Freezing Credit Will Now Be Free. Here’s Why You Should Go for It.

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Consumers will soon be able to freeze their credit files without charge. So if you have not yet frozen your files — a recommended step to foil identity theft — now is a good time to take action, consumer advocates say.

Security freezes, often called credit freezes, are “absolutely” the best way to prevent criminals from using your personal information to open new accounts in your name, said Paul Stephens, director of policy and advocacy with Privacy Rights Clearinghouse, a consumer advocacy nonprofit group.

Free freezes, which will be available next Friday, were required as part of broader financial legislation signed in May by President Trump.

Free security freezes were already available in some states and in certain situations, but the federal law requires that they be made available nationally. Two of the three major credit reporting bureaus, Equifax and TransUnion, have already abandoned the fees. The third, Experian, said it would begin offering free credit freezes next Friday. To be effective, freezes must be placed at all three bureaus.

The Federal Trade Commission says that when the law takes effect, its identity theft website will provide links to each bureau’s freeze website.

A security freeze makes it harder for criminals to use stolen information to open fraudulent new accounts, or borrow money, in your name. Credit bureaus house records of your accounts and payment history, which card companies and lenders use to decide whether you are likely to pay your bills. If you freeze your file, the bureaus will not provide information to lenders unless you “thaw” the freeze first, using a special personal identification number.

Free security freezes are becoming available more than a year after a huge data breach was discovered at Equifax. The breach compromised the personal information, including Social Security numbers, birth dates and other sensitive details, of more than 145 million people — nearly half the population of the United States.

Despite the scale of that breach, and a steady stream of other incidents, security freezes have not really caught on. An AARP survey of about 2,000 adults found that just 14 percent had frozen their credit files. (The survey, conducted in July by GfK Group using a probability-based online panel, has a margin of sampling error of plus or minus two percentage points.)

In-depth interviews with 24 consumers by researchers at the University of Michigan School of Information found that many people knew about the Equifax breach, but few had taken the step of freezing their credit files as a result.

Consumers suffer from “optimism bias,” the researchers found. They realized that the breach created risk, but did not think anything would happen to them personally. “People tend to underestimate their own risk,” said Florian Schaub, an assistant professor at the school and one of the study’s authors.

Others incorrectly assumed that because they had poor credit or little wealth, they would be unattractive targets for identity thieves. “They think: ‘I don’t have much money. I have nothing to lose,’” Mr. Schaub said. “But that’s not how identity thieves operate.”

People interviewed also cited the cost of freezes as a barrier. It can cost as much as $10 per bureau to place a freeze, and a similar fee is charged to thaw it temporarily when you want to apply for credit.

Consumer advocates hope that making freezes free will spur more consumers to use them. (The new law requires that a thaw must also be free.)

But the freeze process is not as easy as it could be, said Mike Litt, consumer campaign director for U.S. PIRG, the consumer advocacy group. He would prefer credit files to be “frozen” by default, and thawed on request. As it stands, consumers must place freezes separately at all three bureaus, and keep track of three PINs.

And because it’s not always possible to know in advance what credit bureau a lender will use, consumers typically must lift the freezes at all three bureaus when they want to apply for new credit.

Brett Merfish, a lawyer in Austin, Tex., said she froze her credit at all three bureaus several years ago, after her personal information was used to open “a steady flow” of fraudulent credit card accounts. The freeze process was “tedious,” she recalled, but ultimately effective because she no longer has problems with fake accounts. “It’s worth it to do it,” she said.

One credit bureau, TransUnion, introduced a smartphone app, myTransUnion, this month that consumers can use to more easily freeze and thaw their credit. The app is available for both Apple and Android phones. Mr. Stephens, of the Privacy Rights Clearinghouse, said he had not seen the app, but cautioned consumers to tread carefully, in case it is used to market other, fee-based products and services.

The credit bureaus also offer something called a credit “lock,” which they promote as a more convenient way to protect your information. But some offerings carry fees, and consumer advocates prefer freezes because the rules are set by law, rather than by the credit bureaus.

One other less-protective option is a fraud alert, which requires credit bureaus to contact you to verify your identity when a company requests your credit file. Under the new law, initial fraud alerts must last for one year once established. Fraud alerts are free, and, unlike the freezes, an alert placed at one bureau is automatically placed at all three.

U.S. PIRG also recommends freezing your file at a lesser-known reporting agency known as the National Consumer Telecom and Utilities Exchange. The exchange provides credit information to some cellphone, pay television and utility companies. (Some consumers have reported having cellular accounts opened in their names, even though they had placed freezes on their credit reports at the main bureaus.)

The website for the utilities exchange says its database is “housed and managed” by Equifax. But the exchange is a “distinct” entity that requires its own freeze, said Craig Caesar, outside counsel to the exchange. “A separate request to N.C.T.U.E. is required because it is a separate database,” Mr. Caesar said in an email. There is no cost for a freeze, he said.

The new law also requires credit bureaus to allow parents to create and freeze credit files for their children under 16, to prevent their identities from being misused. The Federal Trade Commission offers information on what to do.

Freezes will not protect you from other types of fraud, like someone using the number of a credit card you already have, or impersonating you online to claim your Social Security benefits. To help prevent those types of theft, Mr. Litt recommends checking your credit card statements regularly for suspicious charges, and setting up and monitoring an online Social Security account, to prevent criminals from opening one first and diverting your benefit checks. A PIRG report suggests other helpful steps as well.

Checking your credit report periodically is also wise. You are entitled to one free copy each year from the big three bureaus at annualcreditreport.com. (A security freeze will not prevent you from getting your free annual report, the F.T.C. says.)

Here are the websites to visit to set up security freezes:

TransUnion: transunion.com/credit-freeze

Experian: experian.com/freeze/center.html

Equifax: www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

National Consumer Telecom and Utilities Exchange: www.nctue.com/Consumers

Why Is College in America So Expensive?

The outrageous price of a U.S. degree is unique in the world.

college ripoffBefore the automobile, before the Statue of Liberty, before the vast majority of contemporary colleges existed, the rising cost of higher education was shocking the American conscience: “Gentlemen have to pay for their sons in one year more than they spent themselves in the whole four years of their course,” The New York Times lamented in 1875.

Decadence was to blame, the writer argued: fancy student apartments, expensive meals, and “the mania for athletic sports.”

Today, the U.S. spends more on college than almost any other country, according to the 2018 Education at a Glance report, released this week by the Organization for Economic Cooperation and Development (OECD).

All told, including the contributions of individual families and the government (in the form of student loans, grants, and other assistance), Americans spend about $30,000 per student a year—nearly twice as much as the average developed country. “The U.S. is in a class of its own,” says Andreas Schleicher, the director for education and skills at the OECD, and he does not mean this as a compliment. “Spending per student is exorbitant, and it has virtually no relationship to the value that students could possibly get in exchange.”

Only one country spends more per student, and that country is Luxembourg—where tuition is nevertheless free for students, thanks to government outlays. In fact, a third of developed countries offer college free of charge to their citizens. (And another third keep tuition very cheap—less than $2,400 a year.) The farther away you get from the United States, the more baffling it looks.

This back-to-school season, The Atlantic is investigating a classic American mystery: Why does college cost so much? And is it worth it?

At first, like the 19th-century writer of yore, I wanted to blame the curdled indulgences of campus life: fancy dormitories, climbing walls, lazy rivers, dining halls with open-fire-pit grills. And most of all—college sports. Certainly sports deserved blame.

On first glance, the new international data provide some support for this narrative. The U.S. ranks No. 1 in the world for spending on student-welfare services such as housing, meals, health care, and transportation, a category of spending that the OECD lumps together under “ancillary services.” All in all, American taxpayers and families spend about $3,370 on these services per student—more than three times the average for the developed world. One reason for this difference is that American college students are far more likely to live away from home. And living away from home is expensive, with or without a lazy river. Experts say that campuses in Canada and Europe tend to have fewer dormitories and dining halls than campuses in the U.S. “The bundle of services that an American university provides and what a French university provides are very different,” says David Feldman, an economist focused on education at William & Mary in Williamsburg, Virginia. “Reasonable people can argue about whether American universities should have these kind of services, but the fact that we do does not mark American universities as inherently inefficient. It marks them as different.” READ MORE:https://www.theatlantic.com/education/archive/2018/09/why-is-college-so-expensive-in-america/569884/

How Trump Betrays ‘Forgotten’ Americans

Screen Shot 2018-09-03 at 7.45.29 AMFrom the Supreme Court to labor organizing rules, the president undermines workers’ greatest champions.

Donald Trump promotes himself as a friend of “forgotten” workers, but in ways large and small his administration has undermined what has traditionally been the biggest champion of workers: labor unions.

Most recently, he used his authority as president to deliver a harsh Labor Day message to the 2.1 million people who work for him, canceling pay raises for the civilian employees of the federal government. In May, he issued three executive orders to weaken federal employees’ unions by, among other things, limiting the subjects they can bargain over. (On Aug. 25, a judge ruled that this move violated federal law.) In March 2017, Mr. Trump signed a law repealing an executive order signed by President Obama that sought to keep the federal government from awarding contracts to companies that violate laws protecting workers’ right to unionize, as well as wage and job safety laws.

Since taking office, Mr. Trump has installed a conservative majority on the National Labor Relations Board that has moved quickly to make it harder for unions to organize. Last December, the board overturned a rule, beloved by unions, that made it easier to organize smaller units of workers in big factories and stores. In another board decision, his appointees made it tougher for workers at fast-food restaurants and other franchised operations to unionize, although that “joint employer” ruling was vacated when a labor board member later recused himself because of a conflict of interest. The board is also looking to slow down unionization elections, a move that unions oppose because it would give corporations more time to pressure workers to vote against unionizing.

Mr. Trump’s first nominee to the Supreme Court, Neil Gorsuch, was the deciding vote in a case that delivered this year’s biggest blow to workers. In Janus v. AFSCME, the court’s conservative majority, in a 5-to-4 vote, ruled in June that government employees can’t be required to pay any fees to the unions that bargain for them. By allowing many government workers to become “free riders,” that ruling is expected to chop revenues to many public employee unions by one-tenth to one-third.

READ MORE: https://www.nytimes.com/2018/09/03/opinion/trump-labor-unions-greenhouse.html

Marijuana sellers plan big parties as California pot legalization begins

7W4TV6V23ZFBJOX2N7Z5A4UJVQLive music. Free T-shirts. A “Fweedom” celebration with mystery prize boxes worth up to $500, and a shot at a behind-the-scenes tour. Marijuana legalization arrives Monday in California with lots of hoopla, but only a handful of cities will initially have retail outlets ready to sell recreational pot. By Thursday afternoon, California had issued only 42 retail licenses. Another 150 applications were pending, and regulators planned to work a second straight weekend to review them. Los Angeles and San Francisco were late to approve local regulations, meaning no recreational pot shops there will open their doors Monday.

The lucky few outlets with licenses — mainly in San Diego, the Bay Area, the Palm Springs area and Santa Cruz — think they have an edge being first out of the gate.

But excitement about California joining the growing list of states and Washington, D.C., with legal recreational weed is tempered with the stresses of ensuring shelves are stocked in the face of uncertain demand. The state issued its first 20 retail licenses two weeks ago and an additional 22 have trickled out since, some for already established medical marijuana businesses that have thrived in California for two decades and will continue.

Alex Traverso, a spokesman for the California Bureau of Cannabis Control, said a dozen employees were vetting applications to “issue as many licenses as we can” in the coming days.

The temporary permits represent just a sliver of the thousands of licenses expected to eventually be issued for retail recreational sales. Local permits are a prerequisite for the state licenses, and many cities — including Los Angeles, San Francisco and Long Beach — have yet to issue any local rules, putting huge swaths of the state on the sidelines for opening day. The Palm Springs area had nine of the state’s first retail licenses, including seven in Cathedral City, population 54,000.

San Diego had eight. Santa Cruz and San Jose had four each, and others were scattered around the Bay Area and the state’s northern reaches. An outlet known as Caliva in San Jose is promoting the “Fweedom” celebration Monday with the prize boxes and exclusive tours of its growing areas, along with massages, acupuncture, waffle desserts and music with “mellow beats.”

A county supervisor will attend a 7 a.m. ribbon-cutting ceremony at Kind Peoples in Santa Cruz. Its chief executive, Khalil Moutawakkil, said pot has long been “a huge part” of the culture of the oceanfront college town.

Berkeley Patients Group, which opened as a medical marijuana dispensary in 1999 and has received a permit for recreational sales, expects lines around the block to mark opening day. The mayor of the city is expected at a ribbon-cutting ceremony at 6 a.m.

“You’ll see the people who have been consumers for decades and they were for legalization back in the ’60s,” said Sean Luse, chief operating officer. “But you’re also going to see a more mainstream group of people who were waiting for the green light.”

Harborside is planning brass bands at its locations in Oakland and San Jose, with flags and T-shirts for the first 100 people in line.

A few outlets with recreational licenses are passing on the hoopla.

For them, excitement at being first out of the gate is tempered with the stresses of complying with new regulations. Golden State Greens, with a modest storefront amid car repair shops and budget hotels in San Diego, houses a bustling business that has sold marijuana for medical purposes since 2015. It will open its doors at 7 a.m. Monday, like it does every other day of the year.

After California voters approved recreational weed last year, the shop changed its name from Point Loma Patients Consumer Cooperative, reflecting its ambitions for a broader clientele. “We’re planning for the worst and hoping for the best,” said Adam Knopf, its chief executive. “There are a lot of unknown factors but we’re prepared.”

Gary Cherlin, chief executive of Desert Organic Solutions Collective in North Palm Springs, received holiday news of his recreational sales permit as he devised promotional packages with hotels aimed at tourists who come for warm winters. He said being among the first shops to sell recreational pot means less competition.

“I don’t know how many more are coming but they don’t have a lot of time left,” he said.

Mount Shasta Patients Collective, which opened three years ago in the northern part of the state as a medical dispensary, has already turned away people coming for recreational pot.

Others with medical marijuana cards have been stocking up ahead of price increases expected after recreational weed is legal.

“We’ll have all hands on deck,” general manager Austin Freeman said of opening day. “It could be really hectic.”

The Trump Administration to Restaurants: Take the Tips!

Most Americans assume that when they leave a tip for waiters and bcapital-one-credit-cardartenders, those workers pocket the money. That could become wishful thinking under a Trump administration proposal that would give restaurants and other businesses complete control over the tips earned by their employees.

The Department of Labor recently proposed allowing employers to pool tips and use them as they see fit as long as all of their workers are paid at least the minimum wage, which is $7.25 an hour nationally and higher in some states and cities. Officials argue that this will free restaurants to use some of the tip money to reward lowly dishwashers, line cooks and other workers who toil in the less glamorous quarters and presumably make less than servers who get tips. Using tips to compensate all employees sounds like a worthy cause, but a simple reading of the government’s proposal makes clear that business owners would have no obligation to use the money in this way. They would be free to pocket some or all of that cash, spend it to spiff up the dining room or use it to underwrite $2 margaritas at happy hour. And that’s what makes this proposal so disturbing.

The 3.2 million Americans who work as waiters, waitresses and bartenders include some of the lowest-compensated working people in the country. The median hourly wage for waiters and waitresses was $9.61 an hour last year, according to the Bureau of Labor Statistics. Further, there is a sordid history of restaurant owners who steal tips, and of settlements in which they have agreed to repay workers millions of dollars.

6 Ways to Be Better at Money in 2018

capital-one-credit-cardWelcome to the Smarter Living newsletter. Editor Tim Herrera emails readers once a week with tips and advice for living a better, more fulfilling life. Sign up here to get it in your inbox every Monday morning. Though there’s never a wrong time to get your finances in order, a new year is the perfect excuse to take a deep look at your relationship with money. Whether you’re just starting out in your career or you’re nearing retirement, below is The Times best financial advice from this year on earning and saving more money and, more important, deciding what to do with all of it.

Save a little extra money every week

No, cutting out that indulgent, extra-fancy coffee once a week won’t make you a millionaire, but those small savings truly do add up over time. Find where you’re nickel-and-diming yourself, then see what you can stand to eliminate. Read more »

News About Obamacare Has Been Bad Lately. How Bad?

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Ever since passage of the Affordable Care Act, a fierce debate has been waged over whether the law would work as advertised. While advocates promised that the design of new insurance markets would transform the way consumers buy health insurance, critics warned that the new market would never succeed. Reed Abelson and Margot Sanger-Katz have had front-row seats to the debate, and the two reporters took a few minutes to discuss when — and if — the market would stabilize.

Margot: It’s been a few weeks of bad news about the Obamacare marketplaces. On Friday, we learned that UnitedHealth has decided to pull out of Obamacare marketplaces in two states. The week before, the Blue Cross and Blue Shield Association put out a paper offering not-too-subtle hints that some members were losing money. Reed, you wrote recently about how surprising stasis in the employer insurance market means we can look forward to much smaller Obamacare marketplaces than most people expected when the health law passed. And the parade of struggling start-up insurer companies has extended to Maine’s Community Health Options, one of the co-ops that had long been held up as one of the most successful. Health insurers need to submit their rates to regulators in the next few weeks — or decide to exit markets. Should we be worried about a health insurance apocalypse?

Reed: I think people have a tendency to catastrophize, especially when it comes to Obamacare. UnitedHealth, which is one of the nation’s largest health insurers, has only reluctantly embraced the new market, and the company is always held up as an example of why the sky is falling and why Obamacare is going to crash and burn: If United can’t make it, no one can.

United has only a small fraction of the individual market, but some of the Blues are also struggling. What is most troubling is the fact that many insurers are losing money. You may not sympathize much with the insurance companies — and no one does — but they have to make enough money to pay claims. Do you think those losses are temporary — or a sign that the market is fundamentally unstable and potentially unsustainable?

Margot: I think some of both. It seems clear that some insurers just made pricing mistakes. I’d include a lot of the nonprofit co-op plans that have gone belly up in that category. United may fall in that category, too, in some places. That doesn’t seem to me like a permanent problem. If everyone priced too low, they can just raise their prices in future years, and it’ll be O.K. That’s not great for middle-class people who pay their own premiums, but most people in the exchanges won’t notice a difference because of the way the subsidies work.

These markets also turned out to be more complicated than some insurers expected. Some regulatory choices didn’t go their way. And it does look as if more customers than you might expect are staying enrolled in plans for only part of the year, which makes it hard for the insurers to collect premiums. But I think they’ll probably figure it out.

Reed: But isn’t it a vicious cycle? The big players won’t stay in markets unless they can attract enough customers to make it worth their while. Those who say Obamacare is doomed argue that the premiums are just too high for people who don’t qualify for a subsidy. If you are insured and relatively healthy, you may not feel as if the coverage is a good deal. The deductibles are steep, meaning you end up paying for a lot of your care before you see the first dollar of coverage, and you can’t always see your choice of doctor.

The result is that the market could be too small and therefore too volatile to attract mainstream insurers like United.

How do you solve that?

Margot: Well, it seems clear that you need some competition in every market to keep prices low. But maybe we don’t need the big carriers to play everywhere. As you noted, United barely showed up in the exchanges in the first place, and customers in most markets still have a lot of choices. The Medicaid-managed care plans seem to be having some success in this market, so maybe they will be a big part of the exchange mix.

I also think it’s worth looking at the states where things are going well and the insurers are making money: California, Vermont, Washington. Those state exchanges made some different regulatory choices early on that got more people into the new markets right away, so their markets stabilized more quickly.

Reed: You’re right that you may not need the established players for the market to work. The market may not look the way we thought it would, with the same insurers and same characteristics as the employer market. But one of the reasons insurers are leaving is because of the market’s instability. There’s tremendous churn in this market, with most people switching plans every year to try to find a cheaper alternative.

I’m not sure I know what the business model is for an insurer, if the expectation is that you’re going to keep your customers for only a year. It makes achieving long-term goals like keeping people healthier and focusing on preventive measures much harder because there may be no payoff for the insurer.

Margot: Yes, I think this is one of the contradictions of the Affordable Care Act’s design. The whole idea was that competition between the insurance companies would help to hold down prices, the way it does for, say, electronics or groceries. In order for that system to work, you need people to actually switch plans if their plan starts charging more than the competition. The fact that people are actually switching seems like a sign that this market is functioning as it was designed. But as you point out, all that churn sure makes it hard for an insurer to make money by investing in its customers’ long-term health. But the individual market, pre-Obamacare, also had a lot of churn.

Reed: Yes, there’s always been churn, but the insurers got pretty good at figuring out which people they wanted to insure by turning away the people who were most likely to cost them the most money. They definitely figured out how to make money.

It’s easier to smooth all of this out if you insure more people. Do you think there’s opportunity to see the market increase in size? I know insurers in the early years suffered when some states allowed people to keep their existing plans. Those plans that were grandmothered, as it is called.

Margot: My sense from talking to folks in the industry is that the grandmothered plans really wrecked their early calculations. The Obama administration, responding to a political freakout about people whose plans were getting canceled in 2014, let states keep them for a few more years. The result was that healthy people tended to hold onto their old, cheaper plans, while sick people went to the exchanges. You can see how that might make the exchange market unprofitable for new entrants.

I do think the market size is a bit of a chicken-or-egg question. Your story last week on stability in the employer market did such a good job of laying this out. Everyone (including the Congressional Budget Office) expected that employers would start dropping coverage once the marketplaces were up and running. That didn’t happen. It means that Obamacare has been much less disruptive to the status quo than many people thought. But it also means that the exchange markets are smaller and probably more expensive than people thought, too. If prices keep going up, maybe they’ll never grow much. It certainly seems like everyone is cutting down their long-term estimates for exchange enrollment.

Reed: The other possibility would be to expand the pool of people who qualify for subsidies. Is that a political nonstarter?

Continue reading the main story

Margot: It’s such an interesting question. Every time I write a story about the health law, I get comments and emails from people just above the income cutoff for subsidies. These are the people who have been most hurt by the health law. Plans on the exchanges are just really expensive for them, and often come with big deductibles, too. And if premiums keep rising, they’ll keep getting squeezed. Analysts from the Urban Institute have done the math and found that some of them are paying more than 25 percent of their income on health care now. Still, it is awfully hard to imagine Congress approving massive new spending to make Obamacare more generous. Hillary Clinton has some proposals about affordability, but they don’t include expanding subsidies.

Reed: One of the strengths of the law, and its main weakness, is its emphasis on keeping the status quo. While President Obama may have overpromised when he said you can keep your plan if you like it, the insurance isn’t radically different. The only way companies can seem to bring down prices is by narrowing networks of hospitals and doctors or hiking deductibles. While Bernie Sanders seems to be offering the most dramatic change by proposing that everyone switch to a government plan like Medicare, I’m still looking for a market response — some real change in how care is delivered that is much less expensive or at least more effective.

Margot: This is the thing I say whenever anyone asks me what I think about the health law. It basically baked in all of the complexity and dysfunction of the pre-existing American health care system.

Reed: We’re heading into the season when insurers and state regulators start talking about next year. Any thoughts on what we might expect?

Margot: I’m expecting them to ask for rate increases! The insurance companies are doing everything they can to broadcast their intentions to charge more. There are reasons we should expect the plans to do so even if the markets were already stable. Some of the early training-wheel programs set up by the law expire, which means the plans have to pay out more claims for really expensive patients. Last week, I heard Peter Lee, who runs Covered California, the most stable market of all, say he’s expecting bigger rate hikes next year than the last two. The Department of Health and Human Services has even signaled it expects rates to go up. This week, it put out a research paper to remind the public that requests to hike rates don’t always matter for individual consumers.

What will you be keeping your eyes open for to shape your thinking about how these markets will do long term?

Reed: We should keep watching for the exits.

But we should also look at what happens with some of the newer players, like Oscar, the for-profit company in New York that has a lot of capital. And I know that some of the big health systems — I’m thinking of another hometown player, Northwell Health, formerly North Shore-LIJ Health System — have started offering plans. Some of these systems, like Northwell, have had some success in attracting customers and think they can make a go of it.

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And we should watch the Department of Justice. If it approves some of those big health insurance mergers like Anthem and Cigna and Aetna and Humana, my guess is those companies will not be leaving the marketplaces anytime soon.