Friday, September 22, 2017

Equifax Data Breach - What Should You Do?

There was a national webinar held yesterday on 09/21/2017 where over 1,300 credit union security members from across the country received information and suggestions related to the recent Equifax data breach. The webinar was frankly a sobering several hours. This data breach is far worse than any so far since it impacts 143 Million consumers. Basically anyone who has a credit report on file with Equifax is included in the data breach. What is most concerning about this data breach is that the data stolen is a treasure trove of all the most critical, personal information. Names, addresses, birth dates, social security numbers, employment information, and in some cases, driver's license information. 

With this information, a data thief could create account relationships of all types. Deposit accounts, loan accounts, rental agreements, medical insurance, and others could all be fraudulently created. 

Scary stuff for sure and a helpless feeling for many consumers. What should consumers do?

Access to the credit file must be restricted to avoid use by a criminal. Restricting that access can either be done by a credit freeze or a fraud alert. 

A credit freeze is when the consumer establishes a block on their credit report where nobody can access their file. The consumer establishes a PIN that only they know. To unlock that credit file the consumer must log into the credit bureau site and provide that PIN. There normally is a cost for a credit freeze but given the scope of this massive potential for identity theft, hopefully any costs will be waived for a period of time. It is VERY IMPORTANT for anyone using the credit freeze to secure their PIN in two separate secure locations. Consumers who lose their PIN will have a difficult time getting their credit file unlocked. A credit freeze must be placed by the consumer on each of the credit bureau agencies.

A fraud alert may be preferable since the credit file could be obtained but no action would be available/legal unless the consumer was notified by the established contact number listed in the fraud alert. The fraud alert is intended for identity theft victims. The fraud alerts typically expire ever 90 days, unless the consumer is a direct identity theft victim and then the fraud alert is good for 7 years. In my opinion, Equifax has just created 143 Million identity theft victims so hopefully the 90 day period will be extended for all new fraud alerts added because of this data breach. Another good aspect of the fraud alert is that it only requires the consumer to notify one credit bureau which then contacts the other credit bureaus to file on their reports also. 

Credit monitoring services are also recommended to alert consumers to activity involving their credit report or personal identification. Utilizing the various account alerts on deposit and credit accounts is also recommended to keep a close eye on any unusual activity that might take place. 

Consumers and financial institutions are going to be dealing with an elevated risk of identity theft concerns for many years as a result of this Equifax data breach. Consumers are encouraged to visit the various credit bureau sites below for specific information and steps to better secure your personal credit file(s). 

For those without Internet access, Equifax has a dedicated incident response number of 1-866-447-7559 with hours of 7:00 AM to 1:00 AM, everyday including weekends.

Friday, August 25, 2017

Federal Reserve to Begin Same Day ACH Debits on 09-15-2017

A big change is coming on 09-15-2017 that will affect those consumers who have been using a bit of "float" time on their checking transactions. In the past, consumers have written checks on the day that they will be paid that night. Payrolls and other direct deposits that post in the evenings are being posted for recipient access by the following business morning. In the past, these checks written would never be presented for payment in the same day unless a merchant physically brought the check to the financial institution. That all changes on 09-15-2017. The Federal Reserve will then be processing same day Automated Clearing House (ACH) debits several times during each business day. This means that a check written at 10:00 AM could be presented electronically to the financial institution for payment that same afternoon. This only applies to those merchants who will convert checks written to an ACH debit as a means of receiving their money. The big box retailers will most certainly do this but smaller, local merchants probably will not at least not at the beginning of this change. 

This will also apply to any debit authorizations given over the telephone or Internet. If you authorize a debit from your account with a merchant that morning, it is possible that your checking account will be debited that afternoon for the transaction amount. Again, there is a cost for a merchant processing multiple debit files throughout the day so not all merchants will utilize the availability. 

The problem for consumers is that they will not know which merchants (1) Convert written checks to ACH debit drafts, and (2) Process multiple debit authorization files throughout the day.

The best advice is to maintain a practice of only authorizing transactions on your checking account for funds that are already in place within the account, or available from an overdraft source. Legally, funds are already supposed to be in the account at the time of the transaction. Online home banking, mobile apps, and audio response systems are all available to verify available balances before transactions are performed. 

Please remember that this same day ACH debit change is coming from the Federal Reserve and will affect all financial institutions. Also know that same day ACH credits (deposits) began a year ago to speed up deposits coming into accounts.

Friday, June 23, 2017

Why North Alabama Educators Credit Union?

Consumers have many choices out there, so why choose North Alabama Educators Credit Union (NAECU) for financial services? 

To begin with, we're a credit union. The financial structure of a credit union means that you as a consumer will receive a better overall benefit. NAECU is owned by our 10,200+ members and governed by our nine volunteer board members who are mostly either current or former employees of a school system. There are no outside investors from other states or countries making decisions that impact our local member-owners. NAECU is a "not for profit" entity so our objective is to maintain safety and soundness reserves while returning all other profits back to our members in the form of lower loan rates, higher savings rates, and much lower fees than traditional banking institutions. An example of this would be our low cost, low dollar loans of $500 or less that traditional for profit institutions are not interested in since they do not produce enough profit. Again, profit is not a primary motivator with a credit union. 

Being a mid-sized credit union at roughly $90 Million in Total Assets, NAECU has the ability to offer many of the same popular electronic services as the big multi-billion dollar institutions such as home banking, bill payment, mobile App, remote check deposit through SPRIG, debit card controls through our MobiMoney app, online loan applications by phone or tablet, and a Surcharge Free ATM locator App to find one of over 28,000 ATM's available. The big difference is that our members can actually speak with our staff and management about any issues or problems that need to be resolved. It is rare for account holders of the big regional banks to be able to speak with the CEO on an inquiry or problem on their account. As the CEO of NAECU my job is to work for our members so I am always eager to meet or speak with any of our members and do so quite often over the course of each week. Our staff has the time to be more friendly and helpful during member visits, something not always available at the much larger institutions where long lines tend to promote speed over service. 

There is nothing wrong with being members of multiple credit unions. Each credit union, regardless of their size, operate under the same "not for profit" structure. Each credit union offers different strengths that may change over time. Consumers benefit when they compare services available to them. It is our job at NAECU to offer the best services at the best prices whenever possible, recognizing though that we have to manage the balance sheet of our member's deposits and loans in the process. Our auto loan rates remain some of the most competitive in the area because our balance sheet right now could use more loans rather than deposits. It's not a bad thing but indicative of how pricing and availability of services takes place. Every credit union needs borrowers AND savers. 

NAECU has been around since 1955 and is still going strong. How many institutions can you think of that have been merged or sold in the last 10 years? One of the business models of small community banks is to build a customer base and then sell that bank, plus their customers, to a larger regional bank. The customers don't benefit from those acquisitions but the bank investors sure do. NAECU is the most local type of organization you can think of since the vast bulk of our member-owners live and work right here in the Tennessee Valley. 

It sounds corny but the primary objective of NAECU is to help improve the bottom line of our member-owners above our own. Ownership does have benefits. It is the difference between being a member of an organization that works for you versus being a customer of an organization that needs you to produce income for the real owners, the investors. 

Thursday, June 1, 2017

Don't be a Money Mule

A "Money Mule" is anyone who allows their banking account be used as a means of transferring funds to an unknown third party. Scams, frauds, and outright money laundering operations utilize a money mule to either move stolen funds or illegal funds. Account holders have a legal responsibility to know who they are transacting business with and are responsible for all funds that flow in or out of their account. 

Popular scams involving money mules are work from home offers, lottery/game awards, Secret Shopper programs, and inheritance scams. There is usually a money making component to these scams where a small percentage of the funds can be kept. Money can be received by cashier's checks or even electronic deposit in some cases. In most cases the checks are either counterfeit or stolen checks and electronic deposits can be money stolen from a victim elsewhere.

There is no good reason for anyone to allow a stranger to move money in and out of your own personal account. No legitimate employment would be processing their payroll through an individual personal banking account. If you ever did truly win a large lottery award you would not be asked to pay taxes and such up front. If money was stolen from elsewhere and deposited into your account, you could be held responsible both from a civil and criminal standpoint. 

If you ever have a suspicion due to a request to move funds through your own personal account, feel free to contact the management of your financial institution. I have personally assisted various credit union members over the years in preventing losses from scams and fraud cases. We would much rather help you before the fact rather than after! 

Friday, April 28, 2017

Do Your Homework on Car Shopping

We all know about homework, right? The idea is practice and learn how to perform better when it counts. Whether in the classroom, arts, or sporting arena the value of preparation cannot be denied. If we recognize that homework is valuable for these purposes then it must be beneficial for major purchases. 

Purchasing an automobile is one major purchase where proper homework can payoff in considerable reduced cost. Researching information surrounding a vehicle purchase BEFORE meeting a seller is really a necessity to make an informed transaction. 

To keep things simple, below is a basic homework list for potential car shoppers;

1. What to buy? You know what you like so research a list of vehicles that you are interested in. Consumers Reports is a great resource for research on reliability, strong points, and weak points of vehicles tested. For pricing information and are excellent resources. You as the buyer should NOT be paying the retail value on most vehicles. Split the difference between wholesale/average trade-in and the retail value for an offer price. If buying a new vehicle you should work up from the invoice price, not down from the MSRP price.This is a fair price to both the buyer and seller. If you have a trade-in vehicle be sure to obtain the pricing info on it as well. You can usually obtain more for your vehicle by selling it yourself but that process is not always convenient for everyone. A CARFAX report is relatively inexpensive and well worth the price if the seller does not have the report available for your review.

2. Where to buy? The world wide web has opened up so many more sellers with vehicles available. Online shopping sites allow you to customize and search for exactly the type of vehicle you want. We have seen more and more members buying vehicles out of the area, especially if the vehicle being sought is limited in supply. Be leery of online offers that request a deposit to "hold the vehicle" for you as often these are just pure scams. It's always good to buy local and support local dealers when possible but keeping local dealers honest by checking pricing elsewhere is the right approach to doing your due diligence in obtaining a fair price. If buying a used vehicle from an individual it is important to promote safety in meeting locations, and avoid carrying large sums of cash until you're certain of a deal. It is advisable to meet in a public place such as a financial institution parking lot or police area. 

3. How will you pay for the vehicle? Amazingly this factor is often neglected until the vehicle has already been selected and that car fever is at a high level. The emotional side of us just wants to get the deal done and move out to the road in that shiny new ride. You may have negotiated a great deal on the vehicle but if you don't do you homework on financing (if you needing to finance) you are a prime candidate for paying too much. Dealerships especially make a considerable amount of profit from the financing and various add-on's that they will offer on a vehicle. Do you homework on available loan rates and offers, knowing the full terms and conditions connected to them. You might hear a "low as 1.50% APR" rate offer but then discover that the low rate is only available for 24-month financing for a A-rated credit score. Everyone has risk-based pricing meaning that your actual loan rate will be determined by your credit score and length of the loan. Shop around and know what the rate could be for the term you will want. A pre-approval is a great way to find out exactly what is available to you. Don't forget to research what your insurance costs will be as well. 

4. Avoid the "How much are you willing to spend?" game. I have had dealers to ask me that question and I always answer "What it's worth." If you reply with a desired monthly payment amount they will find a vehicle within that range and have you paying that amount much longer than you would like. You would also likely be forever upside down on that vehicle, meaning that you would owe more than the vehicle is worth.  This upside down situation makes it much more difficult to sell or trade that vehicle later on. 

5. Read what you're signing. You need to know what is the final Annual Percentage Rate (APR), monthly payment, term of the loan (how many months), and any fees or charges associated with the loan and paperwork. There are several dealers now charging extremely high document fees of $500, $600, & more. You can negotiate a lower price of the vehicle as a result of these higher document fees. When shopping different dealers find out what the different document fees are. 

6. Do your homework on add-on products as well. One big seller on all vehicles is Guaranteed Asset Protection (GAP) that covers any gap that might exist in an accident total loss situation between what the loan payoff is and what your automobile insurance will pay. Dealers sell this product for upwards of $500 and higher where NAECU sells the product for $199. Extended warranties, roadside assistance programs, and other products will be presented as well so research these as well before adding to the obligation. 

Doing the proper homework on all aspects of a vehicle purchase will make you an informed buyer and reduce the possibility of paying more than you should for a transaction that you will be living with for multiple years. 

Thursday, February 23, 2017

MobiMoney - Take control of YOUR Debit Card!

Tired of data breaches where your Debit Card info gets hacked and money is taken from your account? We are too! Take control of your debit card and help stop fraud with our new MobiMoney phone app. With the MobiMoney app you can turn your Debit Card off and on, set lower dollar amounts for approved transactions, receive notifications on transactions, and other controls.

The Credit Union would recommend that you use this FREE app to turn the card off/on as necessary and set a dollar amount for approved individual transactions that you normally perform, like $150.00 to $200.00. Setting notifications for some specified dollar amount is also a good tool to make sure that only you are performing transactions on your debit card. If a hacker attempts a $500.00 transaction in California and you have these controls on, that transaction would be denied plus you will receive an instant alert through your phone on the transaction. You can always change your max dollar amounts for transactions so long as they don’t exceed our daily institution cap of $1,500.00 per day. (Controls can be changed live on the spot at any time using the app.)

To download the FREE app go to your Play Store or iTunes and search for “MobiMoney”. After downloading the app enter your MasterCard Debit Card number to enroll in the FREE service. IMPORTANT: Please remember or record your “Username” so that you can reset your password later if you forget it.

There is no worse feeling in the world than having your MasterCard Debit Card in your possession and having a counterfeit card transaction take place, stealing money from your account. This FREE MobiMoney app can help to prevent that nightmare situation from happening.

Personally, I use this MobiMoney app to turn my debit card off when not in use. (Just remember to turn back on before use!) When the card is turned on I have a lower dollar amount maximum in place that I can change on the spot of a retail store if necessary. I also have set transaction notifications to be sent on transactions above $50.00. These would go through but I would see them immediately which would be helpful if one came through that I didn’t do.

Please note that each joint owner would need to enroll their own cards since card numbers vary by each owner or joint owner. If the credit union had a majority of members using this MobiMoney service for their MasterCard Debit Cards, unauthorized fraud losses would decrease dramatically. Protect yourselves and take control using MobiMoney! 

CLICK HERE for a short video on the MobiMoney app by our card processor, Vantiv!