Here are three of the week's top pieces of financial insight, gathered from around the web:
A new trick from identity thieves
My wife and I recently learned the hard way about how thieves can outwit financial services companies, said Ron Lieber at The New York Times. Starting with a name, address, and little more, scammers can "extract more detailed information, such as driver's license numbers," thanks to the auto-fill features intended to make it easier to apply for a policy on many car insurance websites. "From there, it's a short jump to submitting a fake unemployment claim, which was what happened to us." What made this especially frustrating was that we have security freezes on our credit reports. This theoretically should restrict access to your credit file until you give clearance. Only after my wife fell victim to the scammer did we find out that in most states there's an exception: Insurance companies can ignore the freeze.
Pushing for more IRS enforcement
President Biden wants to beef up the IRS budget significantly, said Jeff Stein at The Washington Post. Biden is looking to increase the Internal Revenue Service's budget by $80 billion over the next 10 years, with the money going toward increasing "the number of agents and giving the IRS new tools and technology to execute collections and crack down on avoidance" by the wealthiest families. The White House says the extra boost could "raise as much as $700 billion," helping pay for an expansive child-care and education plan. The IRS has lost roughly 18,000 full-time positions since 2010, "with the number of auditors falling to lows unseen since the 1950s." The head of the IRS told a Senate committee this month that tax cheats cost the government as much as $1 trillion a year.
HELOCs are still frozen over
Banks are still reluctant to extend home-equity lines of credit, said Robyn Friedman at The Wall Street Journal. The HELOC "is a revolving line of credit secured by a mortgage." Last April, Wells Fargo and Chase Bank temporarily suspended applications for such loans because of the "economic uncertainty created by COVID." A year later, the economic outlook has improved, but the banks are still not taking new applications. Industry experts say banks were spooked by echoes of the financial crisis; because a HELOC is "typically a second mortgage," the holder doesn't get paid in the event of a foreclosure unless the first mortgage is fully paid off. The product should be rolled out again soon, but "carefully," and mainly for existing customers.
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