الجمعة، 17 مايو 2019
Whataburger explores possible sale of popular burger chain
Source Business - poconorecord.com http://bit.ly/2HBG7v5
Is a Gap Year Better Financially Than Going Straight to College?
Nathan writes in:
I am entering my senior year in high school next fall. My parents want me to go to college in the fall right after graduation. They have some savings for me but I will have to add some student loans. I want to take a gap year or two and work full time. I would put that money aside for college and figure out what I want to do because I don’t know what I want to study. Is it better to graduate a year later with no student loans or go straight to college after high school with student loans and go straight to a job with better pay?
This is a really great question from a well-spoken high school student. I have a feeling that Nathan, with his ability to think through situations and his ability to present them this well, will do just fine in whatever he chooses to do.
The question you’re asking, in essence, is whether or not the relatively low earnings you might bring in during a “gap year” right after high school, when applied to college tuition, is more financially valuable than starting in your career path a year early.
That question is loaded with a ton of assumptions. You have to assume how much you’d earn during that year off and what portion of that you’d actually save. You have to assume how much you’d earn after graduating and what portion of that you would immediately be able to apply to student loans. There’s also the issue of a changed career trajectory – would the “gap year” change your overall career trajectory in a positive direction, improving your post-graduation annual salary?
Let’s look at the easy question: does a gap year help you with your career trajectory? If a gap year can actually improve your career path, then it should be a no-brainer, right?
According to the clearest data I could find, a “gap year” can help if you use it in a way that genuinely improves your college results by helping you get into a better school, clarifying what you want to do in school, and helping you build a better work ethic. However, the benefits of a gap year seem to be heavily tied to how you spend that year. The best outcomes seem to come not from working at a job in your hometown for a year, but engaging in a program like Americorps for a year.
I’m not going to get into the nuances of a gap year, but it seems that the most benefits from a gap year aren’t correlated with maximizing income during that gap year but rather maximizing rewarding experiences and personal insight during that year. In other words, a gap year offers the best career outcomes when the primary goal is rewarding experience and helping you figure out your goals rather than just maximizing income. It is unclear whether a gap year of this type is a net positive financially, but it does seem to be a pretty strong net positive in terms of college performance and happiness with one’s career choices. Sarah and I are open to the idea of our own children taking a gap year for this very purpose – life experience and figuring things out, not earning income.
Let’s get down to the dollars and cents of it, though. Let’s say, for example, that you took a year and worked 50 weeks full time at a job paying $10 an hour while living at home. You’d earn $20,000 – let’s assume after taxes and some minimal expenses, you were able to bank $12,000 of it.
That $12,000 would theoretically cut out $12,000 in student loans. Student loan rates seem to be somewhere around 5% right now, and most loans are on a ten year repayment schedule. That ends up totaling $15,367 in student loan repayment over the lifetime of that loan.
That’s what a gap year focused on income saves you, but what does it cost you? In terms of your career, it essentially costs you a year in retirement, assuming you would have the same length of career as you would otherwise. However, if you were to assume that you stick that $127 a month for the first ten years that would have been your student loan payments into a retirement account that returns an average of 7% year, you wind up with an extra $200,000 in your retirement coffers, which actually lets you retire a year or two earlier than if you didn’t take that gap year as you’ll hit your target retirement number at a younger age.
The issue with these kinds of calculations, however, is that it assumes perfect financial behavior on your part. It assumes that you’ll work a full time job for 50 weeks during that gap year. It assumes that you’d contribute that now-nonexistent student loan payment to your retirement account rather than spending it. It assumes your lifelong financial path will be smooth.
In my eyes, this exercise reveals two things.
One, the decision of whether or not to take a “gap year” is less important in the end than the commitment to lifelong smart financial choices. If you commit to spending less than you earn every year of your life and doing something smart with the difference and if you commit to using windfalls and extra sources of money for wise things like debt elimination and retirement savings, you’ll blow away the financial difference between a gap year of working for money and going straight to college after school.
I think this is a really key lesson that applies to almost everyone. Making wise financial choices day in and day out trumps almost any life choice you might make. If you consistently spend less than you earn, eliminate debts and avoid high interest consumer debt, and get into a situation where you’re not relying on loans for cars or eventually a home, your good financial choices will trump most of the life and career choices you might make.
I really like the old Charles Dickens quote from David Copperfield:
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
It’s as true then as it is now: consistent smart financial choices, starting with spending less than you earn, is incredibly important for a stable life and trumps most life and career choices.
Two, in terms of maximizing the benefit of a gap year in terms of your career and quality of life, the focus of your gap year should be quality experiences and personal growth, not the wages of a 40 hour a week job. A gap year that focuses on quality experiences, figuring yourself out, maturing, and getting a grip on what you actually want to do with your life seems to strongly correlate with better academic performance in college.
In the end, it comes down to your own personality and situation. Do you know what you want to do with your life? Do you have good personal habits when it comes to being self-motivated? The more sure you are about your future and your own habits, the more sense it makes to go straight to college. However, if I were making a recommendation to my own children when they were unsure about what to do next after high school, I would probably encourage them, if they were reasonably mature, to consider taking a gap year and figure out their plans going forward while getting quality experiences through a program like Americorps.
Good luck, Nathan, but I think you’ll be fine either way.
The post Is a Gap Year Better Financially Than Going Straight to College? appeared first on The Simple Dollar.
Source The Simple Dollar http://bit.ly/2w5ptyA
Do Americans Really Spend $1,500 a Month on Nonessentials? Probably Not
Your latest hate-click was likely brought to you by USA Today, which recently highlighted a survey that says you spend $18,000 on “nonessentials” — including way too much on lunch.
The article, which was promptly ratioed on Twitter, is based off a survey commissioned by life insurance company Ladder and claims that “Americans are spending a small fortune on treats that are ultimately stripping them of the opportunity to save and use their money more responsibly.”
Among its findings: The average American spends $177.88 on meal delivery, $96.11 on rideshares and $93.96 on subscription boxes every month.
Any true Penny Hoarder would look at these numbers and roll their eyes so furiously they might end up on the floor
Luckily, the government, specifically the U.S. Bureau of Labor Statistics, already tracks spending in its consumer expenditure survey. And its data, which is available each quarter and includes in-depth interviews with more than 7,000 people compared to the 2,000 in the survey.
(Click here to check out the last time we put a USA Today article on blast.)
In the U.S., the average household spends about $333 on eating out each month — if you include alcohol — according to the BLS. That’s less than half the $749 the Ladder survey says an individual American spends on restaurants, takeout and drinks with friends.
As far as lunch goes, U.S. consumers spend a little over $78 a month when they forget the whole meal prep thing, says BLS data. The survey number is more than double that — $173.62.
Again, that number is only for a single person!
Pro Tip
Meal prepping doesn’t have to mean five days of the same old meal. Use a variety of spices and sides to zest up your weekly prep.
And about that rideshare statistic of $96 a month? The average household, according to the BLS, actually spends about $64 a month on public and other transportation, which includes taxis, Uber or Lyft. For “personal grooming,” which doesn’t include gym memberships, the survey’s estimate of $94.25 is about 50% greater than what the government tracks.
The Ladder survey is ostensibly to prove that you can actually afford life insurance so long as you do away with frivolous spending. The piece follows a recent trend of articles that we’ll call “consumption shaming.” Usually, these focus on millennials (even though we found that millennials are actually thriftier than boomers).
Sallie Krawcheck, CEO and co-founder of Ellevest, called out this phenomenon — specifically related to women — in a recent Fast Company column. In it, she focuses on the trope about how simply not buying your daily latté will help you save thousands.
“All this nonsense about lattes and shoes is shifting the attention — and thus the blame — for the underlying systemic money challenges women face, to the women themselves,” she writes. “The pink tax, the wage gap, the debt gap, the funding gap, the domestic work (and emotional labor) gap, and — my personal crusade — the investing gap.”
Still, despite the whack numbers from the survey that don’t even touch reality, Penny Hoarders know there are always ways to cut back — no shaming necessary. Okay, some shaming: In a recent survey with a representative sample of the U.S., we found that 40% of Americans don’t keep a budget.
That’s a great place to find areas where you can reduce spending without depriving yourself of all happiness. The Penny Hoarder Academy’s Budgeting 101 program can help you find a budget you’ll be more likely to stick to.
Once you nail down a budget, you can start thinking about debt repayment, automating your finances and developing a holistic, budget-conscious lifestyle.
Oh, and for the record, Americans do make room in their budget for life insurance. They spend more than $400 a year, according to government data.
Alex Mahadevan is a data journalist at The Penny Hoarder. Follow him on Twitter @AlexMahadevan to read more rants about questionable data.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
source The Penny Hoarder http://bit.ly/2WdR4vY
How to Optimize Your Robots.txt File
SEO goes far and beyond keyword research and building backlinks. There is also a technical side of SEO that will largely impact your search ranking.
This is an area where your robots.txt file will become a factor.
In my experience, most people aren’t too familiar with robots.txt files and don’t know where to begin. That’s what inspired me to create this guide.
Let’s start with the basics. What exactly is a robots.txt file?
When a search engine bot is crawling a website, it uses the robots.txt file to determine what parts of the site need to be indexed.
Sitemaps are hosted in your root folder and in the robots.txt file. You create a sitemap to make it easier for search engines to index your content.
Think of your robots.txt file like a guide or instruction manual for bots. It’s a guide that has rules that they need to follow. These rules will tell crawlers what they’re allowed to view (like the pages on your sitemap) and what parts of your site are restricted.
If your robots.txt file isn’t optimized properly, it can cause major SEO problems for your website.
That’s why it’s important for you to understand exactly how this works and what you need to do to ensure that this technical component of your website is helping you, as opposed to hurting you.
Find your robots.txt file
Before you do anything, the first step is verifying that you have a robots.txt file to begin with. Some of you probably never came here before.
The easiest way to see if your site already has one is by putting your website’s URL into a web browser, followed by /robots.txt.
Here’s what it looks like for Quick Sprout.
When you do this, one of three things will happen.
- You’ll find a robots.txt file that looks something like the one above. (Although if you’ve never taken the time to optimize it, then it probably isn’t as in-depth).
- You’ll find a robots.txt file that’s completely blank, but at least set up.
- You’ll get a 404 error because that page doesn’t exist.
Most of you will likely fall into the top two scenarios. You shouldn’t get a 404 error because the majority of websites will have a robots.txt file setup by default when the site was created. Those default settings should still be there if you’ve never made any changes.
To create or edit this file, just navigate to the root folder of your website.
Modify your robots.txt content
For the most part, you normally don’t want to mess around with this too much. It’s not something that you’re going to be altering on a frequent basis.
The only reason why you would want to add something to your robots.txt file is if there are certain pages on your website that you don’t want bots to crawl and index.
You need to get familiar with the syntax used for commands. So open up a plain text editor to write the syntax.
I’ll cover the syntax that’s most commonly used.
First, you need to identify the crawlers. This is referred to as the User-agent.
User-agent: *
This syntax above refers to all search engine crawlers (Google, Yahoo, Bing, etc.)
User-agent: Googlebot
As the name implies, this value is speaking directly to Google’s crawlers.
After you identify the crawler, you can allow or disallow content on your site. Here’s an example that we saw earlier in the Quick Sprout robots.txt file.
User-agent: *
Disallow: /wp-content/
This page is used for our administrative backend for WordPress. So this command tells all crawlers (User-agent: *) not to crawl that page. There’s no reason for the bots to waste time crawling that.
So let’s say you want to tell all bots not to crawl this specific page on your website. http://bit.ly/2w1An8s
The syntax would look like this:
User-agent: *
Disallow: /samplepage1/
Here’s another example:
Disallow: /*.gif$
This would block a specific file type (in this case .gif). You can refer to this chart from Google for more common rules and examples.
The concept is very straightforward.
If you want to disallow pages, files, or content on your site from all crawlers (or specific crawlers) then you just need to find the proper syntax command and add it to your plain text editor.
Once you’ve finished writing the commands, simply copy and paste that into your robots.txt file.
Why the robots.txt file needs to be optimized
I know what some of you are thinking. Why in the world would I want to mess around with any of this?
Here’s what you need to understand. The purpose of your robots.txt file isn’t to completely block pages or site content from a search engine.
Instead, you’re just trying to maximize the efficiency of their crawl budgets. All you’re doing is telling the bots that they don’t need to crawl pages that aren’t made for the public.
Here’s a summary of how Google’s crawl budget works.
It’s broken down into two parts:
- Crawl rate limit
- Crawl demand
The crawl rate limit represents how many connections a crawler can make to any given site. This also includes the amount of time between fetches.
Websites that respond quickly have a higher crawl rate limit, which means they can have more connections with the bot. On the other hand, sites that slow down as the result of crawling will not be crawled as frequently.
Sites are also crawled based on demand. This means that popular websites are crawled on a more frequent basis. On the flip side, sites that aren’t popular or updated frequently won’t be crawled as often, even if the crawl rate limit has not been met.
By optimizing your robots.txt file, you’re making the job of the crawlers much easier. According to Google, these are some examples of elements that affect crawl budgets:
- Session identifiers
- Faceted navigation
- Error pages
- Pages that have been hacked
- Duplicate content
- Infinite spaces and proxies
- Low-quality content
- Spam
By using the robots.txt file to disallow this type of content from crawlers, it ensures that they spend more time discovering and indexing the top content on your website.
Here’s a visual comparison of sites with and without an optimized robots.txt file.
A search engine crawler will spend more time, and therefore more of the crawl budget, on the left website. But the site on the right ensures that only the top content is being crawled.
Here’s a scenario where you’d want to take advantage of the robots.txt file.
As I’m sure you know, duplicate content is harmful to SEO. But there are certain times when it’s necessary to have on your website. For example, some of you might have printer-friendly versions of specific pages. That’s duplicate content. So you can tell bots not to crawl that printer-friendly page by optimizing your robots.txt syntax.
Testing your robots.txt file
Once you’ve found, modified, and optimized your robots.txt file, it’s time to test everything to make sure that it’s working properly.
In order to do this, you’ll need to sign into your Google Webmasters account. Navigate to “crawl” from your dashboard.
This will expand the menu.
Once expanded, you’re going to look for the “robots.txt Tester” option.
Then simply click the “test” button in the bottom right corner of the screen.
If there are any problems, you can just edit the syntax directly in the tester. Continue running the tests until everything is smooth.
Be aware that changes made in the tester do not get saved to your website. So you’ll need to make sure you copy and paste any changes into your actual robots.txt file.
It’s also worth noting that this tool is only for testing Google bots and crawlers. It won’t be able to predict how other search engines will read your robots.txt file.
Considering that Google controls 89.95% of the global search engine market share, I don’t think you need to run these tests using any other tools. But I’ll leave that decision up to you.
Robots.txt best practices
Your robots.txt file needs to be named “robots.txt” in order to be found. It’s case-sensitive, meaning Robots.txt or robots.TXT would not be acceptable.
The robots.txt file must always be in the root folder of your website in a top-level directory of the host.
Anyone can see your robots.txt file. All they need to do is type in the name of your website URL with /robots.txt after the root domain to view it. So don’t use this to be sneaky or deceptive, since it’s essentially public information.
For the most part, I wouldn’t recommend making specific rules for different search engine crawlers. I can’t see the benefit of having a certain set of rules for Google, and another set of rules for Bing. It’s much less confusing if your rules apply to all user-agents.
Adding a disallow syntax to your robots.txt file won’t prevent that page from being indexed. Instead, you’d have to use a noindex tag.
Search engine crawlers are extremely advanced. They essentially view your website content the same way that a real person would. So if your website uses CSS and JS to function, you should not block those folders in your robots.txt file. It will be a major SEO mistake if crawlers can’t see a functioning version of your website.
If you want your robots.txt file to be recognized immediately after it’s been updated, submit it directly to Google, rather than waiting for your website to get crawled.
Link equity cannot be passed from blocked pages to link destinations. This means that links on pages that are disallowed will be considered nofollow. So some links won’t be indexed unless they’re on other pages that are accessible by search engines.
The robots.txt file is not a substitute for blocking private user data and other sensitive information from showing up in your SERPs. As I said before, disallowed pages can still be indexed. So you’ll still need to make sure that these pages are password protected and use a noindex meta directive.
Sitemaps should be placed at the bottom of your robots.txt file.
Conclusion
That was your crash-course on everything you need to know about robots.txt files.
I know that lots of this information was a little technical, but don’t let that intimidate you. The basic concepts and applications of your robots.txt are fairly easy to understand.
Remember, this isn’t something that you’ll want to modify too frequently. It’s also extremely important that you test everything out before you save the changes. Make sure that you double and triple-check everything.
One error could cause a search engine to stop crawling your site altogether. This would be devastating to your SEO position. So only make changes that are absolutely necessary.
When optimized correctly, your website will be crawled efficiently by Google’s crawl budget. This increases the chances that your top content will be noticed, indexed, and ranked accordingly.
Source Quick Sprout http://bit.ly/2Q5S5kv
Dear Penny: I’m a College Grad Making $11 an Hour. How Do I Find a Career?
Dear Artist,
“Do what you love and you’ll never work a day in your life,” they tell you.
It sounds great when you’re a kid imagining what you’ll be when you grow up and when you’re picking a college major. Then the realities of adulthood hit, and you realize it was pretty rotten career advice.
You asked how to find a satisfying career, not your dream job — and that’s good. Music composition is your passion, but it doesn’t have to be your career. There are plenty of happily employed people working a job that pays the bills while pursuing their love for music, writing or crafting on the side.
The challenge for you, Artist, is to define what a satisfying career looks like to you. Then you can make a plan for how to get there.
What motivates you? Are you determined to pursue your passion, even at the expense of money? Do you want a job that makes you feel like you’re making the world a little bit better? What kind of work/life balance do you want? And while you shouldn’t base career decisions solely on money, the truth is that salary and benefits are important to the equation, so consider your long-term financial goals, as well.
I’d suggest holding off on going back to school — that is, unless this exercise leads you to the conclusion that your dream job requires a specific degree.
Instead, try meeting with a career counselor who can help you identify potential professions that fit the criteria you’ve laid out. They can also help you tailor your resume to opportunities that interest you, and find ways to get the experience you may need to get them, be it through taking on new opportunities at work, volunteering, taking on a side gig or getting a certification.
You’re in a good position to change careers. Unemployment is at a near 50-year low, and wages are finally rising. You have a college degree and no student loan debt. (The Nosy Nelly in me wonders how the heck you’ve amassed $23,000 at age 26 while making $11 an hour, but I won’t go down that rabbit hole.) The bottom line is, you’re financially stable, which means you don’t need to make decisions out of desperation.
Don’t be frustrated about not having your life plan all figured out. You’re 26. You have many jobs ahead of you. Some of them, you’ll love. Some you’ll barely tolerate. But every experience will help you better understand what matters to you. And that, Artist, is how you find a truly satisfying career.
Robin Hartill is a senior editor at The Penny Hoarder and the voice behind Dear Penny. Write Dear Penny and you might see your question answered in an upcoming column.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
source The Penny Hoarder http://bit.ly/2Qa83Km
My money lessons: Buying our first home
Yorkshireman Jonathan Whiting tells Moneywise about the trials and tribulations that he and his girlfriend, Harriet, have experienced while trying to get a foot on the property ladder in London
From a young age I’ve held the hope that one day I would be able to own my own home. Somewhere that I can put a stamp on and call mine. As they say, an Englishman’s home is his castle.
My girlfriend, Harriet, and I started to get serious about the prospect of buying in the capital after living for over four years in rented flats in London.
We were very content in our little south London flat, but grew tired of seeing our monthly rent fund a faceless landlord’s early retirement. So we started to do the maths.
At first, we didn’t know where to begin. It was a steep learning curve understanding all the various permutations of financing the purchase, from Help to Buy Isas, high loan-to-value mortgages and stamp duty thresholds.
All we knew was that we were going to have to get together an eye-watering amount of money for a deposit if we were really set on buying our first home in London.
Thankfully we have both been brought up understanding the value of savings, so have saved up a modest deposit between us. Harriet even had savings she had kept since her first retail job at the age of 17.
Plus, we were both fortunate enough to have parents who were in the position to help us out, something we are both incredibly grateful for.
Location, location, location
Parents and friends all said ‘location, location, location’ was the most important factor in our house buying venture – but for us there was also the compromise between being on the tube network, commuting distance to both our current jobs, having some outside space and being close to friends.
Unfortunately, the reality is you can’t get everything you want – some things needed to take priority. For us, number one priority was indeed location.
We tried to look for the “ugliest house on the prettiest road”, somewhere we knew ticked the location box, and the connection to central London box, but also meant we could put our stamp on it and make it a home.
Not easy to find!
“You can’t get it all, some things must take priority”
Viewing 60 properties
We began the search 18 months ago when we decided we were fully committed and dedicated to buying. We have since spent many weekends, evenings and days off viewing properties and exploring some of the more affordable areas that our budget would allow for.
There were areas of London we loved and dreamt of but were sadly way out of our budget. On the flip side there were areas that we’d not even visited once that seemed within budget, which felt worth exploring.
Harriet had always been a south-of-the-river girl and I had lived in north London previously, so we were very open to looking for new areas. After looking around Walthamstow for nearly five months we decided we weren’t sure it felt right, despite the value for money.
We then came back south of the river, to Dulwich, Peckham and Herne Hill - but all those areas felt over-priced.
After viewing over 60 properties we started to feel disheartened and frustrated. It became all we spoke about. We were receiving over 30 Rightmove property alerts every day. Our motivation started to dwindle.
Harriet and Jonathan: their own home is finally in sight
Does Brexit matter?
Despite the location being an incredibly difficult decision to settle on, there were also other factors at play. Brexit uncertainty has been a real concern, with the prospect of house prices dropping significantly. All our friends and family offered their own 10-pence worth on what would happen too.
In the end we decided there’s always going to be something in the bigger picture that could impact house prices, and we could end up waiting forever for the ‘right time’ to buy. Only hindsight will give us the answer there!
It’s been a long and pretty emotional 18 months and after a number of flats falling through, and offers being rejected, we’ve finally found somewhere we love and have had an offer accepted on it. Ironically, it’s slap-bang in the middle of East Dulwich, an area we looked at nearly a year ago.
For us, the most complicated part starts now, trying to debunk mortgage, surveyors and solicitor jargon. Although there will be more bumps along the way, we’re hoping this is the beginning of the end of the process.
We are very fortunate to have supportive friends and family who are ready with the boxes and paintbrushes once we’re in – bring it on!
Do you have a lesson you’ve learnt about money you’d like to share? Please email editor@moneywise.co.uk
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Source Moneywise http://bit.ly/2JKF7Hx
Fresh hope for payment scam victims - how bank customers can get their money back
A new code that comes into effect on 28 May aims to ensure that victims of complex bank scams are reimbursed. Moneywise investigates how customers can get their money back
More than 34,000 cases of authorised push payment (APP) fraud were reported in the UK in the first half of 2018, with bank customers losing £145 million.
In the majority of these cases, banks refused to return the lost funds to customers because they had authorised the payment after being tricked by scammers.
But a campaign by consumer groups and an investigation by the Payment Systems Regulator has finally persuaded the top banks to establish a voluntary code to tighten their security. The code also ensures that victims are reimbursed when neither the bank nor the customer is to blame for the fraud.
Scams are increasingly sophisticated
Criminals are stealing around £1 million a day via social engineering, in which they groom and manipulate people into transferring money from their bank into another account.
Often the fraudster will contact a customer by phone, text message, email or social media pretending to be a genuine organisation, such as a bank, the police, a utility company or a government department.
The scammers often claim there has been suspicious activity on a bank or card account and use a sense of urgency to persuade victims to act immediately. In other forms of APP, fraudsters have hacked into business email accounts and sent out fake invoices with altered bank details. A third popular type of scam is fraudulent investments.
“Being a victim or financial fraud can really affect your mental health”
Victims have lost their life savings in these scams, with one Essex couple losing £120,000 when they sent money to what they thought was their solicitor’s bank account.
Rachel Duffy, chief executive of PayPlan, says: “Being a victim of financial fraud can have disastrous consequences for people, often resulting in long-term money problems and even bankruptcy. It’s a frightening and distressing experience, which can really affect people’s mental wellbeing, particularly if they’re already vulnerable.”
What the new code means for victims
Until now, banks and payment service providers have been reluctant to refund victims of APP fraud, saying that the responsibility lies with the customer who authorised the payment.
But from the end of this month a new voluntary code of good practice will take effect, which will be backed up by a pot of money to reimburse genuine victims.
Hannah Nixon, managing director of the Payment Systems Regulator, says customers will now have “better protection from APP scams than they have ever had before”.
Rob Tharle, fraud expert at NICE Actimize, which helps financial institutions detect and prevent fraud, says although the code does not fix the problem it will significantly help victims.
“These crimes are often nasty and increasingly sophisticated. Not being refunded can be life changing. In the vast amount of cases now victims are likely to be refunded, while in the past the majority were not,” he adds.
The burden of proof will now be on banks rather than customers and they will have to prove that a customer acted carelessly when they were scammed. For example, if a customer ignores warnings when setting up a new payee it could still be argued that they were negligent.
Barclays, Lloyds, HSBC, RBS and Metro banks have all signed up to the code, and Santander and Nationwide have also agreed to join, according to the Payment Systems Regulator.
Katy Worobec, managing director of Economic Crime at industry body UK Finance, says the code means that customers will be reimbursed when their bank or payment service provider is at fault as long as the customer “has met the standards expected of them under the code”.
The funds will come from the sending or receiving bank depending on which is at fault.
Scam victims will also be reimbursed if neither the bank or the customer is at fault under the ‘no blame’ rules. Money for this will come from a dedicated reimbursement fund, which is bank rolled until the end of the year. A longer-term solution will be implemented from January 2020, the details of which are yet to be announced.
The code does not fix the problem but it will help victims
But the new system will only protect customers whose banks are signed up to the code. All other consumers will have to seek reimbursement via a complaint to the Financial Ombudsman Service (FOS), which is the current, largely unsatisfactory procedure. There is also no process under the code for reimbursing customers who transferred their money unwittingly to fraudsters before 28 May 2019.
Strengthening customer support
The new code is part of a wider range of measures that the banking industry is developing to protect customers from push payment fraud.
From January this year, victims of APP scams have been able to report complaints to both the sending and receiving payment service provider and escalate them to FOS. Until this date, victims could only make their complaint to the sending bank, even if it appeared the receiving bank was at fault for enabling a fraudulent account to be set up, for example.
A new security check, called Confirmation of Payee, where a money transfer is blocked if the recipient’s name and account number do not match is also due to be implemented next year.
This would potentially prevent scams where business invoices have been intercepted or falsified and bank details changed before being emailed to customers. If the business name on the reference does not match that on the receiving account the automatic payment would be prevented.
“We need radical changes to banking”
Retired professor David Canter nearly lost £18,000 when fraudsters fooled him in an elaborate push-payment con.
The scam began when hackers got into the 76-year-old’s email account and sent messages to his contacts saying he was in Turkey and needed money.
Professor Canter immediately changed his password but a week later, after lengthy conversations with his email provider, he realised messages were being automatically forwarded on to another address the fraudsters had set up.
The forwarding was stopped, but a few days later he received a phone call on his ex-directory home number saying his IP address had been compromised.
The woman on the phone claimed to be acting on behalf of his internet provider and took him through a series of ‘checks’ asking him to corroborate unique numbers on his computer, which he wrongly assumed meant the caller was legitimate.
“We should be able to chase the identity of people who have set up an account for fraudulent purposes”
The woman then passed him on to a man who asked him to download some ‘protective’ software before logging into his bank accounts.
The whole operation took several hours and at certain points his computer screen went blank but the man on the phone told him not to panic as this was normal.
As a result, the scammers were able to take £7,500 from his NatWest account and two lots of £3,919 from his Santander account. They also attempted to transfer £2,500 from his Lloyds account, but the bank blocked it and he was able to cancel it.
Lily Canter’s father, Professor Canter (above), was left feeling vulnerable
NatWest repaid all of the money the next day but it took six weeks for Santander to do the same after Professor Canter complained to the chief executive.
The bank initially said it could not refund the money because he authorised the payments but did a U-turn when he complained about how they handled the crime.
Santander customer Susan Grossman was also stung via a similar scam and lost £1,700. A second payment of the same amount was blocked.
The bank investigated her case but refused to reimburse her, stating in a letter that “Santander cannot be held responsible for the loss”.
The bank’s adviser could have been more sensitive
When asked why it had treated the two cases differently, Santander told Moneywise it reviews each case of fraud individually.
“In Professor Canter’s case, we identified errors in the way his claim was handled, therefore the decision was taken to refund the money he had transferred to the scammers.
It added: “We have the deepest sympathy for Ms Grossman and to all those who fall victim to scams. In Ms Grossman’s case, there was nothing to suggest the bank had acted incorrectly.”
Ms Grossman strongly disagrees and says Santander admitted to not offering the level of service expected and the letter from the Santander fraud complaint handler admits “the advisor [sic] was at times quite abrupt and could have been more sensitive given the circumstances.”
The situation is typical of the banks inconsistent and inadequate approach to tackling these scams, says Professor Canter.
“I knew the account numbers the money was transferred to and handed these over and yet the banks and police did not appear to be chasing the money.”
The crime left him feeling “violated and vulnerable” and unsupported by the banks and police. He has spoken about his experience at the University of the Third Age and been contacted by other victims, who were not so fortunate in getting a refund, including Ms Grossman.v
Although he welcomes the new code, he says it still fails to get to the heart of the problem. “It is great that the banks are making a start on this but the whole mechanism needs looking at including the banks, police and Action Fraud,” he says.
“With modern technology we should be able to put a block on an account and chase the identity of people who have set up an account for fraudulent purposes.
“We need radical change in the whole attitude towards banking. There needs to be a minister for information technology with a remit for dealing with fraud and bringing all the relevant bodies together.”
LILY CANTER writes on personal finance for publications such as The Daily Telegraph, The Guardian and The TImes
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Source Moneywise http://bit.ly/2JpZ8Ec