When a lender gets an investment from someone besides the government, people take notice.  Today it was announced that LendingClub is getting $12 million in venture capital money to help it keep growing.  That’s big news when traditional financial institutions are taking billions just to stay in business.

I’ve posted before about LendingClub, the peer-to-peer lending network.  Unlike traditional banks, they help people loan money directly to one another via their network, and hope to get better rates to both lenders and borrowers in the proceess. 

They’ve grown in both members and as a company.  They’ve reportedly doubled in size over the past 5 months and have filed with the SEC, both very important steps.  But they also now have some major financial backing as they have closed a $12 million round of funding, which gives them a lot of strength as a lender and plenty of room to grow.

I really see places like LendingClub as the future of lending.  The recent news of bank colapses and near colapses (like Citibank’s stock falling below a dollar) has put traditional banking on notice.  But like a traditional bank, they offer a variety of loans, from debt consolidation loans to auto loans to home improvement loans. 

The rates paid to vary on a sliding scale according to the one’s credit score, with the best loan rates being well below the national average.  As of this writing, LendingClub reports rates starting at 7.88% with national averages for personal loans being at 11.43% and credit cards at 13.64%.  So why not check it out?

Already use LendingClub or another peer-to-peer lending service?  Tell us about it in the comments below…

Source: TechCrunch

Just how safe is your identity?  Identity theft is all over the news, but I wanted to learn a little more about how prevalent this crime actually was, so I did a little research and came up with some stats to make it seem a little more real, and it wasn’t exactly encouraging.

Prevalence of Identity Theft: By The Numbers

• The average amount obtained during a theft was $1,882: That’s quite a bit. The good news is that banks will usually cover the charges if identity theft happens.  The bad news is you’re in for a bit of a shock once you find out it’s going on.
• Victims had to pay about $371 out-of-pocket expenses: There still are expenses, such as payment of fraudulent debt, wages lost, legal fees and other costs.
• 1 in 10 had to spend at least 55 hours resolving the problems caused by identity theft:  Many didn’t have that bad of a problem, but those who got hit hard took a long time to set things right.  1 in 20 had to spend 130 hours or more!
• The total obtained by thieves was $15.6 billion: That’s getting close to government bailout size money.  To put it in perspective, that’s almost six times what Forbes magazine says Donald “You’re Fired” Trump is worth.
• 8.3 million people in the US were ID theft victims: That’s as if the entire populations of Los Angeles, Chicago and Philadelphia had their identities stolen in a single year.

I got these stats from the Federal Trade Commission’s 2006 summary. That’s a little dated, but based on current news reports and how easily your identity is stolen, I only assume that identity theft is more prevalent.  Not to mention all the ways identity thieves conspire to sell your stolen data these days.

Fortunately, there are things you can do, such as check your credit reports yearly at www.annualcreditreport.com or by signing up with a credit monitoring service, such as one of Equifax’s credit monitoring products (that’s what I use) or one of the many others out there.  I want to be able to catch things before they get out of hand.

What’s your experience with identity theft?  Got any statistics?  Let me know in the comments below…

Your identity may be for sale to the highest bidder.  The fact is, not all people who are out to pilfer your data are planning on using it themselves.  Often people make a career of stealing ids make their living selling that data to others, rather than going through the process of converting that data directly into cash.

It makes sense, as with many types of trade, people learn to specialize in one task and let others specialize in another part.  But the unfortunate thing is the high level of automation that’s been brought into the exchange of personal data.  There really are many marketplaces where crooks can make a living off of the good name of others.

Hackers run secret websites to sell your stolen information. Everything from credit card numbers, to all the data needed to fully assume your identity can be made available online for sale to the highest bidder. Take for example this story from Wired Magazine about one hackers attempt to take over all sites that were selling data to make one mega site. Fortunately, he’s out of business, but it certainly also opened up the door for replacement sites.

Like with all organized crime, the law enforcement sets up sting operations to fight this activity, but like all organized crime, it’s a game of cat and mouse, leaving your identity continuously vulnerable to folks who want to pilfer it and trade it.  The FTC says the average amount a criminal gains in a theft is $1,882*, which makes a single theft quite lucrative.

What’s someone to do about all this?  As always, one should check their credit report every year at a site like www.annualcreditreport.com, but the fact is, criminals can do a lot of damage in a hurry with stolen data, so it’s always worth looking at a paid identity theft prevention option as well.

* From the FTC’s 2006 Identity Theft Survey Report

The bad economic news is everywhere.  The Washington Post says “Economic Signs Turn From Grim To Worse” and CNN Money proclaims this the “Sharpest decline in 26 years.”  Sure, times are tough, but I wanted to end the week with some resources to help us cope in hard times.

Here are a few categories that I can think to look to to help you get employed and save a penny or two during good times, bad times and horrible times.

Jobs

• Monster.com – huge site, some annoying ads, but they’ve supposedly had a big redesign recently.
• CareerBuilder.com – Big site that also has content for job seekers.
• jobs.yahoo.com – Owned by Yahoo! so there’s tons of exposure.
• Dice.com – Mostly IT, but great if that’s your line of work.
• LinkedIn.com – A great way to network and control you professional presence on the web.

Saving

• IngDirect.com – They’ve had cutbacks like all other banks, but they also have some sweet rates of return on savings.
• FNBO Direct – Another place that lets you park your money for a better return than many places offer.

Borrowing/Lending Money

• LendingClub.com – I recently outlined this peer-to-peer lending site.  If you’ve got a credit score of at least 660, or want to lend money at a solid rate of return, check it out.

Geting out of debt

• Radio host Clark Howard recommends the National Foundation For Credit Counseling to help if you’re having trouble with debt. — nfcc.org
• Dave Ramsey – He’s got a no-nonsense approach that works for some and seems to irritate others.  In addition to authoring multiple books, he runs a radio show and offers live seminars around the US.  I attended one of his seminars a while back andlearned from it. — daveramsey.com

Got any resources you’d like to share that can help during a downturn?  Post them in the comments below…

The global credit crunch may mean an opportunity for new lending strategies, such as peer to peer lending.  Banks are facing huge losses and the lack of transparency has made it hard for banks to lend between each other, opening the door for a newer, more direct type of lending, known as peer to peer lending.

Peer-to-peer, (or person-to-person) lending is just what it’s name implies.  You loan money to another person, with a third party acting as the intermediary.  The key to doing it this way is the opportunity to get a better return on money you lend, or a better rate on the money you borrow.

There is a downside.  Just as with traditional lending, sometimes people will default on loans.  The intermediary should do some kind of background check on those seeking money.  For instance, Lending Club currently requires a FICO score of 660, among other criteria to loan people money.  You’ll have to check with the intermediary to see exactly what the details currently are.

There’s a even a global twist to this.  Kiva.com is a site that coordinates loans between lenders and businesses in developing countries.  What makes it interesting is that lenders can pick individuals they want to help.  I’m not sure on the returns, but one is likely knowing that you’re helping develop an economy in troubled times.

No matter what, peer to peer lending is expected to grow dramatically.  With that kind of growth and better returns possible, peer to peer lending just might be the future of how we loan and borrow money.

Have you tried peer to peer lending? Any good or bad experiences?  Let us know in the comments below.  You can check out Lending Club here.

With the economic downturn, people have turned to pawn shops in an attempt to get some cash.  In an attempt to get some extra cash, people are pawning items for quick money.

In case you’ve lived an unusually sheltered life, pawn shops will give you a loan for an item, usually at high interest rates.  You’ll have a time period to buy the item back (in other words pay the loan off in full) or the item is put up for sale.  It’s traditionally considered a last resort for people the poor and desperate, but more an more people are apparently turning to these sorts of loans for quick money.

Check out the video about this I found on Afternoon Rally’s video feed.

But there’s a down side for pawn shops, who are now getting overloaded with inventory.  What sells?  At least in the US, it’s guns and motorbikes, according to the video.

I can’t help but think that someone could be much better off trying to sell their stuff at a discount on a place like eBay or Half.com than hope to pay off a hefty loan.  I just couldn’t risk putting a high-ticket item like a family heirloom up either.

Have a pawn shop experience?  I’d love to hear about it.

Who’s in your wallet? It might be more than a some dead presidents and a few bank logos.  Identity theives have gotten rather creative when it come to getting your information, so I thought I’d outline some of the ways they do their dirty deeds so we can defend against them.
 
So without further ado, here’s a list of common ways your identity can  be stolen (and some proposed solutions):

1. Dumpster Dive – Identity theives turn your garbage into gold by grabbing your discarded statements, pre-approved card offers or anything that might have your personal data.  Solution: destroy documents, including unopened offers before tossing them.
2. Skimming – When you give your card to a waiter or cashier who’s up to no good, they may swipe your card twice, “skimming” the data off of your card’s magnetic stripe so they can make a fake card.  Solution: Be aware of who’s using your cards and how.  Check your card statements and immediately report any fraud.
3. Going Phishing – Nearly everyone has gotten an email from X bank or Y credit card claiming there’s a problem, and if you could just click a link and log in, everything would be fine.  Solution: Just say “no.”  You can verify an email is legit with the site, install software that checks for bad sites, type in the site name rather than clicking the link in the email or just realize that if an email from someone you don’t know personally is in your “Spam” folder, it’s probably there for a reason.
4. Shoulder Surfing – This is ultra low-tech snooping.  Ever anounce your credit card number and expriation or SSN over the phone where others could hear?  Ever punch in your PIN so someone could see it?  Well, if you do, someone can get the inside track on your data.  Solution: Keep it (your voice) down and keep it (your fingers) covered.
5. The Job Rob – This is one I hadn’t heard of before.  Someone presents you with a fake job offer, you reply with a full resume with your home address, phone and who knows what else.  Solution: Use reputable job sites, use the “confidential search” feature they offer to keep your data private until you verify the recruiter.
6. Gone, But Not Forgotten – Where is that old PC you threw out last year?  A land fill?  Possibly a hacker’s basement?  In a variation of the dumpster dive, high-tech hackers can revive your old disk drive and pick through your data — even files you thought were erased — and get the info the need.  Solution, destroy old disk drives and/or “wipe” them clean before you get rid of or sell them.
7. Alice Doesn’t Live Here – The thief falsely forwards your mail somewhere else and takes your data.  Solution?  Be aware of your mail situation.  If it stops for a few days, check with the post office and your cards to make sure your address information is right.
8. Social Engineering – You’ve got to be smooth to pull this one off, but it has been a favorite of hackers for years.  The thief just smooth-talks his or her way into getting the target to give up information.  Solution: No tech support person will ask you for your password  Be very aware of who you are talking to.  Don’t give your credit card number out on a call you didn’t originate.
9. The Search Is On: I wrote before on how Google can get you fired, but it’s really any web site, especially social sites where people feel they should give away far too much personal information.  Theives just start searching and find someone with loose lips.  Solution: Don’t just give it away.  You may think your MySpace page only has a few “friends” but it may have plenty of enemys you can’t see.  If you’re in doubt, don’t give it out.
10. The Hack – Full scale hacker attacks on your PC or big data warehouses.  Solution: You can’t do Choice Point’s job for them, but you can install virus protection and other software to keep your PC safe.
11. (Bonus Item) Actual Theft – Pickpockets and other thieves actually take your wallet or purse but do far more than the old school grab-the-cash-and-toss-the-rest routine.  They can just start trying to use your data and cards right away.  Solution: Know where your wallet is and report any theft to the police, banks and anyone else who needs to know.

My solutions aren’t foolproof, and you should look for even more ways to keep yourself guarded.  What’s a little depressing is that it isn’t all under our control as so many organizations have a piece of the data that defines us as, well us.

Later, I’ll get out a post on how to deal with theft once it’s happened.

Got an ID theft story?  Know some other tips to keep us protected?  Let me know in the comments below.

What better way to start off the new year than by taking care of some personal finance matters?  OK, that might not sound like the most exciting thing in the world, but by summer, you’ll be more likely to spend a worry free vacation knowing you’ve handled a few of the basic issues back in January.

I’ve compiled a short list of good personal finance links I think most everyone should visit, separated into both free and pay links.  I think they are all worth paying a visit to.  Here’s the list:

Free Links

• Do Not Call List: Keep the telemarketers at bay by registering your number here.  Registration is permanent and should curb most calls.  There are loopholes, such as political campaigns and surveys, but I hardly get virtually no sales calls now.  https://www.donotcall.gov/
• Opt Out Prescreen: Sick of the credit card offers?  You can opt out of the pre-screen list, getting you out of most of those mail credit card offers.  It might also be a way to fight off one source of identity theft. https://www.optoutprescreen.com/
• Annual Credit Report: You can get one report per year for free.  I think that it’s not a total solution, but it’s worth checking what’s on your report so you can correct errors and see if someone’s been using your report for their credit. https://www.annualcreditreport.com/cra/index.jsp
• Mint: Mint is personal finance tracking software and it’s pretty slick.  They’ve updated since my Mint review, including a new iPone app. http://www.Mint.com

Pay sites:

• Identity Protection: With identity theft on the rise, it’s smart to have a solution that works for you 24/7 to make sure thieves are at bay.  The annual credit report I mentioned is great, but a LOT can be done with your identity in far less than 12 months. ProtectMyID is run by one of the biggest credit agencies out there, so they have a lot of experience behind them.  Try it free for 30 days and see if it makes a difference.
• Big Crumbs: I started shopping at BigCrumbs a while back and think it’s pretty slick.  The idea is simple - they offer you a rebate for things you buy though the site.  Think of it as a coupon site, except you don’t need to search for the right coupon, you just shop and get money back.  Tip: sign up as a CrumbSaver and you’d get more money back on what you buy.  Unless you’re really going to get a lot of referrals, it’s the best route.

That’s the sites I have so far.  What sites do you know of?  feel free to comment below.