Don't go to sleep on your credit card bills!  (I know this photo is a stretch, but it's funny.)

Don’t go to sleep on your credit card bills! (I know this photo is a stretch, but it’s funny.)

One of the most common recommendations for using a credit card successfully is to pay off the balance in full every billing cycle so you avoid interest charges. Just about everybody knows that — but that doesn’t mean everyone does it. In fact, despite some modest improvements in credit card usage habits since the recession, roughly half of American credit card users still end up carrying a balance and paying interest, according to a new survey by the Financial Industry Regulatory Authority (FINRA) — a private organization that helps regulate the financial industry. And a surprising number make other expensive critical credit card mistakes, too.

The results of the FINRA survey about “risky credit card behaviors” were published in a report called “Financial Capability in the United States.”

This story first appeared on Credit.com. Read it there.

Back in 2009, during the height of the recession, only 41% of U.S. adult credit card users said they paid their bills in full every month. By 2015, that number had risen to 52%, the report says. That’s a substantial improvement, but it still means about half of credit card users are still paying costly credit card interest rates.

Credit cards are a critical way that Americans engage in short-term borrowing — 77% of Americans hold at least one credit card, according to the report. But revolving credit can be expensive, with penalty interest rate approaching 30%.

Credit card spending, which was sharply curtailed during the recession, has reportedly surged in recent years. According to the Federal Reserve, outstanding credit card debt has grown from $842 billion to $953 billion since 2011, and is right now growing at an annualized rate of 3%.

The FINRA report unearthed other bad credit card habits, too. Nearly one-third (32%) of respondents admitted that in some months they pay only the minimum payment on their credit card bills. That’s down from 40% in 2009. On the other hand, the number of people who say they paid a late fee (14%) has been cut nearly in half since 2009 (26%).

Overall, the FINRA report says that 39% of cardholders engage in at least one “risky” behavior, destined to make their credit card bill more expensive through fees and interest than it has to be.

Not surprisingly, those with lower incomes were far more likely to do so. About 49% of those earning under $25,000 annually engaged in risky card usage, while only 29% of those earning more than $75,000 did. African Americans (56%) were almost twice as likely as whites (35%) to pay credit card interest or fees.

The report echoes other research showing that credit card usage is up by many measures. The American Banking Association (ABA) reported earlier this year that new credit card account volume rose a stunning 16.5% during 2015.

“Recent growth in the credit card market is consistent with what we’re seeing in the broader economy,” Jess Sharp, executive director of ABA’s Card Policy Council, said in a press release. “With nearly 6 million jobs created over the last two years, it’s natural to see strong growth in new cards and purchase volumes. Faster wage growth and healthy levels of disposable income have helped shore up many account holders who may have had difficulty managing their credit in the past. Consumers are now in a better position to pay on time and rebuild their credit.”

With all this flurry of activity, the FINRA report suggests that many consumers are still engaging in what might be the riskiest of all behaviors: Failing to shop around and get the best credit card deal. Only 35% of adults said they compared information from “more than one company” when obtaining their most recent credit card. Millennials, at 46%, were slightly more likely to comparison shop than the rest of the population.

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When I tried to get a comment from alleged phantom debt collection company, the firm tried to scam me.

When I tried to get a comment from alleged phantom debt collection company, the firm tried to scam me.

Never had this happen before:  When I tried to email a company accused of scamming a consumer to ask for a comment, the company immediately tried the same scam on me.  Read on…

She was accused of check fraud, and theft by deception. She was told that she owed $4,526, and was facing daily late fees. She was warned that her wages could be garnished or her property could be seized. The menacing phone calls and emails began in April and starting piling up quickly.

But Susan Marquardt, of Chicago, had never heard of the company calling and writing her: Advance Cash Services.

“It was horrible,” Marquardt, 51, said. “They just kept calling and leaving really harassing messages.”

Fortunately, the internet had heard of them. Marquardt did a quick search and found mountains of complaints about the firm allegedly harassing consumers over debts they say they don’t owe. My own search found complaints dating back several years. For example, Washington state officials first warned consumers about ACS in 2011, but renewed its warning late last year.

(This story first appeared on Credit.com. Read it there.)

The tactic is sometimes called “phantom debt collection” and it continues because it works. Consumers, intimidated or scared by the threat of legal action, pay up. In Marquardt’s case, she was told she could avoid legal trouble if she paid $700 immediately. According to a complaint she filed with the Illinois Attorney General’s office, she was threatened with seizure and sale of “movable” assets and wage garnishment.

“Phantom debt collection is one of the most egregious scams I’ve seen in years,” Illinois Attorney General Lisa Madigan said. “Simply entering your personal information on a payday loan site can easily come back to haunt you. There is no way of knowing where this information will end up, and unfortunately it’s usually in the hands of scam artists.”

That could be how Marquardt’s trouble began. Earlier this year, she took out a small online payday loan, but paid it back within a few weeks. She’s had nothing but trouble ever since. First, someone used her banking details to write fraudulent checks. Then, the phone started ringing off the hook with this fake debt incident.

Attempts to get a comment from ACS for this story were unsuccessful, but reporting on it did land me my own menacing debt collection note.

When I called the number listed for ACS at the Better Business Bureau in West Florida — where ACS has been hit with more than 1,600 complaints — a man who answered the phone said he did not wish to comment. (I was unable to confirm that the man was connected to ACS, or that the phone number was correct). An email sent to what appeared to be ACS’s main office was returned as undeliverable.

But an email sent to the address that contacted Marquardt yielded a surprising “comment” for the story.

“This is (Advance Cash Services), it is a parent company which owns and operates more than 350 parental payday loan websites,” it read. “You applied from one of our website and you never bothered to pay this debt, so the creditor wants to know your intention about this matter of yours that what would you like to do. And now with the late fees and tax, Rate of Interest the initial amount goes up to $935.76.”

I was asked to provide a date when I would pay the amount.

“We are talking about the loan amount that you took with the company ACS -Advance Cash Services (A Parental Pay Day Advance Company), using an e-mail address (Bob@XXX.net) and your SSN. The money was successfully deposited into your bank account. Kindly provide us the date on which you can come up with $935.76 so that we can send you the Settlement Agreement which you need to fill, sign and send us back in order to freeze down your case.”

The letter went on to warn me that if the case file was “downloaded…we won’t be able to help you out.”

To be clear, I have not applied for a payday loan recently, or ever. But consumers who have done so likely are facing at least some financial trouble, so they make good targets for intimidation. Also, it’s fairly easy to create doubt in a consumer’s mind. Marquart keeps good financial records, but still there was a part of her that might have fallen for the scam.

“I knew I had paid [the payday loan] off, but 5% of me thought, ‘Well maybe…’” she said. “Two years ago I got a divorce and I thought, maybe it’s my ex, but it wasn’t.”

That’s why phantom debt scam calls work; if they can create just a little doubt in a consumer’s mind, criminals have a chance to exploit that weakness and make a killing.

“I was kind of mad. I thought, ‘how dare they!’” she said. “I pay all my bills and whatever and when they come up saying I owe them. That’s why I filled out the complaint.”

And that’s why Marquart agreed to describe her experience to Credit.com.

“If I help just one other person who might fall for this kind of thing, it’s worth it,” she said.

We’ve talked before about the things every consumer should do when they receive a debt collection call – here’s a quick list of seven questions to ask – but asking one question would probably help you sniff out most phantom collectors: “What is your license number?” Most states require collectors to be registered. Attempt to verify the license before doing anything else, and you’ll be more likely to scare off most scammers.

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Visa.com

Visa.com

By now you’ve probably heard of RFID blockers — those wallets, purses and other gadgets offering protection from hackers who can pluck your personal information out of thin air.

RFID, or radio frequency identification, chips are growing in popularity. But there’s something you need to know about those blockers before you buy them.

The rise of this industry coincides with the conversion of America’s credit cards to EMV, which will ultimately put a computer chip on every piece of plastic in your wallet. That’s no coincidence, according to the EMV Migration Forum, a group created by trade group the Smart Card Alliance to promote education and adoption of EMV cards.

“The ‘RFID blocker’ sales people are using the new cards with EMV chips to confuse cardholders into thinking that all EMV cards have RFID, and you need to block them,” said Adrian Riley, a spokesman for the EMV organization.

The fact is, you don’t. The new chips on your credit card almost certainly don’t emit radio waves. You can’t pay with your new chip credit card by waving it over a sales terminal; you have to insert it in the machine. So no one can listen to your personal information on such a card with a wireless snooping device. To put it more bluntly: EMV is not RFID.

(This story first appeared on Credit.com. Read it there.)

When I set out to confirm this, I was surprised to find a lot of confusion online. That’s because there is a similar-sounding technology called contactless credit cards, which do use RFID and send a signal that an RFID blocker might defeat. There is also such a thing as “dual interface chip cards” that have both EMV and this contactless RFID capability.

But I’m willing to bet you don’t have one.

I was unable to find a precise number for how many of these are in the wild, but it’s a low number. (Some estimates I found suggest less than 1%.) The Smart Card Alliance notes in a 2015 white paper that contactless credit cards, first issued back in 2004, have suffered “sluggish adoption rates.”

I’ve never seen a contactless credit or debit card used by a consumer in the U.S. (They’re more common in Europe.) Some banks are thinking about adding RFID now that the EMV conversion is well under way, but other wave-and-pay systems like Apple Pay seem to have made contactless credit cards a technology that few Americans really seem to want.

I asked an RFID blocker company for help with understanding the prevalence of RFID, and a representative of the firm sent me to a blog post at Heartland Payment Systems, which says:

“Back to the magic chip reader question. Is it possible to read the data on an EMV chip from a distance? The short answer is, ‘not likely.’ EMV cards do use RFID. Similar to AM and FM radio bands, EMV chips utilize specific bands to communicate.”

This is all incorrect, according to the EMV Migration Forum. EMV does not equal RFID. Just because there’s a chip in your wallet doesn’t mean someone can sniff the data off it with wireless technology. (I asked Heartland about the post, written by a former employee last year, and didn’t get an immediate response.)

Here’s the bottom line: Some items you may carry do emit RFID signals under the right circumstances. Your newish passport does. Your employee badge might. If you carry them around all the time and are hyper-vigilant, perhaps you’ll enjoy RFID blocking technology.

Just know it does nothing to protect your new EMV credit card from hackers. And most important, while security researchers have demonstrated that RFID payment signals can indeed be hacked wirelessly, no one I know has found an example of this occurring on any scale in the real world. You have to be very close to the victim, and the data a hacker would steal is “disposable” and not very valuable, making this a very slow way to make money compared to all the other quick ways hackers make money today.

“I …want to emphasize that contactless payment technology doesn’t pose any risk to consumers,” said Riley. “Like contact chip cards, contactless chip cards generate a one-time-use code that can’t be reused. So even if a criminal managed to get their hands on the info, any captured data couldn’t be used to execute new transactions.”

How do you know if your credit card can broadcast data wirelessly? It has a logo called a wave that looks like radio waves. If your cards don’t have it, you don’t need an RFID blocking gadget to protect them.

Remember, it’s still important to monitor your credit or debit card statements regularly for fraud. And if you’re concerned about deeper identity theft, consider putting a freeze on your credit, which will prevent anyone from pulling your credit report, unless you thaw it. You can also monitor your credit forsigns of identity theft, like a sudden drop in credit scores. (You can see two of your credit scores, updated each month, on Credit.com.)

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Where Americans have the most equity in their homes. Urban Institute (click for report).

Where Americans have the most equity in their homes.
Urban Institute (click for report).

When people say they own their home, it’s usually a half-truth at best. Often, a bank owns the home they live in — most of it, anyway.

Still, Americans have a lot of real money tied up in their homes — on average, $150,506, according to a new report by the Urban Institute called “How Much House Do Americans Really own? Measuring America’s Accessible Housing Wealth by Geography and Age.”

That amount represents what’s left over after the debt on the mortgage is subtracted from the home’s 2015 value. It also represents a major portion of most Americans’ net worth, making “net housing wealth” a critical element to many families’ economic future and security.

Not surprisingly, there are wide disparities of net housing wealth among age groups and geographic areas. Older folks who’ve been paying mortgages longer own more of their homes, and places where real estate values have skyrocketed also add to this real net housing worth bottom line. In Washington, D.C., the average net worth is around $381,000, for example, while in Arkansas, it’s around only $80,000. Meanwhile, California had only 9.3% of all owner-occupied housing units but accounted for 20.4% of total net housing wealth for the country.

(This story first appeared on Credit.com. Read it there.)

These aren’t merely paper values; homeowners can borrow between 75 and 85% of the net value of their homes via home equity loans or lines of credit, depending on their credit score. Cash-out loans and reverse mortgages are also possible. So net home wealth represents a real, usable asset that can serve both as safety net and opportunity for investment.

“Homeownership is important to building wealth,” said report author Laurie Goodman. “This can be seen by the fact that housing wealth, while inequitably distributed, is still more equitably distributed than other types of wealth.”

Nationally, there were over 73 million owner-occupied housing units in the U.S. in 2015. Of these, around 46 million had home debt such as mortgages and equity loans, and nearly 27 million were owned free and clear. The Urban Institute calculates that there is about $11 trillion in total net housing wealth across the country, and about $7 trillion of that could be turned into cash through lending products.

Age is big predictor of net housing wealth. The report found that those over 60 hold 52% of all home equity. Those under 50 hold only 23%. Meanwhile, owners under 40 owned 17% of all owner-occupied housing units but had only 6% of accessible housing wealth.

But real home net worth exists all around the country, and by some measures is spread around fairly evenly. The report found that 80% of all homeowners nationwide had equity at or above 15% of the current value of their home. In Hawaii, Washington, D.C., Vermont, and California, nearly 90% of homeowners had at least 15% equity. In Rhode Island and Nevada, the rate was 70-72% — not so wide a gap.

On the other side of the coin, there are still substantial numbers of Americans for whom their house is a liability, not an asset.

The report says that almost 9% of homeowners aged between 50 and 59, and 7.5% of those aged 60-64 owed over 5% more than their houses were worth. That group is staring at retirement while being upside-down on a mortgage.

Much has been made in recent years about the stagnant wages of the American middle class, but middle class net worth has also been stagnant. For example, a 2014 report by the U.S. Censusshowed that the middle quintile of Americans saw their net worth shrink from $74,000 to $69,000 between the years 2000 and 2011. On the other hand, the richest 20% of Americans saw their net worth soar over the same period.

The Urban Institute authors note concerns about some government policies that might exacerbate housing-based inequality. Still, they conclude, homeownership is an important part of wealth building for the vast majority of the U.S. population.

“Government at all levels — the government-sponsored enterprises, lenders, housing providers and advocates — must work together to improve access to mortgage credit that allows owners to sustain homeownership and enhance the economic well-being of their families,” it says.

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(Bob Sullivan photo)

(Bob Sullivan photo)

Americans are terrible at taking vacations, and that’s a shame, because they aren’t helping their companies or themselves. People are just less productive in summer, for a whole host of reasons. So you might as well hang out at the beach anyway.

Americans wasted a record-setting 658 million vacation days in 2015, left on the table by 55% of workers, according to Project: Time Off’s new report, The State of American Vacation. The group says Americans’ vacation habits are amid a decades-long decline in usage. A pile of other past studies make this same point. The average American gives $500 of free labor to their employers every year; the average millennial works during vacation, with 1-in-4 working every single vacation day.

(This story first appeared on Credit.com. Read it there.)

All this lack of sun isn’t really doing anyone any favors. Because the truth is summer slowdowns are real, and you probably aren’t getting much done anyway. Here are seven reasons why you, and everyone else, really is less productive in summer.

1. The Weather (Duh!)

As a writer, I loved living in Seattle. Yes, because it rained all the time. It’s pretty easy to commit yourself to sticking your face in a computer at a coffee shop when it’s gray and misty outside. When it’s beautiful and sunny? Well, it’s darn near impossible.

That’s not made up. One study of the Census Bureau’s American Time Use Survey found that, on rainy days, men spent, on average, thirty more minutes at work than they did on similarly sunny days.

2. FOMO  

It should be obvious that distraction is the enemy of productivity. And nothing is more distracting than looking outside a window to see sun you aren’t enjoying. Well, there might be one thing more distracting: Seeing pictures of other people enjoying the sun online.

We know that social media sites like Facebook can lead to a lot of wasted time at the office. But in summer, it can do lead to something potentially more problematic.

When the New Yorker covered why summer makes us lazy, it highlighted a Harvard study that found looking at pictures of people sailing or eating outside made them focus less at work.

“Instead of focusing on their work, they focused on what they’d rather be doing,” the New Yorker proclaimed. “The mere thought of pleasant alternatives made people concentrate less.”

And these were random pictures of people the subjects didn’t’ know. Imagine how much stronger the effect is when your old college buddy is at Folly Beach in North Carolina and you are sitting in front of Microsoft Outlook. (Thanks a lot, Tim).

3. It’s HOT

Your brain slows down when it’s hot and humid. In fact, heat lowers skepticism, making people more pliable, according to one study. Who wants employees with lower levels of skepticism making decisions? Meanwhile, humidity makes people sleepy and lose concentration. Again, that’s a terrible time to work.

4. It’s COLD

Oh, the irony. People who are cold also lose concentration, and given the prevalence of thermostat wars in most buildings, this can be a real problem. A Cornell University study that took place in an insurance office found that when temperatures were low, employees committed 44% more typing errors than when the office was a warm 77 degrees. The report said that employers also experienced a 10% drop in productivity when workers are freezing thanks to hyperactive AC. When you are cold, you can’t think.

5. It’s the Beginning of the (Fiscal) Year

Many companies go through a mad rush to finish projects as June 30 approaches. Then, in July, new planning begins. That has traditionally made July a time where many workers relax a bit from the end-of-year crunch, and also wait for new marching orders. Of course, this only applies to firms with taxyears that span July 1 to June 30. But even if your firm interacts with a firm that uses a fiscal year, this can impact you. Which leads to the next point…

6. Everybody Else Is on Vacation

It’s really hard to get things done when nobody else is around. Try scheduling a meeting in Germany on a Friday afternoon — or for that matter on a summer Friday in New York City — and you’ll see what I mean. This shows the wisdom of August holidays that are adopted to a greater or lesser degree around Europe. When everyone agrees to take off at the same time, there’s a lot less frustration about the inability to get things done. And that leads to the final, contentious point about summer slowdowns …

7. The Summer Hours …?

A small number of companies in select industries — like New York publishing houses — close their offices on Friday afternoons in the summer. Born of tradition, workers tend to love these policies, as they can have a chance to beat the Friday afternoon rush hour traffic on their way to the beach. But they are not without controversy. Obviously, no-Friday-afternoons mean less productivity, right? That’s what the firm Captivate says it found when it surveyed summer hour workers. In fact, early Fridays make workers stressed out, the firm says – because they have to work that much harder earlier in the week. Some 23% of those who make up for fewer Friday hours by working more hours from Monday to Thursday report that their stress levels increase, according to Captivate.

“On the face of it, summer hours probably seem like a terrific idea and are welcome by all,” Mike DiFranza, president of Captivate Network, which manages office elevator displays, said in a press release. “Unfortunately, the impact is almost uniformly negative. Given the state of the economy and the unease felt by many workers, perhaps it’s time to reconsider these types of policies.”

Not everyone agrees.

Plenty of studies separate “hours worked” and productivity. The OECD found that workers in Greece clock 2,034 hours a year versus 1,397 in Germany, for example, but Germans’ productivity is 70% higher. So giving people a couple of free hours on a Friday just makes them that much more focused during the week, this line of thinking argues. Meanwhile, possible woe to the firm that is inflexible on summer Fridays. In a study that directly contradicts the Captivate one, a firm named Workplace Options found more than half of workers say there is no summer slowdown, but young employees look for perks like flexible summer schedules, that let them get away early when they have to.

So, theoretically, firms that don’t allow flex time – that is, beat the traffic to the beach time – could find their best workers heading out the door permanently. (If you are looking to change jobs, you may want to check your credit since some employers pull a version of your credit report as part of their application process. You can pull your credit reports for free each year at AnnualCreditReport.com andsee a free credit report summary each month on Credit.com. And you go here to learn how to dispute any errors you may find on your credit reports.)

In any event, it can be a good idea to take your vacation days in the summer. Enjoy the sun. The week after Labor Day is going to be frantic, whether you take vacation or not, so you might as well make the best of it.

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We’ve written a lot recently about the disappearing starter home. A combination of rising prices, aggressive investors, and flat incomes are turning America into a nation of renters … and making things very hard on young people just starting out.

But there are still communities where plenty of starter homes are for sale — hundreds of them, around the country. Working with data provided by RealtyTrac, Credit.com has crunched the numbers and developed a robust list of ZIP codes where nearly all homes cost less than $200,000, well below the national median list price of $250,000. In fact, there are 515 ZIP codes in the U.S. where at least 95% of homes sold between January and May this year were under $200,000, according to the data. (And more than 1,000 where at least 90% were sold for $200,000 or less).

Price alone doesn’t indicate affordability, however. In some places, $200,000 sounds ridiculously cheap; in others, it’s out of reach even for folks earning more than the local average. So we fine-tuned the list by requiring that the local median income was 125% of the national median income ($53,657). In other words, we found places with cheaper-than-average homes and higher-than-average incomes.

And even by those high-income standards, there are still more than 60 places in the U.S. — most east of the Mississippi — where the vast majority of homes sold cost under $200,000.

Places like Magnolia, Delaware, near Dover, make the cut. There, the median sale price this year has been around $162,000, while the median income is around $74,000. And Manchester, Pennsylvania, near York, with homes selling for close to $129,000, and incomes are at around $73,000. Racine, Wisconsin, made the list, too (homes about $97,000, incomes about $67,000). Smaller towns near Chicago, St. Louis, Detroit, and Philadelphia are also on the list.

“Certainly the list is a demonstration that there are plenty of affordable housing markets in the country, just most of them east of the Mississippi. Maybe the message from this is ‘Go east, young homebuyer,’” said Daren Bloomquist, vice president of RealtyTrac.

(This story first appeared on Credit.com. Read it there.)

As you look at the list, here’s a general rule to keep in mind. Places were the ratio of home price to income is greater than 4 begin to become unaffordable, while a ratio of 3 would be considered very affordable. So if median prices are $225,000, but income in $53,000, the average earner is going to struggle to buy a home. On the other hand, if homes cost $150,000, but incomes are $50,000, that’s pretty attainable for the average-paid worker.

All hope is not lost for sub-$200,000 home seekers out West, however. If you dial down the criteria, more sub-$200,000 places appear all across the U.S. — even in California. For example, if you expand the list to include ZIP codes where only 75% of home sales were sub-$200,000, but maintain the 125% income standard, 648 ZIP codes fit the bill. Most are still in the East or the South. But Pueblo, Colorado, makes the cut ($129,000/$73,000). So does Bakersfield, California ($160,000/$73,000) So, by the way, does Pittsburgh ($142,000/$72,000), a place we’ve written about before in our Real Cost of Living series as does Hebron, Ohio, near Columbus, which we’ve also spotlighted ($143,000/$68,000).

All income data, was taken from the 2014 U.S. Census.

List I compiled using RealtyTrac data.l

List I compiled using RealtyTrac data.

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This Post-Dispatch story does the best job of providing context. Click to read it.

This Post-Dispatch story does the best job of providing context. Click to read it.

Baseball has long celebrated cheating, but electronic cheating just sent a former team front-office worker to prison for nearly four years.

Former St. Louis Cardinals scouting director Chris Correa, who earlier pled guilty to using old passwords to access a former team’s scouting database, was sentenced to 46 months in jail on Monday. Correa broke into the Houston Astros’ computer systems repeatedly, stealing data. He had previously worked for the Astros.

Correa has been dubbed a hacker by sports media, but he simply made educated guesses to break into his old team’s computer database, mainly to download scouting intelligence that might help the Cardinals gain insight into players the Astros wanted to draft or trade for.

The long sentence was tied to the economic loss “suffered” by the Astros…and here things get confusing. According to STLToday.com, federal prosecutors essentially calculated how much money the Astros spent developing the data in their player database.

Assistant U.S. Attorney Michael Chu, who handled the hearing, listed the formula used to arrive at $1.7 million.

“But since much of the data that we looked at focused on the 2013 draft, what we did was we took the number of players that he looked at by 200 and we divided that by the number of players that were eligible to be drafted that year, and we multiplied that times the scouting budget of the Astros that year. That comes to $1.7 million,” he said.

That kind of loss meant a sentence of 36-48 months, according to federal guidelines.

That kind of jail time sounds like a lot for what some might consider the equivalent of stealing a third-base coach’s signs…particularly when you hear about rapists getting 6-month sentences…but it is not out of line with many computer criminal punishments.

There has long been debate about fairness in hacker sentencing, a debate that reached fever pitch after Aaron Swartz for “hacking” research and received a 30-year sentence and ultimately committed suicide.

Again, Correa is no hacker.  When I talked to Morey Haber, vice president of technology at BeyondTrust, he sharply defended the sentence.

“Yes, there is a certain amount of cheating that goes on (in sports), but that’s during the game,” he said. “This is corporate espionage. It’s no different from hacking a bank…It’s no different than if you went from Lockheed Martin to Northrup Grumman (and hacked into your old employer)….It’s not acceptable and courts are sending a strong message.”

Whatever you feel about Correa’s sentence — and hanging questions about whether or not he could have been the only one who knew about all this — there are three really important lessons to learn from the Cardinals hack.\

First, Correa actually told the judge during a hearing that he started breaking into Astros computers because he was afraid they were doing the same thing to him.  That may or may not be true. But “hacking back,” however tempting, is a crime. And it can steal several years from your life.

Second, using an old password to log into your old company — or slight variations of that — might seem like a fairly innocent thing to do. Maybe you forgot a contact phone number, or there’s a document (you wrote!) that you’d like to see one more time.  This kind of “hacking” can feel like no crime at all. It’s just a few keystrokes.

Doing that can also cost you years of your life.

Finally, to you Astros-like companies out there.  Passwords can be easily guessed.  And they can be really easily guessed by former employers who know the password tendencies of your current employees.  Look at this section of the court transcript that describes the ‘hack.’

“It was based on the name of a player who was scrawny and who would not have been thought of to succeed in the major leagues, but through effort and determination he succeeded anyway. So this user of the password just liked that name, so he just kept on using that name over the years. … Kind of like Magidson123… Or Magidson1/2,1/4,1/3.

Have a smarter authentication system than that. At least change the indicator once in a while. (That’s a baseball joke.)

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Author Rana Foroohar

Author Rana Foroohar

Rana Foroohar’s new book, Makers and Takers, is a first-class takedown of the way many American firms make money today. The book’s subtitle – The Rise of Finance and the Fall of American Business – lays out the sad paradox.  Some people make money by making things. Others make money by playing clever financial tricks with stuff that the first group makes.  In the late 20th Century, some clever folks on Wall Street realized it was far easier to make gobs of money doing the latter than the former. As just one example, Goldman Sachs not long ago was accused of helping raise Coca-Cola profits by hoarding aluminum and forcing its price higher.

A massive system of this kind of speculation was put in place, creating wild profits for “financial innovators” and wild bubble swings for everyone else.   But more fundamentally, the rewards for hard work are steered towards the wrong people – the takers, rather than the makers – and that has contributed to the growing income inequality problem that now threatens the American social fabric.

(This story first appeared on Credit.com. Read it there.)

Foroohar calls this development “financialization.” (I have called this ‘Money for Nothing’ for a long time, with full apologies to Mark Knopfler.

Credit.com asked her to explain what it means for consumers, and for the future of American business.

Me: What is financialization, and what does it mean in the (real or perceived) conflict of Wall Street vs Main Street?

Click to buy the book from Amazon.

Click to buy the book from Amazon.

Rana: Financialization is the growth in size and power of the financial sector – it creates only 4 percent of the jobs in this country, but takes 25 percent of all corporate profits, is regularly one of the top three industry lobbying forces in Washington, and has come to dictate the terms of American business, which results in a corporate focus on short term profits rather than longer term economic growth.

Is there a connection between financialization and what I’ve seen you call the “falling down” problem, where older workers lose their jobs and have to settle for lower salaries in their new jobs — or worse?

Yes — the neo-liberal philosophy of letting capital go wherever it will (which is usually where labor is cheapest) is a crucial part of how financialization works. Unfortunately, it leads to greater inequality and slower growth, as wealth is funneled to the top of the economic pyramid. Over the last 40 years, the rise of finance has correlated with fewer start-ups, less R & D spending, flat wages, and lower economic growth.

Here’s a parlor game I play with young families. A generation or two ago, if you asked parents what they hoped their kids would be, they’d give answers like doctor, pilot, maybe engineer.  Today, that’s a harder question to answer.  “App developer” doesn’t seem to offer the same prestige or security. How would you answer?

Well, today, parents might say they want their kids to be a financier — in fact, it’s the number one job choice for MBA grads, in part because wages in the financial sector have so outpaced those in other fields, as a result of the monopoly power of the financial industry.

Just what are they teaching in those MBA programs these days?

Balance sheet manipulation. As I explain in chapter 3 of my book, (one) of the biggest complaints that business leaders have about MBA education today is that it has become too focused on the short term engineering of capital, rather than innovation, industrial expertise, or a real understanding of how to nurture human talent.

Uber-rich social commenter Nick Hanauer has famously said, and repeated, that income inequality could eventually lead to an ugly pitchfork scene.  Is that where the Makers vs Takers world is headed?

If we don’t fix things, for sure. I’m a big fan of Thomas Piketty, and as he sketched so clearly and powerfully in his book, greater income inequality eventually leads to political and social instability. It doesn’t have to be that way, though. As I talk about in my book, there are countries and communities that have found better more sustainable ways to grow. Private companies in the US, for example, that aren’t under pressure from the financial markets, invest about twice as much into productive things like factory upgrades, worker training, and R & D, as similar public companies do.

Many Main Street Americans will be hearing these concepts for the first time, and it will make them feel helpless — like there’s a party they haven’t been invited to, or a game where the rules are a secret.  What can they do to react to this?

The most direct way to respond to the problem of financialization is via our retirement savings. Asset management is the fastest growing and one of the most exploitative areas of the financial sector. Actively managed funds that have higher than average fees and lower than average returns can eat up 30-60 percent of our retirement nest egg over our lifetimes. Put your money in an index fund, and forget about it.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list, or click on an advertisement, or just share the story.





 

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Click to read my story on CNBC

Click to read my story on CNBC

When I started researching age discrimination earlier this year, I thought I understood the problem fairly well.

I had no idea.

I had no idea how much the law favors corporations trying to dump older workers; and I had no idea how much casual age discrimination exists.

I am proud that I was able to call attention to this issue with a story on CNBC.com recently; amidst all the other world and market chaos going on, the story was among the site’s most popular offerings all day. It struck a nerve.

Speaking of nerve, here’s how some younger people reacted to the story:

  • “Learn personal responsibility for your life. And get a job. These babies crying about can’t find a job. It is because they are worthless.”
  • “If you’re spending 5 minutes trying to differentiate between a 6 and an 8 on an oversized monitor,…”
  • “There may be a target on the back of every experienced high salaried employee – and there needs to be…Those that are just trying to float through the last ten years of their career need to go!”
  • “I love this old person discrimination myth people have. Have fun thinking you are worth something.”

Companies coldly lay off higher-paid workers when they reorganize, and for obvious reasons, that often correlates with age. I’ll have more details about this in a later post, but I found one example of a firm that laid of thousands of workers, and employees in their 50s were  about 10 times more likely to get the axe as those in their 30s.

And that’s perfectly legal. At least at the moment, thanks to a series of Supreme Court cases that have whittled away at federal laws protecting older workers.

Older workers are a protected class, but protection against age discrimination is not as strong as protection against discrimination for race, creed, and gender provided by the Civil Rights Act.  Please click over to CNBC.com to read the rest of my story. And in this case, I think it’s worth reading the comments too.  But here, I’ll leave you with the comment the AARP offered to me for this piece:

“Age discrimination is the last form of discrimination that we are willing to accept. It’s not viewed as wrong or as serious as other forms of discrimination,” said Laurie McCann, senior attorney with the AARP Foundation Litigation. “I can make jokes about Dave’s age and no one is going to get upset,” McCann said. “If someone said something about race or gender there would be consequences, but it’s OK to keep asking someone when they are going to retire to spend more time with their grandchildren.”

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list, or click on an advertisement, or just share the story.





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Kaspersky images; click to report the report

Kaspersky images; click to report the report

There’s been a scary increase in successful ransomware attacks against large organizations this year. Specifically, hospitals have found themselves at the mercy of hackers who demand ransom payments to unlock critical system files. Recently, there have been signs that these criminals have moved on to universities, too. The University of Calgary admitted to Canadian media last month that it paid $20,000 ransom “to address system issues.”

But individuals have something new to worry about. A new report from Kaspersky Lab says its detection rate for mobile ransomware — malicious software targeting smartphones and demanding ransoms — quadrupled in one year.

It’s easy to see why phone ransomware would work. Consumers fly into a panic when their phone battery dies; imagine what it’s like to see a message saying your phone is locked, and a $100 payment is required to unlock it.

Kaspersky says some ransomware criminals simply require that mobile victims type in a iTunes gift card number to free the device. I’ve written recently about the increases use of Apple card payments for fraud.

A combination of easy, anonymous payments and off-the-shelf copycatting software tools makes mobile ransomware a new and potentially dangerous threat, both to consumers and to the companies that employ them.

The numbers tell the story: From April 2014 to March 2015, Kaspersky Lab security solutions for Android protected 35,413 users from mobile ransomware. A year later the number had increased almost four-fold to 136,532 users.

It’s unclear from the report how users encounter mobile ransomware in the first place, though at least some get it when visiting porn sites and are tricked into downloading and installing malicious software.

“The extortion model is here to stay,” Kaspersky says in its report. “Mobile ransomware emerged as a follow-up to PC ransomware and it is likely that it will be followed-up with malware targeting devices that are very different to a PC or a smartphone. These could be connected devices: like smart watches, smart TVs, and other smart products including home and in-car entertainment systems. There are a few proof-of-concepts for some of these devices, and the appearance of actual malware targeting smart devices is only a question of time.”

Kaspersly offers these tips to consumers:

Back-up is a must. If you ever thought that one day you would finally download and install that strange boring back-up software, today is the day. The sooner back-up becomes yet another rule in your day-to-day PC activity, the sooner you will become invulnerable to any kind of ransomware.

Use a reliable security solution. And when using it do not turn off the advanced security features which it most certainly has. Usually these are features that enable the detection of new ransomware based on its behavior.

Keep the software on your PC up-to-date. Most widely-used programs (Flash, Java, Chrome, Firefox, Internet Explorer, Microsoft Windows and Office) have an automatic updates feature. Keep it turned on, and don’t ignore requests from these applications for the installation of updates.

Keep an eye on files you download from the Internet. Especially from untrusted sources. In other words, if what is supposed to be an mp3 file has an .exe extension, it is definitely not a musical track but malware. The best way to be sure that everything is fine with the downloaded content is to make sure it has the right extension and has successfully passed the checks run by the protection solution on your PC.

Keep yourself informed of the new approaches cyber-crooks use to lure their victims into installing malware.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list, or click on an advertisement, or just share the story.





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