Overpayment Scam Returns

Two years ago I posted an article on our blog about how crooks are using classified ads and other websites to perpetrate a scam that can be called "Overpayment."  The scam artist says he will buy your $2,000 stereo from you based on the ad he has seen in the newspaper or online.  He sends a cheque for $4,000.  You, being the honest person you are, e-mail him saying that he overpaid.  The scam artist replies that it was his secretary's fault and says it would be easier if you just deposit the cheque and than mail a money order for the difference back to him, even offering $100 as a reward for your honesty.

You deposit his cheque, take out the $1,900 as a money order and mail it off.  A day or two later you find out that his cheque was fake and that it has bounced, while the money you sent from your account as a money order is very real.  This overpayment scam has grown and is being used all over the country, including targeting people in the Rocky Region.  It is generally best to meet the buyer/seller in person so you can see the goods or the money you will be getting.

A new version of the scam

There is a slightly modified version of this scam going around this past year.  It preys on people who are looking for work.  It goes like this:

In Case Of A Car Accident

An opinion piece by Jerry

A few weeks ago my wife and I were involved in a collision that could have ended much worse than it did.  While traveling north on a primary highway a car coming south turned left across our lane.  I was able to stomp on the brakes and yank steering wheel to the left so that we just clipped the other car's right rear bumper at about 50 km/hr.

Fortunately no-one was injured. We each were able to drive off the road into the nearby gas station.  There we exchanged insurance information and business cards.  We pulled off the pieces of our right headlight and duct taped the wires down so we could continue driving.  Both vehicles were quite functionally usable.

This was the first time I had ever been in an accident when I needed to make a claim.  It was a learning experience for me.  Here is what I learned from this incident:

Saving Money Is A Choice?

An opinion piece by Jerry

My wife and I finished buying our children's clothes and school supplies 2 weeks ago.  It was a lot of money to spend in one weekend, and there is more to come with school fees and the fall sports/activities registration coming up.  In fact we have found mid August to mid September to be more expensive than Christmas for our family.

We are fairly frugal, and my wife is amazing with a budget.  Before we did any clothes shopping she went through the kids current clothes to see what still fits and the shape of the clothes.  None of them had much of a growth spurt this last year, so many of the clothes can be worn again, those that didn't fit were given to friends that could use them or to goodwill.  There were a few new things they needed, so we made a list.  We went to Old Navy and stuck to the list.  Old Navy carries its own brand and doesn't carry popular brand name clothing, but the quality and prices are decent, although we did notice price increases over last year.

Life With Low Rates

An opinion piece by Jerry

With the Federal Reserve in the U.S. announcing that rates will be kept low until into 2013, Canada's own government bond rates have dropped and will most likely stay relatively low for the next year and half as well.

What does this mean?  With an almost guarantee of low rates for the next few years this will mean something very different to 2 groups - the savers/investors and the borrowers.

Savers & Investors - Low rates mean low returns on the safest investments.  This means bonds, GICs and term deposits.  With so many baby boomers looking at retirement over the next dozen years (or much sooner) they want a good return to build up their retirement fund.  The reality is that returns will be low, unless they go into riskier investments like mutual funds and stock markets.  However, principal and returns are not guaranteed with mutual funds and stocks, so investors need to be careful how much of their portfolio they put into the riskier investments while hoping for higher returns.

Extra Payments Pay Off

Taking a mortgage out over 25 years or more helps make the monthly payments more manageable, but by extending out the loan for so long you really increase the amount of interest you pay. 

To help reduce the total interest you pay on a mortgage (or any loan) I would encourage you to make extra payments.  If you get a tax return or a bonus, make sure at least some of it goes to repaying debt.  High interest debt, like credit cards, gets top billing as my first recommendation for extra payments, but reducing mortgages help long term as well.

For example, if you have a $10,000 credit card balance at 19%  annual interest (store cards range from 24% to 28%) and have to make the monthly interest payment and the monthly minimum principal payment of 2% (some are 3%) with a minimum payment of $20, you will pay the credit card off after 13.5 years and will have paid over $7,500 in interest.  If you can make an additional payment of $600 each year in the first 5 years you will knock off over 3 years of payments and save over $2,300 in interest.  It is well worth your time and money to try to pay off credit cards quickly, and not add to the credit card debt as you pay it off.