Debtmerica Debt News
Consumers looking to consolidate debt should beware of unscrupulous lenders
Thursday, May 27, 2010 12:22 AM
If debt consolidation options look too good to be true, they probably are, according to a recent report from Consumer Affairs.The consumer advocacy group says that there are several tell-tale signs that a given organization's offer of debt consolidation could be a rip-off. Any offer that promises to settle debt for much less than the amount owed is a dead giveaway, Consumer Affairs says.
The author of the report, Mark Huffman, also says that "scammers like to get paid in advance. In fact, they insist on it. They want to have received all your money before you figure out you've been scammed. Many states have recently passed laws prohibiting advance fees for debt settlement services. Whether your state has or not, it's never a good idea to pay in full in advance."
Criminals of various stripes have been quick to take advantage of the desperate financial straits that Americans have occasionally found themselves in during the economic slowdown, but experts say that legitimate debt consolidation options are available and can be a big help to consumers. Add a comment
New Federal Reserve website could help those in credit card debt
Tuesday, May 25, 2010 10:05 PM
A new website run by the Federal Reserve will serve as a clearinghouse for all credit card plan details for companies that serve over 10,000 customers, allowing consumers looking to consolidate debt to have easy access to important information.More than 300 credit card companies have plans listed on the website, which went live on Monday. The Federal Reserve says that, in addition to looking up information on plans they already participate in, consumers can compare different credit card offers to find the ones that are most appropriate to their situation.
The Federal Reserve added that the database will be updated once every three months, meaning that that new information will be added to the site on August 2.
The database was created as a part of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, and is among many measures in that law that attempts to crack down on what are seen as deceptive practices by credit card companies. Another law, currently in reconciliation between the House and the Senate, could place further curbs on large issuers like Visa and MasterCard. Add a comment
Report: Consumer confidence on the rise
Tuesday, May 25, 2010 08:03 PM
American consumers are beginning to take a rosier view of their economic prospects as the Confidence Board's consumer confidence index jumped for the third straight month, reaching 85.3 for the month of May.While consumers were still much more likely to describe current economic conditions as bad, rather than good, the differential between the two figures shrunk, with 10 percent of respondents saying that conditions were good and 39.3 percent answering more negatively. These figures were 8.9 percent and 40 percent respectively in April. Remedial measures like debt counseling and settlement could be partially responsible for this improvement.
"Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction. Consumers' apprehension about current business conditions and the job market continues to slowly dissipate. Consumers' expectations, on the other hand, have increased sharply over the past three months, propelling the Expectations Index to pre-recession levels," said Confidence Board consumer research center director Lynn Franco.
Experts have cited improvements in consumer confidence levels as being key to the resurgence of many important economic sectors, including real estate and job growth. Add a comment
Study: Debt-saddled Americans still view banking industry with suspicion
Monday, May 24, 2010 10:52 PM
While most bankers believe that the general public's view of their industry has lightened considerably since the onset of the financial crisis, the consumers themselves were far less positive, according to the results of a survey from BAI and Finacle.BAI Research managing director Ajay Nagarkatte said that "while consumers across geography, gender and generations are discouraged right now with the banking industry as a whole, when asked about their primary bank, there are significant consumer segments that respond positively to what their banks are doing for them."
The survey found that fewer than half of all bank customers surveyed felt that the fees their banks charged were fair, and that the past six months had seen the general level of trust in primary banks experience a general decline, rather than the rise that many bankers predicted.
However, experts say, there are some signs that the economy is beginning to recover from its recent trauma, and if the banking industry can be seen to be integral to an economic resurgence, its popularity may skyrocket. Add a comment
Expert: Market growth outstripped economy
Friday, May 21, 2010 08:36 PM
The surging markets of recent years created unrealistically high expectations for stock performance, according to U.S. News and World Report columnist Rick Newman, creating an economic climate in which consumers were subject to punishing levels of debt and creating a serious need for credit counseling services.Newman writes that "our instinct during a market drop is to ask what happened to trigger it. But we might just as well ask whether that 83 percent run-up was warranted in the first place. Surely some of it was. Stocks sank to the lows of last March because investors were terrified of a full-blown depression, which obviously didn't materialize, thanks to aggressive government intervention."
Newman also points out that, despite the slow resurgence of consumer spending since the recession, incomes have not kept pace with these increases, meaning that more and more U.S. consumers are going into debt in order to afford their purchases.
However, other experts have pointed out that the increase in consumer spending could be a sign of a more general economic recovery, spurring the income growth that is currently missing from financial indicators. Add a comment
Financial reform bill passes Senate, headed for reconciliation with House measure
Friday, May 21, 2010 07:31 PM
In what is being described as a significant political victory for the Obama administration, the Senate voted to pass an omnibus financial reform bill, but experts are divided over the way in which it will affect consumers looking to consolidate debt.Senators Russ Feingold and Maria Cantwell, the only two Democrats to vote against the measure, said that it did not go far enough toward protecting the American consumer from predatory and unfair lending practices by the financial industry.
However, many in the financial industry disagreed, saying the Senate bill places unfair restrictions on banks and could limit the options available to consumers searching for debt consolidation loans and other financial instruments.
Beyond its effects on the consumer lending industry, the main thrust of the bill is aimed at limiting the amount of risk that large financial institutions are allowed to take on, with the idea of forestalling any crises similar to the widespread bank failures in 2007 and 2008 that severely damaged the American economy and cost taxpayers billions in bailouts. Add a comment
FTC wins injunction, shutting down phony credit card debt consolidation operations
Thursday, May 20, 2010 11:04 PM
Three companies offering U.S. consumers assistance in consolidating their debt were effectively closed down Thursday by a federal court order enjoining them from practicing their deceptive telemarketing.The Federal Trade Commission said that the FBI, IRS, and Secret Service were also interested in the three companies, and while a criminal complaint has not yet been filed against them, those three agencies are working together to find any evidence pointing to violations of criminal law.
The firms, according to the FTC, bilked already debt-saddled Americans out of up-front fees for ostensibly guaranteed debt reduction services and then doing nothing except for resisting attempts to gain a refund. The FTC said that "consumers who complained and demanded refunds allegedly were denied outright, got the run-around, or had a $199 'nonrefundable fee' deducted from their refund."
Consumers looking for help in pulling themselves out of debt should be careful of offers that seem too good to be true, and be particularly cautious of anyone demanding money up front or promising reduced principals. Add a comment
Defense Department announces new initiative to provide debt counseling for service members
Thursday, May 20, 2010 11:03 PM
Military personnel in financial trouble could find it difficult to concentrate on their critically important duties, so the Defense Department recently announced several new programs to help service members consolidate debt and stay out of fiscal minefields.A program analyst for the Pentagon's military community and family policy office, Marcus Beauregard, said that "anything that will help a service member to do their job better and feel more prepared for their duty in taking care of their finances is certainly beneficial. The most important thing we can do is to educate service members and their families, make them aware of things that may be a problem, [and] make them aware of how to deal with transactions."
Beauregard urged military personnel to view businesses and organizations that claim to have the service member's best interests at heart, as some of these can offer genuine services to them, while others are scam artists looking for a quick buck.
Other studies have shown that many veterans benefit from job skills training and career placement programs, which can help them stay out of debt after their service. Add a comment
Need for debt counseling could increase as U.S. credit card customers lose some caution
Wednesday, May 19, 2010 10:35 PM
The demand for credit among American consumers is heading upwards, according to a FICO study released on Wednesday, but this could cause an uptick in credit card delinquencies going forward.Bankers surveyed by the research firm generally agreed that the combination of the slowly improvingeconomy and the effect of soon-to-be-implemented federal regulations would cause them to place a higher priority on risk management in the future. They also expect interest rates to either stay the same or increase.
Additionally, well over half of bankers expected to see delinquencies rise in the near future across most categories of consumer loan. Fewer than 60 percent said that credit card delinquencies would move upward soon, and even more were pessimistic about the future return rates of small business loans.
Experts say that this pending spike in consumers facing financial trouble could provide the consumer credit counseling industry with a corresponding leap in potential customers, as Americans look to consolidate debt and escape the worst effects of the economic downturn. Add a comment
Slashed credit card fees could hurt issuers, but help with bill consolidation
Wednesday, May 19, 2010 10:06 PM
In the wake of a successful amendment to the Senate's financial reform bill that would cap debit card processing fees for issuers, Bloomberg News reports that credit card processing fees could be next.The news agency cites a client note from Stifel, Nicolaus and Co. analyst Chris Brendler, which asserted that credit card interchange fees would be "inevitably next" on the list of card issues tackled by U.S. lawmakers.
Bloomberg News also says that Visa and MasterCard had previously been successful in derailing legislative attempts to regulate swipe fees, which are charged to merchants each time consumers use their cards to pay for goods or services.
Experts say that the cap on debit card swipe fees - and a possible similar limitation on those for credit cards - could help merchants reduce prices across the board, easing the financial burden on Americans whose finances took a turn for the worse during the recent recession. It could also allow those in particularly dire straits to afford debt counseling, should they need it. Add a comment
New rules for NYC collections agencies could let consumers consolidate debt in peace
Tuesday, May 18, 2010 10:58 PM
While debt collectors are an important part of the consumer financial ecosystem, some agencies have been accused of threatening, harassing, and lying to consumers in pursuit of unpaid debts. The mayor of New York, Michael Bloomberg, recently announced tough new restrictions on those companies.Bloomberg said that "the measures we are announcing today will help stop this rising tide of wrongful and financially harmful collection tactics, and protect New Yorkers from their often damaging consequences."
The mayor and consumer affairs commissioner Jonathan Mintz assert that some collection agencies routinely harass people who have the same names as their targeted debtors, making little to no effort to ascertain whether the person actually owes them any money.
Experts say that consumers should make every effort to repair their financial troubles before collection agents are brought in, however. Reputable credit counseling services can help stop a slide into debt that might otherwise cause creditors to take drastic action against a consumer. A consumer's credit rating is also endangered by a referral to a collections agency. Add a comment
Interchange fee legislation could deal blow to credit card companies
Monday, May 17, 2010 11:00 PM
An amendment to an omnibus financial regulation bill currently being considered in the U.S. Senate - which was recently approved by that chamber with 64 votes - will place strict caps on so-called interchange fees that credit card issuers charge merchants for processing payments made with debit or credit cards.According to financial news and analysis website The Motley Fool, the caps on interchange fees will not directly harm the bottom lines of companies like Visa and MasterCard. However, the website quotes Visa's annual report as saying that "if we cannot successfully defend our ability to set default interchange rates to maximize system volume, our payments system may become unattractive to issuers and/or acquirers."
Proponents of the amendment say that it will shift the burden of these interchange fees off of merchants, who say that the fees can seriously harm their profits on low-margin sales.
However, consumers could see a reduction in the number of establishments able to accept debit cards, and experts say that the effect on an already-stretched U.S. consumer base might not be universally positive, making for increased demand for consumer debt counseling. Add a comment
Credit card companies say indicators pointing to bright future
Monday, May 17, 2010 10:58 PM
While the U.S. credit card market is still plagued by heightened levels of delinquency and above-average amounts of consumer debt, the major card issuers say that the trends are moving in a broadly positive direction, according to the Wall Street Journal.Keefe, Bruyette, and Woods analyst Sanjay Sakhrani told the Journal that "we are definitely past the peak in charge-offs. From an investor's standpoint, this data begs the question whether we can see a pick-up in growth or at least a stemming of the decline in credit-card balances."
Annualized charge-off numbers declined across the board in March, the Wall Street Journal reported, with the amount of money written off as bad debts by the major card issuers slowly but steadily decreasing.
While this is hardly conclusive proof of a burgeoning economic recovery, it could still be a positive sign that the financial position of the average U.S. consumer is beginning to improve toward the point where consumer spending might begin to recover. Experts say that this development would be one of the signs that the crisis is well and truly past. Add a comment
Report: Generational spending habits may have changed thanks to recent recession
Friday, May 14, 2010 11:23 PM
Americans born in the early 1980s - also known as the "millennial" generation - have seen their spending habits drastically reshaped by the recent recession, spurring a need for debt consolidation, according to Northwestern University's Medill Reports.FD International's senior vice president of Americas, Brent McGoldrick, told the publication that "the early evidence is that it [spending habits] have changed and it will continue to change. They understand that things might not get better." The Medill Reports story also cites a recent poll showing that Millennial's confidence in their ability to earn a living is quite low.
Americans of this age group are much more focused than previous generations on keeping themselves out of debt and managing what debt they are forced to take on with skill and responsibility, the Medill Reports story said.
For free-spending young people who were caught off-guard by the sudden economic downturn and found themselves in a surprise economic hole, debt consolidation and counseling could be a necessary step on the road back to financial stability. Add a comment
Consumers increasingly optimistic about U.S. economy, survey says
Thursday, May 06, 2010 11:26 PM
Americans' opinions regarding the economy are steadily becoming more favorable as they begin to be less pessimistic about their local economies, likely leading to a decreased need for some to consolidate debt and save their finances.The latest RBC Consumer Outlook Index released on Thursday showed an increase of 8.1 points as it hit 72.7 in May, led primarily by an increasing confidence in an economic recovery as well as an improved job market.
Overall, 31 percent of consumers felt that the economy would likely improve in the next year, more than the 26 percent who feel it will become worse but less than the 43 percent who expect it to stay the same.
"This month's RBC Consumer Outlook Index shows that consumers' negative attitudes are moving towards neutral, but not yet into positives - they are not yet ready to say that things have gotten better, especially when it comes to the national economy," said Marc Harris, co-head of global research at RBC Capital Markets. "Few Americans are ready to say they are enjoying good times."
Despite the improved sentiments, 49 percent of consumers still described their personal financial situation as bad compared to three months ago, up from 45 percent who said so in April.
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Restaurants sales data shows increases in March
Wednesday, May 05, 2010 12:58 AM
Likely spurred by some indicators of an economic rebound, newly released restaurant sales data for the end of 2010's first quarter show significant improvements that may indicate consumers are not as reliant on debt consolidation tactics as they once were.The latest Restaurant PerformanceIndex released by the National Restaurant Association last week saw a notable increase of 1.4 percent to hit 100.5 in March compared to the previous month’s figures.
The monthly increase in the index above 100 for the first time in 29 months and to its highest level since September 2007.
"The RPI's solid performance in March was driven by improvements among both the current-situation and forward-looking indicators," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the association. "Restaurant operators reported net gains in both same-store sales and customer traffic in March, the first time in 31 months that both indicators stood in positive territory."
Additionally, the NRA's Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures, hit 99.0 during March, a 2.4 percent increase from February's figures. While same-store sales and traffic indicators increased during the month, labor and capital expenditure indicators continued to lag and decline.
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Personal income increases in March, says BEA
Tuesday, May 04, 2010 12:08 AM
New government figures released at the start of May have found that the end of 2010's first quarter saw widespread gains in most figures relating to consumer income, signaling that Americans may not be as strapped for cash and in need of debt consolidation as they have been in recent months.According to newly released data from the U.S. Bureau of Economic Analysis, personal income increased by $36 billion in March representing a 0.3 percent increase over the previous month's figures.
Along with an increase in the amount of money finding its way into the bank accounts of consumers across the country, so too did the amount of extra cash that Americans had to spend. The BEA's March figure for disposable personal income also saw an increase of $32.3 billion, a 0.3 percent increase from the previous month's figures.
The BEA also found that private wage and salary disbursements for the month also saw an increase of $11.8 billion for the month, nearly double the $6.8 billion increase in the figure seen in February.
Goods-producing industries' payrolls were also able to nearly offset a $3.3 billion decrease recorded in February as they increased by $2.2 billion in March.
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Bankrate: Mortgage rates remain stable
Friday, April 30, 2010 06:13 PM
Average interest rates for all mortgage types remained somewhat stable and showed minimal declines in the second part of April, continuing low rates that could be utilized to consolidate debt for homeowners looking to refinance.According to the latest weekly national survey released by Bankrate.com on Thursday, the average rate for 30-year fixed-rate mortgages decreased slightly by 0.01 percentage points to hit 5.21 percent for the week ending April 21. While a decline, the rate change was minimal compared to the 0.14 percentage point decline seen one week prior.
Similarly, the average rate for 15-year FRMs declined by 0.01 percentage points as well, falling to 4.54 percent for the week. The mortgage type had also seen a more sizable decline of 0.13 percentage points one week earlier as well.
The average rate for 5/1-year adjustable-rate mortgages saw the largest decrease of the week as it fell by 0.05 percentage points to hit 4.37 percent. The week prior, the rate had seen a drop of 0.07 percentage points.
With the slight rate decreases, a $200,000 loan taken out in November 2008 that was refinanced under the current conditions would reduce mortgage payments by $142 every month as it fell to $1,099.46.
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Mortgage fraud increased in 2009, says LexisNexis
Tuesday, April 27, 2010 11:10 PM
As homeowners struggling with their finances look to consolidate debt any way possible, including through mortgage refinancing, they should be aware that mortgage fraud cases rose yet again in 2009.According to the latest report released Monday by LexisNexis' Mortgage Asset Research Institute, incidents of mortgage fraud and misrepresentations by industry professionals increased by 7 percent from 2008 to 2009 in the U.S.
The increase was less than the 26 percent increase in mortgage fraud seen the year prior, with experts adding that the year-by-year percentage difference may not be as wide as the data indicates.
"While this is a noticeable increase, we believe that mortgage fraud is significantly understated, even during times of massive origination volumes," said Jennifer Butts, LexisNexis Mortgage Asset Research Institute manager of data processing.
"Lenders are facing hurdles with compliance, loss mitigation and staving off additional financial losses due to poor loan performance," added Denise James, LexisNexis Risk Solutions director of real estate solutions.
After holding the unfortunate title of the state with the highest rate of mortgage fraud for two of the last three years, Florida again overtook Rhode Island in 2009 as its residents suffered through three times the expected amount of fraud cases.
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Jobs that are more stressful may carry higher income, more security, survey says
Friday, April 23, 2010 11:42 PM
Americans across the country who are becoming increasingly desperate for any type of income as they look to consolidate debt may be faced with a decision to either make more money in a more grueling job, or settle for less cash in position that is less stressful.According to a recent survey conducted by CareerCast.com, some of the most stressful jobs in 2010 were found to be firefighter, corporate executive, surgeon, police officer, and commercial pilot.
However, while incredibly stressful, the survey also pointed out that many of the listed positions were also found to be the most sought-after positions on the market because of their high wages or job security.
"While fear of losing your job may keep you awake at night, the nation's most stressful job – firefighter – has one of the lowest unemployment rates," explains Tony Lee, publisher for CareerCast.com. "On the other hand, many low-stress jobs offer little room for advancement, and often don't appeal to ambitious, educated job seekers."
Among the least stressful jobs documented during the year - which are easier on a daily basis but may not bring in as much of a salary - were musical instrument repairer, medical records technician, actuary, and librarian. Add a comment
More Articles...
- Initial unemployment insurance claims continue to slide nationwide
- Study: Foreclosures increased by 7 percent during first quarter of 2010
- Creation of new bureau could cause problems for auto financing, says NADA
- Bankrate: Mortgage rates return to form midway through April
- Consumer spending increased in March, survey says
- Bank of America reports more HAMP modifications completed in March
- Mortgage rates increase as April gets underway, says Freddie Mac
- Survey: Workers are unable to save money, using tax returns to pay off bills
- Cell phone customers beginning to flock towards pre-paid cell phone plans
- More than 1 million households lost between 2005 and 2008, says MBA
- Job openings and labor turnover only decline slightly, says Department of Labor
- Florida plan offers tax-free college savings account to in- and out-of-state residents
- Maryland AG reaches settlement with BJs over deceptive coupons
- Americans more likely to consider leaving country because of economy
- Proof of therapy may be necessary to prove unfilled taxes were due to personal reasons
- Toyota posts annual sales increases in March
- Business owners expect increased sales, hiring, in next six monthe, says survey
- Unemployment insurance claims continue to decline, says DOL
- Zillow: Most mortgage rates see increases to end March
- Dept. of Labor: Nearly 14,000 approved for TAA certification
- MBA: Mortgage rates erase previous week's decline with notable increases
- Trade deficit between U.S. and China a reason for high unemployment in Pennsylvania, says report
- BEA: State personal income declines in 2009
- First-time independent tax filers should be aware of the refunds they can qualify for
- Biden, Geithner, and Shulman urge Americans to use all incentives possible when filling out taxes this year
- HIRE Act may not be effective in reducing unemployment rates, says Cornell professor
- Mortgage rates remain unstable midway through March, says Bankrate
- Freddie Mac finds mortgage rates remain mostly stable
- Conference Board: Economic index showing slowed signs of recovery in February
- Best job market for young adults in Austin, Texas, says survey
- Zillow: Mortgage rates uneven as March reaches its midpoint
- HAMP mortgage modifications become more popular in February
- Mortgage rates decline in first full week of March, says Freddie Mac
- Foreclosure figures remain mixed in February, says RealtyTrac
- Unemployment rate remains stable in February, says BLS
- Job market slowly recovering in second quarter of 2010, says Manpower
- Initial unemployment claims decline yet again, says DOL
- Pennsylvania residents could see savings with proposed tax cut
- Americans doing a better job at paying their credit card bills, says BillShrink
- Freddie Mac: Mortgage rates increase to end February
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