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The Chip Cards are Coming!

In a continual effort to reduce fraudulent credit card charges and increase security, the credit card companies are moving away from magnetic-stripe cards, which are easier to counterfeit, and towards the EMV chip card as soon as possible.

According to a recent report by Barclays, almost half of the world’s credit card fraud happens in the United States, even though only a quarter of all credit card transactions occur here. This statistic, in addition to the Target and Neiman Marcus security breaches, are the major motivators behind the changeover.

In an attempt to reduce this statistic and future breaches in security, the EMV (Europay, MasterCard and Visa) chip card is already being rolled out across the U.S., and by October of 2015 merchants will be pretty much forced (see below) to upgrade their machines.

These cards, which have been status quo for in EU and Canada for several years, are manufactured with a small integrated circuit or chip in the card. Payment data (name, billing address, phone number, etc.) is read from this chip instead of the magnetic stripe. This chip protects against fraud in two ways: making it more difficult and expensive to counterfeit and varying the way the data is transmitted each time the card is read. Consequently, while the magnetic-stripe card can be skimmed easily, chip information will be much harder to garner.

Processing device providers are promising to make the transition for their customers (merchants) as flawless and cost-effective as possible. They are also working on several solutions for their Square Stand customers.

Chip cards will not be swiped in the same way as the magnetic-stripe cards, hence the new processing equipment. The cards are inserted into the payment device and left in place for the entire transaction as the reader and the card talk back and forth.

Although this new measure goes a long way to thwart fraud, it will not provide any added protection against the card-not-present transaction, i.e. purchases online or over the phone.

Even though merchants will have the option of using their current processing technology because the new chip cards will still have the magnetic stripe as a backup, starting in October 2015, the liability for fraud will shift to the cardholder and the merchant. In other words, since the EMV terminal could have theoretically prevented the fraud, the liability now falls on the user (the customer) and the processor (the merchant/business).

The timeline for the EMV Chip Card Liability Shift in the U.S.

October 1, 2015 – Visa, MasterCard, American Express and Discover liability shift to POS terminals.

October 1, 2016 – MasterCard liability shift for ATMs.

October 1, 2017 – Visa, MasterCard, American Express and Discover liability shift to pay-at-pump gas stations, as well as for Visa and American Express at ATMs.

Don’t Fall Victim to a Tax Scam

Tax season is looming and, unfortunately, so are the scammers. With a growing number of reports over the last several weeks, from the IRS and police departments across the country, of people falling prey to tax schemes, it’s the perfect time to share some of the most widely used tax scams. Hopefully, this insight will keep you from becoming another statistic.

Phone Scams – This scheme has been occurring with more frequency over the last few weeks. Basically, someone calls you claiming they work for the IRS. These scammers impersonate an IRS agent and typically try to scare/threaten you. They try to intimidate you with supposed penalties, being arrested or deported, etc. if you don’t pay them right now. They even may know all or part of your Social Security number. Don’t panic. The IRS won’t ever just call you out of the blue. They always initiate communication in writing, even if you owe money. They also will never ask for debit or credit card numbers over the phone or threaten you with arrest, etc. for non-payment. If you have any doubts to the authenticity of a call or any correspondence, you can contact them directly (800-829-1040) or visit their website (IRS.gov).

Phishing – This scheme happens throughout the year. This occurs when scammers try to get your personal information by fooling you with fake emails or websites. However, during tax season they lure you in by claiming they have information about your tax refund, etc. You may, for example, get an email that looks like it’s coming from the IRS, inviting you to click on a link for information concerning your tax return or the money that may be due to you. Don’t fall for it. The IRS doesn’t initiate contact via email.

Identity Theft – This one is the worst…the tax scheme of all tax schemes. You arehappily awaiting your tax return, already happily anticipating where you plan to spend it and then you find out that someone else has been using your Social Security number as well as other identifying information, has filed a return in your name and is claiming your refund. Cut this off at the pass by never giving out personal information unless you know who’s asking for it and why, shredding personal and financial documents, knowing your tax preparer (see below) and filing your return early…beating the scammers to the punch.

Tax Return Preparer Fraud – You are inundated with advertisements of people/services that want to prepare and file your return for you. Just remember, like every service and/or person, some are ethical and honest and some are not. A majority of taxpayers today use a preparer. Just do your homework…check them out…get references, etc. In addition, remember that just because someone else prepares your tax return doesn’t release you from the responsibility of its accuracy. You’re the one who is ultimately responsible for the information contained in your return. So, make sure to review it thoroughly before you file it.

False Promises – Always trust your instincts…your common sense. The old saying, “If it sounds too good to be true, it usually is,” can often be the case where refunds are concerned too. Watch for promises of big tax refunds by people who don’t know anything about you or your financial/tax circumstances.

Tax season can be hectic enough without adding undue stressors. So, eliminate the added stress by being aware of these types of scams, using your common sense, dealing with reputable, longstanding tax preparers and thoroughly reviewing your return. And last, but not least…when in doubt, contact the IRS.
Here’s to a stress-free, safe tax season!

Countdown to College – A High School Action Plan

In the blink of an eye, seeming like it was only yesterday you put them on the bus for their first day of kindergarten, your child is entering high school and it’s time to begin preparing him or her for the next big chapter of their lives – college.

Believe it or not, the classes that your child takes and the activities they do in high school play an integral part in shaping them as an adult as well as a college applicant.  Even if your child plans to attend a local community college or less-selective state college, he or she will still need to successfully fulfill certain requirements, and if they want to gain admission to highly selective colleges or receive scholarships, they will need to accomplish even more. The bottom line, it’s very competitive out there!

In the same breath, high school shouldn’t be a dreary march through class requirements and mandatory community service hours. It should also be a time of exploration for your child – figuring out who he or she is and what he or she wants to be when they grow up.

With that said, here are some basic guidelines to help your high schooler work toward his or her educational and life goals.

First and foremost, have them begin setting goals. Whether your child plans to go to college or immediately head out into the workforce, now is the time for them, with your help and guidance, to take stock of their aspirations, strengths, weaknesses and life experiences and begin the process of ascertaining what they might like doing when they’re on their own. They don’t need anything written in stone, but by their sophomore year they should have some broad ideas of what they might want to pursue in the next several years.

This is also the time to have your child look into the scholastic/collegiate requirements of his or her career interests. Have your child begin setting goals based on this concerning his or her grades, standardized test scores, involvement in school and community as well as the steps needed to reach those goals.

Your child should also begin seeking experiences through clubs at school, volunteer activities and speaking to individuals in the fields he or she is possibly interested in pursuing. A wide range of experiences will help your child narrow down career possibilities as well as help them build an attractive, competitive college resume.

Now that your child has set his or her goals for the next four years (freshman through senior years), he or she should break them down year by year. Having a long list goals and to-dos can be daunting. The process won’t be so overwhelming if it broken down into a yearly check list. His or her high school counselor should be very helpful with this task. This will also help your high school student stay on track and eliminate any last minute surprises.

Below is a basic action plan or check list for your child’s high school freshman, sophomore, junior and senior years.

  1. Freshman year – Have your child meet with his or her counselor and start getting involved in extracurricular activities (e.g. a part-time job, joining a school club or volunteering in the community). This is the time for your child to seriously think about not only their GPA but also the classes they are taking to earn that GPA. If they haven’t been automatically placed into advanced classes, it’s a good time to have them ask to be placed in them. Most schools will allow students to move into accelerated classes if they’re doing well in the ones their currently taking.
  2. Sophomore year – Have your child continue meeting with his or her counselor, keeping grades up and staying involved in outside activities. This is the year to begin looking at perspective schools and their scholastic requirements as well as financial planning. Creating a financial plan can better help you and your child prepare for the financial responsibility of college, establishing an estimate of tuition, housing and ancillary costs (books, fees, meals, etc.), so that your child’s college education doesn’t become a financial burden.
  3. Junior year – This year is when the rubber meets the road so to speak. Your child should begin preparing for standardized tests now instead of waiting until their senior year. Time spent doing this now will allow your child to concentrate on their grades and enjoy their final year of high school. This is also the time to begin searching for scholarship opportunities. A great place to begin is scholarships.com. Again, his or her counselor can be of great help with this.
  4. Senior year – Your child’s high school days are numbered and college is right around the corner. Now is the time to begin the college application process. Here are a few helpful reminders:

a. Begin gathering recommendations – To ace this section of the college application, have your child get letters of recommendation (e.g. teachers, coaches, volunteer directors, summer job supervisors, etc.).

b. Register for the ACT and/or SAT.

c. Apply to selected schools – Pay close attention to deadlines. Your student will stand a better chance of admission if they apply early. Make sure your child also pays close attention to grammar and spelling when completing his or her application form. Have your child personalize their essay to the particular school where they are applying (e.g. citing reasons for their interest in each particular school).

d. Continue searching for scholarships – Have your child begin this at the start of the school year.  Have them see what’s available and what’s coming up so they will have time to apply for those scholarships that are best suited to them. There will be hundreds of scholarships that will be applicable to your child. So, it’s best to have them select their top 10 or 20 to begin and continue moving through the list with another 10 or 20 each month until they’ve exhausted the list.

e. Submit the FAFSA form – the deadline for submitting the FAFSA on the web varies by state. No matter the date, you and your child should try to submit it as soon after January 1 as possible. It’s quicker and easier to submit this form online at fafsa.ed.gov. Beware of sites that want to charge for applying for financial aid. The FAFSA is a free application for federal student aid.

e. Now, it’s just a waiting game – Most colleges will let your child know their decision by May. Once your child has received all his or her letters of acceptance, begin weighing the options. Both of you will want to consider financial needs, the location, and of course, the overall reputation of the college as well as their reputation in the field of study your child is planning to pursue. Have your child let each school know their decision as soon as they can.

Phew! You’re done! Now, you both can sit back, relax and begin looking forward to a life changing and exciting next four years!