The Survive and Thrive Boomer Guide

What consumers need to know about crowdfunding

Within days, crowdfunding websites reportedly raised more than $2 million to support victims of the Boston Marathon bombing tragedy. 

While online giving provides a quick and easy way to support those in need, donors should ask questions and know what to expect when contributing through crowdfunding websites.

Crowdfunding websites are established to allow solicitation of money for a variety of purposes. The organizations or individuals to which the funds are given can be, but aren’t necessarily charitable, according to the Better Business Bureau. Some contributions through these sites may not be tax deductible as charitable donations.  

Donors should know that crowdfunding websites usually take a percentage of the donation ranging from 5 to 20 percent and may also deduct payment processing fees in addition. A few of these sites may allow the donor to cover all such fees but, in many cases, the recipient may not receive the full amount given.  

Crowdfunding websites can raise money for legitimate charities.  However, if you want to be sure that the charity receives the entire amount given, it’s a good idea to go to a charity’s website and make a direct online contribution, the BBB advises. 

Giving through established charities has advantages including the requirement that they register with state government authorities, must report on use of funds, and are subject to the oversight of a board of directors.

Only certain types of tax-exempt organizations are eligible to receive contributions deductible as charitable gifts, according to the Internal Revenue Service. 

Crowdfunding donations made to support a specific individual or family are considered a “personal gift” and not a charitable contribution. If charitable tax deductibility is important to you, be sure to donate to an eligible organization as defined by the IRS.

Additional tips from the BBB:

• Make sure the crowdfunding websites you use to donate securely encrypt all transactions using Secure Socket Layer technology. Look for https at the beginning of the website address.

• Read the crowdfunding site’s statement about its policies –  including its terms, conditions, and privacy policy – to understand how your donation and your personal information will be handled before giving.

• Check out charities through www.bbb.org.

Copyright 2013, Rita R. Robison, Consumer Specialist

Fear, sex, money, life’s meaning, and moving are the topics for this week’s Best of Boomer Blogs

From the other side of the world, Katie Foster of Arabian Tales and Other Amazing Adventures is the host for this Best of Boomer Blogs #306.

The boomer blog roundup is a collection of like-minded blogs cooperating to share their best stories of interest to the Baby Boomer Generation.

This week boomer bloggers are writing about recognizing fear; fostering romance; love, and sex at midlife; balancing money and meaning in life; embarking on a hero’s journey to uncover life’s meaning; finding fun in movies for grownups; looking out for the debt trap that can be caused by payday loans; and stressing about moving

In addition to my blog, other members of the Best of Boomer Blogs are: The Midlife Crisis Queen, Sightings Over 60, Arabian Tales and Other Amazing Adventures, So Baby Boomer, Blue Blinds Media, and Tao Flashes.

Be sure to check back next week to see what baby boomer bloggers are thinking and writing about.

Copyright 2013, Rita R. Robison, Consumer Specialist

Stay away from payday and deposit advance loans: Report shows they trap consumers in debt

A report on payday and deposit advance loans found that for many consumers these products lead to a cycle of indebtedness.

Loose lending standards, high costs, and risky loan structures may contribute to the continued use of these products, which can trap borrowers in debt, according to a report by the Consumer Financial Protection Bureau.

The report found that payday loans and the deposit advance loans offered by a small but growing number of banks and other financial institutions are similar and raise the same kind of the consumer protection concerns

Both are described as a way to bridge a cash flow shortage between paychecks or other income. They offer easy accessibility, especially for consumers who may not qualify for other credit.

The loans generally have three features:

• They’re small-dollar amounts.

• Borrowers must repay them quickly.

• They require that a borrower repay the full amount or give lenders access to repayment through a claim on the borrower’s deposit account. 

Key findings

Payday and deposit advance loans can become debt traps for consumers

The report found many consumers repeatedly roll over their payday and deposit advance loans or take out additional loans, often a short time after the previous one was repaid. This means that many consumers end up in cycles of repeated borrowing and incur significant costs over time. The study also confirmed that these loans are expensive and not suitable for continued use.

Loose Lending

Lenders often don’t take a borrower’s ability to repay into consideration when making a loan. Instead, they may rely on ensuring they’re one of the first in line to be repaid from a borrower’s income.

Risky loan structures

The risk posed by the loose underwriting is compounded by some of the features of payday and deposit advance loans, particularly the rapid repayment structure. Paying back a lump sum when a consumer’s next paycheck or other deposit arrives can be difficult for an already cash-strapped consumer, leading them to take out another loan.

High costs

Both payday loans and deposit advances are designed for short-term use and can have high costs. These high costs can add up – on top of the already existing loans that a consumer is taking on.

Continued use

The loose underwriting, the rapid repayment requirement, and the high costs all may contribute to turning a short-term loan into an expensive, long-term loan.

Bureau action

The bureau, which has authority to regulate the payday loan market and deposit advance loans at the banks and credit unions it supervises, is in the process of figuring out the right approach to protect consumers and ensuring that they’ll have access to a small loan market that is fair, transparent, and competitive, Richard Cordray, director of the bureau, said.

While the study looked at storefront payday lenders, the bureau will continue to analyze online payday lenders.

The bureau offers an Ask CFPB web tool to help consumers with their questions about payday and deposit advance loans.

A factsheet about payday and deposit advance loans is available at: http://files.consumerfinance.gov/f/201304_cfpb_payday-factsheet.pdf.

Copyright 2013, Rita R. Robison, Consumer Specialist

Attorney general's action a good reminder to beware when selecting a debt management firm

TV ads abound for companies that promise to help you figure out better ways to handle your debts, but an action in Texas is a reminder that consumers need to use caution when selecting debt management companies.

'Debt management' company charged

Texas Attorney General Greg Abbott has charged a Dallas-based “debt management” firm with defrauding its customers.

The state’s enforcement action sought an asset freeze and temporary restraining order against Shane V. Garner and Credit Alliance Group dba Credit Services Today.

The defendant marketed its services through a now-defunct website and direct customer e-mails, according to state investigators. Using purchased leads on individuals with debt-related problems, CAG allegedly contacted prospective customers claiming it would eliminate 20 to 60 percent of their outstanding balances within three years.

CAG promised that customers wouldn’t owe the firm “a dime” if the firm failed to deliver on its claims. However, the state’s investigation revealed that customers were charged up-front fees, sometimes up to 35 percent of the debt they owed, and that CAG failed to deliver on its services.

CAG customers were promised that their payments to the firm would be deposited into separate accounts that would be under their control and managed by the firm, according to court documents filed by the state. However, state investigators found that those promises weren’t honored and that CAG deposited/commingled customers’ funds into its own operating account. As a result, customers had no control over their own money.

In addition, court documents said Garner used customer funds to pay his personal bills. 


CAG clients discovered they couldn’t receive refunds on advance fees paid, nor on the accumulated funds the defendant promised to hold in trust to help manage and resolve their debts, the agency said.

The Attorney General’s Office review of 52 CAG clients’ accounts – out of about 800 – showed that CAG owes these 52 clients more than $180,000 in escrowed funds alone.

So beware if you’re selecting a debt management firm. You don’t want to end up in worse financial condition because of the company you select to help you.

Consumer credit counseling

You can get free or low-cost help from a trained, certified counselor who will assist you in determine the best options for your financial situation. See the National Foundation for Credit Counseling’s website to locate a credit counselor near you.

Money management classes

April is Financial Literacy Month, and you can find classes on managing your finances in most states during Money Smart Week April 22 through 27.

Copyright 2013, Rita R. Robison, Consumer Specialist

After Boston: Make sure you’re prepared for emergencies

If you’re looking for something positive to do after the Boston Marathon tragedy yesterday, you can make sure you and your family are ready for emergencies.

Baby boomers, age 49 to 67, can look over this list and see what actions are needed. Do you have:

• An emergency plan?

• Emergency equipment including a battery-operated radio and emergency supplies for your car?

• Medical insurance?

• Ways to retrieve financial information?

• A will?

• A living will?

Consumers often put off being ready for emergencies, although we never know when they’ll occur.

It’s best to be prepared.

See my article “Boston Tragedy Reminds Us to Be Ready for Emergencies” for resources to help you get ready for emergencies.

Copyright 2013, Rita R. Robison, Consumer Specialist

Midlife transitions, boomer secrets, wisdom, and airline performance are topics for this week’s Best of Boomer Blogs

Tom Sightings of Sightings Over 60 is the host for this week’s Best of Boomer Blogs #304.

The boomer blog roundup is a collection of like-minded blogs cooperating to share their best stories of interest to the Baby Boomer Generation.

As April 15 draws to a close, you’re probably able to focus on something other than your taxes. 

Here at the Best of Boomer Blogs, boomer bloggers are writing about midlife transitions, secrets boomers may be hiding, the simple wisdom of Winnie the Pooh, the bittersweet experience of emptying out an aunt's home, and the performance of your favorite – or least favorite – airline.

In addition to my blog, other members of the Best of Boomer Blogs are: The Midlife Crisis Queen, Sightings Over 60, Arabian Tales and Other Amazing Adventures, So Baby Boomer, Blue Blinds Media, and Tao Flashes.

Be sure to check back next week to see what baby boomer bloggers are thinking and writing about.

Copyright 2013, Rita R. Robison, Consumer Specialist

Happy Tax Day, April 15

I filed my taxes last week. I’m so happy I have them done.

If you’d like a free item, especially fast food or sugar, on Tax Day, see my article “Companies Offering Free Items to Help Reduce Your Income Tax Stress.”

I’d go get a donut from Krispy Kreme, which is free if you buy milk, or Potato Cakes from Arby’s, but I had wine and chocolate at a fundraiser yesterday and I’m not planning to go out today so a special trip for free items would be a waste of gas.

However, some of the freebies last beyond April 15. Office Depot's offer of free shredding of five pounds of documents expires May 1. I don’t have to worry about the sugar content of that one.

If you get an e-mail from the Internal Revenue Service or the company you used to file your taxes electronically about a problem with your taxes, check it out carefully. Last year, I received a notice my return was incomplete, but it was a legitimate e-mail. Scammers are taking advantage of e-mails like these to get private information so they can steal your money or identity. Be an alert, informed consumer.

Have a great day. If you’re still struggling with your taxes, my best wishes to you.

Copyright 2013, Rita R. Robison, Consumer Specialist

Watch out for tax scams as Tax Day approaches

April 15 is almost here, but that doesn’t mean consumers can’t get scammed by unscrupulous tax preparers.

“Tax scams peak around tax filing day,” Oklahoma Attorney General Scott Pruitt said. “We cannot stress enough to watch out for those who promise faster turnarounds, bigger refunds, or credits. What looks like a good deal at first, could cost you more in the long run.”

The Internal Revenue Service points out scams to be aware of this year:

• Identity thieves are using people’s Social Security numbers or other identifying information to fraudulently file tax returns and claim refunds.

• Fake e-mails, known as phishing, from the IRS are being used to attempt to obtain confidential personal and financial information so the sender can steal consumers’ identity. Never respond to these e-mails or open the attachments.

• Unscrupulous tax preparers prey on taxpayers by encouraging consumers to claim false information for larger refunds, which can result in fraud or theft.  

• Scammers often promote that “free money” is available from the IRS and claim that securing this money requires little or no documentation. Some even guarantee fraudulent Social Security refunds or rebates.

To avoid becoming a victim this tax season, the Attorney Generals Office’s offers these tax safety tips:

• Be wary of offers to split your refund in exchange for filing your return.

• When you file your taxes electronically, use a software provider that’s authorized by the IRS. If using a tax preparer, make sure they’re authorized to do so by the IRS.

• Look out for unsolicited offers to prepare your taxes from an unfamiliar company or one that’s located far away.

Pruitt reminds taxpayers that they’re responsible for what’s on their returns even if someone else prepared it for them.

If something sounds too good to be true, then it probably is, he said. Staying alert and being cautious can help prevent costly mistakes.

If you think you may be at risk or have been a victim of tax fraud, contact the IRS at 800-908-4490. If you have questions about your taxes, visit www.IRS.gov or call or visit your local IRS office.

Copyright 2013, Rita R. Robison, Consumer Specialist

Prescription drug prices vary widely at pharmacies, report shows

Consumers who don’t shop around for their prescription drugs may be paying significantly more.

Failing to comparison shop could result in overpaying by as much as $100 a month or even more, depending on the drug, Consumer Reports said in the May issue of the magazine.  

Consumer Reports compared drug prices for five top-selling drugs that have recently gone generic, including heart drugs Lipitor and Plavix. It found that Costco offered the lowest retail prices overall and CVS charged the highest. 

While consumers can find low drug prices at Costco, consumers may find a good deal too at their local independent pharmacies, Consumer Reports said.  

Consumer Reports’ secret shoppers called more than 200 pharmacies throughout the nation to get retail prices – what you would pay without insurance – on a month’s supply of five best-selling drugs that have recently become available as generics: 

• Actos, pioglitazone, for diabetes.

• Lexapro, escitalopram, an antidepressant.

• Lipitor, atorvastatin, for high cholesterol.

• Plavix, clopidogrel, a blood thinner.

• Singulair, montelukast, for asthma. 

The result? A difference of $749, or 447 percent, between the highest and lowest priced stores.

Some price comparisons

If you shop around, you could find a month’s supply of generic Lipitor at a cost of $17 at Costco. However, if you purchase it from CVS, you could pay $150. That’s a difference of $133. Rite Aid and Target were also pricey, the Consumer Reports’ shoppers found.

For the antidepressant Lexapro, a month’s supply of the generic version cost $7 at Costco and $126 at CVS. Rite Aid, grocery stores, and Walgreens also charged high prices on average, Consumer Reports found.

Generic Plavix, which is prescribed to people with cardiovascular disease, was also available at widely varying prices. For example, on the low end, a month’s supply was available at $12 through Healthwarehouse.com and $15 at Costco, while CVS quoted $180 when Consumer Reports’ secret shoppers asked about prices.

For the market basket of drugs Consumer Reports checked, independent and grocery store pharmacies’ prices varied widely between stores, sometimes offering the cheapest and the most expensive price for the same drug.

How to save

• Request the lowest price. Consumer Reports’ analysis shows that shoppers weren’t always given the best, lowest price. Make sure you ask.

• Go with generics. Generics are copies of brand-name medications whose patents have expired. The U.S. Food and Drug Administration requires that generics contain the same active ingredients in the same strength as the brands they copy. In addition, a generic must be “bioequivalent” to its corresponding brand, meaning that it delivers the same amount of active ingredients into a person’s bloodstream in the same amount of time as the original brand. 

• Leave the city and shop in rural areas. Consumer Reports found that some grocery-store and independent drugstores had higher prices in urban areas than rural areas. For example, Consumer Reports shoppers priced a 30-day supply of generic Actos at a pharmacy in Raleigh, N.C., for $203, while another pharmacy in a rural area of the state sold it for $37. 

• Get a refill for 90 days, not 30 days. Most pharmacies offer discounts on a three-month supply.

• Look for additional discounts. All chain and big-box drugstores now offer discount generic-drug programs, with some selling hundreds of generic drugs for $4 a month or $10 for a three-month supply. Just make sure your drug is on the list. Offers vary and check the fine print.

The report is available where magazines are sold, in libraries, and online at www.ConsumerReports.org. 

Copyright 2013, Rita R. Robison, Consumer Specialist

Federal regulator seeks ban on commissions for forced-place insurance

The Federal Housing Finance Agency filed a notice Tuesday that it intends to regulate forced-place insurance, expensive insurance homeowners are required to pay for when they stop paying for homeowners insurance themselves.

The agency oversees the operations of Fannie Mae and Freddie Mac, the nation’s two largest mortgage guarantors.

Premiums for forced-place insurance are generally double those for voluntary insurance, and in some cases are significantly higher.

Fannie Mae and Freddie Mac may be affected by such costs where lenders pay higher premiums and are unable to recoup the costs from the homeowner or at a foreclosure sale, and the expense is passed along to Fannie and Freddie for reimbursement, the agency said.

Due to the housing crisis, lenders increased their use of force-placed insurance.

Concerns about the insurance have been raised by the National Association of Insurance Commissioners, state regulators, the Consumer Financial Protection Bureau, state attorneys general, and consumer organizations. They’re questioning excessive rates, costs passed onto borrowers, commissions, and other costs.

The agency is proposing a rule that would prohibit insurance companies from paying sales commissions for force-placed insurance to lenders or mortgage servicers.

After a 60-day comment period, the agency will review input and determine if any changes are needed to its proposal. In its notice, the agency said it expects to issue a final rule by the end of the year.

Last week, New York Gov. Andrew M. Cuomo announced a major settlement with the country’s largest force-placed insurer, Assurant Inc. 

The settlement includes restitution for homeowners, a $14 million penalty paid to the state, and reforms that will save homeowners, taxpayers, and investors millions of dollars through lower rates.

“Our investigation found that insurers and banks built a network of troubling relationships and payoffs that helped drive premiums sky high,” Benjamin M. Lawsky, superintendent of the New York State Department of Financial Services, said in a statement. “Those improper practices created significant conflicts of interest and saddled homeowners, taxpayers, and investors with millions of dollars in unfair and unnecessary costs.”

Among the provisions of the settlement are several that prohibit some commissions and expenses.

The settlement also requires Assurant to file its rates with the state of New York and permits insurance regulators to monitor the company’s business practices.

Copyright 2013, Rita R. Robison, Consumer Specialist