When it comes to identity theft and other financial fraud, the perpetrator is sometimes close to home.
While people worry about having their identity or money stolen by strangers online, family, friends and acquaintances are increasingly the ones stealing and profiting from personal information, according to one survey. This creates a tricky and potentially expensive situation for victims to resolve.
Experts say theft by a family member or acquaintance is vastly underreported.
The National Crime Victimization Survey by the Bureau of Justice Statistics from 2016 found that just 6% of all victims of identity theft knew something about the offender. But another more recent report by Javelin Research & Strategy, which surveyed 5,000 adults, found that the number of victims who knew the offender in cases of identity theft spiked to 15% in 2018 from 7% in 2017. Because victims were hesitant to report the crime, about three-quarters of these victims personally bore all or some liability for the fraud that occurred.
Experts said that victims generally do not report the fraud because they don’t want to get friends or family in trouble with the law or cause personal rifts. They often feel some shame and embarrassment that it occurred. And in some cases — such as with children or the elderly — they may be unaware or reliant upon the perpetrator.
Axton Betz-Hamilton is an authority on the topic — both personally and professionally.
Growing up, Betz-Hamilton watched her parents struggle unsuccessfully for years to resolve cases of identity theft. At 19, she discovered that her own identity had been stolen years earlier. It took Betz-Hamilton about eight years to straighten out her credit report.
The cruelest twist came after her mother’s death in 2013, when she and her father discovered that her mother had been the culprit — taking an estimated $600,000 combined from Betz-Hamilton, her father and grandfather through various misdeeds.
She has turned the formidable experience into a career. Betz -Hamilton is now an assistant professor of consumer affairs at South Dakota State University, where she focuses on issues such as family financial abuse, child identity theft and elderly financial exploitation.
She also wrote a book “The Less People Know About Us” about her personal experience.
Since the book’s publication earlier this year, Betz-Hamilton has heard from other victims around the globe — some with stories more extreme than hers. In many cases involving other forms of abuse.
Still, Betz-Hamilton and other experts say many fraud victims are ashamed to come forward.
“It is exceptionally underreported,” said Charity Lacey, spokeswoman for the Identity Theft Resource Center, a non-profit that focuses on supporting victims.
“There are all these justifications that can happen on the part of the victim as to why they will allow that known perpetrator identity crime to happen,” she said.
Here are a few ways you help prevent or recover from familiar fraud:
It pays to protect yourself in some of the ways you would from any identity theft.
Freeze your credit, which restricts access to your credit file. It’s free, easy and will essentially halt someone from opening any new credit in your name.
While you are at it, freeze your children’s credit too and urge elderly loved ones to do the same. Experts say children and the elderly are often targeted because they’re vulnerable and the activity goes undetected. It’s not just family but friends and acquaintances who take advantage of access to personal information.
Store personal information and documents such as Social Security cards, passports and birth certificates in a safe place. Shred sensitive documents and keep information on electronic devices protected. Monitor your credit reports regularly for any unusual activity.
Vet anyone who may be in your home regularly — such as caregivers or other service providers. Don’t leave personal information out — such as bank statements — if you are expecting others in your home.
Be selective about who you trust to maintain your finances in old age or in disability. Consider putting checks and balances in place with a financial professional or multiple trusted people as a safeguard to keep each in check.
Keep an eye out for signs of fraudulent activity.
Review your bank and credit card statements closely. Look out for signs of new account activity — this could include bills for items you didn’t buy, debt collection calls for or denial for loan applications. Credit card applications arriving in the mail for a minor are another giveaway.
Pay close attention if an elderly loved one is reliant on others for their care as this is when they are most susceptible. Look out for changes in financial activity or activity they cannot explain. Additionally, take note if items are missing from their home. Also notice if a caregiver shows a change in lifestyle — quitting a job or buying big ticket items for instance.
Javelin Strategy & Research found that fraud cases show an uptick around economic downturns as people grow desperate.
Kyle Marchini, who co-authored the firm’s report on identity theft, refers to need as one corner of a “fraud triangle,” with opportunity and rationalization as the other two corners.
For example, sometimes a family member might use another’s information to get a loan to pay the rent. While that is easier to rationalize than a spending spree, it’s still a crime.
A big hurdle for victims is the emotional betrayal of someone they trust. Then comes the question of whether to report it.
There’s a lot of guilt and shame about ‘’I should have known better’,” said Lacey of the Identity Theft Resource Center. “Now that person’s outcome is in (their) hand and (they) have a weighty decision to make.”
Lacey recommends victims report the crime in most cases. Law enforcement will need proof.
The police report is “sort of your ticket to show to banks and credit reporting agencies” said Betz-Hamilton. It also helps convince banks and creditors that you aren’t complicit in the fraud, said Marchini.
Consider seeking other help, such as through a victim’s support group like Identity Theft Resource Center or professional therapy.
Sarah Skidmore Sell, The Associated Press
The post Financial fraud more fraught when perpetrator is known appeared first on Canadian Business – Your Source For Business News.
Lawrence Summers Wants to Target the Rich, But Not Through a Wealth Tax
(Bloomberg) — Former Treasury Secretary Lawrence Summers proposed a suite of steps the U.S. government can take to raise trillions of dollars more in revenue from the rich without adopting a wealth tax.They include higher levies on capital gains, the closure of loopholes and shelters disproportionately used by the wealthy, and stepped-up Internal Revenue Service oversight of tax returns, especially those filed by the rich.In a paper being presented at a Brookings Institution conference on Tuesday, Harvard University economist Summers and his co-authors argue that their “pragmatic approach” is superior to the wealth taxes championed by Democratic presidential candidates Bernie Sanders and Elizabeth Warren.Because the proposed reforms build on the current tax code, they would be easier to administer and “more likely to be implemented successfully than riskier, untested alternatives that are vulnerable to political attacks, legislative impasse and legal challenges,” according to the paper. Summers is a paid contributor for Bloomberg Television.Summers and his co-authors — University of Pennsylvania law and finance professor Natasha Sarin and research assistant Joe Kupferberg — said their proposals have the potential to raise more than $4 trillion over the coming decade. That would help the government pay for services for an aging society and for steps to combat inequality, while avoiding an excessive build-up in debt.Democrats’ PrioritiesDemocratic lawmakers are considering how to raise taxes in a way that would make it easier, technically as well as politically, for Congress to pass a measure quickly should their party win the presidency in November. That money could be used to fund the policy priorities of the Democratic candidates, such as expanding health care and child-care access, investing in renewable energy, or forgiving student-loan debt.Some in Congress have publicly expressed concern that a number of the ideas floated by presidential contenders, such as the wealth tax, could be difficult to design or face constitutional challenges that would delay implementation.The Sarin-Summers-Kupferberg plan includes many of the same elements embraced by presidential candidates ranging from former vice president Joe Biden to Sanders. Taxing capital-gain income at the same rate as wages, increasing audits on the wealthy and corporations and hiking levies on offshore corporate profits are fixtures of Democratic tax plans in 2020.They would also do way with the carried interest loophole and cap tax deductions, such as mortgage interest, at 28%.The proposal though does include two potential political red flags for key constituencies — small businesses and charities — if this were to get serious consideration in Congress.The plan calls for the repeal of a 20% deduction for some pass-through businesses, a new provision in the 2017 tax law intended to give small businesses similar tax benefits to those that corporations were receiving.Corporate RateWhile the plan would raise the corporate rate slightly — to 25% from 21% — it would still be far below the 35% it was prior to President Donald Trump’s tax overhaul. However, small business owners would presumably see their tax benefits disappear and pay a top rate of 37%.Churches, colleges and other non-profits might balk at a change that would curb tax breaks for appreciated stock. Currently, donors can claim a write-off for the full value of the asset, and avoid any tax on the capital gain.Summers, Sarin and Kupferberg acknowledged that it is unlikely that the wide range of changes they are proposing could be implemented quickly. They suggested that the initial focus of the reforms should be on substantially beefing up IRS resources, which they said could raise $1.2 trillion in new revenue over 10 years.“Our belief is that the best path forward is through a combination of deterring illegal tax evasion — by investing more in an underfunded Internal Revenue Service — and reducing legal tax avoidance by broadening the tax base and closing loopholes that enable the wealthy to decrease their tax liabilities,” the authors wrote.(Michael Bloomberg is seeking the Democratic presidential nomination. Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)To contact the reporters on this story: Rich Miller in Washington at firstname.lastname@example.org;Laura Davison in Washington at email@example.comTo contact the editors responsible for this story: Margaret Collins at firstname.lastname@example.org, Scott Lanman, Alister BullFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
What Walmart and Target need to do to stay on top in a reshaped retail world
It was only a few years ago that both of those titanic big-box retailers were in peril, losing customers in droves to the e-commerce giant. But the past decade’s radical reshaping of how Americans shop, a change fueled by Amazon’s inexorable ascent, has paradoxically resulted in Walmart and Target—along with a few other big U.S. retailers—evolving to become stronger and more successful companies than ever. The massive shock of e-commerce’s encroachment, analysts agree, gave them the jolt they needed to reinvent themselves.
The result has been a stunning return to form for both Walmart and Target, each of which was founded back in 1962. Walmart is expected in February to report its 22nd straight quarter of comparable sales growth in the United States. Target, despite a disappointing 2019 holiday season, says it should post an 11th quarter of growth by that metric, which excludes the impact of newly closed or opened stores.
Most crucially: Both chains are getting more shoppers to come to their stores. Each company has poured billions into updating both the technology and the décor at their massive brick-and-mortar fleets—4,800 stores for Walmart U.S, and 1,800 for Target.
“What they did that was brilliant was to leverage their stores and sales associates in way to compete against Amazon on convenience, defining convenience in a different way,” Barbara Kahn, a professor of marketing at the Wharton School in Philadelphia, says of the two companies.
Walmart’s shares have roughly doubled since October 2015 when it announced massive investments to counter Amazon. And the top line is also at record levels, with U.S. sales likely to top $340 billion for the fiscal year that’s about to end. Target’s shares, despite a recent mini-slump, are up 60% compared to last January.
The question now is: How long can Walmart and Target extend their winning streaks? Leaders at both companies know they can ill afford to rest on their laurels. In November, Walmart chief executive Doug McMillon, ranked by peers as one of the most underrated CEOs in a recent Fortune survey, expressed dissatisfaction with the company’s U.S. e-commerce progress. And Target got a rude awakening during the recent holiday season, when comparable sales rose only 1.4%.
Each company is also coping with big changes in the c-suite. Greg Foran, the architect of the vast improvement of Walmart’s U.S. stores, has stepped down to return to his native New Zealand to lead an airline there. He’s been replaced by John Furner, until recently CEO of Walmart’s Sam’s Club. Walmart’s well-regarded chief merchant Steve Bratspies is also on his way out. Target, meanwhile, also recently lost its chief merchant, Mark Tritton, who oversaw the creation of many of its successful new brands; he left to become CEO of Bed Bath & Beyond.
Both Walmart and Target have begun to telegraph how they plan to build on their success. The two companies will update investors on their respective plans with analyst days, Walmart next month and Target in early March. Each will likely be rolling out new strategies while building on current strengths. And each is painfully aware that hot competition and fickle customers can bring a sudden change of fortune. “At any moment, things can turn,” says Forrester analyst Sucharita Kodali.
Here’s a preview of what investors—and shoppers—can expect.
Walmart: Better clothes and a better website
Walmart has been posting explosive online growth, with its e-commerce sales up 41% year-over-year last quarter. According to a Recode report, the company’s 2019 U.S. e-commerce should come in at $22 billion or so. It has spent billions to build up the infrastructure to steer customers toward curbside pickup of online orders, particularly for groceries, and in-store pickup.
It’s largely Walmart’s grocery business that has fueled that recent e–commerce growth. Overall, the online business is still losing money, with losses estimated by Recode to be $1 billion for the fiscal year winding down. All that has left McMillon frustrated about the costs and pace of expansion in Walmart’s other online sectors – its general merchandise business and its marketplace for smaller independent vendors. “We need to do more and move faster,” the CEO told investors in November, saying he wants “a stronger Walmart.com business that’s profitable over time.”
Many observers expect Walmart to tighten the purse strings on e-commerce investments to focus on those that will pay off. As Wharton’s Kahn puts it, Walmart has “to offer value but do it in a way that doesn’t make them bleed.” Indeed, Walmart is reportedly looking into shedding its Jetblack concierge service and has drastically streamlined jet.com, the e-commerce service it acquired in 2016 for $3 billion.
Amazon’s online sales are currently about six times as big as Walmart’s. And Forrester’s Kodali says Walmart still has a lot of work to do if it wants to truly challenge Amazon in that arena. That includes mastering some e-commerce fundamentals: Providing more reliable information on whether an item is in stock at a store, for example, is one such arena, Kodali says. That need for up-to-date information on availability and speed of delivery also applies to Walmart’s third-party marketplace, and Kodali says it’s crucial to keeping customers on the site in general. “If you lose a customer’s confidence, it’s that much harder to get ever get anyone to try something again,” she notes.
One key area where analysts expect Walmart to try to make bigger inroads is clothing sales, both online and in its stores. The company has struggled to turn e-commerce clothing brand acquisitions like ModCloth, which it is selling off, and Bonobos into successes. Yet it’s clear Walmart has not thrown in the towel, recently reviving defunct women’s fashion brand Scoop as its own brand, and selling some Karl Lagerfeld merchandise via a partnership with Lord & Taylor. A better women’s clothing assortment, beyond the $7 camisoles Walmart is known for, would go a long way to getting shoppers to spend more time, and therefore more money, at its stores.
Walmart is the biggest grocer in the country and gets 56% of its revenue by selling food. It built much of its recent growth by leaning in on nicer presentation of fresh food and a better assortment of offerings. This year, though, the pressure will only grow on Walmart to keep its grocery offering enticing to shoppers, particularly at the lower end. Aldi, the German deep discounter whose generic store brands are increasingly popular, continues to expand in the U.S, often opening stores catty-corner from a Walmart. And Lidl, another German low-price grocer taking root in the U.S., is also likely to pinch Walmart. (Those two chains severely dented the market share of Walmart’s Asda chain in Britain in recent years.)
How could Walmart play offense in the grocery aisle? Look for the company to continue to expand its fresh food assortment. Beyond that, Walmart could try offering services like meal delivery plans, as well as selling higher-end prepared foods, says Forrester’s Kodali.
Analysts also expect Walmart to branch out beyond its traditional business for new sources of revenue—much as Amazon has done. Walmart has already been dipping its toes in the digital advertising world, where it uses its masses of customer data to sell ads on its web site to other companies. By some estimates, that could become a $5-billion-a-year business in short order. The Wall Street Journal recently reported that Walmart was looking into selling warehouse and shipping capacity to third-party sellers doing business on its online marketplace, as well as selling some of its computing firepower to outside parties.
In a multifront retail battle, “The only retailer that can compete head-to-head with Amazon is Walmart,” says Wharton’s Kahn.
Target: More hot brands, more groceries
Target slumped in the mid-2010s in part because its store brands had lost their appeal. But it has recaptured its Tarzhay cheap-chic aura, ditching many stale brands, including some billion-dollar labels, and replacing them with new, instantly popular names.
That strategy continues to pay off, enabling Target to poach business from department stores and clothing chains. Yes, the recent holidays were disappointing for the company, but its clothing department wasn’t to blame. Apparel sales rose 5% during the holidays, while at Kohl’s, Target’s frequent strip mall neighbor, women’s clothing was weak. That was no coincidence. Last year, Target convinced Levi’s to let it start selling its better red-tab jeans in a big threat to the likes of Kohl’s and J.C. Penney.
“When you walk through a renovated Target, there’s a Lululemon, there’s a plus-size store, there’s a Victoria’s Secret,” says Stacey Widlitz, co-founder of SW Retail Advisors, of the needs filled by Target’s new brands. “There is no need to go anywhere else.” The challenge will be to keep trotting out those new brands—Target’s own, and others’—while staying in sync with shoppers’ tastes, she adds.
It will also be challenging for Target to preserve its merchandising Midas touch under its two new chief merchants, Jill Sando and Christina Hennington. Nonetheless, analysts expect the steady rollout of new brands to continue. Just last week, in fact, Target launched the “All In Motion” sports clothing label to replace the discontinued C9 athletic brand made by Champion.
Analysts expect to see a lot more progress in the grocery department, where Target derives a significantly smaller share of its revenue than Walmart does. Last year Target launched its health-focused “Good & Gather” brand, and it will add more products to the line this year to bring the brand’s assortment to 2,000 different items. The chain has won kudos for its alcoholic-beverage assortment at some 1,500 stores and its strong variety of organic food. A more appealing grocery lineup would go a long way to driving customers to visit its stores more often, a linchpin of Target’s strategy.
On the e-commerce front, Target has gingerly waded into the marketplace waters, selling other companies’ brands online. Target has so far kept its marketplace selective and invitation-only, selling only 55 brands in a few specific product categories. But after digital sales rose a scant 19% during the holidays compared to the 2018 period, barely more than half the clip they hit in the summer and early autumn, the pressure is on Target to keep pushing its e-commerce.
There’s no guarantee that Walmart and Target will continue to correctly anticipate shoppers’ desires. They’ll have to remain relentless in investing in their stores, adding to the conveniences they already offer and avoid falling into the ruts that hurt both chains over the last decade.
“Even just one off day will throw your numbers off,” says Forrester’s Kodali. And it takes perpetual hustle to keep those numbers in the black.
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Gov’t raises P134B from RTB sale
THE government raised P134 billion from its 23rd offer of retail Treasury bonds (RTBs), which was met with firm demand amid strong liquidity in the market.
The Bureau of the Treasury (BTr) awarded P134 billion worth of three-year RTBs at the rate-setting auction for the papers out of total bids worth P149.827 billion. This was almost five times the initial offer of P30 billion, prompting the government to upsize the acceptance.
The papers were quoted at a coupon of 4.375%, higher compared to the 4.25% coupon fetched for the three-year RTBs issued last April 2017 or RTB 3-08 as well as the 4.274% quoted for the tenor at the close of the secondary market yesterday.
Proceeds from the issue will be used for general budgetary purposes including the state’s critical infrastructure projects and social services.
The Development Bank of the Philippines (DBP) and Land Bank of the Philippines are the joint lead managers for the 23rd RTB offering.
The two state-run banks are also part of the joint issue managers, which are BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investment Corp., PNB Capital and Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp.
The three-year RTBs are now being offered to the general investing public for minimum denominations of P5,000.
Interested investors should have a peso account with selling agent banks accredited by the BTr, as they will receive quarterly interest payments and the principal amount on maturity via this account, the Treasury said.
To invest, one can approach their bank branch of choice or visit the BTr website and buy via its online ordering facility.
The public offer period is set to run until Feb. 6, unless the Treasury closes it earlier.
Following the rate-setting auction, National Treasurer Rosalia V. de Leon said yield on the RTBs is a “fair value,” given the volume of tenders and considering that the offer was to provide some incentive for them (individual and retail investors) to participate.”
“We’ll have to see first how much will be tendered, particularly for individuals because our preference is to be able to allocate to individuals and the retail (investors) which is precisely the rationale for this RTB issuance,” she told reporters.
For Carlyn Therese X. Dulay, first vice-president and head of institutional sales at Security Bank Corp., the rate set was within the market expectations while the huge amount of tenders was “indicative of how well the market supports” the issuance.
“I think 4.25%-4.375% was the range that was really given for this bond so the 4.375% is a very attractive rate but it’s still within expectations, so I think it’s positive for the market,” Ms. Dulay said in an interview after the auction.
At the same time, the BTr is also holding an exchange offer program for this issue.
Under the program, bondholders of the RTB 3-08 issued in 2017 which will mature this April can exchange these papers for this latest RTB issue for a “convenient reinvestment option for their current holdings at no cost.”
“In terms of the switch, merong cap sa (there will be a cap for the) switch, P15 billion per [working] day. [However,] we’ll just have to see first how much will be the demand for the switch but we anticipate na there will be a lot for those holding the (RTB) 3-08 in exchange for the (RTB) 23 recognizing that the coupon for this one is higher than the RTB 3-08,” Ms. De Leon said.
She, however, said the P15-billion daily cap for the switch can still be adjusted. The volume accepted per day for the switch will be determined at the end of the day.
According to Ms. De Leon, there are P180 billion worth of three-year papers maturing this April that are eligible for the exchange offer.
“P180 billion is the outstanding right now and that will mature in April so all the volume will be eligible for the switch, but per day, we cap the amount at P15 billion. But we reserve the right [to decide] how much we will accept. So we can also upsize in the same manner that we upsized in our auction today,” the Treasury official said on Tuesday.
Interested holders need to go to their broker or dealer to facilitate the submission of their offers.
“For the first time, the National Registry of Scripless Securities, through its Switch Module, will serve as the electronic platform whereby offers to exchange will be submitted, allocated and settled,” the Treasury said.
The BTr on Tuesday held a roadshow for the RTBs in Makati City and will hold additional ones in Cebu City, Davao City, Baguio City, Pampanga, South Cotabato, Bacolod City, Misamis Oriental and Iloilo City. — Beatrice M. Laforga
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