Month: February 2016

Singletary: Clearing name after ID theft can be taxing

You probably missed these observances last week, but don’t miss the message.

The National Cyber Security Alliance designated Jan. 28 as “Data Privacy Day” in an effort to make people more aware of the importance of protecting their personal information. “Tax Identity Theft Awareness Week,” promoted by the Federal Trade Commission, ran from Jan. 25-29.

Both are good campaigns. And while there are some things we can do to protect our privacy, the reality is that guarding our personal data is like trying to put toothpaste back in the tube. It’s a tough task. Just ask Crystal, a Virginia woman who had her identity stolen last year. A fraudulent tax return was then filed in her name.

Crystal, who asked that her last name not be used, worries that she’ll be victimized again this year. No matter what Crystal did to protect her data — faithfully checking her credit reports, for example — she couldn’t fend off the scoundrels who used her Social Security number to file a 1040-EZ return. 

For people like Crystal who’ve been victimized, the IRS has a list of recommended actions. Crystal followed the steps last year after she realized her data had been compromised. She filed a paper return, attaching IRS Form 14039, the “Identity Theft Affidavit.” She called the IRS’ Identity Protection Specialized Unit (800-908-4490) to answer questions in order to prove she was the real taxpayer.   

Crystal said she was told by the IRS that, prior to the start of this year’s filing season, she would receive a special “Identity Protection Personal Identification Number,” or IP PIN, in the mail to help protect her tax returns going forward. 

She’s still waiting on the number.

So she called the IRS’ identity-protection unit again. The advice she got was simply to file her return early. 

“I told them I will file as early as I can and had planned on doing that, but I have to wait until I get W-2s and 1099s, whereas the fraudsters can just make up numbers and file before me,” Crystal told me in an interview. “I am so frustrated. I feel like I’ve been left out in the cold by the IRS.”

A spokesperson for the IRS said taxpayers who had their identities used to file fraudulent returns generally will be eligible for the special PIN after their cases have been resolved. This year, the IRS sent 2.7 million taxpayers IP PINs. As for Crystal, the IRS said an additional small group of taxpayers should receive their notices in the next couple weeks. 

Earlier this month, the IRS announced it was beefing up measures to help taxpayers. As part of a test program, all taxpayers in the District of Columbia, Florida and Georgia — regardless of whether they are identity victims — can apply to get the six-digit IP PIN to use with their tax returns. These three locations were chosen because of their higher rates of identity theft, the IRS said. 

To opt into the program, you can create an account at As part of the registration process, you’ll have to verify your identity. Please note that once you get an IP PIN, you can’t opt out. You will have to use the number to confirm your identity on all federal tax returns you file this year and in subsequent years.

Here are some other resources to be proactive when it comes to tax-related identity theft:

o Read IRS Publication 4524, “Security Awareness for Taxpayers.”

o Go to and look for the 13 videos in the agency’s “Identify Theft” playlist. 

If you become a victim, here are some resources on to help you start clearing things up: 

o Read this guide: “IRS Identity Theft Victim Assistance: How It Works.”

o You have the option of requesting a copy of the fraudulent return. It will be redacted, but the IRS says there’ll be enough information to determine how your information was used. Search for “Instructions for Requesting Copy of Fraudulent Returns.”

The FTC recently announced that people can now get a free, personalized plan to help recover from identify theft, including tips, online forms and template letters. Go to There is a customized option if someone else has used your information to file a tax return. The site is also integrated with the FTC’s consumer complaint system and will allow identity-theft victims to file a complaint with the agency. 

The timing of the site launch should really help people like Crystal. But if you become an identity theft victim, dig deep for a lot of patience, because clearing your name can be taxing.

Michelle Singletary welcomes comments and column ideas. Reach her in care of The Washington Post, 1150 15th St. NW, Washington, DC 20071; or

Prosper Publishes Financial Wellness Study: Americans Struggle with Money but Fintech Can Help

Prosper Marketplace has published a survey on the Financial Wellness of the nation.  According to Prosper, their metrics indicate that nearly 60% of the population does not have financial freedom and manystruggle  to accomplish their financial goals. The survey included 1,000 Americans, aged 18 or older with decision-making power regarding their finances. Prosper stated, the results underscore the struggle many Americans face with their finances on a daily basis, and show that improving financial wellness is a top priority in 2016 and beyond.  Prosper is a leading marketplace lending platform that primarly services consumers looking to refinance burdensome debt at lower rates.  But Prosper is just one of many Fintech firms seeking to provide better, less costly and more efficient financial services for the masses.

Aaron Vermut, CEO of Prosper, said their research indicated that while the economy had pulled out from the worse elements of the Great Recession, many Americans struggle to get ahead and stay there.

“With the current economic volatility, the power of having a clear plan in place–whether that be consolidating debt at a lower, fixed rate; cutting expenses; or creating a better strategy for saving–is instrumental in helping people feel in control of their finances,” said Vermut.

The Prosper data states;

  • only 29% of people feel very strongly that they are in control of their finances, and
  • nearly 50% are living paycheck to paycheck.
  • Over 50% of survey respondents said they could not absorb a financial shock. The group most likely to be impacted–Americans over 55 years old–are the most worried about their financial future, Millennials feel more secure in their finances.
  • Over 50% have less than $5,000 in their checking or savings accounts, and  more than a third have less than $1,000.
  • 60% of Americans have credit card debt and a majority of this group are going deeper into debt by not paying them off in full each month.
  • A full 22 percent do not even think about their long-term stability.

In this presidential election year, Prosper states that US citizens are determined to take control of their financial future. Of course saying and doing are two very distinct things.

According to Prosper;

  • Debt relief is ranked as a top priority (44%) for improving standing, closely followed by consistent progress in paying off debt (34%)
  • 38% of survey participants said they currently have a financial plan for themselves; another 23% claim to be making financial plans during the year
  • 30% of survey participants currently contribute to their 401(k) plan; an additional 28% will be doing so in the near future.
  • Owning life insurance (30%), investing in stocks (29%) and contributing to a 401(k) (28%) also emerged as top next steps survey participants intend to take.

Fintech, along with marketplace lending platforms, remain an opportunity for many consumers to accomplish their financial goals.  It is interesting that awareness appears quite high in the Prosper survey results.

  • 65% of surveyed consumers are currently using technology to improve their financial well-being
  • The majority of respondents use between one and three applications to manage their financial lives, and most use those apps at least a few times a week.
  • 18% of people who are not currently using online apps or sites for finances say they plan to do so.

Prosper drives the bulk of its business by providing consumers with more affordable credit. Typical credit cards charge ridiculously high interest rates. Prosper may help some consumers easily refinance high interest rate debt online.

The summary report is embedded below.

FTC: Tax Fraud Behind 47% Spike in ID Theft

The US Federal Trade Commission (FTC) today said it tracked a nearly 50 percent increase in identity theft complaints in 2015, and that by far the biggest contributor to that spike was tax refund fraud. The announcement coincided with the debut of a beefed up FTC Web site aimed at making it easier for consumers to report and recover from all forms of ID theft.

In kicking off Tax Identity Theft Awareness Week, FTC released new stats showing that the agency received more than 490,000 identity theft complaints last year, a 47 percent increase over 2014. In a conference call with the news media, FTC Chairwoman Edith Ramirez called tax refund fraud the largest and fastest growing ID theft category that the commission tracks.

How to Wipe Out Credit Card Debt

Digging out of credit card debt can seem like an impossible task at times. If you feel like youre drowning, dont despair. Youre not alone in your struggle with debt. The average household in the United States has more than $15,000 in credit card debt and roughly $129,579 in total debt. However, you dont have to spend the rest of your life living with crippling debt. Here a few things you can do that may help you get your finances back on track and regain your peace of mind.

Start by paying down the credit cards with the highest interest rates. Bankrate has a handy debt payoff calculator that can assist you with tracking your goal. If you tend to get discouraged easily and would like to see quicker results, another option would be to try the debt snowball method. This involves paying down the credit card with the lowest balance first. That way, youll start to see some of your smaller debts disappear quickly. The only drawback is that you will end up paying more interest on all of your debt in the long run, since you wont be tackling those higher interest cards first.

Another money move worth making is contacting your credit card issuer and requesting a lower interest rate. A study found that two out of three cardholders who ask for a lower interest rate have their request honored. So reaching out to your credit card issuer is worth a try. Know, however, that your request might not be granted if your account is not in good standing. Customers who pay their bills in full and on time, every time, are more likely to be able to negotiate better terms.

If you want to make a significant dent in your debt, youll need to develop a budget. A realistic budget will provide you with a clear picture of how much money is coming into and going out of your household. Once this new perspective is gained youll be able to see where you can cut back on your spending and find extra money to put toward your credit card bills. Budgeting tools are a great way to stay on top of your debt-repayment efforts. Two budgeting tools to consider are Mint and Buxfer.

Another key to chipping away debt is to keep tabs on your spending. If you spend as much as or more than youre paying off, youll have a difficult time reaching your financial goals. Avoid making an impulse purchase by unsubscribing from email newsletters for your favorite stores and staying out of the mall until youre closer to paying off your debt.

Make more than the minimum  payment on your credit cards. Sending in the minimum required payment will just prolong the debt repayment and result in more interest payments over time. If you can, send in a double payment each month. Putting more money toward the interest will help you quickly lower your balance.

You can also consider a balance transfer or debt consolidation. Transferring a balance to a credit card with 0% interest can be a good way to help you pay your debt in less time. Consolidating debt can also be a good move when you have several debts to pay and you need help managing your payments. If you need assistance with overwhelming debt and you dont feel that youll be able to keep up with payments, call your credit card issuer and let them know you are experiencing financial difficulty. Its also a good idea to get in touch with a certified credit counselor. The National Foundation for Credit Counseling has a directory of certified credit counselors who may be able to help you create a debt management plan so you can regain control of your debt.

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 More from Money amp; Career Cheat Sheet:

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Residents Of The West And New England Have Nation’s Highest Credit Scores

CHARLOTTE, NC, Feb.4, 2016 /PRNewswire/ — San Francisco-area residents have the highest credit scores of any metro area in the US, increasing their eligibility for the best rates on mortgages and other types of loans.

Thats one of the findings of a new analysis of credit scores and loan offer information from LendingTree, the nations leading online loan marketplace. The company examined over four million loan requests made through in 2015 to calculate average credit scores by metro areas, and to correlate credit scores with loan offer interest.

Western and Northeastern metros dominate the top spots on the credit score rankings, accounting for ten of the top twenty areas. Metros in Southern states account for virtually all of the twenty lowest-ranking cities.

Credit scores represent peoples creditworthiness for loans through a calculation of several different factors, including the amount an individual currently owes to lenders and his or her credit history. Most credit score models range from a low of 300 to a high of 850, with those above 720 usually considered excellent loan candidates and those below 500 generally classified as poor candidates. The average score in this study is 643.

Because credit scores are so closely tied to interest rates offered to borrowers, a credit score difference of even 50 points can mean substantial financial savings for large financial transactions like buying a home, financing a car or consolidating debt, said Doug Lebda, founder and CEO of LendingTree. Knowing and managing your credit score is especially important in this volatile interest rate environment.

People living around San Francisco and San Jose boast an average score of approximately 673, besting Bridgeport, CT and Boston, both about 664, Oxnard/Thousand Oaks, CA at roughly 663 and Denver and Washington, DC, each around 662.

With an average credit score of 620, Jackson, MS takes the lists bottom spot.

Credit and loans

In 2015, borrowers with a credit score of 720 and higher were offered APRs averaging 4.15% for a 30-year fixed rate purchase mortgage. For a $200,000 loan, the monthly payment would be roughly $963 per month.

However, borrowers with a credit score between 620 and 639 were offered APRs averaging 4.93%. For the same loan, the borrower with the lower credit score would pay about $1,052 per month, a difference of roughly $89 per month, $1,068 per year or over $32,000 over the life of the loan.

If you are planning a major purchase in the next year or two, there are several steps you can take now that will help to improve your credit score in the future, said Lebda. Reducing balances on credit cards is a good place to start. Second, always be diligent about paying your bills on time and find ways to remind yourself of when a payment is due. Third, be sure to review details in your credit report and alert the major credit agencies to any errors. With MyLendingTree, we provide a free monthly credit score and score analysis to help consumers easily monitor and manage their credit score. We also analyze interest rates offered on our network and, based on your credit profile and existing loan details, will let you know if you could be overpaying, by how much, and what you can do to save money on your loan payments.

Italian government approves decree aimed at helping battered banking sector

ROME The Italian government approved a package of measures on Wednesday aimed at helping the countrys ailing banking sector, including the creation of a guarantee scheme to enable domestic banks to offload non-performing loans.

The scheme, drawn up following months of negotiations with the European Union, is designed to let Italys banks bundle at least some of their 200 billion euros (153 billion pounds) of bad loans into securities for sale to free up their balance sheets.

Italian banks have lost almost 40 percent of their value on the Milan bourse so far this year, pounded in part by investor concerns over their battery of non-performing loans, largely accumulated during the recent economic downturn.

We will do everything needed to resolve definitively the problem of non-performing loans within the framework of EU rules, said Prime Minister Matteo Renzi, adding that the nations banks were more solid some of their European peers.

I am much more worried about other banks in other countries which are stronger in theory than Italy, he told reporters, specifically mentioning Germany, whose largest lender, Deutsche Bank, has seen a major share sell-off this year.

Renzi had hoped that Italy would be able to create a so-called bad bank to absorb a sizeable chunk of the non-performing loans and thereby allow lenders to offer more credit to clients in an effort to boost the lacklustre recovery.

However, new European Union rules curbing state aid to the banking sector meant Rome has had to limit its ambitions.

Under the scheme backed by the cabinet, the government will help banks bundle their bad loans into bonds by selling guarantees that will make some portions of the debt less risky.

Critics have questioned how many banks will actually use this mechanism because analysts say it will reduce only slightly the gap between the balance sheet value and the market price of bad loans, the main hurdle that has blocked the trade so far.


Other measures included in the cabinet decree were new regulations for small cooperative banks aimed at encouraging them to consolidate.

Italys 371 credit cooperatives are part of a diffuse banking system and the Treasury believes mergers are vital to increase efficiency, boost transparency and lower costs.

Renzi said the idea was to create a single group with capital of at least one billion euros, but added that no cooperative would be forced to sign up to this project.

None of these measures will resolve all the problems … but all these measures are additional pieces of the mosaic aimed at consolidating the banking system, he said.

The government last year forced the big cooperative lenders to convert into joint-stock companies, expecting that it would lead to a major consolidation drive.

This has yet to materialise, but at least two banks — Banco Popolare and Banca Popolare di Milano — are believed to be in advanced merger talks.

Renzis cabinet also approved a bill on Wednesday, which will need to be approved by parliament, aimed at accelerating the notoriously lengthy legal process surrounding bankruptcy cases in an effort to help lenders recuperate part or all of their outstanding loans as quickly as possible.

Full details of these plans will be released on Thursday.

One measure not included in Wednesdays package was a long-promised compensation fund that the government has said it will set up to help some small investors who lost out when four banks were salvaged last year in line with new EU norms.

Renzi said this would be unveiled in the coming days.

(Reporting by Giuseppe Fonte; Editing by Crispian Balmer)

COLUMN: ID theft has incalculable impact on us

A few days ago, we received a complaint form to complete and return to the company holding the bag here – an $800 one at that. The Federal Trade Commission developed the paperwork as a means for ID theft victims to dispute unauthorized charges or purchases. Neither one of us has any tolerance whatsoever for paperwork, and this request simply added insult to injury.

Man uses ID theft to start party business, police say

The victims of id theft are not responsible for these purchases, said financial crimes unity detective David Passmore. So, the loan companies that actually bought the products for him will end up being the true victims.

Police say Ramirez took out loans from five different finance companies to purchase the goods found inside the home.

Police arrested Ramirez in Fresno in September. They followed the evidence in the case to Riverdale, where the suspect was living with his wife.

Ramirez faces multiple counts of ID theft and grand theft.

Fight back against ID theft

Identity theft remains a serious and on-going problem.

About 13 million Americans became victims last year, according to a new report by Javelin Strategy Research. Thats up three percent from 2014.

The Javelin report found that many people dont do the simple things that could flag fraud. For example, have you set up real-time alerts with your credit card companies and financial institutions?

If not, you really need to do it.

Set up alerts for things like large transactions, card-not-present transactions and overseas transactions. And these can be sent to your email address or your mobile device by text, explained Al Pascual, Javelins director of fraud and security. Youre deputizing yourself to prevent fraud and you are going to know better than the bank whether something is legitimate. Its a great way to be an active participant in the process.

Something else you can do. Check your financial accounts every week or so to look for any suspicious transactions. If you spot something, contact the bank or credit card company right away.

Remember: When it comes to identity fraud, the sooner its detected, the better – losses tend to be smaller and its easier to undo the damage.

Be involved. Do your part to fight fraud.

More Info: Identity Thieves Changing Tactics to Steal Your Money, Report Says

This One Security Program Has Serious Unfixed Bugs

It turns out that in 2015, ID theft surged 47% over 2014, to 490,220 cases reported to the FTC. Of those, about half were tax or wage identity theft. Those cases of ID theft more than doubled, from 109,250 in 2014, to 221,854 in 2015.

The FTC is taking steps to combat ID theft. Among its actions, during its Identity Theft Awareness Week, is the debut of its improved website, The site is meant to provide an easy way for you to report ID theft to the government.

Next page: FTCs ID theft plan and another step you need to take