• clarkhoward.com - IRA's and investing

Something is spreading through the insurance industry that directly affects you. Insurers are deciding whether to do business with you based solely on your credit score. Let’s say you’re trying to buy homeowner’s insurance or auto insurance. If your credit score is a 680, for example, the company could turn you down. The thinking is that if you have a low credit score you are more likely to burn your house down for the insurance money or you’re more likely to be a claims maniac. The link between credit scores and claims is crazy. States control the regulation of insurance companies. But insurance companies are using every tool they can to convince states to allow insurance companies to fire you after a routine check of your credit report. The state of Missouri conducted a study into the practice and found that specific groups are targeted. People who have suffered a layoff, have gotten a divorce or have a low income are at particular risk. So, until the industry shapes up, do everything you can to pay your bills on time. That is the No. 1 priority.

We get questions from listeners who have bought brand new cars from dealerships that have undisclosed hail damage. It’s a messy subject because hail damage is an enormous problem for auto manufacturers and their dealers. The fleets are sitting there like sitting ducks, so dealers can suffer massive losses. But the good news is that Nissan has come up with an amazing new technology that could prevent hail damage to owners and dealers. According to the Jackson Clarion Ledger in Jackson, Mississippi, the technology senses when hail is coming, creates a sonic wave in the atmosphere that disrupts the forming of hailstones within a one-mile radius. Nissan modified the machine, which was originally used by farmers. It’s a win-win for everyone, and the systems are affordable enough for dealers to have in their car lots. Who knows? You may be able to afford one for your home. What does it mean for the rest of the weather, though. Are we messing with Mother Nature?

It’s a political year, and there have been some volatile events happening over the past few days regarding outsourcing jobs overseas. The idea of free trade and work moving around the globe has long been a controversial issue. Looking at the issue from an economic standpoint, there is a short-term effect on people and a long-term effect on the country as a whole. For the past three years, American workers have endured a tremendous hardship in the job market. People who are highly trained and who were making really nice salaries have found themselves unemployed. And it’s been a very rough road. But the reality with jobs is that the market place finds the most efficient way to deliver products and services. We went through this first with manufacturing jobs that went overseas. Then there were shifts in cars and electronics. Now, clothing and furniture are being made overseas in massive numbers. People in North Carolina who are skilled furniture makers have lost tons to people overseas. But we are both workers and consumers. The advantages of free trade as a consumer are enormous. Jobs may disappear but the flip side is that we now have opportunities to purchase great deals. Think of DVD players. You can buy one now for $30 or $40. If the only one you could buy came from America, it may cost you $800 to $1,000. We go through a constant churning process in capitalism, whereby people must learn skills in completely unrelated fields. And Clark thinks there is a role for government in this. The government needs to step in and provide those meaningful opportunities. If you’ve lost your job, take advantage of the marketplace. Learn skills that are needed today because you have to deal with the cards the marketplace is giving you. Clark doesn’t want to belittle this very tough topic, but get the skills you need to succeed. Don’t be a sitting duck.

For years, Clark has taken calls from people who have fallen victim to cram charges. These are phony charges applied to phone bills – usually businesses – that go undetected because bills are so hard to understand. Well, it turns out that the Gambino crime family has been behind this scam, according to the New York Times. Only in America could the mob get involved with local phone companies and add phony charges to your bill. The phone industry claims that FCC regulations require them to provide billing services for everyone who wants a phone in their home or business. But the local phone company has taken a big cut of this cramming action. Law enforcement claims that about a quarter of a billion dollars has been stolen. So, how did it work? In some cases, the mob sent out almost exact replicas of phone bills from made-up phone companies. For instance, the legitimate company may be Southwestern Bell. The phony bill, which looked almost identical, came from “Southwestern Bill,” and claimed that the company needed immediate payment or their phone service would be cut off. People got scared and paid. About a half a dozen people have been arrested. But the majority of the money was siphoned through the local phone companies, which allowed the charges to go through. So, you need to read your bill each month and challenge charges that don’t look right to you. If you see “unregulated charges,” it’s a red flag that could indicate you are being charged unnecessarily. Don’t just accept what they send you.

Did you know that there is a book in circulation that the federal government is trying to have banned? It’s written by a man named Irwin Schiff, who claims that people don’t need to pay income taxes. The Feds have asked the U.S. Circuit Court of Appeals to get involved and have even asked for a list of people who have bought the book. The Feds want the IRS to check the list to see if they are paying taxes. That is scary stuff. Clark believes it is our civic duty to pay taxes, but he thinks what the government is doing is wrong. If you want to buy a book and believe what’s written in it, you should be able to.

In the country of Finland, speeding ticket fines are based on your personal wealth and income. The police get the income information from the income tax office and pass it on to the courts. When the person is in court, the judge determines how much the fine should be based on that amount. Do you think your fine should be based on your income or wealth or should it be the same for everyone? Tell us in our latest poll.

Clark is happy to report that U.C. Berkeley and the Department of Education have reached an agreement regarding the slip up on the part of FedEx delivering Berkeley’s Fulbright Scholarship applications. Clark was about to give out the phone number of the DOE representative who was ready to refuse the applications that were delivered late because of FedEx. But apparently there was a Fulbright board that had the final say. And they agreed to let the applications through. Now, 30 of the brightest students in the country have a chance to receive what was deserved all along.