What you need to know about the Equifax data breach and steps you can take

data breach

As you may be aware, Equifax announced last week they had experienced a data breach affecting approximately 143 million Americans. The Canadian exposure is reported to be limited.

This breach was not against any bank or credit union, but against the credit reporting bureau. If you wish to check whether your data may be among those files that were compromised, you can check on the following website:  https://trustedidpremier.com/eligibility/eligibility.html

Alternatively, you can monitor the situation on a special Equifax web page for current information  https://www.equifaxsecurity2017.com/

If you wish, you can contact Equifax to discuss your concerns at  1-877-323-2598 or 1-866-828-5961 . Please note that service may be affected by Hurricane Irma.

What to do if you believe your data has been hacked:

  • Monitor your existing credit card and bank accounts closely for unauthorized charges. Contact relevant financial institutions, such as banks that issued credit cards and stop cheques, as quickly as possible. Call local police along with Service Canada if your Social Insurance Number was used. Report confirmed cases to the Canadian Anti-Fraud Centre  http://www.antifraudcentre-centreantifraude.ca/index-eng.htm  Toll Free  1-888-495-8501;
  • Change all affected passwords with new, strong and unique passwords for each account;
  • Consider placing a credit freeze on your files. A credit freeze makes it harder for someone to open a new account in your name. It will not prevent a thief from using any of your existing accounts;
  • Consider enrolling in a fraud alert. Equifax says it will offer free identity theft protection and credit file monitoring for one year to all U.S. consumers, but doesn’t say if that will be available to Canadians. The service monitors if your information is used to open credit accounts or appears on suspicious websites. Several identity theft and recovery companies provide similar services.
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The 5 Financial Stages of Life

What financial stage are you in?

As we go through different stages in our lives, our financial goals will often change, sometimes dramatically. Where do you fit in this financial picture? Keep in mind, your goals may differ from the average person. For instance, you may decide to start a new business in the Early Career stage of your life. Or, you may decide to focus on travel during this time period, rather than purchasing large ticket items like a car or a house. In any case, mapping out your financial stages of life is a good start to recognizing and developing the goals that are important to you!

5 Financial Stages of Life

 

Need advice to help you reach your financial goals? Contact us at Your Neighbourhood Credit Union, where we making banking simple, personal, and friendly.

 

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The Top 20 Jobs For Getting Ahead In 2017

Linkedin_revised

What career path are you contemplating? Whether you’re an undergraduate or mid-career employee looking for a change, it makes sense to be aware of jobs that are in demand. LinkedIn recently released their inaugural list of ‘The Most Promising Jobs of 2017.’ The list draws on data from more than 12 million Canadian member profiles to identify the top jobs for Canadians in 2017. What elements are considered for a job to land in the top 20? Base salary, current job openings, and potential for career advancement are all essential. LinkedIn also provides information about the top skills required for each job in today’s marketplace.

Top Jobs_Linkedin_Chart

To learn more about the methodology for this study, go to LinkedIn.

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How to leave your bank and start a new relationship with a credit union in 5 simple steps

notepad, pen, glasses and cup of coffee

There’s never been a better time to switch from your bank to a credit union.

From ever-rising fees, to poor service, to criticism over aggressive sales practices, Canadian banks have come under heavy scrutiny in the past year. So what stops angry and frustrated bank customers from immediately closing up their bank accounts and embarking on a new relationship – with a credit union?

At YNCU, the number #1 reason we hear is ‘it’s too much work to switch.’ And the truth is it can be complex and time consuming. On the other hand, it can be a smooth and relatively painless experience. Much depends on attitude, as well as having an organized approach.

Here are some things to consider if you’re planning to switch your bank accounts:

Chequing and savings accounts

Your first step is shopping around and deciding where you are taking your business. Before closing out your bank account, open up a personal chequing or savings account at your new financial institution.

Remember to go through several monthly statements from your existing account since they’ll have nowhere to go once you close your old account.

Here’s a handy account switching checklist courtesy of Your Neighbourhood Credit Union.

Depending on your bank, you can close a chequing or savings account at a branch by phone or online. There is usually no fee to close a chequing or savings account. BMO charges a $20 fee if the account is closed within 90 days. CIBC charges a $20 fee to close and/or transfer accounts to other financial institutions. Royal Bank’s $20 fee is waived if you close the account in person.

Credit cards

Credit cards and bank accounts are independent of each other. So you can have a credit card with one financial institution and a bank account elsewhere. Cancelling a card can be done at a branch or by phone and should be effective immediately.

There is no fee to close a credit-card account. Of course, you still have to pay the outstanding balance, fees, carry-overs and interest.

Remember that pre-authorized payments set up on the credit card will no longer be processed, so you’ll need to provide billers with your new credit-card number.

calculator and banking statements

Personal loans

You will first need to decide which new personal-loan product you want and apply for it through your new lender.

Once you’ve qualified, you’ll need to notify your current lender in person and pay the balance plus interest either by cheque or debit at the time of closing, or your new financial institution can arrange to pay out the loan for you.

Mortgages

For a conventional mortgage, it’s a good idea to wait until the mortgage term matures to avoid paying penalties. But you should start looking at mortgage rates several months before your term ends.

Plan to give yourself several months before the renewal date to pre-qualify with a new lender (you can lock in a rate 90 days in advance of the renewal date). This lead time allows the financial institution to process your mortgage application, which requires a property appraisal for a fee and proof of income and employment. The lender also needs to do paperwork to get a payout statement from your current lender indicating the mortgage balance.

Banks will charge a discount fee of several hundred dollars to transfer the mortgage title to your new lender but credit unions will sometimes cover it (try to negotiate this!).

If you decide to transfer your mortgage before the term matures, you’ll have to pay a penalty. Your mortgage document will have the formula to help you estimate the amount. But your bank will tally the exact amount.

Remember to provide the new mortgage details to your home insurer.

Investments

You can hold your registered savings wherever you want, including those that are employer-matched. In addition to simplified record-keeping (one statement and one slip at tax time), consolidating your savings means you could get a better rate on higher balances.

To transfer registered investments, such as RRSPs, RIFs and TFSAs, you’ll need to meet with your new financial institution and bring your statements. Once you settle on the appropriate investment vehicle, the adviser will fill out a transfer authorization form, which will be sent to your bank to request the transfer.

There is a transfer-out fee per transfer. Since you’re a new customer, it’s worth asking your new financial institution to cover this fee.

The transfer process takes several weeks to complete.

If you hold non-registered investments, such as GICs or term deposits, it’s advisable to wait until the maturity date to transfer them to avoid penalties.

Source: Chu, Showwei. How to Break up with Your Bank. Special to The Globe and Mail. Published Thursday, Apr. 06, 2017.

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Be aware of these fraud trends to watch out for in 2017

hand coming out of computer to steal man's wallet

According to the Canadian Competition Bureau (Competition Bureau, 2017), these are the trends in fraud related crimes we can expect to see in  2017:

Subscription Traps: Survey says…be careful

Subscription traps, sometimes also referred to as Continuity Scams, can take various forms. They can appear as an advertisement featured on your favourite social media site, a referral from a friend (on Facebook, for example), a fake “survey” that pops up on your computer while you’re online on another website, or from a telemarketer. No matter the form, they will always offer you a “free” trial or purchase of a product, and all you have to do is simply pay the shipping and handling using your credit card. If consumers agree to this, they will find themselves signed up to a subscription service with ongoing fees and unexpected charges. Contacting the company will result in them pointing you towards their online terms and conditions, routinely buried in fine print. Unfortunately, by not returning the “free” product you ordered, you agreed to a monthly subscription of that product and authorized monthly charges on your credit card. Once, you are stuck in this situation, it is often extremely difficult to put a stop to the charges.

Spoofed websites: Ain’t nothing like the real thing

A spoofed website is a site that uses deceptive means to mislead consumers into thinking that it represents a specific business, financial institution, government or charity. These websites generally imitate the real websites to sell products or services that may or may not be authentic, or to obtain sensitive financial or personal information from users. Often they will provide enough information to appear like the real thing, including the location of stores, phone numbers, terms and conditions, and logos.

Ransomware: When your hard-drive is kidnapped

Ransomeware is a type of malicious software designed to block access to a computer until a sum of money is paid. A computer can be infected by ransomware in a number of ways, but most commonly, victims click on a malicious link or attachment received through a phishing email. Once infected, victims will see a “ransom” note which is often designed to scare or extort the victims into making a payment. For instance, a message could appear saying that your personal files and pictures will be deleted unless the consumer pays $100-$250 via Bitcoin, Ukash or PaySafe Card to have the computer unlocked.

Business Executive Scam: Don’t follow this boss’ orders

Sometimes referred to as the Business Email Compromise scam, this fraud starts when a potential victim receives an email that appears to come from an executive in their company who has the authority to request wire transfers. In some cases, the fraudsters create email addresses that mimic those of the CEO or CFO. In other cases, the fraudsters have compromised and subsequently used the email account belonging to the CEO or CFO. Often, the email will indicate that the “executive” is working off-site and has identified an outstanding payment that needs to be made as soon as possible. The “executive” instructs the payment to be made and provides a name and a bank account where the funds, generally a large dollar amount, are to be sent.

Losses to this scam typically range from tens of thousands of dollars to hundreds of thousands of dollars.

And here are the ones that we keep seeing again and again:

Fake Online Endorsements and Sponsored Content – Followers and likes doesn’t mean it is good advice

Consumers are often enticed to purchase a product or service based on reviews by social media influencers or those with a significant online presence. Unfortunately, there’s a chance that these reviews are not genuine and have in fact been paid for by a company as a marketing tactic. By not revealing their business interests and creating what seem to be authentic experiences or opinions, these influencers are misleading consumers and could be subject to action under the Competition Act.

Astroturfing – It looks real, but it isn’t

Astroturfing has similar characteristics to fake online endorsements. The term “astroturfing”, when used in an online advertising context, refers to the practice of creating content that masquerades as the authentic experiences and opinions of impartial consumers, such as fake consumer reviews and testimonials. This is often part of organized efforts by companies to boost their own ratings or to lower the ratings of their competitors. For example, companies have been known to encourage their employees to post positive reviews on websites and review platforms, or to provide their customers with incentives to leave positive reviews.

Binary Options Scam: Never a good bet

Similar to gambling, binary options work much like a wager. All or nothing “bets” are invested based on how an asset will perform within a certain timeframe. The asset could be a stock, a currency or a commodity. Websites are designed to attract users to trade binary options, by offering high rates of return and by claiming to be risk free. Initially, a virtual gain is seen, but there is no way to access the profits because they are non-existent. Currently in Canada no business is registered or authorized to sell or market binary options.

It is always risky to invest in offshore companies; investors who buy into a binary option run the risk of having their identity stolen, accumulating losses for unauthorized withdrawals on their credit cards and incurring high interest payments on an investment that doesn’t exist.

Employment Scams: No experience needed!

Scammers use online classified websites like Kijiji, Craigslist, Monster, Indeed, and Workopolis to recruit potential victims. The most common scams include Mystery Shopper and HR/Administrative jobs.

Consumers are offered a mystery shopper job after responding to an online ad or a text message. The victims receive a cheque in the mail with instructions to complete local purchases and send unspent funds through a money service business. Victims are told to document all experiences and evaluate customer service. Eventually, the cheque is returned as counterfeit and the “employee” is accountable to pay for the funds that were wired.

Another common job scam involves the victim acting as a financial receiver/agent. Victims are told to accept payment in their personal account (often by eTransfer or cheque), keep a portion and forward the remaining amounts to third party “employees” or “companies”. Victims are eventually advised by their bank that the original payment was fake or fraudulent and any subsequent monies sent are therefore paid out of the victim’s own pocket. Scammers will attempt to process as many payments as possible before the victim’s financial institution advises that the original payment was fake.

 

It’s extremely important to report fraud to the authorities. Complaints are one of the best ways to gather evidence in order to better protect consumers and businesses. If you think you’ve been the victim of fraud, report it to the Canada Anti-Fraud Centre, the Competition Bureau or the RCMP.

 

Source: Competition Bureau. (2017, February 28). Retrieved March 23, 2017, from Government of Canada: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04201.html

 

 

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Digital Spring Cleaning

Fraud prevention

Thank you to Angela Baas with Re/Max Twin City Realty in Waterloo for sharing this timely article during Fraud Prevention Month. Many of us don’t consider cleaning up our digital space on an annual basis – this would definitely be a good habit to start!

Courtesy of the Better Business Bureau and the American National Cyber Security Alliance, here is a 4-week schedule on how to clean up your digital life.

Week 1: Keep Clean Machines

As a very basic first step, make sure that all web-connected devices ‒ including PCs, mobile phones, smartphones and tablets ‒ are free from malware and infections. Keep all critical software current and up-to-date. Delete unused apps from your devices. Actively manage your location services, Bluetooth, microphone and camera settings.

Week 2: Make Sure You’re Secure

Secure your router. Make sure it has a strong password and does not broadcast who or where you are. Create better passwords. Use a combination of caps, lowercase, numbers AND symbols. Have separate password for important online accesses (email, banking, networking, etc.) Write them all down and keep them safe. Secure your phone by using a passcode or a fingerprint to unlock it.

Week 3: Digital File Purge and Protection

Tend to your digital records, PCs, phones and any device with storage just as you do for paper files. Clean up your email – delete or archive what you don’t need. Dispose of electronics securely – shred hard drives, disks & memory cards. Update your online photo albums and online relationships – Make sure you have everything and everyone where they should be. Back it up – copy important data to a secure cloud or drive for safe storage. Commit to doing backups on a regular basis. Empty your trash or recycle bin on all devices.

Week 4: Clean Up Your Online Reputation

Parents and older kids with social media accounts can take an active role in making sure their online reputation is squeaky clean. Own your online presence. Review privacy and security settings. Clean up your social media presence and update your personal information, where necessary.

*Source: http://www.bbb.org/digital-spring-cleaning/

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Should you contribute to a RRSP or TFSA? (Part 2)

Hand drawing money sign, "Where to Invest"

TFSA vs RRSP?

Last month I talked about when to use the RRSP vs TFSA. This week I will touch on this topic further.

RRSP’s are optimized when you make contributions when your tax rate is high, with the strategy to withdraw these funds at a later date (like retirement) at a lower tax rate.

Let’s take a deeper dive into this.

Suppose you earn $75,000 per year today. Making a $1000 contribution this year will save you $296 in taxes (29.65% tax rate). When you retire and you have a smaller income (for example, $40,000), you will pay $200 in taxes (20% tax rate) on a $1,000 withdrawal.

This tax savings can be further magnified by the fact that your original $1000 contribution has gained value since it was initially purchased. (The ‘time value of money’ effect)

During retirement, seniors have the ability to split income, including pensions and RRSP/RRIF accounts once over age 65. This can generate significant tax savings.

So why a TFSA then?

TFSA’s are an additional option to help Canadians save that is tax deferred. If you are in a high marginal tax rate, you will want to utilize the RRSP first. If your tax rate is low now, and you expect it to be higher in retirement than it is today, a TFSA is your best option.

All things being equal, if your tax rate never changes from now into retirement, than it makes no difference which one you choose (at least from a tax planning perspective)

The following illustrates this point.

TFSA vs. RRSP

(Notice the after tax outcome after 20yrs is identical when tax rates stay the same)

Source: Investment Planning Counsel, http://www.deferthetax.ca/rrsp_vs_tfsa

 

I would caution you when looking at these options to ask yourself what the intended purpose is for these funds? Tax savings today do have consequences in the future. The TFSA offers tremendous liquidity and the ability to take funds out and re-contribute back in. Once you access funds from an RRSP you can’t re-contribute unless you have RRSP room available.

Although these plans don’t seem overly complicated, making the right decision on how to build them is critical to their success. Mastering the basics is a good start, but seeking the advice of a qualified Financial Planner/Advisor can make a big difference down the road.

Grant Galloway, CFP, CLU, CHS

Financial Planner

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Contribute to RRSP or TFSA? Here’s an easy way to know.

tfsa-or-rrsp

On my drive to work this morning, I couldn’t help but notice the $1.16 per litre gas prices… (As we start 2017 with yet another government tax grab on carbon).

I am hoping to help you and your members alleviate some of the tax pain this season with some proper planning!

If you have heard me speak about TFSA’s you will know how passionate I am about these plans. TFSA’s have now been around since January 2009 and they are literally one of the best things the government has given Canadians. The tax-free growth and access on these accounts is obviously the biggest attraction, but they are also a great estate planning tool, giving the ability to name a beneficiary or successor holder allows the funds to bypass the estate and avoid probate.

For 2017 we receive an additional $5500 of new TFSA contribution room, with a cumulative (lifetime limit) of $52,000

(Did you know if you were to max out your TFSA and invest into a conservative portfolio you could have nearly $1,000,000 in 40 years)

The turn of the calendar also brings a new RRSP season, the 2017 RRSP limit is $26,010

I continuously receive questions about the RRSP vs TFSA debate, when should you buy an RRSP? When should you buy a TFSA?

My first reply is YES, always…

Rule of thumb is it depends on your tax bracket, for example in 2017 if you earn over $45,916 you will have a top marginal tax rate of 29.65% this means the next dollar you earn above this income you give our friends at CRA 29.65 cents. Making an RRSP contribution reduces your total income..

Example: If you earn $55,916 in 2017 the last $10,000 you earned you paid $2,965 in taxes; if you made a $10,000 RRSP contribution you would save $2,965 in taxes. Perhaps generating a refund when you file your taxes in April 2018.

 

If you earn less than this $45,916 (24.15% tax bracket) I encourage people to make their savings contributions into a TFSA for now, once their income increases they can always transfer these contributions to an RRSP and still receive a tax refund at that time.

I don’t expect you to provide members with any kind of tax advice, however we would love to talk to them and give them the proper guidance.

Remember a dollar saved in taxes, is a dollar that can be reinvested and compounded over time.

Here is a link to the 2017 Tax Brackets and RRSP & TFSA Limits 

Want to know more about the differences between RRSPs and TFSAs (and which one is right for you?). Here’s an e-book.

Cheers

Grant Galloway, Financial Planner CFP, CLU, CHS

168 King St S Suite 2
Waterloo On
N2J1P6
519-579-7324 ext 1
226-218-4646 Cell
519-579-7597 Fax
1866-328-7324 Toll Free

 

 

 

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Build a Holiday Budget with our handy Budget Builder!

Build a Holiday Budget in Minutes!

According to Canadian Living Magazine, the average Canadian adult spent $766 on holiday gifts in 2015. About 27 percent spent over $800, while 23 percent spent $200 or less.

Do most Canadians stick to their budget? Yes, but…

stick-to-your-budget

Source: thechive.com

 

Our handy YNCU Holiday Budget Builder can help you quickly build a budget. Our advice? Print off a copy, fill out the first three categories, then bring it with you while shopping. Fill it out as you go so that you can stay on top of your spending. Then when January rolls around, you won’t be one of the 30% of Canadians that regrets how much they spent for Christmas!

Holiday Budget Spreadsheet

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Here’s 6 reasons why a budget is your most powerful tool!

Did you know that according to the Financial Consumer Agency of Canada, less than half (46%) of Canadians have a budget, yet the vast majority (93%) of those who do budget stay within it most of the time. What does this mean for you? It means that if you put in the effort to start a budget, you will probably stick to it. It also means you can feel more confident about your future – a budget can completely change your financial destiny.

infographic - 6 reasons why budgeting is your most powerful tool

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