Wells Fargo sums up its business in one word: Courtesy. Others might choose a different word.

Wells Fargo sums up its business in one word: Courtesy. Others might choose a different word. (Bob Sullivan)

You probably can’t help but follow the continually unfolding fake account scandal at Wells Fargo.  When that story first broke, I wrote that the Wells way to do business – perverse incentives that encourage underpaid employees to cheat their fellow woman and man – is common.  Well, today brought more evidence of that.

And if you are gloating about not being a Wells Fargo customer, you might want to carefully examine your credit report for fake accounts.

S&P Global studied the Consumer Financial Protection Bureau’s complaint database and found — surprise! — found that Wells was actually in the middle of the pack for “unsolicited issuance of credit cards” complaints. Lots of banks with names you know had registered more complaints, even when normalized for size. I’m not naming them here because I’m unconvinced the complaints represent a large enough sample size to be meaningful — more in a moment. But here’s what you need to know:

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Click to read my story at Grow.

Click to read my story at Grow.

 

Paying down debt is a lovely idea.  Who can argue with financial advice to live a debt-free life?  But it’s bad advice — and perhaps even cruel advice — to people who struggle just to pay the bills every month. And there’s a lot of you.

Here’s the reality crushing those family monthly budgets. Real incomes have been stagnant for a generation — and according to some measures, since Americans landed a man on the Moon. Meanwhile, the price of basics like housing and health care have soared.  For example: The number of Americans who pay close to half their income on rent is up 37 percent in the past decade, and their ranks are swelling (anything over 30 percent is considered “rent-burdened.” Fifty percent is toxic).  When you start the month that far in the hole — cash flow negative, as a corporation would say — there’s no money left over to pay down credit cards and student loans.

It’s a reality that’s easy to observe. Here’s all you need to know about the fragile state of the American middle class. An online payday-type lender named Elevate Credit sees the middle class as its target market.

“Decades–long macroeconomic trends and the recent financial crisis have resulted in a growing ‘New Middle Class’ with little to no savings, urgent credit needs and limited options,” the firm says on its website.

Here’s another way to express the problem.  About 60 percent Americans are unsure they could come up with $2,000 if an emergency hit.  How could anyone in that group have cash left over at the end of the month to make extra debt payments? In fact, folks in that situation should be building up their emergency savings before making extra student loan or car loan payments.

The Pew Charitable Trusts recently tried to dig even deeper into monthly budgets to understand what was going on, and came up with more precise figures for this “more money is going out than coming in” problem. From 1996-2014, average annual housing costs for Americans swelled from $12,300 to $17,000.  Health care costs jumped from $1,119 to $2,560.  But incomes barely budged.  As a result, “slack” — or money left over at the end of the month — is disappearing from the family budget, Pew said.  On average, Americans spent 71 percent of income on the basics in 1996, and by 2014, it was 75 percent, and headed the wrong way.

No slack, no debt payments.

“This change in the expenditure-to-income ratio in the years following the financial crisis is a clear indication of why and how households feel financially strained,” Pew said.

Something has to give.

Often, that “something” is said to be a latte – an easy target as symbol of youthful spending excess.  OK, sure. Drop the Monday-Friday $4 latte habit.  But let’s be clear: That’s not going to get you out of debt. It’ll mean $20 less spending each week; or about $80 a month. Real money, for sure, but lattes aren’t digging your financial debt grave.   For many people, the basic cost of living does that.

A few years ago, I asked my website readers to mail me their monthly budgets, and thousands did….

Read the rest of the story at Grow.

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Hunting for fakes

Hunting for fakes

Anyone who’s read oddly positive online reviews or happened on Twitter users with suspiciously large followings knows that the Internet is full of fakes. Bogus followers or fake reviews aren’t just annoying — they call into question the very notion of crowdsourcing, one of the Internet’s most valuable tools.

Researchers at Carnegie Mellon University are hard at work developing automated tools to separate fake from real, attempting to restore the credibility of the wisdom of crowds. They call their new system Fraudar, a play on the word radar, and it works by detecting users who are almost certainly real. The Fraudar algorithm is open source, meaning it’s free for any company to use.

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

Those who create fake reviews and followers have long been engaged in a cat-and-mouse game with sites that facilitate sharing. Simple techniques like buying Twitter followers still work, but they are fairly easily uncovered. You’ve probably seen Twitter users with huge numbers of followers and accounts followed, for example, which is a sign that the user simply engages in follow-for-follow schemes.

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A warning message on Yahoo

A warning message on Yahoo

 

Yahoo says 500 million user accounts have been compromised, and they are telling users to change their passwords. That’s good advice, and below you’ll find better advice from security firm Sophos.

But first: For the next several days, or even weeks, beware emails that appear to come from Yahoo. Now will be a great time for phishers to trick users into following alleged “change your password” links that actually lead to hacker-controlled sites.

Now, onto the better advice:

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Yahoo's message to users

Yahoo’s message to users

It’s not the big one, but it’s close.

Yahoo confirmed on Wednesday long-suspected reports that a hacker had accessed millions of customer passwords. The number, however, is a bit shocking even to a reporter who’s been writing this same story for the past 10 years.

Five Hundred Million. For many years, I’ve prepared myself to report on a very, very large scale data compromise that would undercut the integrity of the Internet itself, and perhaps cause immediate harm to the economy. I won’t tell you what kind of event that would be, but you could probably guess.

This Yahoo news isn’t that. But it’s the closest thing to date.

Yahoo announced earlier today that 500 million user accounts had been compromised; the data stolen by a hacker believed to be working for a nation state, the firm said.

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Click to watch Elizabeth Warren at the Wells Fargo hearing.

Click to watch Elizabeth Warren at the Wells Fargo hearing.

Elizabeth Warren rightly eviscerated Wells Fargo CEO  John Stumpf at today’s hearing on that bank’s wide-ranging scandal.  She connected the dots neatly, showing that Stumpf made perhaps hundreds of millions of dollars in salary and stock while presiding over a crime involving two million fake consumer accounts.  She then made the point that a $12-per-hour teller who stole a few $20 bills would be in jail; Stumpf gets to laugh all the way to the bank.

There’s plenty more places to read about the outrage.  Start with Helaine Olen at Slate. NPR’s coverage is good, too.

But I’d like to highlight a critical element of this story that’s easy to miss in the blind rage of it all.   Victims of this massive fraud tried to stop it by suing — both individually, and as a class. But they couldn’t.  Why?

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‘Stop and spit,’ cameras seized, trumped up charges — if you don’t think above-the-law cops impact you, just wait

September 20, 2016 Cybercrime / Privacy

America is being ripped apart right now by one video after another showing unarmed African Americans killed by police.  The videos often turn into Rorschach Tests, with viewers seeing what they want to see; taken as a package, however, the depth of the problem is both obvious and undeniable. Thank goodness we have the videos.  Don’t take […]

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Alleged NYC bomber’s family had filed bankruptcy, fought years-long legal battle with city over restaurant’s late-night hours, discrimination claims

September 19, 2016 Features

The alleged NYC-area bomber and his family were engaged in a 7-year long court battle with city officials over late-night hours and accusations of ethnic prejudice at the restaurant they ran in Elizabeth N.J., and the father of the family declared bankruptcy in 2005, my review of  extensive federal court records has found. The extensive legal history paints the […]

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House flipping is back in a big way. Is that bad? (And where the most flips are)

September 19, 2016 Gotchas / Consumer

In another sign that the housing market is beginning to resemble its pre-recession heyday, house flipping is back in style. ATTOM Data Solutions released a report Thursday showing that flipping activity — buying and selling the same home within 12 months — is at its highest level in six years. More investors completed at least one house […]

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Alert: Resurgence of infected Zip files a new (old) menace to your email inbox

September 16, 2016 Cybercrime / Privacy

You’re busy, so I’ll say this fast and loud: DON’T OPEN UNEXPECTED ZIP FILES THAT ARRIVE AS EMAIL ATTACHMENTS. Suddenly, there’s a lot of them around. That advice is nearly as old as email, but as they say, everything old is new again. And the Internet is newly awash in spam sending out booby-trapped zip […]

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