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.
B.P.s First of Many Bills due July 1
British Petroleum has been given until July 1 to pay the recent $69 million bill, the first of many expected to be handed over to them for the massive oil spill that has to date, leaked approximately 50 million gallons of oil into the Gulf of Mexico. This bill is strictly for the initial costs incurred by the government for their response to the spill.
In a recent interview, Obama told CNN’s Larry King, “I am furious at this entire situation because this is an example where somebody didn’t think through the consequences of their actions. This is imperiling an entire way of life and an entire region for potentially years.”
New permits for oil and gas drilling in the Gulf of Mexico have been stopped by the Minerals Management Service. Michael J. Saucier, regional supervisor of field operations for the MMS Gulf of Mexico region, sent an e-mail stating that “until further notice” there will not be any new drilling allowed in the Gulf of Mexico regardless if it is deep or shallow water.
This statement stirred some controversy, as it was a complete contradiction to an earlier statement released by Kendra Barkoff, a spokeswoman for the Interior Secretary, Ken Salazar who said, “There is no moratorium on shallow water drilling. Shallow-water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements and have exploration plans that meet those requirements.”
The Mineral Management Service released their e-mail a day after granting approval for a drilling permit to Bandon Oil and Gas. They applied for the right to drill 115 feet below the surface, 50 miles off the coast of Louisiana. Several environmental groups accused the administration of misleading the public by granting drilling rights in water up to 500 feet, while still maintaining a freeze on any deepwater drilling.
Acting director of the Minerals Management Service, Bob Abbey, says that all operators will be required to submit additional risk and safety information before drilling considerations will be accepted. These rules are even being implemented on already existing plans that have been approved. It is hoped that this new information will tighten the safety standards and lessen the risk of environmental catastrophes in drilling plans.
On the flipside, a group of local lawmakers expressed concern that any drilling bans could have a massive negative impact on the state’s economy, which is already struggling with business closures and job losses that have been directly related to the oil spill.
Online Hackers and Your Bank Account
You may want to keep this in mind the next time you access your online account. Despite the bank’s best efforts to keep customers protected, hacker attacks remain a serious threat, costing Americans millions of dollars each year. Last year, the Internet Crime Complaint Centre reported the country lost approximately $559 million to internet thieves for the duration of 2009. That is more than twice the amount for losses in 2008, where the same centre recorded losses of $268 million from the internet.
Sean Sullivan from an internet security firm, F-Secure, says, “Last year there were more online bank robberies than there were actual on-site bank robberies. Banks have become very proactive in protecting accounts from hackers, but it’s still quite a large problem. We see all types of new attempts every day.”
According to F-Secure, the biggest threats to consumers who bank online are what are known as banking Trojans. These codes are specifically aimed at banking fraud. They are invisible and can hack through your computer, stealing data such as passwords. Some of the more advanced Trojans have the capability of producing fraudulent transfers to drain your account while you’re logged in to your account.
Business accounts have become the more desirable target as opposed to personal accounts as hackers would much rather break into an account with six-figures instead of a personal account with only a few hundred or a few thousand dollars in it. Unfortunately, business accounts are the most vulnerable and least protected.
So, how can we tell if our bank is safe for online banking? Well, the more passwords and questions requested in order to log in, the safer the website. Banks that ask for only a username and password are not as secure as they should be. Many banks now require a site key name and even use personalized symbols that appears during the login process. You should also be prompted to answer a security question as well prior to gaining access to the account.
If you have been the victim of online banking theft, it is imperative you know your rights. If the bank can show any sort of breach was caused on your part, they are not liable for your loss. For customers who have a business account or line of credit, extra caution is recommended because the bank will most likely not be obligated to cover your loss. With proper caution and strong passwords, online banking remains safe for many of us. Using encrypted sites and staying away from public connections while banking are additional ways to keep yourself protected.
Canada’s Navy Suffers Financial Cutbacks
A recent cutback has seen Canada’s Navy make a tough choice to leave several of its vessels at the Halifax and Esquimalt docks. It has been decided that three ships will remain on each coast with the remaining six of the 55-foot vessels being sent to long-term storage.
Built in the mid-1990s, the Kingston-class ships were designed to detect mines that could block or interfere with Canadian ports. They are only lightly armed but can be converted to carry a platoon of soldiers or a small underwater robot.
A shortage of both sailors and money is forcing Canada’s navy to cut half of its fleet of 12 vessels used to patrol the Arctic, Atlantic and Pacific coasts. The navy says the move is necessary to continue the primary mission of defending Canada. The move was made as the navy admits it does not have enough resources to operate them all.
Denise LaViolette, a spokeswoman for the navy wrote “Upon close examination of resources and priorities, this was deemed necessary to safeguard and optimize our operational capability, both now and in the future.”
Although the navy has not disclosed the amount of money it would need to keep the whole fleet active or how much it will save by reducing the fleet by six of its current twelve vessels, it has been noted by navy officials that the Canadian government is providing “stable and predictable” funding as the navy continues to refit its submarines and modernize its frigates. However, Nova Scotia’s Premier, Darrell Dexter, says that although he is briefed regularly by DND officials, he was not given any warning about the cuts from Ottawa, even though he is the minister responsible for Canada’s military relations but would have been pleased to have assisted Canada’s National Defence Minister, Peter MacKay, in making a case to keep the fleet intact.
Nova Scotia’s Premier was noted as saying “Minister MacKay would have my full support in making the case to the cabinet and the prime minister on the importance of naval operations not just to this province, but to this country and that anything that would lead to the paring down of operations would be of concern to us.”
This decision will have a large impact on the economics of both Victoria and Halifax ports as well as the ability to patrol Canada’s coasts. Government cutbacks have affected many of the country’s staples, including worker’s benefits and insurance plans.
Travel and Your Canadian Dollar
Canadians have been so long with a dollar worth only pennies in exchange for US currency or the Euro, it almost goes against the grain to think about how to use the high dollar to our advantage. In early 2002, the Canadian dollar sank to less than $.62 against the American dollar. But our economic recovery has surprised pretty much everyone (even us!) and even our finance minister has said that the high value of the Canadian dollar is likely here for a while. So what are the advantages and disadvantages to the all-time high our currency is enjoying?
First, traveling in the US may or may not be cheaper. But with a Canadian dollar more or less at par, it becomes possible for many more Canadians. Instead of adding 30% or more to the cost due to exchange losses, visiting the US can at least be considered as a vacation destination. There are a few things to remember, though, if you plan a trip south.
Retailers more than a few hours across the border generally won’t accept Canadian dollars. Even if they do, they’ll not likely give you the current exchange rate. If you revert to your credit cards, you’ll still lose on the exchange (although not as badly as when the Canadian dollar was worth much less) and get dinged big time service fees as well. The best way to save with a high Canadian dollar is to make sure you exchange your money in to US funds at your bank before you head south. Then pay as much as you can with cash. For example, reserve your rooms with your credit card, but pay in cash.
Once in the US, of course, many products can cost much less. So take advantage of the buys and look for great deals, especially on clothes, books, some electronics, and if you’re buying really big, even vehicles. Even if the prices are no cheaper, sometimes the biggest bonus of shopping south of the border is selection and quality-both are nearly impossible to match in the much smaller Canadian market.
Traveling to Western Europe and the EU nations, however, is a different story. Europeans are well accustomed to dealing with all kinds of currencies, and give much better exchanges. The dwindling Euro means Canadian dollars can go a long way this year if you’re traveling abroad-right now one Euro will cost you about $1.29 Canadian, about 40 cents less than this time last year.
Not all EU countries will take your Euros-England and Switzerland, for example, don’t take Euros at all, even though they’re member nations. So before you change all your currency into Euros, check the countries where you plan to travel. In many cases, it’s better to use local money. But don’t change your currency at the airport where costs are through the roof. Many banks now will simply spew out the local currency at the ATM machine, only charge the exchange rate and no extra fees. Before you go, check if your bank offers this service.
The best thing about a high Canadian dollar is that it can allow you to think about traveling to countries that were out of reach only a few years ago, without breaking the bank to get there.
The Bank of Montreal is Claiming Mortgage Fraud
The Bank of Montreal estimates it may lose as much as $30 million on a mortgage scheme that involved some of its own employees. The bank is suing a few hundred people including four of its own employees, along with mortgage brokers and, so far, seventeen lawyers in what they allege is one of the largest cases of mortgage fraud in Canadian history.
The Bank of Montreal says its securities department first noticed irregularities in several of their Western Canada mortgages back in 2006. This prompted the bank to hire a forensic accounting firm who spent the next year digging through the details to uncover what was really going on.
The forensic accounting firm realized a rather sophisticated scheme where scammers would chose the worst house in a preferred, established neighbourhood. They would then convince the bank the house was worth much more than it really was due to it’s location, and being as banks rely on software programs to determine house values, the banks would concur. The scammers would then purchase the house and pocket the difference.
To qualify for the mortgages, these scammers were paying unsuspecting people, generally new immigrants $2,000 to $8,000 for the use of their name on the mortgage. Lawyers would then step in and draw up fake documents of earnings, often showing inflated wages and high net incomes to ensure the immigrants would qualify for the mortgages. The legal documents filed by the bank shows the fraud scheme was operated by 14 inter-connected groups that generated approximately $140 million of which $70 million was in fake mortgages.
The Bank of Montreal’s documents also showed that millions of the fraudulent money was sent to countries such as India, United Arab Emirates, Lebanon Pakistan and Saudi Arabia. They also noted that in one instance alone, a home in Calgary that was bought for $900,000 was sold three years later for $2.3 million, netting the scammers a whopping $1.4 million.
A Calgary based management company had documents unravelled by the Bank of Montreal investigators showing 150 suspected counts of mortgage fraud within 16 different financial institutions. The investigators felt this was a clear sign of how inefficient the controls are in the banking system. If you have been the victim of fraud and have had your finances affected because of it, you might want to consider a private consolidation or car title loan to help get your mortgage back on track.
The New West Partnership Agreement
Many long-time residents of Western Canada question why the 3 western-most provinces, who rely so much on one another and who interact to the degree that they do, never thought of this before. Between the three provinces, B.C., Alberta and Saskatchewan, there has finally been an agreement to function, more or less, as a single economic zone. Between oil and gas, mining, farming and lumber, these three provinces also share a major part of their population. Many people leave their native province to zip into one of the others for work. Closer to the Alberta / BC border, some even live in one and while working in the other.
So now that the premiers of B.C., Alberta and Saskatchewan have finally signed a deal that has helped remove those barriers and encourages these provinces to function more as a single economic zone, what exactly does this mean? Well, under the new West Partnership Agreement, these changes mean that professional qualifications and business licenses that were earned in one province will be transferable and recognized by each of the three partnering provinces. This is great news for the trades industry or for anyone who holds a skills ticket. This means if you are a teacher who earned a teaching certificate in Alberta, you will be able to gain certification and teach in either B.C. or Saskatchewan.
Saskatchewan’s Brad Wall was quoted as saying “We signed an agreement today that creates an amazing economic force: the new west, an economic region of 9 million people strong and $555 billion in GDP is an economic region that is home to a number of industries the world is very interested in right now.” There are also plans of promoting the three provinces together. The first of these joint promotions will take place next month when the three premiers share a trip to Japan and China. They hope such joint promotions will help attract investment and talent into the provinces.
Among some of the other benefits they see are using the provinces’ joint purchasing power to get better deals from suppliers for necessities such as prescription drugs, school equipment and textbooks. This should be a substantial savings for the provinces, which, in turn, should be a substantial savings for its residents. The Canadian Federation of Independent Business supported the new agreement, saying it hopes this will solve some of the labour shortage problems. This agreement should also make finding work easier for certified trades people.