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ITAC Head on Protecting Consumers from ID Theft
By Tracy Kitten, September 2, 2010, Bank Info Security
Financial losses associated with account takeover and intercepted personal information not only adversely affect a consumer's relationship with his banking institution, but also can have a devastating impact on an institution's reputation and financial well-being.
Anne Wallace, president of the Identity Theft Assistance Center, says financial institutions must implement best practices to protect their customers' identities.
In this interview, Wallace discusses:- How banking institutions can better protect and educate consumers about identity theft;
- Why it is so critical to implement tools and practices that help consumers and institutions detect potential breaches that could compromise identity;
- Why institutions must stay ahead of fraud risks associated with emerging technology, such as mobile banking and social networking.
Wallace is President of the Identity Theft Assistance Corp., a nonprofit corporation that operates ITAC, the Identity Theft Assistance Center. As the industry center of expertise, ITAC and its member companies fight identity theft through identity protection and victim assistance services, law enforcement partnerships, consumer education and research.
Wallace is a nationally recognized expert on privacy, financial services and payments law. She began her legal career with the Board of Governors of the Federal Reserve Board, where she served as assistant director of the Division of Consumer and Community Affairs and implemented key consumer credit laws, including the Equal Credit Opportunity Act.
KITTEN: What are the primary customer and member privacy concerns facing financial institutions today? Hi, I'm Tracy Kitten with Information Security Media Group. I'm here today with Anne Wallace, the president of the Identity Theft Assistance Corporation. Hi, Anne, thanks for speaking with us today.
ANNE WALLACE: Hello, it's great to be with you.
KITTEN: Anne, please tell the audience a little bit about the Identity Theft Assistance Center, when it was founded, and what its primary role is.
WALLACE: Well, we're a nonprofit. We were founded seven years ago, to help customers of financial-services companies recover from identity fraud. And what our member companies realized, back in 2003, was that each of them was helping their customers individually, within their own company -- helping that customer close the accounts that were affected, and whatever. But what they realized was that as a group, they could do more, and that their customers really needed additional help, because identity fraud is such an awful emotional experience; and it's difficult to recover from. So, ITAC was formed with an idea of collective action -- that these big companies would get together, work together and help all of their customers at the same time. I would just add that another big part of our mission is to partner with law enforcement; and, again, we realize that, as a group representing all these big companies, we could do more to work with law enforcement to fight this crime.
KITTEN: And how long has the organization been around?
WALLACE: Well, we've actually been around for seven years, legally, but as a corporation, our Victim Assistance Center is coming up on its sixth anniversary. So we have helped 70,000 people over the last six years of operation.
Read the entire article by Tracy Kitten, September 2, 2010, Bank Info Security. -
Kiplinger: 12 News Rules for Your Money
From Kiplinger's Personal Finance Magazine, September 2010
In this era of high unemployment, flat home prices and do-it-yourself retirement savings, some traditional rules of saving and investing are due for an overhaul
Renting may beat buying. Buying wins hands down when home prices are rising. But when they're flat or falling, it makes sense only if you get a great deal, your monthly payment won't exceed rent on a comparable home by much, and you'll own the home long enough to recoup your costs for both buying and later selling your home. Check out our Are You Better Off Renting? calculator.
Consider a Roth. Although the traditional rule of tax planning is never to pay a tax bill today that you can put off until tomorrow, Roth IRAs and Roth 401(k) plans stand that rule on its head. With a traditional IRA or work-based retirement plan, you get an upfront tax deduction, but every dime you withdraw in retirement is taxed at your ordinary income-tax rate. With a Roth, you forgo the upfront tax break, but all withdrawals -- including decades of earnings -- can be withdrawn tax-free. If income-tax rates rise, a pot of tax-free retirement income could be a financial lifesaver. To contribute to a Roth IRA, your income in 2010 can't top $120,000 if you're single or $177,000 if you're married. Anyone, regardless of income, can now convert a traditional IRA to a Roth IRA, but you'll owe taxes on the entire amount. There are no income-eligibility limits to contribute to a Roth 401(k), but not all employers offer them. (See Why You Need a Roth IRA.)
Focus on dividends. Invest in stocks that pay dividends. Your options should continue to expand -- more companies are paying dividends, and many of the elite dividend-paying members of Standard & Poor's 500- stock index are upping their payouts to shareholders. True, dividends do not guarantee that a stock will be a winner. Some failed big banks used to pay high dividends, while highfliers Apple and Google don't pay a penny. But during periods of market volatility, when stock prices tend to bounce around in reaction to political and economic gyrations rather than accurately reflect corporate fundamentals, dividends can provide a predictable income stream. That's not going to make you rich, but it is a comfort when other traditional sources of income have slowed to a trickle (see 10 Great Funds That Deliver High Income With Dividends and Interest).
Personalize your emergency fund. The standard advice is to keep enough in savings to cover three to six months' worth of expenses. But a lot depends on the stability of your job and the predictability of your income. The greater the risk your income could drop, the larger your emergency fund should be. If you think your job is in jeopardy, aim to save at least a year's worth of expenses; ditto for individuals with erratic incomes, such as those who work on commission. Retirees should keep two to three years' worth of expenses in money-market funds, short-term CDs or other liquid investments. The goal is to keep enough cash on hand so that you don't have to sell stocks or rack up expensive credit-card debt if you have an emergency, but not so much that you miss out on the higher returns you can earn on longer-term investments. (See How Much Cash Do You Really Need?
Read the entire article from Kiplinger's Personal Finance Magazine, September 2010.
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Dallas Morning News: Act Your Age When it Comes to Investing
By Dallas Morning News, August 28, 2010
Although each life is different, there are certain stages that everyone goes through – and each new phase brings with it financial responsibilities, needs and goals.
The Certified Financial Planner Board of Standards, which grants the respected CFP certification, has laid out five key phases in a person's life.
Each stage is a building block to help you reach your financial goal.
"Every stage has its financial work to do," said Eleanor Blayney, the CFP board's consumer advocate.
The starting-out years
Ages 18-25: "If you're in your 20s and broke, you're in very good company," said Rick Salmeron, certified financial planner at the Salmeron Financial Network in Dallas.
The financial habits you form during these years will determine whether you will have a secure retirement or have to work later in life. You're laying your financial foundation.
"When you are starting out, you may have more debt than assets," Blayney said. "Your game plan is to get yourself out of the negative and to stay on the right financial path."
Ways to do that are to "fight the urge to splurge, plan your purchases and don't get too excited about a good deal," she said.
Be very careful about taking on debt. If you do take on debt, make your payments on time so you can start building a good credit history.
"Getting off on the right foot can impact their ability to build and accumulate wealth throughout their lives," Blayney said. "Money saved in this phase or invested does so much more work for the individual than the 50-year-old who wakes up and says, 'Oh, dear, I've got to start saving or investing now.' "
The nesting years
Ages 25-40: This is when you're making big lifetime decisions about marriage and children and buying a home.
"Once the career phase starts, there is a material accumulation phase," said Gary Silverman, a certified financial planner in Wichita Falls. "This is where the person, usually a couple, is getting their kids, their house, their cars, their appliances, their furniture, etc."
The timing of those choices will have a huge impact on your ability to build wealth.
Save before you start investing.
"You want nine months of living expenses saved before even thinking about investing," Blayney said.
Max out on your employer's 401(k) plan, especially if the company matches your contribution.
This is also the point in life to consider your insurance needs. But spend wisely.
"If you are single without dependents, do you need a million-dollar term-life insurance policy? Probably not," Blayney said.
But if you have children, consider life insurance because you want them provided for if you die prematurely.
If you're on track for retirement, you've paid off your consumer debt and you've got a decent emergency fund, it's time to start saving for your kids' higher education.
"A realistic goal for most families might be to save for one-third to one-half the cost of public school education and rely on borrowing to cover the rest," Salmeron said.
Read the entire article by Dallas Morning News, August 28, 2010 -
CNN Money: More Employers Make 401(k) Enrollment Automatic
By Aaron Smith, August 24, 2010, CNNMoney.com
You could be contributing to a retirement plan without even knowing it.
That's because an increasing number of companies are offering "opt-out" 401(k) plans that encourage more workers to save.
The percentage of employers that offer automatic 401(k) enrollment has increased dramatically to 38%, according to financial services company Charles Schwab. That's more than seven times the rate in 2005, when automatic enrollment was at 5%.
Automatic enrollment is a system in which companies direct pay from a worker's paycheck into a 401(k) plan, unless the employee explicitly chooses to opt out. The system requires no initiative on the part of the employee.
Of the employers who automatically enroll their workers in a 401(k), some 37% also require automatic savings increases. This type of 401(k) plan might start at 3% for an employee, but the employer automatically adds another percentage point the following year. This practice has more than doubled from 14% in 2006 -- when Schwab clients first implemented the strategy.
At the same time, there has been a dip in matching contributions: 69% of employers who offer a 401(k) plan also provide a matching contribution. That's down from a peak of 76% in 2006.
Read the entire article by Aaron Smith, August 24, 2010, CNNMoney.com
