• Less than perfect credit?
• No credit?
• Bankruptcy?
• No problem! Generic lending company can help you get approved for a loan right now!

We have all heard the commercials or even seen them in the Internet. Some company offering a loan to help you meet your needs regardless of your credit qualifications. Unfortunately, these offers are often scams or loans that leave consumers worse off financially than they were when they started.

Here are some more warning signs that a lender you are considering is actually operating a scam.

1. The guarantee. A legitimate company will not guarantee they can provide you a loan, “regardless of your credit.” Loans made without accessing your credit report will, most likely, have numerous fees and high interest rates.  You will pay a lot more for the “privilege” of getting a loan regardless of your credit history.
2. Fees. We mentioned fees above. It is a good practice to ask lenders about their fees. A good lender is clear and upfront about their fees. In a typical loan, fees are deducted from the amount you borrow and paid to the lender when the loan closes.  Other lenders may require you pay them upfront in exchange for the loan. This type of agreement is usually a scam.
3. Another indicator a lender is not practicing ethically is if they offer loans over the phone, and then ask you to pay for the loan before it comes through. According to the Federal Trade Commission, this type of lending practice is illegal.[1] 
4. Wiring money. A particularly distressing scam is one where an individual is offered money in exchange for cashing a check and wiring money back to someone else. The check is not legitimate and unfortunately, the consumer who cashes the check is often confronted with repaying the funds or faces potential prosecution.

So what are some ways to protect yourself from these scams? Always take the time to determine if the lender you are dealing with is licensed in your state. Start by visiting your State Attorney General’s office. If they do not have this type of information, they will know what agency in your state does.  Being licensed does not mean the lender is wonderful, but it is a way of determining whether they are trying to obey the laws of your state.

Also, if someone offers you cash in exchange for cashing a check, walk away. This is definitely a scam. And remember, you should not have to pay money in advance in order to receive a loan.

If you are unsure whether a lender is legitimate, ask a friend or family member to look over paperwork with you. You can also shop around for the best loan available. If one lender believes you are loan worthy, then chances are, someone else will too.

For more information on how to recognize loan and financial scams, and for other options on how to manage your finances, call and speak to a certified credit counselor. They are available Monday through Friday, 6:00 a.m. to 7:00 p.m. PST at 1(888)282-5492.

For questions 1 – 11 select (A) Always, (S) Sometimes, or (N) Never.

For questions 12 – 15 select (T) True or (F) False.

  Scoring

How Did You Score?

26 to 30 points

A score of 26 to 30 points suggests that you are handling your finances very well. Keep up the good work!

21 – 25 points

A score of 21 to 25 points suggest that you are successful at managing some aspects of your financial life; however, you may want to investigate opportunities for increasing your savings or reducing your debts.

16 – 20

A score of 16 to 20 points suggests that while you typically manage your finances well, you are probably missing some items that can either improve your current situation or protect you from future hardship. You may benefit by talking to a credit counselor and developing a step-by-step approach for managing your money.

0 – 15

A score of 0 to 15 points suggests that you need to improve your money management skills to protect yourself and your finances. Think about taking a financial education course or talking to a credit counselor to help you learn ways to successfully and effectively manage your finances. 

(NAPS)—A new scam is swindling consumers: checks that seem legitimate to both bank employees and consumers, but that are counterfeit and leave unsuspecting consumers footing the bill.

The Federal Trade Commission has a new brochure, “Giving the Bounce to Counterfeit Check Scams,” which explains common angles used in these scams, the responsibilities of banks and consumers when it comes to counterfeit checks, and advice on how to avoid them.

While the angles used by scam artists may vary, the basics of the counterfeit check scam remain the same. The consumer receives a generous check with an explanation that he or she has just won an award, a prize, a lottery or some other windfall. The consumer is instructed to deposit the check and wire a portion back to pay fees, taxes or the like. The consumer deposits the check, the bank credits the funds to the consumer’s account and the consumer wires the money to the sender. Some time later, both the bank and the consumer learn the check was bogus.

Unfortunately, the consumer is out of luck: The money that was wired can’t be retrieved and, by law, the consumer is responsible for the deposited check—even though he or she didn’t know it was fake. The FTC advises consumers not to rely on funds from checks unless they know and trust the person who gave them the check or, better yet, until the bank confirms that the check has cleared. Other tips:

·         Throw away any offer that asks you to pay for a prize or a gift. If it’s free or a gift, you shouldn’t pay for it.

·          Resist the urge to enter foreign lotteries. It’s illegal to play a foreign lottery through the mail or the telephone, and most foreign lottery solicitations are phony.

·         Know who you’re dealing with and never wire money to strangers.

·         If you’re selling something, don’t accept a check for more than the selling price, no matter how tempting the offer or how convincing the story. Ask the buyer to write the check for the correct amount. If the buyer refuses to send the correct amount, return the check. Don’t send the merchandise.

·         If you accept payment by check, ask for a check drawn on a local bank or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid.

·         If the buyer insists that you wire back funds, end the transaction immediately.

·         Resist any pressure to “act now.” If the buyer’s offer is good now, it should be good after the check clears.

To file a complaint and for more information, visit www.ftc.gov.

Bremerton, WA ‐ Financial literacy issues bring Senator Derek Kilmer to local Credit Counseling Agency.

With shared concerns regarding the deepening credit crisis accompanied by a weak labor market, high inflation and falling house prices, Senator Kilmer met with Ron Lafayette, President of the North Seattle Community College and Hank Keaton, President of American Financial Solutions (AFS) to learn firsthand what services AFS is offering to consumers in financial distress.

Consumers and borrowers whose home loans are resetting at considerably higher rates are having a difficult time keeping up on payments while soaring oil prices are eroding already marginal household budgets. They are finding themselves in need of help in identifying options for improving their financial situations. That is where American Financial Solutions comes in. With trained and certified Credit Counselors, callers are provided education to understand their finances and what options are available to them. Most importantly, callers are empowered to make sound decisions to gain control of their finances.

The current credit crisis has spread from rising defaults in the market for sub-prime mortgage loans to other types of loans such as student loans or auto loans. Ron Lafayette, President of North Seattle Community College, expressed concerns about the credit crisis having a major impact on students keeping current on payments for student loans.

An article published in MSN Money April 22, 2008, titled Why Generation Y is broke, cited the following statistics:

• median credit-card debt of low-and middle- income people aged 18-34 is $8,200
• the average college debt for recent grads is more the $20,000 and rising
• people between the ages of 25 and 24 make up 22.7% of all U.S. bankruptcies (but just 14% of the population at large)
• only 52% of high school seniors passed a recent national financial literacy test, meaning adults entering the work force do not know enough about basic budgeting, interest rates or taxes to make sound decisions for their own lives.

Senator Kilmer asked, “Where do we learn about personal finance other than from our parents or at home?” Senator Kilmer, added, “Financial education is hugely important, but legislators are reluctant to add another mandate in our K-12 system so it is essential that partnerships are established”. It was agreed that there is a crucial need for Consumer Financial Literacy training and that training should start as early as possible to help people use credit responsibly.

American Financial Solutions (AFS) is a division of North Seattle Community College Foundation. Located in Bremerton, WA, AFS is a non‐profit 501(c)3 credit counseling agency promoting the need for financial education and personal money management.

AFS’ mission is to create change through education and service locally and nationally. AFS provides free budget, credit and housing counseling to consumers in addition to the personal money management course, Investing in Yourself.

In response to increasing consumer debt and rising foreclosure filings within the State, AFS has added Pre‐Purchase Housing Counseling, Foreclosure Intervention and Assistance Counseling, and will soon add Bankruptcy Counseling to its existing services.

AFS has partnered with schools, state and county agencies to provide financial literacy training.

Bremerton, WA ‐ State Representative Larry Seaquist (D‐26th District) visits local Credit Counseling Agency on impact of housing and credit crunch.

Rep. Seaquist, concerned with the economy and the impact on both low and middle income families, met with Hank Keaton, President of American Financial Solutions (AFS) and AFS staff to learn, first hand, about the impact of current economic stress on Washington residents. AFS, a nonprofit credit counseling agency in Bremerton, provided financial education and counseling on credit and housing issues to over 30,000 consumers in the last year.

“What are you hearing from Washington families and what do you see about their future as we work through the slowing economy?”, Seaquist asked. “Many of the people we talk with have little or no savings and carry significant credit card debt”, said Barbara Mascarin, Operations Director at AFS. “Then when the price of energy and groceries rose so dramatically, they couldn’t make their payments.” Representative Seaquist said, “About three blocks from here, I met a woman that said she had just started to use her 401k savings to buy groceries.” Mascarin added, “If their variable rate mortgage resets, they are pushed over the edge. We see this housing impact continuing to have a domino effect on family budgets for at least two more years.”

Trained and certified credit counselors empower callers with education, resources and tools to
get control of their debt. Bob Denend, a certified credit counselor, explained, “Because of the
downturn in the economy related to the housing and energy crisis, the disposable income just
isn’t there anymore. Once a budget is put in front of people in black and white, they can see
where they stand and quite often it’s not as bad as they perceive it to be. People need to know
that they are not unique to this situation and that there is a solution. Often times it comes by
doing several things, not just one.”

A quick look at Washington Foreclosure Statistics*

• Foreclosure filings have increased 10% between May 2008 and June 2008. They have increased 69% since June 2007.
• Washington State ranked 20th in the nation in total properties with foreclosure filings reported.
• Average statewide foreclosures: 1 of every 977 households.
• County foreclosure filings:

Pierce County; one in every 483 households ‐ twice the state average.
Kitsap County: 1 of every 839 households.
King County: 1 of every 1125 households.

In response to increasing consumer debt and rising foreclosure filings within the State, AFS has
added Pre‐Purchase Housing Counseling, Foreclosure Intervention and Assistance Counseling,
and will soon add Bankruptcy Counseling to its existing services.

These are remedial services and Rep Seaquist agreed that real prevention lies in Financial
Literacy training and that training should start in schools as early as possible. AFS provides free
educational materials, workshops and classes on making the most of personal income, developing a budget, and managing credit and debt. More information about counseling services, money management courses and debt management programs are posted on the AFS website http://www.myfinancialgoals.org/.

*Data Source: RealtyTrac U.S. Foreclosure Market Report

I suggest that you take the following quiz. The results will reveal whether or not you need to seek professional help to avoid falling into a deeper financial quagmire.

Answer True or False to the below questions, and then tally your score.

1. I normally pay only the minimum amount due on my credit card bills.
2. My credit card balances increase each month.
3. There are arguments in my home about money.
4. I sometimes hide purchases from my spouse.
5. I frequently charge items that I used to pay for with cash.
6. I have thought about filing for bankruptcy.
7. I have begun using cash advances to meet my obligations.
8. Most of my credit cards are near the limit, so I’ve begun applying for new lines of credit.
9. I do not know the total amount that I owe.
10. I skip paying my bills some months, or pay late.
11. I have depleted my savings.
12. I am consumed with thoughts of my debt.
13. My debt interferes with my job and/or home life.
14. Collectors have begun contacting me.
15. I have taken money from my retirement account to satisfy debt obligations.
16. If I lost my job, it would mean an immediate financial crisis in my life.
17. I use balance transfers.
18. I have no emergency savings account.
19. Next month’s bills arrive before I’ve paid this month’s.
20. I do not open my bills when they arrive, or soon thereafter.

If you answered True to more than three questions you may benefit from credit counseling.
Whether your problem stems from a lack of financial knowledge, changes in your income, concerns over an increasing mortgage payment, or if you’re considering bankruptcy, speaking with a trained and certified counselor can help you find your way out of financial trouble.

National Financial Literacy Month is recognized in the United States in April in an effort to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits.

In 2000, Jump$tart, a National Coalition for Personal Financial Literacy, began promoting April as Financial Literacy for Youth Month. Finally, in 2003 the United States Congress showed its support. Senate Resolution 48 and House Resolution 127 asked President, George W. Bush to declare April as Financial Literacy for Youth Month. At that time, governors of eight states had already named the month of April as such.

The year after Senate Resolution 48 and House Resolution 127 passed, further action was taken to designate April as National Financial Literacy Month to improve Americans’ financial and economic knowledge. April was named National Financial Literacy Month by the passing of Senate Resolution 316 with unanimous consent, championed by Daniel Akaka D-HI.

AFS has partnered with Jump$tart Washington since 2005. Both Barbara Mascarin and I have served on the Board of Directors of the Washington based coalition.

Visit our Jump$tart partner link to find materials relating to personal money management for young children and teens. The materials can be taught by both teachers and parents. If you would like to peak your teen’s interest, have them take the Reality Check.

On April 9, 2008 Jump$tart, the National Coalition for Personal Financial Literacy, announced that financial literacy among High School Seniors is still on the decline.

In Jump$tart Coalition’s biennial survey given to 6,856 high school 12th graders in 40 states, students correctly answered only 48.3 percent of the questions. This mean score is a decrease from those posted by the senior class of 2006, which correctly answered 52.4 percent of the questions.

“The survey demonstrates that graduating high school seniors continue to struggle with financial literacy basics,” said Lewis Mandell, Ph.D., professor of finance and managerial economics at SUNY Buffalo School of Management. Mandell conducts the surveys for Jump$tart.

Encourage your teen to turn off the TV, video game or iPod and take the 1st step towards becoming a financially literate adult by taking our on-line course, Your Financial Life – For Young Adults. There they can learn about the importance of setting financial goals, budgeting, credit, saving and investing, borrowing money, taxes, and much more!

If your children are younger, please take our on-line class, Children & Money Tips for Parents and Teachers. It is never too early to start planting the financial literacy seed.

For more information about Jump$tart and its biennial survey go to our website http://www.myfinancialgoals.org/ and visit our partner links!

Many people believe that in order to become debt free you must close or stop using your credit cards. While that may certainly help you, it is only a part of the answer. To become debt free what we need to do is have a plan for making, saving and spending money.

Visit the American Financial Solutions’ Learning Center to find tips, classes, and calculators that will help you create your plan for becoming debt free. You may also call a counselor for help with this process. Visit http://www.myfinancialgoals.org/.