Investing

Does anybody know of any banks in Louisiana that let minors open checking accounts?

Why is it not a good idea to get a savings account vs. a checking account?

Why does it take so long for Scottrade to transfer money from my checking accoung to my Scottrade account?

Identity thieves strain students’ bank accounts

When Andrea Stohs, junior business administration major, received her bank statement in the mail earlier this month and noticed a charge on her debit card in a language that she didn’t understand for a hotel room in Spain, she knew something was wrong.

There were over 17 transactions, but Lyon County State Bank at 902 Merchant St. caught the fraudulent charges. The transactions included the hotel room, as well as various retail stores, and the charges put Stohs in debt.

“People can just walk by and see your pin number (when you’re checking out),” Stohs said. “Don’t give anybody any information or let them use your debit card. I even have a hard time allowing my parents to use my information now.”

As soon as Stohs noticed the foreign transactions, she contacted Lyon County State Bank, and they immediately closed her account. Stohs had to file a transaction dispute claiming that the charges where not made by her.

Now, Stohs said she no longer does as much online shopping and has notified her bank that she should never have any international transactions without her personal approval.

Kevin Flanders, sophomore Spanish and psychology major, also recently noticed that his bank account was sufficiently lower than usual. Flanders said students should always carry an I.D. on them and keep all other forms of identification locked away.

“(My parents) checked my monthly bank statement and found there were two charges to a business that I (had) never patronized,” Flanders said.

Clare Spellman, vice president and back office processing manager at Lyon County State Bank, said identity theft occurs when a person finds your personal information, such as your social security number or PIN number and address, and uses it to either pretend to be you or make fraudulent charges. It occurs most commonly through “dumpster divers” – which is someone who digs through trash to find personal information – spam emails asking for clarification of information and phony telemarketers, Spellman said.

“With any young person, especially in college, there’s a lot to learn,” Spellman said. “We rely a lot on the Internet as a communication tool. Those are some great resources, but they are also the most common method for people to try to steal identity or account information to ultimately steal money.”

Spellman said that her husband had his identity stolen several years ago.

“A person in California was using my husband’s name and social security (number) to open cell phone and credit card accounts,” Spellman said. “Those companies started calling and things weren’t matching up because they were using our current address as a previous address.”

Spellman said ways to reduce the risk of identity theft includes keeping personal information safe. When receiving any mail or documents with personal information, it is best to shred it instead of throwing it away. Another way is to monitor credit reports.

“We encourage people to check their credit reports,” Spellman said. “If you see you didn’t authorize (a transaction), it might indicate someone is using your identity and social security to gain credit.”

Susan Welte

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First Person: My Savings Bonds Turned Into a $1,900 Tax Bill

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When I graduated with honors from the University of Maryland I was ready to cash in my United States Series EE bonds that had been bestowed on me at birth and gifted to me at childhood milestones.

As a graduate of the College of Business and Management, I had studied finance, economics and accounting. Unfortunately, tax accounting was not part of my curriculum.

I was not ignorant at all about money, banking, budgeting and all one needs to know to be financially independent. Fortunately, my education was paid for by my parents as state schools were inexpensive at the time for in-state residents. However, I was physically paying the bills.

The summer before freshman year, my father had me open a checking account. He would deposit a semester’s worth of money with the understanding that the money was for school and if I was careful, there was room for a little mad money as well. By graduation, I was ready to for financial freedom pending employment.

Therefore, I went to the bank with low face value EE bonds that had accumulated to around $5,000 and bought into some blue chip stocks. That was easy. Until, I got a letter from the IRS six years later stating that I owed double my EE cash out in interest plus penalties for not declaring the gains on my return the following year. Huh?

I had always filed a simple 1040EZ form. My assets required nothing more. I knew about capital gains on stocks, but wasn’t Uncle Sam “giving” me interest for borrowing my money for all those years? I did not even buy them! They were gifts! However, a bill doubling my original payout with a penalty tacked on appeared.

After six months of paperwork, endless pleading phone calls, and a payment plan, they rescinded the penalty. I paid back the tax plus interest. Unfortunately, this incident happened in the 1980s when interest rates were in double-digits.

More unfortunate, my audit led to an audit of my father’s personal and professional returns as he had been a co-signer on my first rental agreement. The look on his face said: “Are you sure that honors degree in business, a diploma for which I paid, isn’t a fake.”

My father is now gone, but the IRS is not. This is a lesson that will stay with me until my money and I part at death.

Prominent Roseburg businessman Dave Gilbert sentenced to federal prison

A prominent Roseburg businessman who beat a couple of banks out of about $3 million was sentenced this week to a little more than three years in federal prison for conspiracy to commit bank fraud.

David Gilbert, 65, president of the Greater Oregon Mazda Dealers Association and owner of a car dealership and investment business, acknowledged in a sentencing hearing in Eugene on Wednesday that he kited more than 500 checks, totaling more than $19 million during one eight-day period, according to Assistant U.S. Attorney Scott E. Bradford.

Gilbert’s scheme, outlined in a detailed plea agreement, involved what the government called an elaborate plan. His car dealership, identified in court papers as Horizon Honda Mazda, sustained cash-flow problems in 2008 that caused a shortage of funds in the checking accounts of two banks: PremierWest Bank and Northwest Community Credit Union.

“To cover the shortages, (Gilbert) and others created and executed a check-kiting scheme in order to artificially inflate the account balances in the checking accounts at (the banks), court records show.

Gilbert got his bookkeeper to determine the actual bank balances of the checking accounts, including the shortfall for each. Then they met each workday morning.

“After each meeting, defendant told his bookkeeper to artificially inflate the checking account balances at (the banks) by a particular amount in order to create the facade of positive balances,” according to court papers.

This went on for several months, and Gilbert admitted that this allowed him to obtain a series of unauthorized, unsecured and interest-free loans, prosecutors reported.

“The kite collapsed in December ’08, when the banks discovered it,” Bradford said, adding that the checks looked suspicious during a down-turn in the auto sales business.

Then the FBI investigated.

“Business owners need to understand that such conduct is a crime and will not be tolerated,” said Amanda Marshall, the U.S. attorney for Oregon. “There are legitimate ways, like bankruptcy, to work through difficult financial times. Taking shortcuts such as check kiting puts individuals and communities at risk, is illegal, and will land you in jail.”

Chief U.S. District Judge Ann Aiken ordered Bradford to report to prison in 60 days.

– Bryan Denson

Save on Taxes: How to Pay Less

Here are some of the most common tax mistakes that business owners make. Are you getting any of these wrong?

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The millionaires and the billionaires seem to know something that we don’t as it relates to taxes. Warren Buffett pays a higher tax rate than his secretary. Mitt Romney makes millions of dollars every year, but pays less than 15% in income tax.

These headlines make for great political fodder, but they got me thinking about my own taxes. As a small business owner, am I paying more than I should?

Two big areas of tax reduction for the ultra-rich people stem from the source of income: They get their income from capital gains and interest income, not salary. Those are not on my immediate horizon for managing my taxes. But I discovered you don’t need to open up offshore accounts and shady shell companies to pay less taxes.

I reached out to a few of my own advisors–tax accountant, financial advisor and lawyer–to find out how small business owners can do a better job of legally (and ethically) paying only their share of taxes. From those conversations emerged a list of the most frequently missed opportunities for business owners.

Common Tax Mistakes

Now of course, you will need to talk to your own advisors to make certain how to best use these ideas. But for that discussion, you want to be sure to mention these common tax mistakes.

• Not taking advantage of accelerated depreciation rules. Under certain circumstances, you can make an election to get a full deduction in the year of purchase for a variety of business purchases. Computers, phone systems, vehicles and other purchases can be deducted according to an accelerated schedule. Depending on how your profits look in a particular year, this can be a great deduction.
• Improperly matching revenue and expenses. This area has a lot of components to it, so make certain to get good advice. The problems that were cited most often included: not recording all the expenses associated with the business, not putting the deductions in the correct period, and not managing the accrual cycles correctly. You are allowed certain flexibilities to recognize your revenue and expenses in a way that provides you a tax advantage–and you should make certain you are following it.
• Not taking advantage of retirement plan funding deductions. This way of sheltering income from taxes was given as the most often missed or underutilized tax-saving opportunities for business owners.
• Not taking all of the legal home office deductions. It’s not just the office itself: If you have a true home office, you might also have a dedicated business phone line, Internet connection, office supplies and so on. Just make sure everything is truly dedicated to your business alone: Home offices are an audit red flag.
• Not keeping business expenses separate. The best way to make certain you capture every deduction and keep accurate, current records is to establish a separate checking account and credit card for all of your business expenses. Don’t mix your personal and business records; it’s flirting with disaster. Besides, most business credit cards will provide enhanced reporting that makes your record keeping easier and more accurate.

Surround yourself with a great financial team and take every deduction to which you are legally allowed. The millionaires know: It’s not about how much money you make, but about how much you keep.

Author, speaker and consultant Tom Searcy is the foremost expert in large account sales. With Hunt Big Sales, a fast-growth consultancy, he’s helped clients land more than $5 billion in new sales. Click to get Tom’s weekly tips, or to learn more about Hunt Big Sales. @tomsearcy

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Barclays Starts U.K. Mobile Phones Service to Transfer Money

February 16, 2012, 4:29 AM EST

By Howard Mustoe

(Updates with executive comment from fourth paragraph.)

Feb. 16 (Bloomberg) — Barclays Plc, the U.K. bank led by Robert Diamond, today begins a service to enable its 11.9 million checking account customers to transfer money to one another using mobile phones.

Barclays’s Pingit application will allow users to send as much as 300 pounds ($470) a day by linking their mobile phone number to their checking account details. Anyone with a U.K. checking account will be able to receive payments and the service will be expanded to customers without a Barclays account by early March, the London-based bank said in the statement.

Barclays, Britain’s third-largest bank by assets, last week its U.K. consumer unit division increased pretax profit by 3 percent to 1.02 billion pounds in 2011 from the year-earlier period. Antony Jenkins, consumer banking head, in June promised a “simpler, more effective way to do business.” The bank said Pingit is the first of its kind in Europe.

“Once people start to use the service they’ll like it, they’ll become very happy to do business with Barclays and the next time they think about getting a mortgage, savings account or credit card they’ll think of Barclays,” Jenkins said in an interview today.

Development was started in the middle of last year, and the bank is betting it can attract customers now to keep them away from any competitor’s systems that may emerge, he said.

“Once you’ve got people in the system, they’ve got no incentive to go anywhere else, so why use another service?” he said.

The application can be used on Apple Inc. iPhones, Google Inc.’s Android and Research In Motion Ltd.’s BlackBerry, the lender said. Bill payments, international payments could be added to the software, Jenkins said.

“We have plenty of ideas in the hopper,” said Jenkins.

– Editors: Jon Menon, Steve Bailey

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

Barclays Starts U.K. Service to Transfer Money Via Mobile Phones

February 15, 2012, 9:17 PM EST

By Howard Mustoe

Feb. 16 (Bloomberg) — Barclays Plc, the U.K. bank led by Robert Diamond, today begins a service to enable its 11.9 million checking account customers to transfer money to one another using mobile phones.

Barclays’s Pingit application will allow users to send as much as 300 pounds ($470) a day by linking their mobile phone number to their checking account details. Anyone with a U.K. checking account will be able to receive payments and the service will be expanded to customers without a Barclays account by early March, the London-based bank said in the statement.

Barclays, Britain’s third-largest bank by assets, last week its U.K. consumer unit division increased pretax profit by 3 percent to 1.02 billion pounds in 2011 from the year-earlier period. Antony Jenkins, consumer banking head, in June promised a “simpler, more effective way to do business.” The bank said Pingit is the first of its kind in Europe.

“We’re committed to making customers’ lives much easier, giving them more choice in how they manage their money,” Jenkins said in today’s statement. The application can be used on Apple Inc. iPhones, Google Inc.’s Android and Research In Motion Ltd.’s BlackBerry, the lender said.

– Editors: Jon Menon, Steve Bailey

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

Pigeon Forge woman didn't apply for online loan, but bank sees unusual activity

By DON DARE
6 On Your Side Reporter

PIGEON FORGE (WATE) – What if you didn’t apply for a loan, but someone was fooling around with your checking account? A young woman was notified by her bank in Pigeon Forge about unusual activity with her account.

Kelly Hall is a customer at SmartBank. An alert account representative there noticed unusual activity on Kelly’s statement a few days ago.

“She said on the same day they took out the 13 cents in increments of six cents, four cents and three cents, and the bank was concerned someone was messing with my account and wanted me to be aware of it,” Kelly said.

She also says neither she nor her husband had applied for an online loan.

Kelly was told the company’s name was Cash Loan Today. There’s a phone number for the company on her statement.

Kelly talked with a service rep there. “She advised me that I had been approved for an $800 loan. When I asked how they got my information, she wasn’t able to tell me how they got this information to my bank.”

SmartBank President Billy Carroll said, “We were fortunate we saw it, happened to be doing some work on the account. We noticed it.”

He says when the service rep noticed the transactions, she contacted Kelly immediately.

“Sometimes those are legitimate transactions. In this case, they weren’t. In this case, they were unusual. That’s why our financial service rep asked,” Carroll said.

Kelly says she’s grateful the bank called her. “I have an IRS check that’s going to be deposited into that account, and it could be a large sum of money taken out without me knowing about it.”

Hoping to get information from the loan company, we called the toll free number on Kelly’s statement. A customer service rep said, “I apologize, even my supervisor cannot answer your questions.”

When 6 On Your Side checked the company’s website, we found it’s under construction.

We also found complaints online about the company. One said, “…went into my account and took $30 out without my permission. How did they get access to my account?”

“They told me once that they deposited the $800, they were going to take out the $30,” Kelly said.

There are steps you can take to protect your account. “If you’re online banking, log onto your account, look through your transaction history on a regular basis,” Carroll advised. “If you’re getting paper statements, open that statement every month and look through every transaction to make sure there is nothing unusual there.”

From now on, Kelly will check her account frequently. “Keep a close eye on it because you never know who is pulling money in and out of that account,” she advised.

Also, stay away from online loan companies. Dealing long distance can be troublesome. Doing business locally is easier and safer.