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Four steps you can take if you think your credit or debit card data was hacked

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Lately, we’ve received a lot of questions about what to do in light of the recent data breach at Target retail stores. This theft of credit and debit card information could impact tens of millions of consumers and we want to let you know what you can do to protect yourself if you spot fraudulent charges.
Protect your credit and debit card information
If your information was part of a breach, the most immediate risk is that the thieves may make unauthorized charges or debits to your accounts. Keep a close eye on your account activity and report suspicious transactions immediately to your bank or credit card provider. The sooner you tell your provider about any unauthorized debits or charges, the better off you’ll be.

1. Check your accounts for unauthorized charges or debits and continue monitoring your accounts

If you have online or mobile access to your accounts, check your transactions as frequently as possible. If you receive paper statements, be sure to open them and review them closely. If your provider offers it, consider signing up for email or text alerts.

Report even small problems right away. Sometimes thieves will process a small debit or charge against your account and return to take more from your bank account or add more charges to your credit card if the first smaller debit or charge goes through. And keep paying attention—fraudulent charges to your card or fraudulent debits to your bank account might occur many months after the theft of your information during a data breach.

2. Report a suspicious charge or debit immediately

Contact your bank or card provider immediately if you suspect an unauthorized debit or charge. If a thief charges items to your account, you should cancel the card and have it replaced before more transactions come through. Even if you’re not sure that PIN information was taken, consider changing your PIN just to be on the safe side.

If your physical credit card has not been lost or stolen, you’re not responsible for unauthorized charges. You can protect yourself from being liable for unauthorized debit card charges by reporting those charges immediately after you find out about them or they show up on your bank statement.

If you spot a fraudulent transaction, call the card provider’s toll-free customer service number immediately. Follow up with a written letter. Your monthly statement or error resolution notice will tell you how and where to report fraudulent charges or billing disputes.

When you communicate in writing, be sure to keep a copy for your records. Write down the dates you make follow-up calls and keep this information together in a file.

If your card or PIN was lost or stolen, different rules may apply. Your timeline for reporting after your card, PIN, or other access device is lost or stolen is tied to when you discover the loss or theft or when unauthorized transactions show up on your bank statement. Therefore, you should make the report as soon as you know that there is a problem

3. Submit a complaint if you have an issue with your bank or card provider’s response

Debit card issuers should investigate the charges (generally within 10 business days) and take action quickly (generally within 3 business days). For your credit card, it can take longer, but you don’t have to pay the charge while it’s under investigation. You also have a right to see the results of their investigations.

If you have an issue with their response, you can submit a complaint online or by calling (855) 411-2372. For TTY/TDD, call (855) 729-2372.

If you have other questions about billing disputes and your debit and credit card protections, you can Ask CFPB.

4. Know when to ignore anyone contacting you to “verify” your account information by phone or email

This could be a common scam, often referred to as “phishing,” to steal your account information. Banks and credit unions never ask for account information through phone or email that they initiate. If you receive this type of contact, you should immediately call your card provider (using a customer service number that you get from a different source than the initial call or email) and report it.

For more information on phishing scams, check out the FTC’s consumer alerts.

For more information, check out the consumer advisory.

Consumer advisory: Stop getting sidetracked by your student loan servicer

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Over the last several years, many Americans have been able to save on monthly payments on their mortgages and other loans by refinancing to the low interest rates available in the market.

Unfortunately, with few refinancing options, many student loan borrowers tell us they feel stuck in loans with high rates, well after they’ve graduated and landed a job.

Since many borrowers can’t refinance, one of the only ways to avoid paying unnecessary interest is to pay their high-rate loans off more quickly. According to the Truth in Lending Act, your lender or servicer cannot assess any penalties or fees if you prepay your private student loan.

Recently, we released a report that describes how the payment processing policies of private student lenders and loan servicers may be sidetracking responsible borrowers looking to pay off their loans more quickly. If you have several loans associated with the same loan servicer (the company that sends you a bill each month) and you don’t provide instructions, your servicer will generally decide how to allocate your payments in excess of the amount due.

Leaving this decision up to them isn’t always the best choice.

Your student loan servicer should listen to your instructions about which loan your additional payment goes toward when you submit your payment.

Here’s why providing instructions to your servicer can be a good idea:

  • If you direct any extra money to your highest interest rate loan first, you may save hundreds of dollars or more in extra interest payments and you may be able to get out of debt faster.
  • If you don’t tell them what to do, your servicer will apply extra payments as they see fit, in most cases spreading your money out across all of the loans on your account.
  • This means that you’ll pay down your debt slowly, and you’ll pay more money in interest over the life of your loan.

To help you explain to your servicer what it should do with your money, we’ve put together some sample instructions you can send to your servicer to ask them that they direct any extra payments toward your highest-rate loan. Helpful servicers will generally accommodate your request. You’ll want to be sure your servicer responds to your request so you know if you need to send additional instructions.

You can download a sample letter to mail to your servicer, or you can use the text below to provide instructions using the “Send a Message” or “Contact Us” feature when you log into your account on the servicer’s website:

I am writing to provide you instructions on how to apply payments when I send an amount greater than the minimum amount due. Please apply payments as follows:

  1. After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the highest interest rate.
  2. If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding principal balance.
  3. If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of my payment to the loan with the next highest interest rate.

It is possible that I may find an option to refinance my loans to a lower rate with another lender. If this lender or any third party makes payments to my account on my behalf, you should use the instructions outlined above.

Retain these instructions. Please apply these instructions to all future overpayments. Please confirm that these payments will be processed as specified or please provide an explanation as to why you are unable to follow these instructions.

Thank you for your cooperation.

You’ll want to save the message you sent for your records.

For most borrowers, it makes sense to direct any extra payment toward your loan with the highest interest rate – this is the fastest way to save the most money over the long term. For other borrowers, saving the most money might not be their main goal. You may be interested in paying extra each month on certain loans in order to improve your credit profile, qualify for a mortgage, or eliminate a monthly bill. You should weigh all of your options.

You can also submit a complaint online.

If you have questions about repaying student loans, check out our Repay Student Debt tool to find out how you can tackle your student loan debt.

For more information on private student loans and other consumer financial products or services, visit Ask CFPB.

Protecting funds from the Cobell v. Salazar settlement

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Hundreds of thousands of Native Americans started getting the first payments last week as part of a long-awaited settlement with the federal government over its management as trustee of Individual Indian Money Accounts. The settlement, commonly known as Cobell v. Salazar, means the arrival of funds for Native Americans across the country. Cash payments like this can be a great opportunity for consumers to build up their assets—but we also anticipate scammers targeting settlement recipients, looking to separate these communities from their money.

If you received money from the Cobell settlement, here are some simple steps you can take to protect your money:

  • Take your time. Beware of “opportunities” that force you to make a snap decision—high pressure “act now” offers are often used to keep you from understanding the true costs and risks of a product. Never sign anything without asking questions and understanding it first. If necessary, ask a trusted relative, friend, tribal official, or attorney for a second opinion before acting.
  • Pay off debt. If you took out a loan anticipating money from the settlement or use other expensive credit products, the settlement check is a good opportunity to pay down that debt.
  • Save. Consider using the settlement funds to start saving. People with savings are better prepared to handle financial emergencies—like a major car or home repair—and are less likely to rely on expensive debt.

We also want to remind companies that are planning on doing business with Cobell recipients to conscientiously comply with all consumer protection laws. CFPB is charged with protecting consumers from unfair, deceptive, abusive, or discriminatory financial practices, which could impact Cobell recipients. The enforcement team will continue to be on the watch for scams and other harmful financial products that target Native Americans. Consumers and tribal leaders shouldn’t hesitate to let us know if they are seeing financial practices that are deceptive, unfair, abusive, or discriminatory.

Report problems with payday loans, settlement anticipation loans, auto loans, or anything bought with credit. Submit a complaint online at consumerfinance.gov/complaint or call us at (855) 411-2372.

You can also:

If you think you’ve been scammed, report suspected fraud immediately. The longer you wait, the more difficult it could be to get your money back when appropriate.

Responding to the Cobell settlement is one part of our broader ongoing collaboration with tribal governments and consumers across Indian Country. We’re excited about opportunities to advance consumer education and empowerment in tribal communities, carefully examine consumer protection concerns in Indian Country, and partner with tribal officials to prevent harmful practices targeting Native American consumers.

Prepare your finances for emergencies

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Hurricane Sandy reminded us that disasters – storms, fires, floods, earthquakes – can happen to anyone, and when they do you have little time to react.

If you had to leave your home in an emergency, you would only have minutes to choose what stays and what goes, and your financial records may be one of the last things on your mind. So, collecting and organizing your financial information now could help you avoid problems and recover faster.

Keep your account information and important documents in a water-tight container or fire safe, and keep copies somewhere else, like a safe deposit box, a secure place at work, or with a trusted relative or friend. Here is an outline of the items you should gather.

Account information

If your house is destroyed, missing a credit card payment may not seem like a big deal. However, ignoring credit card or loan payments could cause your interest rates to jump, costing you more money, and could damage your credit score when you’ll need access to credit most.

If you’re affected by disaster, you’ll need to contact your creditors as soon as possible and let them know about your situation. Most of them will have ways to help. Also, if you are unable to live in your home, check with your utility companies (e.g. electric, gas, cable) to see if you can suspend your utilities to add extra money to your budget. You may want to consider signing up for direct deposit with your employer and electronic bill payment with your utilities to make receiving income and paying bills easier.

Make a list of account and customer service numbers for:

  • Checking and savings accounts
  • Credit and charge cards
  • Mortgage and home equity loans
  • Auto loans
  • Student loans
  • Personal loans
  • Cable, telephone, and utility companies

Personal records

Personal records documents can be replaced, but it can take time. Plus, you may need these documents to verify that you are the owner of the property that was damaged or destroyed in the disaster to receive insurance help or other assistance.

Gather and make copies of:

  • Identification, including your driver’s license or passport
  • Social security cards
  • Birth certificates
  • Marriage certificates and divorce decrees
  • Titles, deeds, car registrations

Financial records

Again most financial records can be replaced, but you will need your insurance information if your property is damaged, or if you or a family member needs medical care. Keeping this information safe will also help you avoid trouble if questions arise later about your investments, taxes or workplace benefits.

Gather and make copies of:

  • Insurance policies
  • A room-by-room inventory of your belongings
  • Investment records
  • Income tax information
  • Pay stubs and employer benefits records
  • Wills, living wills, trusts, medical powers of attorney

Computer files

If you keep financial records, passwords, family photos and videos on your computer, consider backing the information up to a secure cloud storage service, or back up your data regularly and keep the backups somewhere safe.

After the disaster

Americans tend to come together in times of crisis. There will be a lot of people and organizations who will want to help you. And, unfortunately, there will be criminals who will want to exploit the trauma. Watch out for:

  • Up-front fees to help you claim services, benefits, or get loans. No government official or agency will ever ask you for money to claim a benefit or service.
  • Contractors offering door-to-door repairs, especially if they offer deep discounts or require payment before you have a contract in writing.
  • Insurance agents who try to sell you coverage after the fact.
  • Organizations with names similar to government agencies or charitable organizations.

If you believe you may be targeted by these practices, contact your local or state law enforcement officials, or submit a complaint to the CFPB online or at (855) 411-2372. See our rebuilding your finances checklist and other information on protecting and rebuilding your finances after a disaster. To find more information and answers to all kinds of commonly asked questions about consumer financial protection issues, Ask CFPB.

Don’t take a bath on a flood-damaged car

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Hurricanes and severe storms can bring misery to a lot of people. We’ve all seen recent images of houses and cars submerged in water. Have you ever wondered what happens to those cars once the floodwater subsides?

Unfortunately, a number of them will be turning up for sale on the internet or at car lots halfway across the United States, with no mention that they were saturated in dirty water not so long ago. Although some states require disclosure of flood damage or salvage on a car title, other states do not – so you may not be able to rely on the car title for that information. If you’re taking out a loan to buy the car, it’s important to understand the impact flood damage can have on the car’s value and consider whether it’s worth the amount you’re borrowing.

You should be a cautious buyer and check out the car carefully before you buy. (Since flood damage can be hard to spot, it’s a good idea to consider paying an expert mechanic to inspect it for you.) Below are a few simple steps you can take to help protect yourself.

    See: if there are any high-water or mud marks on the engine, the wheel wells, the trunk or even the glove box. Get a flashlight and take a look in those hard-to-reach places that might not have been cleaned. Lift up the carpet and look underneath for mud, rust or dirt.

    Smell: the upholstery and the carpeting. Do they smell funky? Also, turn on the heat and see if there’s an electric/burning smell that might come from damaged wires. And turn on the AC and see if you get a blast of mildew-scented air.

    Feel: the wires under the dashboard and in the engine (obviously when the car is turned off!). Do they feel brittle? That may be the result of immersion in water.

    Listen: to the sound system/radio. If it sounds bad or isn’t working at all, that could be a sign of water damage. Ask why it’s not working.

    Ask: the seller outright if the car was ever in a flood. While they may not have volunteered the information, they may be reluctant to lie when asked directly.

    Consider: buying a vehicle history report that should tell you if the car’s been in a flood or issued a salvage title.

Realize: this isn’t just an issue of a bad-smelling car. Floods can damage vital parts of a car like the air bag system, brakes, and electrical system – and the damage may not show up right away. Your safety could be at risk if you are unknowingly riding around in a flood-damaged car.

Buying a car is one of the biggest consumer purchases you’ll make. Don’t put your hard-earned money into a flood-damaged lemon. Once you’ve signed the contract you’re committed, so Know Before You Owe!

You can find more information from the U.S. Department of Justice and from the Federal Trade Commission’s about buying a used car and hurricane recovery.

Protecting and rebuilding your finances after a disaster

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After the shock of a disaster, it’s time to rebuild. Starting over requires a lot of complex choices, uncertainty and expense. Being prepared and knowing how to protect yourself can help you avoid scams, save money and get back on your feet faster.

Relief organizations like the Red Cross can help you with your immediate needs in a disaster. Local organizations will establish shelters, provide vouchers for meals, clothing and a limited amount of personal goods. If you are in a presidentially declared disaster area, the Federal Emergency Management Agency (FEMA) will help you find disaster assistance.

Your home

Contact your insurance company as soon as possible to start the claims process. Also be sure to ask for a copy of your policy if you don’t have one available. This will help you verify your coverage. Take pictures of the damage.

Your next call should be to your mortgage servicer, if you own your home. Damage to your home does not stop your responsibility to pay your mortgage. Tell your servicer about your situation and take careful notes during the conversation. There may be a number of options available that could help you put off or reduce your mortgage payments. Both Fannie Mae and Freddie Mac have told mortgage servicers that they can help homeowners affected by Hurricane Sandy. You can find out if your mortgage is owned by Fannie or Freddie on their websites.

If you don’t have a monthly mortgage statement or coupon book with you, search the Mortgage Electronic Registration Systems (MERS) or call them toll-free at (888) 679-6377 to find the company that services your mortgage. You can also call the CFPB at (855) 411-CFPB (2372) to be connected to a U.S. Department of Housing and Urban Development (HUD)-approved housing counselor.

Adjusters and contractors

Once your insurance claim is received, the insurance company may send out an adjuster to look at the property damage and help you through the claims process. In many states you can also hire public adjusters. A public adjuster represents you as the claimant, but will charge you a percentage of your settlement.

Be careful if you choose to hire a public adjuster. Be sure the adjuster is licensed to do business in your state. Avoid adjusters who come from out of state or who knock on your door looking for business. Other warning signs to watch for are:

  • Red flag: Adjusters who charge big upfront fees. Don’t pay a lot before you know if the adjuster is going to help you. Many states put a limit on fees.
  • Red flag: The adjuster refers you to a contractor. Dishonest adjusters will sometimes work with contractors that give them kickbacks.
  • Red flag: Avoid any adjuster or advisor who asks you to make a false or inflated claim. This is fraud against the insurance company.
  • Red flag: Avoid hiring a public adjuster who asks you for a suspicious amount of personal information. Some con artists may pose as adjusters to steal your personal information.

When picking a contractor:

  • Get bids from several local, established contractors.
  • Avoid contractors who are working door to door, come from out of state, don’t provide an address and phone number, or refuse to show identification.
  • Ask if the contractor has the required licenses. Ask for the license number and use your state licensing agency’s website or hotline to make sure it’s valid.
  • Check with licensing agencies to see if the contractor has a history of complaints.
  • Never pay in advance.
  • Never pay in cash.
  • Never provide personal financial information, such as your checking account credit card or debit card numbers. You might be told this will “speed up payment” to start the repair process. Don’t believe it.
  • If you have to borrow to pay for repairs, don’t let the contractor steer you toward a particular lender.
  • Never sign anything before carefully reading it.

The Coalition Against Insurance Fraud has more information on avoiding adjuster and contractor scams.

When you get your settlement

When your settlement is paid, the check will probably be made out to both you and your mortgage servicer. Most mortgage agreements require this.

Your insurance settlement is to rebuild your home. So the amount may be more or less than what you owe on your loan.

Keep in mind that the market value of your home may not match the insured replacement value. That’s because, in some locations, the materials and labor that go into rebuilding your home may be less than the overall value of your property – its location, desirability and other things that go into housing prices. There are also special laws in various states addressing what happens if your home was insured for less than its replacement value. Your state Department of Insurance or Insurance Commissioner may have useful information. You may also need the advice of a lawyer if your claim is large.

Typically, your mortgage servicer will release a portion of the settlement money before work begins so you can hire a contractor. When the work is halfway finished, the servicer will typically release more money. The rest will be released once the job is finished and the home passes inspection.

Creditors, bills and budgeting

You may have lost your job because of a disaster, or had your income interrupted. If you don’t think you will be able to pay your credit cards or other loans, be sure to contact your lenders as soon as possible. Explain your situation and when you think you will be able to resume normal payments.

Most creditors will try to find a way to work with you. The important thing is to make the call before your next payments are due. Late or missing payments could damage your credit score at a time when you need access to credit most.

If your home is so damaged that you can’t live in it, you’ll also want to contact your utility companies and ask to suspend your service. This could help free up money in your budget for other expenses.

Take a look at your other bills and set priorities. Your mortgage, rent and insurance payments should stay high on your list.

Next, take a look at your income and savings and determine how much you have available. If you don’t have an emergency savings account, consider starting one as soon as you can. If you are unable to work because of the disaster, federal or state benefits may also be available to you.

Watch out for fraud

In times of crisis most Americans pull together. But some people may try to rip you off. Frauds take many shapes, but the con artists often use a handful of common tricks to manipulate our emotions. It is hardest to make rational decisions when emotions run high.

Recognizing the tricks that con artist use, and the effects they have on us, can help you spot scams easier. The best way to avoid scams is to ask questions, lots of them. Asking questions puts you back in control and puts any crooks on the spot.

Avoid over-confidence. The first thing to remember is that most con artists are professionals. Anyone can be victimized by fraud. The problem is that most of us believe it will never happen to us. The more overconfident we are, research shows, the more susceptible we are to fraud. The best way to avoid over-confidence is to always be on the lookout for fraud, especially immediately after a disaster or other times of financial stress.

Don’t give credibility to titles and uniforms that can be faked. Con artists will often pose as government employees, insurance adjusters, law enforcement officials, bank employees, or whatever it takes to get to your money. Credibility can be easily faked. Always ask for identification. And never give personal information to anyone you don’t know. Also remember that government employees will never ask you for financial information or request payment of any kind.

Another common credibility scam is fake charities. These cons use names that are similar to national organizations to get you to make a “donation.” But your money ends up in their pocket. Never make donations over the phone. Make sure you get the organization’s name and contact information and review written materials closely.

Don’t fall for “limited time only” offers. Scarcity is common in disasters. But don’t let it get the better of you. Be suspicious of contractors or others offering to move you to the front of the line. Also beware of “opportunities” that force you to make a snap decision. You should never make a decision under pressure. Take your time. Never sign anything without fully reading and understanding it first. And if necessary, ask a trusted relative, friend, or attorney for a second opinion before acting.