Volume 5 Number 41 October 10, 2008
Dear Fellow Floridian:
We saw the instability in the financial markets continue this week as the Dow Jones Industrial Average lost more than 20 percent of its value over the previous week. On Friday alone, the Dow moved nearly 1,000 points, fluctuating wildly as the market drew to a close.
The President addressed Americans once again Friday morning, appealing to investors to have confidence and detailing the federal government’s plans to increase liquidity and stabilize the financial markets. The Federal Reserve and U.S. Department of the Treasury are continuing to analyze proposals to bring this sorely needed stability.
For most Americans, the events of the past few weeks have been unsettling. However, it is important to remember that the federal government is backing up most American’s finances—provided you have less than $250,000 in an FDIC-insured financial institution. This is a good time to be evaluating your family budget and saving additional money where possible.
We are keeping a watchful eye on the financial markets and will continue to provide you with updates as these events progress.
First meeting of Sink’s Safeguard Our Seniors Task Force generates ideas, solutions
Alice Bouchard, 94, from New Port Richey, was one of three senior investors who shared her story of being exploited financially by an unscrupulous insurance agent on Monday at the Hillsborough County Courthouse with Chief Financial Officer Alex Sink, Hillsborough County State Attorney Mark Ober and members of the Safeguard our Seniors (SOS) Task Force. The discussion with senior investors was part of the first meeting of the SOS Task Force, which was created by CFO Sink last month to review and recommend solutions to better protect Florida seniors against financial fraud, with an immediate focus on annuity fraud.
Joining Alice at the event to share their personal experiences was Bonnie Madden, 81, from Port Richey and Mary Nusser, 89, from Clearwater, Florida.
Alice and her husband had invested in annuities since 1994. An annuity is a life insurance product that offers a guaranteed series of payments over a period of time. Following the death of Alice’s husband in 1998, a corrupt agent, Bijan Razdar, began moving Alice’s annuity policies from one company to another, also called “twisting,” in order to generate commissions for himself while promising Alice greater returns on her investments. She “trusted” the agent was working on her behalf. Over a period of six years, Razdar “twisted” Alice’s annuity investments at least 30 times, which resulted in Alice paying more than $20,000 in surrender charges and losing nearly $293,000. The agent received over $140,000 in commissions. Although Razdar’s license was permanently revoked by the Department of Financial Services in early 2006, due to inadequate legal protections, he never served any jail time for defrauding Alice.
“We have zero tolerance for anyone who manipulates and cheats our seniors out of their hard-earned retirement funds,” said CFO Sink, who oversees the Department of Financial Services and has taken action against several dozen agents for theft and fraud involving the elderly. “We need tougher penalties so we can bring the full force of the law against these scam artists and make sure they serve jail time.”
Ober agrees. “Where possible, we need to amp up penalties for egregious acts of fraud,” said Ober, who is also president of the Florida State Attorneys Association.
In addition to the need for stronger criminal penalties to help more efficiently prosecute “twisting” of annuity products, SOS Task Force members discussed several ideas for improving protections for senior investors, including:
Strengthening other statutes, including “organized scheme to defraud,” “theft of a senior 65 or older” and “financial exploitation of the elderly;” A review of the industry’s oversight of their sales agents, including implementation of “monitoring standards;” Capping surrender charges and limiting the time that a company is able to charge them; A review of the commission structure for certain annuity products; Eliminating the “opt out” on disclosures when a product is sold; More aggressive education with the public, including the agents who sell these products; and Establishing one set of regulations related to the sale of annuity products.
The SOS Task Force’s next meeting will be held in mid-November in Ft. Myers. In addition to considering solutions to better protect seniors against annuity fraud, task force members will also evaluate ways to safeguard seniors against problems associated with Stranger-Originated Life Insurance (STOLI) products and reverse mortgages being used to fund the purchase of insurance products.
To learn more about the SOS Task Force or what to consider when purchasing annuities, visit www.FLSeniors.net. Senior Floridians who believe they may have been the victim of annuity fraud should call 1-877-My-FL-CFO or log on to www.MyFloridaCFO.com to file a complaint.
Florida’s business leaders gathered in Orlando on October 6 for the annual two-day Future of Florida forum, hearing from Florida leaders in economics, government and industry including Chief Financial Officer Alex Sink. The annual event brings statewide business leaders together to review Florida’s economic health and progress towards strengthening the pillars of Florida’s economy: talent, innovation, infrastructure, business competitiveness, governance and quality of life.
CFO Sink addressed the transition of Florida’s economy from a low-cost of living state to a state with a cost of living at, or in some areas above the national average. She agreed with the assembled group that Florida’s economy is changing – and that the state and its leaders in both the public- and private- sectors must come together to reinvent Florida once again.
“Florida can no longer afford to rely on the one-trick pony that real estate has been as a driver of growth for our economy, nor should we want to,” said Sink. “Entrepreneurs have been the lifeblood of Florida’s economy throughout our history building innovative enterprises and strengthening our state.”
With 100,000 jobs lost in Florida since the beginning of 2008, the majority in construction and related industries, Florida’s unemployment is above the national average at 6.1 percent. CFO Sink encouraged Florida’s business leaders to work more closely with local government leaders to help Florida communities weather the economic storm that has caused the state’s budget to dwindle over the last two budget years by 15 percent.
The CFO applauded the Florida Chamber’s plan for a new economic future based on their six pillars of Florida's economy. Within the six economic pillars are opportunities for both public- and private-sector support. They are not partisan or regional, yet they require shared vision and long-term commitment.
Today, in a ceremony held at the Florida’s Fallen Firefighter Memorial on the grounds of the state fire college, dozens of Floridians gathered to remember and honor all of the Florida firefighters who paid the ultimate sacrifice while serving their communities. It is humbling when you reflect on what it takes for an individual to run into a burning building, to fight past debris to rescue people after a storm, or to respond to a horrific accident.
Of course, there are rewards – when someone is rescued, when a life is saved. A firefighter who along with his partner helped save a toddler from a burning home, recently said, “It feels good.”
These simple words do go a long way toward summing up what drives these heroes. Throughout the year, firefighters put in a lot of hard work for their communities and for charities, particularly the Muscular Dystrophy Association. Florida firefighters alone raise millions of dollars every year to go toward research for cures. And of course they are a favorite at parades and provide frequent programs at local schools to help teach our children about fire safety.
They are an important part of our communities, and we owe them a debt of gratitude. The best way we can do that is by doing all we can to prevent fires. As the cold weather approaches, please make sure your heating appliances are in good order, your chimney is clean, your smoke alarms are working and your family has a fire escape plan.
It is a tragedy when anyone is injured in a fire, but it becomes a double tragedy when we lose a firefighter.
As part of the week’s activities, which include numerous fire safety education programs, Florida will add the names of four firefighters who lost their lives last year, and one who lost his life in 1983, to the state’s Fallen Firefighter Memorial. The Memorial program, hosted by the Division of State Fire Marshal and the Florida Joint Council of Fire and Emergency Service Organizations, was held Friday, October 10, 2008, at the Florida State Fire College in Ocala.
“On Friday, we will honor four courageous men who gave their lives to protect others, and there is no greater sacrifice than that,” said CFO Sink. “During Fire Prevention Week, Floridians should pause and take a moment to recognize all the brave men and women who put their lives on the line every day to protect our families and loved ones.”
During the Fallen Firefighter Memorial program, the following names will be added to the memorial: Jeremy Adams, who died January 16, 2007; John Curry, who died November 27, 2007; Michael Douthitt, who died July 13, 2007; Paul Reynolds, Sr., who died February 27, 2007; and Donald Lund, who died December 9, 1983.
The death of Chief Adams, of the Springfield Fire Department, was attributed to complications from an injury he sustained while responding to a structure fire. Firefighter Curry, of the Volusia County Wildland Fire Team, died during a training accident. Driver/Engineer Douthitt, of the Broward Sheriff’s Office Department of Fire/Rescue; Firefighter Reynolds, of Estero Fire Rescue; and Driver Operator Lund, of Clearwater Fire Rescue, all died of various ailments following very busy shifts.
The memorial service is open to the public and will feature a presentation to each family by Les Hallman, Director of the Division of State Fire Marshal. The fallen firefighters will be honored by a Statewide Honor Guard comprising more than 25 teams from around the state, and a united Fallen Firefighter Memorial Pipe and Drum Corp, also made up of units from throughout Florida, will play.
“The Florida Fallen Firefighter Memorial, which was dedicated in January of 1992, is considered hallowed ground to the firefighters of this state,” said Dave Casey, Chief of the Bureau of Fire Standards and Training, which oversees the fire college. “The bronze statue of a firefighter at rest represents each and every one of our state’s dedicated firefighters.”
For a schedule of Fire Prevention Week education programs, visit http://www.myfloridacfo.com/sfm/Notices/FirePreventionWeek_2008.pdf.
Have you studied the fine print on your credit card bill lately? Keep an eye on the rate of interest you are paying and don't be afraid to ask for a rate reduction. Especially if the rates have jumped up lately, no matter the reason.
Just call your company and ask. If the first person refuses to help, ask for the supervisor. Tell them that you are going to take your business to another company and mean it - those introductory offers that you get in the mail are ideal for moving your balance. The company makes money by keeping your business in place - they won't want to lose you.
On a $5,000 balance, a rate reduction of three percent will save you $150 a year. Pick up the phone and ask - there's nothing to lose.
Your family may not appreciate it, but leaving lights on all over the house is costly. The same goes for the television and other commonly used electrical items. Turning them off can save on your monthly utility bill.
Many people leave their television sets on for hours at a time. What they don’t realize is that it costs anywhere from two to four cents per hour for a color TV to run. If you leave it on for five hours a day you’re going to be paying at least three dollars in electricity at the end of the month. This may not sound like much, but when you add a range of other appliances like a standard refrigerator costing between $8.40 and $14.00 a month, the electric bill adds up quickly.
Start making it a habit to turn off lights when you leave a room. Don’t leave the television on in the background. Shut down your computer and monitor while not in use. You will be surprised at how many different appliances throughout your home are contributing to your high electric bills.
Make it a household competition to get your kids involved in the effort to turn off lights. Not only will you be saving yourself cash, but you’ll be doing a good turn for the environment!
State Fire Marshal Sink warns that alternative heating sources can be risky
Florida Chief Financial Officer and State Fire Marshal Alex Sink is joining the American Red Cross and the National Fire Protection Association (NFPA) in warning Floridians about the risks of using alternative, even unconventional, heating sources to keep home heating bills down as fuel costs rise.
In time for Fire Prevention Week, which began Sunday and continues through Saturday, October 11, the American Red Cross and NFPA released the results of a survey showing that up to half of survey respondents intended to use stoves and ovens to keep warm, in addition to portable space heaters and fireplaces, all of which pose fire hazards. The telephone survey of more than 1,000 U.S. adult residents was conducted September 25-28, 2008.
“Already more deaths occur in home fires than in any other kind of fire,” said Fire Marshal Sink. “For your safety and your family’s safety, please think twice about using stoves and ovens for anything other than cooking, use space heaters with an automatic shutoff and make sure your fireplaces are clean.”
Young adults, ages 18-24, were more likely than other respondents to state they will use the oven to keep the kitchen warm this winter (17 percent versus 7 percent for all households). Meanwhile, one-third (36 percent) of people with fireplaces reported they never cleaned or inspected their chimneys, and 23 percent of respondents indicated they did not consider it essential that someone is home when food is cooking on the stove.
In 2007, more than 23,700 Florida homes caught fire, resulting in more than 144 deaths – 73 percent of the total 198 reported fire-related deaths – and 592 injuries. And more home fires occur in the month of December than in any other month, due to the added risk of holiday lights and decorations.
“Of the more than 74,000 disasters the American Red Cross responds to each year, approximately 93 percent are fire-related, but unlike natural disasters, most home fires can be prevented,” said Gail J. McGovern, president and CEO of the American Red Cross.
In addition to making sure heating appliances are in good condition, Sink also advises:
Residents are not the only ones at risk when a fire occurs. One hundred and forty-two Florida firefighters have lost their lives in the line of duty, including four firefighters who died last year. They will be honored, along with a firefighter who died in 1983, during the Florida Fallen Firefighter Memorial to be held Friday at 11:00 a.m. at the Florida State Fire College in Ocala. The annual event is hosted by the Division of State Fire Marshal and the Florida Joint Council of Fire and Emergency Service Organizations.
E-mails fraudulently claiming to be from the FDIC are attempting to trick recipients into installing unknown software on personal computers.
The FDIC is aware of e-mails appearing to be sent from the FDIC that ask recipients to open and review an attached file. Currently, the subject line of the e-mail states: "Funds wired into your account are stolen." The e-mail is fraudulent and was not sent by the FDIC.
The fraudulent e-mail tells the recipient that proceeds from identity theft crimes have been wire-transferred into their bank account. The e-mail then directs the recipient to open and review an attached copy of their bank account statement and to contact their bank account managers.
The attached file is actually an executable file containing malicious code or software. Recipients should consider the attached file as a malicious attempt to collect online banking credentials or other personal and confidential information that could be used to gain unauthorized access to on-line banking services or perpetrate identity theft and other criminal activities.
Recipients of the fraudulent e-mail should not reply and should not attempt to open the attached file. According to reports received by the FDIC, many antivirus software programs have been detecting and removing the malicious attachment before the e-mail is delivered. However, if a recipient does open the attachment, the FDIC recommends updating anti-virus software patches and performing a complete scan of the computer and network, if applicable. If a computer becomes infected and the user encounters difficulties removing the malicious code, users should contact their anti-virus software vendor. The FDIC highly recommends using anti-virus software.
For additional information about safe online banking and avoiding online scams, visit http://www.fdic.gov/consumers/consumer/guard/.
For your reference, FDIC Special Alerts may be accessed from the FDIC's Web site at www.fdic.gov/news/news/SpecialAlert/2008/index.html. To learn how to automatically receive FDIC Special Alerts through e-mail, please visit www.fdic.gov/about/subscriptions/index.html.