglary and forgery.

“She was just buying everything I showed to her,” said sales manager Ryan Wilson. “She did not know what she was looking at. She just wanted the most expensive stuff.”

One purchase was a mountain bike selling for $4,200.

Employees were suspicious because two weeks earlier, their other store in El Dorado Hills was hit with a $5,000 fake credit purchase using the same credit line.

Two days later, a different person tried another large purchase, which the store declined. The person was able to get away.

“She knew the customer’s social security number, she knew absolutely everything,” said Wilson. “And the phone number she gave was the real phone number for the person she was impersonating.

Store employees distracted Wooldridge while staff contacted the real person listed on the account who denied having the credit line.

Luckily, a Folsom police squad car was spotted nearby and officers came to the bike store.

Officer Andrew Bates said Wooldridge was arrested when she left the store, but two men waiting for Wooldridge in the parking lot drove away.

Bates said detectives are now looking for the two accomplices.

The challenges faced by risk advisers in 2014

The risk insurance industry is often defined by its challenges, with under-insurance, lapse, regulation and competing direct propositions unlikely to disappear. Despite this, sales in both the group and individual spaces are continuing to grow. Kate Cowling looks at what the new year has in store and what challenges will be most relevant for advisers.

For an industry thats still on an overall growth trajectory, risk insurance is pervaded by problems.

High claim levels, under-insurance, lapse, the competitive pressure of the direct channel and regulatory crackdowns are just some of the issues plaguing advisers traversing the risk space.

As the risk insurance game has evolved and opened new purchasing avenues for consumers, the obligation of advisers to meet tightening standards has become subject to further scrutiny.

But despite the challenges, sales in the industry are continuing to prevail.

Recent DEXXamp;R statistics suggest inforce risk activity shot up 10.5 per cent in the year to September 2013, rising from $10.6 billion to $11.7 billion in just 12 months.

Group risk is performing particularly well, growing by 15 per cent over the same 12 months from $3.5 billion to $4 billion.

And the growth is expected to continue with group risk premiums of up to 40 per cent doing a stellar job of offsetting higher-than-expected TPD and salary continuance claims, according to the DEXXamp;R research.

BT Financial Group national life insurance product manager, Scott Moffitt, said stakeholders have the opportunity to capitalise on the growth while simultaneously offsetting some of the more pertinent challenges.

The key for the industry is continuing to look at how you can improve the service model and collectively improving the messaging to the market on the value of protection and the need for it is something that the industry needs to come together and deliver on, he said.

It will be about trying to really drive a change this year about educating the market on the claims process.

TAL Life CEO Brett Clark described the next 12 months as an exciting time which would force better engagement between insurers, advisers and consumers.

However, the question of advisers evolving roles in the tightly contested direct insurance market and how to deal with the issue of lapse is not as clear cut.

The direct threat

With the growing popularity of the direct risk insurance proposition, a key challenge for advisers will be finding a way to share the previously planner-dominated space.

If consumers can turn on the television or open up their web browser to purchase their ideal life insurance package, could the adviser be rendered redundant?

Most stakeholders say no.

It is our view that the business that is coming through the advice channel has significant benefits, Moffitt said.

It ensures that those customers get the right advice; we see that they are a well-informed consumer, you dont see the under or over-insurance issues through that process. You have a better informed consumer at the time they accept the policy, and also a better insured consumer at the time you go through the claims process.

Indeed, the direct channel should not be seen as a competitor, according to Metlife head of insurance products Richard Anderson, but rather a distinct offering for a very separate consumer segment.

I do have a large number of colleagues in the financial planning or insurance provider market and theyve indicated to me that their clients are not compromised by direct insurers, he told Money Management.

In fact, some are saying that direct insurers approaches are educating their clients and because they believe and subscribe to needs-driven advice, clients generally do make contact with their planner or adviser before taking any action.

TALs Brett Clark agrees it is not a matter of one insurance stream being optimal, but more about the insurance arena becoming dynamic and catering to different desires.

The needs of consumers are wide and varied, and while we believe it is important people obtain quality financial advice, the reality is many people do not seek it out, he said.

The newer channels via superannuation and direct have been important to expand the reach of life insurance to help people get cover when they otherwise wouldnt, he added.

But apart from contesting the traditional life insurance relationships, the direct proposition throws out other challenges for the industry as a whole, according to Synchron director Don Trapnell.

I think we are going to see insurance companies starting to realise that the direct insurance through television advertising has a horrendous lapse rate, he said.

And thats because if a person buys on price theyll sell on price.

We are going to see insurance rates recognising that and increasing the premiums on those channels, he added.

The lapse dilemma

Policy lapse continues to cast a dark shadow over the risk insurance industry and one without a simple cause or solution.

Data from Plan for Life predicts lapse rates for advice-based sales will hit an average 8.4 per cent in first-year policies by 2018 and as high as 39 per cent for direct policies.

Meanwhile, policy cancellations are at the highest level for two decades, according to Plan for Life. But the actual impact of lapse is a matter of contention.

As the life insurance landscape changes, TALs Brett Clark believes lapse is a natural consequence of savvy consumer habits.

Consumers are price-checking and asking their advisers to find them better deals every year, he said.

Were seeing some of that, theres no doubt theres evidence of that happening.

For Moffitt, the much-talked about trends have not been as dire as predicted.

Weve seen that while in the industry theres a lot of talk of the duration of lapse, we have not seen that same trend, or the extent of that trend, he said.

We have seen very modest deterioration of our lapse experience.

Synchrons Trapnell views lapse as an inevitability, given Australias ageing population, and believes too much emphasis is placed on the phenomenon.

He said the word lsquo;lapse, which is currently broadly inclusive, needs to be redefined.

If you notice, with one life insurance company, if a client declines an automatic increase, thats actually recorded as a lapse. With another insurance company, if a client dies, thats recorded as a lapse … Of course were going to have an increase in terminations, based on what theyre calling a lapse. When they start to separate what lapse rates really are, I will then take notice of what they are really saying.

People are getting older, weve got an ageing population, so we must have that it must happen.

Lifting industry standards

Beyond lapse, the real benchmark for the risk insurance industry should be sustainability, Trapnell said.

I would like to see the debate broadened in relation to the separation of disciplines, he said.

Risk advice may not be compatible with financial planning, according to Trapnell, who is a strong advocate for government-level discussion about the best direction for what he sees as divergent practices.

He said when the Financial Services Reform Act came into play, it melded the financial planning and life insurance perhaps unnecessarily.

The challenge is a life insurance policy has more in common with a home and contents policy than it does with a transition to retirement program. Yet life insurance is lumped in with financial planning. That doesnt make a lot of sense to me, Trapnell said.

For Metlifes Richard Anderson, sustainability will depend on further regulatory intervention to protect the various stakeholders.

Were increasingly seeing the advertisements on free-to-air TV and pay TV by legal firms, essentially touting for claims entitlement rights, he said.

I feel this is an issue moving forward, because we really do need to educate insured members on their right to claim.

Members entitlements are really being eroded by legal fees or share of entitlements associated with successful claims, when in reality if the insured members had made an approach to the insurer or to their super fund directly, they would have received a full entitlement to benefit in their own right.

Beyond the legal sphere, Anderson said he would like to see regulation of ratings websites and research houses.

It is extremely disappointing that there are no regulations governing rating houses or research industry comparison sites, he said.

Im a proponent of our industry body to lobby for adoption of regulation of these sites.

Conversely, for BTs Moffitt, the improvement of the industry rests on education and consistency in the need for insurance.

Weve been particularly vocal about the need to get a consistency in the message we put out around the product and services developed, particularly in the claims space, he said.

Were a big believer that there should be an industry performance benchmark on that experience and that will help to build the perception of the value of life insurance.

He said driving that level of consumer education will require industry-wide cooperation.

Its a reasonably tough time, so the key for the industry is continuing to look at how you can improve the service model and collectively improve the messaging to the market on the value of protection, he said.

TAL Lifes Brett Clark agreed an across-the-board commitment to industry development is key for future growth.

While the market continues to grow, it is doing so at a slower rate than in the past, he said.

This, coupled with increased levels of claims and changing consumer behaviours, means the industry is looking to adjust and develop greater sustainability for all stakeholders.

Under-insurance persists

But while the industry tries to map out a linear future path, a major remaining question mark is how to tackle under-insurance.

The cost of life under-insurance is already estimated to be around $47 million a year and is on the rise, according to Rice Warner.

The term has become a buzzword in the risk insurance industry but who should take responsibility is a matter for debate.

BTs Moffitt said although under-insurance has not been a significant issue at his company in the last 12 months, it will be a defining challenge for 2014 for both insurers and advisers.

A recent Rice Warner report found the median level of coverage for Australian households would only adequately maintain the standard of living for 42 per cent of claimants.

However, trauma and TPD cover would only maintain the lifestyles of 14 and 16 per cent of recipients respectively.

Rice Warners head of life insurance Richard Weatherhead said some of the onus for addressing the shortfall should be divided across the industry.

The life insurance industry needs to focus on a deeper understanding of individual clients insurance needs, so that insurance offers can be targeted at those with the greatest need, rather than on raising levels of cover across the board, he said.

These figures show that a vibrant and sustainable life insurance industry is vital to the future of the Australian economy, he added.


Despite the myriad of issues faced by advisers in the risk space, there is still a gentle wave of optimism in 2014.

BTs Scott Moffitt said while it is technically tough times, stakeholders should be reminded that sales are still fairly strong.

Zurich Lifes general manager of retail, Philip Kewin, said 2014 should see more confidence in the industry, with the insurers survey results showing 90 per cent of risk advisers were optimistic.

I think there is a strong sense that the new government will bring with it a degree of stability and certainty for our industry, he said.

In a recent column for Money Management, Integrity Resolutions principal Col Fullager said regardless of the outlook, risk advice providers should be reminded of the momentous duty they have and the importance of taking a holistic approach to their role.

The responsibilities falling to those who provide risk insurance advice are considerable, for they are charged with protecting the financial security and independence of clients, now and into the future.

To take up and meet these responsibilities can, and should, result in considerable monetary and non-monetary reward.

To take up and fail to meet these responsibilities can lead to widespread and devastating consequences, he said.

Borrowers begin to see refinance options for private student loans

Charter One has joined the few lenders offering refinancing for private student loans.

The Consumer Financial Protection Bureau has been leaning on banks to make it easier for students to refinance private student loans, many of which came with low variable rates before a higher rate kicked in.

Consumer advocates contend that while college students tend to graduate with low or nonexistent credit scores, they havent been able to get recognition for building better credit records as they begin working and responsibly handling credit cards and loans.

Charter One advertises its new Education Refinance Loan as having fixed rates as low as 5.24% and a variable rate of 2.84 % above the one-month LIBOR rate, which is a fluctuating rate that banks borrow at. The current LIBOR rate is 0.16 percent. Advertised rates are reserved for people with better credit and may depend on having a co-signer.

A bank spokeswoman said the rates arent recalculated over the life of the loan based on a customers score, but a borrower who builds credit can refinance later if his or her score improves.

The CFPB met with big banks earlier this month to encourage them to create more programs for graduates overwhelmed by private student loan debts.

By the bureaus estimate, as many as 850,000 private student loans are in default, and even more are in arrears.

Federal loans carry forgiveness and flexible repayment options for borrowers who are financially struggling, but private loans traditionally have not. A CFPB report last year found that private loan borrowers were frustrated because they often couldnt get cooperation from loan servicers when they tried to make extra payments or, conversely, wanted a workout if they were falling behind.

As a result of steady pressure from the CFPB, college graduates can expect to see other banks and credit unions roll these products out.

Students considering refinancing private student loans should compare the rates and terms for different loans and lenders. When they are considering variable rates, they should look carefully not just at the current rate but also at how high interest rates could go.

Federal loans should never be consolidated with private loans, because borrowers lose repayment and forgiveness options exclusive to federal loans.

College borrowers can get more information on managing private loans at the CFPBs site,

Other resources for borrowers can be found at

Follow Sheryl on Twitter: @consumerwriter

On Facebook: PDConsumerAffairs

Email Sheryl at sharris

Dear John: Lessons on student loans

Dear John: I have another question about college-loan forgiveness.

My daughter has about $15,000 in loans through Nelnet. She graduated from West Virginia University as an art teacher.

She is currently seeking employment with the South Korean Public School system to teach English.

Does loan forgiveness apply in her situation, even though she [would be] teaching outside the US?

If so, what should she do to get the ball rolling? She is making small payments now.

I appreciate any more information you can give on this subject. MS

Dear MS: I doubt she’s eligible for any loan forgiveness or delay. Those programs are intended to encourage teachers to go to less-desirable parts of this country where schools are hard to staff.

It seems like she is doing what she should be doing, paying off as much of the loan as she can. And, luckily, $15,000 doesn’t seem like nearly as large a loan as many young people are stuck with.

But I’d like to add something that is going to anger a lot of people: Help your kids pick a college, then advise them on a field of study. I still can’t figure out why parents say: “Where would you like to go to school? Oh, it’s $40,000 a year? No problem — you’ll get loans.”

Would you take the same approach to any other purchase? “Mary, what kind of car would you like? Oh, a Mercedes? I think that’s a great choice. We’ll worry about paying for it later.” No, you wouldn’t.

Good luck with your daughter’s loan.


Dear John: I’m curious — what is your take on ObamaCare? This [law] states that 82 items are to be implemented. Half are delayed or pushed back for one full year.

An example of this would be monies transferring from Medicare to ObamaCare — pushed back one full year. As you and I know, that causes uncertainty.

Another example: Business owners who have 50 or more employees being forced to provide health care — also pushed back.

I’m a financial adviser with 18 years of experience; the majority of my clients are small-business owners.

I [recently] attended a Fox News party, and one [journalist] asked why businesses aren’t putting their cash to work. [I think that] with 41 items being delayed or pushed back, it leaves small business in a very difficult position of knowing the future.

What do you think? SS

Dear SS: I think the whole thing is one big mess. But did anyone expect any better?

On the most basic, humane level I believe everyone is entitled to quality health care. The mess has always been in the details.

The very first problem, which I and many others spotted, was that companies are living in a very puzzling economic environment. If you increase the costs of a company — because it now has to supply medical care, or extend coverage until age 26 for children — the bosses of that company are going to react.

So they don’t hire full-time workers, or they reduce expansion efforts, or they take away the free coffee.

And that’s been happening. Cost containment has been the result of ObamaCare. It’s as obvious as potholes in New York City.

But nobody would have expected all the computer problems in rolling out ObamaCare. Damn, could they have gotten it any more screwed up?!

So parts of the plan have been delayed, people are hearing bad things about the sign-up process, and corporate uncertainty will continue. And that’s going to keep economic expansion down.

The only real answer is a do-over, which should occur when the economy is better.

Of course, that’s easy for me to say, because I’m healthy and insured. If I were sick and out of work, I might see more urgency.

I think the computer glitches are the least problematic for ObamaCare. The bigger issue is, can Americans afford this plan right now? And if not, does anyone have the guts to put it mercifully out of its misery?

Send your questions to Dear John, The NY Post, 1211 Ave. of the Americas, NY, NY 10036, or

Credit Unions Help Ease the Sting of Holiday Debt

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2014 finally here…a New Year and time a fresh start One of top 10 New Years resolutions (right up there with eating healthier, getting fit, getting organized, and enjoying life) getting out debt and/or saving more money And while seems like simple-enough goal for New Year, you may already be off to rocky start if irksome holiday debt standing your way.

The good news is you dont have let some bad habits from 2013 keep you from reaching your new goals With some affordable tools and trusted tips, your is there help you start New Year off on right foot.

Transfer Credit Card Balance to Low Rate Card

A great way manage those extra bills and maintain or establish credit with an affordable credit card from your credit union.

A low rate CU credit card with flexible terms and convenient access options may be exactly what you need take control your finances Many cards offer low, fixed rate and no fees balance transfers Plus, once you put an end high-interest debt, you will have reliable credit card everyday purchases.

Beginning February 2014, Merck, Sharpe, amp; Dohme Federal Credit Union (Chalfont, PA) will be offering an APR 1.99% balance transfers their Platinum Visa and Platinum Rewards Visa, which good one year.

For limited time, Mission Federal Credit Union (San Diego, CA) also helping through post-holiday slump with 0% Intro APR balance transfers Platinum or Preferred Platinum Credit Cards through December 2014 billing cycle The Mission Fed Platinum Credit Card has everyday rates as low as 9.90%, no annual fee and all of advantages come with Platinum MasterCard like free rewards and Fraud Text Alert service.

The CU also featuring Mission Fed Money Match Campaign Were giving $1 Million our as our way thanking them their loyalty, said Angie Lasagna, VP Community and External Relations As one of prizes, were matching 10 Mission Fed Credit Card purchases every day, up $250 each, through end 2014.

RTN Federal Credit Unions (Waltham, MA) current balance transfer offer runs through February 28th with low rate 2.99% through April 2015, and no balance transfer fee RTN Visa Credit Cards a great value with everyday low rates, great benefits, and no hidden fees, says Nicole James, SVP Retail Services.

James explained how RTNs Visa balance transfer promo rate can help pay down credit card balances resulting a potential savings more than $250 finance charges and $200 balance reduction (based on $2,500 balance at 12.99% vs RTNs 2.99% APR 13 months).

State Employees Credit Union (Raleigh, NC) offers Visa with an everyday low 7.75% variable APR, no annual fee and no balance transfer fees…great consolidating debt, cash advances and balance transfers.

Learn Money Management Basics

Consumers who educated about saving and budgeting able better manage finances For this reason, CUs committed educating members.

It our responsibility as a institution teach the in our community be financially savvy To give them tools budget, save and grow their portfolios This can start at any age or stage a persons career, explained Debra Schwartz, President and CEO.

We always educating on budgeting, saving and responsibility, contended Lasagna A few tips she likes share with people who trying start New Year off right include: 1) Create monthly budget; 2) Set meaningful priorities, 3) Focus paying off debt and use balance transfer offers wisely, and 4) Think before you buy.

In terms other helpful products, Lasagna noted some opt a Home Equity Line Credit consolidate debt and gain potential tax savings She also suggests opening Savings Account at beginning of year I recommend an automatic transfer $20, $50 or $100 per paycheck, then its taken care of them And at end of year, theyll also have cash holiday shopping or travel.

Domenic DiPillo, VP, Marketing MSDFCU, said that, general when it comes post-holiday debt, he would recommend that consolidate high rate credit cards (such as retail cards) with special transfer offers, refrain from using cards, and pay more than minimum payment until debt was under control Plan your 2014 holiday purchases and set and stick to budget keep yourself from getting into same situation next year, he added.

Likewise, SECUs Leanne Phelps, SVP, Card Services cites planning and consistency as key developing spending plan and setting reasonable goals pay down debt Members should monitor progress throughout year and consider debt load before making significant purchases Obtain lower rate consolidation from your CU with shorter term eliminate higher rate credit cards, close these cards, and use money saved start savings account avoid need rely credit.

Phelps also suggested that use an unsecured closed end loan, which offers reduced rate, ensure payoff of debt within specific time frame, or use an asset such as equity a vehicle obtain lower rate and eliminate debt.

Be Debt-Free and Financially Savvy 2014

Whether youre striving pay off debt, build credit, or simply better manage lifes expenses 2014, look your look your credit union support Not member? Join today and start taking advantage invaluable benefits like affordable credit/financing options and expert advice.

Car Loan Myths and Fallacies Explained by Complete Auto Loans

Seattle, WA (PRWEB) February 10, 2014

In a world full of information, it’s easy for consumers within any industry to be misinformed or confused. Upon finding a great article from Billings Federal Credit Union, Complete Auto Loans (CAL) joined the conversation with blog post of their own. Dedicated to helping those with bad or no credit, CAL discusses credit issues, down payments, and safe budgets, pointing consumers towards a secure and affordable loan.

Click here to read the full article.

The overwhelming truth conveyed by CAL is that car loans are still attainable by people with bad credit. Modern lenders understand how today’s economy have affected consumers, and have created programs with that in mind. Online resources have further enabled those with credit issues.

The second myth, that loan-seekers need a large down payment, is another topic given notice. In reference to the article’s inspiration, Complete Auto Loans writes, BFCU reminds consumers that a large down payment will only result in a smaller loan. While this is certainly a good thing, and a cash down payment is recommended, bad credit financing allows for the smallest budget to procure a loan.

About Complete Auto Loans:

CAL provides bad credit auto loans online. Their unique finance platform can accept 100% of applicants, regardless of poor credit or even bankruptcy. By visiting, consumers are able to find the ideal loan for their personal financial situation, all through a quick and easy online process.

Reduce financial stress through good planning

(Special) – While money is foremost on the minds of some 63 per cent of Canadians, many still are not preparing financial plans and dedicating enough time and effort to managing their financial resources.

Experts suggest seeking the help of a financial planning professional and offer a number of tips on how Canadians can get started with financial planning and management.

Simply stated, a financial plan looks at where you are today and where you want to go. It defines your short-, medium- and long-term financial goals and how you can reach them.

Examine your future and collect all the facts. Consider the things that you want to achieve and your desired financial situation in the next five, 10, 25 years and beyond. Make a list of these lifestyle goals, objectives and milestones and then assess your current financial situation, noting your assets, liabilities, income and spending habits.

Build a budget. Calculate your monthly fixed costs and prioritize your short, medium and long-term goals, suggests Patrick French, director of financial and retirement planning with Edward Jones.

Pay yourself first. This involves setting up a plan to put a certain amount of money into your savings account each month. If youre just starting to work, for example, begin by putting $50 a month into savings and increase that amount as you build your career.

Pay off your debts first and then start to build your emergency and long-term goals fund. Debt is one the most insidious impediments to a healthy financial future and should be paid off as soon as you can.

A recent study by Manulife Bank noted that almost half of Canadian homeowners expect to be taking debt into their retirement. Nearly one third of homeowners are very unhappy with how theyve managed their debt and day-to-day finances over the last year and three quarters say freedom from debt is among their top financial priorities.

Debt is a tool that Canadians can use to improve their standard of living and purchase assets over the long term, but people still need a strategy to manage debt, says Manulife Bank President Doug Conick. The key is to determine what your financial priorities are, seek out professional advice and put a personalized plan in place.

When asked what strategies they use to manage their debt effectively, two-thirds of respondents said they always pay their credit card balances in full. Other commonly-used strategies included making extra payments on debts, creating a written budget to track and manage spending, consolidating debt into a single low rate and seeking debt advice from a financial adviser.

Eighty per cent of people who get debt management advice from an adviser pay their credit card balances in full compared to 64 per cent who dont get advice and those who work with an adviser are more likely to make extra debt payments and create a written budget, the Manulife study found.

Build, review and rebalance your savings. Determine the best savings vehicles for you such as mutual funds, stocks and/or bonds that can help your money grow based on your tolerance for risk.

And be patient, investing is a long-term process. It can take decades of patience, perseverance and good decisions to save enough for your long-term goals. Success often is based on the length of time that you are in the market. The earlier you start a plan the sooner youll feel in control of your finances.

By working with an adviser to review your financial situation and put an investment strategy in place you too can be satisfied with your financial decisions, French says.

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.

Copyright 2014 Talbot Boggs

 Copyright Times Colonist

Photo Poll: Student Loans

In the first edition of Student Video poll, The Chronicle asks students how long they think it will take to pay off their student loans. The consensus: longer than they would prefer.