Dormant Bank Account Fund Approved

What happens to money left unclaimed in bank accounts that people have forgotten about? In some cases, the account holder will remember (or be reminded) that it’s there, but in others, that simply doesn’t happen. In the United States, each state runs a missing money program where unclaimed funds go. Each state is required to keep the money or other valuable property in an individual’s name until it can be claimed. If it isn’t claimed after a certain point, it can be used by the states.

But things are different in the UK. In cases when there is unclaimed money it could be put to use helping good causes – and that’s exactly what’s happening, thanks to a new initiative involving a major financial group of businesses…

The Co-operative Financial Services will run the fund that collects money from dormant bank accounts to use in the Big Lottery Fund, after receiving authorization from the Financial Services Authority (FSA), which regulates providers of financial services in the country.

As reported on Think Money, the new fund will be known as Reclaim Fund Ltd, and will be run on a purely non-profit basis. As such, it will operate independently from the rest of The Co-operative Financial services, with its own Executive and its own Board.

It’s part of government plans in which all money held in bank accounts that have been untouched for 15 years or more will be put towards charitable causes. However, some of this money will be held back by Reclaim Fund Ltd, just in case account holders do realize they have a dormant account and want to claim their money back.

It is thought that the Reclaim Fund will receive a total of £400 million or so from dormant bank accounts, with the first distribution to the Big Lottery Fund in the region of £60-100 million, transferred in phases over the next 12 months.

In England, some of the money will be used to fund the ‘Big Society Bank’, which according to the Financial Times will lend money to businesses whose goals will produce “a social benefit”.

It’s good to see the UK government doing good things with the money – and it’s something the US might want to consider in the future.


Recent California Supreme Court Ruling Drives Lawsuits

After a ruling in February in the California Supreme Court, it is now illegal for a retailer in the state to request the zip code of customers paying with a credit card. Apparently this information was being used for marketing purposes although consumers were led to believe otherwise. The result: more than 150 class-action lawsuits have been filed in California against numerous companies. The retailers include Kohl’s, J.C. Penney, Bed Bath & Beyond and Wal-Mart.

More than 40 of these lawsuits were filed in San Francisco Superior Court but include other jurisdictions in California as well.

Consumers claim the basis for these lawsuits is they were deceived into providing personal information under the assumption it was pertinent to finalizing the credit card transaction or for fraud prevention. Instead, consumers are learning this information seems to have been used for marking purposes.

The court ruled that collecting zip codes is illegal under a law that bars stores from collecting “personal identification information” when it is not needed for a transaction. The law was originally put in place to prevent customers’ personal data from being misused. But that is the same justification stores are using for taking zip codes; they say it is an anti-fraud measure.

In the Supreme Court Case, Pineda v. Williams-Sonoma Stores, Inc., a woman sued the home store Williams-Sonoma after the company used her name and zip code to find her address and added it to a marketing database.

Clearly most consumers would not have divulged personal information, such as their zip code, if they knew what it was really being used for. Stores in California certainly won’t be asking for zip codes moving forward, but that isn’t enough for many consumers who feel they’ve been violated and deceived in a big way.

Bill Dombrowski, president of the California Retailers Association told The San Francisco Examiner: “Most of the time, it’s being used to verify the credit card is your credit card, so it’s for fraud prevention.”

But the California Supreme Court disagrees.


Five Reasons to Use a Credit Union Instead of a Bank

As the economy continues to suffer and big name banks continue to take flak for unscrupulous practices, credit unions have begun to grow. Many people fail to realize the advantages a small credit union has to offer because they cannot see past the blaring marketing plans of big name banks. The major difference between credit unions and banks is that big banks are businesses. Commercial banks have one intention: to make more money from their customers (you). Big name banks often have very low interest rates, loan rates are competitive, and they are always trying to sell you things. On the other hand, credit unions exist to help their members. The following are five reasons why credit unions are your best banking option today:

1. Member Owned: This means that every person with an account at a credit union is a partial owner of that credit union. While wealthy shareholders typically own major banks, you don’t have to be a wealthy shareholder to have some say in the business procedures of a credit union. The minute that you open a credit union account, you own a portion of the credit union. You will get to vote on who you want to serve on the Board of Directors and therefore help guide the direction of your credit union. You are able to provide personal input into what financial services you are interested in having through the credit union.

2. Non-Profit: As mentioned before, big name banks are businesses. They run off of the profit they make from their customers. Because credit unions do not exist to make a profit, they often offer better services at lower costs. They are community oriented and tax-exempt. A credit union is not going to try to sell you something or dupe you into a service that you don’t want or need just to make some money. They are more customer-oriented because their customers are also their members.

3. Better Interest Rates and Loans: Credit unions offer higher interest rates on your savings, money market and CD deposits than typical banks do. They tend to also offer lower interest rates on your mortgage, auto loans, and credit cards. This is possible because of the way the non-profit aspect of a credit union works. The credit union makes profit and then returns the profits back to its member in the form of better interest rates.

4. Lower Penalties on Overdrafts: One of the most aggravating aspects of a big bank is their overdraft charges. Most everyone is going to have an overdraft or two at some point in their life. And most banks are going to take advantage of those times when we lose track of our balances or run out of cash. Big banks tend to charge outrageous fees even for the slightest overcharge. Because credit unions are smaller and more member-oriented they are typically more willing to work with individuals who are having financial difficulties. Many credit unions will not even charge for overdrafts and instead send you a notification and try to solve things with you.

5. Better ATM Access: It is a common misconception that credit unions have highly limited access to ATMs. Although credit unions are typically small, many allow you to access ATMs of other credit unions for no additional fees. So, while they will likely not have as many ATMs nationwide as some of the big national banks, they do offer fairly thorough ATM access, often through an ATM network.


Wells Fargo and Chase Introduce Microchip Credit Cards in U.S.

It appears the U.S. is finally making an effort to catch up with other countries in the implementation of microchip-embedded credit cards, also known as EMV-chip technology. Wells Fargo & Co. announced Wednesday that they will test EMV chip cards with 15,000 customers who travel abroad frequently. On Thursday, JPMorgan Chase announced that it would add a chip to its high-end Palladium card.

The U.S. has lagged behind countries such as Japan, Mexico, China, Brazil and most European countries that have already made the conversion from magnetic strips to microchip-embedded credit cards. American Express Blue cards originally offered microchip credit cards, but without the necessary payment infrastructure at U.S. ATMs and merchants, the feature was unpopular. Fearing a drop in credit card applications, American Express replaced the chip with RFID, the technology that allows payment by holding the credit card near a reader, in 2005.

Microchip Versus Magnetic Strip Credit Cards

EMV technology has already become the standard throughout Europe and other countries because it provides heightened security and protection against fraudulent charges. It is beneficial to every party involved, including consumers, retailers and credit card issuers. Every in-person transaction requires a PIN. One reason the U.S. has fallen behind is that U.S. issuers have focused on RFID technology — also known as PayPass or Blink — instead, hoping to drive credit card applications.

U.S. Travelers Face Difficulty

Almost 10 million American travelers had trouble using credit cards in 2008, costing about $4 billion in lost transactions and $447 million in lost revenue for card issuers, according to Bloomberg News. In some cases, consumers can show identification to verify the card is indeed theirs, but many European retailers simply refuse to accept credit cards without the microchip. Additionally, travelers have faced difficulty using the ever-growing number of automated kiosks in Europe, many of which only accept microchip-embedded credit cards. As discussed in other articles, credit cards are often the most convenient payment method for travelers and it is not the smartest idea to travel with a large amount of cash.


Risk vs. Reward – Are you a Risk Taker?

I am sure that many of you will understand what I mean by the title, “Risk vs. Reward.” In just about any walk of life, if we do not take any “risks” our rewards by not doing so are generally much lower.

That is not to say there is anything wrong with individuals whom do not wish to take any risks, in financial circles these people are referred to as “risk adverse” and it is a perfectly acceptable view to take on both your everyday life as well as financial matters.

Taking Risks – Risk vs. Reward

There is of course a major consideration in taking risks and that is the higher likelihood that you may fail at whatever task you take on. Whether that is investing your hard earned money into a savings vehicle which is considered to be “high risk” or a lifestyle change which you cannot guarantee will work out.

Risks and Benefits

To illustrate this point further let me give you a personal example. When I was starting out in life and as most young men do, I wanted to get a house of my own. The cost of a mortgage payment, with what was my young and small income, was significant at that time. I didn’t have much room to move in terms of financial commitments but it did mean I could get my leg up onto the property ladder at the ripe age of 18 years. This was a significant risk to me, could I afford it? Would I have to sacrifice my social life? What about the hidden costs?

All these questions and more were going round my head (and my wallet!) but after weighing up all the options I decided to take the risk and purchase my first house. For me, it was the best “risk” I had ever taken and after only 3 years of living at the address the value of the property had raised by some 45%. This enabled me to move up the property ladder to something bigger and in a nicer neighborhood and some 20 years later; I have the house of my dreams.

The Risks of Failure

Things could of course have gone completely differently. If I had purchased this first home just 4 or 5 years ago the chances are I would not have made any money at all, in addition, I probably would not have afforded the large deposits lenders now require in the wake of the biggest financial meltdown for 50 years!

Consider the Risks

You will have heard of the term “calculated risks.” This is an excellent concept and helps people understand the pitfalls in taking actions. By assessing the background to the risk you are considering and looking at many of the details associated with it, you will be in a better position to consider the options at hand. Knowledge is most definitively power when discussing risks, gather everything you can about the problem and set time aside to consider them.

Even with taking “calculated risks” remember that risks are “risks,” you have to go into them with a open mind and importantly a mindset of success – the bigger the risk, the larger the reward, but just make sure you understand all the risk attributes as much as possible before making a decision.


What Should You Keep in Your Safety Deposit Box?

Safety Deposit Boxes at your bank are important for keeping items that are difficult to replace. These are private, so not even the bank knows what is in them. Keeping items in a fire-proof safe in the house is not as good protection from theft, fire and flood. Many are only fire-proof up to a certain temperature.

Write down the date you open your safety deposit box and where it is located, in case you forget. Write down the contents of your safety deposit box and store in a file in case you are looking for a certain document. “Did I put the birth certificate in my safety deposit box or is it somewhere else?”

You usually get the best deal on a safety deposit box with your current bank or credit union. The usual cost per year is $30 to $75.

What should you keep in your safety deposit box?

  • Birth certificates
  • Marriage certificates
  • Social security cards
  • Adoption records
  • Death certificates
  • Divorce records
  • Child custody documents
  • Military records
  • Deeds
  • Titles
  • Mortgages
  • Leases
  • Stocks
  • Bonds
  • Certificates of Deposit
  • Insurance policies
  • Expensive jewels
  • Medals
  • Rare stamps
  • Collectibles
  • Photos – and back ups of digital photos on CDs or DVDs, photo negatives
  • Videos
  • Video and pictures of house with its contents for insurance purposes
  • Copies of your driver’s license
  • Copies of the contents of your wallet (front and back of cards) in case your wallet is stolen
  • List of your credit card numbers
  • Account numbers account numbers, balances, online banking ID’s & passwords. Deposit accounts, PayPal, eBay, ClickBank and anything else a family member would need to know in case they had to take over the finances.
  • Copy of your will (not the original)
  • Current credit reports
  • Hard to replace items

Put these in air tight containers or zip locks to help prevent any damage in case something happens to the bank. Their vaults are highly resistant but not 100% guaranteed.

What not to keep in a safety deposit box

Safety deposit boxes are available only during bank hours so emergency items are not a good idea to store.

  • Passport
  • Power of Attorney
  • Medical directives
  • Funeral Instructions
  • Cemetery deeds
  • Estate documents
  • Will

Some states allow co-renters or family members to get wills out of safety deposit boxes. But other states require a court order, so check your state before putting your will in a safety deposit box. You can also get a co-renter for emergencies who will have access to your box. Or you can get an agent in the presence of the bank who will have access. Many times power of attorney does not give access to safety deposit boxes.

Law enforcement can obtain a court order if they suspect something illegal in your box. The IRS can also freeze your assets (Including your safety deposit box) in disputes.

See if your insurance will cover Safety Deposit boxes because the FDIC does not cover loss of these.

Make sure you know where your most important documents and valuables are.


Sallie Mae Debit Card Is A Helpful Convenience For Students, If Handled Responsibly

The student loan company Sallie Mae is preparing to release a student debit card in partnership with Mastercard. The new program, which will start this summer, allows students to receive financial aid money and tuition refunds in a special checking account.

Sallie Mae Debit Card Features

Perks of the accounts include:

  1. A free checking account (Here is a Sallie Mae savings account review).
  2. More efficient receipt of money. Students can expect to receive a refund the day it is issued rather than the typical two- to three-day bank lag.
  3. FDIC insurance on deposits.
  4. Surcharge-free withdrawals at 35,000 ATMs nationwide.
  5. No minimum account balance.
  6. The card will not allow the user to overdraw.

Saves students money. The new Sallie Mae debit card will save students money in the long run, especially compared to some of the main competitors in the space. With the new accounts, Sallie Mae is challenging Higher One, its main rival in student payments. Higher One runs a similar program but only has 600 fee-free ATMs. It also charges fees for PIN-based transactions.

Faster and safer for financial aid refunds. Sallie Mae’s move comes in time to comply with new rules taking effect in July requiring universities to refund unused financial aid money in 7 days instead of 14. In addition refunds and other transactions can be handled electronically, which is faster and safer than other types of financial transactions.

Added convenience. The cards will be convenient for students and provide an incentive to borrow from Sallie Mae. But with financial aid money in hand, they will need to be extra careful not to spend it carelessly since, for most students, it will need to be paid back with interest eventually.

A great option for students. Overall, this card is a solid option for students, since they will have added convenience, free checking, many fee-free ATM options, FDIC insurance, no minimum account balance, and the inability to overdraw their accounts.


Top 5 Things to Consider When Shopping for a Home Safe

When a tragedy strikes, will your meaningful belongings and documents be protected? It is never too late (or early) to add a safe to your house. Burglary, fire and floods are all variables that cannot be controlled however; you can do something to ensure that at least irreplaceable items and important documents will not be lost forever. Any size family and home can find a safe to fulfill their needs by considering the following five things.

What you need to consider for your home safe

1. Content – What do you intend on keeping in your safe? You should know that not all safes are created equally and certain styles are designed to be more protective of certain items. For example, Gardall safes are available in models that are specifically designed for firearms which is crucial, especially if you have children in your home. Different models of safes are even made from different material so considering whether you will primarily be storing documents, money, valuables, media files, firearms or a little of everything will help you choose the right safe for you.

2. Locks – What type of lock will you be most comfortable with? Most safes and safety security boxes come with a standard lock but some allow you the option to either change it or add on another lock for more security. Key locks are popular and if you happen to lose your key, most companies can send you a new one. Combination locks are quite common as well are are a preferred choice, alongside a key lock when double protection is desired. Lastly, electronic locks empower you to program different combinations for multiple users and you can change these as needed.

3. Location – Where is the best place for a safe to be stored in your home? Some models are free-standing that can be hidden in a closet, pantry, etc., or there are those that are installed in a wall or the floor of your home. These provide an added security feature of being able to hide them.

4. Waterproof – Do you need your safe to be waterproof? For many people, this is a top concern if they live in an area prone to flooding and hurricanes. However, water damage can occur regardless of where you live from roof damage, frozen pipes that burst or just a freak of nature. More and more catastrophes are happening today that are blamed on the weather that no one is prepared for them.

5. Fireproof – Is your primary concern with fire protection? A fire can happen to any home at any time and there is never the chance to gather your important belongings and get your family and pets out of the house. There are some safes that are designed to keep the contents of your safe cool for as long as two hours so when the fire is put out, you will find everything inside unharmed.

Buying a home safe should be a priority on the list of everyone. There are many sizes to choose from with various features so use this guide to help determine the kind of safe that will best fulfill your needs.


Why Certificate of Deposits Are One of the Safest Places to Put Your Money

Volatile markets, falling home prices and an unpredictable economy are all reasons for one to be concerned about the safety of one’s money. If you are seeking to keep your assets protected, then I suggest using Certificates of Deposit, or CDs, as one of the safest places to keep your money. There are several reasons for this:

  • Insurance – If you open a CD with a FDIC insured bank your money is protected up to $250,000, up from the previous limit of $100,000. Just as with a savings or checking account if that bank should fail the federal government will make sure that all customers will get back their money up to that limit. There are no such guarantees with stocks and bonds.
  • Guaranteed Return – A Certificate of Deposit often comes with a fixed interest rate that is higher than a regular savings account and that can outperform stocks and mutual funds in a down market. There is no guessing at what your return will be at the end of you CD’s term. It can be calculated and you can plan on having that return on your investment.
  • No Broker Fees – Setting up a CD is just like setting up any other bank account and does not carry with it any origination or maintenance fees. Unlike a brokerage account there is no need to pay someone to keep looking at your assets, changing their allocation and charging you for the privilege.
  • Low Risk – Real estate has climbed and fallen over the past ten years. During that same time the stock market has been flat. Even bonds do not have the return rates they used to. Investing in any of those three over the past decade could very well have resulted, and for many did result, in a significant monetary loss. By contrast a CD would have continued to earn money during that same time period. The low risk of CDs can make it a wise portfolio investment during uncertain times.
  • No Monitoring – Once opened the CD takes care of itself. There is no need to fret or to pore over you monthly statement. Just sit back, wait until the end of the account’s term and enjoy the return.

Some may assume that uncertain times are when risks should be taken. But some investors are looking not for risk but safety. If so then a certificate of deposit is one of the safest places to keep your money.


Essential Treasury Management Services

What is treasury management and why is it important for your business?

Treasury management is a generic term used to describe popular banking products and services for businesses and non-profits.

Treasury management, also known as cash management, allows organizations to easily control cash flow in an efficient and effective manner, while staying up-to-date with financial statements and collections. There are many tools available, and there is not a one-size-fits-all approach. Hopefully, this article be a valuable resource as you research what banking tools are best for your organization. This is by no means an extensive article, and further research should be done before deciding on your banking solutions.

What are the most popular treasury management services?

Direct Deposit of Payroll:

Direct deposit is quickly becoming the norm for medium to large organizations. This service expedites the paycheck distribution while also providing enhanced security. Instead of mailing out checks, the bank or credit union involved will electronically deposit the funds into your employees financial accounts. It is a great time-saver and should be considered by any business with employees.

Positive Pay:

Positive Pay was developed to eliminate check fraud for organizations. Your financial institution will only pay for checks that match your company profile (i.e. check serial numbers and dollar amounts). If a check written in your company name does not match up with the above criteria, then you will be alerted, or the bank will simply refuse the check depending on the type of positive pay in place.

Merchant Services / Credit Card Processing:

If you are a brick and mortar shop or an e-commerce only business, you will likely need merchant services. This service allows you to accept payments from all major credit and debit cards. It also allows your to automate reoccurring billing. Usually financial institutions offering this service will also provide point-of-sale (POS) equipment and a loyalty card program. Make sure that before you choose merchant services provider that you understand all of the fees associated with credit card processing.

Other Treasury Management Tools:

If you are seriously considering banking services for you business, you may also want to research Bill Pay, Remote Deposit, Wire Transfer, Sweep Account Services, Bill Pointe, Business Checking, and Automated Clearing House.

In conclusion, make sure that you do your research before deciding on your business-banking partner, so that you get good rates and state-of-the-art equipment and services. Also, understand that every business has different banking needs. If you are small “Mom and Pop” shop, you might not need half of the services listed above; however, if you are a medium to large corporation, it is probably essential for your organization to have the best of these services because of the security, efficiency, and reporting available.