Judge orders Treasury to take its money back to the drawing board

If a ruling made yesterday by a federal judge stands, we'll eventually have currency changes even more drastic than those ushered in earlier this year with the colorful bills. U.S. District Judge James Robertson ruled for the plaintiff in American Council of the Blind v. Paulson, Secretary of the Treasury, deciding that American paper currency violates the Rehabilitation Act because bills of different denominations can't be distinguished from each other by the visually impaired.

"Of the more than 180 countries that issue paper currency, only the United States prints bills that are identical in size and color in all their denominations," Robertson wrote. "More than 100 of the other issuers vary their bills in size according to denomination, and every other issuer includes at least some features that help the visually impaired."

The judge ordered officials to begin working on a remedy, but he also structured his decision to speed the inevitable appeal.

It sounds like a radical decision (and, indeed, I see some bloggers are already screaming about activist judging), but it strikes me as a sensible one. Why shouldn't we make bills easier to tell apart? There's no downside to doing so (except, I suppose, the cost of a redesign), and the benefits will be felt even beyond the visually impaired target audience. I've handed over the wrong bills to pay for things (and recieved the wrong bills back in change) when I wasn't paying close attention, and when David moved here from Australia (motto: "Our money is more colorful than a Pink Floyd laser show") the indistinguishability of American bills drove him nuts.

(By the way, thanks for all the kudos and good feedback on my op-ed yesterday. David is back in good health, so all is calm on that front.)

Birds and Bills hits the op-ed rounds

I have an op-ed in today's Baltimore Sun about my experiences with and criticisms of "consumer"-driven healthcare. Newspaper opinion pieces are like really long blog entries, done old-skool style. On paper. Crazy talk!

On overdrafts and automatic 401k deposits

My bank refunded my stolen money over the weekend, so I'm back in business. I will give my bank giant brownie points for one big customer-service selling point: No bounced-check fees. My account has a $1,000 overdraft. So long as I don't go past that $1k, my bank will process checks and debits without charging me any fees. (OK, I pay interest on the overdraft money I'm borrowing, but since I've always repaid overdrafts within days, this interest has never totaled more than a dollar.) I don't make a habit of overdrafting, but when stuff like this account hacking happens, my balance goes zooming into the red. Bounced-check fees are up a record high average of $27.40 per transaction, according to Bankrate's latest research. Not having to worry about incurring giant fees for every bounced transaction is a big relief.

In other tidbits, my company sent out a notice recently that in 2007, it will begin automatically enrolling non-participants in the 401k plan, deducting 3 percent from their paychecks for 401k contributions. (My company matches 50 percent of employees' contributions, up to 6 percent -- so, it'll effectively contribute 3 percent of your pay.) Those automatically enrolled can still opt out of contributing, but they'll need to file paperwork with JP Morgan confirming that they don't want to make 401k contributions.

I think this is a great move. I'm already contributing, so it won't affect me, but studies and anecdotal evidence consistently show that a number of people don't participate in 401ks not because they've thought through the decision and intentionally chosen to abstain, but simply because it's One More Thing to deal with. A recent Hewitt Associates study found that automatic enrollment boosts 401k participation rates from 68 percent to 90 percent. If companies didn't offer an opt-out option, I'd object, but since they do, I think it's a smart step to give people that extra nudge toward participation. I imagine automatic enrollment will be a growing trend.

Notaries and police reports -- the continuing joys of identity theft

My cheer that the thieves didn't entirely clean out my checking account proved premature. Another $700 went on Saturday -- after the card was supposedly cancelled. Arugh. The transactions seem to have come from an ATM in Quezon City. Fabulous.

I filed a police report, though I felt almost guilty adding to the NYPD workload with a crime they're not going to be able to do anything to solve. Financial identity-theft crimes are skyrocketing. While I waited to fill out the report, I chatted with a lady who was there to report a similar situation: someone had opened a DirecTV account in her name, and clearly had access to her Social Security number and other personal details. The detective who took my report said I was the seventh or eighth person that day reporting this type of crime.

It feels like the most effective way to stem crimes like the ATM scheme that keeps nailing me would be a national database overseen by a national agency, like the FBI. I'm 99% sure I got hit by a trapped ATM. If I did, then so did lots of others, but the only way to find the rogue ATM would be to cross-check the records of those hit recently. I would cheerfully turn over my bank records to an investigatory agency. (Sure, there's a risk in handing over my personal banking info -- but my account already leaks like a sieve. The chances of a bad cop stealing my info feel smaller than those of electronic thieves continuing to crack it.)

Since I doubt the police vigorously pursue these crimes, that leaves enforcement to the banks, which are the ones eating the losses. Big banks like Citibank already have the massive data access you'd need to cross-check the trails of victim -- I wonder to what extent that's already happening? The New York Times article I keep referring to about ATM fraud mentioned one crime ring that got caught after it began siphoning funds from 4,000 compromised accounts. It doesn't go into detail about how investigators cracked the case. That would be a fascinating piece ... if one has written one, I should check it out.

Once again, the most exasperating part of this process was making time to deal with all the paperwork like the police report. My bank also requires a notary to sign my dispute paperwork, so I spent an hour yesterday trudging around the Flatiron area looking for one. After stopping at two office-services shops and three banks, I finally found one available and willing. Arugh. That is my motto this week: Arugh.

Bank account hacked a-bloody-GAIN

I am some sort of lightning rod for financial identity theft.

Dedicated readers will recall my grousing last April when my American Express card got hacked and fraudulently used. I never lost the card; someone got hold of the numbers and used them. As I mentioned in April, that wasn't the first time I'd been through the theft rigmarole. It was the third -- first time with Amex, after two previous attacks on my NetBank check Visa/ATM card. Remember my oh-so-chipper post title? "At least it's less painful than having my debit card hacked."

My debit card got hacked this morning.

Logged on around 1pm to see if an expense check from my company had cleared, only to find a string of seven ATM withdrawals for $99.84 each, plus another for $19.97. None mine.

ARUGH.

I promptly called the bank to cancel, and that may have saved me a bit of money. The thieves got $718.85, but unlike the last two times this happened to my NetBank account, the account wasn't totally wiped out. The customer service person said the ATM withdrawals happened about an hour earlier, in quick succession. Seven successes, then the machine bounced the eight attempt. Maybe I got the account cancelled before the thief hit another ATM for round two.

So, tonight I'll be tromping over to my local police precinct office to file a report, and on Monday I have to tromp around near my office looking for a notary to sign my dispute forms to send my bank so they'll refund my money. Meanwhile, I have virtually no cash until NetBank gets my replacement card to me. Such fun this is.

This new attack is like the first on my NetBank account, three years or so ago -- someone got hold of my card number and my PIN, and made a duplicate card. (I still have my card. It wasn't lost. And, as before, no one -- not even my spouse -- knows my PIN.) Once again, the likeliest explanation is that I used a dodgy deli ATM with trapdoor software in it, capturing the information off cards as they're used. I know I should stick with bank ATMs, especially since this has now hit me twice. The spirit is willing, the flesh is weak. Since my bank has no ATM and I pay a fee every time I use one (no back-end fees to my bank, though), I usually just go with whatever shonky ATM is closest.

Can we please crack down on this crime, stat? I suppose I'm high risk -- I probably use an unregulated deli ATM six or seven times in an average month. But still, for this ATM-trapdoor problem to hit me twice in a matter of years seems to suggest it's a problem that's getting pretty rampant, at least in big cities like NYC.

HSA update

Well, I opted for the HSA, though I almost didn't at the last minute thanks to a loophole that makes it problematic if you have my precise, fairly unusual situation.

In my earlier post I mentioned that an HSA (health savings account) is logistically similar to an FSA (flexible spending account), with the big difference that money in your HSA doesn't disappear at the end of the year. If it's unspent, you keep it. Because of that distinction, the government doesn't want people double-dipping with an HSA/FSA combo: you can't set up an HSA, also fund an FSA, and then use the FSA money to cover your expenses, leaving your HSA savings untouched. That's a sensible restriction. If you have an HSA, you can only use an FSA for things the HSA isn't allowed to cover (which seems to be dental and vision expenses, primarily).

However, here is my particular weirdness, which only becomes an issue if you are a) married, b) don't share a health insurance plan with your spouse, and c) also have relatively separate finances. (See why I said this is a loophole that may only be a problem for me?) David and I each have separate, individual insurance through our separate employers. That's always been more cost-effective for us than sharing a plan. However, when you set up an FSA, you can use your FSA to pay for medical expenses for family members, even if those family members aren't sharing your health-insurance plan. So, this past year, I put a chunk of money in my FSA and used it to pay some of his medical expenses.

Opting for the HSA means the restrictions on what I can use my FSA for (vision and dental only) apply to everyone I would spend my FSA money on (at least, so saith my HR department). But my HSA, of course, can only be spent on me. Hence: no way for me to set up tax-free savings to pay for David's medical expenses in 2007.

The sensible thing, of course, is for him to set up an FSA and put into it however much I would have put into mine. It works out exactly the same to our overall income and spending as a couple. It's just a pain in the ass. Me having the FSA was an easy way for me to contribute an agreed-on amount to the medical costs, and meant I could do all the paperwork for reimbursements and such (which I have more tolerance for than David does). Having the FSA in David's name means we need to rebalance our finances in other areas to offset the whack that will take out of his paychecks, and means he's probably going to have to deal with more of the paperwork.

For that reason, I almost ditched the HSA and stuck with my old HMO + FSA system. However, it was making me unduly cranky to face down the prospect of once again spending a fair chunk each month for insurance that didn't actually pay for almost any of the services I actually consume. (With the HSA, the insurance still won't be paying. I will, unless something unlikely happens and I go past my deductible. But I pay less for the insurance, and I go in knowing what I'll be paying for.)

This is all more about psychology than actual dollars-and-cents calculations of what will save us money. I suspect that the HMO + FSA option would in the end have only cost me a few hundred more than my current HSA scheme, which isn't really enough money to justify the hours and angst I've devoted to thinking through all this. But part of the allure of the HSA is simply that I want to experiment with it. I still have a bad feeling it's the thin end of a nasty wedge, and I don't like the way it's portrayed as an option for insuring the uninsured but is actually a big savings/tax-sheltering opportunity for the well-off. But I figure a year of seeing what the HSA plan is like will give me a firmer foundation for spouting off about them.

And now, a consumerist interlude

This week the Washington Post profiled Goozex, a used video-game swapping service that aims to fetch gamers better value for their old games than they'd get selling them to retail used-games shops. It sounds like a good idea (gamers, check it out), but it's also a nice illustration of what I'm coming to think of as the yuppie subscription economy. (OK, I know "yuppies" is hopelessly '80s. What are we now? And if anyone suggests bobos, I break out the knives.)

I love the concept of libraries but am a poor user of them. Books are kind of a special case for me, since I choose to buy and hoard them, but for other media, the library concept is a great one -- borrow the things you don't feel compelled to own permanently. Like others in my peer group, though, I hate media-consumption deadlines. When I massively cleaned out my bedroom the summer before I first headed off for college, I found a few books that were overdue by years.

This is why I'm among the six million people subscribing to Netflix. I suspect I come out on the wrong end of this equation financially. I have the three-DVD plan and will go months at a time without sending anything back. I'm not paying for Netflix because it's cost effective. I'm paying for Netflix so I don't have to a) accumulate DVDs I'll only watch one or twice and don't want clogging up my living room, and b) don't have to remember what I owe the video store when.

Goozex seems tailored for people who are going to go through games rapidly. You get the freedom from return dates that comes with ownership, but you also get access to an exchange network so you can keep your media supply fresh. You're paying for the perk of your extended borrowing and access to new titles (you could make do for cheaper; some libraries will loan you older, less enticing video games for free these days), but you're not paying nearly as much as you would buying everything at new, retail price.

This kind of service seems very well suited to a certain demographic (ie: mine) that immerses in media and is willing to pay for convenience -- as iTunes demonstrates. I see them popping up all over. There's BooksFree.com and GameFly, and loads of others, I imagine.

***

On a separate moneyspending note, my friend Ryan has brought his blog Just What I Wanted out of hiatus for the holiday season. It's a neat source of unusual gift ideas, many very affordably priced. And, unlike so many of the gift guides you'll start seeing in glossy mags as the Giftmas season gets going, the blog is noncommercial. Ryan spotlights the products he finds intriguing. Go benefit from his good taste :)