Some 57 million Uber users’ personal information was exposed in October 2016 when the car-hailing company experienced a cyber attack, the company announced Tuesday — more than a year after the occurrence of the incident.
Bloomberg reported the company paid $100,000 to the hackers responsible for the attack to keep the breach private.
Dara Khosrowshahi, Uber’s new CEO who was appointed by the board in August, said in a statement that two people outside the company “inappropriately accessed user data stored on a third-party cloud-based service that we use.”
The attackers stole data of the 57 million people across the globe, including their names, email addresses and mobile phone numbers. About 600,000 U.S.-based drivers were among 7 million Uber drivers whose license numbers and names were exposed in the breach.
The data breach was the latest in a string of high profile cyber attacks that weren’t revealed until months or years later. Fortunately, it doesn’t appear that Uber users have to worry about any of their financial information being exposed. Khosrowshahi said no evidence indicated that trip location history, credit card numbers, bank account numbers, or dates of birth were stolen.
What was done?
After the attack happened, Uber “took immediate steps” to safeguard the data and blocked further unauthorized access to the information, according to Khosrowshahi. The company identified the hackers and made sure the exposed data had been destroyed. Security measures were also taken to enhance control on the company’s cloud storage.
“None of this should have happened, and I will not make excuses for it,” Khosrowshahi said. “While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes. We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”
The company let go two employees who led the response to the incident on Tuesday, according to the statement. Uber is also reporting the attack to regulatory authorities.
What can you do?
Uber said no evidence shows fraud or misuse connected to the data breach.
Check out our guide on credit freezes and other steps you can take to protect your identity if personal information is compromised in a data breach.
If you are an Uber rider…
The company said you don’t need to take any action. Uber is monitoring the affected accounts and have marked them for additional fraud protection, Khosrowshahi said. But you are encouraged to regularly monitor your credit and Uber accounts for any unexpected or unusual activities.
If anything happens, notify Uber via the Help Center immediately. You can do this by tapping “Help” in your app, then “Account and Payment Options” > “I have an unknown charge” > “I think my account has been hacked.”
If you are an Uber driver…
If you are affected, you will be notified by Uber via email or mail and the company is offering free credit monitoring and identity theft protection.
You can check whether your Uber account is at risk here.
Parents spent an average of $422 per child on holiday presents in 2016, according to a survey by T. Rowe Price. An estimated 56 percent of parents with children ages 8 to 14 use credit to purchase gifts, which are bound to include gadgets that’ll be old news by New Year’s but not paid off until months after that.
Indeed, the holiday season — the most wonderful time of the year, as it’s known to some — may be far from wonderful for budgets as some parents try to fulfill every child’s every wish.
56 percent of people said they spend too much money during the holidays.
55 percent admitted that they feel stressed about their finances during the holidays.
43 percent said the extra expense makes the holidays hard to enjoy.
Some parents overload their children with “stuff” that will quite possibly be obsolete or bested in popularity by the next big thing just in time for the next holiday season. No great mystery that the U.S. has 3.1 percent of the world’s children, but consumes 40 percent of the world’s toys.
“We are a materialistic society, and often our rituals and celebrations reflect this,” says Dr. Mary Gresham, an Atlanta-based psychologist who specializes in financial and clinical psychology. “Many parents get caught up in this and start to believe that the right toy will bring happiness to their child.”
Here are five gifts to give your little ones besides presents this year. Your overflowing closets and pockets may thank you for considering other gift options.
Brendan Mullooly, an investment adviser for an asset management firm in Wall Township, N.J., suggests that novice investors interested in making a financial gift to a young person should use a service like Stockpile, an online company that simplifies the process of gifting stocks to minors. Check out our review here.
“You can purchase gift cards of individual stocks and some index ETFs to give as a gift,” says Mullooly.
And Stockpile allows you to buy fractional shares, so the gift cards can be for small amounts. Mullooly recommends setting up view-only access to these custodial accounts so your young investor can check on how the investments are doing.
“This offers a great way to give a gift that’s interesting, has monetary value, and also offers an educational aspect,” he says.
The gift of giving
For children, the holiday season can be a “gimme”time of year. But it’s also the time when we often hear that it’s better to give than receive.
Jayne Pearl, a family business and financial parenting expert and co-author of “Kids, Wealth and Consequences: Ensuring a Responsible Financial Future for the Next Generation,”says it’s not hard to nurture a child’s giving spirit. She suggests combating the “gimmes” with the “givvies.”
Put part of your holiday budget toward giving to the less fortunate, perhaps through a charitable organization. For example, you could give a gift in your child’s name to an organization such as Unicef or the American Red Cross, or to an area animal shelter or humane society.
“Giving kids the tools and the consciousness to try to help people is extremely empowering,” Pearl says.
Her recommendation is to sit down with your children and find out what bothers them about the world, help them figure out how they can help, and make this part of your holiday celebration. Use the holidays as a time to teach your kids that “we have values and our values are not just ‘stuff,’ ” Pearl says.
The gift of membership
You can’t go wrong with season passes to a favorite destination like a local museum, an amusement park or the zoo. You can use them over and over throughout the year, which could ultimately help your family spend less on entertainment.
Also, check out memberships to national organizations, like the Baseball Hall of Fame for the sports enthusiast.
Or get a pass that’s fun for the whole family, like the $80 America the Beautiful Annual Pass, which pays for itself in as few as fivevisits to national parks. The pass covers entry to over 2,000 parks for a full year, and nearly 100 percentof sale proceeds goes toward improving and enhancing federal recreation sites.
The gift of travel
Pool the money you would spend on toys and trinkets and knock a destination off your family bucket list. You could time the trip to coincide with the holiday season or breaks during the school year.
Erica Steed, 37, allowed her children to choose something they wanted to experience together in Christmas 2016.
Ellison, who was 10, wanted to see the Statue of Liberty. Elian, 7, wanted to see snow, which doesn’t often happen in Georgia. They took a family trip to New York for the holidays, and although it didn’t snow, “we had such a great time that it made up for it,” says Steed, who lives in Roswell, Ga.
When you factor in the cost of airline tickets and lodging in New York City for a family of four during the holidays, this gift option didn’t save the Steeds the money they would’ve spent on presents.
But by planning, creating a budget and sticking to it, the family spent the holidays doing something they could all enjoy and remember for a lifetime. And this, Steed says, amounted to money well spent.
The gift of learning
You know your children better than anyone. And every one of them is unique, with his/her own set of interests, so give a gift that helps a child develop existing or new skills.
Sign them up for classes that help them take their passion or hobby to the next level.
Consider coding camp for your computer whiz or cooking classes for your foodie. You can find classes offered by educational institutions, community organizations, companies or individuals.
You could also take a look at online classes like these from MasterClass, which can help your child hone a craft with a celebrity idol without leaving home.
“When people feel really good about things, they tend to spend more,” Dvorkin says.
Bruce McClary, vice president of communications at the National Foundation for Credit Counseling, says people have a tendency to overspend during the holidays, relying heavily on credit cards and not paying off the debt until later, sometimes even years later.
McClary has also noticed that credit card delinquencies have been increasing slightly over the last two quarters. The Federal Reserve Bank notes in its report that “credit card balances increased and flows into delinquency have increased over the past year.”
While most Americans are aware and ready to spend a little extra during the holiday season, you can make it a little more merry by avoiding these common debt traps.
Keeping up with the Joneses
Holiday purchasing pressure ranges from buying the hottest toys to giving (or buying for yourself) the latest tech gadget or the biggest TV on the block. People are tempted to get the latest and greatest, Dvorkin says.
It all adds up, especially if you’re out to outdo a neighbor: The tree and all the trimmings; hostess gifts for parties; food for your own holiday meals and entertaining; your Clark Griswold-style light shows. Randy Williams, president of A Debt Coach, a counseling service in Kentucky, says the desire for personal reward can contribute to holiday debt.
“You feel good when you do something for somebody,” he says.
But then consumers may have the motto “One for you, one for me,” and purchase an item for themselves, which continues the spending cycle.
Hot holiday toy crazes
Unfurling your child’s Christmas wish list can be at once fun and terrifying. Parents planned to spend, on average, $495 per child, according to 2016 holiday shopping data from the Rubicon Project.
Lists could include hot holiday toys for 2017 like the $30-$45 Fingerlings (the little plastic monkeys that attach to fingers and move in response to sounds and touch) a $300 Nintendo Switch gaming console or even the $799 Lego Ultimate Collectors Series Millennium Falcon, the company’s biggest set with 7,541 pieces.
When the toys start to run out, the prices can escalate. The Fingerlings, for example, typically retail at $14.99, but some were listed in November fortwice as much on eBay. Since it can be harder for parents to say “no” to the frenzy when it’s a gift that’s going to bring a smile to a little one’s face, Williams says there’s extra incentive to plan well.
Store credit card pitches
McClary warns not to get into store credit card offers. The instant savings of 10 percent off on the day of your purchase could come with a high cost, such as 29.99 percent APR later.
“People should resist the temptation,” he says.
Williams says there’s a reason for the incentives, such as a discount on your purchase, because the company will make back whatever you initially saved.
“Most people do not pay off their cards within the intro offer time,” he says.
Instead, set aside cash for holiday spending and use it, instead of credit. If you’re sure you can “affordably borrow,” Williams suggests using an existing line of credit instead of falling for the attractive offers from retailers.
Deals seem to abound when shopping online or in stores, but if you aren’t careful, some can land you in more trouble than no deal at all.
McClary advises to avoid promotions like deferred interest cards and convenience checks. Discounts during the holidays are usually found during other times of the year, too, when the budget is less tight.
“It’s to the advantage of the consumer to be looking at sales during the year and look for opportunities to get the most out of their money,” he says.
Trying to keep family traditions alive
Wanting to continue your grandparents’ or parents’ traditions may be sentimental but also pricey in today’s economy. Maybe they held extravagant dinner parties, paid for holiday trips and gave their children a certain number of gifts every year. You want to follow suit, but can’t afford it.
“(I’m a) firm believer that what gets us in trouble in the holidays is wanting to do what Mom and Dad did,” Williams says. “Things are more expensive now.”
Shopping with family members post-Thanksgiving, on Black Friday, although a tradition, also may be a temptation because of impulse buys or if family members don’t hold you accountable to sticking to a budget.
“It’s tradition but it’s also a day people can’t afford,” Williams says.
Hosting hordes of holiday visitors
While milk and cookies are left out for Santa, entertaining guests, from neighbors and co-workers to out-of-town family and friends, can increase your food and utilities spending in December.
“You spend money in all sorts of ways,” Dvorkin says.
“Where the problem is, we don’t plan for Christmas, we just do Christmas,” says Williams. He says that means sometimes consumers plan, mentally, to go into debt.
He advises to plan ahead for the next season, adding that he knows people who start checking items off their list in February during sales, or in June or July when fewer people are buying and prices are lower.
House and Senate Republicans have rolled out separate versions of tax-reform plans, aiming to cut taxes for corporations and individuals. Although the two bills diverge in a number of ways and the fate of both remains in flux, one thing’s for certain: Homeowners would be affected under both plans.
In this article, we lay out the changes to housing-related provisions under both plans and explain what they would mean for existing homeowners and first-time homebuyers.
The Senate’s bill is to go to the full Senate for a vote the week following the Thanksgiving holiday. President Trump has called on lawmakers to pass one cohesive bill by Christmas, and Republican legislators would like to see the reforms take effect in 2018.
What are the changes?
Here’s a quick overview of housing-related changes proposed in the bills:
Both bills nearly double the standard deduction, while eliminating personal exemptions.
The House and Senate both proposed changing residency requirements for capital gains home-sale exclusions by increasing the live-in time period to five out of the last eight years. Current law allows people to write off up to $250,000 — or $500,000 for couples filing jointly — from capital gains when selling a home, as long as they have lived in it for two out of the past five years.
Under the House plan, mortgage borrowers can deduct mortgage interest on loans up to $500,000, for debt incurred after Nov. 2, 2017. Currently, the tax deduction cap is $1 million. The deduction for state and local income taxes would be gone. The state and local property tax deduction would remain but be capped at $10,000. (There is no cap, currently.)
The Senate bill would leave the mortgage interest deduction unchanged, but eliminate all state and local tax deductions (SALT), including deductions for property taxes.
Fewer people will claim mortgage interest deductions
The National Association of Realtors (NAR), a vocal critic of the tax reform proposals, expressed through statements and press briefings that both plans would negatively affect homeownership. The association has called the tax reform legislation an “overall assault on housing.”
“Simply preserving the mortgage interest deduction in name only isn’t enough to protect homeownership,” NAR President Elizabeth Mendenhall said in a statement.
Nearly doubling the standard deductions and repealing some itemized deductions would likely mean that far fewer people would itemize when they file taxes. NAR officials worry that these moves will undercut the incentives to pursue homeownership.
The standard deduction is a fixed dollar amount, based on your filing status and age, by which the IRS lets you reduce your taxable income. The itemized deduction allows you to list your various deductions, including the mortgage interest deduction. You can claim one or the other — whichever lowers your taxable income more.
The standard deduction for a married couple filing jointly is $24,400 under the House plan and $24,000 under the Senate plan. Wolters Kluwer, a global information services company, suggested in an analysis that only those taxpayers who would deduct more taxes through itemizing than taking the bigger standard deduction — the top earners — would benefit from itemizing deductions like the one for mortgage interest.
Impact under House plan
Capping the mortgage interest deduction
The good news is that the majority of existing homeowners won’t be affected by the cap on the mortgage interest deduction, because only about 21 percent of American households take the deduction under the current law, according to the Tax Policy Center.
But about 18.5 percent of new homebuyers would get hit with a bigger tax bill on their housing-related tax liabilities, according to an analysis released by Trulia, an online real estate resource for homebuyers and renters.
Many economists say the mortgage interest deduction distorts the housing market by driving up home prices and soaking up much-needed supply, and that it doesn’t necessarily help increase homeownership rate.“Because the mortgage interest deduction skews to upper-income families, it encourages people to buy bigger homes,” Nela Richardson, chief economist at Redfin, a Seattle-based real estate and technology company, told MagnifyMoney. “It also encourages builders to also build bigger homes, so it encourages sprawl.”
Less than 10 percent of the bottom 90 percent of the income distribution receive the tax subsidy on mortgages, the Tax Policy Center said.
Richardson added that this doesn’t mean the deduction should be completely eliminated. She said she thinks putting a cap on the deduction is only to make the math work for the corporate tax cut, though it is not structured in a way to help middle-class homeowners.
“People who have the means to buy those homes” with a mortgage of more than $500,000 “would continue to buy those homes,” Richardson said. “What we’d like to see is [changes] to help buyers who wouldn’t be able to afford a house unless they got some kind of tax credit. That would be a subsidy that was progressive instead of regressive.”
A silver lining to some: Middle-class homeowners might benefit from an income tax cut, which hopefully would help them purchase a house, experts say.
“The result of that is still a little fuzzy,” Richardson said. “It’s not clear that middle-class buyers in the long run would actually receive an income tax cut.”
What does it mean to first-time homebuyers in expensive cities?
The mortgage interest deduction provides little benefit to new home buyers because many new U.S. homeowners do not itemize or are in the 15 percent tax bracket or lower, William G. Gale, chairman of federal economic policy in the Economic Studies Program at the Brookings Institution, wrote in an analysisfor the Tax Policy Center.First-time buyers are generally looking for cheaper homes. Nationally, the median sales price for existing homes is $245,100, according to the Federal Reserve Bank of St. Louis, well under the $500,000 cap, so capping the mortgage interest deduction shouldn’t affect them too much.
But for buyers in high-cost markets, where demand is high and affordability is challenging, the cap will sting, Richardson said.
“You cannot find a $500,000 home in the Bay Area,” Richardson said. “Good luck with that.”
In San Francisco, the median home sales price is around $1.2 million, according to Redfin and Trulia.
Home prices are expected to go up next year, as the Federal Reserve is expected to increase the short-term interest rate by year’s end, economists say.
“For the first-time buyer, you are dealing with this double whammy,” Richardson said. “If you add onto the fact that really expensive states’ first-time home buyers won’t be able to deduct all of the mortgage interest, then that is an additional expense. So it really is a challenging situation to put new buyers in.”
Trulia reported that across the 100 largest markets, more than half of homebuyers in coastal California, New York and Cambridge, Mass., would experience an increase in their home-related tax liabilities if they purchased a home under the House plan.
Impact on housing supply
Real estate experts expect less movement in the housing market since people who already own homes with big mortgages can continue to deduct the interest. This would make the housing supply crunch even worse in those expensive markets because people may choose to stay in the same house, knowing they couldn’t deduct the same amount of interest on their next big mortgage.
Factor in a longer live-in requirement for capital gains exclusions of homes sales, which economists believe will result in more homeowners waiting longer before moving to a different house to save on capital gains, and it would be even trickier for first-home buyers to bid for a desirable house in higher-end markets.
“It’s definitely not going to help alleviate price increases,” Cheryl Young, senior economist at Trulia, told MagnifyMoney. “But it will also contribute to competition.”
Trulia found that roughly 10 percent or more of existing homeowners in California and the Northeast would lose the incentive to sell their homes. Nationwide, the figure is 2.5 percent.
What does it mean for homeowners in high-tax states?
People living in high-tax states, such as New Jersey, New York and California, where homes are also costly, will see a rise in their property tax liability on taxes paid above the $10,000 property-deduction cap.
Trulia estimates that more than 20 percent of existing homeowners in New York and San Francisco would experience an increase in their property tax bills. Nationally, about 9.2 percent of existing homeowners will experience an increase in their property taxes.
Impact under Senate plan
Bigger property tax liability
Although the Senate plan is in some respects seen as more straightforward than the House bill, removing all SALT deductions would have a more expansive impact on homeowners across the country. That’s because they wouldn’t be able to deduct their property taxes anymore, Trulia’s chief economist, Ralph McLaughlin, explained in an analysis.
Existing homeowners in the Northeast and the Bay Area — New Jersey, New York, Connecticut and California — would be hit the hardest, according to McLaughlin.
A study commissioned by the National Association of Realtors and conducted by PricewaterhouseCoopers (PwC) found that, for many homeowners who currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction.
The study found that homeowners with adjusted gross incomes between $50,000 and $200,000 would see their taxes rise by an average of $815.
Mortgage interest deduction would be worth less
Leonard Burman, a fellow at the Urban Institute and professor of public administration and international affairs at Syracuse University, wrote in an analysis that if homeowners cannot deduct state and local income, sales and property taxes, only the very wealthy and the very generous would benefit from itemizing. As a result, he estimated that only 4.5 percent of households would itemize under the plan, compared with the current 26.6 percent.
“Even for those who continue to itemize, the mortgage interest deduction may be worth much less than many homeowners believe,” Burman wrote. “This is because net tax savings depend not only on whether mortgage interest plus other deductions exceed the standard deduction, but by how much.”
For lots of people, holiday shopping consists of frantically running through the crowded aisles at Target, Walmart, T.J.Maxx, Macy’s and Best Buy — or typing things like “gifts for Mom” into the Amazon search field. And while they spend a good deal of time and effort shopping (and stressing), the outcome is all too often a load of generic products from big-box stores and a generous helping of conspicuous consumers’ guilt.
If you’re looking to break that pattern, there are lots of places where you can find holiday gifts that will stand out among all the other “stuff.” Here, we rounded up some noteworthy retailers and brand websites you could explore for interesting, unusual gifts, based on the personality of the person you’re shopping for.
A plus: You can feel good about spending money in these places because someone else will benefit from your dime.
For the sassy and quirky
BlueQ is the place to buy a gift for someone with a good sense of humor. The Pittsfield, Mass.-based novelty gift manufacturer was founded in 1988, and its self-described mission is simple: “We just want you to be happy.”
From colorful stocks to quirky reusable handbags, and tin boxes to oven mitts, almost every item sold at BlueQ features a sassy phrase combined with edgy, vintage imagery. Want a taste?
Fun stuff doesn’t need to be costly. The price range for the goods is from $1.80 to $15.
The joy-bringing gift shop donates 1 percent of the sales of its socks to Doctors Without Borders and 1 percent of oven mitt and dish towel sales to hunger relief programs throughout the world. Another 1 percent, this from profit selling recycled purses and bags — made from 95 percent post-consumer goods — goes to support international environmental initiatives. BlueQ also employs people with disabilities to assemble its products.
Where to shop
You can order from BlueQ’s website, and many bookstores and gift shops carry BlueQ’s items. Find a store near you here.
For the creative and ethically conscious
Uncommongoods is a marketplace for artists and crafters from across the world to sell independently designed, often fair-traded and hand-crafted products. To name a few:
The company values sustainability as a business and a product distributor. Many the items sold on its website are made of recycled materials. Customers can choose a nonprofit organization that partners with Uncommongoods to give $1 with every order.
A team of buyers not only evaluates goods based on materials and function, but also cares where each design comes from, how it’s made and who made it, according to the shop’s website.
During the peak winter months, when Uncommongoods hires hundreds of seasonal workers, the company says it pays its lowest paid hourly worker 100 percent more than minimum wage.
To make your shopping experience easier, Uncommongoods has a search engine for gift suggestions for your loved ones, letting you filter different personalities and hobbies.
Mouth is a paradise for your foodie friends and family. The company prides itself on producing interesting, indie, small-batch foods. You can buy your friends specialty eats from 40 states, and learn about the people who made the food you purchase here.
Why we like it
You won’t find convenience-store staples like Doritos or Hershey’s on Mouth. Most of the foods that Mouth sources are either handmade at local stores or workshops across the country, or come from brands started as homemade concoctions, according to its website. You would be supporting small, local businesses by purchasing treats that match your friends’ tastes. For ingredients that cannot be sourced domestically, such as coffee and chocolate, the company makes sure they are fair-traded and organic.
While Mouth is dedicated to selling treats that are made in an environmentally friendly, relatively healthier way, it by no means claims that everything on its website is good for you. But Mouth promises that its foods are not full of chemicals, preservatives or unhealthy fats.
Independent stores tend to have a rich history and offer diverse specialty books depending on the theme of the store and its location. Chicago’s Women and Children First, for instance, opened in a modest storefront in 1979 and is one of the country’s biggest feminist bookstores — it would be a great place to shop for someone passionate about supporting women. Sales from Indy Reads Books in Indianapolis support a nonprofit dedicated to improving adult literacy, and a book from there could be a meaningful gift for a philanthropic friend.
Why we like them
Apart from offering personalized services, specialized book selections and a platform for literary gatherings, many local bookshops are increasingly carrying gift items — pins, mugs, T-shirts, cards — consistent with the history or theme of the store.
If you have bookworms on your shopping list, pick a book from their favorite author or a souvenir from the shop they loyally frequent. This is a great way to support small businesses.
Where to find independent bookstores
You can use this guide to find a local independent bookstore near you.
For the artsy and modern
Museum gift shops are stocked with fine-art-inspired collectibles — not just totes or posters. Gift shop items often embody the very best design principles in a form of functionality or art.
Depending on where you are and what types of art you like, you can find prints, office stationery, books, dining sets, home furniture, apparel and more from the country’s art museums or through their websites
Why we like them
The gift shop is usually a critical revenue generator for a nonprofit museum, according to the State Department Bureau of International Information Programs. So when you buy a Monet umbrella or an American Gothic magnet while visiting a museum, you’re showing your support. If you are a member of a particular museum, you can often get a discount. And the purchase is likely to be appreciated by your art-loving friends.
The Art Institute of Chicago: The Art Institute is America’s second-largest art museum after the Met in New York. It is best known for Impressionist and Post-Impressionist art collections. The collectibles at the gift shop well represent the museum’s masterpieces.
Museum of Modern Art: The MoMA in New York has an outstanding history with design. In 1932, the museum established the world’s first curatorial department devoted to architecture and design. The MoMA Design Store features a vast range of modern and innovative design objects. It is currently offering 20 percent off on 100 gift items.
San Francisco Museum of Modern Art: The SFMOMA gift store offers an impressive selection of modern and contemporary art books. Apart from that, you can order gallery-quality reproductions of artworks that are often exclusive to the museum, through its website.
By now, many consumers know to automatically delete suspicious emails or social media messages requesting wire transfers from Nigerian princes or scammers posing as long-lost relatives.
Even so, people have lost millions of dollars to fraudsters via wire transfer scams. If you’ve fallen victim to a wire transfer scam involving Western Union, you might want to pay attention to this news.
Consumers now can file claims to recoup money lost when scammers told them to pay via Western Union’s money transfer system, as part of a $586 million federal settlement with the company that was announced this week.
The deadline to file claims with the U.S. Department of Justice is Feb. 12, 2018. The settlement applies to scams executed through Western Union between Jan. 1, 2004, and Jan. 19, 2017.
“American consumers lost money while Western Union looked the other way,” Federal Trade Commission (FTC) Acting Chairman Maureen K. Ohlhausen said this week in a press release. “We’re pleased to start the process that will get that money back into consumers’ rightful hands.”
The settlement stemmed from a January 2017 complaint against the company by the FTC, which said that lax security policies have made the popular money transfer service a way for scammers to defraud consumers.
The case was investigated with the assistance of the Department of Justice, the Postal Inspection Service, the FBI and several local law enforcement agencies.
“Returning forfeited funds to these victims and other victims of crime is one of the department’s highest priorities,” Acting Assistant Attorney General Kenneth A. Blanco, of the Justice Department’s Criminal Division, said in a Nov. 13 statement.
Western Union also has agreed to implement an antifraud program and enhance its policies on federal compliance obligations.
Internet purchase scams: You paid for, but never received, things you bought online.
Prize promotion scams: You were told you won a sweepstakes and would receive your winnings in exchange for payment, but you never received any prize.
Family member scams: You sent money to someone who was pretending to be a relative in urgent need of money.
Loan scams: You paid upfront fees for a loan, but did not get the promised funds.
Online dating scams: You sent money to someone who created a fake profile on a dating or social networking site.
How do I submit a claim?
If you’ve already reported your losses to Western Union, the FTC or a government agency, you may receive a form in the mail from Gilardi & Co., the claims administrator hired by Justice to handle refunds. This form will include a claim ID and a PIN that you’ll need when filing your claim online at www.ftc.gov/wu.
You also can file a claim if you did not receive a form in the mail. Visit www.ftc.gov/wu and click on the link indicating that you did not receive a claim form and follow the instructions to complete your filing.
If you sent money to a scammer via Western Union, file a claim even if you don’t have any paperwork, according to the Justice Department. You may still be eligible for a refund.
You can file more than one claim, if you were a scam victim more than once.
Will I definitely get my money back?
Hard to say. Each claim will be verified by the Justice Department. If your claim is verified, the amount you get will depend on how much you lost and the total number of consumers who submit valid claims.
If verified, you’re only entitled to a refund of the actual amount you transferred through Western Union, according to the Justice Department. Other expenses, like fees or transfers sent through other companies, will not be included in your refund.
Update: House Republicans have passed a sweeping tax bill that would cut both corporate and income taxes by $1.5 trillion, bringing the country one step closer to the biggest taxation overhaul in decades.
The House passed the Tax Cuts and Jobs Act in a 227-205 vote, bringing President Trump nearer to his first major legislative accomplishment since he took office in January.
“Today’s vote brings America one step closer to historic tax cuts that will allow Americans to keep more of their hard-earned money,” Ronna McDaniel, chairwoman of the Republican National Committee, said in a statement shortly after the vote. “President Trump and Republicans in Congress are keeping their promise to give workers a raise, support American businesses and grow our economy.”
Some experts say the whopping $1.5 trillion tax cut will benefit many taxpayers. But will some lose out? And what does it all mean for you?
As expected, in order to pay for the tax cuts, lawmakers chose to get rid of or limit many key tax breaks. Some of the items on the chopping block under the Republicans’ plan, which include personal exemptions, deductions for medical expenses, paid student loan interest and paid mortgage interest, could impact millions of Americans.
“It really depends on the individual situation whether they’ll be more helped or hurt,” Mark Luscombe, principal federal tax analyst at Wolters Kluwer, told MagnifyMoney. You can read the entire bill here.
What happens next?
The bill will move for a vote in the Senate, which hasn’t yet voted on its own version of a tax cut plan. Trump has called for lawmakers to pass one cohesive bill by Christmas. Republican lawmakers would like to see the reforms take effect in 2018.
But the tax overhaul has a long way to go. The House and Senate proposals differ on a number of major provisions, which will make it tough for the two bills to be reconciled and spur clashes over tax policy. To see what the Senate has in store, check out this post.
Keep reading for a summary of the tax changes to come and how they might affect your bottom line:
The bill compressed the current seven-tier tax system into four tax brackets: 12 , 25, 35 and 39.6 percent. The top individual tax rate remains unchanged at 39.6 percent.
The new bottom bracket of 12 percent is higher than the current bottom bracket of 10 percent but replaces the 15 percent bracket as well. The proposal will also push some in the current 33 percent bracket into the 35 percent. So there will be some shuffling, and its impact on you depends on your earnings picture.
Here’s the breakdown of brackets for married filers:
The income threshold for the 25 percent bracket moves to $90,000, up from $75,900 for married couples. The 35 percent bracket starts at $260,000, and the top tax rate starts at $1 million.
Next, let’s look at tax deductions. Under the plan, some would increase.
Deductions that would be increased
Under the House plan, the standard deduction would be almost doubled. The standard deduction is a dollar amount that reduces the amount of income on which you are taxed.
For individuals, the standard deduction would rise from $6,350 to $12,000. For married couples, it would go up from $12,700 to $24,000.
But personal exemptions, currently $4,050 per person, would now be included in the standard deduction, so the actual increase isn’t as big as it seems at first blush. Under the current tax code, taxpayers could claim one personal exemption for themselves and one for a spouse.
The change in personal exemption will likely offset the benefits from the standard deduction for many to some extent. “If they are doubling the standard deduction but eliminating the personal exemption, a single parent with a number of kids could actually be hurt by that on a net basis,” Luscombe said.
Child tax credit
The House bill also proposes to expand the child tax credit, which allows parents to offset expenses of raising children, from $1,000 to $1,600.
The bill also will provide a credit of $300 for each parent with a dependent who is not a child, such as a grandfather or a college student. Those $300 credits expire in five years.
Those credits are seen by advocates as helping some families make up for the loss of personal exemptions.
401(k) contribution limits
Unlike what was suggested in an earlier round of rumors, the Republicans did not call for reducing the contribution limits for 401(k) accounts. Phew.
For 2018, workers under age 59.5 can contribute $18,500 to a 401(k) on a pre-tax basis.
But still, more changes are proposed, with some deductions changed or ended under the proposal.
Deductions that will be eliminated or altered
The House bill keeps the home mortgage interest deduction for existing mortgages. But for newly purchased homes, the home mortgage interest deduction is lowered to $500,000 from the current $1 million debt limit.
It could well put a damper on higher-end home purchases, where half of a $1 million mortgage is not eligible for interest deduction, Luscombe said.
Medical-expense deductions are going away. Right now, individuals can deduct qualified medical expenses that exceed 10% or 7.5% of their adjusted gross income (depending on age). Households with outstanding medical costs and are eligible for the deductions will feel significant effects from the repeal. The provision could have big implications for families with high medical costs during the year.
Student loan interest
The deduction for student loan interest could also be eliminated under the Republican tax reform.
Under current rules, borrowers may deduct up to $2,500 in interest payments on student loans on their federal income tax returns. The loss of the deduction would put a heavier financial burden on hundreds of thousands of college graduates grappling with significant education debt.
The state and local income tax deduction
The Republicans are further calling for an end to the deduction for state and local income/sales taxes.
The IRS allows those who make payments for state and local income taxes to deduct them on their federal tax return. The loss of the deduction is seen by some critics as hurting people in high-income tax rate states, such as New York and California.
But the proposal would keep in place the state and local property tax deduction, although capping it at $10,000.
The estate tax
Republican lawmakers proposed to double the estate tax exemption from $5.49 million to nearly $11 million and eventually do away with it. The estate tax is the tax you pay to inherit property or money from a deceased person.
This means families don’t have to pay taxes on any inheritance under $11 million. The bill calls for repealing the estate tax after six years.
In addition to reducing or eliminating several tax breaks, Republicans hope that the tax cuts will boost the economy, foster business growth, make the U.S. business environment more competitive with other countries’ in terms of tax rates, and even spur wage growth. This, in, turn, would bolster tax revenue, supporters say. But critics fear a surge in the budget deficit, with implications for future generations.
Senate Republicans on Tuesday proposed to repeal the individual mandate under the Affordable Care Act by 2019 as a part of their tax reform plan.
With open enrollment for 2018 Obamacare coverage well underway, and after two failed attempts earlier this year to repeal the ACA, the Senate’s proposal has reignited feelings of uncertainty over the health care law’s future.
The Senate’s proposal also came a couple of days before House Republicans’ planned Thursday vote on their own tax reform bill. (The House’s version does not propose to touch the insurance coverage requirement.)
Part of the reason behind the Senate’s proposal to cut the individual mandate is to help free up federal dollars and partially offset a sweeping $1.5 trillion tax cut proposal. Without the mandate, fewer people would likely sign up for coverage and that would mean less money the government would need to spend on the tax subsidies it offers to balance out the cost of premiums for millions of Obamacare enrollees.
The Congressional Budget Office estimates that if the individual mandate is eliminated, it will save the federal government $338 billion, and 13 million more people — mostly the young and healthy — will be uninsured by 2027.
Here is what you need to know about the individual mandate and what it means if it goes away:
What is the individual mandate?
The individual mandate is a provision under the ACA that requires most U.S. citizens and noncitizens who lawfully reside in the country to have health insurance. It was signed into law in 2010. Consumers who can afford health insurance but choose not to buy it have to pay tax penalties unless they are otherwise insured or meet certain exemptions.
The purpose of the mandate was partially to ensure that even healthy and young Americans would sign up for health coverage, balancing the so-called insurance risk pool and helping to keep premiums affordable.
Why is the mandate unpopular?
The provision has been widely unpopular since its introduction. The Kaiser Family Foundation’s latest poll suggests that 55 percent of Americans supported the idea of removing the individual mandate as part of the Republican tax plan.
More than 27 million people in the United States remained uninsured in 2016, the foundation reported, down from 47 million prior to the implementation of the ACA.
How does the individual mandate work?
The tax penalty for nonexempt individuals who do not sign up for health coverage is calculated as a percentage of household income or as a fixed amount per person. You’ll pay whichever is higher.
For 2017 the penalty was either:
$695 per adult and $347.50 per child, up to $2,085 per family, or
2.5 percent of household income
The maximum penalty can be no more than the national average price of the yearly premium for a Bronze plan (the minimum coverage available in the individual insurance market) sold through the insurance marketplace.
HealthCare.gov hasn’t yet published the 2018 guidance, but Kaiser has launched a calculator using 2018 projections from Bloomberg BNA. For 2018, the calculator estimates the amount of penalty is $3,816 for a single person and $19,080 for a family of five or more, according to the foundation.
You meet exemptions if coverage is considered unaffordable based on your income — under the ACA, “unaffordable”’ is if you would have had to pay more than 8.05 percent of your household income for the annual premium amount for health coverage in 2015 or 8.13 percent last year.
If you have experienced economic hardships or difficult domestic situations, such as homelessness, the death of a family member, bankruptcy, substantial medical debt or the toll of a disaster that damaged your property badly, you may apply for a hardship exemption.
People who are ineligible for Medicaid because their state hasn’t expanded that program also qualify for a hardship exemption. Those whose incomes are at or below 138 percent of the federal poverty level are eligible for Medicaid. That 138 percent means a little over $16,600 every year for a single person and nearly $34,000 for a family of four.
See more examples of people who qualify for penalty exemptions at IRS.gov.
You can find out if you are exempt from health care coverage using this tool:
What does it mean if the individual mandate is lost?
The immediate concern is that without fear of a tax penalty, not enough young, healthy people would get covered. When these low-risk people drop out of the market, coverage is skewed toward older, sick people who really need coverage. And that can lead to rapid increases in premium costs and even induce some insurers to drop out of the market.
Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation and senior adviser to the foundation president, summarized his thoughts on the loss of the mandate in a series of tweets Wednesday, saying he’s “doubtful” insurers would remain in the marketplace if the mandate were removed:
Repealing the ACA's individual mandate doesn't sound like something that could be bad for anyone. But, it's the mechanism that allows guaranteed coverage for pre-existing conditions.
The housing market is heating up again. Home prices have risen faster than income growth in the past five years, and the combination of low housing supply and increasing demand is driving home values ever higher.
Could we be in danger of another housing bubble?
Economists don’t seem to be too worried about the national housing market.
Across the U.S., increases in home prices have outpaced income growth by 34 percent since 2012, driven by economic expansion. However, this percentage is less than half the pace seen between 1997 and 2006, according to a recent Urban Institute study.
For the most part, homes are still affordable relative to household incomes, experts say.
According to the Urban Institute, a Washington D.C.-based think tank that carries out economic and social policy research, a median-income household can afford a house that is $70,000 more expensive than the price of the median house sold on the market. In contrast, in 2006, there was a $22,000 shortfall between what the median household could afford and the median sales price.
“Yes, prices are high, yes, the market is expensive, and yes, housing is unaffordable for some people, but that does not mean we are in a bubble yet,” Nela Richardson, chief economist at Redfin, a Seattle-based real estate and technology company, told MagnifyMoney. “Those attributes of a classic bubble are missing.”
By “classic bubble” attributes, Richardson is pointing to telltale signs of trouble, such as lax mortgage lending standards, rapidly rising mortgage rates and the levels of speculation in the housing market we experienced 10 years ago.
Even as home prices were skyrocketing, soft underwriting practices allowed a record number of people to purchase homes with very low down payments. As the crisis intensified, housing prices began to nosedive and borrowers who bought more home than they could afford eventually defaulted on mortgages.
In the wake of the Great Recession, the federal government implemented stricter mortgage lending regulations that have made it much harder for financially unstable borrowers to qualify for a mortgage loan.
“Any of the mortgages made today [are] just super clean” and there is a historically low default rate, Bing Bai, an Urban Institute researcher, told MagnifyMoney. “We are not in that kind of risk like the risk we had before in previous bubble years.”
Mortgage default rates have fallen to 3.68 percent for single-family homes, not quite as low as pre-recession levels but much better than the peak of 11.53 percent in 2010.
10 Metros at Risk of a Housing Bubble
So, the nation as a whole might not be facing an imminent bubble. However, Urban Institute economists have put certain cities of the country on the “bubble watch” list.
In the study, they analyzed 37 metro areas across the U.S. to find how much housing prices have gone up since their lowest point following the financial crisis and how affordable homes are based on the median income for that city. Below are the top 10 cities in danger of a housing bubble.
#1 San Francisco-Redwood City-South San Francisco, Calif.
California snags five of the top eight spots, led by the San Francisco metro area.
In San Francisco, for example, a family earning the median income for the area needs to dedicate at least 70 percent of income for a typical 30-year fixed-rate mortgage, Bai said. The median home sales price is $1.2 million in the Bay Area, according to Redfin and Trulia, an online real estate resource for homebuyers and renters.
The overheated housing situation in the Silicon Valley and Seattle is largely a result of the tech boom during the years of economic recovery, Richardson said. Yet demand is still going strong with healthy job increases despite stunning home prices.
“There’s a lot of money looking for a place to land,” Richardson added.
“It’s not just about the local economy in these markets,” Richardson said. “It’s about the global economy.”
Advice for home buyers in super expensive cities
The truth is, experts don’t see a sign of price decline in hot markets any time soon.
“Demand is still there, with low supply, [and] it’s just going to keep prices high,” Cheryl Young, senior economist at Trulia, told MagnifyMoney.
If you are looking to buy in cities where home prices are sky-high and competition is extremely fierce, here is what pros suggest you can do to bid for a desirable house:
Time it right
“Home buying is all about timing,” Young said. “We always say you shouldn’t rush to enter the housing market if you are not ready.”
If you’ve definitely decided to buy, the best time to start looking might be during the fall. Young said home prices are, in general, at their nadir in the wintertime, so you may want to start looking in the fall when prices started to dip as home supply is higher than they are at other times of the year.
When you are ready to start looking, you also need to save up for a down payment, Young said.
A good rule of thumb for a down payment is 20 percent. That way you could avoid paying for the additional cost of private mortgage insurance. But the reality is that it’s tough for buyers to put down that much money, especially if you are in a super-expensive market. It’s fine if you can’t save up for 20 percent, but of course the more you can scrounge up, the better.
Also recommended: Have all your financial statements ready and compare mortgage rate offers from several financial institutions to be sure you’re getting the best deal. Avoid these common mistakes homebuyers make before they apply for mortgages.
“Working with someone who knows the local area, who knows how to strategize how to make an offer that is as good as cash or almost as good as cash if you are in a competitive market is very important,” said Richardson.
These are the places where the most capital gains have been realized
Just a few years ago, in the aftermath of the Great Recession, Americans were constantly reading about how home ownership had let Americans down. There was red ink everywhere: Not only had stocks lost nearly half of their value between 2007 and 2009, but home prices had declined in virtually every real estate market in the country.
That trend has long since been reversed. Last year, incomes grew an average of 4.7 percent. When adjusted for inflation, they have finally fully recovered to levels seen before the 2007-08 financial crisis. But even better, their investments have been paying off. Stocks, as based on broad market indexes, have more than tripled in value from their 2009 lows. And in most local markets, home prices have also since recovered.
So, who’s cashing in?
MagnifyMoney analyzed five years’ worth of Internal Revenue Service (IRS) data — from 2012 to 2016 — to see where American taxpayers are getting the most return on their investments. In particular, we focused on capital gains: a tax on the sale of appreciated assets like real estate and stocks.
For the 100 largest American metros, we looked at two facets of capital gains: How much in gains, per resident, were realized; and, to get a sense of the breadth of wealth being realized and taxed, the percentage of individuals who filed federal taxes that cited a capital gain.
We ranked each metro on these metrics and weighted them evenly to create a Cashing In Score, from 0 to 100 (with 100 representing a metro that would rank first in both capital gains per resident and the percentage of returns with capital gains).
Topping the list were Fort Myers, Fla.; San Francisco; and Sarasota, also in Florida. Others in the top 10 include tech-heavy places like Seattle and Austin, Texas.
#1 Fort Myers, Fla.
Cashing In score: 98 (Scores are rounded in this list.)
By far, the place with the most cashing-in was Fort Myers, on Florida’s west coast. With a relatively small population of well-off retirees, the city and surrounding area realized nearly $103,000 in capital gains per resident, easily eclipsing other American cities. Moreover, with a capital gain appearing on nearly one in four returns over the past five years, there’s been significant activity in the region.
#2 San Francisco
Cashing In score: 94
The City by the Bay is famous for both its tight real estate market as well as Silicon Valley, and the data bear this out. Even with a significantly large population, San Francisco realized more than $76,000 in capital gains per resident, many of the realized gains likely the result of selling stocks which have greatly appreciated in value.
#3 Sarasota, Fla.
Cashing In score: 75
Sarasota has the distinction of having a higher proportion of federal tax returns with a capital gain than any other metro in the nation, including its Fort Myers neighbor to the south. The capital gains per resident, at more than $56,000, are less than those realized in Fort Myers (as well as No. 9 Miami).
#4 New York
Cashing In score: 70
The nation’s largest metro also sports large gains: more than $60,000 in capital gains per resident over the five-year period we examined. One in five returns included some sort of capital gain. And where the average price of a home in Manhattan has now exceeded $1 million, a healthy percentage of the gains realized were from real estate sales.
Cashing In score: 63
Another metro with a hot real estate market, Boston realized more than $48,000 of capital gains per resident from 2012-2016, while, as in New York, 20 percent of federal filings from the Boston area included some sort of capital gain.
What is a capital gain?
According to the IRS, a capital gain can arise from a sale of stock, a private business, real estate or art. In other words, it’s the money that you earn on an investment after you sell it, less the cost of the initial investment. And while these assets are taxed at differing rates, all may be subject to federal taxes, if they are sold for more than the original purchase price.
Homes are still how most Americans typically accumulate wealth. Overall, 64 percent of American households are homeowner households, according to the most recent Census data . The median value of the primary residence of Americans still exceeds the median value of the stocks and bonds they hold outside of retirement accounts and other managed assets like annuities. And homeowners have a net worth of nearly $230,000, versus an average of about $5,000 for renters.
But housing markets are still local, which may in part explain the variance among the 100 largest metropolitan areas we examined for the most capital gains realized from 2012 to 2016.
The second-home factor
Not all home sales will result in a capital gains tax. Currently homeowners only pay a capital gains tax on gains that exceed $250,000 ($500,000 for couples filing jointly), if it’s their primary residence.
But other property – such as vacation homes and rental properties – aren’t afforded the same protections from capital gains as a primary residence.
Thus, all the gains from these sales may be subject to capital gains tax, which may explain why we found that many of the cities that top our list s are in vacation spots like Florida and Lake Tahoe (considered part of Reno, Nev., by the Census Bureau).
Stocks still likely result in some significant realization.
It’s probably not a surprise that both New York and San Francisco are near the top of the list. Not only do both have tight residential real estate markets, but both Wall Street and Silicon Valley are homes of dozens of public corporations with thousands of employees. Stocks, whether in the form of compensation given to employees or simply bought and sold on the open market, may also result in significant capital gains.
Local economies still a factor.
Finally, local economies may also be a factor in how much in capital gains are realized. Consider two major cities in Texas: Houston and Austin. Despite being fewer than 200 miles apart, Austin ranks significantly higher than Houston on our scale. One explanation: Austin’s tech-heavy economy continues to flourish, while the energy centric economy of Houston is slogging through a period of depressed energy prices, weighing on the residential real estate market there
MagnifyMoney analyzed IRS Statistics of Income data for tax returns filed January 1, 2012 – December 31, 2016, covering five years of tax filings, along with U.S. Census Bureau 2016 population data to create a ‘Cashing in score.’
The 100 largest metros in the U.S. were ranked by the % of returns that declared capital gains, as well as the total capital gains reported per resident over the five year period. These rankings were weighted evenly to create the score for each metro, with 100 the highest possible score for a metro that ranks #1 for both metrics.