Credit Questions? Just Ask Nicole!

Payday Loans: Outrageous Fees and Vicious Cycle

This morning on ABC's Good Morning America was a segment on payday loans.

They profiled two different women's stories, both of whom were living on social security and borrowing money from Advance America, the largest payday loan company in the US, to get by.

Unfortunately, neither of them were able to get by at all, but instead were swept up into the oh-so-ugly, downward spiral world of payday lending.

Did you know that most payday lenders charge between 300% - 800% interest?

And that there are only 15 states in the US that prevent payday lenders from charging such outrageous fees?

Hard to believe I know, but it's true... and absolutely absurd!

I have always cautioned consumers to stay away from payday loans. They appear to be a quick and easy solution to cash flow problems, but more often than not, they end up wreaking long-term havoc on your finances.

It pains me to know that in these tight economic times, more and more people are turning to payday lenders for short-term loans they have a hard time finding elsewhere.

Perhaps if there were a more reasonable and widespread alternative to payday loans, there wouldn't be so many consumers desperate for cash being pigeon-holed into a more difficult financial situation as a result of using payday loans.

It doesn't look like GMA posted the video on their site but you can instead read the story "Vicious Cycle: Desperate Americans Turn to Advance America" by clicking here.

Small Businesses: Stop Crying and Adapt, NOW is the Time to Make Money! Take it from Ed King.

Entrepreneurs and small business owners, do yourself a HUGE favor and take the 1:39 required to view this video of Ed King, Director of Small Business  Services at Wayne State University, drop some sure-fire pure gold nuggets of truth!

I had the distinct pleasure of taking Ed King's 'Starting a Small Business' and 'Running a Small Business' courses several years ago. I still keep the binders from those courses on the shelf in my office.

Matter of fact, I even consulted with him about a few things prior to founding Credit Hour. And hey, now that I think about it, I might need to call his office and schedule an appointment for a business check-in and check-up. :)

This man is good, and he definitely tells it like it T-I-S!

"...if you can't handle the truth, get out of small business and go to work for somebody else." ~ Ed King

Now wasn't that worth watching? Hope you enjoyed it as much as I did.

American Express Will Pay YOU $300 to Close Your Account

Yup, this is for real.

As recently reported by The Wall Street Journal and the Credit Matters blog, American Express is offering select customers a $300 incentive to close their account, provided of course, they pay off any remaining balance first.

Those who received an offer letter and wish to take advantage of the cancellation program have until the end of April to pay off their credit card balance in full at their normal interest rate, and must redeem any rewards points prior to even enrolling in the program, or else lose them.

Molly Faust, an American Express spokesperson is quoted as saying, "The intention is to help cardholders lower their debt and encourage responsible management of their credit."

Ummm... yeah right! Who are they trying to fool? We all know that AmEx is just trying to head some delinquencies off at the pass.

I mean, we all see it. It's more than evident that lots of Americans in today's economy are struggling to pay their bills. And when that happens, credit card debt usually drops to the bottom of the priority pile, behind much higher ranked financial obligations such as rent or the mortgage, food, car payments, insurance, etc.

They don't really care about cardholders lowering their debt... that's how they make their money! Off of cardholder debt!

And do they really want to encourage people to manage their credit responsibly? Or just responsibly pay them off in full and then kick rocks?!

The way I see it, AmEx figures they can give cardholders a $300 prepaid gift card after they get all of their money, and after the account is officially closed and can't be charged back up, all in an effort to sleep better at night without worrying if cardholders will pay or not. They just want to get the folks giving them bubble-guts off of their books altogether!

Oh, and never mind that they'll make money each time those gift cards are swiped in the form of merchant processing fees, which will of course, offset some of their expense of the cards.

Couldn't they have just reduced the outstanding balance cardholders owed by $300 instead of issuing $300 gift cards? But then again, that offer may not have been as sexy. I'm just saying...

Four Charged in Michigan Million Dollar Mortgage Fraud Scheme

Just announced today by the office of Michigan Attorney General Mike Cox, four Michigan residents have been charged in relation to a million dollar mortgage fraud scheme.

Three of the individuals, Dequincy Hyatt (of Detroit), Seaesther Thompson-Hayes (of Flat Rock), and Aaron Brooks, Jr. (of Southgate), were each charged with racketeering, a 20-year felony, plus two counts of false pretenses, each a 10-year felony.

The fourth individual, Pietro Biundo (of Washington, Michigan), was charged with one count of false pretenses for filing a falsified deed in the sale of one of the homes involved in the scheme, which is a 5-year felony.

In 2006, Dequincy Hyatt, managing partner of J.B. Homes/Construction, LLC., Seaesther Hayes, a mortgage broker, and Aaron H. Brooks, Jr., a former service representative for the People's Trust Credit Union, partnered together to pull off a mortgage fraud scheme on two high-end Michigan properties.

Apparently in the first case, these guys sought out a "straw buyer" to secure a $710,000 mortgage on a $510,000 home in Shelby Township, MI, which allowed them to walk away from the transaction with about $163,000 after everything was all said and done.

And in the second case, they again used the same straw buyer to secure a $785,000 mortgage on a $515,000 home in Clinton Township, MI, but it wasn't disclosed how much they walked away with on the deal.

The straw buyer was told that her name and credit, which was boosted by grossly inflating her income and asset data, would be used to purchase the properties, and in return, she would receive compensation. The mortgage payments were supposed to be made by the group on her behalf, with her name to be removed from the mortgages at later date.

However, about a year after the transactions, the mortgage payments stopped, and the straw buyer was left with two mortgages in her name that she was not able to make payments on, which resulted in both houses going into foreclosure.

Not unique to Michigan, this type of mortgage fraud occurs all over the country. And sadly, these fraudulent activities hurt nearly every loan-seeking consumer in some form or fashion.

It's the trickle-down effect... so many bad, fraudulent transactions pass through the pipelines that sooner or later, lending starts to dry up, and it gets much harder for decent, honest, law-abiding consumers to obtain credit and loans.

Look at the situation we're in now!

Thankfully, there are a growing number of targeted task forces across the country dedicated to removing the bad mortgage and real estate actors from the marketplace, so the rest of us can buy, sell and finance our homes in peace.

Credit Card Data Breach Compromises Millions

Yesterday, Heartland Payment Systems released a statement saying their processing system was hacked with malicious software sometime during 2008 that compromised the data that went through their network.

Their network services more than 250,000 business locations nationwide with credit, debit and prepaid card processing, payroll, check management and payments solutions.

And apparently...

"No merchant data or cardholder Social Security numbers, unencrypted personal identification numbers (PIN), addresses or telephone numbers were involved in the breach. Nor were any of Heartland's check management systems; Canadian, payroll, campus solutions or micropayments operations; Give Something Back Network; or the recently acquired Network Services and Chockstone processing platforms."

However, even with that statement, consumers can't feel secure.

Although social security numbers, PIN numbers, addresses and telephone numbers were not compromised in the breach, names, credit card numbers and expiration dates were.

It ticks me off that on the website Heartland set up to to so-call "inform" the public about this breach, www.2008breach.com, they don't provide very much information.

They detail what information was not compromised, but fail to explicitly state what information was compromised, just who exactly is affected by this, and how they were affected in the first place.

That's why I'm glad I found the Washington Post article by Brian Kreb, which gets more down to the nitty gritty of what happened with this breach, and exposes the hardcore fact that tens of millions of credit and debit card transactions could've been compromised, which would make this data breach one of the largest ever reported.

To me, Heartland comes across as so lame by holding back a lot of pertinent details regarding this data breach.

They do, however, apologize for any inconvenience this situation has caused, advise cardholders to examine their monthly statements closely and report any suspicious activity to their card issuers, and remind cardholders that they're not responsible for unauthorized fraudulent charges made by third parties.

It's just so scary to think that millions of consumers' sensitive credit card information could be out there floating around in the hands of crooked cyber criminals, and those consumers haven't even been informed they've been compromised.

The company tagline of Heartland Payment Systems is "The Highest Standards. The Most Trusted Transactions." Yeah, right!

This data breach gives even more reason to make sure you stay on top of thoroughly reviewing your credit card and bank statements frequently!

Be sure to read the full article by Brian Kreb over at the Washington Post.

Free Cosmetics Give-Away from Lawsuit Settlement Starts Today!

As part of a $175 million class-action lawsuit settlement with several major department stores, lots of folks will be eligible to claim one free cosmetics item from one of the affected department stores starting today, January 20, 2009.

In general, you're eligible for a freebie if you're a resident of the United States and purchased cosmetics from one of the named department stores between May 29, 1994 and July 16, 2003. Some exclusions do apply, so to verify if you're eligible, click here.

The give-away will run for up to 7 days or until they run out. There will be no rainchecks issued, and all products will be distributed on a first-come, first served basis.

Each item is estimated to be valued between approximately $18-$38.

To claim your cosmetics lawsuit freebie, all you have to do is go into one of the named department stores, stand in line (because you know there'll be one!), sign & print your name (no ID necessary) & pick your item. And FYI, not all items are available in all stores.
 
A list of the department stores and the cosmetics items being given away are below, but for more details be sure to check out www.cosmeticssettlement.com.
 
Stores:
Bergdorf Goodman
Bergner's
Bloomingdale's
Boston Store
Carson Pirie Scott
Dillard's
Gottschalks
Herberger's
Macy's
Neiman Marcus
Nordstrom
Parisian
Saks Fifth Avenue
Younkers
*Lord & Taylor (not named on website as participating, but as of 1/21/09 I've received several reports they're giving away stuff too!)
 
Cosmetics Items:

Boucheron (USA) Ltd.:
Femme Eau de Toilette (1 ounce/30 ml)

Chanel, Inc.:
Coco Mademoiselle body lotion (3.4 fluid oz)

Christian Dior Perfumes, Inc.:
J'Adore Eau de Parfum (15 ml)

Clarins U.S.A., Inc.:
Clarins Energizing Morning Cream (30 ml) OR
Clarins Beauty Flash Bomb (30 ml)

Conopco, Inc. (distributed by Coty, Inc. on behalf of Conopco, Inc.):
Calvin Klein Euphoria Bath and Shower Crème (6.7 oz) OR
Vera Wang Princess Body Polish (5 oz) OR
Lovely Sarah Jessica Parker Shower Gel (6.7 oz)

The Estée Lauder Companies Inc.:
Estée Lauder Advanced Night Repair (15 ml/0.5 oz) OR
Clinique Moisture Surge (30 ml/1 oz)

Guerlain, Inc.:
My Insolence Eau de Toilette (15 ml)

L'Oréal USA, Inc. (formerly known as Cosmair, Inc.):
Lancôme UV Expert 20 OR
Lancôme Cils Design Pro Mascara OR
Lancôme Fatale Mascara OR
Lancôme Courbe Virtuose Mascara OR
Lancôme Primordial Skin Defense OR
Ralph Lauren Romance Shower Gel (6.7 oz.) OR
Giorgio Armani ACM Shower Gel (6.7 oz) OR
Lancôme Hypnôse Shower Gel

Parfums Givenchy, Inc.:
Very Irresistible Givenchy Eau de Toilette (15 ml)

Although they admit no wrongdoing, all of this stems from these department stores conspiring to sell cosmetics products only at the manufacturers' suggested retail price and never at a discount, and also by coordinating special promotions so other stores couldn't compete.

Doesn't this make you reflect on all the times you went into one of these department stores and spent money on a cosmetics item either for yourself or for a birthday, Mother's day, Christmas, graduation, anniversary or other special occasion?

Oh, please don't get me started thinking about the small fortune I've spent over the years on myself and others on make-up, perfume and gift sets!

I think I feel a headache coming on...

In Honor of Dr. Martin Luther King, Jr. Day - Enjoy This Video of "I Have a Dream"

This is such powerful and moving footage!

Enjoy!