Yesterday I wrote concerning the high-growth industry of prepaid debit cards and I warned of their hidden fees.

Here is an informative video on prepaid debit cards produced by the New York Times and PBS Frontline.

Buying a prepaid debit card these days is just about as easy as picking up a candy bar or a pack of chewing gum. Walk into a Wal-Mart or almost any major drugstore, and rows of plastic worth $25, $100 and even $500 beckon from kiosks alongside prepaid phone cards and gift cards for retailers.

“No Credit Check. Safer Than Cash. No Bank Account Needed,” says the Green Dot Visa Prepaid Card: Just pay at the register and the card is ready for A.T.M. withdrawals, store purchases and online shopping.

For many people who don’t have bank accounts, or can’t get a credit card, the appeal is irresistible, making the reloadable cards among the consumer banking industry’s fastest-growing products. But their convenience comes with a catch – astronomical fees that are usually hidden in the fine print.

The MiCash Prepaid MasterCard docks cardholders a $9.95 activation fee. Like many competitors, it then charges numerous recurring fees, including $1.75 for each A.T.M. withdrawal, $1 for each A.T.M. balance inquiry, 50 cents for each purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 for a call to customer service.

“It’s a very expensive way to bank,” said Jean Ann Fox, director of financial services at the Consumer Federation of America.

A cottage industry only 10 years ago, reloadable prepaid cards have tapped into the vast pool of about 80 million consumers who have little or no access to bank accounts. The market includes college students who do not want to carry around wads of cash and consumers who do not want to type their credit card number into the Internet.

More typically, it comprises low-income people and immigrants who have fewer financial options than other Americans. Often, they turn to these cards because they cannot open a bank account, or they become fed up with the costs of check-cashing stores or overdraft fees on checking accounts.

Among the beneficiaries of these cards are Visa, MasterCard and Discover, which receive about a nickel to 20 cents each time a credit or debit card emblazoned with their logo is swiped.

Given the number of people who have little or no relationship with a bank, both in the United States and abroad, the financial industry is betting on a boom. In 2008, for instance, customers loaded about $8.7 billion onto prepaid cards, a 125 percent increase over the previous year, according to the Mercator Advisory Group. The industry is expected to balloon to $119 billion by 2012, Mercator predicts.

A survey of two dozen prepaid cards released in August by the Consumers Union, the publisher of Consumer Reports, found that the cheapest, the Wal-Mart Money Card, cost $16.59 in the first month and $21.54 in the second. By contrast, the most expensive card, the Millennium Advantage card, cost $115.05 in the first month, because of a $99 application fee, and $27.95 the second month, the survey, compiled by Michelle Jun, a lawyer for Consumers Union, showed.

Source: New York Times.

There are many con artists looking to take advantage of Oklahoma homeowners who are facing home foreclosure. Therefore, you should be extremely cautious when dealing with anyone who claims to be able to prevent the foreclosure of your home.

Here are a few simple precautions that can help you avoid becoming a victim of a foreclosure prevention scam:

• See what your mortgage company thinks about the situation.
• Get the advice of an independent lawyer before you sign any contracts.
• Don’t sign any documents that you don’t fully understand.

Here is a video that offers some good advice:

Chapter 13 bankruptcy can save your home from foreclosure. If you are facing home foreclosure in Oklahoma and would like to know more about how Chapter 13 bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

In my recent post “Oklahoma Consumers Beware of the Work From Home Scam” I warned that you should be very careful when considering Internet advertisements for what sound like great opportunities to work from home and earn good money. Many of the great sounding jobs you see online are simply scams that will take your money and leave you in debt.

Watch the following videos from Dateline NBC that tell the story of some good people who thought they had found an honest and convenient way to earn extra money from home but in fact were the victims of the work-from-home scam.

A scam taking hold as the unemployment rate soars is one in which victims are offered lucrative pay in exchange for working from home. While there are many legitimate ways to earn income from a home-based business, there are just as many if not more work from home scams. So be careful.

Some scammers get victims to pay exorbitant upfront fees or to disclose valuable identity information — such as Social Security numbers — before agreeing to “sign them up” for a job. The job, of course, never materializes.

Other scammers force victims to buy outrageously overpriced supplies or merchandise that are supposedly required for the job — such as envelopes to be stuffed or cosmetics to be sold. In those cases, victims spend hundreds of dollars on supplies that normally cost much less, and the scammers disappear with the profit.

John Breyault, who heads the fraud divison of the National Consumers League, warns against falling for work-at-home scams that seem too good to be true. “Be cautious if you have to buy supplies, especially if the company doesn’t offer to buy them back or if they only offer to buy them back at 50%,” he says. “If it sounds like it’s too good to be true, it probably is.”

Source: MSN Money.

Oklahomans feeling the effects of the current recession are being aggressively targeted with a variety of scams these days. One of the newest is the “Economic Stimulus” scam.

Virtually anytime you surf the Web, you are bombarded with ads that promise large grants or checks out of the government’s stimulus plan.

“In 30 days I was able to get a $12,000 check from the US Govt which I never have to pay back,” reads one such banner ad, which pops up when you search the Web for “economic stimulus.”

When you click on such ads, you are redirected to blogs purportedly written by average Americans who succeeded in getting checks from the government and now want to show you how to do the same. They might ask you to buy a software program that “helps” you apply for a grant, sign you up for a monthly subscription without your consent or even ask for sensitive personal identity details.

The reality is that the economic stimulus bill recently passed by Congress — known as the American Recovery and Reinvestment Act of 2009 — doesn’t include provisions for grants or payments directly to consumers. Rather, consumers should expect a reduction in the amount of taxes withheld from their paychecks every month. Anyway, when the U.S. government wants to give money back to taxpayers, it does so through the Internal Revenue Service, and the IRS never contacts people through banner ads.

“We don’t contact people by e-mail or phone with some offer of a refund,” IRS spokesman Anthony Burke says. “To get a refund, taxpayers need to file a tax return.”

Source: MSN Money.

“Con artists follow the news closely and adapt their schemes to whatever is the crisis of the day,” says Susan Grant, the director of consumer protection for the Consumer Federation of America.

With layoffs increasing and foreclosures on the rise, con artists are now targeting homeowners who are having trouble paying their mortgage. The “foreclosure rescue” or “loan modification” scam is the fastest growing rip-off that Oklahoma consumers should be aware of.

Generally, these scammers will offer to renegotiate the terms of your mortgage and stop a foreclosure if you will pay their upfront fees which can be quite hefty. Unfortunately, many homeowner who have been suckered into this trap, pay thousands of dollars up front only to have the scammers disappear.

Here are some warning signs that a foreclosure rescue or loan modification company may be a not on the up and up:

• Has no telephone number or physical address.
• Has an “.org” Web site or e-mail address but isn’t a nonprofit.
• Demands a fee in advance.
• Tells you to send your mortgage payment to anyone other than your loan servicer.
• Instructs you to transfer ownership of your property.
• Makes verbal promises that aren’t put in writing.
• Asks you to sign a document that has blank lines or spaces.
• Claims to be a national company but has only one or a few local offices.

There are legitimate real estate loan companies and mortgage brokers that offer loan modification services but again homeowners should be wary. Reports suggest that many of these legitimate companies tend to exaggerate what they can actually do. They might put in a couple of calls to your mortgage company, and when they fail to produce results, they shrug their shoulders and claim, “We did the best we could.”

Trouble is, loan brokers and real-estate agents often don’t have the expertise or the authority to renegotiate loans for you. There are some former mortgage brokers and real-estate agents out there scrambling to make a buck, and they think they know everything about foreclosures, but they don’t.

And don’t think that just because someone is a licensed attorney means that he or she can help you either. Law like medicine has become specialized. You would be unwise to hire a lawyer who claims to be able to help you with modifying your home loan if that lawyer has no real-estate expertise.

If you are facing home foreclosure in Oklahoma and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Source: MSN Money.