Current Events in September 2022

One of the best early warnings of identity theft is finding something unexpected on your credit report, such as a loan for a car that isn’t yours. 

During the pandemic, the three major credit reporting agencies began allowing consumers free access to their credit reports on a weekly basis and have jointly announced that free access will continue through 2023.

"The rising cost of living in the wake of COVID-19 has created economic consequences felt by many Americans," the CEOs of Equifax, Experian, and TransUnion said in a joint statement. "Our industry is committed to helping people better position themselves for strong financial futures. Credit reports play an important role in financial health, and providing weekly reports for consumers at no charge is another way that we can support financial education and stability for people across the U.S. at this critical time."

At a time when identity theft crimes are increasing, regularly reviewing credit reports can alert consumers to unauthorized credit activity in their name. Names, birthdates, and Social Security numbers are sold regularly on the dark web. 

A criminal who purchases this information can take out loans and apply for credit cards using a stolen identity. The victim might not become aware that this has happened until months later.

How to dispute erroneous information

Reviewing credit reports can also alert consumers to inaccurate entries that can drag down a credit score. Consumers may appeal to the credit agencies to have the erroneous information removed.

The Consumer Financial Protection Bureau (CFPB) says consumers can submit a dispute to the credit reporting company by phone, by mail, or online. 

“Explain the error and what you want changed,” CFPB advises. “Clearly identify each mistake separately, state the facts, explain why you are disputing the information, and request that it be removed or corrected.”

• Online access to Equifax’s dispute form can be found here.

• Online access to Experian’s dispute form can be found here.

• Online access to TransUnion’s dispute form can be found here.

Credit reports document consumers’ credit history and should be a factual record of credit activity and payment history. They are important because they are used by lenders, creditors, service providers and other businesses to extend financial opportunities and other offers to people. 

To access free weekly credit reports, go to www.annualcreditreport.com.

If you’re headed to the grocery store anytime soon, you better stock up – high prices are predicted to stay. The latest USDA consumer price index for food shows that while a few foodstuffs slowed down on price from July to August, there is zero promise for food prices to retreat for the rest of 2022, but price roar is predicted to head toward more of a whimper in 2023.

And the Bureau of Labor Statistics (BLS) mirrors the USDA research, too. The BLS lists the cost of food-at-home as up substantially – 13.5% higher than a year ago – while food-away-from-home is up only 8%.

Aisle by aisle

Meats: In the meat section, consumers saved a few pennies on the price of beef, pork, and seafood from July to August. Overall, prices softened 0.2%, which basically equates to a pound of pork boneless half loin dropping about 10 cents. Still, Americans are still paying 8.9% more for meat than they did a year ago and that is expected to finish out the year at a 10.5% price hike. By 2023, the agency predicts the price of meat will grow somewhere between 2-3%.

Eggs: No one knows who made the chickens mad, but they’re holding back on egg production. Overall, the price of a dozen eggs has risen nearly 40% in the last year, although only 2.9% from July to August. The USDA says by the end of 2022, egg prices will likely climb to a 27% increase from the beginning of the year, but next year are predicted to flatten out.

Dairy products: Year over year, dairy products are up 16.2%, rising 0.7% from July to August. The USDA prediction for the year-end rise is 12-13% and up as much as 2.5% for 2023.

Fruits and vegetables: Since summer production is usually pretty robust for fruits and veggies, the prices for those products barely moved the needle. Prices were up 0.4% from July to August, and the rest of year should shake out at an overall 7-8% increase. Fruits and vegetables are the brightest hope of any aisle for 2023, too, with prices predicted to rise somewhere between 0.0% and 1%.

However, “processed” vegetables and fruits (such as salad kits, bags of cut baby carrots, pre-washed and chopped lettuce, containers of fresh sliced pineapple, canned corn, etc.) are likely to be a price concern for consumers. Overall, that category is up 14.2% year over year and predicted to finish up 2022 at an 11% bump, with another 2-3% hike in 2023.

Ukraine, Russia… and now, India

The war between Russia and Ukraine continues to impact American grocery shoppers. For example, fats and oils. From August 2021 to August 2022, the price of fats and oils has skyrocketed by 21%. 

There are also other countries that are higher in the pecking order for Russia and Ukraine than the U.S. is. Ukraine and Russia export agricultural and chemical products to many trading partners around the globe. Take corn exports – more than a third of Ukraine’s corn exports are destined for China. 

When it comes to wheat, the dominant force is Russia which sends 40% of its wheat to Egypt and Turkey. In the past when wheat production was an issue, the U.S. (and other countries) were able to count on India to fill in the gap. Unfortunately, a heat wave late in the growing season reduced India’s wheat production, leading its government to impose an export ban to ensure sufficient supplies were available to satisfy demand inside the country.

Investors, especially those with large amounts of cash in their portfolios, may be wondering where to put money to work in an environment where the Federal Reserve is raising interest rates and the stock market and real estate are falling.

At its September meeting, the Fed raised a key interest rate another 0.75%, sending stock prices swooning. But as the price of assets like stocks and real estate goes down, the interest rate investors can get on their money has been going up.

After the Fed’s latest rate hike the yield on the Treasury Department’s two-year bond rose past 4% and, as of this writing, is still climbing. Savers, who have received almost nothing on their cash for nearly two decades, can invest in these bonds, which are backed by the full faith and credit of the U.S. government, and are guaranteed to get their money back in two years – along with a 4% profit.

I Bonds now pay 9.6%

An even higher-paying alternative is the Treasury Department’s I Bond, which is keyed to the inflation rate and currently pays an eye-popping 9.6%. Officially called the Series I Savings Bond, this savings instrument pays a fixed rate of return, along with a higher rate that is calculated on the rate of inflation and reset every six months.

“A combination of a fixed rate that stays the same for the life of the bond and an inflation rate that is set twice a year,” the Treasury Department said on its website. “For bonds issued from May 2022 through October 2022, the combined rate is 9.62%.”

According to Investors Business Daily, when the rate adjusts at the beginning of November, it’s expected to fall to 6% – still higher than most regular bonds. But before considering investing in an I Bond, here are some things to know:

Things to know

• Individuals can purchase up to $10,000 in I Bonds each calendar year

• You must hold the bond at least 12 months before cashing in. You will receive the original purchase price plus interest earnings

• If you redeem an I Bond within the first 5 years, you'll lose your last 3 months of interest. For example, if you redeem an I Bond after 18 months, you'll receive the first 15 months of interest

•  I Bonds can't be purchased and held in a traditional or Roth IRA. The I bonds have to be held in a taxable account

• The interest and principal are paid to you when you cash the bond.

Before undertaking any kind of financial investment, it is always wise to carefully research the investment before acting. In this case, a good place to start is Treasury Direct, a U.S. government website.

In most cases, it will be helpful to seek the counsel of a knowledgeable and objective financial adviser.

A recent report had TikTok under fire for spreading misinformation in suggested videos on current news topics. Now, the social platform is the source of a new cryptocurrency investment scam. 

According to a report from the Better Business Bureau, scammers are using TikTok to lure users into a crypto scam. Content creators show off huge piles of money, enticing TikTok users that a similar fate awaits them if they invest in crypto.

The creator asks for money over Venmo or Zelle, which will then be invested on behalf of the TikTok user, and they promise to return three times as much as the original investment. 

However, before users can ever cash in on their investments, the scammers ask for “fees” for "help.". This is where things can get problematic.

There are reports of some scammers asking for these fees – which can be a few hundred dollars – several times, and they often try to make users feel that they’re always missing out on the next big investment if they ask for their money back.

Unfortunately, those who have fallen victim to this scam haven’t gotten their money back. This includes their original investment and any additional “fees” that they sent to scammers. 

Be vigilant on social media

Consumers who encounter any potential social media investment scams should report it to law enforcement and the Securities and Exchange Commission (SEC). Even if no money is personally lost, the more reports that are filed, the more awareness it creates of these pervasive scams. 

The Colorado Attorney General’s Office offers some tips for consumers who may spot an investment or money-flipping scam on social media. Research is key.

If you’re ever unsure about whether or not a video or post is a potential scam, search keywords in the post and see what comes up. Oftentimes, other users who have gotten scammed have shared their experiences, or important information about the scam is available online. 

They also warn consumers not to trust posts that come from friends or acquaintances on social media. Sometimes their accounts have been hacked, so just because someone you know is sharing something about investing or making money, doesn’t mean it actually came from that person. 

Ultimately, consumers should trust their instincts and avoid giving in to threats from scammers. If something doesn’t look right or looks too good to be true, that’s often a sign that it is indeed a scam.

Additionally, any social media user who pressures you to send them money or threatens legal action is likely hiding behind the scam. Vigilance is key when scrolling through social media.

In August, ConsumerAffairs reported on a rash of police reports across the country concerning stolen Hyundai and Kias, thanks to a viral video showing how easy it is to steal one.

Now, the Highway Loss Data Institute (HLDI) reports there is hard data that confirm these anecdotal reports. In fact, HLDI says these older, bargain-priced compacts are being stolen at a rate as fast as expensive muscle cars and luxury models.

Among newer models, whole vehicle theft insurance claims were highest for the Dodge Charger SRT Hellcat, relative to the number of those cars on the road during the period from 2018 to 2022. But among 2015-19 model-year vehicles, theft claims were nearly twice as common for Hyundai and Kia vehicles as a group as for all other manufacturers. 

“Car theft spiked during the pandemic,” said HLDI Senior Vice President Matt Moore. “These numbers tell us that some vehicles may be targeted because they’re fast or worth a lot of money and others because they’re easy to steal.”

A TikTok video shows thieves how to do it

How easy? As we reported last month, a video on TikTok walks viewers through a relatively-easy process of stealing these particular vehicles. In fact, the video says the only thing a thief needs is a screwdriver and USB cable.

Apparently, it’s not a complicated procedure. Ashley Foot of New York  told WMAR-TV in Baltimore her Kia was stolen while she was vacationing in Missouri.

“My car was probably taken in 30 seconds," Foote said. "There was no glass that was broken. My alarm didn't signal. They did not need a key, and the KIA dealer said that it was about 60 KIA’s per day that were being stolen. I had a 2019 Kia Forte."

No immobilizer

According to the HLDI report, many 2015-19 Hyundai and Kia vehicles lack electronic immobilizers that prevent thieves from simply breaking in and bypassing the ignition. Today, that feature is standard equipment on nearly all vehicles in that age range.

“Our earlier studies show that vehicle theft losses plunged after immobilizers were introduced,” said Moore. “Unfortunately, Hyundai and Kia have lagged behind other automakers in making them standard equipment.”

By the year 2000, HLDI says immobilizers were already standard on 62% of new cars from that era. But even in the 2015 model year, when immobilizers were standard equipment on 96% of other manufacturers’ vehicles, they were standard on only 26% of Hyundai and Kia models.

Hyundai and Kia, which are owned by the same company, say they are aware of and concerned about the problem.

“While all of our vehicles meet or exceed Federal Motor Vehicle Safety Standards, unfortunately, our vehicles have been targeted in a coordinated effort on social media,” Hyundai said in a statement.

Kia noted the problem affects older vehicles equipped with a steel key and turn-to-start ignition system. It says the majority of Kia vehicles in the United States are “equipped with a key fob and push-button-to-start system that makes them more difficult to steal.”

Consumers determined to purchase a new car or truck this year will almost certainly pay more than the manufacturer’s suggested retail price (MSRP). A new study by iSeeCars.com found that in September dealers are charging an average of $3,945 over the sticker price.

Auto manufacturers have discouraged the practice of dealer markups but Karl Brauer, executive analyst at iSeeCars, says dealers are taking advantage of the demand for some popular models that are in short supply. He says dealers are selling fewer cars overall so they seek higher profit margins when they believe they can get them.

“In today’s market, consumers are willing to pay well-above sticker price for new cars because inventory is so scarce and because they know that new car pricing is not expected to improve until 2023 at the earliest,” Brauer said.

According to the study, a consumer purchasing a Jeep Wrangler should expect to pay an average $8,433 above sticker price. That’s a 24.4% premium, the largest percentage of any vehicle in the study.

$16,750 over sticker price

But that’s far from the largest dollar amount over MSRP. That honor goes to the Porsche Cayenne, which brings an average $16,750 over sticker price – a 19.6% premium.

Buyers of the Genesis GV70 and the Lexus RX 450h are paying more than $10,000 over sticker price while consumers selecting a Porsche Macan or a Chevrolet Corvette are paying an additional $14,000.

People buying the new Ford Maverick pickup truck, which starts at just $20,000, are paying an average of $4,616 over MSRP.

“The Maverick compact pickup has been in high demand since its debut, which forced dealers to stop taking orders for both versions at the end of January, resuming only in mid-September,” said Brauer. “Heightened gas prices have boosted demand for this already-hot seller, with both the hybrid and gasoline versions returning excellent gas mileage, and even these marked-up prices remain attainable for buyers given the starting prices of under $25,000.” 

Higher supplier costs

Ford, in particular, appears to be struggling to produce vehicles amid parts shortages and rising costs. The company warned on Tuesday that it is facing an extra $1 billion in supplier costs.

Because of the ongoing parts shortage, now in its second year, Brauer says consumers intent on purchasing a new car or truck will probably have trouble finding available inventory and can expect to pay higher-than-average prices for their vehicle, especially if it is a popular model.

“Consumers looking to purchase a new car should do their research and compare prices between multiple dealers, and in some cases can avoid markups by ordering directly from the manufacturer,” he said.

Can’t pay your mortgage? The Federal Trade Commission (FTC) warns homeowners who are trying to keep the proverbial wolf away from their door that there are companies who say they can help out, but they’re only helping themselves.

The FTC and California’s Department of Financial Protection and Innovation (DFPI) have secured a court order, in response to their lawsuit, suspending operations by Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, Golden Home Services America, as well as their owners.

The court agreed there was strong evidence that people were illegally charged thousands of dollars up-front for the false promise that the company would help the homeowner out by negotiating lower interest rates or monthly payments on their mortgage.

The suit also claimed Home Matters led people to believe the company was connected with government mortgage relief programs and COVID-19 relief programs that the company said it could enroll them in.

Additionally, the FTC said that Home Matters told people to stop paying and communicating with their mortgage companies for three months, the estimated time the company said it would take to get the modification completed.

FTC said that in many cases, Home Matters never got the promised modification. It said people not only lost the money they paid Home Matters, but also had to pay their mortgage lenders more to avoid foreclosure.

Adding insult to injury, the agency said many people ended up with lower credit scores, had their homes placed in foreclosure, or even lost their homes completely.

In making its ruling the U.S. District Court for Central California ordered Home Matters and its affiliates to temporarily suspend operations pending trial or settlement. 

"Weighing the equities and considering Plaintiffs’ likelihood of ultimate success on the merits, a temporary restraining order with an asset freeze, the appointment of a temporary receiver, expedited discovery, and other equitable relief is in the public interest, the court ruled. 

If making a mortgage payment becomes a problem…

FTC guidelines state "It's illegal to charge upfront fees. You can't collect money from a customer unless you deliver – and the customer agrees to – a written offer of mortgage relief from the customer's lender or servicer." 

So, what’s someone to do in this situation? Among the pieces of advice the agency passes out, one word to the wise is that anyone who’s having trouble paying their mortgage or has received a foreclosure notice should first reach out to their mortgage servicer, even if they’re already in foreclosure. 

Another safety net is talking to a certified housing counselor for free. The U.S. Department of Housing and Urban Development (HUD) provides a searchable list of approved housing counseling agencies across the country and can be accessed here.