Archives for April 2018

Why Is The Mobile Wallet So Important?

When Amazon opened its grocery store in Seattle, it was the first-ever cash- and checkout-free supermarket in the US. It relies on a sophisticated collection of infrared sensors and cameras to correctly bill customer’s mobile wallets, letting shoppers grab what they need and leave without ever pulling out cash or credit. But with the Just Walk Out patented technology only operating in Seattle’s flagship store, many people living outside of Washington might wonder why they would ever need a mobile wallet.

A mobile wallet is more than just a ticket into a cashless grocery store on the west coast. A mobile wallet provides an opportunity to change the way consumers manage their money in increasingly convenient and quick ways.

First things first: what is a mobile wallet?

On the surface level, a mobile wallet is a digital version of what you typically keep in your back pocket or purse. It’s any IoT device (or smart device that can connect to the Internet) equipped with the right apps. These apps are provided by banks, fintech companies, online lenders, and retailers. Each app does a different job. Some take on the role of your cash or debit and credit cards, allowing you to pay for things with a simple scan of your personal barcode. Others let you cash in on loyalty rewards accounts. Some, like Starbucks’ and Chase Bank’s mobile wallet, lets you do both.

How does it work?

Contrary to how simple it is to use, it relies on complicated technology. These apps rely on NFC (or Near-Field Communication) chips to transfer data between your device and a retailer’s POS. Only those devices equipped with NFC chips can communicate with each other.

NFC chips aren’t solely used by mobile wallets. If you’ve tapped a credit or debit card at the checkout, then you’ve used NFC technology. Any contactless payment tech shares the same wireless data methods.

Why would you need it?

A mobile wallet simplifies your shopping experience. It takes less time to use your mobile wallet than any other method of payment, so it can save you a ton of time at the till. It’s also much more convenient to use. It’s easy to forget your wallet at home, but most people always remember to bring their phones with them. That means you’re always prepared for when you need to purchase something or collect points.

There are many types of digital payment systems available

Amazon Go isn’t the only way to get use out of your mobile wallet. Corporations like Apple, Google, and Samsung have joined in by offering apps that facilitate digital payments in-store and online. There’s also a growing number of apps that bring other financial services to your phone. Take, for example, an app like Mint. More than 20 million people use this money management app to create budgets, track expenses, and receive alerts about their spending habits. There’s also an app from MoneyKey, an online lender that facilitates personal loans. In a bid to simplify the borrowing experience, they’ve created an app that allows their users to apply, review, and secure cash loans. Then there are online investment apps like Robinhood that provide stock trading options at no cost.

As the role of the mobile wallet continues to evolve, so will its presence in the economy. While you may not have an opportunity to use it often now, a mobile wallet will come in handy eventually. Countries like Sweden are already nearing a cash-free future, with many other developed countries following close behind. Many experts believe the US’ cash-free future is closer than you might think, with Amazon Go just the beginning of retailers’phasing out cash. The only way you could participate is with a mobile wallet designed to make digital payments, making it a very important addition to your smartphone.

Infamous con artists Ponzi schemes

By Frugaling 1 Comment

Before the infamous Charles Ponzi was discovered for the flim-flam villain he really was, not a lot was known about Ponzi schemes. He’s the guy that lent his name to the offensive act of scam and robbery upon the innocent. There are hundreds of different scammers out there. Ponzi, or pyramid schemes can be so brilliantly organized and presented that they can fool the most savvy business investors. These are some of the most infamous con artists and ponzi schemes of all time.

Charles Ponzi, the originator of the Ponzi scheme

Ponzi was an immigrant from the country of Italy. He is one of the most well known con artists in the country. He set up a business that included the purchase and sale of postal coupons. He guaranteed that investors would receive a return of fifty percent on their investment within a 45 day period of time. Those who got in on the bottom floor made as much ass three times their initial investment. This gave Ponzi the proof he needed to advertise the business with hard and legitimate proof. The Securities Exchange Company helped him to amass more than forty thousand investors which netted Ponzi a cool million dollars within just three short hours. The total investment of $15 million was made to his “business” scheme. It later came to light that Ponzi had been paying investors with the money that came in as new investors took a chance. It became obvious that the newer investors had just been scammed out of their money and would never receive a return or anything back from their original investment. Ponzi skipped town after being sentenced to 14 years in prison. He landed in Brazil where he became ill and died in poverty. Prior to his death, he gave a full confession of his willful criminal activity.

Bernie Madoff

Madoff is the second most notorious Ponzi scammer who absconded with $50 billion in ill gotten gains. He operated the largest known Ponzi scheme in all of history. He started the operation in the 1070s and kept it on a roll for a number of years. He was NASDAQ’s former chairman which put him in the perfect position to develop his system. He ruthlessly tricked some of the richest and most business savvy business people in the world. He demanded a minimum investment of $20 million to secure a place in his “business” deal. It didn’t help his victims that Madoff had earned a reputation for being a fair business man with the highest of ethical standards. His record was impeccable until he was caught. The Bernard L. Madodff Investment Securities LLC seemed like a solid investment deal but it turned out to be another Ponzi scheme.

Dona Branca

Dona Branca dos Santos was known as the People’s banker. Although she was impoverished when she first opened her own bank, she quickly became wealthy. In 1970, Dona opened a bank that she claimed was designated for the poor workers of Portugul. She offered the high interest rate of ten percent return a month. Poor people saw this as an amazing deal and the thousands that invested in the bank didn’t stop to think that it could be too good to be true. It did work for about fourteen years. When officials discovered that she was really operating a Ponzi scheme, she was arrested and served ten years in jail.

Sergey Mavrodi

Sergey Mavrodi is one of the most famous Ponzi scammers in history. He even managed to get elected to the Russian Parliament because of his popularity. It was estimated that his scheme lured in a million people, according to investigators’ evidence. When Mavrodi heard this figure, he brazenly scoffed and proudly refuted the claim, insisting that he had duped closer to two million people.

The scam took place in the 1990s when the MMM company guaranteed that the dividends would pay out a thousand percent on investments. They even had the nerve to advertise this publicly through television advertisements. The company hauled in a mind boggling $11 million a day in its prime. The scam went on for five years and during this time, Mavrodi skimmed off $1.5 billion in personal profits before the police raided his offices and he was charged with tax evasion.

Because he was a diplomat, he received immunity which allowed him to pay back the funds he had scammed from the public. His immunity was revoked and he skipped town, but was captured in 2003. For his crimes, Mavrodi only spent 54 months in jail and paid a fin of $390.

How are PPI Claims Affecting the Banks?

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The PPI mis-selling scandal has plagued the British banks for a decade now. With billions of pounds repaid to customers and millions of people claiming PPI, it’s had a dramatic effect on the profitability — not to mention the reputation — of many banks.

The Financial Conduct Authority (FCA) is attempting to draw a line under the scandal by imposing a deadline for all PPI claims. All customers who wish to make a claim against their banks need to do so by 29th August 2019.

More people than ever are eligible to make a claim because of the Plevin rule. In 2014, a PPI case by Mrs Susan Plevin against Paragon Personal Finance was brought to the court because 71% of her PPI sale was a commission. She won her case, meaning others in a similar position are able to make a claim under the Plevin rule. If over 50% of a PPI sale was the commission, customers can make a claim — even if their previous claim was rejected.

The Plevin rule means that the banks are likely to pay out even more money in the next 18 months, adding yet more pressure onto a situation that has banks on the back foot.

Are PPI Claims Increasing?

Lloyds Banking Group is dealing with approximately 11,000 claims per week. As such, the bank has put another £2.4 billion aside for PPI claims. Lloyds is a prominent offender in the PPI debacle, but many of its peers will also be seeing increases in claims as the deadline approaches.

Since the FCA launched the campaign for the PPI deadline, they’ve reported a significant upturn in engagement to the dedicated PPI website and hotline.

The best claims management companies are receiving hundreds of claims per day, with this figure likely to increase as the cut-off date for making claims edges ever closer. In short: yes, the number of PPI claims being made is on the rise, and is only set to increase further still in the coming months.

How Much Have the Banks Repaid to Customers?

In the last three months of 2017, more than £300 million was repaid to consumers each month by the banks. This brings the total figure repaid (since 2011) to nearly £30 billion. By the time the PPI deadline arrives, this figure is likely to be £40 billion. This is bad news for the banks, although, many of them have seen profits gradually start to increase after the initial wave of payments and fines.

But, this figure doesn’t represent the true amount that the mis-selling scandal has cost the banks. The banks contributed £30 million to the campaign for the PPI deadline, plus FCA fines and the cost of hiring more employees has increased the cost of the scandal even more.

Will There be a PPI Repeat?

The scale of the mis-selling scandal means the banks should have learnt their lesson. But, there are other instances of copycat mis-selling scandals that suggest otherwise.

In 2015, it emerged that the banks were mis-selling packaged banks accounts (PBA). While these were not as widely mis-sold as PPI, thousands of people were sold PBA unwillingly. The banks have put aside millions of pounds to repay customers.

But, with £30 billion already repaid to customers for PPI claims and more money to be paid out in the next year-and-a-half, it’s unlikely that we’ll see another mis-selling scandal on this scale again.

How to Claim PPI

Consumers who believe that they were mis-sold PPI should make a claim as soon as possible — and there are a couple of straightforward ways to do so. You can contact the bank yourself and attempt to navigate your way through a claim individually, or enlist the help of a PPI claims company to ensure professional assistance throughout. But, it’s important to read all the terms and conditions before signing any contract with a claims company. Understand your rights and always look for a no win, no fee service.

Find old paperwork with evidence of PPI and then make your claim to the bank. If you can’t find your paperwork, a claims company or creditor should be able to uncover this for you. A claim can take up to six months, so start now and don’t miss out before the PPI deadline.

How to get rid of student loans earlier

By Frugaling 1 Comment

The average college student has over $30,000 in student loans upon graduation. While that usually means a college degree which is going to open some doors professionally, and a higher income down the road, this is also a serious responsibility and a matter that deserves all your attention.

Just like paying off a balance on a credit card for a holiday that is long gone, paying off student loans 15 years after your graduate is not any fun. So there are options to tackle them as soon as possible and get started with your other life goals.

Whether you have federal, private student loans, or both, the first step is to know how much you owe and how much you will have to repay each month. Your student loan provider should be able to send you a clear statement, with the monthly payments, the total owed, and the interest rate.

There are two ways to pay off your student loans quicker, which can be done by making overpayments and reducing the interest rate on what you owe. If you manage to get easy installment loans and keep making the same payment, what you used to pay in interest will be applied to the principal of the loan, hence reducing the amount owed faster.

It is pretty easy to refinance student loans, a company like Credible allows you to compare prequalified refinancing offers for free, without damaging your credit score.

You just enter your personal details, which are not shared with potential lenders, then sort and compare the offers to find the one that is the best fit for you, and finally import your loan information automatically.
Once that is all entered, you get a final offer within a business day. There is no service fee, no origination fee, and more importantly, no prepayment penalty. Paying off your loans early can save you hundreds, if not thousands in interest, and can also drastically reduce the life of your loan.

You can refinance your federal student loans, private student loans from your bank or school, and ParentPLUS loan.

Now that you have the best deal possible, how do you get rid of your loan as fast as you can? Well, it takes time and effort, but it is really worth it. If you are not convinced, ask a 40-something who is still paying off for college from 20 years ago how he feels.

The sooner you pay off your student loans, the sooner you can use that cash to invest, buy a house, save for retirement, or plan for other big money goals.

You were used to living like a student in college right? Roommates, a beater car, ramen noodles? Now that you are earning a full time salary at your graduate job, it is going to be very easy to succumb to lifestyle inflation. After all, you work hard, you deserve a treat once in a while. True, but in moderation. Because treating yourself at the expense of paying off your debt might mean having to work longer to pay for all this.

There are also apps that round up your purchases and allow you to send the balance to your student loans. Or you could switch to bi-weekly payments instead of monthly payments, resulting in 13 payments a year instead of 12. There are many options, and if you use an online calculator to find out how much all these little amounts would add up to, you might be surprised. They can make a big difference.