H&R Block Snafu Delays Refunds
…mandatory field on tax form left blank
Marketwatch.com — H&R Block, the nation’s largest tax preparer, confirmed that its software failed to fill out a mandatory field on Form 8863, which is used to claim educational credits. The IRS would not say what percentage of the roughly 600,000 faulty returns came from H&R Block (US: HRB), but the company received thousands of complaints on its Facebook page and on Twitter.
I have to tell you, I would be pretty mad if this had happened to us. My wife and I used TurboTax to prepare and file our tax return; we have for the last 5 years or so, and have never had a problem. I used H&R Block when I was younger and all I remember was an expensive “loan” in order to get my return immediately. I thought the days of those short term refund loans were over but they are not. Now there is what is called a RAC / RAL or Refund Anticipation Check / Loan.
RALs are those short-term loans usually at outrageous interest rates, for the amount of an expected refund. Tax prep fees are usually deducted from your return amount also. A “good” RAL might have an APR of 40%; a bad one can end up costing 10 times that much.
When combined with other the cost of the RAL can approach loan-shark levels.
Thankfully, this might the last year people need to be warned about RALs. That’s because the RAL industry is getting squeezed by federal regulators, who are cutting off bank funding to the biggest RAL lenders, and by the Internal Revenue Service, who is making it easier to get refunds quickly and without crazy fees.
You know, what’s really problematic is the fact that you have to pay H&R Block something like $150 for 30-40 min of time with their “tax consultant”. If I’m paying for an “expert” to prepare my taxes, I would expect there to be no errors. I realize the “tax consultant” is a human, prone to making mistakes, but this goes farther than the individual tax preparers, the fault falls on H&R Block for failing to stay up-to-date with the IRS and failing to properly train their “tax consultants”.
H&R Block explained that a form had changed, Form 8863 relating to student tax credits, and that in previous years, five lines on the form could be left blank for a “no” answer. Starting this year, preparers must enter an “N” in those fields or risk a delay.
H&R Block said it learned about the tax form change after it had submitted hundreds of thousands of tax returns. The IRS said it was aware of the problem and it is continuing to review the situation and work with “affected software companies to assist in the processing of those tax returns.”
You know, I was always instructed when filling out any form, to never leave a “blank”. If it’s a “no” answer, mark it “no”. If something doesn’t apply, use “n/a”. You would think that H&R Block’s highly trained tax preparers would follow this thinking just from common sense, especially if you are dealing with the Government.
I feel sorry for Mr. & Mrs. John Q. Public who filed their tax return and is expecting their refund only to find out it’s going to take at least 21 days for the IRS to figure everything out and issue the refund.
Now, my good friend TurboTax is not exempt from errors either. Last week, the Minnesota Department of Revenue warned taxpayers against using TurboTax to file their state income taxes, finding 10,000 returns had problems. In a terse statement, the Minnesota Department of Revenue said it would stop processing tax returns filed through Intuit (the company that operates TurboTax) if the problem is not fixed.
Well, I don’t live in Minnesota so it doesn’t affect me but if I did, I wouldn’t be as upset with TurboTax since I know full well that I am filing my return on my own with the help of a computer program. There’s not a $300 an hour “Tax Consultant” using their knowledge and expertise to make sure my return is done correctly.
If you want to insure your taxes get prepared correctly, seek out an Accountant or Bookkeeper certified to prepare tax returns.
… Often times you get what you pay for.
So You Think You’re The Victim Of Identity Theft… Now What?
With so many purchases being made online these days — and with more people using credit cards to buy things at retail locations — it’s surprising we don’t hear about massive data breaches every day. But alas, ID theft is an all-too-frequent occurrence, so it couldn’t hurt to know in advance the steps to take to minimize the damage.
The folks at the Federal Trade Commission have created a comprehensive guide called Taking Back: What to do if your identity is stolen [here’s the PDF] that not only provides detailed information but also sample letters, forms and contact info for various private and federal agencies.
But here are the basics everyone should know…
IF YOU KNOW YOUR IDENTITY HAS BEEN COMPROMISED:
1. Place a fraud alert on your credit reports, and review your credit reports.
Contact any of the three consumer reporting companies (TransUnion: 1-800-680-7289; Equifax: 1-800-525-6285; Experian: 1-888-EXPERIAN (397-3742)) to place a fraud alert on your credit report.
“You only need to contact one of the three companies to place an alert,” writes the FTC. “The company you call is required to contact the other two, which will place an alert on their versions of your report, too. If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.”
The fraud report entitles you to one free copy of your credit report from each bureau. Check those reports for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.
If you find fraudulent or inaccurate information, get it removed.
2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
Call each company with whom you have a possibly compromised account and speak to someone in the security or fraud department. Follow up in writing, and include copies (NOT originals) of supporting documents.
“It’s important to notify credit card companies and banks in writing,” says the FTC. “Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures.”
If the identity thief has made charges or debits on your accounts, or has fraudulently opened accounts, ask the company for the forms to dispute those transactions.
Once you have resolved the dispute with the company, request a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts.
3. File a complaint with the Federal Trade Commission.
You can file a complaint with the FTC using the online complaint form; or call the FTC’s Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. Be sure to call the Hotline to update your complaint if you have any additional information or problems.
Sharing your identity theft complaint with the FTC can help law enforcement track down identity thieves. The FTC can refer victims’ complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces.
4. File a report with your local police or the police in the community where the identity theft took place.
Call your local police department and tell them that you want to file a report about your identity theft. Ask them if you can file the report in person. If you cannot, ask if you can file a report over the Internet or telephone.
If the police are reluctant to take your report, ask to file a “Miscellaneous Incident” report, or try another jurisdiction, like your state police. You also can check with your state Attorney General’s office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
The FTC has also created its own website dedicated to providing information for victims of ID theft. It’s one of those sites you should probably have bookmarked — but hope you never have to look at.
Take This ID Theft Quiz for National Consumer Protection Week
Hi everybody, and happy Monday. Depending on where you live, you might be celebrating Frozen Food Day, Mardi Gras, or If Pets Had Thumbs Day (at least according to an Internet list of “wacky holidays.”) But one thing everybody should be celebrating is our 14th annual National Consumer Protection Week! Running through March 10, this holiday will shine a national spotlight on consumer safety in the U.S.
I thought it would be fun to take a little quiz on identity theft from the Privacy Rights Clearinghouse: Answer to see what your risk is. I myself scored 45—not bad, but I could do better.
___ I receive several offers of pre-approved credit every week. (5 points)
___ I do not shred the pre-approved credit offers I receive (cross-cut shredder preferred) before putting them in the trash. (5 points)
___ I carry my Social Security card in my wallet. (10 points)
___ I use a computer and do not have up-to-date anti-virus, anti-spyware, and firewall protection. (10 points)
___ I do not believe someone would break into my house to steal my personal information. (10 points)
___ I have not ordered a copy of my credit reports for at least 2 years. (20 points)
___ I use an unlocked, open box at work or at my home to drop off my outgoing mail. (10 points)
___ I do not have a P.O. Box or a locked, secured mailbox. (5 points)
___ I carry my military ID in my wallet at all times. (It may display my SSN.) (10 points)
___ I do not shred my banking and credit information, using a cross-cut “confetti” shredder, when I throw it in the trash. (10 points)
___ I throw away old credit and debit cards without shredding or cutting them up. (5 points)
___ I use an ATM machine and do not examine it for signs of tampering. (5 points)
___ I provide my Social Security number (SSN) whenever asked, without asking why it is needed and how it will be safeguarded. (10 points)
___ Add 5 points if you provide it orally without checking to see who might be listening nearby.
___ I respond to unsolicited email messages that appear to be from my bank or credit card company. (10 points)
___ I leave my purse or wallet in my car. (10 points)
___ I have my driver’s license number and/or SSN printed on my personal checks. (10 points)
___ I carry my Medicare card in my wallet at all times. (It displays my SSN.) (10 points)
___ I do not believe that people would root around in my trash looking for credit or financial information or for documents containing my SSN. (10 points)
___ I do not verify that all financial (credit card, debit card, checking) statements are accurate monthly. (10 points)
Ok, now tally up your points. Guess what? Each one of these questions represents a possible avenue for an identity thief. How did you do?
- 100 + points – Recent surveys* indicate that 8-9 million people are victims of ID theft each year. You are at high risk. We recommend you purchase a cross-cut paper shredder, become more security-aware in document handling, and start to question why people need your personal data.
- 50-99 points – Your odds of being victimized are about average.
- 0-49 points – Congratulations. You have a high “IQ.” Keep up the good work and don’t let your guard down now.
Remember, you cannot prevent identity theft. Criminals can commit identity theft relatively easily, but you can reduce your risk of fraud. One of the best things you can do is to check your 3 credit reports at least once a year. If you are a victim of identity theft, you will catch it early by checking your credit reports regularly. Your annual free credit reports are available from (877) 322-8228 or at http://www.annualcreditreport.com.
Over thirty different agencies are participating in providing great information for consumers this week, including the BBB, so check out National Consumer Protection Week information. Also, sign up for a daily tip from the BBB!
Stop Identity Theft so You’re Not the Next Victim
Identity theft can happen quickly but the damage that is left for the victim to clean up is rarely dealt with as fast. Identity theft can happen in a variety of ways with thieves looking to steal debit and credit card information and Social Security numbers. With this information thieves can ruin excellent credit scores, apply for mortgages and even file false medical claims. However, there are ways in which you can prevent identity theft and take action if it happens to you.
Avoiding Theft:
One prevention method is to constantly be checking your bank statements. By keeping tabs on what is being charged or withdrawn, you could easily point out a faulty charge if a thief ever tried to use your account to their benefit. Also, by consistently checking your bank statements it’s easier to freeze the account and maybe receive a refund on any faulty charges rather than having to cancel it altogether. Next, review your credit reports. The three main credit agencies, Equifax, TransUnion and Experian, are required to give you a copy of your credit report, if requested, by law once a year. Another great tip is to use your credit card for online purchases. This is a somewhat safer route because it is not directly linked to your checking and savings accounts like your debit card. Other important and basic prevention tips include shredding documents with personal information and never carrying your Social Security card in your wallet. In addition, be wary of the information you give out online and change your passwords every couple of months.
What if you find that you’ve become a victim?:
First, try not to panic and calmly go over how you were robbed and what account the thief has access to. Was it a faulty charge on your debit or credit card? If so, notify your bank or credit card provider immediately. Let them know the amount of the charge and when it occurred and ask them to freeze your accounts. Next, you will need to notify the one of the three major credit agencies listed above so they can put out a fraud alert. The alert will remain on your credit report for 90 days and the agency will automatically issue you a free updated report. Once you receive the updated report, review it thoroughly for any suspicious activities such as accounts that you didn’t open. Make a report with your local police department and with the Federal Trade Commission. Once the various reports are made, as with other important documents, make copies and file them away in a safe place.
If you experience identity theft in a larger scale there are other steps you may need to take and there is even a way to put out an extended fraud alert that can last up to seven years. In the meantime, be sure to always use the internet wisely and protect your information. In addition, if a scanning device at a gas pump or ATM looks odd or that it may have been tampered with make sure to let the manager or an employee at the establishment know.
If it comes to the point where your identity theft has caused you to go into debt, call the counselors at Debt Helper and ask about the different services they offer that may help lower your debt.
Source:
The New York Times
The New Crime Against Your Children
Identity theft is already a rampant crime that is not only difficult to prosecute, but difficult to recover from, as well. What’s worse is that thieves are finding ways to steal from the people you love the most…your children.
Online businesses are finding ways to get a hold of Social Security numbers, especially those belonging to children, due to the fact that kids don’t really need to use their Social until they are much older. This form of theft is also beneficial for crooks because parents may not know the damage that was done until it’s too far too late.
The crime works like this: The online business obtains the number and will then sell it under a different name. Then, the buyer of the number usually uses it to create a fake credit profile for themselves and eventually build immense amounts of debt. In the end, the scheme not only hurts your child and their future, it creates a whole new problem for the nation’s credit system.
“If people are obtaining enough credit by fraud, we’re back to another financial collapse,” according to the Assistant U.S. Attorney of Kansas City, Linda Marshall.
Another difficulty with this form of theft is that the numbers aren’t directly identified as Social Security numbers when the thieves are using them. Instead, they are listed under CPNs. This lets the numbers operate as credit protection or credit privacy numbers.
Furthermore, because this form of theft is so difficult to detect, millions could be affected and not know it. As of April of this year, 43.4 million or 25.5% of Americans have a credit score lower than 599. This threatens their chances of acquiring loans because it indicates to lenders that the circumstances are too risky.
An even more unfortunate component of this crime is that there aren’t any extra measures parents can take to protect their child’s Social Security number. All a parent can do is contact the credit bureaus to see if there has been a credit file linked to your child’s number.
If you or someone you know is the victim of a crime that has caused debt, the counselors at debthelper.com may be able to help. Call 1-800-920-2262 today.
Source:
The Palm Beach Post
The Most Prevalent Types of Credit Card Fraud (& How To Protect Yourself)
The biggest drawback of using a credit card is the risk of credit card fraud. Unlike debt (which is incurred consciously) credit card fraud can strike at any time, and frequently with no warning to the card holder until it’s too late. And the consequences range from the merely annoying, such as having to call and cancel your stolen card, to the downright catastrophic, such as identity theft. With so much at stake, it pays to know what the most prevalent types of credit card fraud are, how victims are tricked, and how you can protect yourself. Billshrink explains the six most serious threats – and offers six protection tips – below.
Physically Stolen Cards
The oldest form of credit card fraud is the brazen theft of physical cards by criminals. Consumers are susceptible to theft in any location where they are joined by strangers – the bank, the supermarket, even a busy city street. Professional pickpockets have trained themselves to detect signs of distraction and move in for the kill when it appears that you are not paying attention. Having your credit cards stolen by such people exposes you to all manner of fraud. If detected early, you can stop the damage by calling your card issuer and canceling the card. However, if the theft goes undetected, there are few limits to what the thief can do: making extravagant purchases, applying for new credit cards, and in some extreme cases, taking out hefty loans in your name.
“Card Not Present” Orders
Orders placed via Internet and mail are a frequent target of credit card fraud because the actual, physical card is not required or visible for the order. Such transactions allow thieves to use stolen cards without exposing themselves to the risks of in-store shopping (such as being caught on security cameras or apprehended by police.) Unfortunately, card not present fraud penalizes two parties: the original consumer who had their card stolen, and the merchant who unknowingly processed fraudulent orders and will, in all likelihood, have them charged back when the original consumer protests. Card not present orders are also less likely to be investigated, since there are, again, usually no immediate red flags that distinguish stolen card orders from legitimate ones.
Application Fraud
Application fraud is one specific version of what is broadly referred to as “identity theft.” As the name implies, it essentially involves a criminal using someone else’s name and credentials to fill out a credit card application without their permission. Often times, the thief sets the stage for application fraud by stealing supporting documents from the victim, such as utility bills or bank statements, which are then used to substantiate the thief’s fraudulent credit card application. If and when they are approved for a card in the victim’s name, thieves face few restraints in the damage they are capable of inflicting. FICO scores and payment histories can be ruined in a heartbeat by determined thieves in possession of a fraudulently granted credit card.
Account Takeover
Another more brazen type of credit card identity theft involves what is known as “account takeover.” Under this method, the criminal gathers pertinent documents and information about a victim in order to call their credit card company requesting a change of address (one controlled by the criminal.) Following the address change, the criminal proceeds to impersonate the victim by submitting “proof” of identity to the credit card company and requesting that a replacement card be sent to the new address. Although some card issuers attempt to thwart account takeover by requiring card holders to submit photocopies of the card in question and its monthly statements, not all of them do, and this remains an extremely problematic form of credit card fraud.
Phishing
A more modern form of credit card and bank fraud is the so-called “phishing” attack. Rather than rooting through your trash or swiping your wallet at a busy intersection, sophisticated Internet hackers simply lead victims into an authoritative-looking website (usually one claiming to be their bank or credit card company.) Once the victims land on these websites, they are asked to fork over their credit card or bank details as part of a “routine security check.” At no point is it clear that such websites are stealing your information. Indeed, great care is taken to mimic the look and feel of real bank websites down to the most intricate details (including logos, URLs and slogans), such that the entire process of keying in your information feels natural and safe. Only once you have clicked “Submit” will your credit card information fall into the hands of ruthless identity thieves.
Skimming
Skimming is perhaps the form of credit card fraud most difficult to prevent. While the methods above all involve outside criminals, skimming is when a dishonest employee interferes in legitimate transaction that victims did make. An example would be if you walked into an electronics store and bought an iPod on credit, only to have an unscrupulous clerk record your card data and take a spending spree on your tab. Sadly, this is not only difficult to prevent. It is also difficult to detect, after it has occurred. Generally speaking, the last person a defrauded consumer suspects is the friendly store clerk who checked them out. Therefore, it is only once a particular merchant has been involved with a substantial number of credit card fraud incidents that they are even suspected of skimming, much less investigated or prosecuted for any wrongdoing. A merchant who skimmed only once in a while might, in all actuality, never be suspected of anything for as long as they remained in business.
How to Protect Yourself
Don’t Habitually Leave Home With Your Card
One surefire way to reduce your exposure to most forms of credit card fraud is to not always leave home with one. For one thing, a criminal can’t swipe what you don’t have on you. But it also reduces the number of physical card transactions you make, which, in turn, limits your chances of being scammed in proportion. If you don’t want to leave home without plastic of some kind, get a credit card with a low limit and bring that. This way, provided the criminal doesn’t have any additional documentation about you, the worst they can do is spend what that card allows, which is purposefully not enough to devastate your finances.
Use Virtual Credit Cards
Leaving your card at home is all well and good to prevent in-person fraud, but what about shopping online? Surely, you can’t be expected to sacrifice the convenience of buying online just to keep prying eyes out of your finances. Luckily, nothing of the sort is needed. By using virtual credit cards (which have a different number than your regular credit card and expire after one use) you can remove the one thing from the equation that attracts criminals: a viable card to steal. Thieves who intercept virtual credit card numbers will soon find that they no longer work, which will send them on their way toward the next victim-in-waiting. Best of all, most banks and credit card companies (including PayPal) now offer virtual cards for little or no cost.
Shred Your Mail
A key element in several types of credit card fraud, as you now know, are the supporting documents (like bank statements or utility bills) that enable a complete stranger to pose as you to your credit card company. The surest way to prevent criminals from getting their hands on such documents is to shred them before they leave your home. Do not, as many foolishly do, simply toss those papers in the trash and figure that no one will “really” stoop so low as to empty your garbage cans to find them. Professional identity thieves can and will do just that, because they know from experience that it pays off in spades. Don’t take that chance. Instead, invest $40 in a small paper shredder and make it a rule of the household that nothing hits the trash can without being shredded first.
Do Not Submit Credit Card Numbers to Bank Emails
As a general rule, most banks and credit card companies will never request your account numbers via e-mail. Such requests (in the unlikely event they occur at all) will occur over the phone or, more likely, in person. No matter how official, credible, or authoritative an e-mail or website appears to be, if it is asking for sensitive information – especially in connection with a “routine security check” – you can safely assume that you are being scammed and back away. In fact, most banks (on their real websites) explicitly state that they will never approach you for this information in any such manner.
Shop Only at Trusted Merchants
It should go without saying that your odds of being skimmed increase by shopping at smaller, “no-name” merchants. To continue our analogy from earlier: it’s not very likely (though it’s certainly possible) that the local BestBuy is going to skim your card number from a genuine, in-store transaction. Big-name corporate chains tend to have elaborate security procedures that are difficult for rank-and-file store employees to circumvent, even if they wanted to. However, countless fly-by-night shops exist who will happily skim you, both online and in stores. Of course, not every small shop is out to steal your credit card number. It simply pays to be mindful of the possibility and the greater odds of it occurring in smaller rather than larger stores.
Review Your Billing Statements Periodically
The sad truth about most forms of credit card fraud is that you, the card holder, are often in the dark until the thief does something so egregious that you are notified. Fortunately, there is one way to detect early warning signs of fraud: periodically reviewing your billing statements. While most people instinctively toss their statements in the trash (because, after all, they know what they charged), this is in fact the only way to detect whether fraudulent charges have been made. A simple, five minute review of your statement will make crystal clear whether the card has been used improperly, and it can mean the difference between canceling your card while there’s time to limit the damage or being completely unaware until disaster befalls you.
How to Keep Your Credit Card Safe Online
Using your credit card to buy something online has become an almost daily habit for most people. Even so, there are many people who are still uncomfortable with submitting their credit card information online. Their fears aren’t completely unfounded. Scams are everywhere and the techniques scammers use are constantly evolving so it’s true that you are taking on a little bit of risk if you punch in your credit card number online.
Luckily, with some common sense on your part and some technological advances it is incredibly safe to shop online. That isn’t to say there aren’t potential dangers out there, but if you are able to follow a few basic tips and procedures you can make sure your credit card information is safe.
1.Just like you should be aware of your surroundings and be on the lookout for suspicious looking characters when withdrawing money from an ATM, you should know how to recognize the warning signs of online scams and take steps to avoid being a victim. Don’t just blindly click on links or emails and keep your eye out for things that just don’t quite seem right.
2.Ensure your browser and operating system are running the latest versions and you have applied all of the recent updates. These online scammers are constantly changing their tactics and companies must update their software over time to combat their attacks. If you’re running a version that’s a year old you may be vulnerable.
3.Watch for the padlock icon on the status bar at the bottom of your browser window, which indicates that the site is secure. You will also want to look for an ’s’ added to the usual http at the beginning of the web site’s URL when you get ready to submit your purchase information. The https indicates a secure server that is using SSL, which means your information is being encrypted. Without the https or other secure transmission you open yourself up to having your credit card information snagged by a thief during the transaction.
4.Before submitting personal information to a site, read their privacy policy to find out how the information may be used and whether it will be sold or shared with other businesses. If you don’t like what you read, shop somewhere else. Most sites will obviously have a solid privacy policy, but if it’s a site you’ve never used before it is worth double checking.
5.Don’t provide personal information such as address, telephone number, Social Security number, bank account number, or e-mail address unless you know who you’re providing the information to, why it’s being requested, and how it will be used. If an online store is requesting more information than you’re used to, stop and think about why it is asking.
6.Use a credit card, not a debit card, for online purchases. A debit and credit card may look the same, but they aren’t. You have more protection in the event of a fraudulent purchase if you use a credit card. Besides, your debit card is linked to your bank account, so if your information gets stolen you could find your account wiped out!
7.Carefully review your credit card and bank statement each month for unauthorized charges and notify your credit card company or bank immediately if you notice any charges you didn’t authorize. Not only that, but you should be monitoring your credit score and report on a regular basis. Sometimes the goal is to steal your information so that a criminal can create a fake identity, not necessarily steal your money. So looking at your bank statements might not alert you to identity theft.
8.Finally, make sure your computer is secure. If you use a wireless network at home you need to be sure you have it locked down with at least some sort of WEP or WAP protection. Avoid transacting business on wireless networks that are not your own. And make sure your computer’s anti-virus and spyware software is updated and keeping your computer safe. One way scammers can get your information is by loading trojans or other hidden programs on your computer that silently take your personal information even if you don’t realize it.
DEBTHELPER.COM 