June 23, 2018

How a Few People Took Equifax to Small Claims Court Over Its Data Breach and Won

The company failed to act on a March 2017 warning from federal authorities about a vulnerability that hackers would later exploit, resulting in the exposure of millions of consumers’ Social Security numbers, driver’s license numbers and other sensitive personal information.

Even after the breach, Equifax fumbled its response, briefly directing worried consumers to a fake, unaffiliated website. By its own admission, the security lapse had cost the company almost $243 million by the end of the first quarter of this year.

For many, those missteps were a motivation to act. No matter how futile it seemed to take on a multibillion-dollar corporation, local courts at least offered an opportunity to hold Equifax to account.

“They have a responsibility to either get back to you or lose,” Ms. West said of the small claims process. “That’s the most fascinating thing.”

For Ms. Bernstein, who runs a medical device consulting business, the Equifax breach was particularly frustrating because it threatened to interfere with her ability to apply for government grants. Because the grants often require credit checks, a credit freeze, which experts recommended after the breach, was out of the question.

“I really don’t need this aggravation with my credit and my phone number and, God knows, maybe my bank account numbers being leaked all over the internet,” she recalled thinking.

A judge in San Francisco Superior Court agreed, ordering Equifax to pay not only for the cost of credit monitoring, but also for the emotional distress and time Ms. Bernstein spent trying to get through to the company. On appeal, another judge reduced the award by about $2,000, setting it at $7,440.

In the end, Ms. Bernstein received restitution and relief: Last week, just days before receiving the Equifax check, Ms. Bernstein opened an envelope containing another check, this one for $15,000 for a grant she had just been awarded.

Article source: https://www.nytimes.com/2018/06/20/business/equifax-hack-small-claims-court.html?partner=rss&emc=rss

Your Money Adviser: Hurricane Season Has Begun. Do You Need Flood Insurance?

Julie Mix McPeak, commissioner of Tennessee’s Department of Commerce and Insurance and president of the National Association of Insurance Commissioners, said the association was urging a long-term reauthorization of the federal flood program and also supports changes to increase availability of private flood insurance options for consumers.

Meanwhile, she said, homeowners should consider buying flood protection even if they are not in an area traditionally considered to be high risk. In recent years, she noted, areas that had not previously experienced problems have flooded.

The national flood program says 20 percent of claims are paid in areas considered low risk.

“Where it can rain,” Mr. Maurstad said, “it can flood.”

Cost of coverage varies, but the average annual federal flood premium for 2018 increased by 8 percent to $935, according to FEMA. Mr. Maurstad noted that policies for homes in low-risk areas cost around $500. Premiums in high-risk areas, however, can run to four or five figures, Ms. Bach noted.

Here are some questions and answers about flood insurance:

What does a federal flood policy cover?

National Flood Insurance Program policies cover up to $250,000 in damage to the home’s structure, and $100,000 for its contents. (Extra coverage may be bought from private insurers.) But federal policies generally don’t cover living expenses, like the cost of temporary housing.

How can I keep my flood insurance premium affordable?

Homeowners in high-risk areas who take steps to protect their properties, such as by elevating mechanical systems or even the entire home, can see as much as a 60 percent reduction in premiums, according to FEMA. The agency offers grants to help cover the cost of elevating homes, but the process can take time. So interested consumers should apply sooner rather than later, Ms. Bach said. “Be patient.”

Other suggestions for reducing flood insurance costs are available on FEMA’s website.

What happens if Congress doesn’t vote on the flood program by the new deadline?

Article source: https://www.nytimes.com/2018/06/15/your-money/hurricane-season-flood-insurance.html?partner=rss&emc=rss

Your Money Adviser: Advice Has Changed on What Car to Buy for a Young Driver

It can be a challenge, however, to find a suitable car from 2012 and after for less than $10,000, she said. Some carmakers included electronic stability control on earlier models, however, and those may be found at lower prices. For a list, check the website of the National Highway Traffic Safety Administration.

Also, the Insurance Institute for Highway Safety offers a list of recommended used cars for teenagers. (Consumer Reports does, too, but you need to be a subscriber to see the details.)

For families willing to consider a new car, many models have advanced safety features.

One challenge, Mr. Epstein said, is that different manufacturers use different names for the same technologies and may offer them in a bewildering array of combinations, so shoppers should read up on the different systems before buying.

Toyota, for instance, offers a Safety Sense bundle on many models; Subaru markets an EyeSight driver-assist package. Mazda has made automatic emergency braking at lower “city” speeds standard on most of its 2018 cars, but getting the feature at highway speeds generally means pricier trim lines. (Automatic emergency braking is expected to become standard on most new cars by September 2022.)

“You really have to learn what your individual vehicle does,” Mr. Epstein said.

In a follow-up email, he also advised having the auto dealership explain how the safety features work, and taking time to read the owner’s manual.

“If you are not accustomed to driving with these features,” he said, “they can be a bit confusing or disorienting at first, just like getting used to any new feature.”

One option for keeping monthly payments lower while getting advanced safety features is leasing a new car, Ms. Stockburger said. Typically, Consumer Reports doesn’t recommend leasing because it is often less economical in the long term. But giving a new driver a safer car is a possible exception; leases may be available for around $200 a month, or even less, depending on your credit history.

Article source: https://www.nytimes.com/2018/06/08/your-money/advice-has-changed-on-what-car-to-buy-for-a-young-driver.html?partner=rss&emc=rss

Wealth Matters: Balancing the Benefit and the Burden of Wealth

Time is a similar lament for Ms. Galbut Perelman. “You’re sacrificing time with your friends, time with your loved ones, time with your own health,” she said. “If I’m working at my business 16 hours a day, how do I have a sense of wellness and also take care of my employees? Business owners aren’t getting that support in their community.”

For Mr. Aley, though, having more freedom now, at age 52, is worth any sacrifices he made earlier in his career. He now has better control of his time and how he spends it.

“Sometimes, it doesn’t always work out, but for me, but it’s invaluable,” he said. “It also means I can go to lunch with my wife and it doesn’t have to be confined to a Saturday, and I can see my kids’ games.”

The Boston Private survey found that business owners in particular felt the burdens of wealth more intensely than people who grew wealthy working at companies. These entrepreneurs said they felt pressure from other people’s expectations as well as judgments about their wealth.

But some people I talked to also mentioned the gratification they felt, even if it was tinged with regret.

Ms. Daly said she was pleased with how her wealth had allowed her to give back to a group of children in Puerto Rico, where her company managed a rail system. But how she thought about wealth and financial independence earlier in her career left her with one regret: She had neglected her personal life.

“I turned down a couple of proposals,” she said. “I didn’t have a family.”

Still, she remains fulfilled by nonprofit work with children that would not be possible without the money she made in business.

“I have more children than anyone I know,” she said. “There is so much joy in what I’m doing now.”

Article source: https://www.nytimes.com/2018/06/08/your-money/wealth-happiness.html?partner=rss&emc=rss

Maybe the Gig Economy Isn’t Reshaping Work After All

Lawrence Mishel, an economist for the left-leaning Economic Policy Institute and a long-time skeptic of the significance of the gig economy, said it wasn’t surprising that the report showed relatively little impact from online marketplaces.

“A lot of this hype has been driven by the tech world believing that they are the center of the universe,” Mr. Mishel said.

But Mr. Mishel said he was surprised by the slower growth in other areas. And he wasn’t the only one perplexed by the report.

The Bureau of Labor Statistics, for budgetary reasons, had not conducted its survey of alternative work since 2005. But in 2015, the economists Lawrence F. Katz and Alan B. Krueger conducted their own survey that tried to mirror the bureau’s methodology. They found that alternative work was more common — and growing far more quickly — than the data released on Thursday suggests.

Economists offered various explanations for the discrepancy. One possibility is that the boom in gig-type jobs was real but that as the economy has improved, more people have been able to find traditional work. Part-time work, which surged in the recession, has fallen in the recovery, and employment by temporary-help services has leveled off. If true of alternative work more broadly, that would suggest that what many commenters interpreted as a structural shift in the economy was instead a temporary result of a weak labor market.

It is also possible that the new data understates real changes in the nature of work. The government’s standard tools for measuring employment have struggled to capture the shifting employment landscape. For example, the Current Population Survey, the monthly survey used to calculate the unemployment rate and other key measures, shows that self-employment is falling, even as tax data from the Internal Revenue Service has shown the opposite.

“The questions on our standard surveys don’t probe into the nature of these arrangements,” said Katharine G. Abraham, a University of Maryland economist who served as commissioner of the Bureau of Labor Statistics under President Bill Clinton. “We’re not asking the right questions, and they’re hard to answer anyway.”

Article source: https://www.nytimes.com/2018/06/07/business/economy/work-gig-economy.html?partner=rss&emc=rss

Strategies: Thinking About Retirement? Consider Working a Little Longer

On the other hand, Social Security is itself an annuity — one based on outdated estimates of American longevity, Professor Shoven says, making it a better deal than can be found on the commercial market. In a separate paper, “Leaving Big Money on the Table: Arbitrage Opportunities in Delaying Social Security,” the same scholars point out that you can profit from Social Security by deferring benefits even if you stop working. This is an “arbitrage opportunity,” the researchers say, especially for those wealthy enough to be able to get by until 70 without a paycheck or Social Security.

Most people really need Social Security to survive, but many will find that working longer isn’t appealing or even possible.

Do you hate your job? Is working even a minute longer utterly intolerable? Even if it isn’t quite that bad, maybe you have an overwhelming urge to leave work behind? The authors use bland economic jargon to describe that quandary: “The disutility of work would have to be very high” to outweigh work’s financial benefits.

But even if you want to work, you may not be able to find a suitable position in your 60s. And if your life expectancy is short — if you know you don’t have much time left — working longer may be foolish on multiple levels, the most mundane being that you won’t be around to collect much money.

If you don’t start benefits at “full retirement age” — say, 66 — and wait until 70, when the monthly payments are higher, how long will it take to make up for the lost money? Using my own estimates from Social Security, I determined the answer: My personal “break-even point” is 12 years.

That seems all right to me. Social Security says my life expectancy is 84 or 85 years. I’ll come out ahead financially if I live that long. And the kind of work I do seems worthwhile enough to try to continue doing it until at least age 70.

Plus, my wife may collect higher survivor benefits if she outlives me, and she probably will, the mortality tables say. It seems a good bet that at least one of us will live long enough to cash in.

There are many ways of looking at this. If you’re wealthy enough, these considerations may not matter. But I’m thinking my personal retirement plan should probably include working longer, if I possibly can.

Article source: https://www.nytimes.com/2018/06/01/business/thinking-about-retirement-consider-working-a-little-longer.html?partner=rss&emc=rss

Your Money Adviser: New Law Will Let Consumers ‘Freeze’ Credit Files Without Charge

Anna Laitin, director of financial policy with Consumers Union, said the group generally recommended freezes rather than locks, since rules for freezes are established by law but those for locks, a service designed by the credit bureaus, may change. “Consumers will know what they’re getting with a freeze,” she said.

John Ulzheimer, an author and a consumer credit expert, said another benefit of the new law was that fraud alerts — a step below a freeze, in which the credit bureau has to verify your identity before releasing information — would remain in place for a year. Currently, alerts expire after 90 days, unless they are renewed.

Here are some questions and answers about credit freezes:

When will free credit freezes be available?

The consumer credit rules in the new law take effect 120 days after the law was enacted, so most likely sometime in September.

Equifax’s freezes were already free through June 30, as part of the company’s response to last year’s data breach. On Thursday, a spokesman, Wyatt Jefferies, said in an email, “Equifax is extending free credit freezes until the law takes effect.”

TransUnion and Experian didn’t immediately respond to inquiries about when they will end freeze fees.

How do I place a freeze on my credit file?

You can do it by phone or by filling out a form on the website of each of the three credit bureaus. You’ll receive a personal identification number that you must use to lift the freeze if you want to apply for a loan or a credit card.

Does the new law offer freeze protection to children?

Yes. The law allows parents or guardians of children under 16 to freeze a child’s credit file. If a child doesn’t have a credit file — which is often the case — the law directs the bureaus to create one, and then freeze it. (Currently, options for freezing a child’s credit vary by state and credit bureau.)

Eva Velasquez, president and chief executive at the Identity Theft Resource Center, advised parents who freeze a child’s credit file to carefully safeguard the PIN, and plan ahead for removing the freeze when the time comes.

Article source: https://www.nytimes.com/2018/06/01/your-money/credit-freeze-new-law.html?partner=rss&emc=rss

Your Money Adviser: Free Tickets. Money. College Savings Plans Try to Stir Up Interest.

All states but Wyoming now offer some type of 529 plan, as does the District of Columbia. The plans allow families to invest in an account that grows tax-free. The money is also withdrawn tax free, as long as it is spent on eligible expenses like tuition, fees and other costs, including room and board, books and equipment. (A few plans, known as prepaid tuition plans, work a bit differently.) For additional details, a good resource is www.savingforcollege.com.

Rules for 529 plans were established by Congress in 1996, and the plans began growing more quickly after 2001, when withdrawals were made tax-free. Balances in the accounts have reached record levels, according to the latest data from the savings plans network. The number of accounts grew 3 percent in 2017, while total assets in the plans rose to $319 billion in 2017, a 16 percent increase over the prior year. The average account is now worth $24,000.

Yet the public’s awareness of the plans remains somewhat muted — hence, the annual spring publicity campaign.

A survey by the investment firm Edward Jones found that fewer than a third of Americans could correctly identify a 529 plan as an education savings tool, although more affluent people were more likely to get it right. The survey of 1,004 adults was done by landline and cellphone in April and has a margin of sampling error of plus or minus 3 percent. (Edward Jones offers “adviser sold” 529 plans, which include professional advice as well as extra sales fees or commissions. Most states offer plans that consumers can enroll in directly, without paying sales fees.)

James J. Burns, a financial planner on Long Island and an ambassador for the Certified Financial Planner Board of Standards, says some families have misconceptions about 529 plans. For instance, he said, they may worry about what will happen to their savings if their child doesn’t go to college. But the plans are flexible, he said. If a child chooses not to go to college, the money can also be used for vocational schools. Or, the money can be used for another child or relative. (If 529 funds are withdrawn for ineligible purposes, the earnings — but not the original contributions — are generally taxed as income, plus a 10 percent penalty.)

Article source: https://www.nytimes.com/2018/05/25/your-money/529-college-savings-plans.html?partner=rss&emc=rss

Wealth Matters: An Investment on Your Wrist

Rolex watches span the gamut from affordable to exclusive, starting at less than $6,000 and soaring to limited-edition models that cost more than $300,000. It’s like the range of Mercedes cars between a basic C Class sedan, which has no rarity value, and a more coveted AMG Cabriolet that tops $300,000.

“Rolex has become a cultural symbol and a status symbol,” said Benjamin Clymer, founder and chief executive of Hodinkee. “The quality you receive in a Rolex is above most other watches at that price point.”

Patek has invested heavily in marketing campaigns that focus on its watches as heirlooms. But Mr. Clymer said the brand does not translate immediately into appreciation.

He said that the company’s signature watch, the Calatrava, which costs about $20,000, is like any new car. “If you bought it and tried to sell it the next day, you’d take a bath,” he said.

“They’re not always great investments, but there is a track record for them becoming great investments,” he said of the Patek Philippe timepieces.

Photo
“We’re monetizing a wristwatch as if it’s an asset,” said Danny Govberg, the chief executive of WatchBox. Credit Mark Makela for The New York Times

Discerning the investment potential of watches can be as complex as the intricate machinery that runs them.

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“Things can change very rapidly in the watch world, the way they can with other investments,” said Daryn Schnipper, chairwoman of Sotheby’s international watch division. “One of the things I suspect people should be tuned into is production quantities and trends of a company — is it a solid company or a new company?”

As with most investments, she said, supply drives watch prices. For instance, new Rolex Daytonas are not easy to find, so the price for vintage ones has ticked up.

Watches that are known beyond aficionados have a tendency to increase in value, Mr. Clymer said. Mr. Newman’s Rolex Daytona is one. The Omega Speedmaster, which astronauts wore on the Apollo 11 moon mission, is another.

“That Speedmaster has a place in world history,” he said.

But sometimes the high prices that watches fetch have as much to do with luck as anything else.

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Article source: https://www.nytimes.com/2018/05/25/your-money/watch-investment-auction.html?partner=rss&emc=rss

Wealth Matters: From Super Bowl to David Bowie, V.I.P. Treatment Awaits

Both companies also have parties at the Super Bowl and the Art Basel art fair in Miami Beach, Fla.

“The No. 1, 2 and 3 reasons for these events are retention, retention, retention,” said Kenny Dichter, chief executive of Wheels Up. “If people show up, they’ll always renew.”

But if other jet companies — and luxury purveyors in general — are throwing the same great parties at the same exclusive venues, the events lose their unique appeal.

After a five-figure initiation fee, Wheels Up charges $4,500 to $7,500 an hour. Another industry rival, VistaJet, which aims for a more global client and so has bigger jets, charges $12,000 to $19,000 an hour.

To woo their well-heeled clients, such companies create events so intimate that they beggar belief. Want to play tennis with Roger Federer? NetJets has organized that. If you’d prefer Serena Williams, Wheels Up has set up private events with her.

Then there were private viewings of the David Rockefeller collection before it went to auction this week at Christie’s. To see it all meant hopping among international destinations, and VistaJet took care of it.

“In London, 20,000 people saw it, but I arranged a dinner for 12 people in Christie’s ballroom with the head of Christie’s London and the head curator of the Rockefeller auction,” said Matteo Atti, executive vice president for marketing and innovation at VistaJet. “I put people in the room who might like each other.”

And for many, that’s the cachet: rubbing elbows with other equally wealthy people who may have shared interests or present a business opportunity.

Of course, sometimes the bar is not that high. Mr. Orender recalled a simple perk of having exclusive access to the Olympic Games: “There was a special line so no one was hassling you and you didn’t have to wait to go in.”

Article source: https://www.nytimes.com/2018/05/11/your-money/vip-event-packages-wealth.html?partner=rss&emc=rss