Resources

While there are hundreds of “debt counseling” organizations across the country, BALANCE has agreed to quality standards that include accreditation, certification of counselors, audits, and core policies that ensure quality service. We offer a Debt Management Plan and are committed to providing comprehensive money management education and counseling.

Our counseling services range from money management to housing to debt management and everything in between. Our counselors are certified credit report reviewers and know their stuff. They are your financial gurus, here to give you the right guidance and support, whatever your financial situation.

Borrowing to pay for college is the easy part. Repaying the debt is much harder. To know which options are best for you, your career prospects, and your budget, it helps to have access to an expert who can guide you through the complexity of the various programs, explain your options under each, and consider the context of your financial circumstances. BALANCE Credit Counselors speak the language of student loan financing fluently and are ready to work with you in a one-on-one student loan counseling session.

Housing can be an overwhelming subject to tackle on your own, whether you are dreaming of owning your first home or struggling to make mortgage payments on your current home. Our counselors are readily available to help you make sense of it all.

BALANCE offers free education on building credit and becoming a desirable tenant. Our specialized rental counselors will help you develop a personalized spending plan and provide you with advice for saving money, increasing income, and reducing debt. Our counselors will work with you to review:

• Why credit matters

• Calculating an affordable rent payment

• Common landlord requirements

• Understanding lease agreements

• Basic tenant rights and affordable housing options

Make informed decisions on your next major purchase or financing decision. Review our tailored products to meet your needs, or review the valuable information provided by our partners from the links below.

SWSFCU Consumer Loans & Visas
A variety of loans and borrowing options to tailor a package for your specific needs. Look no further than SWSFCU for your next auto, credit card, or personal loan.

SWSFCU Real Estate Loans
Whether you are buying a new home, refinancing an existing home, or making improvements, SWSFCU can help. We have a wide variety of real estate programs to meet your specific needs.

Credit Reports & Credit Bureaus
One of the best forms of fraud prevention is to be informed. Monitor your credit report and learn more about the financial decisions that affect your credit scores. Select from any of the three major credit bureaus for more information.

• Equifax

• Experian

• TransUnion

Another site for credit reports: www.annualcreditreport.com

Understanding your FICO Score
It's important to really understand what makes up your FICO score, what affects your score, and how it can affect you. Download this free informative guide, and you'll be a more informed borrower.

Keep Your Home California
A free service for homeowners who have suffered financial hardship - we may be able to help you stay in your homes, maintain an affordable mortgage payment, and avoid foreclosure.

Browse through articles and web-based tools to learn more about personal finances, budgeting, and taxes and make informed financial decisions.

• Direct Deposit Trims Your To-Do List

• Put Savings on Automatic

• Helpful Tip: Unsigned Credit Cards

• Credit Scoring

• Improve Your Finances

• TruStage

For nearly 80 years, the members-first mission of credit unions everywhere has remained unchanged. Today, in accordance with that mission, our team of experts and well-known insurance providers share the desire to help you prepare for and enjoy the moments that matter most.

The thought of buying a home is exciting but owning one isn't for everyone. Some people would rather leave the yard work to the landlord and like being mobile or close to vital downtown areas where work and play are a short walk away.

It is a big decision, so here's some information to help you determine whether buying or renting works better for your immediate needs and your pocketbook.

When it comes to buying:

When you own, you can deduct interest and the local property tax portions of each mortgage payment you make from federal taxes. (Note, however, there's a maximum loan amount of $1 million--$500,000 if married but filing separately--that qualifies for an interest deduction.) If you're in the 28% tax bracket, the government underwrites $292 for every $1,000 of deductible interest and taxes.

When you own, each payment builds equity, or the financial stake you have in your house, and increases your net worth. As your house's value appreciates through improvements you've made or changes in the market, your equity grows.

When it comes to renting:

With renting, lower monthly payments will help you sock away money for the one-two financial punch of a down payment--which typically runs between 5% and 20% of the house's price--and closing costs--which typically run between 3% and 6% of the house's price.

With renting, if you know your family is going to grow, it may be better to continue renting until you save up for a house you won't outgrow before you recoup your expenses, which typically takes five to seven years.

Renting may be your best bet if your job could require you to move in a couple of years.

As you weigh renting vs. buying and face what may be the biggest financial decision of your life, give equal consideration to your personal preferences as well as the dollars and cents. For information about our low mortgage rates and savings accounts to help you save for that down payment or other goals, contact us today.

Is it Right for You?

Everyone has seen and heard the zero percent auto financing ads on the radio, T.V., and in newspapers, but are they really a good deal? Zero percent financing is reserved for customers with an excellent credit rating. Each dealer has their own finance company and its own credit requirements.

Zero Percent Equals Higher Payments

Most car dealers require financing terms of three years or less with a zero percent offer. This means your monthly payment would be higher than if you took a low-interest-rate auto loan from your credit union.

No Cash Rebate

By taking the zero percent financing, you forgo any cash rebate from the auto manufacturer.

It’s no mystery that auto dealers make no profit from zero percent financing, so they are naturally going to make up for it somewhere else.

• Dealers will increase extended service contracts or warranties

• Dealers may also charge an application fee or pre-payment penalty preventing you from paying your loan off early

• Fewer models to choose from, limiting your choices, and the cars for sale often have a lower resale value

If you need a strategy to use at the dealership or buying advice from the pros, contact our loan department at (925) 228-4545 and get you a great loan to match the car you want!

It's never too early to save for college

Investing in higher education can give your child, or you, a new outlook on life and advantages for the future. Here are some tips that you can think about when saving for future schooling needs:

• Saving for your own retirement is more important than saving for college. Your children will have more sources of money for college than you will have for your golden years, so don't sacrifice your retirement savings.

• The sooner you start saving, the better. Even modest savings can pack a punch if you give them enough time to grow. Investing just $100 a month for 18 years will yield $48,000, assuming an 8% average annual return.

• Stocks are best for your college savings portfolio. With tuition costs rising faster than inflation, a portfolio tilted toward stocks is the best way to build enough savings in the long term. As your child approaches college age, you can shelter your returns by switching more money into bonds and cash.

• You don't have to save the entire cost of four years of college. Federal, state, and private grants and loans can bridge the gap between your savings and tuition bills, even if you think you make too much to qualify.

• With mutual funds, investing in college is simple. Investing in mutual funds puts a professional in charge of your savings so that you don't have to watch the markets daily.

• 529 savings plans are another option to consider for college savings. Qualified withdrawals are now free of federal tax. Plus, there are no income limitations or age restrictions, which means you can start a 529 no matter how much you make or how old your beneficiary is.

• Tax breaks are almost as good as grants. You may be able to take two federal tax credits – the American Opportunity Tax Credit and Lifetime Learning Credit – in the years you pay tuition.

• The approval process for college loans is more lenient than for other loans. Late payments on your credit record aren't automatic grounds for refusal of a college loan.

• Lenders can be flexible when it's time to repay. There are still ways to cut costs after you graduate and begin repaying your student loans. For instance, there is often a one-quarter percentage point interest rate decrease if you set up automatic debit, in which monthly payments are automatically taken from your account.

• Taxpayers with student loans get a tax break. You may deduct the interest you pay up to $2,500 a year if your modified adjusted gross income is less than $70,000 if you're single or less than $145,000 if you're married and filing jointly. The deduction can be taken for the life of the loan.

Even if the timetable is short to save for your child or yourself, it's never too late to start. SWSFCU offers savings options that can help you pay for higher education, and we offer a scholarship program every spring.

Financial planning for newlyweds

Marriage is a major step in life - both emotionally and financially. Money and finances are the major causes of marital conflict, so it benefits newlyweds to have a good understanding of each other's financial situation before the big day. Frequent discussions and good communication are key to avoiding problems. Here's what you can consider:

Will you each have an individual bank account or a joint account? It is generally a good idea to consider a combination of both joint and individual accounts. A joint account should be used for family expenses, such as the mortgage or rent, utilities, bills, groceries, and so on. In addition, each person should have an individual discretionary account for personal spending or fun money.

Will you take advantage of the convenience of online banking? By banking online, you can save considerable time and money. As your lives become fuller and busier after marriage, you have less time for visiting branches and writing out checks. SWSFCU’s Online Banking and Mobile Banking services allow you to do your banking when and where it is convenient for you.

How will you budget your money? Even if you had created a budget for yourself in the past, your new spouse will contribute to the debt, assets, bills, and savings of your household. Discussing your debt, savings plans, and ways to handle expenses will help you develop a realistic budget.

What are your plans for the unexpected? Important decisions need to be made about insurance and estate planning. If both of you work and are covered by a health plan through an employer, take a look at which plan will be the most beneficial. Getting married is one of the life events that allow you to change your health insurance election without waiting for the open enrollment period. After you get married, discuss what would happen if your spouse was left to support your household alone, and consider whether or not life insurance would be appropriate. A sudden loss of income can be devastating to a family.

What are your retirement plans? Take a look at your beneficiaries on existing retirement plans, pensions, IRAs, and any other assets you may have. When you establish beneficiaries on these accounts, you can ensure that your assets are disbursed properly when you die. Don’t forget to take advantage of the many different retirement accounts that are available to help your tax situation. With two incomes, it can be a great time to begin saving for retirement and save money on taxes at the same time.

SWSFCU can help you start your married life the right way with products and services that fit your needs.

Homebuying tips to help you get ahead

Homeownership is a major milestone in life, but it requires plenty of time and money. Figuring out your budget can be complex. You want to purchase as nice a home as possible, but you want to be able to afford it, too. What you can afford depends on the size of your mortgage, mortgage rates, costs of homeownership, your other expenses, and your income. One rule of thumb to consider is that the total of your mortgage payment, property taxes, and insurance should be no more than 28% of your household income. Here are some other things to think about:

• Don't buy if you can't stay put. If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.

• Start by shoring up your credit. Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct and fix any problems you discover.

• Aim for a home you can really afford. The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

• Get preapproval before you begin searching for a home. SWSFCU can help you with preapproval, so you know how much money you will be able to finance. This will help you determine if a particular price is realistic for you.

• Buy in a district with good schools. In most areas, this advice applies even if you don't have school-age children. When it comes time to sell, strong school districts are a top priority for many home buyers, thus helping to boost property values.

• Get professional help. Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.

SWSFCU can help make the dream of home ownership a reality. Contact our loan department at (925) 228-4545, which provides you with information to contact CU Homeland (800-795-1333), whom we’ve contracted with for real estate loans. Apply for a no-obligation home loan pre-approval.

Financial planning for a baby

Having a child is one of the most rewarding experiences in life. But the impact on your finances can be daunting - hundreds of thousands of dollars between birth and age 18, not including college costs or inflation adjustments. Here are a few tips about how to manage your finances during this exciting time.

• Build some financial reserves before the birth. Once you know you are going to have a baby, make sure to save some additional money. It will be easier to cover those diaper costs if you don't have to worry about money.

• Check your medical insurance. If you do not have medical insurance, buy a policy before you become pregnant. Some policies require three or more months of coverage before the start of your pregnancy. Other policies limit the amount they will pay, so be sure to check the terms of your policy.

• Check your employee benefits. Many companies have provisions for paid leave for pregnancies for both the mother and the father. You may even be able to combine vacation pay, disability pay, and sick days to maintain your income for a few extra weeks before returning to work.

• Review your life insurance coverage. You are going to have an additional person in your family that is dependent on your income. If you do not have life insurance, now is a good time to get it. If you have coverage, consider increasing it to recognize the additional financial responsibility you will have. Many companies offer inexpensive life insurance coverage as part of their employee benefits program, and there are inexpensive term policies available from many life insurance companies that you may want to explore.

• Talk to your employer. Be sure to know your employer's maternity leave policy and talk with your supervisor so the appropriate planning can be done.

• Write or revise your will. Even if you do not have substantial assets, a will is necessary at this time. The will can designate guardians in case you and your spouse are unable to take care of the child. You should also use this time to create a power of attorney for health care issues. This document will spell out the type of care you will receive in case you and your spouse are unable to make those decisions.

• Consider how you are going to handle childcare. If you plan to stay home with the child and not return to work, you will have less income. If you plan to use a daycare center, it will cost money. In either case, investigate your options and do some financial planning before the delivery of your child.

• Start saving for college. College is expensive, and the sooner you start saving, the easier it will be. Once the child is born, you will want to apply for a Social Security number and open a savings account for the child.

Here's how to prepare financially for divorce

During a divorce, couples need to analyze how best to separate finances while keeping each spouse as whole as possible financially. As emotions settle, split couples must face reality and prepare for a financial life separate from each other.

• Review your credit report. As early as possible in the divorce process, you should pull the most recent copy of your credit report from the three main credit bureaus: Experian, Equifax, and Transunion. You can also download your credit report for free from www.annualcreditreport.com. Make sure that everything is accurate, and be certain that you understand your own individual credit and accounts and those of your spouse.

• Open new individual accounts. This is important to do as soon as you make the decision to divorce and before it is final. It will be easier to get bank accounts and credit cards as an individual while you still have joint accounts. And you will usually get a lower interest rate than you will after the divorce is final.

• Close all of your joint accounts. Once both you and your spouse have opened individual accounts, close all of your joint accounts. This will avoid either of you getting credit that will impact the other. And it makes a line between joint and individual responsibility for the couple’s finances as the divorce is finalized.

• Review your will and estate plan. Make sure your beneficiaries after the divorce will still have your best interests at heart. If your spouse or one of his or her relatives were beneficiaries, then you will probably want to change that after the divorce. Make certain that your will and your financial plans reflect the new realities of your new individual status.

• Create a new budget. The divorce may change both the income and expense sides of your personal budget. Make sure you allocate enough for court-mandated child support or spousal support. Remember to be very conservative in your budgeting. You should be able to have money left at the end of the month rather than a month left at the end of your money.

• Seek professional tax and financial planning advice. Divorces are complex and often have unanticipated financial consequences. Finance professionals will help you navigate these uncharted waters and help you maximize your financial benefits and minimize your tax and other obligations.

Start planning today for a better tomorrow

When it comes to retirement savings, you'll likely rely on one or more of these income sources.

Employer Retirement Plans - 401(k) Plans
Most large companies and many small and medium companies provide a retirement plan as part of their overall employee benefits program. With a 401(k), employees contribute a portion of their wages to the plan (reducing their taxable income), and their employer usually matches some portion of what the employees contribute. Earnings on money within the plan are not subject to tax until they are withdrawn. Employees can usually choose from a number of choices to invest their funds.

Individual Retirement Accounts (IRAs)
Anyone with earned income can contribute to an IRA to supplement other retirement savings. Both regular IRAs and Roth IRAs provide tax-deferred accumulation of funds within the accounts. Contributions to a regular IRA may be deductible if you do not participate in an employer-sponsored retirement plan or if your income does not exceed certain levels. Contributions to Roth IRAs are not tax-deductible, but Roth IRAs provide an additional benefit because distributions are not subject to income tax, and there is more distribution flexibility. In addition, individuals ages 50 and over can make additional annual contributions.

Other Personal Savings
Another source of retirement income is other personal savings. While not enjoying the tax preferences of 401(k) plans and IRAs, saving more and earning more on these funds can add greatly to your retirement lifestyle.

Social Security Retirement Benefits
The Social Security system has played a major part in Americans' retirement planning for decades. The current examination and debate over the future of the system will probably produce some changes for future retirees.

SWSFCU has IRA accounts that can help you save for your retirement. Additionally, you can use the SWSFCU-sponsored Financial Planning Program at no charge to credit union members (Jason Vitucci 925-370-3750 or www.vitucciintegratedplanning.com).

Helpful steps after the death of a loved one

After the death of a loved one, you'll have many important financial decisions to make. Here are some tips we hope you find helpful.

If you're the surviving spouse:

Make sure you are ready emotionally to proceed and make important decisions.

Consult with professional advisors knowledgeable about estate settlement and inheritance matters to help you review legal documents and your own personal situation.

Collect all of your spouse’s important legal and financial information.

Ensure that your immediate financial needs are met during the settlement of your spouse’s estate.

If you're the executor:

If you have been designated as executor, you will be charged with settling the deceased’s estate, which can be a time-consuming and complicated process.

You may wish to hire an attorney who is knowledgeable about estate administration and is familiar with the probate laws of the state of the deceased’s primary residence. The attorney can help you understand your responsibilities as an executor as you work through the following steps:

a) Apply for an Employer Identification Number (EIN) from the IRS to identify the decedent’s estate accounts during the account transfer and estate settlement process.

b) Petition the Probate Court to validate the deceased’s will and certify the executor (or personal representative) named in the will. If no will, the court will appoint an administrator.

c) Publish a “notice of probate” in local newspapers to give creditors and beneficiaries public notice of the decedent’s death and the appointment of the personal representative.

To report a death to an insurance company, you will need your loved one’s full name, Social Security number, and date of death, as well as a mailing address where claim information can be sent.

To claim insurance death benefits, you will need:

a) Original or certified copy of the death certificate.

b) Copy of police report if your loved one died in an automobile or other accident.

c) Original or certified letter of qualification issued by the Circuit Court if benefits are to be paid to an estate.

d) Copies of trust agreement establishing a trust and appointment of individual trustee if benefits are to be paid to a trust.

e) Copy of guardianship appointment for minor child’s estate if benefits are to be paid to a minor child.

f) Copy of power-of-attorney document if benefits are to be paid to a non-minor beneficiary who has a designated attorney-in-fact to handle his or her affairs.

Take control of your finances:

You may need to make important financial decisions that can impact your current taxes and future assets. To help you with these decisions on your inherited assets, you will want to settle the estate, organize your records, and assess the resources available to you to build on for the future.

Organize all the legal and financial documents you have collected for easy reference.

Begin transferring assets to yourself and/or designated beneficiaries.

Assess your net worth (the difference between your assets and your liabilities) to help you determine new goals and financial plans.

Understand the tax implications of withdrawing from your inherited assets and how your income tax situation could change. Determine if all your assets, including those you may have inherited, can cover your financial needs.

Determine how you can make the most of inherited IRA or Keogh assets.

Technology Helps Ensure Security

When you use the Internet to visit your credit union, whether it's to learn about rates, review your account, pay bills, or transact other business, you are entering a secure area.

Password Protection

Before using online services, you develop a secret password that only you know. This assures that you, and only you, have access to your accounts.

Encryption

Once online with your credit union, your transactions and personal information are secured by encryption software that converts the information into code readable by only you and your credit union.

Privacy Policies

Every credit union must implement a stringent privacy and security policy to protect your personal and financial information. Each member's confidential information is treated with the utmost care, meeting or exceeding federal and state mandates.

Next, consider what you can do to keep your end of the Internet safe.

Understanding Your Role

No security system is 100% safe, not on your home, not on your computer. At home, you may have sturdy doors and windows, locks, and perhaps an alarm or intrusion detection system. Here are some areas of security to know about for your home computer.

Passwords

Your password is the key that opens your home computer. You wouldn't use a passkey on your front door. Similarly, don't use a password that is easy for others to guess, such as birth dates, Social Security numbers, or child or pet names. Instead, use a password that contains a variety of letters, numbers, and symbols and change it regularly.

Anti-Virus Software

Anti-virus software should be installed on all Internet-connected computers. Many computers come with this software, but you have to make sure it's turned on. Your anti-virus software is like your annual flu shot. Your first installation protects you for a while, but because new viruses are emerging daily, it is essential to update your anti-virus software regularly.

Firewalls

A firewall is a protective shell between your computer and the outside world. It reduces threats to your home computer from the Internet by filtering out potentially dangerous data and preventing unauthorized access to your computer. Updates to firewalls are called patches. Your software company may notify you by e-mail when it releases a new patch, but you should check your software company's website regularly to make sure that you don't miss one.

Encryption

Encryption is the scrambling of your private information to prevent unauthorized data capturing. If you communicate through a secure web page like your credit union's, the information you transmit is almost certainly encrypted. However, email is frequently unencrypted, even if you access it from a secured web page, so be wary of sending sensitive information such as account numbers through e-mail.

Operating Systems

You should regularly check on whether new security updates are available for your computer operating system (i.e., Windows, macOS).

Disconnect

Turn off your computer or disconnect from the Internet when you are not using it. An intruder cannot attack your computer if it is turned off or otherwise completely disconnected from the Internet.

Back-Up Your Data

Even with all these security measures in place, the information on your computer is still vulnerable. Protect yourself from the loss of critical data by backing up your files.

Watch for these threats

Unknown E-Mails, Attachments, And Programs

Before opening any e-mails or attachments, make sure you know where they came from. If you must open an e-mail or attachment before you can verify the source, following these steps will reduce the chance that any malicious code contained in the attachment might spread to your computer:

• Make sure your virus definitions are up to date

• Save the file to your hard disk

• Scan the file using your anti-virus software

• Open the file

For additional protection, disconnect your computer's network connection before opening the file.

Fraudulent Websites (Phishing)

Copycat websites deliberately use a name and web address that is deceptively close to the web address of a genuine business. The trick is to lure you into clicking on their website and giving them personal information, such as your account number and password. With this information, the operator of this website may put charges on your credit card, steal from your accounts, and even steal your identity. Always make sure that you have typed the correct website address and that you are familiar with the home page before conducting any business or disclosing any personal information.

You can visit our website at any time, day or night - that's convenience! Your credit union is doing its part to make the journey safe, and with some simple, common-sense precautions, you can do your part!

More on identity theft on the FTC site.

The Sneakiest New Shopping Scams

Easy ways to avoid the biggest rip-offs online and in stores
By the editors of Shop Smart Magazine

Just as important as knowing how to sniff out great buys is understanding what it takes to avoid rip-offs. And with Internet fraud on the rise, it's getting tougher to outsmart the criminals. Complaints to the Internet Crime Complaint Center, a joint operation of the FBI and the National White Collar Crime Center, jumped 22 percent last year. The complaints include plenty of run-of-the-mill scams, like sellers who steal credit-card numbers or take the money and run. But those are child's play compared with what else is brewing.

Think you're too savvy to get taken? OK, maybe you don't fall for those e-mails from Nigerian royalty asking you to wire money, but digital criminals are getting sneakier every year. One scam that can trip up even the most cautious consumers involves "skimmers" attached to ATMs. Those devices record account numbers and passwords so that thieves can clean out your bank account.

"These guys are constantly thinking of new ways to swindle you, some of which are quite sophisticated," says Brian Krebs, a computer security expert and author of "Krebs on Security" at Krebsonsecurity.com.

Think you're safer shopping at the mall? Official purse-snatching statistics show there's been a downward trend, but many of those crimes aren't reported to law enforcement officials. And pickpocket activity always jumps around holiday time, says Bob Arno, co-author of "Travel Advisory! How to Avoid Thefts, Cons and Street Scams While Traveling" (Bonus Books, 2003). But you can outsmart even the craftiest swindlers if you know what's in their bag of nasty tricks. Here's a guide to the latest, sneakiest scams and simple tips that can help you protect yourself.

Smishing

How it works: "Phishing" is when you get an e-mail from a supposedly trustworthy source, such as your bank or PayPal, claiming a problem with your account and asking for your username and password. When you respond, your information is stolen, and your account is siphoned. "Smishing" is the latest twist on that scam - instead of getting an e-mail, you get a text message. (The word is a combination of "SMS," for short message service, aka text messaging, and "phishing.") You're told to call a toll-free number, which is answered by a bogus interactive voice-response system that tries to fool you into providing your account number and password.

"It works because people don't give their cell phone numbers out," Krebs says. "If someone has my cell number, I figure it's someone I know." Thieves can use random-dialing telemarketing services to hit on your number, says Rod Rasmussen, president and CTO of IID, an Internet security firm. If you belong to a credit union, be especially wary - members are targets because often the call-back number has a local area code, not an 800 number, which makes victims less likely to suspect a hoax, Rasmussen says.

Prevent it: If you get a text alert about an account, don't respond before you verify that it's legitimate. You can do a Google search on the number to see whether it matches your financial institution. Even better, call the customer service number at your bank or other service provider to give any needed information to a representative.

Teeny, tiny charges

How it works: Thieves get hold of your credit or debit card number and make very small charges of 20 cents to $10. The charges appear on your bill with an innocuous-sounding corporate name, and a toll-free number may appear next to the charge. But when you call the number, it's either disconnected, or you're instructed to leave a message, and your call is never returned.

That was precisely the scam that the Federal Trade Commission broke up in June, according to spokesman Frank Dorman. "We don't know where the thieves got the card numbers, but we're looking into that," he says. The scam was successful because most consumers either didn't notice the charges or didn't bother to correct them because the amounts were so small. In all, the crime ring racked up more than $10 million in bogus charges, the FTC estimates.

Prevent it: Scrutinize every item on your bill every month and question those you don't recognize. (Some charges, but not all, will list a phone number.) If you think a charge is fraudulent, notify your card company as soon as possible but no later than 60 days after the charge appears. By law, the card company must remove the disputed amount from your account while it investigates. Worst case, by law, you're liable for only the first $50 on a credit card. (In most cases, Visa and Mastercard will cover the full amount.) Debit cards offer fewer protections: You must report the problem two days after you notice it. If you don't, you could be liable for the first $500 in fraudulent charges. If you wait more than 60 days after your statement is mailed, you could lose all the money in your account.

Skimmers

How it works: Skimmers, devices that thieves attach to ATMs or gas pumps to steal your debit account number and password, have been around for years - and they're not going away. They're getting even more sophisticated.

The devices are placed at the mouth of the card-acceptance slot and record the data off of the magnetic strip on the back of your ATM card when you slide it into the machine. Crooks will usually plant a second device, such as a hidden camera or a transparent plastic PIN pad overlay, that's used to record your PIN when you type it in. In the early days of skimming, the thief had to return to the ATM or gas pump to retrieve the apparatus. But now, Krebs says, wireless technology enables the devices to be rigged to send account information via text message to the thief's cell phone. "The thief can be down the street in a coffee house or halfway around the world," he says. "As long as he's got a working phone signal, he can get the information sent to him right away and start using it."

Prevent it: Use credit cards and avoid using non-bank ATMs. Those machines are generally located in areas that are less secure, making it easier for thieves to tamper with them. And check the card slot: If there's a plastic strip or plastic film sticking out, or anything glued to the card reader, go elsewhere. If your card is stuck inside the card slot, do not leave the machine. Use your cell phone to call your bank branch or the 24-hour service number to report the problem.

Membership programs

How they work: You're buying from a large, reputable website but just before you click the "confirm" button on your purchase, you see a pop-up window or banner ad with an offer such as "$10 Cash Back on Your Next Purchase!" Here's the catch. By accepting that so-called deal, you're agreeing to enroll in a web discount program that's run by a completely separate company. Those programs, which have innocuous names such as "Reservation Rewards," "Travel Values Plus," or "Great Fun," often provide a 30-day trial period during which you get discounts on a variety of merchandise and services. After that, a monthly membership fee, usually $10 to $20, will appear on your credit card bill - even though you never gave that outside company your card number.

Sounds dicey, doesn't it? A Senate committee headed by Jay Rockefeller, D-W.Va., thought so, too. Last year, the committee launched an investigation into three large companies that sell memberships to those discount clubs: Affinion Group, Vertrue, and Webloyalty. The committee's report was issued last November and alleged, among other things, that "misleading 'Yes' and 'Continue' buttons cause consumers to reasonably think they are completing the original transaction, rather than entering into a new, ongoing financial relationship with a membership club operated by Affinion, Vertrue, or Webloyalty."

The problem is so ubiquitous that in May, Rockefeller introduced a bill to ban that and other misleading sales practices. Meanwhile, the three companies mentioned in the report have pledged to change their ways. Previously, customers' credit card numbers were provided to the discount company by the original site without the consumer's knowledge. After the investigation began, all three companies started to require consumers to type in, at a minimum, the last four digits of their card number to make it clear that they are entering into a separate transaction. We'll be on the lookout for whether those changes are enough to keep consumers from being duped.

Prevent it: Be wary of pop-up windows or banner ads that promise an additional discount before you complete a transaction. If you do click on an offer, take the time to read the fine print. Scrutinize your credit card statement every month and question any unfamiliar charges, no matter how small. Check your e-mail inbox and spam folder because web loyalty programs often send a notification e-mail before they start charging your credit card when you still have time to cancel.

Stripped gift cards

How it works: Thieves look for gift cards that are displayed on grab-and-go racks, such as in grocery and department stores. They use a handheld scanner - which you can buy online for just a few hundred dollars - to read the code behind the magnetic or scratch-off strip on the back of the card. That, combined with the card number on the front, gives them everything they need to steal the value of the card. Then they put the card back on the rack. Later an unsuspecting buyer purchases the worthless gift card. Even if a card isn't preloaded, a thief can steal the card number and security code, then call the 800 number shown on the card every few days to check the balance. Once a shopper has purchased the card and loaded it with a dollar amount, the thief can spend it before the purchaser does.

Prevent it: Buy cards that are behind a customer-service desk, says Tom Browning, vice president of corporate compliance and chief security officer for AlliedBarton Security Services. Inspect the card; if the magnetic or peel-off strip on the back isn't pristine, the card might have been tampered with. When buying a preloaded card, ask the cashier to scan it to make sure the full value is on it. If you're buying from a third-party gift card site, look at the refund policy. And always hang on to the receipts. If something goes wrong, it can help you - or the gift recipient - get a refund.

Counterfeit electronics

How it works: Counterfeiting might seem like old news, but it's still going strong - in fact, stronger than ever. Last year, U.S. Customs and Border Protection made 14,841 seizures of fake and pirated goods worth $261 billion, an all-time high. The counterfeits seized included the usual suspects - footwear, apparel, and accessories - plus a huge number of electronics. "A knockoff handbag may not present a direct risk to consumers," says Anthony Toderian, spokesman for CSA International, which tests and certifies products, "but counterfeit electronics certainly do." Fake goods could have substandard wiring, faulty fuses, flammable plastic casings, and harmful chemicals such as lead and mercury. All kinds of electronics have been illegally copied, including computers, phones, and handheld gaming devices, he says. Although online shopping and auction sites and deep-discount stores are the most likely places those fakes will pop up, some have made their way onto the shelves of major retailers. "Buyers for stores can be fooled just as easily as regular consumers can," Toderian says.

Prevent it: Look for a label stating that the product has been certified by CSA International or Underwriters Laboratory. (Go to CSA-International.org and click on "Certification Marks" to see what genuine labels look like. At UL.com, go to the search box and type in "How to spot fakes.") Look at the product, too. Are there misspellings on the package? If the box is see-through, does it contain all of the listed components, including batteries, cases, and power cords? Is the manufacturer's contact information, including address and phone number, clearly displayed? When in doubt, buy from well-known retailers that offer a full refund.

3 simple ways to protect yourself

Get the right security software

In recent tests, we found two great, downloadable programs that protect against viruses, spyware, and other online threats at no charge. Try Avira, at www.free-av.com, or Microsoft Security Essentials, at www.microsoft.com/security_essentials.

Fight fraud

There are several useful resources for ensuring your online safety. Bookmark these!

- FTC.gov The Federal Trade Commission's site has lots of fact sheets that tell you what to do if you've been scammed. Under the Consumer Protection tab, click on "Consumer Information" and then "Shopping for Products & Services." Don't miss the helpful primers on what to do if you're billed for merchandise you never receive and "How to right a wrong."

- Safeshopping.org This site is sponsored by the American Bar Association and is packed with advice on safe payment methods, protecting your privacy when you shop, and other need-to-know topics.

- OnGuardOnline.gov This site has tips on Internet shopping and is sponsored by government agencies. Quizzes test your knowledge of spyware, online auctions, ID theft, and more.

- Antiphishing.org The Anti-Phishing Working Group, an industry-sponsored association, has a tip sheet on how to avoid being scammed. Click on "Consumer Advice," then "How to Avoid Phishing Scams."

Hang on to your handbag!

Bob Arno, an author and anti-theft consultant, has traveled the world secretly filming pickpockets. So he knows their tricks and how to thwart them. Here's his advice:

Get a grip: Thieves are just as likely to snatch your purse as to slip a hand inside it to grab a wallet. So keep your handbag tight against your body and in front of you at all times. And when you're sitting down in the food court at the mall, don't sling your purse behind you on the chair. Even if you think you're maintaining physical contact with your bag, leaning forward for just a second is all the opportunity a thief needs to grab it. And never put it on the floor, even if it's in front of you.

Nix knapsacks: They're back in style, but any bag that's not within your view is a juicy target for skilled pickpockets, no matter how securely it's fastened. And avoid purses with open compartments. Bags with zippers are best.

Keep your focus: A classic ploy of purse thieves is to create a diversion - pointing at something, talking loudly, holding open a map and asking for directions, or spilling something on your coat, then offering to clean it up. It can happen in a restaurant or a busy mall. Whenever anyone approaches you, be sure to firmly hold your purse and keep it in front of you.

Pare down your wallet: Do you really need to bring all of your credit cards and ID cards with you? Leave everything except the necessities at home. And never routinely carry around anything with your Social Security number on it. (Photocopy all of the cards in your wallet, just in case.)

Be smart with your car: Park in well-lit areas. If it's still daylight, but you plan to shop for a while, park under a street lamp or in a well-lit garage. Always put up your windows and lock the car. If you go back to your car to stow packages, put them in the trunk - visible boxes and bags are magnets for thieves. Don't load up with so many packages that your purse dangles from your arm, out of your sight. Take advantage of curbside pickup or ask the store to hold bags for you. If someone tries to grab your purse, don't resist. "It's not worth losing your life over," Arno says. Also, if you have a GPS device in your car, program it so that your "home" setting isn't your home address. Instead, use the school or church down the street, or crooks will know how to get to your house while you're out. GPS thefts are also on the rise, so don't leave any visible trace of one in your car, including the mount.

Check sellers: Before you do business with anyone, go to the Better Business Bureau at www.bbb.org/us. Grades A to F are based on how long the seller has been in business and how good a job it does resolving complaints. Also, do a Google search of the site or retailer and the word "complaints."

Beware of Text Message SMiShing Attacks!

We had several reports of SMiShing attacks (text phishing) by several financial institutions (primarily in the eastern region of the U.S.). Cardholders are receiving suspicious text messages attempting to collect information about their card.

SMiShing is a type of social engineering that uses cell phone text messages to persuade victims to provide personal information such as card number, CVV2 (the security code on the back of your card), and PIN. The text message may contain either a website address or, more commonly, a phone number that connects to an automated voice response system, which then asks for personal information.

The following are examples of SMiShing messages recently sent to cardholders:

• Text messages originating from either cu1676526@account.com or sdf8g7a5s87g5@vtext.com

• ABC CU has deactivated your Debit Card. To reactivate, contact: 512XXXXXXXX (capturing local area codes)

• This is an automated message from ABC Bank. Your ATM card has been suspended. To reactivate, call urgent at 1866215XXXX

• Text message originating from sms.alert@visa.com

• sms.alert@visa.com/VISA(Card Blocked) Alert. For more information, please call 1877XXXXXXX

Never provide personal information to anyone claiming to be your institution that is asking for a card number, CVV2, or PIN number.