October 31, 2007
BoyDucky recently caught an erroneous charge to his debit card when he was preparing to pay bills to the tune of $450.
Luckily, BofA is willing to give him a temporary credit because he caught the charge the morning it showed up on his statement, but the onus is on him to disprove the charges, and to prove that the charge was made without his authorization.
If he doesn’t jump through their hoops, however, (returning the affadavit with the correct boxes checked off, the name of the possible perpetrator, etc., within 5 days of receipt; returning a copy of the police report within 7 days of reporting the incident) they’re going to take that temporary credit right back.
On top of being at an out of town hospital with his father 4 of 7 days of the week, he’s had to:
1. Contact the business where he believes the credit card number was stolen by an employee (because that’s the only time the card has ever been out of his sight);
2. Try to get the employee’s first and last names, which means explaining the whole situation to the various Supercuts managers;
3. Wait for the manager and corporate offices and police to review their store tapes. They found that it does look like the employee copied something down onto a Post-It and put it in his pocket;
4. Talk to the police and schedule an appointment to meet as soon as he’s back in town.
5. See if they can track down the charge and if it can be connected to that scuzzy guy who had his mitts on BoyDucky’s card.
I’ve warned him countless times of perils of using debit cards in fraud situations and he’s always shrugged it off. Believe me, I know the pain of dealing with false charges and credit cards are the way to go. If he hadn’t caught the charge immediately, BofA wouldn’t have given him a credit and he’d be out $450 for however long it takes to resolve the situation.
The most work I’ve ever had to do for false charges, like an extra “tip” a restaurant gave itself, was to report it as fraudulent to the credit card company. They immediately sent me verification paperwork to swear on someone’s grave that I did not, and no authorized users, authorized the charge, and then the company had to prove that they were allowed to charge my card. In one case, I had a copy of the receipt with my signature and written tip; in another, I never charged anything to that company so they had to prove that I did. I was never out any money, and the credit card company settled the problems painlessly.
Of course, my fraud problems were directly associated with a business and were obviously due to an employee stupidly trying to line his or her pocket for a whole dollar or so.
We’ll have to hope that the employee conveniently tried to pay on his account or something directly linked to him like that because if not, there’s no way that employee can be sacked based only on suspicion of stealing the card number.
July 25, 2007
Many of your comments to my post on my parents’ possible business venture were great moral support and bolster to my common sense and caution. I truly wanted to hear your thoughts because this is an emotionally driven situation in which I feel a knee-jerk reaction coming on, instead of a carefully considered decision. And as Matt pointed out, if my instinct is telling me something, I should pay attention, whether or not I ultimately choose to listen.
There are a number of issues that concerned me with regards to the money-lending situation:
1. Can I afford to lose this money?
2. Would I resent the loss of this money? Or the waste of any profits, should there be any?
3. Is the business plan and market sound? Is there true long-term potential (we’re talking about years, not months)?
And then of course, Mapgirl came through with an extremely thoughtful and detailed response to my request. She had some great questions as well, a few of which I’ve borrowed for your perusal:
4. Did your parents ask you for the money? Or are you thinking of volunteering the money?
5. Do you want to protect your investment?
6. Do *you* think it’s risky?
7. Have you and your folks done the due diligence and talked to other owners besides their friend and his wife?
8. Do you want a say in how the money is used and when it’s paid back?
The huge red flag here is that I felt the need to ask for advice: if I were comfortable losing this money (or giving it away, since personal loans to family and friends are best considered gifts and repayments as bonuses), I wouldn’t need to ask. That means that I’d better have a very good reason for risking my financial security, if I choose to.
Another factor is that I’ve been retraining myself to stop thinking emotionally: that everything that’s mine is theirs. It can’t be, not if I’m going to make it out of this situation and help them in the long-term. I’m the saver, and they’ve been living on the edge far too long; they’ve lost sight of long-term planning.
I absolutely must be financially secure, and thriving, to be able to support them in their later years. Obviously, that means not throwing money away and not making unwise decisions. The need to help them upon request is born of that old habit wherein I rushed to the rescue in every situation, rather than judiciously, and as English Major pointed out, is probably more enabling than helping. What can I say? I was young and stupid. I’m not young anymore, so I can’t be stupid anymore either 🙂
So, could I afford to lose this money? I don’t include it as part of my net worth, I don’t count it in my savings plans and goals. For all intents and purposes, I don’t have that money until I recall the loan. It wouldn’t really be losing money, in the sense of having a big empty hole in my savings account. But would I resent the loss of it? Yes. Even though I don’t count it, knowing that it’s there and doing some “work,” and could be recalled is another form of emergency fund. In six months, if I really am out thousands of dollars because of my brother, I’ll need and want all the cushion I can get. In protecting this money, I’m protecting all of us against some level of financial disaster. Someone has to pay the rent.
3. Is the business plan sound? Magic 8-ball says: Wait and see.
4. Yes, Ma asked me if she could put some of the charges on my credit card that she’s an AU on. She doesn’t know if the wholesaler takes cards, but she knows that I prefer to use cards over cash, and it’s a good way to track expenses.
Again, I’m not comfortable charging anything that I don’t already have the money for, so I wasn’t in favor of this idea. She also floated the idea of using a 0% BT in her/Pa’s name, but I’m almost positive neither she or Pa’s credit has recovered enough to make that idea feasible. Last time we dug them out of credit card debt by transferring their balances to my 0% card. And eventually I paid off the remainder of the balance for them. Thousands of dollars later, I’m not putting another balance on my cards, even at 0% because I have tons of other savings goals to meet, not just pay-off-others’-debt.
5. I consider this a loan, not an investment, but perhaps there are advantages to thinking of it as an investment? If anything, I just want to give them a start, I don’t expect any profit from it. There are indirect advantages if they regain their financial independence, though, as the daily burden of supporting them would eventually ease. Still, that wouldn’t be expected in the early months.
6-7. My objection is primarily to the lending of money in a venture I don’t know enough about, but more light should be shed on the matter in the next several weeks. Pa is to research the market and plans to discuss the matter with some friends who own the businesses he’d like to supply. They’ll give him a better idea of the services they’d expect if they were to use him, and whether or not they’d be willing to come on board as customers.
8. I expect them to tell me how the money is being used (for inventory) and that it’ll be paid back as they begin to see a profit. However, knowing that Pa has a few other financial obligations that he’s being close-mouthed about, and that he’ll have to attend to those so that he doesn’t have to borrow from me, I’d have to accept that I wouldn’t truly have a say. Again, could I live with that? I’m not sure.
There are a lot of trust issues at play here, and the most important is that I’m not willing to see our relationship further corroded by resentment or arguments over business decisions. And, if I’m smart enough to see that they cannot work with my brother, I have to take a good look at whether or not I can work with them.
Tentatively, I think I could live with this: Ma thinks she can earn enough side money monthly to make a healthy repayment on the loan. Her most insiduous problem tends to be letting that money trickle away to pay Pa’s, or her unexpected, expenses if she doesn’t have a compelling reason to STOP touching that money. She can start giving me that money now and I’ll put it away in one of my high interest accounts while Pa’s doing his research. If enough information supports this as a feasible plan, I will see if I can reasonably supplement the pot with a rational portion of my own money, depending on how much I can save in the interim, and give the whole amount as a loan. Eventually, when they pay it back, I’ll take Ma’s portion of the seed money and keep it in savings for her.
I’ve got to learn when and how to say no, and saying “I can only help this much right now” is a start.
July 23, 2007
Am I on the verge of making a really stupid decision? Have I learned my lesson from previous incidents enough to make the right decision now?
The situation: I have finally overcome the savings watermark below which I would have been in deep debt once my 0% balance transfer money (that I’d loaned to my brother) came due. Unfortunately, that was very recently, so I’m just a few hundred(?) over that point. Aside from the deep sense of failure that brings, I’ve been feeling ohhh-so-insecure because if anything happens now I haven’t got any real cushion!
Recently, my parents have discussed starting another business which consists of supplying service businesses in a very specific industry. Dad’s friend encouraged him to try this line of work because it can be lucrative enough to produce a living wage, and even if they’re unable to develop the market in our area, his wife owns two of those businesses and would be willing to take the supplies off his hands. He feels that it’s win-win: If it succeeds, good. If it’s too slow? Sell off the merchandise and get out. The capital required to purchase the supplies? Approximately $5-7k.
My brother has nothing to do with this venture, nor will I allow them to involve him in any way, so that’s not a factor. But I don’t have that kind of cash. Or at least, I don’t right now. And I couldn’t even think of putting it on a card yet because I don’t have the money to cover it.
If I don’t come up with the cash, I’m not sure what other funding options they have. None good, I know that much. Dad will take some financially reprehensible cash advance at some ridiculous APR, and I’ll eventually have to help bail them out at a much later (and more expensive) date.
The only option I have to avoid incurring debt is to recall a $5k personal loan I’d made last year. I hesitate because the interest from that loan is reducing the principal of another personal loan Dad owes. It’s my “floater” cushion that I’d really rather not use.
So:
Con: I run the risk of losing that $5k cushion. It took me a LONG time to save that much, can I bear to lose it?
Pro: Alternatively, if the business works out, I would recoup that “investment” and possibly see my parents become more self-sufficient.
I’m finally asking the question that seemed unthinkable before. Not “Can I?” or “How do I?” but “Should I?
(oh Mapgirl, that’s your cue!)
June 12, 2007
How many times do I have to make the same mistake before I actually learn from it? I do not trust my brother’s financial sense in the least. After all, he acts like he’s got none. I’ve been really good about not trusting him and he knows it, therefore he has to toe the line with me that he completely ignores in his dealings with our parents. At my parents’ behest, 23 months ago, I bought a truck for the family’s use with the understanding that he would pay the monthly bill and the insurance. It was his last chance to repair our financial relationship, after his years of financial transgressions that I’d bailed him out of.
So what did I do? After 20 months of agonizing over how long he’s going to stay on good behavior and pay his monthly bill to me for the car and insurance, after worrying that I’m going to be stiffed with the car bill because I just don’t know that he’s going to maintain a stable job, I went and made the same idiotic mistake of trusting him, with money.
I knew that he and my parents could not do business together, I knew that I would be forced into the position of peacemaker and dealbroker which I don’t have time for, and I knew that I’d be taking a huge risk of losing that money. Given those odds, didn’t that sound like my answer should have been “No no NO! Bloody no!”? Shouldn’t it have? Every instinct in my mind screamed no! But I didn’t listen. Because ….
1. He came to my parents proposing that they work together. He had been working on his own business for about a year with moderate success, and he thought this would be a good way for them to make some money without doing much work.
2. PaDucky came to me asking that I put up the stake because they couldn’t get it elsewhere and this was a chance at financial independence for everyone.
I desperately wanted my family to start functioning normally again, and I thought that my brother had been doing this on his own for about a year with moderate success already, so wasn’t this a history of having learnt his lesson and all? After some long thought, and with deep misgivings, I said yes. Conditionally, of course, that no single party would make any decisions on their own – all business decisions had to be made in group meetings. And he had a friend/partner who was supposed to keep tabs on the cash flow part of the business, and be his check & balance.
What an idiot I was. What an utter absolute idiot. As predicted, within weeks of their working together, everything fell apart and I’m left as go-between, as peacemaker, and one completely frustrated-to-smithereens loan originator, and kicking myself every single day for making such an idiotic decision. I can’t even express how deeply angry I am at everyone involved, either, because I have to focus on being the peacemaker go-between to make sure that I get as much of that money back as possible as my brother is still working on it, on his own. He’s made one of 7 scheduled payments, missed one, and I’m still trying to get a straight answer about the next one.
I’d used my BT money to make the loan, which gave me a year-long loan of interest free money. I had initially intended to put that money into a high interest savings account and earn my $50 interest a month. I should have done and found another way to support my family. Instead, I have to consider what to do at the end of 12 months when and if he doesn’t pay me back in full. Right now, I have enough in my savings to pay it off completely when the time comes, but that will utterly wipe me out. All that I’ve saved, everything I’ve worked so hard for, scrimped and saved for over the last 2.5 years, gone.
I’ve been trying to make my peace with that. After all, I was the idiot who ultimately decided to go out on this limb in the first place without really truly considering the dire circumstances. I couldn’t even say that even if I have no emergency money, I would at least be debt-free. Because I’d still have that car note. I have one investment that will pay out in a couple more years, but other than that, I’d be back to zero.
This lesson is particularly painful because, well, I was an idiot. I didn’t even really seriously think: Can I pay this off entirely, by myself, if he doesn’t pay up? Every single day, I ponder how much this, losing my life savings because I made a really stupid decision, is going to suck.
And I can’t even guarantee this’ll never happen again. Not even after I collect whatever I can collect. Just because I’ve learned from this lesson doesn’t mean that they won’t need me to help them again and I need to gauge what help I can give vs. what help I should give. I have to understand that my family is collectively financially unsavvy and peculiarly waterproofed against my attempts at helping them make better long-term decisions. So I have to be even more careful not to follow their well-intentioned paths to ruin, again. I can’t keep starting over because of them.
There. My blogging head has been in the sand for a while now because of this. I actually still don’t feel much better for having “said” it aloud. I hoped that I would, but I don’t. It’s like admitting out loud that you kick puppies, or something like that. I did a stupid thing and I’m paying for it.
I definitely need alternate streams of income.
And boy, do I ever hate that it’s so much quicker and easier to get into trouble than it is to get out of it!
April 7, 2007
In what may seem to most PF bloggers a ridiculously simple and obvious frugal move, I’ve gone and renewed my library card. For various reasons (accessibility, doubts that they had anything I’d not read yet, etc.) I haven’t been to our public library in years. The one time I did go there to study last summer, I found the upstairs to be resoundingly noisy and annoying with children running around, talking at the top of their lungs and eating. Shocked to my very soul, I haven’t been back since.
This afternoon’s visit was much more sedate and satisfying. They couldn’t find my library membership from a decade ago, but didn’t require my birth certificate, utility bills and passport to verify my identity. Though I did have the utility bills in my purse, they were none of them in my name, and would have been useless. Happily, the library has relaxed their standards just enough to allow even a reprobate like me to borrow a few books. I was only allowed three since it was my “first visit” but I’ll just come back tomorrow and heave home another armful of books. How reminiscent of my childhood this is!
AND, I’ve got reading materials galore without violating my no-spend parole. Happy day!