Debt: Consolidation

Beware when looking up advice online

By: Sierra Moller 

In today’s digital age, there are hundreds of thousands of articles on financial advice. A quick Google search of “credit repair” or “debt consolidation” will populate hundreds of millions search results from blogs all over the Internet. In all the noise of available advice on the Internet, how do you know what resources to trust?

In my quest to assemble great consumer tips and tricks on debt consolidation and credit repair, I came across many sites that had content that seemed like good advice, but also seemed like it was trying to guide me towards a particular product or service.

As it turns out, for every well-intentioned article available on the Internet, there are dozens of articles geared towards advertising a particular product. This form of marketing is called native advertising, and it’s rampant throughout the Internet today. Native advertising is the concept that corporations pay to have content about their products included in articles that align with the publication in style and tone, making it very difficult for readers to spot. [1]

Financial websites such as Forbes, have been participating in native advertising for several years. For instance, Forbes has a program called BrandVoice, which allows marketers to produce articles for Forbes.com and the magazine, which often resemble the look and tone of regular articles. [2] The articles contain general advice, but often also embed a “plug” for a particular brand or service. To their credit, Forbes maintains a staff of sponsored content specialists to work with the advertisers to ensure the article remains valuable to readers.

Forbes is not alone. In fact, other prominent financial websites use native advertising. For example, Fortune.com and Money.com work with Impact Partnership, a marketing organization, to pair advice on retirement and financial planning with native content from financial advisors across the country.[3]

Native advertising works. In fact, it might work too well. Click-through rates tend to be much higher than typical advertisements and readers are usually more engaged in the content. However, it can be problematic when readers, who are reading the articles for advice, rely on those articles, not realizing it was an advertisement.

This practice has garnered both positive and negative attention. On the one hand, the practice has arguably created a whole new business model for companies such as Forbes by creating new sources of revenue. On the other hand, consumer protection organizations call the practice is deceptive to consumers because readers may not always realize when the content is an ad. [4]

The practice has also raised eyebrows at the Federal Trade Commission. The FTC is currently considering implementing regulatory measures on native ads, including plans to monitor the market to ensure that native advertising is being used in a manner than benefits consumers.[5]

For now, the FTC has not issued formal guidance on requiring disclosure, but there are rumors that it plans to do so. Additionally, industry organizations such the Interactive advertising bureau (IAB) has issued their own warnings to advertisers. They suggest that brands respect consumers and clearly label sponsored content as advertising. [6]

Until the FTC issues more rules and guidance on native ads, here are a few commonly accepted labels to help spot native ads.

  • “Advertisement” or “AD“ (Google, YouTube)
  • “Promoted” or “Promoted by [brand]”
  • “Sponsored” or “Sponsored by [brand]” or “Sponsored Content”
  • “Presented by [brand]” and “Featured Partner”

Lastly, its important to note that the advice provided in sponsored articles is not necessarily wrong or even bad advice. In fact, most of the advice in these articles is legitimate. But it is important that when your searching for advice on the internet, you use sources of information that you trust. Or at the very least, you should know when your reading an article that is intended to be an advertisement or promotion for a product. Be on the lookout for content in articles that promotes one specific product or service over others.

[1] http://www.wordstream.com/blog/ws/2014/07/07/

[2] http://blogs.wsj.com/cmo/2015/01/04/forbes-takes-native-ads-to-new-level-with-att-sponsored-cover/

[3] http://www.prnewswire.com/news-releases/impact-partnership-expands-relationship-with-fortune-to-include-money-fortune-knowledge-group-300022824.html

[4] http://www.bloomberg.com/bw/articles/2014-08-05/ad-industry-execs-weigh-in-on-john-olivers-native-advertising-takedown

[5] https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-revised-endorsement-guides-what-people-are-asking

[6] http://www.iab.net/iablog/2015/01/what-happens-if-the-ftc-provides-native-advertising-guidance-in-2015.html

 

Finally, an App for that. My review of Mint.com

By: Sierra Moller

Today, there seems to be an app for everything. And nearly every app is designed to get you to spend money. But are there apps that will truly help me save money?

Mint.com is a simple app that allows you to link all of your accounts to one easy-to-use platform. Its free to signup and only takes a few minutes to link your accounts.

Please note, you must already have online banking set up with your bank in order to use the app. Therefore, if you don’t have online banking already set-up, you will need to go to your bank to set up an online account with your bank. Mint.com works by adding your bank accounts onto their platform to present your financial information in a slick web-interface, complete with graphs and charts.

The app itself is fun, intuitive, and easy to understand. The service is particularly useful for budgeting, creating goals, and looking at all your financial accounts in one place.

As previously mentioned, it requires linking your bank accounts to the app. I loaded up all my debt accounts first so I could capture how much I actually owe all in one place. It recognized my credit card and student loan accounts instantly. However, it didn’t recognize all of my accounts immediately. For instance, it took 24 hours to recognize one of my accounts from a local bank. In fact, depending on your bank, you may not be able to link all of your accounts. That said, mint.com recognized most of my major accounts so when I was finished, I did feel like it accurately reflected my net worth.

After linking my accounts, I was able to look over all my recent transactions and categorize my spending habits. Mint.com initially auto-categorizes your transactions. Most of them are correct, but there were also a lot of transaction that were mislabeled that I had to re-categorize. It was a little inconvenient at first, but once I adjusted a transaction to a different category, mint.com saved it and automatically remembered it for all future transactions. For example, it labeled my parking meter charges as “other” at first, but then remembered to categorize it as “transportation expense” later.

After three weeks of using the app, I quickly realized that I was spending money at restaurants way more each month than I realized. So I tried out mint.com weekly summaries via email. I normally hate emails from apps, but I thought a weekly email would reveal more about what I was buying each week closer to when I purchased it, so I would be more likely to remember.

Truthfully, it was about as useful as most email alerts. I only really checked it when I had the time, and if I was busy, I just deleted the email before reading it. I think if I checked my mint.com account before I bought every meal I would have resisted spending more. But who has the time? I’m usually grabbing lunch because I’m in a hurry and on the go. Therefore the email feature didn’t stop me from making purchases, but it did help me see what I was buying and how much. After a few weeks of using the email feature, I did notice that I started packing my lunch more, and I was more deliberate about the price of my lunch when I was purchasing my lunch on the go.

Another useful feature is the alert function. You can set it up either with your phone or via email for every late fee, bill reminder, rate change, or when you go over budget on a category. I used this function to alert me when I would go over budget on eating out, and I found this function much more useful to control my spending then the weekly email. The reminders for bill due dates was also a nice feature that I highly recommend.

Lastly, mint.com has a credit monitoring function that I found useful. Mint.com allows you to view and monitor your credit score, payment history, errors, and account usage. I was hesitant at first to enter my credit information, but after checking their terms of service, I opted to enter my info.

Remember when using mint.com the company makes money by acting as a lead generator for other financial services. Which means that the company makes money by recommending various financial services, which they get a referral fee for every customer that signs up. Therefore be on the lookout of when the site is directing you to a third party service, as those services usually cost money.

All in all, I find mint.com a great budgeting tool and I recommend it to those looking to get their finances back on track.

 

Credit Repair Series (3 of 3): Credit Repair Agencies

By: CameronPassmore 

In Part 2 of our series, we covered how to identify and correct inaccurate information on credit reports. In Part 3, we will discuss the businesses that offer these services professionally: credit repair agencies.

Overview and Concerns
A “credit services organization” (or agency) is defined under Colorado law as, “any person, including a nonprofit organization exempt from taxation under section 501 (c) (3) of the federal “Internal Revenue Code of 1986″, who, with respect to the extension of credit by others, represents that such person can or will, in return for the payment of money or other valuable consideration by the buyer, improve or attempt to improve a buyer’s credit record, history, or rating.” CRS § 12-14.5-103(2). It should be noted that attorneys acting in their normal capacity are excepted from this definition.

Not only has the State of Colorado taken the time to define this occupation legally, but an entire series of laws (known as the Colorado Credit Services Organization Act, CRS § 12-14.5-101, et seq.) has been written with an eye to protect consumers. The state legislature has summarized their concerns, “[c]ertain advertising and business practices of some credit services organizations have worked a financial hardship upon the people of this state, often those who are of limited economic means and inexperienced in credit matters. Credit services organizations have significant impact upon the economy and well-being of this state and its people.” CRS § 12-14.5-102(1)(b).

The savvy consumer should be aware that bad actors are present within the field of credit repair. At a minimum, remember that nobody can promise results. Other things to look out for include: payment up-front, offers such as “guarantee plans,” agencies that sell advice, etc. Most of the time when a credit report contains an inaccuracy, a savvy consumer will be able to address the issue themselves, provided they are willing to see the process through to its end.

Complex Matters
This series has been aimed at educating consumers on how to obtain their credit report and how to challenge inaccurate credit report information. A great deal of the time, a credit repair agency will not be able to offer you anything you cannot get for yourself. That said, every credit situation is different, and complex issues can arise regarding liens, taxes, and collection actions. If the credit repair task ahead of you is complex, credit repair agencies do have the benefit of repetition, and a reputable agency is one possible way to resolve complex issues.

Selecting a credit repair agency, should you decide you need one, is beyond the scope of this series. However, at minimum, savvy consumers should use the usual due diligence before selecting anyone to help them with any financial issue. A partial list of research tools appears below:

Google

(you can search business reviews in the Google Local section of your Google+ account)

Better Business Bureau

Do your homework before contacting an agency: the last thing your credit horror story needs is a sequel. In the end, remember that when it comes to credit repair you will always be your primary advocate. Stay credit vigilant, and good luck.