Filed under: Cards, Ripoffs and Scams, Fraud

Last week, police busted a woman working at a Wendy’s restaurant for credit card fraud.

They say that when customers in the drive through used a credit card to pay for their food, she would swipe their cards through a credit card reader that captures all the card’s information. She would take the tiny reader home and download all the data to a laptop computer for her own use. Police say she was making fake credit cards with customers’ real data and going shopping with those cards, victimizing between 40 and 50 Wendy’s customers.

This is a risk any time we hand our credit cards to someone and can’t see what’s happening to it. The credit card readers (often called skimmers) are inexpensive, sometimes as cheap as $100. They can fit nicely into someone’s pocket, so whenever a server at a restaurant walks away with your card, you might be at risk.

Since it’s not always possible to keep an eye on your credit card, what can you do? The best advice is to routinely check your credit card balances online. I check mine once per day to make sure that there aren’t any unusual charges. That way, if someone has stolen my credit card information, I’ll be able to halt their theft early.

Consumers usually aren’t liable for fraudulent charges on their credit cards, but it still pays to cease these crimes swiftly. It will be much easier to clean up the mess if it’s smaller. And by stopping the thief, you save all consumers money…. their theft is paid for by all of us via higher fees and rates.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Ripoffs and Scams

To many “Prosperity Theology” or “Prosperity Gospel” represents nothing more than praying to God for money. The prosperity doctrine is gaining in popularity thanks to engaging televangelists like Joel Osteen and books and movies like “The Secret.”

Believers in this doctrine often preach that those whose finances are bad just haven’t had enough faith in God. Those who can’t seem to lose weight just aren’t praying hard enough and thinking thin thoughts. You can have anything you want if you pray hard enough and believe that you can have it.

But that amounts to blasphemy for many devout followers of God and the Bible. People don’t become sick because they lack faith in God. Hard times don’t come upon us because we don’t believe in God enough or want prosperity enough.

Add to this the fact that the high-profile evangelists are often seen raking in millions of dollars, and you’ve got a huge problem on your hands. Aren’t those evangelists proof that God blesses the faithful with money? Those on the other side state the evangelists are exploiting the weak and vulnerable with this “you can have it all” gospel. People want to believe that their lives can improve, and exploiting religion in this regard is one of the oldest tricks in the book.

Beware: These sketchy teachings go by many different names, including health and wealth theology, prosperity gospel, word of faith, name it and claim it, and many others. Yes, God will bless those who live right and believe, but prosperity theology takes the Bible out of context and misleads believers.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Record-keeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Cards, Ripoffs and Scams, Fraud

Last week, police busted a woman working at a Wendy’s restaurant for credit card fraud.

They state that when customers in the drive through used a credit card to pay for their food, she would swipe their cards through a credit card reader that captures all the card’s information. She would take the little reader home and download all the data to a laptop personal for her own use. Police say she was making fake credit cards with customers’ real data and going shopping with those cards, victimizing between 40 and 50 Wendy’s customers.

This is a risk any time we hand our credit cards to someone and can’t see what’s happening to it. The credit card readers (often called skimmers) are inexpensive, sometimes as cheap as $100. They can fit nicely into someone’s pocket, so whenever a server at a restaurant walks away with your card, you may be at risk.

Since it’s not always possible to keep an eye on your credit card, what can you do? The ideal advice is to routinely check your credit card balances on the web. I check mine once per day to make sure that there aren’t any unusual charges. That way, if someone has stolen my credit card information, I’ll be able to cease their theft early.

Consumers usually aren’t liable for fraudulent charges on their credit cards, but it still pays to stop these crimes quickly. It will be much easier to clean up the mess if it’s smaller. And by stopping the thief, you save all consumers money…. their theft is paid for by all of us via higher fees and rates.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Filed under: Ripoffs and Scams

To many “Prosperity Theology” or “Prosperity Gospel” represents nothing more than praying to God for money. The prosperity doctrine is gaining in popularity thanks to engaging televangelists like Joel Osteen and books and movies like “The Secret.”

Believers in this doctrine often preach that those whose finances are bad just haven’t had enough faith in God. Those who can’t seem to lose weight just aren’t praying hard enough and thinking thin thoughts. You can have anything you want if you pray hard enough and believe that you can have it.

But that amounts to blasphemy for many devout followers of God and the Bible. People don’t become sick because they lack faith in God. Hard times don’t come upon us because we don’t believe in God enough or want prosperity enough.

Add to this the fact that the high-profile evangelists are often seen raking in millions of dollars, and you’ve got a large problem on your hands. Aren’t those evangelists proof that God blesses the faithful with money? Those on the other side say the evangelists are exploiting the weak and vulnerable with this “you can have it all” gospel. People want to believe that their lives can improve, and exploiting religion in this regard is one of the oldest tricks in the book.

Beware: These sketchy teachings go by many different names, including health and wealth theology, prosperity gospel, word of faith, name it and claim it, and many others. Yes, God will bless those who live right and believe, but prosperity theology takes the Bible out of context and misleads believers.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Banks, Borrowing, Debt, Real Estate, Ripoffs and Scams

While I can’t guarantee that there won’t be any exotic mortgages lurking out there in 2008, they’ll be rare and hard to find. You also will need to have stellar credit ratings to qualify for exotic mortgages, because investors have pretty much dried up. The risks of loss are just too high for most mortgage investors.

When exotic mortgages were at the top of their game in 2005, lenders made about $625 billion in subprime loans, and most of these fit into the category of exotic mortgages. Essentially any mortgage that can’t be sold to Fannie Mae and Freddie Mac because it doesn’t meet their prime lending terms gets categorized as subprime, even if the borrower is also a candidate for a prime loan. In 2005, about $625 billion of subprime loans were funded. In 2007, that number will drop to about $50 billion, or just about 2% of the mortgage market.

Don’t anticipate to find option ARMs, 0% down mortgage loans (especially if it’s an investment property and not your primary home), and ridiculously low teaser rates that jump dramatically in two to three years. Also, many of the balloon loans will be shut out except for those with strong credit histories.

The folks who likely will be hardest hit with this change in market conditions are people who are self-employed and have a difficult time proving income. No doc loans will be hard to find, and probably the rules for getting approval will be very stiff.

Many exotic loans helped to introduce the term upside-down mortgage, which used to be solely for vehicles when the car was worth less than the loan amount due. With people putting 0% down, and in some cases not even paying all the interest due, mortgages quickly became upside-down as the real estate market weakened.

Good riddance to exotic mortgages, and I hope for the sake of American consumers they never come back.

This post was written as part of a series on on 2007 departures. Read about more products, companies and people you won’t see in 2008.

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Filed under: Budgets, Ripoffs and Scams, Saving

Every year at this time, economists and financial analysts are jockeying for position on television news shows and in magazine articles. They each have the latest and greatest prediction about what’s going to happen in the coming year. And those stories sell, which is why you keep hearing them.

But economists are often wrong more than they’re right. Take the forecasts about the housing market. A year ago, many respected analysts were predicting that the recovery of the real estate market would begin in 2007. They were wrong, as the housing market made history with its declines. From housing strength to home building, the economists’ predictions were wrong.

Why do you care? Consumers hear this information and many times use it to make major financial decisions for their families. If so many economists are certain that housing is going to rebound in the next year, some people are bound to believe them.
But predictions are just that…. Predictions. Don’t put your family’s financial future in the hands of an economist pretending to be a psychic. Buy and invest in only what you can afford.

Don’t get a too-big home in the hopes that you’ll get a superior paying job in 2008. Don’t finance a buy, hoping to pay it off next year with the bonus you expect. Don’t get an adjustable rate mortgage with the idea that interest rates will be lower when your rate resets.

In times of economic uncertainty, it makes the most sense to be conservative with your dollars, especially if your family’s budget is tight. If you’ve extra savings or you make far more than you need to pay your basic expenses, then you can take a tiny more risk with your investments and spending habits.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

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Filed under: Private equity industry

The American consumer is not the only part of the US economy that’s holding off on spending. So are institutional bond investors.

Based on a report from Bloomberg, it looks like Wall Street’s premier investment banks — including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and JPMorgan Chase (NYSE: JPM) — are slashing prices on their buyout debt backlog. In fact, some of the discounts are as much as 10% of the face value. Given that Wall Street is going to report horrendous financial results, it makes sense to deal with the problems now, right?

Interestingly enough, Wall Street had some help from failed deals, such as with SLM (NYSE: SLM). This trend has wiped out $51 billion in obligations.

Yet, there is still much to finance, such as Clear Channel, Harrah’s, BCE and Alltel. So, we might also see some post-Christmas buyout bond slashing, as well.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: International markets, SEC filings, Products and services, Management, Middle East, Oil, Headline news

Dubai World, a state owned investment company, announced that it has increased its ownership in MGM Mirage (NYSE: MGM) to 6.5% by purchasing an additional five million shares of stock in the company.

Following the announced buy, Lawrence Klatzkin of Jefferies & Co. told his clients that MGM is one of his top three picks and maintains a “buy” rating. According to Klatzkin, investors can expect to see Dubai World continue to add to its MGM holdings. This will continue to help keep the stock strong and definitely minimize any sort of downside risk.

Dubai, which has been swimming in money since the oil boom brought billions into the economy, has been moving fast over the past decade to branch out in its revenue streams. Seeing the end of the country’s oil reserves in the near future, the country has been working hard to become one of the world’s top tourist destinations, and moving into Las Vegas gaming is just one more step in the country’s strategy to remain a relevant world player once the oil runs dry.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.

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Filed under: Other issues, Industry, Law, Consumer experience, Employees, Headline news, Small business

A recent ruling handed down by the Equal Employment Opportunity Commission has given employers discretion in using Medicare eligibility as a factor when calculating health care benefits for retired employees, as reported by Marketplace. The AARP had raised a stink about the issue claiming that having employers shift health care costs to Medicare when applicable amounted to age discrimination. My question is, if the level of care and benefits remains the same, who really cares from what direction the bills are paid? If employers carry the burden then we all see it in our bottom line. If the government pays for it, then we all see it in our tax load. The end effect to us as a society is basically the same.

This decision reaffirms in part exactly what Medicare was intended to do. The system has two major intents. First and foremost, Medicare is meant to fill the gap in cases where health care coverage is lacking. Secondly, Medicare is intended to help free the business world from the administration of benefits for people who no longer participate as an active part of their work force.

If the level of actual benefits is in no way reduced and the process of accessing those benefits is in no way hampered, then there’s no room to gripe about employers shifting the burden. In fact, this kind of move is exactly what American business needs right now. However, if this decision in any way dilutes the benefits that hard working people have bargained their working careers for, then the AARP has an extremely valid argument and they desire to have that argument tested by the Supreme Court.

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Filed under: Ripoffs and Scams, Transportation, Travel

It’s bad being an airline passenger in a coach seat. It’s pretty bad as an employee too. Especially if you work for US Airways. Apparently, employees are humiliated to admit they work for this pathetic excuse of an airline.

US Airways is known far and wide as the worst massive airline in America, and it’s not hard to see why. Employees are complaining about how bad the planes smell and how dirty they’re.

And apparently passengers aren’t too thrilled with the pretzels handed out in coach. Wonder why they suck? Because they cost…. get this…. three cents per package. Three cents. That’s what you, the hated passenger, are worth. Three cents. So at three cents per package, US Airways isn’t too eager to find a supplier with better tasting pretzels, you see.

Employees are encouraged to give feedback directly to the company’s CEO, but that doesn’t seem to have much of an impact. In addition to dirty planes, the company’s current claim to fame is the worst on-time flight record, the highest rate of lost luggage, and the most complaints filed with the Transportation Department.

Well, at least US Airways isn’t offering passengers urine-soaked seats like AirTran is.

Tracy L. Coenen, CPA, MBA, CFE performs performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Record-keeping, and is the author of Essentials of Corporate Fraud.

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