June 2021 - High Point FCU

Beware Child Tax Credit Scams

Money’s on the way to millions of households, and that means scammers are not far behind! The Child Tax Credit (CTC) taking effect in July will provide monthly payments of up to $300 per child for approximately 40 million households. The payments will provide struggling families with desperately needed funds unless the scammers get to the money first.

Here’s what you need to know about CTC scams and how to avoid them.

How the scams play out

In one variation of the scam, victims receive phone calls, emails, or social media messages appearing to be from the IRS and asking them to authenticate their personal details or share sensitive information to get their CTC funds. Instead of pretending to be the IRS, the scammer may claim to be offering to “help” the victim get their funds. In either scenario, if the victim follows the instructions, they’ll be playing right into the hands of scammers.

In another variation of the scam, victims land on a spoofed government website and are invited to input their personal information. Unfortunately, this can open the door for scammers to pull off identity theft and more.

What you need to know about the Child Tax Credit and the IRS

The IRS does not make unsolicited calls or emails. All official communications from the IRS are sent via standard USPS mail.
You do not need to take any action or share any personal info to receive the Child Tax Credit.
Only the IRS will be issuing the Child Tax Credits. Anyone else claiming to “help” you receive the payments is a scammer.

If you’ve been targeted

If you believe you’ve been targeted by a CTC scam, follow the cardinal rule of personal safety: Never share sensitive data with an unverified source. Triple-check the URL on any IRS webpage you visit, as these are easily spoofed. Finally, report all suspicious activity to the IRS and the FTC.

For additional information on the upcoming Child Tax Credits, to check if you qualify, or to update your dependent or banking information, visit the IRS’s CTC webpage directly at IRS.gov

Stay safe!

Your Complete Guide to Homeowners Insurance

Q: I’m taking out a homeowners insurance policy on my new home. What do I need to know?

A: Homeowners insurance is designed to protect you and your family members from liability and cover your home, plus possessions, in the event of disaster or theft.

What kinds of plans are available for homeowners insurance?

Here are the most common types of homeowners insurance plans:

HO-2 – A policy that only protects against 16 specified perils.

HO-3 – A broad policy that protects against all perils other than those excluded in the policy.

HO-5 – A premium policy that usually protects newer homes and covers all perils except the few excluded in the policy.

HO-6 – Insurance for co-ops/condominiums, which includes personal property coverage and liability coverage.

Each plan type will also include some extent of liability coverage.

Are all catastrophes covered by insurance?

Most policies will only cover events if they are sudden and accidental. Some natural disasters, like earthquakes and floods, require a separate policy for coverage.

Should I choose a plan with a lower deductible?

A lower deductible means your insurance coverage will kick in sooner, but you’ll also have a higher premium. When choosing a plan, find one offering a deductible you can comfortably afford along with the lowest possible premium. Your Financial Institution may have a maximum amount allowed for your deductible.

Will my insurance cover all of my belongings?

Every policy will have a cap on payouts, and there are also sub-limits at play. For example, an insured dwelling that’s valued at $400,000 will typically have a 50% sub-limit. In case of a major catastrophe, the insured will only receive up to $200,000 in payouts.

Most policies will also have a replacement cap on specific items. If you own valuables, like pricey jewelry, firearms and artwork, consider purchasing a rider to separately cover these items.

Should I choose a replacement-cost plan or an actual cash-value plan?

A replacement-cost plan will pay for the full cost of replacing a damaged dwelling or your belongings up to a predetermined cap. An actual cash-value plan, on the other hand, will only offer payouts to cover what the damaged item was worth at the time of the disaster.

A replacement-cost plan offers more robust coverage, but the premiums can be a lot higher. The perfect plan for you depends on your financial standing, the value of your home and belongings, and the price you put on peace of mind.

Will all of my claims be honored?

For your claims to be honored, your property and home must be well-maintained. Be careful to take the necessary measures to ensure that your home is in excellent condition.

Should I use the insurance company my lender recommends?

You’re under no obligation to use the company your lender recommends. It’s best to get at least three different quotes before making a decision.

7 Reasons Not to Skip A Home Inspection

If you’re in the market for a new home, don’t forget to include an inspection contingency in your contract. A professional home inspection can save you a ton of aggravation and thousands of dollars in the long run. The inspector will carefully examine the entire house, checking its systems, structure and equipment for functionality and potential problems.

Here are 7 reasons to not skip a home inspection:

1. Find deal-breakers

A house may look fantastic, yet have major issues with wiring, roof, HVAC, plumbing and more. A quality home inspection will give you the inside scoop. If the inspection reveals any large problems that may take heavy work or expensive repairs, you might want to back out of the deal.

2. Safety concerns

An inspection can reveal the presence of harmful substances like radon, carbon monoxide and mold. Look for these hazards before it’s officially yours. You don’t want any unpleasant surprises when it’s too late to back out.

3. Anticipate future costly repairs

A home’s systems and equipment may appear to be working fine when they’re actually on their last legs. A professional inspector can determine the age and condition of the systems and equipment, and then forecast when they’ll need to be repaired or replaced. This can help you budget for a major repair several years down the line.

4. Reveal illegal additions

The awesome rec room you love in your potential new home might have been illegally built. An inspection will check for rooms, garages and basements that were added or finished without following legal codes or obtaining the proper permits. Having an illegal addition in your home means owning property that does not officially exist. This can get you into big trouble with home insurance and property taxes.

If a home inspection reveals any illegal additions, you can ask the seller to obtain the proper permits now, use this information as a bargaining chip or choose to back out of the deal.

5. Obtain insurance easily

Lots of home insurance companies will not insure a home if it has not undergone a certified inspection.

6. Learn how to protect your investment

The inspector will be an invaluable source of information for you, providing tips and knowledge on how best to maintain your home. Knowing how to properly care for your home can save you thousands of dollars over the years.

7. Negotiate

Most home inspections will reveal problems. If they are minor enough to keep you interested in buying the house in its present condition, use them as bargaining tools and renegotiate the purchase price of the home.

Are you in the market for a new home? Call, click or stop by Olean Area Federal Credit Union today to ask about our fantastic home loan options!

What Do I Need to Know About the Advance Child Tax Credit Payments?

Q: What do I need to know about the advance Child Tax Credit payments of 2021?

A: The advance Child Tax Credits of 2021 will be distributed monthly to eligible families, beginning on July 15. Here’s what you need to know about these payments.

What are the changes to the Child Tax Credits for 2021?

The Child Tax Credit (CTC) for 2021 will be greatly expanded:

Eligible families will get $3,000 per qualifying child between ages 6 and 17 at the end of 2021.
Eligible families will get $3,600 per qualifying child under age 6 at the end of 2021.
The credit is fully refundable.
Advance payments of up to 50% of the total CTC per family will be distributed once a month, from July 15 through Dec. 15, 2021.

Who’s eligible for the Child Tax Credits?

Taxpayers who have a primary residence in the U.S. and live in it at least half of the year are eligible for the child tax credits.

Payments will begin to be phased out for married taxpayers filing a joint return who earn more than $150,000 a year, for heads of household earning more than $112,500 a year and for all other taxpayers earning more than $75,000 a year. Income eligibility will be based on 2020’s tax return.

How much will I receive per month through the advance Child Tax Credits?

The advance payments being sent to qualifying families will be equal to up to 50% of each family’s total CTC. The payments will be based upon the income information found in taxpayers’ 2020 tax returns, or, if these are not yet filed, in the 2019 tax returns.

Families eligible for the full CTC will receive half of the total across a six-month time span. From July to December, eligible families will receive $300 a month per child under age 6, and $250 a month per child ages 6-17.

Can I decline the advance payments of the 2021 Child Tax Credits?

Eligible taxpayers who do not want advance payments of the 2021 Child Tax Credit can choose not to receive them. This may apply to taxpayers who anticipate earning more in 2021 than in 2020, or who have primary custody of the child(ren) receiving the credit in 2020, but not in 2021. The IRS has not yet provided instructions for how to officially decline the advanced payments, but has promised to update its website when they are available.

The advance CTC payments will be a boon for families struggling with the financial fallout of the pandemic, but it may not be in every taxpayer’s best interest to accept these payments now. Use our guide to brush up on the details of these payments so you can make an informed decision.

SOURCES:

https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

https://www.cnbc.com/2021/05/17/new-monthly-child-tax-credit-payments-start-july-15-what-to-know-.html

College Degree Scams

For many young adults, a college degree is the key to a secure financial future. Unfortunately, though, scammers are offering fake diplomas and bogus degree programs to the unsuspecting college-bound crowd. Here’s what you need to know about college degree scams.

How the scams play out

College degree scams can take on several forms:

Diploma mills advertise to attract potential students, claiming they don’t need to do any studying, take exams or even interact with professors to earn their “degree.”
Accreditation mills will allegedly provide higher education accreditation to diploma mills. Unfortunately, though, they cannot grant authentic accreditation because they are not recognized by the U.S. Department of Education (USDE) or the Council on Higher Education Accreditation (CHEA.)
Life experience degrees offer a fully accredited “degree” for work experience alone.

In each of these variations, the victim will only discover that the degree is bogus when they try to use it. It won’t be recognized by reputable employers, can negatively impact a career path even if the victim is already employed and can get the victim into trouble with the law.

10 signs a college or degree program is bogus

The school’s mailing address is a P.O. box.
Tuition is billed as a flat rate per degree.
The “school” claims you can get your degree in an impossibly short time.
You have little to no interaction with the “professors” of the school.
The name of the “college” is similar to a well-known legitimate university.
The web address doesn’t end in .edu.
The school is accredited by an organization that isn’t approved by the USDE or the CHEA.
The school does not ask for any form of I.D. upon enrollment.
A degree can be earned with minimal effort.
The school claims you can earn your degree solely through experience in the workfield.

How can I be sure my degree program is legit?

The Federal Trade Commission (FTC) suggests taking these steps before enrolling in any college program:

Is the school officially accredited? You can verify this by checking for the school or program on College Navigator, and/or looking it up on the USDE and the CHEA If your school or program isn’t listed on these sites, you’re looking at a scam.
Ask the registrar of any local community college or state university if they’d accept transfer credits from this institution. If the answer is no, it’s an obvious scam.
Contact the state attorney general’s office in the state where the school or program is located to ask if it’s operating legally.

If you’ve been targeted

Report scam attempts to the FTC at FTC.gov and to your state attorney general. Let your friends know about the scam, too.
Be alert and do your due diligence before signing up for a college or degree program, and stay safe!

Tips for Recent Homebuyers

Becoming a homeowner is a major milestone. There’s a thrill in owning your own place, and you’ve got a new, large investment to maintain. Successful homebuyers are those who can perfectly balance that new freedom and responsibility.

There are several upcoming firsts for recent homebuyers. Check out these common homeowner situations, and you’ll be prepared for a possible setback.

1. Something major breaks

As a renter, if the refrigerator breaks, the landlord repairs it. In contrast, when something like an appliance or major system breaks in your home, you’ll be responsible to fix it.

If you’re counting on homeowner’s insurance or a home warranty to cover you, check your policies carefully. Most home warranties end at the walls of your house, and insurance won’t cover damage outside of a disaster. If your home needs significant work, you’ll probably be covering the costs yourself.

Consider practicing self-insurance. Start a home repair and renovation fund, and build major expenses into your monthly budget. These expenses become manageable when spread out over the course of several months. Expect to spend 1-4% of the value of your home in repairs and maintenance annually.

2. Costs increase

When considering a budget in your new location, housing costs aren’t the only thing likely to increase. If you’re moving from a smaller apartment into a larger home, utility costs will rise. If you’re moving into an older house, appliances won’t run as efficiently.

Additionally, transportation costs may rise if you’ve moved further away from work. A larger kitchen might encourage more cooking and entertaining, increasing the grocery budget. Lawn maintenance costs may appear on your budget for the first time.

During your first month as a homeowner, document your new living expenses so you can budget for them properly. If, after a month, you see that your expenses are too high, you’ll have an idea about where you can make cuts.

3. Tax bills come due

Property taxes can wreak havoc on your budget. While many mortgage companies include these costs in your regular mortgage payment, other homeowners are responsible to pay them at tax time. If that’s the case for you, it’s important to determine what your tax bill might look like.

The U.S. average property tax bill is under $3,000, or $250 per month. Here also, setting the expense aside monthly instead of paying it in one shot makes it manageable.

4. Maintenance requirements increase

There are dozens of things around the house, such as smoke alarms and toilet bowl seats, that decay with time. Some of these objects can damage your house if they don’t work properly.

Make a list of chores that need to be done monthly, weekly or annually. Keep a spreadsheet so you know the last time maintenance was performed on major items in your home. As always, it’s a good idea to fix little problems before they turn into big ones.

Six Reasons to Switch to E-Statements

Quick, convenient, and clutter-free, E-statements are the way to secure your account info.

Your E-statements work similarly to paper statements, except for the fact that they’re delivered electronically. At the end of each statement period, you’ll get an email from your credit union informing you that your E-statement is ready to view through the online app or another secure means. Once you access the E-statement, you’ll find it has all the information you’re used to getting with your paper statements. You can also access your E-statement by logging into your online banking account, E-teller, or app at any time throughout the month.

Here are six reasons to consider switching to E-statements.

1. Check your accounts at a glance

With E-statements, there’s no need to wait for your monthly statement to arrive in the mail. With just a few clicks, you can check your account balance at any time, anywhere, using the mobile device of your choice.

2. Clear out the clutter

Why bother with piles of paperwork when you can access your accounts digitally? It’s neater, cleaner, and helps cut down on stuff flooding your mailbox.

3. Keep your information safer

With E-statements, you’ll never have to worry about losing a paper that has confidential banking information, or mistakenly tossing it into the trash where it can be nabbed by shady peeps.

4. Monitor your accounts for fraud

When you have instant access to your accounts throughout the month, it’s a lot easier to check for signs of fraud. Plus, when you spot the fraud sooner, you can take steps to stop and fix the damage earlier, giving you a better chance of a full recovery.

5. Eco-friendly

Less paper statements means less paper waste and fewer trees getting felled for something that will ultimately be tossed. Go green for the environment with E-statements!

6. Safe and secure storage

Filing cabinets are so last century. With E-statements, you’ll never stress about misplacing your account statements again. Your online banking portal or app acts as a convenient and secure filing cabinet, storing your account statements for access as needed.

Ready to make the switch to E-statements? Signing up is easy! Just follow the instructions on our mobile app, Mobile CU, or click on this link to get started. Hello, convenience!

The Promises and the Perils of Buy Now, Pay Later

Gotta have it now, but don’t have the cash? Why not buy now, and pay later? (BNPL). It’s the perfect way for you to walk away with that overpriced exercise bike even if your wallet is practically empty, right?

Maybe. Or maybe not.

Let’s take a look at these programs, how they work and what to be aware of before you sign up.

How BNPL works

You’ll find a BNPL button when checking out at most online retailers. This option will usually link you to a BNPL app, such as Afterpay, Affirm or Quadpay. A brick-and-mortar store may offer you this option at checkout as well. Here, too, you’ll pay up through an affiliated app.

If you choose to go with a BNPL option, you’ll need to get approved. Apps will usually run just a soft credit check to confirm your information. Once approved, you can choose to link your debit card, checking account or credit card so the app can collect the payments when they’re due. Next, you’ll generally make a 25% deposit on the purchase, and the item is yours! Most BNPL plans require you to pay off the rest in three fixed installments, but payment schedules can vary.

When to choose BNPL

BNPL programs can be a good choice for items you urgently need, but can’t afford right now, like medical equipment that’s not covered by insurance. It can also be ideal for workers with an uneven income flow who may experience lean times of the year, but know that better cashflow is ahead.

Why BNPL can be a bad idea

It encourages overspending. It’s easy to think that, if you’ll only be paying a small part of the price today, why not buy it now instead of financing the full amount?
Missed payments are penalized. Some services slap an interest charge on your outstanding balance, with rates as high as 40%. Other programs will charge a one-time late fee, which can be as high as $39. Others will tack on an extra fixed fee to all subsequent payments.

It can kill responsible financial habits. If a consumer has purchased multiple items through BNPL programs, the monthly payments won’t be so minimal. The payments will need to be factored into a budget and can eat into other categories, like savings.

Buy now, pay later programs can be super-convenient, but they also present risks. Our best advice? Use with caution.

Don’t Share Your Grad Photo Online

Congrats — you did it! You’ve spent years studying for exams, keeping up with your coursework and writing papers. Finally, the finish line is within reach. You’re graduating!

It’s a super-exciting time, and all you want to talk about is your graduation. So when a bunch of your friends are sharing their senior photos and joining graduation contests on Facebook, Instagram or other social media platforms, you think it’s harmless to do it, too. Unfortunately, though, posting a senior portrait with your graduation year and the name of your school on a public platform can mean playing right into a scam.

Here’s what you need to know about grad photo scams and how to play it safe.

How the scams play out

The Better Business Bureau (BBB) is warning graduates not to post their senior pictures on any social media platforms. Scammers, they explain, are using these sites to gather new targets. When they see a grad photo with a graduation year and the name of a school, they can take this information. Since these items are commonly used for security questions, scammers can look up more details about the target or even hack into private accounts. Once they’ve completed this step, they can pull off identity theft and more.

Also, lots of trending post-your-list-of-favorites contests for graduates can be exploited by scammers. In these contests, graduates are asked to share their senior portrait along with a list of favorites, such as their favorite songs or cars they’ve owned. This information can also be unknowingly seen by scammers.

How to stay safe

The BBB shares the following tips to help graduates and others keep safe on social media:

Only share your graduate photos privately with friends.
Don’t join grad photo contests that compromise your privacy.
Review and adjust the security settings on your devices and social media accounts.
If you believe you’ve been targeted, consider changing your passwords and security questions.

If you find evidence of fraud, let your credit union know so it can place a fraud alert on your accounts. You’ll also want to report the fraud to the FTC at FTC.gov.

Graduation is a super-exciting milestone and you don’t want scammers ruining this special time. Stay safe!