New Technology, New Credit Scams
Being warned of new credit scams is not really anything new, however, the way scammers are looking to steal both personal identification and your money, is. With so many warnings constantly hitting the internet, it almost seems better to just stay home and shop from there, but if you’re like most other people who head out with debit or credit card in hand, here are a few ‘new scams’ to be aware of.
One of the newest scams to hit the market is aimed mostly towards investors and businesses. A ‘letter of credit’, which is a legitimate financial contract, is being sent to investors as a guarantee of payment to a seller. More times than not, the investors later find out they’ve been scammed with high interest rates of between 100 per cent and 300 per cent!
The comforts of bluetooth have definitely made life easier for any of us who have used it, and now, most electronics come with such features. Unfortunately, the dishonest have found a way to use bluetooth to steal personal information. Yes, scammers have been caught abusing bluetooth by wirelessly transmitting debit and credit card information back to their ‘base’ via skimming machines that have been planted in restaurants, ATM machines and gas stations.
Phishing emails are not necessarily new when it comes to comparing such devious acts to the new bluetooth problem; however, phishing emails most certainly have come a long way in their look. Copying company logos or duplicating a banks webpage has raised concern as more and more people are filling out personal information and hitting ’send’. This is then used to reproduce fake credit and debit cards in your name.
The recession has caused many people to fall behind on their mortgage payments. Scammers are out and about seeking people who are in financial distress and assuring them they can stop the sale of their home regardless of how far behind they are on their payments. The scam involves homeowners paying these companies hundreds of dollars a month to prevent foreclosure. Mortgage rescue scam also involves signing over the deed to your house. The scammers then transfer the house into their name and then rent or sell it. Legally, the original homeowners are often still liable for the mortgage payments.
Trying to rebuild a bad credit rating can take a long time, however, secured credit cards can definitely help this process. It is worth taking note on which credit card company you chose. Some of these companies offer secured cards with more fees on them than your balance. They charge monthly service fees and annual fees as well as set-up fees and activation fees, all this on top of incredibly high interest rates. Your balance is gone before you’ve even had a chance to make a purchase.
There are also many companies out there who offer overnight (or the next best thing) credit repair. The idea is they claim to be an agency that can help clean up your credit rating by having certain things removed off your report or that they have inside links and can even have debt forgiven. Of course, there is no such legitimate service and unsuspecting people fork over hundreds of dollars in the meantime. If you are looking to repair your credit, it is best to do some homework and check out any potential company you are thinking of doing business with. One great way to know if they’re valid or not is to look for a BBB (Better Business Bureau) logo on their home page. Many legitimate companies that are worth doing business with will have ensured they are registered for both their protection as well as the protection of their clients.
How the HST Affects Buying a Home
There has been a lot of confusion about how the newly implemented HST affects the purchase of a new, or used home. Many realtors and brokers are pointing their finger at the HST factor for the recent drop in the real estate market. They say that many people simply do not understand what the HST means to them and they are under the impression that this new tax means a substantial increase in the cost of buying a house.
First of all, it’s probably important to understand what the HST is all about. The Harmonized Sales Tax, or HST, was put into affect on July 1, 2010 in the Canadian provinces of Ontario and British Columbia only. This new tax combines both the federal goods and services tax (of five per cent) with the provincial sales tax, which is seven per cent in British Columbia and eight per cent in Ontario. The HST combines these two single taxes into one. As well, it is being applied to certain goods and services, while remaining exempt from others. This, perhaps, is where most of the confusion lies.
Most items that were tax exempt before, like prescription drugs and groceries, will remain tax-free. Items that were taxed with both the GST and the PST prior to the HST will remain taxed the same. However, the controversy lies in the ‘other’ goods and services that were once only taxed the GST, such as everyday products like haircuts and gasoline. Now, as of July 1, they are HST taxed, meaning they are essentially being taxed both the GST as well as the PST. This has caused a significant rise in everyday essentials. So services such as lawyers for instance, were only subject to GST before July 1 but are now subject to both, meaning the full HST is applied to lawyer’s fees.
When it comes to buying and selling a home, the mortgage fees and banking fees will remain as before, meaning they are still tax-exempt. One difference, however, will be in the real estate commissions, as they are now subject to the full HST instead of only the GST as pre-July 1. Also, new homes in both provinces will be taxed the HST, but are eligible for tax rebates depending on the cost of the new home. In Ontario for instance, a home under $400,000 is eligible for a rebate of 75 per cent of the provincial part of the tax, up to a maximum of $24,000.
In British Columbia, homes under $525,000 are subject to a 71.43 per cent tax rebate of the provincial portion of the HST while homes over $525,000 can apply for the maximum rebate of $26,250. Something else to factor in is the cost of new appliances, movers, painters and construction workers who are all now on the hook to charge both GST and PST, meaning you, as a consumer, will be fitting the entire HST bill.
Buying a new home may have gotten a little more complicated, or perhaps it has just gotten a lot more expensive for the average person. Being in the market for a new home can be exciting but it something best done with a lot of financial planning.
Mother Nature’s Landslides Continue in British Columbia
This season’s rain has raised much havoc around the world, but closer to home, British Columbians have been the most recent victims to Mother Nature’s wet wrath. The area of Pemberton has seen more than a thousand people evacuated from their homes from threats of a massive landslide such as have happened in the past.
An evacuation order was issued for approximately 1,500 locals after concerns that a build-up of water from a previously blocked dam known as Meager Creek, could spill over and eventually rush down the slope towards the occupied homes. However, a natural channel emerged, allowing the excess water to run down into the valley and dissipate on its own.
Leslie Lloyd, information officer for the Squamish-Lillooet Regional District’s emergency operations centre said, “Based on the information we were given throughout the day yesterday and last night, based on the assessment that was done at that time, there was obviously the very high possibility that that entire dam that was formed could have just been a sudden break.”
The district also had an evacuation alert in place for approximately 4,000 additional residents as the potential landslide measured 40 million cubic meters and was made mostly of snow, mud and large rocks. The mayor of Pemberton, Jordan Sturdy noted this was the largest slide he’s ever seen, also adding, “The biggest slide ever in Canadian recorded history is the Hope slide, and that was 46 million cubic metres. So we’re really up there.”
There have been several landslides in Canada that have caused massive destruction. There was the Frank Slide in Alberta that occurred in 1903, burying an entire town during the night under 30 million cubic meters of rock, while in 1965 Hope, BC suffered a similar slide resulting in four deaths.
Realtors will admit that buying a home is all about location, so if you own a house that tends to get in the way of mother nature once in awhile, it may be a good idea to make sure you have the additional home coverage that will be appropriate for such times. If adding extra coverage to your current policy has been on your mind, but the funds are not available, perhaps relying on a loan might not be such a bad idea. When traditional banks are not an option, getting a bad credit loan could be an alternative that could have you feeling more prepared for Mother Nature.
Canada’s Economic Recovery Slowing
A recent economic retake of the predicted recession recovery for Canada shows the country is not improving as fast as hoped. As a matter of fact, it’s been stated that Canada is slowing much quicker than previously anticipated. However, the Bank of Canada is confident Canada will not slip into a second recession.
The Central Bank shares concerns that the economic weakness in the United States combined with the global uncertainty due to Europe’s ongoing debt issues could have a negative affect on both Canadian and global recoveries in general. However, some confidence has been resumed from government plans that have been put into place to prevent additional European deficits from getting out of control. Mark Carney from the Bank of Canada says, “Those responses took out … the possibility of something very bad happening because of the debt burden.” Carney also adds, “Given the profile of growth in the three per cent area both in Canada and the United States, the prospect of that (double-dip recession) is very low.”
The unfortunate domino effect of the slow global recovery will hit Canada especially as the demand for Canadian resources such as exports, soft lumber and other goods will decline. The Bank of Canada is expecting the country’s third-quarter growth to be even more conservative with a 2.8 per cent increase, 0.7 per cent lower than previously hoped. Overall, it is expected that Canada’s growth should average 3.5 per cent for 2010 and an anticipated 2.9 per cent for 2011.
However, the Bank of Canada is certain the country is stable enough to handle the most recent of its lending increases. Short-term interest rates saw a quarter point spike for the second time in two months and is expected to increase another quarter point in the Fall. With the national jobless rate still sitting at 7.9 per cent, it could take a few years for Canada to see that rate dip below the pre-recession six per cent average.
Average Canadians will take a little longer to recover from the recession as both job growth and household incomes remain moderate. Even with the sharp employment gains, 400,000 additional jobs since July 2009, available working hours and pay raises have remained low which instils concerns that consumer spending will also remain low. Despite these numbers, Michael Gregory from the Bank of Montreal feels that Canadians will have time to adjust to the bank’s rate increases.
British Columbia Home Sales Fall in June
The average home in British Columbia will set you back around $449,908 as of June of this year, which is up 8.2 per cent from June 2009, however it is slightly lower than the average of $504,281 during the first six months of this year.
Throughout British Columbia, realtors have sold a combined 7,722 homes via MLS (Multiple Listing Service). This number shows sales are down about 22.5 per cent from June of 2009. Realtor Ron Antalek notes, “There’s not the necessity of multiple offers and competing bids. People are able to shop. They have time to compare.” On the other side of the real estate market they have seen an increase by almost 21 percent in listings with June offering 59,232 properties to choose from. Based on previous recorded rates of sales, that gives British Columbia a 9-month supply of listings, according to Cameron Nuir, the association’s chief economist noted. He also felt that the tougher rules for qualifying have had an impact on home sales as first-time buyers will have more difficulty getting approved for mortgages.
Muir said, “I don’t know if there’s anything surprising about it, but we’ve seen a transition, in Vancouver in particular, from a seller’s market at the start of the year to a buyer’s market in the summer.”
Where you are buying in British Columbia will also have an effect on your purchasing experience as certain cities are showing bigger drops in sales than others. The popular and sough-after city of Victoria showed the biggest decline with sales dipping a surprising 36 percent in June 2010, compared to June 2009. Kelowna and Vernon also saw a decline in sales by 27 per cent while Metro Vancouver’s sales decreased by a whopping 30 percent.
The current trend is believed to be only temporary as Muir feels certain things will pick up again in the Fall. With the new mortgage rules only recently being put into effect, it seems some of the sting can be felt already as less people are qualifying to buy. Whether it’s a lack of the upfront deposits, not meeting the annual income requirements or perhaps it’s an increase in poor credit scores due to the recent economic turmoil, qualifying can be a challenge to say the least. More and more people are being turned away from traditional lenders due to bad credit not only in B.C., but all across the country. First time home buyers are highly recommended to get their credit rating in order before applying for a mortgage.
Job Market Hits Record High in Australia
After a dismal few weeks of reports on slow growth and possible downward dips in both the Canadian and American economy, there is no such news for Australia. Australia has reported that it is enjoying an employment number of 11.1 million working Aussies, keeping their unemployment rate at a low 5.1 per cent. This news has sent their dollar and stock market soaring.
The Bureau of Statistics in Australia reported that their economy has created 45,900 jobs in June alone, a far cry from the forecast 15,000. Employment minister, Simon Crean states, “Australia’s strong labour force figures stand in stark contrast to the stubbornly high unemployment rates still being experienced in many other advanced economies, where the aftershocks from the crisis are continuing to reverberate. Australia’s unemployment rate is clearly the envy of most of our major trading partners.”
This news has also seen the Australian dollar climb almost one cent higher, closing at $87.41 US. It has also seen ANZ shares close at more than a 4 per cent increase, which has helped boost the overall market by 2.4 per cent.
Wayne Swan, Treasurer, says the recent data has shown that Australia was “well ahead of the curve. The Australian economy is well placed to benefit from our proximity and links to the world’s fastest growing region (Asia), with the IMF pointing to robust commodity prices which are boosting domestic demand in our economy,” He also added “Australia remains a world leader in the global recovery, with stronger growth, lower unemployment and much lower debt than other advanced economies.”
Australia’s updated figures show a 3.5 per cent growth in 2010 and a forecast 3.5 per cent increase for 2011. It’s an impressive outcome being as the unemployment rate sat at 4.8 per cent in January 2009 and jumped to 5.2 per cent in February as the global crisis began to unfold. At it’s highest point, the unemployment rate peaked at 5.8 per cent, a drastic difference from the government’s forecast 8.5 per cent.
As many other countries continue to flounder during these uncertain times, Australia, it seems, has pulled out of the economic disaster that many of its fellow liaisons are still wallowing in. With the U.S. unemployment rate sitting at 9.5 per cent and Europe’s hitting a record 10.1 per cent, it’s no wonder many people are just not ready to start spending. Maybe it’s time the world took a closer look at Australia’s example.
Less Risk and More Savings at Canadian Banks
Canadian banks may be the ones benefiting from the savings safety net many people have put their money into. A growing trend has seen Canadians putting their money into checking and saving accounts rather than high-risk investments. Banks have reported a 20 percent increase in the last year, which is up considerably from the normal 3 or 5 percent they saw the year before.
Financial services consultant David McVay explains, “Canadians are more conservative than they were in 2007, adding that “more consumers are paying off debt, opening RRSPs and tax-free savings accounts than they were a year ago. We’re seeing a shift from stock investing into keeping more money in savings accounts because of the financial crisis,” he said.
“The banks are marketing to the uncertainty that Canadians have about their savings and retirement plans caused by the financial crisis,” McVay said. This comes as banks see many baby boomers putting their money in safer places after declining stocks had a large impact on their retirement savings. Another equivalent loss could see them possibly working for another 10 years.
The recent 20 percent increase in the banks checking and saving accounts will add up to about $100 billion in business as banks can easily make more money from consumers with savings accounts instead of customers who pile their cash into stocks and bonds.
A recent Scotiabank survey done by Harris / Decima, found that almost one-third of Canadians do not have any savings accounts even though 94 percent of those surveyed said they feel better having a saving safety net. Gillian Riley, Scotiabank senior vice-president of retail deposits, payment and lending noted, “We did have a tough period in the last few years and I think now is a great time to really focus on this and get people thinking about how they can save. Over the last year we certainly have seen some movement towards savings as a flight to safety,” Riley added.
It was also found that 55 percent of those surveyed said they do save money on a regular basis but yet, one-in-five Canadians confess they do not have any savings at all. It was also noted that the debt to income ratio has risen dramatically and is currently around the 147 percent mark. That means for every dollar a person makes, they owe $1.47. These numbers are proof that it’s important to save more than we did before the recession.
How to Bank Safely Online
With so many stories of fraud, keeping our own credit and debt cards protected is a concern for most. No line-ups or ATM fees is one of the many desirable features to online banking. That, of course, combined with the fact we no longer have to leave our homes to transfer money or pay bills. With more and more consumers turning to online banking, it seems fraudsters are following the trend as well.
The result of a recent Internet User Survey by Statistics Canada showed that online banking is growing, and growing quickly, with 54 per cent of the Canadian population 16 and over using this service. With its increased popularity comes increased interest from criminals and their desire to crack open your account is their main goal.
Paul Proulx, RCMP Staff Sergeant and manager at the Canadian Anti-Fraud Centre says “It used to be all phone fraud, but now we’re seeing the internet taking over. We’re seeing that especially in the last two years, and the trend is increasing.”
The next time you are online, there are a few things you can do to protect yourself and your account. One very common problem is sites that are known for phishing. Dishonest sites have a technique where they are able to act like a bank or fish, in order to get your banking information. They will send requests for thing such as personal information or PIN numbers in order to ‘update your information.’ Report these sites and contact your bank in person if you have any questions or concerns.
Making a point to always do online banking from your own personal computer is also a great way to safeguard against hackers. Keeping your personal passwords and account numbers on your computer will assure no one else gets a hold of them. Keeping your computer secure by making sure to always update security settings, firewalls and anti-virus software on a regular basis will help protect your sensitive information as well.
When doing online banking, it’s very important to ensure you have an encrypted connection. If you are unsure how to check for this, have someone help set up the security on your computer. Also, a secure site will have a padlock in the corner depicting security. If you are still not sure, a secure bank connection to a bank will begin with ‘https’ for the Internet address.
Try to avoid using Internet hot spots as they are for public use and the connection may pose a risk to the security of online accounts. Keeping your accounts protected is a common sense way to not only prevent a thief from emptying your account, it’s also a way to protect your credit.
Economic Recovery Not Only Slow for Canada
While many watch holding their breath, the economic recovery seems to be stalling for our neighbours to the south. With an unexpected number of new claims for jobless benefits combined with slowing activity in the manufacturing sector, many economists are concerned the economy is not only stalling, but will take another downward dip back into a lighter form of recession. This risk has caused many investors concern, sending share prices plummeting. Not all analysts, however, share this fear.
John Canally, an economist with LPL Financial out of Boston says, “Just because the economy is slowing doesn’t mean it’s going into a recession, that’s the nuance the market has not figured out. The market has pretty much fully priced in a double-dip recession; at this point we don’t agree.”
But according to the U.S. Labour Department, it was hoped the market would see numbers decline to 452,000, instead, state unemployment claims have risen by 13,000, closing the official number at 472,000. At the same time, stocks on Wall Street have fallen for the fourth straight day in a row.
Nearly eight million Americans lost their jobs during the recession, something Obama promised to address, but as the unemployment rate remains high, it is proving to be a sore spot for the Democrats. Even though layoffs have slowed from last year, many business owners are sceptical when it comes to hiring. Many Americans still doubt the strength and recovery of the recession.
A report released during the last week of June showed only 13,000 private-sector hirings were added to the numbers, a disappointment as economists expected non-government job hiring to increase. As well, the National Association of Realtors showed there was a 30 per cent decrease in the sales of pre-owned homes.
A senior economist at Welch Consulting in Washington, Stephen Bronars says, “It’s looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn’t really picked up and this is disappointing. There is a lot of uncertainty on the hiring side. In order for the recovery to give people confidence it needs to cut across different sectors of the economy.”
The Labour Department reported that for the last week of June, the number of people receiving jobless benefits had increased by 43,000, closing the June numbers at 4.62 million. As the instability of the economy continues to rise and fall, it can add many stresses to those making several monthly payments. If you are feeling overwhelmed by your payments, you may want to consider applying for a debt consolidation loan. There are many private lending institutions that cater specifically to clients with bad credit. A little research to find the right loan and the right lender can have you navigating the financial waters with relative ease.
Mass Marketing Fraud and You
If you are one of the thousands of people who receive e-mails that claim you have won money or have someone claiming to pay you for your help to transfer money you need to read this. Every year, these mass marketing scams are costing Canadians more than $10 billion and this number has been growing steadily since 2007.
Many of the offers that come streaming through your e-mail box will appear very legitimate, which is the key to getting unsuspecting people to open them. They are sophisticated schemes that offer things such as lotteries where they require money upfront in order to complete the transaction to send you the winnings. There are also many fake bank schemes asking for your personal information to update their system or other money schemes that single out people with bad credit then attempt to offer them loans (that never arrive) for an up-front fee.
There are also schemes that offer prizes from contests, but to claim any such prize, you must call a special 1-900 number, which ends up costing the consumer much more than the value of their winnings. There is also the Nigerian millionaire who needs your help getting money out of the African nation and offers a huge payment in lieu of your help.
The more recent of bad Canadian schemes is discounted auto insurance being offered in Ontario. People are sent fake insurance slips and convinced they are insured when actually, they are not. The RCMP says that most fraud in Canada is not reported. In 2009 alone, The Canada Anti-Fraud Centre received more than 25,000 consumer complaints about these schemes. That averages more than 430 calls a day, but that is anticipated to be a mere fraction of the real number as the RCMP believe between one and fiver per cent of Canadian victims actually come forward. The reason, they believe, is because fraud victims do not want to admit they’ve been had. The stereotype that fraud victims are stupid prevents many from reporting but it’s important to note that fraud victims include experienced business people, doctors, police officers and lawyers. It includes anyone and everyone.
Canada is officially a member of the International Mass-marketing Fraud Working Group that involves police agencies from the U.K., the Netherlands, Nigeria, Australia and the United States. Since 2008, the Canadian Anti-Fraud Centre has discovered and shut down more than 45,000 scammer e-mail accounts along with over 10,000 phone numbers. It has also been responsible for working with credit card companies in closing 150 merchant accounts that were posing threats to consumers by scammers.
These organized crimes are operating from one country but stealing from people all over the world. This has made it incredibly difficult to prosecute any of the scammers so the best that can be done now is to break the link between the scammers and their victims. A good rule-of-thumb to go by is to use common sense. If you have not entered a contest or a lottery or have shared with email address with someone you know, any outside contact is probably a scam.