Financially Insecure

We all know that new technologies bring new concerns and new opportunities for both confusion and fraud . As a result, financial insecurity has taken on more than one meaning.

It doesn’t take a post-graduate Masters in Business Administration to realize that financial institutions are here to put on the fake smile while finding ways to make money off of their customers.

Take, for example, a bank I did business with until last week. They have a policy of charging a $20 service fee if a transaction does not occur at least once a month in their customer’s checking account. Another bank charges a fee after forty-five days. In the olden days, most banks wouldn’t poke you to see if you were still alive unless half a year went by without activity. As I had an on-line presence with this bank, I noticed the fee one month three months previously. A phone call to customer service explained why I got the inactivity fee. I made a mental note to make sure I remembered every month to make a small transfer between accounts in order to waive the fee.

I noticed, however, last week that despite the presence of these mandatory transactions the past two months in my checking account, I still got hit with the inactivity usage fee. So, I decided it was time to close out the accounts in this bank and move to a new one.

Killing two birds with one stone, I moved the money to a bank where I also have my mortgage. This would now make it more convenient to pay the mortgage. It should have been an easy transition, except that I had to call the tech support people to reset my on-line connection because it was linked to an old mobile phone. (I had an online presence at the other bank because of the mortgage)

Not only was the security link not functional, but the tech support people had to fix it so that my new checking account also displayed. The final insult from the new checking account bank was the two temporary checks I was given to use until the real checks would show up in about ten days. What’s the problem with that? This- if I use either of the temporary checks, there is a two dollar fee per usage.

Finally, this brings us to the last of my escapades with online financial transacting. In this case, a credit card company. For the second time in five months, my credit card was compromised despite the issuance of a replacement number for the first crime. I have to presume that purchases made online with this card from the same two or three vendors that one of them has either a criminal working for them or slipshod processing that leaks information to outside processors.

To minimize the chance of a third occurrence I went to a new credit card issuer that encourages their customers to use virtual numbers when buying from online sources. I recently took advantage and made a purchase. About a week later, I received an email indicating I could go online and review my first statement and not wait for the paper copy that will come at least seven days later. I logged into their site and clicked on the statement section. A message displayed indicating that this feature is not yet available for me but will be soon.

I recently asked a friend what he invested in. He replied, “all my money is tied up in cash.”

Identity Theft

About a week ago in the late evening a text message is buzzed on my old-style flip phone. It asks a simple question: Did I just purchase a pair of athletic shoes for x dollars?” The message is from one of my credit card issuers. It asks me to respond with YES or NO.

I quickly responded with NO. A new text message informs me to give them a call. I do and am connected to the fraudulent activities department. As a double check on what the person will tell me, I immediately log into my account information on-line. It shows two transactions. One for a trifle amount, the other is the one for which I receive the text.
The fraud agent told me not to worry- that he would remove the two phony transactions. He would now put a hold on my card and issue a new number which would be delivered in about a week. I checked again on-line a little bit later and saw indeed that the two phony charges were removed. As promised, a week later I received my new card.

Besides naturally feeling violated, I was also curious to how the credit card company was able to be suspicious of the activity. I asked my brother who is an expert in how financial institutions deal with fraud in credit card processing. I gave him the details of the two phony transactions and he immediately explained how they were catchable. I am not going to reveal what he said as I don’t want to give out information to help those who are on the wrong side of the law.

However, I did learn something that may be helpful to others thinking of ways to minimize having to go through the aggravation and sense of violation I experienced. I mentioned to a friend about the incident. He told me not to be so upset that it happened to him twice in the past- within a year of each other. He said he came across a solution that seems to work well. He found a credit card company that issues virtual ids to the holder- one for each merchant from which he purchases. In other words, if he uses that issuer to purchase from three different stores, he will get three ids- one for each. He also sets an expiration date on how long the id is good. So, the perpetrator is generally not going to know which retailer the id he stole is acceptable for the name on the card.

There is another thing you can do to mitigate the identity theft of a credit card. Make sure than any purchase you enact on line is linked to an email followup approval. This means you have to make sure that the thief doesn’t have your email address and password access to your email.

Sounds like a plan.

I’ll See You in My Dreams

I dream at night that I drive somewhere and when I’m done with whatever I do I can’t remember where my car is or how to get back home.

I’m guessing that an overpaid shrink will say that it is normal for a person in his early social security years to have such a dream. It probably means that I want to look back at the past, would like to somehow go back to its comfort but am stymied because what is past, is gone.

The past is comforting but having the knowledge of how it plays out helps make it easier to endure. That’s the problem going forward for those of us who collect a social security pension and/or are on medicare. We like to think that we can endure what lays ahead but there is always that feeling of looking over our shoulder to see who or what is gaining on us.

Last week I sat in a meeting with a client and two outside consultants regarding their need to acquire a new accounting system. I had been supporting their system for the past thirty years. The system was now insufficient and behind the times. It was time to be replaced with something fancier. There was a sense of relief because I no longer wanted to be responsible on a day-to-day basis to keep their system functioning. I still wanted to be involved in some aspect of the new system, whatever it would be.

One of the other consultants made an offhanded comment late in the meeting, while staring at me, “after all, you are retiring”. Huh? Who said I was retiring- I just don’t want as much responsibility as in the past.

I met this fellow for the first time an hour earlier. The only way he would have made such a statement is because the owner made an offhanded comment to him. How’s that for loyalty? Hey, after designing and supporting customized accounting systems for forty years, I’m entitled to downgrade the responsibilities I want to take on. And hey- the present and future costs money. There’s no comfort in the unknown. As an actor playing a professional athlete once famously said in a movie, “show me the money” and tell me what I have to do.

There’s another aspect to the dream I started with- someone wants to help me find my car and give me directions on how to go home but they also expect to be paid. Everybody wants to get into the act!

Money Talks

by Larry Teren

Money talks. Who’s listening?

A book written more than a decade ago presents, for example, two case studies on the:

  1. Financial consequence of being lazy or tardy.
  2. Financial incentive to cheat.

The first case involves a day care center where parents are habitually coming to pick their child(ren) up well past the 4pm closing time. A not-too-happy employee is obligated to stay at least once a week a half hour to an hour late without pay because of the inconsideration of these parents.

The owners of the day care center make a decision to charge a $3 fine per each child when a parent arrives late. The fine is tacked on to the monthly bill. Before the fine system is instituted, maybe a handful – four or five- parents a month are habitually late. A couple of months after the fines begin to be assessed, it turns out that more than twenty parents are now late and being assessed fines.

The increase in the number of late parents are the result of a couple of unintentional actions by the day care center management. Assessing a late fee becomes a validation for such action. It also places a value on being late for which the parent then can decide if it’s worth it. In other words- one can be late and this is how much it is going to cost.

There are parents who most likely wanted to be late but until the penalty comes into place are afraid to do so. They see that the day care people recognize it as a fact of life and place a financial worth to it. This validation gives these parents the impetus to change their personal time management, even at a cost. There are also parents who probably feel guilty about being late but now that they are being fined their guilt is relieved. They see it as an extra service fee worth it as a sacrifice to their budgeted time.

This is no different than public library users borrowing books. The vast majority return their books on time but there are a few who for whatever reason let the deadline slip. The library publishes the late fee and the borrower knows in advance how much to expense against their tardiness. Everyone goes home happy, hopefully.

It’s the same with paying off credit card purchases. Some people pay their bills in full- others know the consequences in advance of late payment and make those decisions recognizing the cost of the consequence.

The other case involves the Chicago Public School system which about a dozen years ago sensed that there is cheating going on. All of a sudden, evaluation tests show a marked improvement in class-wide scores.

The highest level administration is convinced there is cheating. Statistician analysts are brought in to review the grades on the multiple choice tests and the pattern they detect becomes obvious. The cheating is not being done by the students but rather the teachers. The instructors are erasing the marks made by their students and systematically marking a range of answers with the correct solutions. The intention is not to be too obvious and create a glut of A students but to reduce the number of D and F students percentage-wise. Why? Because teachers are given financial incentives for improving the average grades in their classrooms.

The result is that those teachers are identified and fired. Of course, the Teacher’s Union protests but facts are facts. No one wants cheaters to be teachers.

In the early part of the 2010s decade, the Chicago schools are still using the same testing system. By 2013 or so, they shift to a test system authored by the Common Core State Standards Initiative, which is used in most other states. There is a dramatic shift in several school’s evaluation of entire grade ranking compared to the same grade around the country. It has gone significantly down.

Some schools are put on warning of closure, others do indeed close. It is a case of throwing out the baby with the bath water. The thinking is that a school’s sense of educational worth has become so polluted, it is better to shift those students to nearby schools. Fumigate the culture by vacating the school building into obsolescence.

Our first example shows that having enough money helps make it easier for some to perpetuate a personality fault- being late for an obligation. The second example exposes that financial incentive may lead to unethical action that unfairly causes the rest of us to spend more money.

Yes, money talks and we all wish we can control the conversation.

An Unexpedited Delivery

by Larry Teren

Ok, so you know me by now- I’m a hot head, a reactionary. But I’ll hold off on how I’m gonna tell this one until I cool down.

An hour has passed. So this is what happened. On the eighth of the month (pick a month) I ordered a pair of socks online. No, not any simple pair that you can buy at Walmarts and save the aggravation. These are relatively expensive compression socks.

I forgot to mention that I placed the order online in the early evening. Anyway, the next morning around 10am I see that an email arrived indicating that one of the colors was backordered and I should let them know if they should ship what they have. So I dialed up their customer service department.

I spoke to a “support” person. I told her to go ahead and send the one pair and when the other was available in a day or two, to send that one as well. After all, it wasn’t going to cost them that much more as I chose the Slow Boat to China free shipping method.

She said I was too late. That I should have been sitting breathlessly at my computer and guessed when her company was going to send an email about availability. ‘Cause now both items were out of stock.

I raged about why they didn’t use their high school education to realize that it was okay to send what they had and backorder the other. She said it was company policy not to. (I think she also meant it was company policy to screw up an order as much as possible. Wait- maybe I wasn’t being fair- maybe they only had a policy to screw up one order a day and I won the lottery.)

So I told them to let it be. When the socks would come into stock, just send them. Obviously a mistake on my part or the story would end here.

A week later, still no socks. In the meantime, I went online and checked out my credit card status and saw that those jamokes billed my credit card even though they never sent anything. So I called the customer service people at the socks place and had the pleasure of speaking to another member of their staff.

I pointed out to her that they had honored me with being the one order in their company they permanently keep on backorder but added insult by billing me for it. Reading from the same script book, she replied. “but it’s company policy, sir”.

I asked to speak to a supervisor who came to the phone after a three minute wait on hold while the customer service clerk gave her my vitals and disposition. Their conversation probably went something like this: “take this call. There’s an as..le on it.”

I explained the issue to the supervisor- the two major flaws in her company’s policy. She apologized and said that the item was backordered. I didn’t call her a liar- okay, i did- sue me. I told her that the items I wanted were popular and could not believe that they allowed the stock to not get replenished for a week. She agreed that the order should have been filled and didn’t know why. (Yeah, sure- she didn’t want to admit I was the lucky permanent backorder customer)

She promised to expedite the delivery by having it shipped directly from the manufacturer. Four days later the items came with a packing slip indicating next day delivery. An email came the next day from the supervisor apologizing once again and that she decided to take the next day off so she didn’t get to my expedited promise until two days later. (Yeah, it’s company policy to take a day off after you promise to expedite the solution to a problem.)

Righting Two Wrongs

You know what they say- two wrongs don’t make a right. But one right can correct two wrongs- or in this case, three. At least that’s what my buddy Vince says. By the way, this guy has seen too much television and thinks of himself either as a member of the Sopranos or that guy who used to do standup comedy wearing a leather jacket and biking chain.

Vince tells me that three wrongs happened, that he subsequently made a couple of phone calls- bada bing- and they’ve been corrected. At least he thinks so and we’ll know in a couple of weeks. It happened like this:

He wrote two checks to pay bills. Put the correct amount on each one, to the correct companies and signed them. But he accidentally switched envelopes. You got it- each company received a check for someone else for an amount not due to them. Both companies didn’t bother to examine the checks. (That takes too much time and someone to think about what they’re doing.) So, both companies deposited the checks. His bank didn’t care. (Too many checks to look at on a commercial deposit ticket. Both are electronic deposit anyways) Three mistakes- his switching the checks and both companies not examining what they got and just going ahead and processing it.

So, he makes a call to one of them- a hospital corporation- and explains that they cashed a check for the wrong amount and for the wrong party. In fact, it was a couple of hundred more than they should have received. The customer service lady told him to hold on while she checked the records. After a few minutes, she came back on the line and said that her supervisor said they were refunding the entire amount. He told her to hold it- why not just refund the overpayment? The lady said that he said that he wanted the money back. He told her that he never said that. She said that it was too late to change it- the refund process started. So, he asked her when he could expect the money? She said that it would take one to two weeks. He didn’t want to create a bigger hassle so he told them to go with the plan, that he would send a new check for the correct amount of what he owed. Bada boo.

The next call was made to a bank institution that also has a credit card. When Vince got their customer service person on the phone, he had the feeling he was talking through a United Nations interpreter and that she was in a far away country. She probably felt likewise.

He explained to her about their cashing a check that they shouldn’t have. He also pointed out that he was charged $5.87 interest because the payment didn’t cover the full balance owed. He also looked at when they cashed his check through his online banking site. He told them that they deposited the wrong check ten days before it was due and that they could have called him and said that they would tear up the check and a replacement would have been sent in plenty of time. So, he should not have been charged interest for paying less than the balance due.

Vince asked for the $5.87 fee to be dropped. The customer service rep told him that she tried to submit his request and it was denied. That’s when he explained to her that it was fraud to cash a check written to someone else claiming to be that person or entity. All of a sudden, whoever else was giving her advice told her that she now had good news to tell Vince- that the $5.87 was being dropped. He was happy.

Vince stopped in at his bank and asked them why they would record deposits on checks that were not properly written to the recipient. They said they could not give him an answer because their computer was down and would he like a coffee mug for his inconvenience? Anyways, he’s counting two weeks to see what happens. Bada bing, bada boo.