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Small Fees, Big Impact

March 27th, 2012 | Comments Off on Small Fees, Big Impact | Posted in Financial News

Seemingly insignificant charges in retirement plans can add up.

So much fine print goes unread. Few people realize how significantly 401(k) account fees can impact their retirement savings efforts. AARP recently conducted a poll of 401(k) participants and the results were eye-opening: 71% incorrectly assumed that they paid no account fees at all, and another 6% said they were entirely clueless about the matter.1

In 2012, 401(k) plan sponsors will have to inform plan participants about the fees they pay when enrolled in these programs. Some of these fees are also common to IRAs.1

What kind of impact are we talking about? The Department of Labor offers a hypothetical example.

  • An employee has a 401(k) account with $25,000 in it and 35 years to go until his retirement date.
  • Over time, he makes no further contributions to his account.
  • Over the next 35 years, his 401(k) generates an average 7% annual return.
  • If the plan’s fees and expenses are just 0.5% annually, he winds up with $227,000 in his account 35 years later.
  • If the plan’s fees and expenses take a 1.5% bite out of his return annually, he winds up with just $163,000 after 35 years.
  • All other factors aside, a 1% difference in annual fees would mean a 28% difference in his retirement savings over these 35 years.2

Financially, there is nothing trivial about these fees.

The common charges. Your three major 401(k)/IRA fees are account termination fees, account maintenance fees and account transfer charges. There aren’t many ways around them. The admin fee may hit $50 per year, and while that looks like chump change, consider that it amounts to 1% of a young IRA owner’s initial maximum contribution in 2011. Fortunately, these annual admin fees are often waived when your account balance surpasses a certain level.3

The uncommon charges. Have you ever paid a Form 990-T fee? It can ding you for a few hundred bucks. So can a recordkeeping fee, if you have an individual 401(k) and use a third-party recordkeeper. Have you ever paid a loan processing charge? A federal fund wire fee? An overnight delivery fee for checks? You would be surprised at the magnitude of some of these charges.

An interesting choice that is rarely explored. If your 401(k) or IRA custodian allows you to be billed directly, you may have the option to pay some of your account fees with money held outside the account. If you are in the accumulation phase (saving up for retirement), this can be a tax-efficient way to deal with some of these charges. If you are in the distribution phase, it may be better tax-wise to pay the fees with money from the IRA or 401(k) instead.1

A little scrutiny can mean a big difference. According to BrightScope, a firm which gathers data about retirement plans, the average retirement plan offered through an investment company with a balance exceeding $100 million imposes an annual fee of 1.08%. If the plan has between $10 million and $100 million under management, the annual fee for plan participants averages 1.36%; if the plan has a balance of below $10 million, the annual fee for plan participants averages 1.90%. It is little wonder that financially savvy employees end up asking their companies to switch to 401(k) programs with lower annual fees.4

1 – [6/29/11]
2 – [10/10]
3 – [12/16/08]
4 – [6/4/11]

Why Retirement Plan Sponsors Shouldn’t Only Focus on Low Fees

March 27th, 2012 | Comments Off on Why Retirement Plan Sponsors Shouldn’t Only Focus on Low Fees | Posted in Financial News

In our free market economy, there are different companies with their own niche and marketplace whether it’s a manufacturer, retailer, or a professional service provider. Some companies cater to the higher end of the market and some cater to the low end. The free market is strong enough to support companies at different ends of the marketplace like Brooks Brothers and Walmart for men’s clothing.

When it comes to the retirement plan marketplace, there are financial advisors, third party administration (TPA) firms, accounting firms, and ERISA attorneys that cater to different sectors of the market. The TPA handling the retirement plan for a Fortune 500 company isn’t going to be the same TPA for a plan with $200,000 in assets. The financial advisor that handles the retirement plan for a $100 million plan isn’t going to be the same financial advisor handling a $100,000 plan. There are providers of all sizes and all sorts; it’s just a question of finding the providers that are the right fit for you if you are a retirement plan sponsor.

With fee disclosure regulations being implemented in 2012, retirement plan providers will have to divulge to their retirement plan sponsor clients the direct and indirect compensation that they receive for the services they will provide. The administration expenses of running a retirement plan (especially daily valued 401(k) plans) were usually cloaked with hidden fees and hidden reimbursement arrangements from mutual fund companies that led many retirement plan sponsors to believe that they were getting their services for a lot less than what was in reality or that they were getting it for free. To quote the great, former Governor of New York, Hugh Carey, “The days of wine and roses are over.”

When we purchase personal items and we overpay, we may get a little angry that we spent more than we should have. When it comes to retirement plan sponsors, overpaying for plan administration can be a breach of fiduciary duty because for most 401(k) plans, the plan participants are paying the administration expenses of running the plan. Retirement plan sponsors have fiduciary responsibly which include carrying out their duties prudently and paying only reasonable plan expenses.

So while plan sponsors will get the disclosure of the fees they are paying their retirement plan providers, simply putting those disclosure forms in the drawer won’t suffice. Retirement plan sponsors will have a fiduciary duty to institute a process of determining whether those fees are reasonable and the only way to do that is to shop the plan around to other providers and determine whether the fees they are paying are in line with what is out there in the marketplace. So while high fees have been a concern for many retirement plan sponsors, many cynics in the retirement plan business indicate that with the fee disclosure, plan sponsors will move their retirement plan providers to low-cost financial advisors and TPA’s. While I disagree with that view, retirement plan sponsors should understand that picking retirement plan providers should be based on a number of factors such as the amount of fees being charged as well as the breadth of services that the provider is offering.

While paying unreasonable plan expenses is a breach of fiduciary duty, picking providers solely or mainly because they are low in fees can also breach the fiduciary duty. Retirement plan sponsors also have a duty of prudence as a one of their fiduciary duties. Prudence is about the process for making fiduciary decisions. Prudence requires the plan fiduciaries to document decisions and the basis for those decisions. Since most plan sponsors don’t have the background to administer their retirement plan and make investments on their own, they need to hire the expert plan providers that can. So in hiring any plan provider, a fiduciary should survey a number of potential providers. By doing so, the fiduciary can document the process and make a meaningful comparison and selection. They duty of the prudence requires the selection of competent plan providers and selecting an incompetent provider is a certain breach of that duty. So a plan provider needs to select competent plan providers that charge reasonable expenses.

Governmental contracts are typically decided by the lowest bidder. Sometimes it works, lots of times it doesn’t. The same thing goes with selecting plan providers. There are many low cost providers out there and some do a very good job and some do not. Some low cost TPAs may be good if there is a limited amount of work on a 401(k) plan that has a safe harbor design and terrible if the plan requires a discrimination test.

Paying only reasonable expenses is not the same as paying low expenses. Plan provider expenses aren’t important as the quality of service. A financial advisor charging 15 basis points providing no help in the fiduciary process such as developing an investment policy statement, reviewing investment options, and educating participants in a participant directed 401(k) plan is less reasonable than playing another advisor 50 basis points to serve as an ERISA §3(38) fiduciary. Why? The advisor charging 15 basis points is actually increasing the plan sponsor’s liability as a fiduciary because they are doing nothing while the ERISA §3(38) fiduciary is assuming almost all of that liability. Reasonableness is not about cost, it’s about the value of the services provided. A TPA that can help develop a plan design that maximizes contributions for highly compensated employees through a safe harbor/new comparability or a cash balance design is a better value than a TPA who only knows a 401(k) plan with a comp to comp allocation that leaves employer money on the table because it fails to maximize contributions to highly compensated employees.

With fee disclosure regulations, plan sponsors will now have no choice but to annually review their plan providers and shop the plan around to determine whether the fees they are currently being charged are reasonable. When shopping or doing price comparisons, plan sponsors should be aware of what their plan providers provide and only consider providers who could perform around that same level and breadth of service. Plan sponsors need to focus on the competency of plan providers, the services they offer, and the value they provide. Concentrating just on how much a provider charges may cost more in the long run if that provider provides services that are incompetent. I have seen too many plan sponsors forced into the Internal Revenue Service (IRS) or Department of Labor (DOL) correction programs to fix the errors of plan providers that were picked solely on cost. This is not to suggest that low cost providers are incompetent, it just means that the selection of a plan provider requires a careful process of evaluation them to find the best fit.

So when shopping the retirement plan when they received fee disclosures from their current providers or if they are in the market for a new provider, retirement plan sponsors should focus on fees, but also focus on the quality of the plan providers that are in consideration because selecting the wrong provider can lead to huge expenses for plan correction (which may or may not require IRS and/or DOL oversight) or possible litigation by participants alleging a breach of fiduciary duty. The buck stops with the retirement plan sponsor, so it’s in their interest in selecting the right providers, not just the cheapest providers.

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The Value Of A Good Retirement Plan Financial Advisor

March 27th, 2012 | Comments Off on The Value Of A Good Retirement Plan Financial Advisor | Posted in Financial News

Home Depot sparked the do it yourself ethic when it came to home improvement. The do it yourself ethic refers to the ethic of being self-reliant by completing tasks oneself as opposed to having others who are more experienced or able complete them for you. It promotes the idea that an ordinary person can learn to do more than he or she thought was possible.

This do it yourself ethic has spread to investing. In the old days, you needed a broker and you paid high fixed fees for trading. Thanks to deregulation, the explosion of mutual funds, and internet discount brokers, laymen have been able to partake in do it yourself investing. There is nothing wrong with do it yourself investing as long as you know that any gains and losses are your responsibility. The do it yourself investing has spread to retirement plans as many sole proprietors or single employee corporations have operated simplified employee pensions, SIMPLE-IRAs, and Solo 401(k) Plans. However, the moment that you hire an employee and have them participate in your plan, it is imperative that you hire a financial advisor for your plan, regardless of whether the investments in the plan are trustee or participant directed.

In the do it yourself world of investing, financial advisors are seen as useful as travel agents. While these do it yourself investors don’t understand the utility of financial advisors for their own portfolio, financial advisors serve as an important purpose in the administration of retirement plans. A good financial advisor will offer education to plan sponsors, trustees, and (if the plan is participant directed) plan participants. The good financial advisor will help minimize the plan sponsor’s fiduciary liability and improve the retirement savings under the Plan at a reasonable fee.

An employer who sponsors a retirement plan and the plan’s individual trustees are fiduciaries. Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. These responsibilities include the duty to act prudently and to diversify plan investments. The duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as investments. Lacking that expertise, a fiduciary will want to hire someone with that professional knowledge to carry out the investment decisions and other functions. Prudence focuses on the process for making fiduciary decisions. Unless a plan sponsor and the trustees have a background and education in finance, they need to hire a financial advisor to advise them, regardless of how the investments are made under the Plan.

Financial advisors serve a paramount importance in retirement plans where the investments are trustee directed. Since all the assets are under the trustees’ direction, any gain or loss is on them as there is now provision under ERISA to limit their liability. The good financial advisor will develop an investment policy statement (IPS) with the trustees, as well as a strategy to execute the parameters set forth by the IPS. The financial advisor will also advise the plan sponsor and trustees on changes in the marketplace and advise them on any tactical investing changes that have to be made. The perfect example was a union plan that I handled for a number of years. The financial advisor showed up at quarterly trustee meetings and would give a presentation of changes in the financial world, changes in the plan’s investments, as well as any suggestions on what changes that the plan’s trustees should make. The financial advisor also constantly reviewed the terms of the IPS and would make changes with the trustees’ approval to allow for other investments that the financial advisor thought was worthy. While the financial advisor’s track record for the plan was impeccable, ERISA has no concern about performance; ERISA cares only about process and whether the plan fiduciaries completed that process. So rate of return isn’t nearly as important as fiduciary review meetings, implementation of an IPS, and documentation of all decisions made by the plan fiduciaries.

For participant directed plans, there is a misnomer as to the plan fiduciaries’ role and liability. Participant directed plans that adhere to ERISA Section 404(c) limit the fiduciaries’ liability as the participants borne the liability for the gain and loss of their account balance. The problem is that most plan fiduciaries don’t understand that ERISA 404(c) is not a get out of jail free card or as I call it, a suicide pact. ERISA 404(c) also requires that the plan fiduciaries follow a process and only if they complete that process will they achieve limited liability for participants’ losses through self direction. The ERISA 404(c) process requires participants to be given the opportunity to choose from a broad range of investment alternatives, there must be at least three different investment options so that employees can diversify investments within an investment category. In addition, participants must be given sufficient information to make informed decisions about the options offered under the plan. Participants also must be allowed to give investment instructions at least once a quarter, and perhaps more often if the investment option is volatile. The investment alternatives must be selected based on criteria set forth in the IPS and reviewed at least on a semi-annual basis to determine whether they still comply with the IPS.

To illustrate this point and plan fiduciaries’ ignorance of ERISA 404(c) liability, I was working at a semi-prestigious Long Island law firm and the firm’s human resources director asked me to talk to her about the firm’s 401(k) plan soon after I joined the firm. The HR director also served as one of the plan’s trustees and she asked for my guidance. The HR director handed me a lineup of the plan’s mutual funds for participant direction. While I am not a financial advisor, I realized the fund lineup boasted of some funds that were top notch funds, 10 years earlier,. I asked the HR director who selected the funds and she informed that an ERISA partner who left the firm and was a former trustee picked those funds about 10 years earlier. The plan had no financial advisor, the plan had no investment policy statement, and the funds hadn’t been reviewed in about 10 years. To top it off, I asked the HR director what type of education or information that is distributed to plan participants. The HR director told me that there was no enrollment/investment education meetings for participants and the only information that participants received were Morningstar mutual fund profiles. Needless to say, I was very frank and told the HR director that not only was the law firm breaching their fiduciary liability but in her position as trustee, she was doing the same and her liability could be personal liability. Within months, we had a financial advisor and enrollment/education meetings for participants. The lesson to be learned here is that if a law firm with ERISA partners can’t figure out the value of a financial advisor, why should any other plan sponsor?

Despite my talk that retirement plans need a good financial advisor to enhance their retirement savings and limit their liability, I am still amazed how many retirement plan sponsors have no financial advisors. This usually occurs when the plan is being administered by a mutual fund company or by a payroll provider. For the plans being administered by a mutual fund company, simple using that company’s mutual funds on the fund lineup won’t substitute the role of a financial advisor in limiting liability or providing participant education. Payroll provider TPA administered plans with no financial advisors are even worse because these payroll providers do offer mutual fund lineups to plan sponsors, but they clearly state that what they offer is not investment advice or act in any fiduciary capacity. So what they offer the plan sponsor are mutual fund lineups and nothing more. So while plan sponsors think they are receiving some sort of fiduciary support from their payroll provider, courts have been telling plan sponsors differently, that payroll provider TPAs are not fiduciaries for the plans they administer. Why should plan sponsors rely on what I call “fake advisors” when they can have the real thing?

While many retirement plans have financial advisors, many of these financial advisors are what I call “milk carton advisors”, meaning that the plan sponsors hasn’t seen their advisor in quite some time that they might be missing and should be placed on a milk carton. So hiring a financial advisor for your retirement plan isn’t enough, making sure that the advisor that they hire partake in and manage the fiduciary process. Names, credentials, and returns are nice, but the most important aspect that a financial advisor is needed for is following the fiduciary process of selecting funds, meeting with the fiduciary on a continuing basis, the drafting of the IPS, and providing education to participants when the plan is participant directed. The best advisor don’t just help in the fiduciary process, they go above and beyond their role and serve as an ombudsman between the plan sponsor and other plan providers to make sure that the plan administration is smooth and that the plan maintains its qualification under the Internal Revenue Code.

How to tell the good financial advisors from the so-so and not so good advisors? Look for financial advisors who understand retirement plans, handle retirement plans on a consistent basis, someone who is independent in the sense that the only investment product they push are the best performing investments products. Choose a financial advisor that is independent from your TPA because they won’t pick funds, predominately based on how much revenue sharing they will kick back to the TPA. Choose a financial advisor because they will assist your role as a fiduciary which will limit your liability, so hiring a financial advisor only because he or she is someone’s cousin won’t suffice. Nepotism is a nice concept for those that benefit from it, but it will only create conflicts of interests, increased fiduciary liability, and possible claim that the relationship with a related advisor is a prohibited transaction. Charity begins at home, but pick another charity than your retirement plan, Thanks to the internet and CNBC, many people think that they are financial experts. While they invest their own money and do well handling that on their own, they need a financial advisor for their retirement plan the moment they hire an employee that is not related to them. Financial advisor offer a service to retirement plans that can not be duplicated by any other service provider. They have the background and training to draft an IPS, develop an investment lineup, provide education to participants, meet with the plan’s fiduciaries, and document what transpired in those fiduciary review meetings.

Next to purchasing an ERISA bond and fiduciary liability insurance, the best way to limit liability is to hire a financial advisor that will become your partner in managing the investment side of that retirement plan. So financial advisors are not the travel agents of the financial world, they serve a purpose that cannot be imitated.

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Changes In IRA & 401(K)s for 2012

March 27th, 2012 | Comments Off on Changes In IRA & 401(K)s for 2012 | Posted in Financial News

The IRS has announced cost-of-living adjustments to IRAs and employer-sponsored retirement plans for 2012, so here is what you need to know about the newly altered contribution limits and phase-outs for these plans.

401(k) & IRA yearly contribution limits. In 2012, these are the annual contribution limits for some popular retirement savings vehicles:

  • 401(k)s, 403(b)s, most 457 plans, Thrift Savings Plan (TSP)$17,000 with an additional $5,500 catch-up contribution allowed for those 50 or older. (2012 COLA: $500.)
  • Traditional & Roth IRAs $5,000 with an additional $1,000 catch-up contribution allowed for those 50 or older. (No 2012 COLA.)
  • Simple IRAs $11,500 with an additional $2,500 catch-up contribution allowed for those 50 or older. (No 2012 COLA.)
  • SEP IRAs $50,000 or 25% of an employee’s compensation, whichever is lesser. (2012 COLA: $1,000.)
  • 415(b) defined benefit plans – the limitation on annual benefits under a defined benefit plan is increased to $200,000. (2012 COLA: $5,000.)1,2,3,4

Traditional IRA phase-outs. The new MAGI limits affecting deductions for traditional IRA contributions are:

  • Singles & heads of household covered by a workplace retirement plan: $58,000-68,000. (2012 COLA: $2,000.)
  • Married filing jointly, with spouse making the IRA contribution covered by a workplace retirement plan: $92,000-112,000. (2012 COLA: $2,000.)
  • Married filing jointly, IRA contributor not covered by a workplace retirement plan but married to someone who is: $173,000-183,000. That MAGI range is for a couple rather than an individual. (2012 COLA: $4,000.)1

Roth IRA phase-outs. The MAGI limits affecting deductions for Roth IRA contributions are set as follows for 2012:

  • Singles & heads of household covered by a workplace retirement plan: $110,000-125,000. (2012 COLA: $3,000.)
  • Married filing jointly: $173,000-183,000. (2012 COLA: $4,000.)
  • Married filing separately, with the Roth IRA contributor covered by a workplace retirement plan: $0-10,000. (No 2012 COLA.)1

Lastly, a couple of notes for employers. When it comes to defining “key employees” in a top-heavy plan, the determination limit goes up $5,000 to $165,000 in 2012. The maximum taxable earnings amount for Social Security increases to $110,100 from $106,800 next year.5

1,,id=248482,00.html [10/20/11]
2 [10/21/11]
3,,id=211345,00.html [10/20/11]
4,,id=111419,00.html#12 [10/21/11]
5 [10/20/11]

Monthly Economic Update for March

March 27th, 2012 | Comments Off on Monthly Economic Update for March | Posted in Monthly Economic Update

Steps to Prevent Identity Theft, and What to Do if It Happens

March 27th, 2012 | Comments Off on Steps to Prevent Identity Theft, and What to Do if It Happens | Posted in Lifestyle

Identity theft is not just an unauthorized charge on a credit card anymore.

Identity theft, according to the Federal Trade Commission, “occurs when someone uses your personally identifying information, like your name, Social Security number or credit card number, without your permission, to commit fraud or other crimes.”

How your information is stolen, and how it is used, varies greatly. With stolen Social Security numbers, thieves are filing false medical claims, applying for mortgages and opening lines of credit for fictitious businesses. By adding fake fronts onto A.T.M.’s or gas pumps, they are collecting credit card numbers and PINs.

But while the trade commission estimates that nine million Americans are victims of some sort of identity theft each year, these extreme cases of identity fraud remain rare, luckily.

You may find that you will need only to close a compromised account or freeze your credit if errors appear. But recovering from the effects of an extreme case of identity theft can be incredibly messy and time-consuming. You could be denied a mortgage, for example, or refused new lines of credit. It can take months or even years to repair your credit history, and this type of crime is hard to prosecute.

While financial institutions, health care companies and other organizations have taken steps to improve security measures in recent years, do not rely on them to protect you. Taking some common-sense steps now can help prevent major headaches later.

PREVENTION Your first step should be to review monthly statements from your checking and other financial accounts. The earlier you catch an error, the easier it is to resolve it. Yes, balancing your checkbook may seem a monotonous chore, but understanding where your money goes will help you spot any irregular withdrawals or charges. Reviewing your credit card bill each month is critical as well, especially if you charge a lot of your daily purchases. If you have not already, this may be a great time to sign up for online accounts. It’s easier and faster to review accounts online, on a computer you trust.

Next, order and review your credit reports. The three credit agencies, TransUnion, Equifax and Experian, are each required by law to provide you one free credit report a year. has links to all three, and it is the only place to get them free. (Other sites may try to charge you or get you to sign up for monthly services of some sort.) Stagger your requests, and you can monitor your credit history every four months. While you are at it, make sure your name, address and other information are correct. If you find old or inaccurate information, have it removed.

While companies like your health care provider are no longer printing Social Security numbers on member identification cards, a lot of personal information is still out there. Be sure to shred old bank statements, applications for new credit cards and other documents that have personal information.

Secure your personal information online and offline. Do not carry your Social Security card in your wallet. Keep it at home with your other important documents. Be careful about online passwords as well and change them often. And be vigilant about sharing personal information when opening new accounts online. If online advertisements or offers seem too good to be true, they probably are.

ACTION The steps you will need to take to recover from identity theft depend on the type of fraud you believe has occurred. If you are going through your monthly statements and see an error on an existing credit card, monthly bill or financial account, first call the company to report it.

By federal law, credit card companies have strong consumer protections in place, and they have large departments to investigate fraud. For that reason, you may want to consider using a credit card to pay for online and major purchases. That will give you more protection than if you use a debit card, because the money comes directly out of your bank account when you use a debit card. Making purchases with a credit card provides a layer of protection.

Once you have reported the error and determined there is reason to believe a fraud has occurred, the Federal Trade Commission recommends that you place an initial fraud alert with one of the three major credit reporting agencies. (They are required by law to report the fraud alert to the other two agencies.) The alert, which remains on your credit report for 90 days, automatically entitles you to a free copy of your report. Review this for any accounts you did not open or activity you did not conduct, and confirm that the report has your correct name, address and Social Security number.

Once you have determined that a fraud has occurred, you should also file both a complaint form with the trade commission and an identity theft report with your local police department. And you should file these complaints if you see any new accounts on your credit reports that you did not personally open.

After you have filed the reports, make multiple copies of them and save the originals in a safe place. While identity theft is hard to prosecute, these documents will help you investigate your case with the credit agencies and the financial institutions you do business with. Filing with the trade commission may also provide you with certain protections. In addition, law enforcement may use your information in their identity theft investigations.

Depending on the severity of your situation, you may want to consider the second type of fraud alert. The initial alert, which is recommended if, say, you lose your wallet, requires potential creditors to take certain steps to verify your identity before opening new accounts in your name. The extended fraud alert, which lasts seven years, requires creditors to contact you personally before new accounts are opened.

But there is one thing to remember: Fraud alerts help only when a thief is trying to open a new line of credit. They may not prevent a thief from using existing accounts or ordering new cards. Nor can they prevent the opening of a bank account or another account that does not require a credit check.

While they are different in each state, credit freezes are also available. When you place a freeze on your credit report, businesses and creditors cannot check your credit history unless you temporarily lift the freeze. The cost of freezing your credit, the cost of thawing it temporarily and the rules on who can freeze their credit depend on the state.

Regardless of the severity of the problem, be careful when you contact the companies of the compromised accounts or the accounts you think have been tampered with. While the level of risk varies because of credit limit, credit history and other factors, your credit score may be negatively affected if you choose to cancel credit card accounts. Inform the creditor that you have reason to suspect you are victim of fraud, and ask it for the company’s policy in situations like these. One option is to ask that the account be assigned a new number. Another option, when contacting credit agencies, is to place a 100-word consumer statement on your credit report explaining the fraud. This statement will stay on your credit report as long as you want.

And again, be sure to get documentation on all of your conversations and interactions with these lenders.

EXTRA HELP In recent years, the three main credit agencies — and other companies as well — began offering credit monitoring and identity fraud services for monthly or annual subscriptions. Some companies even offer identity theft insurance. Prices and services vary, but over all, the agencies promise to monitor your credit report and send alerts if any questionable activity is found.

Whether it is a wise idea to sign up for such services depends on your wallet and your need for peace of mind. If you have already been a victim of identity theft and have had to spend a significant amount of time and resources to clean up your record, the services may reassure you. But if you have not had any problems and you are already vigilant about reviewing your accounts, it may not be worth the money.

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The Risk Inside Your Credit Card

March 27th, 2012 | Comments Off on The Risk Inside Your Credit Card | Posted in Lifestyle

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