Advantage Financial Services

12/01/2025

UPDATE: He has made it back home with his owners!

We have an adventurer on our hands! Does anyone recognize this little guy, he was recently brought to us after being found in someone's barn. Make sure to share so we can find his owner! If he's yours give us a call at 989-362-3170. Help us get this sweet boy home.😊

09/28/2022

Over the past few years, there’s been a notable migration from in-person to e-commerce shopping. Coupled with the shift to EMV chip cards, which has significantly reduced card present fraud at the point of sale, the industry has seen a sharp uptick in card not present (CNP) fraud.

According to Insider Intelligence, domestic CNP fraud losses are projected to reach $8.75 billion this year, an increase of 11.3% over 2021. By 2024, CNP fraud is projected to top $10 billion and account for 74% of all fraudulent card transactions.

Co-op credit union client portfolio data also shows CNP as the highest reported category of fraud, at 79%. The top merchant classifications for CNP fraud volume include Digital Goods/Gaming (which includes Microsoft), Computer Software (think streaming services), Eating/Restaurants (including popular delivery apps like Uber Eats and Door Dash) and Money Transfers (such as Apple Cash).

Top 5 Scam Trends to Watch Now

As the holidays approach here are some of the fraud trends we’re watching at Co-op:

P2P scams:
Per Javelin Strategy & Research, 18 million Americans were defrauded through scams involving digital wallets and person-to-person payment apps in 2020. That number has not declined—if anything, it’s increasing as P2P grows in popularity. In fact, half of respondents to a recent survey from Allstate say that P2P scams concern them, and 29% say either they had been a victim or know someone who has.

One of the latest scams in this arena is the “flip.” In this scheme, the victim receives a direct message or views a social media post requesting that they send a certain amount of money—typically small dollars—in return for a promised larger sum. The victim, sensing a quick payday, sends the money, and never hears from the requester again.

E-commerce scams:
As supply chain issues captured the world’s attention, shipping fraud increased nearly 800% worldwide in the past year— making it one of the biggest threats to consumers.

One common type of e-commerce scheme is the “pre-sale” scam, where fraudsters pose as sellers on social media platforms and offer lucrative student discounts. The victim, lured by attractive deals, submits payment upfront, and the fraudster vanishes without delivering the items purchased. Easy targets include students looking to purchase college textbooks at a discount, as well as consumers in the market for pricey, highly desirable items like concert merchandise.

The “giveaway” scam is another common method used by fraudsters, whereby they entice unwitting consumers to provide their personal credentials in exchange for “free” stuff.

Employment scams:
The industry has seen a rise in employment-related scams and phishing attempts since the pandemic. According to the 2021 BBB Scam Tracker Risk Report, employment scams were the second-riskiest type of fraud behind online purchase scams for the 18-24 year-old demographic, and third-riskiest for those in the 25-34, 35-44 and 55-64 brackets.

LinkedIn holds the top spot as the most impersonated brand used in phishing scams, accounting for 45% of phishing emails observed in the second quarter of 2022.

Scholarship/financial aid scams:
Scams aimed at students, prospective students and recent graduates are a seasonal problem in the fall, as the deadline for financial aid approaches in October. Following the Biden Administration’s recent loan forgiveness announcement, there has been a sharp increase in education and student loan scams.

Romance fraud:
As Americans increasingly go online looking for love, the fraudsters follow. According to Bloomberg, fraud losses on social media ballooned in 2021 to $770 million. Of the most popular types of fraud conducted over social media, 24% were romance scams, behind only investment scams in volume.

02/03/2022

*Attention* The location for the Polar Plunge has changed! The water wasn't deep enough so we had to move the event to the boat launch behind Michigan State Police station, just the other side of Tawas Bay Beach Resort. We will have signage in place. This will also be where you will register if you have not already done so. It's too late to change this on the printed schedules so please help us share this with our participants. Thank you!

01/22/2022

Why should you bank with a credit union? Because banks don't care about you!

Noah Golden opened an account at Chase bank in 2017 for his then-6-year-old daughter. The idea was to gradually deposit funds and then present her with the windfall when she turns 18.

Golden, 41, seldom monitored the account. Year after year, he just kept putting cash into it.

It wasn't until recently the Woodland Hills resident discovered that, on dozens of occasions, someone else — not his daughter — was taking money out.

This is one of numerous horror stories I received in response to last week's column on Chase's failure to prevent an 81-year-old customer from wiring more than $600,000 to an overseas scammer.

In that case, Chase says it followed all its security protocols, including asking the woman if she was sure she wanted to make the transactions. (The bank didn't know the scammer was listening in the whole time via the woman's cellphone.)

A number of readers shared similar experiences involving elderly loved ones and banks that didn't seem interested in going the extra mile to protect customers from fraud. Some of these incidents involved Chase, some involved other big banks.

Golden's story jumped out because it involved a child and because it's a pretty stunning example of a bank placing short-term financial interest ahead of long-term customer loyalty.

In response to Chase's refusal to restore even a portion of his daughter's money, Golden said he closed his five Chase accounts and moved about $160,000 in assets to another bank.

"I was amazed," he told me. "They showed no remorse whatsoever. I even placed my daughter on the phone with them. They told her they couldn't help."

Chase says it can't confirm that a bank worker spoke with the girl. But Golden's daughter, now 11, told me the exchange did occur.

"I said I was very sad that they couldn't do anything," the sixth-grader recalled. "They said it was my problem, not theirs. I was crying."

The classic stereotype of bankers is that they're hardhearted. Think Mr. Potter from "It's a Wonderful Life."

But what kind of bank worker reduces a young girl to tears and isn't sufficiently moved to try to restore at least some of the missing funds?

Golden said he discovered the fraudulent transactions last month while doing routine year-end financial housekeeping.

Between January and November of last year, he said, someone made about 30 separate withdrawals from his daughter's account.

It typically happened one day each month, with two or three withdrawals made on each occasion. Most were for small amounts, $20 here, $30 there. The largest single-day hit was for $360.

"I think they were doing these minuscule amounts to avoid drawing attention and to keep the account active," Golden said.

In total, the fraudster drained about $1,200 from the Chase account and transferred all the money to a PayPal account.

Golden said PayPal confirmed having received the funds but said there was nothing more it could do without a court order.

"If it was my money, OK," he said. "But for an 11-year-old girl, this should never happen."

Golden laid out the problem for Chase and was told the bank would investigate. It didn't take long for Chase to conclude that, as it apparently told the little girl, this wasn't the bank's problem.

That's because of a rule that all suspicious activity must be reported within 60 days of the transaction, it said.

Golden replied that he wasn't aware of any such rule. It's in the contract, Chase countered.

It is. On page 13 of Chase's 25-page deposit account agreement, I found this:

"If your statement shows electronic funds transfers that you did not make, tell us right away. If you do not tell us within 60 days after the statement was sent or otherwise made available to you, you may not get back any money you lost after the 60 days if we can prove that we could have prevented the transactions if you had told us in time."

So let's be clear: Chase did nothing wrong. It set rules for situations like this and it followed them.

In fact, Golden said the bank refunded $20 withdrawn by the fraudster on Jan. 1 of this year, after he lodged his complaint.

Even so, there's following rules and then there's doing right by a long-term customer.

Golden said he's been banking with Chase for 15 years. As noted above, he had five accounts at the bank containing roughly $160,000.

Does any business really want to jeopardize such a relationship? There's absolutely no room for compromise, especially considering the circumstances?

A day after I contacted Chase this week, Golden said he received a call from the bank saying it was reopening the investigation it had closed.

Chase told me Thursday afternoon it's now partially reimbursing Golden for the missing funds.

"This is an unfortunate situation," a bank spokesperson said by email. "However, protecting a customer’s account must be a partnership between the bank and the customer.

"We monitor accounts continually and need customers to do the same, especially with accounts for minors. The sooner the customer contacts us to report suspicious activity on an account, the sooner we can help. Unfortunately, reporting fraud 10 months later doesn't help stop it."

He's right. For consumers, a key takeaway here is to be diligent in overseeing your financial accounts. More often than not, if you don't spot a questionable transaction, no one will. And then it may be too late to fix things.

Also, and I know this is asking a lot, read the contracts. Many of us might reasonably conclude that it's unfair to bury important terms deep within a 25-page document.

But that's how the game's played. As long as a business discloses its rules, it's largely off the hook when the you-know-what hits the fan. Buyer beware and all that.

That said, Chase bank's corporate parent, JPMorgan Chase, earned $11.7 billion in profit in the third quarter of last year. And these guys really wanted to play hardball with an 11-year-old girl?

I asked Golden's daughter if there was a chance she'd be a Chase customer when she grows up.

"No," she answered without hesitation.

That's the sort of thing all businesses should take note of. People remember the companies that treated them well.

And they remember the ones that didn't.

This story originally appeared in Los Angeles Times.

07/08/2021

Nearly a quarter of a century since the creation of Roth IRAs in 1998, there are still numerous questions surrounding the “5-year rules” for Roth distributions.

It should be noted that these 5-year rules have application not only to Roth IRAs, but also to Roth Thrift Savings Plan (TSP) distributions, to traditional TSP transfers to Roth IRAs, and to conversions of traditional IRAs to Roth IRAs. This column will discuss and explain the “5-year rules” that are applicable to all Roth accounts.

In general, Roth IRA distribution rules are favorable to individuals. All of an individual’s Roth IRAs are aggregated to determine the tax consequences of a distribution from any one of them. Funds are considered to leave the accounts in a specific order. In particular, Roth IRA contributions (which have been previously taxed and therefore are not taxed again when withdrawn) come out first, followed by converted funds, and then accrued earnings.

With respect to Roth accrued earnings, it is important that Roth IRA owners understand the 5-year rule with respect to qualified distributions. By understanding and following this rule, individual Roth IRA owners can cash out their Roth IRAs completely tax-free. Since one of the main goals of saving with Roth IRAs is to receive tax-free distributions, the importance of understanding the 5-year rule cannot be emphasized enough.

In order to have a tax-free distribution of Roth IRA accrued earnings, two conditions must be met.

First, the Roth IRA owner has to be over age 59.5, disabled, a first-time home buyer, or deceased.

The second condition is that the distribution must satisfy a five-year holding period. The five-year holding period starts on January 1 of the year that the Roth IRA owner made his or her first Roth IRA contribution or converted a traditional IRA to a Roth IRA.

The five-year holding period never restarts. In that sense, the five-year period is a ‘forever clock”. Additional contributions or conversions at a later time have no effect on its’ resetting.

The following example illustrates:

On April 10, 2017, Joyce, a federal employee and age 60, contributed $2,000 to her Roth IRA as a 2016-year Roth IRA contribution. This was Joyce’s first contribution to a Roth IRA. Joyce retired from federal service in 2018.

In 2019, Joyce transferred $400,000 of her traditional TSP to a traditional IRA. In 2020 Joyce converted her $400,000 traditional IRA to a Roth IRA. On June 15, 2021 when her $400,000 traditional IRA was worth $480,000, Joyce withdrew the full $480,000 from her Roth IRA. The distribution is a “qualified distribution”, meaning that Joyce does not owe federal and state income tax on the $480,000 distribution nor is there any early withdrawal penalty. This is because: (1) Joyce is over age 59.5 and the five-year holding period began on January 1, 2016, the first day of the year for which her first Roth IRA contribution was made and ended on December 31, 2020. Joyce met the 5-year holding period requirement. Any Roth IRA distributions paid to Joyce thereafter will be tax and penalty-free.

The fact that is it has not been five years since Joyce’s first Roth IRA contribution and has been less than five years since her conversion does not matter. It also does not matter that the contribution that started the five-year clock was made to a different Roth IRA.

Five-year Rule for Converted Roth IRA Funds
In 1998 when Roth IRAs were first available, the rules allowed for immediate distributions of converted funds without penalty. This allowed individuals younger than age 59.5 looking to access their retirement funds early, to avoid the 10 percent penalty to simply do a Roth conversion and take an immediate distribution.

In order to close this loophole, the five-year holding period for penalty-free distributions of converted funds for those under age 59.5 was imposed. The five-year holding period starts on January 1 of the year in which the conversion is completed. For those individuals over age 59.5, no five-year wait is required in order to avoid a penalty. But for those individuals who are younger than age 59.5, failure to wait will result in a 10 percent early withdrawal penalty in addition to having pay federal and state income taxes on the accrued earnings.

Unlike the five-year forever clock for qualified distributions of earnings discussed above, the five-year holding period for penalty-free distributions of converted funds restarts with each conversion. In other words, each Roth IRA conversion will have its own five-year conversion clock.

The following example illustrates:

In 2016 Robert, age 40, converted $20,000 from his traditional IRA to a Roth IRA. In 2019 he converted another $10,000 of his traditional IRA to a Roth IRA. In early 2021 Robert withdrew $30,000 of converted funds from his Roth IRA. Of the $30,000, $20,000, converted in 2016, would be exempt from the 10 percent early withdrawal penalty, since it has been five years since January 1, 2016 and $10,000, converted in 2019, would be subject to the penalty.

It needs to be emphasized that the previous discussion is with respect to the 10 percent early withdrawal penalty. If either the five-year rule or the post-age 59.5 requirement is not met, federal and state income taxes will also have to be paid on the withdrawn earnings. In case of a traditional IRA that was converted to a Roth IRA and had a “deductible” (before-taxed) contribution, the 10 percent penalty and taxation rules apply.

Transfer of Traditional TSP to Roth IRAs
A retired TSP participant is allowed to transfer their traditional TSP account to a Roth IRA. This type of transfer is in many ways a Roth IRA conversion in the sense money in a before-taxed account – the traditional TSP – is being transferred to a Roth IRA. As such, this is a Roth IRA conversion and the Roth IRA conversion rules with regard to taxation of accrued earnings and the early withdrawal penalty (10 percent) apply.

The following summarizes the five-year rule for TSP participants who transfer their traditional TSP to Roth IRAs.

• Retired TSP participants younger than age 59.5. The five-year holding period starts on January 1 of every year that part of a traditional TSP account is transferred to a Roth IRA. Failing to wait those five years will result in a 10 percent penalty, in addition to the federal and state taxes that must be paid each year in which transfers are made.

• Retired TSP participants aged 59.5 and older, or TSP participants aged 59.5 still in federal service. No five-year wait is necessary to avoid 10 percent early withdrawal penalty. However, full federal and state income taxes must be paid in the years of transfer.

Inherited Roth IRAs
For beneficiaries who inherit a Roth IRA from someone else such as a parent, the five-year rule for penalty-free distributions of converted funds is of no concern. This is because there is an exception to the 10 percent penalty for distributions from inherited Roth IRAs.

In summary, there is no doubt that the Roth five-year rules can be confusing and tricky. But for those individuals who keep their Roth accounts intact until they retire and who are over age 59.5, the rules are much simpler and easier to follow.

Leaving one’s Roth account intact (no withdrawals) until the individual is at least 59.5 makes the five year-rules much easier to understand and follow. For most Roth IRA owners, waiting until at least age 59.5 to make withdrawals from their Roth IRAs should not be that difficult. Roth IRA are advised to be in it for the ‘long haul” in the sense of leaving their Roth IRA accounts intact as long as possible. Roth IRAs are the only type of retirement account that is not subject to required minimum distributions (RMDs), meaning that the Roth IRA can continue to grow tax-free indefinitely.

At the death of the Roth IRA owner, a spousal beneficiary can transfer the inherited Roth IRA to their own Roth IRA and continue to grow tax-free over the years. At the death of the spouse designated “non-eligible designated” beneficiaries (such as children) will have to withdraw in its entirety their inherited Roth IRAs within 10 years of the Roth IRA owner’s death. This is in accordance with the Secure Act that was passed inti law by Congress in December 2019. But the heirs will not have to pay any income taxes on their required Roth IRA withdrawals.

A full understanding the 5-year rules for Roth accounts will hopefully result in the preservation of an individual’s Roth IRAs for many years. Roth IRA owners who have to pay their expenses during retirement using their Roth IRAs should certainly do so.

But knowing that no taxes and penalties have to be paid when withdrawals are made will allow for the maximum use of Roth IRAs. Any remaining Roth IRA assets that are transferred to designated Roth IRA beneficiaries will allow these beneficiaries to make tax-free withdrawals of their inherited Roth TSP accounts. In that sense, preserving one’s Roth IRAs as long as possible will hopefully result in the maximum transfer of non-taxable assets from one generation to the next.

06/28/2021

Weekly Economic Update

In this week’s recap: Stocks reach all-me highs and the housing market showed significant improvement. Weekly Economic Update

Presented by Ryan Moser, June 28, 2021

THE WEEK ON WALL STREET Stocks reached new all-me highs last week as markets staged a strong rebound from the previous week’s declines. The Dow Jones Industrial Average rose 3.44%, while the Standard & Poor’s 500 picked up 2.74%. The Nasdaq Composite index increased 2.35%. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.97%

1,2,3 STOCKS CLIMB Stocks rallied on the first day of trading last week and gained further momentum on Thursday and Friday. Despite some discouraging data on housing and inial jobless claims, stocks managed to set new highs, as investors cheered an agreement between President Biden and a group of senators that appeared to pave the way for the passage of a $1 trillion infrastructure bill.

4 Posive results from the Federal Reserve’s stress tests of banks, which raised the prospect of banks raising their dividend payouts and share buybacks, and a key inflaon measure coming in at market expectaons provided impetus for further gains. The S&P 500 had its best week since February and ended the five-trading days at a record high.

5 HOUSING HEADWINDS Historically low mortgage rates, the COVID-19 pandemic, and a flush consumer have contributed to a very strong housing market in recent months. Last week’s housing data for May, however, showed that housing may be running into headwinds. The rising cost of materials and labor led to a 5.9% decline in new single home sales in May even as the median price hit an all-time high.

Meanwhile, sales of existing homes fell 0.9%, the fourth-straight month of declines, owing to a very low inventory. High demand, coupled with a depressed supply, led to a 23.6% increase in the median price of an existing home.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Consumer Confidence.
Wednesday: ADP (Automated Data Processing) Employment Report.
Thursday: Jobless Claims. ISM (Institute of Supply Management) Manufacturing Index.
Friday: Employment Situation Report. Factory Orders.
Source: Econoday, June 25, 2021

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal
Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources
believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and
may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Wednesday: Micron Technology, Inc. (MU), Constellation Brands, Inc. (STZ), General Mills, Inc. (GIS).
Thursday: Walgreens Boots Alliance, Inc. (WBA), McCormick & Company, Inc. (MKC).
Source: Zacks, June 25, 2021

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale
of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and
tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold,
investments may be worth more or less than their original cost. Companies may reschedule when they report earnings
without notice.

06/28/2021

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10/12/2020

04/30/2020

03/01/2020

At Advantage Financial...

12/27/2019

Check out what the Dow, S & P 500 and the NASDAQ did with only one trading day left in 2019! Don't spend it all in one place!

04/03/2019

Still feeling safe?

Researchers at the cybersecurity firm UpGuard on Wednesday said they had discovered the existence of two datasets together containing the personal data of hundreds of millions of Facebook users. Both were left publicly accessible.