All You Need To Know About Applying For FAFSA

article-applying-for-fafsa.jpg

Free Application for Federal Student Aid (FAFSA) season is in full swing! Whether you’re a college student, a high school senior or you’re seeking financial aid for your college-age child, it’s time to fill out those forms. The rules and deadlines can be confusing, but we’re here to help. We have answered all your questions on applying for FAFSA.
When is my application due?
There are three FAFSA deadlines you need to know: federal, college and state. The federal FAFSA submission has one set date, while each college and state sets its own separate deadlines.
The 2020-21 FAFSA form became available on Oct. 1, 2019. This form is for the 2020-21 award year, which runs from July 1, 2020, to June 30, 2021.Online applications for this form must be submitted by 11:59 p.m. Central time (CT) on June 30, 2021. Any corrections or updates must be submitted by 11:59 p.m. CT on Sept. 11, 2021. You can look up the 2020-21 deadlines for your college and state using these links:  College deadlines 2020-21State deadlines 2020-21.
You can still submit an application for the 2019-20 FAFSA form, which became available on Oct. 1, 2018. This form is for the 2019-20 award year, which runs from July 1, 2019, to June 30, 2020. Online applications for this form must be submitted by 11:59 p.m. CT on June 30, 2020. Any corrections or updates must be submitted by 11:59 p.m. CT on Sept. 12, 2020. You can look up the 2019-20 deadlines for your college and state using these links: College deadlines 2019-20State deadlines 2019-20.

Who is eligible for FAFSA?

To qualify for FAFSA, you must meet the following criteria:

  • Demonstrate financial need.
  • Be a U.S. citizen or an eligible noncitizen.
  • Have a valid Social Security number (unless you are from the Republic of the Marshall Islands, Federated States of Micronesia or the Republic of Palau).
  • Men must be registered with Selective Service.
  • Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program.
  • Maintain satisfactory academic progress in college or career school.
  • Have a high school diploma or a recognized equivalent.
There are more eligibility requirements for FAFSA. You can view the full list of criteria here.
How do I apply for FAFSA?
You can now apply for FAFSA using the free  myStudentAid app. If you use the app with an Apple device, be sure to disable the “smart punctuation” feature before filling out the form to avoid errors.
If you’d rather not download an app, you can also apply for FAFSA online at FAFSA.ed.gov.
You can still send in your application via snail mail, but this is not recommended for several reasons: The online applications are simpler to complete and generally have fewer errors because they only ask you relevant questions and are designed to detect common errors. Your application is also likely to be processed quicker when submitted online. Finally, when applying for FAFSA online, you will be given the option to have your IRS data automatically retrieved and then populate the relevant fields, significantly lowering your chances of errors in your tax reporting.
What are some common mistakes people make on the FAFSA form?
A careless mistake on your form can delay your application and limit your eligibility for aid. To avoid errors, be sure to read every question carefully and to review your application before submitting.
Here are some of the most common errors on FAFSA forms:
  • Leaving blank fields. If a question does not apply to you, enter a “0” or write “Not applicable.”
  • Using commas or decimal points in numeric fields. There is no need for either of these symbols; simply round to the nearest dollar.
  • Listing an incorrect Social Security number or driver’s license number. Triple-check these numbers to ensure accuracy.
  • Using the wrong name. Be sure to use your full legal name as it appears on your Social Security card.
  • Entering the wrong address. Use your permanent address only to avoid confusion.
  • Forgetting to list your college. Be sure to obtain the Federal School Code for the college you plan on attending and list it along with any other schools where you’ve applied for admission.
  • Forgetting to sign and date. Don’t forget this crucial step!
Can I apply for FAFSA as an independent?
If for whatever reasons your parents are not paying any part of your college tuition, you may be able to apply for FAFSA as an independent. If you can apply as an independent, your parents’ income will not be considered when your eligibility is determined.
You may be able to apply for FAFSA as an independent if you meet any of the following criteria:
  • You will be 24 years of age or older by Dec. 31 of the award year.
  • You are an orphan (both parents deceased), ward of the court, in foster care or you were a ward of the court at age 13 or older.
  • You are a veteran of the Armed Forces of the United States or serving on active duty.
  • You are a graduate or professional student.
  • You are legally married.
  • You have legal dependents (excluding a spouse).
  • You are an emancipated minor or in legal guardianship.
  • You are homeless.
If you do not meet any of these requirements, consider contacting a financial aid administrator to discuss your options. The administrator may be able to provide a dependency override if you can prove you’re living or fleeing from an abusive or hostile home environment. They may also be able to deem you eligible for unsubsidized Stafford loans if you can prove your parents no longer support you financially. Finally, you may qualify for some education tax benefits, such as the Hope Scholarship tax credit and the student loan interest deduction.
The sooner you apply for FAFSA, the greater your chance at obtaining the limited financial aid offered by your college and state.
Don’t delay! Apply today!
Your Turn: Have you filled out your FAFSA forms? Share your tips with us in the comments.

 

Holiday Shipping Calendar: The Days You Need to Know for 2019

shipping package

With a whopping six fewer shopping days in 2019 than 2018, holiday deadlines are going to creep up on you faster than ever—and that includes your holiday shipping calendar.

The secret to making sure all your packages arrive on time is knowing how mail and package carriers work and the various deadlines for each type of holiday shipping. If you’re thinking you might be edging up to the last minute on shipping holiday cards and gifts, it’s important to know the cut-off dates for the 2019 holiday season.

The Inside Scoop on Holiday Carrier Deadlines

What do the terms “Priority Overnight,” “Next Day Air” and “Priority Mail Express” have in common? They all mean that a package is arriving the next day—but FedEx, UPS and USPS call these services by different names.

That alone can seem confusing, but there’s another anomaly you should be aware of: Three-day doesn’t always mean “three days” during the super-busy season. For example, close to the holidays, you have to send something nearly a week before the big day to take advantage of UPS’ “3 Day Select Shipping.” With December 25 falling smack in the middle of the week on a Wednesday, you have to think ahead a bit given that we are dealing with “business days.”

Here is UPS’ official recommended last-chance dates for the various types of service:
UPS Ground: Dec. 13
UPS 3 Day Select: Dec. 19
UPS 2nd Day Air: Dec. 20
UPS Next Day Air: Dec. 23

Refer to their complete “recommended” delivery schedule so you’re not caught in a bind. FedEx has a whopping 12 shipping options to and from some locations.

Finally, the dates the United States Postal Service (USPS) recommends as the final option for getting a package to your loved one on time in the contiguous United States:First-Class Mail Service (1 to 3 business days) Dec. 20
Priority Mail Service (1 to 3 business days) Dec. 21
Priority Mail Express Service (overnight delivery guaranteed) Dec. 23
USPS Retail Ground (ground shipping for items larger than a letter) Dec. 14

Location Plays a Part

Do the specified days seem a little confusing? Where you’re shipping from and to can play a role in how many days it takes, but it’s best to plan for the longest-case scenario, to be safe.

You’ll also want to check the carrier location closest to you to verify the availability of specific shipping services, such as overnight delivery, so you’re not caught in a last-minute bind. FedEx, for example, allows senders to send mail overnight only to locations within their overnight service area.

If you’re really cutting it close, check the pickup time at the mail carrier location. Dropping your mail off before that time can save you money on shipping or get your mail to the recipient a day sooner.

And if you plan to ship anything internationally, send it well in advance, as the delivery time frame is significantly longer. You can check the carriers’ websites for more information.

Packing For Success

Getting your holiday gifts to the recipients by Christmas is important, but it’s just as important to get them there in one piece. And since you don’t have the benefit of Santa’s elves preparing your packages, your best bet is to purchase the right type of shipping supplies. Check your holiday shopping list twice for these holiday package shipping necessities:

A sturdy shipping box that can withstand the journey
High-quality packaging tape
A permanent marker for addressing the box
Festive gift wrap
Plenty of packing peanuts or bubble wrap to fill the box any space left in the shipping box. The less room the item has to move, the less likely it is to get damaged during holiday shipping.

When it comes to holiday shipping, preparation makes all the difference. Save yourself money and stress this holiday season by getting your gifts packaged up and sent out by the deadline of your mail carrier of choice.

About the Author

Source: Office Depot.com Cathie Ericson is a freelance writer who specializes in small business, finance and real estate.

Holiday Scams and Tips to Avoid Being Caught in a Fraudulent Scheme

Fraud schemes are hardly limited to the holidays, but they tend to spike during this high-spending and stressful time of the year. Mutual Credit Union would like to help arm you, our members with information on the fraud practices you may encounter and how to avoid becoming a victim.
Technology has created many more options for you to access accounts and make purchases, fraud too has opened up more sophisticated avenues. But it is always good to be reminded of the basics: to continue to be skeptical about calls, texts, and emails. Here is a refresher of several important fraud methods you might see:

Brute Force schemes are attempts to crack a password or username, find a hidden web page, or find the key used to encrypt a message using a trial-and-error approach to guess correctly. This is an old attack method, but it’s still effective and popular with hackers.

Skimming is perpetrated by using electronic devices to secretly scan and store credit and debit card numbers and PINs. ATMs and some unattended terminals, such as gas stations, are targets for this practice. This information can then be sold to fraudsters or used to commit theft directly. Fraudsters can use the numbers to make online purchases or to create fake cards for in-store transactions.

Phishing is the fraudulent practice of sending emails claiming to be from reputable companies in order to make you reveal personal information, such as passwords and credit card numbers.

SMiShing (SMS phishing) is the act of attempting to acquire personal information such as passwords and details by masquerading as a trustworthy entity through SMS text messages on cell phones. SMiShing messages may come from telephone numbers that are in a strange or unexpected format with links directing to fake websites.
A typical SMiShing occurrence can begin with a you receiving a text message inquiring about a suspicious transaction on an account. In reality, the fraudster is looking to obtain other information from you such as debit/credit card numbers, CV2 codes, expiration dates, PINs and other web login credentials. Please note that legitimate SMS text messages from Mutual CU will NEVER include:

• Requests for cardholder’s data, such as card numbers, PINs, CV2 Codes, or Expiration Dates
• Vague reference of a “merchant” transaction; details should be included
• Hyperlinks to unknown websites
• Phone numbers as hyperlinks

Vishing is the telephone equivalent of phishing. It is described as the act of using the telephone to scam you into surrendering private information that will be used for fraudulent purchases or identity theft.

Some holiday scams your cardholders may see:

Seasonal Travel Scams

• Beware of deals that are too good to be true
• You should always know who your travel is being booked through

Holiday Charity Scams

• A legitimate charity will welcome donations whenever the cardholder chooses to make it. Fraudsters will pressure them to make it immediately.
• Don’t make any donation with a gift card or wire transfer.

Fraud Fighting Services at Mutual Credit Union:

  • Enroll in two-factor authentication to login to online banking
  • All members are enrolled in Text (SMS) notifications for any fraudulent activity that is detected on debit or credit cards
  • Enrolling in CreditSense will alert you to any changes on your credit report
  • Setting up SAMCards Manager allows you to set alerts for places, dollar amounts, regions and to turn your cards on or off

Visit MutualCU.org for any additional information you may need for any of these services.

 

 

 

Waging War Against Porch Pirates

front door with christmas wreath and packages

Ahoy, mateys!

Holiday shopping season is upon us and your (not-so) friendly neighborhood porch pirates are gearing up to pilfer the holiday treasures being delivered to your doorstep.

We’ve all seen the familiar footage from a home security camera: a fish-eye view of a home’s front porch sporting a stack of smiling Amazon Prime boxes. An unexpected car pulls up. A stranger approaches the cardboard booty. He or she looks to the left, looks to the right, scoops up the bounty and runs back to the car, ruining the holidays for everyone.

The holiday season can be stressful enough with arranging travel or hosting overnight guests; baking; cleaning; shopping and wrapping gifts. You don’t need the extra burden of some crooks stealing your joy and peace of mind.

Here are some ways you can conquer the porch pirates and lay claim to the best holiday ever.

Have your packages delivered elsewhere

If you have the luxury of being able to have your packages delivered to your office, this is one of the best options. As a bonus, you can easily hide the gifts from your family.

If this isn’t an option, have your orders shipped to a neighbor or family member who is home during the day.

FedEx packages can be picked up at one of their offices or a local participating Walgreens location.

UPS packages can be received at a local UPS Store, CVS or Michael’s stores or you can arrange to have them delivered on a day when you are home.

Let the delivery person in

Most respondents to a recent PCMag survey of 1,500 people said they are willing to spend an average of $110.86 on home protection gadgets. A total of 28 percent said they have a security camera, 25 percent have a video doorbell,and 17 percent have a smart lock.

Smart locks allow you to unlock your door from your smartphone or computer. Video allows you to see who is at your door. You can instruct delivery people on where to drop the packages and then lock up after they leave.

Smart locks range in price from $100-$300, which is worth it if your family is safe and happy.

Have packages delivered to your car

Key by Amazon allows Amazon Prime members to have their packages left in their home, garage or even their cars.

Download the app to have your items shipped to your car within hours. Check the app or website to see if your product, vehicle and address of the vehicle are eligible for delivery. Pick a delivery time and you’re set. You will receive notification of when your package is out for delivery and when the driver is en route.

According to the Amazon website, “Key In-Car Delivery is available with select makes and models. It is available with model year 2015 and newer Buick, Cadillac, Chevrolet, GMC and Volvo vehicles and requires an active connected car service plan, such as OnStar and On Call.”

Key In-Car Delivery is available on tens of millions of Amazon items and works with Same-Day, One-Day, Two-Day and Standard Shipping. They cannot deliver heavy or bulky items weighing more than 50 pounds.

Track your packages

If high-tech gadgets aren’t your thing, simply use your low-tech skills to track your packages. UPS, the U.S. Postal Service, Amazon and FedEx all offer tracking online.

Sign up for USPS Informed Delivery to automatically get a daily email containing scans of the mail being delivered and tracking numbers of expected packages.

UPS offers the My Choice program. and FedEx’s Delivery Manager also helps keep track of deliveries.

Tracking information for Amazon packages can be found in your order details.

Your special deliveries are at risk, and the porch pirates are sure to be marking their spots of opportunity this holiday season. Use these tips from Mutual Credit Union, and ensure your gifts are received by those you intend.

Your turn: How do you do battle with the scourge of porch piracy? Let us know in the comments.

5 Ways To Save On Winter Heating Costs

thermostat

 

  1. Heat Selectively – To avoid paying for unused heat in rooms that aren’t regularly used, shut the doors and close the vents in those rooms.
  2. Trap the Sunlight – Open your curtains when you’ve got sunlight exposure, and then close them when the angle of the sun changes. This allows you to trap the solar heat inside your home.
  3. Plug up Holes – Seal up all holes near windows, doors and the chimney to help keep the heat in and the cold out.
  4. Digitize Your Heating System – Use a programmable digital thermostat to automatically adjust the temperature in your home according to your family’s schedule and habits.
  5. Maintain Your Heating System – Check for proper airflow throughout your heating system and clear any blockages that you find.

 

Your Turn: How do you keep warm when the weather’s cold? Ugly sweaters? Visualizing a beach? Share your best tips with us in the comments!

8 Ways To Beat Holiday Stress

holiday-stress

‘Tis the season to be merry-except sometimes, it’s not.

If you tend to feel stressed when the holidays roll around, here are eight tips to help turn that frown upside down.

1. Watch the buck

Nothing kills holiday cheer like a mountain of debt. Stick to a budget when doing your holiday shopping, and only spend what you can afford. Be extra careful not to overspend as the holidays draw near, and you’re feeling the pressure to finish your shopping in time.

2. Give back

According to the American Psychological Association, one of the best ways to reduce stress is to give back to the community.

Beat the stress by sharing holiday cheer with those who are less fortunate. You can bring some toys to the local hospital to brighten up a sick child’s holiday, volunteer at a soup kitchen or visit a nursing home and put a smile on the residents’ faces.

3. Stick to a schedule

Lack of quality sleep can make stress levels soar. You don’t need to follow your regular routine over the holidays, but it’s a good idea to keep some sort of schedule. Make sure you’re getting enough shut-eye, and if a physical workout is part of your daily routine, don’t neglect it over the holidays.

4. Party smart

If you like to party, you can end up getting sick over the holidays. Do yourself a favor this year and watch what you imbibe. Enjoy a glass or two of your favorite alcoholic beverage, but try to keep the drinking to a minimum. Similarly, it’s OK to break your diet over Christmas, but it’s best not to go overboard.

5. Delegate

If you’re hosting a large crowd this Christmas, all the extra work can bring your stress levels through the roof. Here’s the good news: You don’t have to do it all! There’s nothing wrong and there’s everything right with asking for help.

6. Take some “me” time

“Me” time is important, and in the chaos of the holidays, this need is often neglected. Consider getting a manicure, taking a solitary half-hour walk, or just locking yourself in your room for some peace and quiet. You’re not being an antisocial snob if you need your “me” time; you’re just being human.

7. Give up the guilt

If you tend to overanalyze every interaction you have with family and friends, you can really beat yourself up over the holidays, questioning everything you’ve said. Try to let go this season and give yourself a break.

8. Lower your expectations

A common cause for holiday stress is unrealistic expectations. It’s best not to build huge castles in the air and to keep your expectations to a minimum. If you don’t expect perfection, you won’t be struggling with mountains of disappointment this holiday.

Here’s wishing you a wonderful holiday season stress-free from all of us here at Mutual Credit Union!

 

Your Turn: How do you beat the holiday stress? Share your best tips with us in the comments.

What Is The Prime Rate And Why Does It Matter?

A bank manager and customer look at interest rates

Q: What is the prime rate and why does it matter?

A: The prime rate, or prime, is the current interest rate that financial institutions in the U.S. charge their best customers.

We have answers for all your questions on the prime rate.

How is the prime rate determined?

First, the Federal Reserve System, which is the central bank of the United States, sets the federal funds target rate, or the interest rate, it thinks is best for financial institutions to use when lending each other money. When financial institutions lend each other money, they base their interest rates on the federal funds target rate. The Wall Street Journal then surveys the country’s largest financial institutions to determine the rate they are using and then publishes it as the prime rate. This number is generally 3 percent higher than the federal funds target rate.

The fed’s target rate, and consequently prime, changes often. The committee who sets the federal funds target rate meets a minimum of eight times a year to discuss possibly changing the rate. You can check out the changes in the prime rate at Federalreserve.gov.

How does the prime rate affect the individual?

First, the interest rate on nearly every loan is affected by the prime rate. Financial institutions and large lenders will base their interest rates on the prime rate, generally establishing their current rates at an amount that is higher than the prime. If the prime rises, the interest rate on your loans and adjustable-rate credit cards rises as well.

Second, the prime rate affects liquidity in the financial markets. When the rate is low, liquidity increases. This means funds are more readily available because loans are less expensive and easier to qualify for. This, in turn, generates a growing economy as businesses expand.

Is the prime rate the only factor used to determine individual interest rates?

While the prime is the starting point used to determine an interest rate on a loan, it is by no means the only factor considered.

Your credit score plays a vital role in the interest rate you’ll be granted for a loan. The higher your score, the lower the interest rate you’ll earn. Keep your score high by using your cards sparingly and paying your credit card bills on time.

Here at Mutual Credit Union, we also consider the general state of your finances when determining your interest rate on a loan. If we see that you’re working toward paying down your debts, we’ll be more likely to grant you a favorable interest rate.

Also, as an institution devoted to your success, we are always striving to help you maintain financial wellness.

Your Turn: How do you keep your credit score high and your interest rates low? Share your best tips with us in the comments.

6 Misleading Advertising Ploys To Beware Of This Black Friday

ARTICLE-misleading-advertising

Here at Mutual Credit Union, we hate seeing your money go to waste, so we’ve put together a list of misleading advertising you may encounter when hunting for deals this Black Friday.
1. Very limited quantities
That $200-off supersized TV on the front page of the big-box circular that landed in your mailbox looks like an incredible deal-until you show up at the store on Black Friday and find it’s sold out. Of course, no deal lasts forever, but when a store that’s only been open for the day a few hours, claims it’s run out of an item, you can assume it only stocked a limited quantity.
When checking out the ads for Black Friday, look for an “In-Stock Guarantee” or a “1-hour In-Stock Guarantee.” This will allow you to get a rain check for a sold-out item as long as you show up on Black Friday, or in the case of the 1-hour guarantee, as long as you show up within the first hour of opening.
2. No discount
In this ploy, retailers deceive shoppers into thinking a product is on sale. They’ll list an item in a Black Friday circular so you’ll assume it’s being offered at a discount when it’s actually being sold at regular price. Do a quick check of an item’s standard selling price before running out to buy it on Black Friday.
3. Full price with a store gift card
At first glance, a regular-priced item that comes with a store gift card can seem like a fantastic deal; however, some research might reveal this product is being sold elsewhere on Black Friday for less. Also, if you’re not a regular customer at this store, you may end up blowing that gift card on stuff you don’t need.
4. Sales based on a dishonest manufacturer’s price
When retailers advertise their sales, they’ll often post the manufacturer’s suggested retail price, or MSRP, for customers to compare. However, this value can be theoretical at best and simply dishonest at worst. If the item was never actually sold at the listed MSRP, the number is essentially meaningless.
Avoid getting pulled in by this deceptive advertising ploy by checking out an item’s retail price online.
5. Stripped-down or downgraded versions
When shopping for computers and TVs, read up on every feature offered with the product. A common Black Friday ruse is to advertise a discounted item, which offers the very minimum in features and accessories. These “add-ons” are often essential features whose lack can make the device almost useless until you buy them.
Your Turn: Have you ever been taken in by a misleading ad? Tell us about it in the comments.

Word of the Month: Interest

boat ride with godparents

“Wow, Grandma! This is awesome!” Sean exclaimed as he toured his grandmother’s new boat.

With delight in his eyes, he admired what he was seeing. It was big. And it was beautiful.

Sean and Grandma sat down on the upholstered bench at the back of the boat and watched the passing waves.

“You know, Grandma,” Sean said after a while, “this must have cost a whole lot of money.”

Grandma laughed. “Well, yes and no,” she said.

“What does that mean?” asked Sean.

“Well, it did cost a lot of money, but because I saved up for it over time it wasn’t so hard. It was just a little bit at a time.”

Sean thought about this. It still sounded tough to save up so much money.

“Plus,” Grandma went on, “my saved money also earned interest, so it took even less time than I expected.”

“Interest?” asked Sean. “What’s interest?”

“Interest,” Grandma said, “which is actually referred to as ‘dividends’ by the credit union, is money that my savings earns while it’s in the account. It’s what helps my savings grow without any extra work on my part.”

“The money earns? For doing what?”

“For doing nothing!” Grandma laughed. “My credit union uses my money to loan money to my fellow members of the credit union so they can buy cars, homes and cover expenses for many other needs. Then, the credit union pays me some of those earnings since the money in my account allowed them to do that. It’s sort of a reward for saving money. You get it?”

“I’m not sure,” Sean said slowly. “Would this work for me, too? How much money do I need to save in order to earn interest?”

“Not a lot at all,” said Grandma. She sat quietly, looking out into the ocean. “I’ll tell you what,” she said after a minute. “How about I teach you about savings and interest by acting like your credit union?”

“What do you mean?” Sean asked.

“I’ll give you an extra dollar for every $10 you save over the next six months,” said Grandma. “That’s a great interest rate-10 percent! Do we have a deal?”

Sean smiled. This sounded cool. “Deal!” he said.

He was excited for the challenge. How much would he be able to save?

***

At first, saving some of his allowance money was easy for Sean. He put away a little at a time, a dollar here, two dollars there. It was just like Grandma had said she had done when saving up for her boat. This way, it wasn’t too hard for Sean to reach his first $10, and then his second and third. Soon, Sean had $40 saved up in a little glass jar at the edge of his desk.

But then came Sean’s birthday. His parents threw him an awesome Star Wars-themed party and all his friends and relatives came to celebrate along with him. His friends gave him presents, but most of his relatives gave him cash gifts.

When the party was over and everyone had gone home, Sean counted up his birthday money. He had gotten $250 in cash! Sean had never had so much of his own money in his life. He was thrilled! Now he’d be able to buy a few new Wii games, a new football and all the pizza he wanted. This was the best birthday ever!

But then Sean saw the little glass jar on the edge of his desk and the pile of money inside. He remembered Grandma’s boat and all she’d said about earning interest. He had $290 saved up already. With Grandma’s interest, that would be $329! And he would be making all of that money, just for holding onto his birthday money a little bit longer.

There were still five full weeks until the six months would be up and Grandma would pay him the interest he’d earned. But he really wanted to buy something with his birthday money. Could he wait that long?

After thinking about it, Sean decided to buy a new football for $25 and put the rest of his money away until the six months were up. He’d also continue saving as much money as he could.

It wasn’t easy to hold onto that money, but Sean knew it would all be worth it in the end.

And it was. When Grandma came to visit after the six months were up, she asked Sean how much money he’d managed to save. Sean told her he had $270. When Grandma handed over the $27 he’d earned, he knew he had made the right choice.

Talking points:

  • Why do you think Grandma offered to reward Sean for his savings?
  • Why do credit unions offer interest/dividends on savings?
  • In your opinion, is it more important to have an account that offers greater convenience or a higher rate?

6 Ways To Spot A Payday Loan Scam

Payday Loans Neon Sign

Payday loan scams may seem like old news, but they’re more common than ever. In fact, in 2018, the FTC paid a total of $505 million to more than one million victims of payday loan scams.

In this scam, a caller claiming to represent a collection agency who is acting on behalf of a loan company tells victims they must pay their outstanding balance on a payday loan. They’ll ask victims to confirm identifying details, such as their date of birth or even their Social Security number. They claim they need it as proof that they’ve seen the victim’s loan application and actually do represent the company. Unfortunately, the caller is actually a scammer trying to rip off victims or steal their identity.

In many payday loan scams, victims may have applied for a payday loan but not yet completed the application, or they may have submitted the application but not yet received the funds. In these scenarios, the victim has unknowingly applied for a loan with an illegitimate company which proceeds to sell the victim’s information to a third party. This way, the caller can appear to be an authentic loan collector because they know lots of information about the victim.

If you’ve applied for a payday loan, be on the lookout for these six red flags, any of which should alert you to the fact that you’re being scammed:

1. You’ve never received a payday loan

While these scams usually target people who have filled out an application for a payday loan, fraudsters often go after victims who haven’t completed one or who have done so but have not yet been granted the loan. Obviously, you can’t be late paying back a loan you never received.

If you haven’t completed your application or you haven’t yet received an answer from the loan company you applied to, you’re talking to a scammer.

 2. The caller demands you pay under threat of arrest

Scammers often dishonestly align themselves with law enforcement agencies to coerce victims into cooperating. A legitimate loan company will never threaten you with immediate arrest.

3. The caller refuses to divulge the name of his collection agency.

If the caller actually represents a collection agency, they should have no problem identifying this agency by name. If they refuse to do so, you may be looking at a scam.

4. You can’t find any information about the agency the caller allegedly represents.

The caller is sometimes willing to name the agency, but the company is completely bogus. If you’re suspicious about the call, do a quick Google search to see what the internet has to say about this company. If you can’t find any proof of the company’s existence, such as a web page, phone number or physical address; or the search turns up evidence of previous scams, hang up.

5. You have not received a validation notice in the mail.

By law, anyone representing a collection agency and attempting to collect on an outstanding debt must send a validation letter to the debtor. This letter will inform the borrower that they can dispute the debt within 30 days. It will also detail the amount of money owed and the party to whom it must be paid.

If you have not received any such letter in the mail before the alleged debt collector calls, you’re probably looking at a scam.

6. The caller only accepts immediate payment over the phone.

If the caller was reaching out to you on behalf of a legitimate collections agency, they’d be happy to work out a payment plan with you, and provide you with an address to which you can mail your payments. When a “collector” insists that you pay in full over the phone and refuses to furnish an address to which you can mail your payments, you’re likely talking to a scammer who is only interested in getting your financial information and your money.

If you find yourself struggling to survive financially between paychecks, call, click or stop by Mutual Credit Union today. We’ll be happy to help you learn how to keep your finances at optimum health.

Your Turn: Have you ever been targeted by a payday loan scam or a similar con? Share your experience with us in the comments.