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Last autumn I took time off to go back to school. The timing turned out to be just right: My American economic history course at the University of California at Berkeley got to the Great Depression in early October, around the time everyone became convinced we were about to have another one.
I have been following the How to Fight Debt Collectors series and noticed that the articles are all geared towards third party collections. For 3 years, I worked as a first party collector in the collections department for a mortgage company.
During that time, I learned a lot about debt, people, and collection law. I did some things that may have been considered shady but I never broke the
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law. The reason is in the distinction between 1st party and 3rd party collections.

1st Party Collections
Lets say my mortgage is with The Bank of Suburban Dollar. Suburban Dollar is reviewing their books and discover that I’m a month behind on my mortgage. They pick up the phone and call me to see what’s happening. The bank representative making the phone call is a direct employee of the bank and therefore a 1st party collector. When asked, they should say they work “with” rather than “on behalf of.” They are not a proxy of the bank, they are the bank.
3rd Party Collections
Same scenario, slightly different circumstances. I am still a month behind but the bank decides they don’t have the funds or the resources to pursue me. Instead, they opt to hire the Bargaineering Busters Collection Agency to do their dirty work. Jim calls me up one day and says “Hey Kyle, this is Jim with Bargaineering Busters Collection Agency calling on behalf of a debt you owe to the Bank of Suburban Dollar.” Jim is acting “on behalf of” the bank but does not work for the bank. Jim is a 3rd party in this debt saga, that makes him a 3rd party collector.
Why It Matters
Whenever you see discussion about debt collection, the Fair Debt Collections Practices Act (FDCPA) is almost always mentioned. The FDCPA is intended to protect the consumer but it only protects the consumer against 3rd party collectors.
Before the law was enacted it wasn’t uncommon for someone from a collection agency to call you up and fill your ear with empty threats until you pay up. The intent of the law was to protect you from this harassing behavior from a party you don’t owe money to. It was not intended to limit the ability of creditors, like the mortgage company, from being able to collect on dbets.
FTC comments define a “debt collector” as:
Employees of a debt collection business, including a corporation, partnership, or other entity whose business is the collection of debts owed another.
As well as,
A firm that regularly collects overdue rent on behalf of real estate owners, or periodic assessments on behalf of condominium associations, because it “regularly collects . . . debts owed or due another.”
In reference to the Creditor (1st party):
Creditors are generally excluded from the definition of “debt collector” to the extent that they collect their own debts in their own name. However, the term specifically applies to “any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is” involved in the collection.
Even more specifically the FTC directly excludes credit card companies trying to collect card holder accounts. The FDCPA does not apply to the 1st party employees of the company you owe money to and they know it. Fortunately most in house collection shops, like the one I worked for, do make a concerted effort to abide by the FDCPA.
Where 1st Party Collectors Blur the Line
After three years in a 1st party collections environment, you start to learn where you are silently encouraged to blur the lines. There are certain spots where a 1st party collector may take additional liberties where a 3rd party collector dare not go for fear of retribution.

  1. Your Neighbors – Any collector, 1st or 3rd party, can contact your acquaintances and neighbors in an attempt to locate your contact information. They can only contact each of them once and only until they get that information. 1st party collectors will call more than once and in some cases leave messages.

  2. Hours of Calling –  The FDCPA defines the hours of contact to be from 8:00 AM to 9:00 PM. If you are a particularly difficult person to reach, a 1st party collector may stretch those hours out in either direction.

  3. At Work – Collectors may not contact you at your place of employment if they know you are not allowed to receive calls there. When you go off the grid and are otherwise unreachable 1st party collectors will typically contact you anyway they can, this includes your work.

The law was enacted to stop collectors from harassing consumers. Most 1st party shops still want your business, so it isn’t in their best interest to violate the law even if it doesn’t apply to them. Another thing to consider is your local state specific laws on debt collection. There are a number of laws which further limit the types of things collectors can do. California has some of the most strict. Several sites maintain lists of the specific laws, you can find one such list at
One a final note, collectors are contacting you because you didn’t pay something you owe. Don’t lose sight of the fact that you still owe them money and it is your responsibility to pay. This doesn’t give them free reign to treat you like dirt so don’t let them, a good collector will work with you to pay your debt in a manner that will help you get back to where you can pay as agreed in your contract.
This is a guest post by Kyle, who writes at where he brings finance and the real world together.
Understanding 1st Party and 3rd Party Collectors from personal finance blog

As credit card companies continue raising rates and fees, lawmakers are considering bills to stop such hikes until new credit card laws take effect.
In my ongoing quest to simplify our personal finances, I started cleaning up some of the connections in my Financial Network Map. The target today was my ING Direct account, which played host to both my CD ladder and my bank account firewall, two financial constructs that have proved invaluable in my financial planning and protection schem
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What I didn’t disclose to you all earlier, when talking about the bank account firewall, was that I created a firewall account for each individual external account. Creating ING Direct subaccounts is and was so easy, I created one for each external connection. I had one for Paypal, one for E*Trade, one for … the list went on to the tune of about half a dozen accounts. Along the way, I also created a checking account to take advantage of a free money promotional offer that has since expired. Between the CD ladder, the five external accounts, the checking account, and the main online savings account, I knew I had to pare it down.

When I tried to close an account, I had trouble finding a way because there isn’t one listed on the account’s maintenance page. The easiest way to close an ING Direct Subaccount is to transfer all of the money into another subaccount. On the transfer confirmation page, you will be given the option of closing the account or simply leaving the account balance at $0.

ONce you click “Close Account,” you’ll be asked to confirm the transaction, then the account is closed immediately. As you’d expect, you lose access to all of the historical data for that account. If you want that information, you’ll have to review eStatements, which are saved in PDF form.
Unfortunately, you cannot close the Electric Orange checking account this way. To close your Electric Orange account, you’ll need to call their customer service line at 1-888-464-0727, available from 8am to 8pm, 7 days a week.
How to Close ING Direct Subaccounts from personal finance blog

Question: I'm 47 years old and would like to begin participating in my company's 401(k) plan. But I don't know if this is the right time to do so. Do you think I should start now or wait until the economy gets better? --Frank, Brighton, Mass.
Reader Jane emailed me last week to warn me about cash advances on credit cards. She recently stuck her credit card into an ATM, withdrew money, and was surprised to learn all the fees associated with a cash advance. She was in a bit of a pinch (she didn’t elaborate, nor did I ask) and needed cash but she left her ATM card at home, so she resorted to her credit card thinking a cash withdrawal from an ATM would be the same as a charge. Unfortunately she was wrong.

What is a cash advance?
A credit card cash advance is when you take your credit card to an ATM and withdraw ca
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sh. There are other scenarios but that one is the most common one people run into. The cash advance is not considered a regular purchase and its treated differently on the card, more on that later. Finally, your cash advance limit will almost always be lower than your credit card’s credit limit.
Why are cash advances bad?
Cash advances are bad for a variety of reasons. First, they’re not considered regular purchase charges on your credit card. The credit card will charge you a fee for the cash advance, something like of 3% of the withdrawn amount. They will also charge you a higher interest rate on the cash advance balance. On one of my cards, the purchase APR is 19.99% while the cash advance APR is 21.99%. Finally, there is no grace period on cash advance balances. You will be charged interest from the day you withdraw the money.
And to add insult to injury, the bank ATM you’re using will probably charge you their standard non-customer ATM fee, which can run several dollars. The credit card cash advance is the equivalent of the nuclear option, when all other options have failed.
When are cash advances OK?
If no one ever used a cash advance, they wouldn’t exist. So when is it OK to use a cash advance? When you need cash during an emergency and there are no other options. In Jane’s case, it didn’t seem like there were many options available because she didn’t have her debit card and her situation forced her to use cash. Sometimes you just have to pay the toll.
Turning credit into cash
If she had more time, I would’ve recommended that she try to find a grocery store. Many, but not all, grocery stores offer cash back on purchases. You could go into the grocery store, buy something small, and then get some cash back on the purchase. The grocery store will add the cash back onto your grocery bill and the credit card will treat it as a normal purchase.
While it would be easy to simply say – “Never ever get a cash advance.” What’s best and what reality deals you doesn’t always agree, so you have to be pragmatic and adapt to the situation. If you have no choice, just recognize the penalties of using a cash advance and be sure to pay off the advance balance as quickly as possible.
(Photo: timpatterson)
Avoid Credit Card Cash Advances! from personal finance blog

There's plenty to distract you from financial planning this time of year, from cheering on your favorite football team to daydreaming about Thanksgiving dinner. But you don't want to let some end-of-year deadlines slip by without taking steps to minimize taxes and maximize savings. Especially in this economic climate, a little extra cash can go a long way.
The spirit of the holidays is about spending time with family and friends, being thankful for the things that we’ve accomplished and the lives we’ve led, and showing appreciation to everyone who has made the year possible. Sometimes the year ends on a high note, as we celebrate the achievements. Sometimes we simply want to turn the page on an otherwise difficult twelve months. For many, this year will seem more like the latter but it’s important to remember that as difficult as it was for you, chances are there were scores facing much tougher challenges.
It’s on th
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is more somber note that I present to you the 2009 Holiday Tipping Guide, which hopefully will give you an idea of what is considered customary when it comes to showing appreciation to those in the services industry who have gone above and beyond. These are merely guidelines, it’s up to you to decide what makes sense for both your area and your own finances.

All of the tip amounts listed are collated from a variety of sources. Remember, it’s up to you to decide what makes sense for you. In general, for most services you’ll want to tip the value of one session or visit. You can adjust that up if you have a familiar and good relationship with the individual, down if you don’t.
Also, just because something appears on this list doesn’t mean it’s necessarily customary to always give them a tip. According to a Consumer Reports’ survey, reprinted in this 2008 MSN Money tipping guide, no one on this list was universally tipped. The highest was a “cleaning person” at 65%. Only 29% of people tip their mail carriers.
Tipping At Home
These are for people who provide services in and around your home, be it a house or an apartment/condo:

  • Babysitter – One night’s pay to as much as a week’s pay, plus a token gift from the children.

  • Doorman: $10-$80, depending on your relationship; consider a bottle of wine too

  • Garbage collector: $15 to $30 each

  • Gardener: $20-$50, or a week’s pay depending on your relationship.

  • Maid/Janitor: A week’s pay if you have a good relationship with the individual

  • Full-time nanny: One week to a month’s pay, plus a token gift from the children.

  • Au pair: One week’s pay, plus a token gift from the children.

  • Daycare: $25-70, plus a token gift from the children

  • Teacher: $25-100 gift certificate, check with school principal for guidelines.

Tipping for Personal Care
These are for people who provide personal care services to you, your family, your pets, etc.

  • Dog walker: 1-2 week’s average pay.

  • Haircare: About the cost of one session.

  • Massage therapist: About the cost of one session.

  • Nails: About the cost of one session.

  • Personal trainer: About the cost of one session, depending on your relationship.

Tipping Deliveries & Mail
These are for your mail carriers and other delivery services. In general, this only applies if you regularly receive package deliveries and have a good relationship with the carrier.

  • United States Post Office Mail carrier: Non-cash gifts (by law) no greater than $20 in value.

  • UPS driver: UPS has no formal policy but driver’s don’t expect tips.

  • FedEx: Non-cash gifts (by corporate policy) no greater than $75 in value.

  • Newspaper: Around $25-50 for a daily delivery, $10 if weekends only

How Should You Tip?
You have the option of giving gifts in cash, gift cards, or in the form of a item. Cash, especially in these economic times, is probably the best option but don’t discount the effect of a small non-cash gift if it fits your budget better. Most people advise against gift cards because of fees and because it’s less flexible than giving cash.
What If Money Is Tight?
Write a thank you note. If you want to show your appreciation but your finances won’t permit it, consider writing a thoughtful thank you letter in lieu of a gift. The year’s been difficult for everyone so most people will appreciate the sentiment, over nothing at all.
The last idea I want to leave you with is that none of the tips could be considered exorbitant and only you know what you would feel comfortable with. There are two quotes from a 2006 CNN Money article on tipping that I think are worth remembering. First, Cindy Streit, president of Etiquette Training Services, said “Tipping is never required. It may be expected in many situations… [but] should be thought of as a reward for excellent service.” Second, New York doorman Gil Santiago states “Doormen are like elephants. We never forget.”
(Photo: sis)
Holiday Tipping Guide from personal finance blog

The top job of managers at every company is the same: allocating capital. Should money be spent on internal growth or acquisitions? Should capital be returned to shareholders via dividends or share repurchases?
Checks for Vets is a guidebook that will help wartime service vets and their surviving spouses receive their VA pensions as a result of their service. If you’ve ever filled out a government form, then you know how complicated and vague that can be. How certain line items, despite “instructions,” can be difficult to understand and that every accidental error or inaccuracy results in a processing delay. Just think about your tax return!
When I was approached by Joe McCarthy’s publicist a
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bout the book, I knew I had to get a copy and review it. I’m always grateful for those who serve, have served, or work in support of our armed services. Knowing how complicated government forms can be, I knew a guide to the whole process, written by someone with intimate knowledge of the process, would be invaluable for those seeking to claim their benefits.

Joseph Scott McCarthy
Who is Joseph Scott McCarthy? Joseph McCarthy has worked for more than eight years as a veterans advocate helping veterans get their VA pensions. He works with veteran service officers at the American Legion, county veteran service officers, and VA personnell to educate and guide thousands of vets and their surviving spouses through the VA pension process. Prior to that, he was a healthcare professional for twenty-nine years in Pennsylvania.
Checks for Vets
Despite the broad name, Checks for Vets primarily focuses on the Aid and Attendance and Housebound pensions program. That program is a non-service-connected pension, which are for veterans whose disability or death was not caused by or aggravated in the line of active military duty. The pension is available to wartime service vets, surviving spouses, and surviving dependent children who meet eligibility rules.
The books through the entire process of applying for and receiving the Aid and Attendance and Housebound pension. It begins with a look at VA Pensions and Benefits, from the past to the future. Then it covers eligibility in great detailed, how much you can expect to receive, how to file a claim and avoid delays, followed by locating one of the most important documents a VA needs for many of his or her benefits – the Discharge Record. Then it discusses the pension itself, other health benefits, and finishes with a series of Appendices of excellent resources one can turn to such as the location of American Legion and VA facilities.
One of the most valuable parts of the book are in the two dozen example forms. The book will include an official form along with detailed directions on what information is required in each box. It explains what parts of the form you can skip, based on previous answers, and what answers you have to fill out. It’s very detailed, much more so than the explanations in the form’s instructions. This is where McCarthy’s experience is most present.
If you’re a veteran looking for help on the Aid and Attendance and Housebound pensions program and can’t get assistance from Veterans Affairs, a local CFW or American Legion, this book looks like a good resource. I hesitate to recommend the book because I’m not a veteran and I’ve never applied for benefits (obviously). I do know that government forms are generally complicated and I’d take all the help I could get in order to avoid delay.
Checks for Vets by Joseph Scott McCarthy from personal finance blog

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