Category Archives: other

Credit breach

Howdy! I’ve compiled this post in hopes it helps our clients who may be impacted by the recent Equifax security breach… I’m not a financial advisor nor an expert in all things credit. But I’ve been doing a lot of research and wanted to share with you what I’ve learned! 

— Denise

By now you probably have heard about the big security breach of Equifax, where some 143 million credit records were potentially stolen. And by “credit records” I mean Social Security, driver’s license and credit card numbers.

Do you know if you’re one of those “lucky” 143 million people? If not, I highly recommend you visit https://www.equifaxsecurity2017.com to find out. Scroll to the bottom of the page and choose, “Potential Impact” which will take you to this screen:

Click “Potential Impact” one more time. It’ll take you to this screen, where you need to fill out two simple things: your last name and the last six digits of your social security number. Note: if you’ve recently gotten married and are going by your spouses’ last name, but you’ve not filed a name change with anyone yet, you’ll want to put your maiden name.

Now, hope you DON’T get this message:

But if you do, congratulations! Your credit is at risk. Oh wait, that’s not something to be happy about. Sorry…

So… now what?

Well, you have a lot of options, including do nothing – but that’s not the option I’d recommend.

First off, Equifax is offering free enrollment in their “Trusted ID Premier.” Now, granted, a part of me is leery of trusting the guys who put me at risk to now keep me safe, but it’s SOMETHING. TransUnion and Experian offer similar programs.

By the way, as if this couldn’t get any better, scammers are also sending phishing emails trying to get information by posing as the credit bureaus wanting to help you. So make sure you double and triple check anything you get in email for its legitimacy.

Speaking of the other two bureaus, though, this is an excellent reminder to check your credit reports! Did you know you get to check them for free once a year? I knew that, but I just never actually do it. Shame, shame, right? Especially since its FREE, and it could save me a lot of heartache down the road when I want to apply for a mortgage or buy a new vehicle.

Head on over to annualcreditreport.com and request your credit reports. Now, keep in mind, I did this yesterday, and due to the volume of traffic to Equifax’s site, I could not pull that one. But I did get to review my other two credit reports.

IF YOU FIND SOMETHING… you need to take the steps to get any incorrect information removed. If you suspect Identity Theft, head over to IdentityTheft.gov. Otherwise, you’ll need to start the process of contacting the credit bureaus and having things removed. All the information how to do this is on all three credit bureau’s websites. (Equifax, Experian, Transunion) I’ve had to do this once, and it was a simple letter submitted to the credit bureau that took care of everything. I think you can do it online now, though. It’s not hard, its just time consuming. You’ll need to have patience as you go through this.

Many people I know are choosing to put a freeze on their credit.

What does this mean? Well, I’m glad you asked because I asked the SAME THING.

Directly from the FTC website:

“Also known as a security freeze, this tool lets you restrict access to your credit report, which in turn makes it more difficult for identity thieves to open new accounts in your name. That’s because most creditors need to see your credit report before they approve a new account. If they can’t see your file, they may not extend the credit.” https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs

Important things to note: a credit freeze does not stop you from using your current lines of credit, nor does it stop thieves from stealing current credit information. So you’ll still need to monitor your current credit card statements and bank statements for fraudulent charges. Like that person who decided to try to buy $500 worth of clothes in a boutique in Florida, but luckily your card is maxed out already so they were declined but you still need to destroy your current card and get a new one. Oh wait, that was me. But you get the idea.

SO how do you freeze your credit? Well, you’ll have to contact ALL THREE credit bureaus to do so. Also from the FTC:

Equifax — 1-800-349-9960
Experian — 1 888 397 3742
TransUnion — 1-888-909-8872

You’ll need to supply your name, address, date of birth, Social Security number and other personal information. Fees vary based on where you live, but commonly range from $5 to $10.

After receiving your freeze request, each credit reporting company will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep the PIN or password in a safe place. You will need it if you choose to lift the freeze.

Keep in mind, freezing credit won’t be the answer for everyone. If you know you’re about the buy a house, need to set up utilities at a new home or apartment, or perhaps your job requires checking your credit (yeah, that happens), you may want to think twice about it. While you can thaw your credit when you need it, you could be looking at expense and time lost doing so…

If you do not freeze your credit, what else can you do?

Keep a close watch in your credit.

Many credit cards offer credit score updates and credit monitoring as part of their services. For example, Capital One offers CreditWise, Discover offers a FICO Credit Scorecard (and recently started offering credit monitoring), Bank of America and Chase also offer FICO monitoring. Many include it in their apps, so you can check your credit from your phone regularly. While this may not be as pro-active as a credit freeze, it’ll allow a faster response and resolution to any identity theft issues.

FILE YOUR TAX RETURN EARLY.

You knew we’d get to this eventually, right?

Look, we’ve dealt with many clients who have had identity theft happen. We’ve dealt with clients whose CHILDREN have had identity theft happen. This is not fun for anyone! Suddenly your tax return is being rejected. You can’t claim your dependents because someone else already did. And now you have to file a paper return, and you need special PIN numbers and… oh my goodness it’s a headache for all involved.

So that’s why we urge anyone potentially impacted by this breach to plan on filing their tax return as early as possible in 2018. The sooner you file, the less likely it is that a thief can file a fraudulent return under your name and SSN to claim a refund. It’s not a guarantee, but its worth trying.

There are countless articles coming out daily with advice on how to handle this Equifax breach. Keep on top of those articles through Google News here: https://news.google.com/news/search/section/q/equifax/equifax?hl=en&ned=us

In this modern technology-driven age we’re facing these sort of security breaches and invasions of privacy all the time. I’m certainly not an expert on all of this, but I’ve been trying to keep up with the latest and hope this post helps our clients at least have a place to start in dealing with this issue.

Major Changes to FAFSA

The Free Application for Federal Student Aid (known as the FAFSA) is a form that current and prospective college students (undergraduate and graduate) use to determine their eligibility for student financial aid.

There are two major changes to this program:

  1. The 2017–18 FAFSA will be available earlier. The 2017–18 FAFSA can be filed as early as October 1, 2016, rather than beginning on January 1, 2017. The earlier submission date will be a permanent change.
  2. FAFSA will accept earlier income and tax information. Beginning with the 2017–18 FAFSA, the program will request the 2015 income and tax information, rather than the 2016 information.

Seven Steps for Making Identity Protection Part of Your Routine

The theft of your identity, especially personal information such as your name, Social Security number, address and children’s names, can be traumatic and frustrating. In this online era, it’s important to always be on guard.

The IRS has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data. Taxes. Security. Together. Working in partnership with you, we can make a difference.

Here are seven steps you can make part of your routine to protect your tax and financial information:

1. Read your credit card and banking statements carefully and often – watch for even the smallest charge that appears suspicious. (Neither your credit card nor bank – or the IRS – will send you emails asking for sensitive personal and financial information such as asking you to update your account.)

2. Review and respond to all notices and correspondence from the Internal Revenue Service. Warning signs of tax-related identity theft can include IRS notices about tax returns you did not file, income you did not receive or employers you’ve never heard of or where you’ve never worked.   3. Review each of your three credit reports at least once a year. Visit annualcreditreport.com to get your free reports.

4. Review your annual Social Security income statement for excessive income reported. You can sign up for an electronic account at www.SSA.gov.

5. Read your health insurance statements; look for claims you never filed or care you never received.

6. Shred any documents with personal and financial information. Never toss documents with your personally identifiable information, especially your social security number, in the trash.

7. If you receive any routine federal deposit such as Social Security Administrator or Department of Veterans Affairs benefits, you probably receive those deposits electronically. You can use the same direct deposit process for your federal and state tax refund. IRS direct deposit is safe and secure and places your tax refund directly into the financial account of your choice.

To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. You also can read Publication 4524, Security Awareness for Taxpayers.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

FAFSA Changes for 2017–18

On Sept. 14, 2015, President Obama announced significant changes to the Free Application for Federal Student Aid (FAFSA®) process that will impact millions of students. Starting next year, students will be able to do the following:

  • Submit a FAFSA® Earlier:  Students will be able to file a 2017–18 FAFSA as early as Oct. 1, 2016, rather than beginning on Jan. 1, 2017. The earlier submission date will be a permanent change, enabling students to complete and submit a FAFSA as early as October 1 every year. (There is NO CHANGE to the 2016–17 schedule, when the FAFSA will become available January 1 as in previous years.)
  • Use Earlier Income Information: Beginning with the 2017–18 FAFSA, students will report income information from an earlier tax year. For example, on the 2017–18 FAFSA, students (and parents, as appropriate) will report their 2015 income information, rather than their 2016 income information.

Background
The FAFSA is the application that college or career school students must complete to apply for federal student aid, which includes Pell Grants, federal student loans, and work-study opportunities. In addition to determining eligibility for federal student aid, FAFSA information is used by many states, colleges, career schools, and private organizations to determine eligibility for nonfederal student aid. Completing the FAFSA is the gateway to accessing funds for college for approximately 20 million students each year.

The FAFSA is currently available for applicants to complete on January 1 for the upcoming application cycle. However, many deadlines for state aid are as early as March. For some students, the current FAFSA application cycle is not aligned with college admissions application deadlines, which typically occur in the fall prior to the FAFSA launch. As a result, time is a critical factor for applicants qualifying for aid. Finally, in addition to the timing of the launch of the FAFSA, the availability of an applicant’s income and tax information may lead students—and, where applicable, their parents—to mistakenly think they are not able to file a FAFSA until they file their tax return. This may cause students to miss out on some federal, state and/or institutional financial aid.

FAFSA® Process Changes
The 2016–17 FAFSA will be the final FAFSA to launch on January 1. Students who need to complete the 2016–17 FAFSA will be able to access and submit the form anytime between Jan. 1, 2016, and June 30, 2017. Beginning with the 2017–18 FAFSA, the start date will move from January 1 to October 1 of the previous year. This means that students who complete the 2017–18 FAFSA will be able to submit the form anytime between Oct. 1, 2016, and June 30, 2018.

In addition to changing the FAFSA launch date, we are also changing the requirements for reporting income information. Currently, FAFSA applicants provide income information from the “prior tax year.” For example, 2016–17 applicants must report 2015 income information. Beginning with the 2017–18 FAFSA, applicants will provide income information from one tax year earlier—the “prior-prior” year. This means that the 2017–18 FAFSA will collect 2015 income information. As a result of this change, more students and families will be able to complete their FAFSA using income information imported electronically from the IRS, using our IRS Data Retrieval Tool (DRT), rather than submitting applications with income estimates that may need correcting, or worse, waiting until the previous year’s tax return has been filed.

The following table provides a summary of key dates as we transition to using the early FAFSA submission timeframe and earlier tax information.

When a Student Is Attending College (School Year)

When a Student Can Submit a FAFSA

Which Year’s Income Information Is Required

July 1, 2015–June 30, 2016

January 1, 2015–June 30, 2016

2014

July 1, 2016–June 30, 2017

January 1, 2016–June 30, 2017

2015

July 1, 2017–June 30, 2018

October 1, 2016–June 30, 2018

2015

July 1, 2018–June 30, 2019

October 1, 2017–June 30, 2019

2016

 

FAFSA® Changes Impact
Recent research and the Department of Education’s own data suggest that implementing an earlier start date and using earlier income information will benefit students. Benefits include

(a) alignment— the financial aid application process may be more aligned with the college admission process,

(b) certainty—applicants will not need to estimate income or taxes paid, and

(c) less pressure—more time for students and parents to explore and understand financial aid options and apply for aid before state deadlines.

All information taken from: U.S. Department of Education; September 2015