National / International News
People with lots of unpaid medical bills could be getting a break on their credit scores.
Fair Isaac Corp., otherwise known as "FICO", says it is changing its calculations to ease the impact of medical debt that’s gone to collection.
So what is it about medical debt that makes it different from all other kinds of debt?
“When you go to the Gap to buy jeans, you ultimately know at the time of purchase exactly what the cost of that is going to be,” says Ken Brevoort, senior economist with the Consumer Financial Protection Bureau. When you pay for your "1969 ultimate panel cuffed always skinny jean," you are the only person paying the bill.
When you go to the doctor – usually – it’s you and your insurance company.
“When you have the insurance involved, you don’t necessarily know what’s going to be your portion and what’s going to be the insurance’s portion,” says Brevoort.
Here’s the thing: paying medical bills is so complicated sometimes the consumer doesn’t even know when they still owe money. FICO senior consumer credit specialist Anthony Sprauve says ignorance isn’t a good reason to give someone a lower FICO score.
“We recognize that it’s not an indicator of a person struggling in most cases when it’s happening by itself,” he says.
The federal government estimates about 7 percent of consumers have unpaid medical bills that have gone to collection agencies. Those consumers could see a 25 point or better score under FICO’s changes, says Sprauve.
“They are going to have access to more credit and they are going to be able to get credit as a lower price,” he says.
That’s the good news. The bad news is more and more consumers must wade into the byzantine world of healthcare billing.
Which means if you want to make sure you’re up to date on your bills, it’s still on you.
Here's a pet peeve about how I sound on the radio: When I listen back to myself in interviews, I'm struck by how often I say "uhhh" as I'm putting together a question. I think it makes me sound stupid, but it's how I talk, so I roll with it.
Turns out I'm completely normal.
A post at the Atlantic quotes a linguist at the University of Pennsylvania, who says men use "uh" more and more as they get older.
Women tend to say"um," but that decreases with age.
Ohio farmers say they are not the only ones to blame for Toledo's polluted drinking water. They say they are using only as much fertilizer as they need to grow their crops.
The biggest banks in the U.S. were made to write living wills, so that in the event of another crisis, like the one in 2008, the economy wouldn't go down with them.
But this week, they basically flunked their checkups with federal regulators.
“Banks weren’t expecting this kind of pushback, they’ve been submitting these living wills for the last several years, like three years in a row, starting in 2012, and they kept on falling short,” says Paddy Hirsch, Marketplace editor and host of The Whiteboard. “But nobody’s really pushed back on them. This time, the regulators pushed back really hard. And it’s taken the banks a little bit by surprise.”
And if banks don’t cooperate, banks could face additional regulations.
“I think it’s in the back of everybody’s minds that [the 2008 crisis] is a possibility. And what the regulators are trying to do, is get to a place where it’s as remote a possibility as possible. And for the most part, the people who are running the banks absolutely don’t want to be in a position where they are a bank that’s ‘too big to fail.’”
So, what happens next?
“What they might actually do is start changing their legal structures to make them less complex,” Hirsch says. Financial derivatives contracts and other structures could be simplified to comply with new and additional regulations.
According to a study from the Urban Institute, an estimated 1 in 3 adults, or around 77 million people, are so far behind on their debt that their account has been placed in collections.
“Being indebted is like being in shackles, or like wearing one of those cartoon ball and chains. And that can be not just a financial obligation, but an emotional or intellectual obligation as well, because it’s hanging over you," consumer columnist David Lazarus say. "It’s coloring virtually every decision you’re making in life.”
And it also takes a toll on your credit score, too. That could make an impact down the line. “If your credit score takes a hammering. Any future borrowing you’re doing is going to be at a much higher interest, if you can get the loan. More over, if you get a black mark on your credit score, it can take about 7 years to get that off.”
But, as David Lazarus notes, the worst thing you can do is ignore the calls. Instead, be aggressive, and "a key thing to remember for consumers is you have rights," Lazarus says. Debt collectors can't harass or abuse you, they can't call you early in the morning or late at night, and they can't threaten to imprison you.
You should also keep in mind that past due debt carries a statute of limitations, depending on your state. “It doesn't mean the debt goes away," Lazarus says, "they can still keep trying to collect, but they can’t take you to court. They can’t sue you”
Next week, the London-based system for setting the price of silver – which is more than a century old – will be scrapped in favor of a new electronic, auction-based method.
The move has raised another big question mark over the future of an even more important price-setting mechanism: the so-called "gold fix." Since 1919, the value of the yellow metal has been set daily in London, but after a series of benchmark rigging scandals, the gold fix is looking more than a little tarnished.
The name doesn't help. These days, the word “fix" hardly inspires confidence in the integrity of the system – especially since banks are involved .
“People don’t trust banks,” says Brian Lucey, Professor of Finance at Trinity College Dublin. “The fix is not a transparent process, and therefore it inevitably gives rise to conspiracy theories and concern.”
Four banks – including Barclays and HSBC – get together on the phone twice a day to deal in gold bullion. The price they strike becomes the latest "fix" or global benchmark for the yellow metal. Details of the conversation between the four banks are not immediately made public, and that provides scope for rigging.
Alberto Thomas of market consulting firm Fideres Partners testified before a parliamentary committee this summer and warned of the danger of abuse: “Effectively you've got a massive potential for insider trading in that market, and market manipulation... It doesn't mean it happens every day, but the opportunity is there. Our analysis shows that between 2010 and 2013, up to 30 percent of the fixes showed signs of rigging."
Adrian Ash of BullionVault.com, an online gold and silver exchange, is not convinced there has been such widespread abuse. But he concedes there has been at least one case of gold fix manipulation.
“Barclays Bank were recently fined 26 million pounds for a trader at a separate, precious metals desk at their bank, who put in a false order at the fix to try to push the price a little bit lower," says Ash. “The trader stood to get a bigger bonus if the gold price fell below a certain level.”
This is not the biggest banking scandal to hit London - the rigging of the LIBOR interest rate benchmark was far more serious, since it was used as the basis for trillions of dollars worth of financial transactions.
But Ash worries that the doubts swirling about the London gold fix could be harmful: “I think there is a danger of the reputation of the London bullion market being damaged by the current fuss around the fix,” he says .
Without greater transparency and independent oversight, the fix could wither, and London could lose more business to the burgeoning gold market in Shanghai.
When the silver fix is reformed next week, gold may not be far behind.
Alex Soma was out in the real world the other week, looking for a match at a rooftop drinks event sponsored by a couple of online dating sites.
“I think I’m pretty terrible at online dating,” Soma says, standing near the bar. “I just don’t get it. I think I’m better in front of a person.” So far, he just uses the site OkCupid.
Others there, like Christina Luzzi, sound like they’re becoming veterans. She says she's tried Tinder, Match and OkCupid. PlentyOfFish was "awful."
“What am I on now? I’m on eHarmony I think?”
While all those sites sound like separate competitors, a good number are part of just one company: IAC/InterActiveCorp.
In recent years, IAC has swallowed up the old stalwart, Match.com, the irreverent, young OkCupid, the fast-swiping Tinder app, and, just recently, an upstart called HowAboutWe. It owns niche sites like BlackPeopleMeet, and OurTime for the 50+ set. And it’s investing in an expensive new matchmaking service.
“What IAC is doing is incredibly smart,” said Amy Webb, author of “Data, A Love Story”. She said IAC is operating kind of like Gap Inc., which owns the brands Old Navy and Banana Republic.
“At the end of the day, they’re all clothing, but they offer different kinds of clothing to different lifestyles, different kinds of buyers,” she said.
Experts used to think the future of online dating was in small niche sites, matching farmers or people who don’t eat gluten, or maybe gluten-free farmers.
But the big sites are winning for a simple reason.
“It’s like a shop,” said Mark Brooks, an industry consultant. “And you’ve really got to stock the shelves. You can’t make do with a few hundred people. You need to have thousands of active people on a dating site.”
Each of these mainstream sites has carved out its own image, partly by word of mouth.
“The reality is that people feel at home when they go to a dating site that has people on it that look like what they think they want,” Brooks said.
That’s how Erica Berger of Brooklyn ended up on OkCupid.
“I joined OkCupid back in November 2009, after I moved to Brooklyn from Los Angeles,” she says. “I was referred to it by a close friend from high school who I trusted.”
Her first online date was a butternut squash tasting.
These kinds of referrals lead to some self-segregation. OkCupid is full of people like Berger, who is 27, lives in a big city, works in media, and is not in a rush for a relationship.
She’s also used IAC-owned apps like Tinder, popular for quick dates, and HowAboutWe, which is focused on specific date ideas. But she hasn’t used Match, whose users tend to be older, and more interested in marriage.
This is why IAC doesn't just combine all the sites into one.
Sam Yagan, CEO of the Match Group, the IAC unit that controls its dating properties, says dating is “such an intimate and personal search process, that people care a lot about the emotional affiliation they have with the brand that they choose.”
The strategy has led IAC to control more than a quarter of the $2.2 billion online dating market in the U.S., according to IBISWorld. That’s twice the next biggest competitor, eHarmony.
Match Group runs all the services separately. Occasionally, the teams will talk about features that worked well. But you don’t see OkCupid staffers talking much with those from Match.com.
Having the sites under one roof, however, does provide opportunities for cross-promotion. “It’s not like you turn 35 and we all of a sudden take your profile from OkCupid and put it on Match,” Yagan joked. “You might start seeing Match ads on OkCupid.”
Then there’s the question of the business model: “If the goal of the dating site is to get you offline and into the real world with your life partner, they probably wouldn't offer a subscription service,” Webb said.
Yagan has an answer that’s less conspiratorial, but perhaps more depressing: “The average adult has over 10 relationships before they get married," he said. "And, by the way, half of all marriages end in divorce. So, if you just do the math there’s a 90+ percent chance that the relationship you’re in when you leave Match, OkCupid [or] Tinder is not going to be your terminal relationship.”
Every week we have someone tell us their story about money. This week, actor and musician Alicia Witt talks about the day she tried to teach her father a lesson.
"My parents were both teachers, my dad made about $35,000 a year and we didn't have a car until I was think 11," says Witt. "Money was always something that we had to be careful of."
But, Witt's father wasn't too careful. "I couldn't believe that my dad kept all his cash in his back pocket of his pants. He never had a wallet ... I would go into my dad's bedroom and find his pants, where had thrown them on the floor, or changed into another pair of pants, and I would just remove the cash from the back pocket and hide it."
She did this until she had collected hundreds of dollars.
"I wanted to show him that he wasn't keeping track of how much cash he had on him at any given time."
It worked. One day, she found her parents sitting in the kitchen, worried. They had figured out that a large amount of money was missing, but didn't know what had happened.
Witt sprung into action. "I went into my room and took out handfuls of money and just started walking through the kitchen fanning myself with the cash."
Did this trick convince Witt's father to change the way he handles his cash?
"He still carries it in his back pocket," says Witt.