CFO Alex Sink's Consumer eViews Newsletter

FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S NEWSLETTER

Volume 5 Number 43 October 24, 2008

HOME


Fall is in full swing and Halloween is only a few days away. While this festive time of year is celebrated for the fun it brings, for many families, it can also mean big spending.

In today’s fragile financial market, any excess spending simply isn’t an option for most families. However, a smart budget mixed with some creativity can make this year’s trick-or-treating just as fun as ever before.

Ordering costumes online or putting one together out of pieces found in a thrift store can be big money savers. Also, making homemade decorations can cut costs dramatically as well as create lasting memories for the whole family. The Internet is a great source for creative ways to cut down on costs.

Looking to the months ahead, keep in mind that Thanksgiving and Christmas don’t have to break the bank either. Whether it’s by purchasing a turkey that’s on sale now and putting it in the freezer or gradually paying for gifts on layaway, sometimes planning in advance is all it takes to make sure that the holiday season is every bit as enjoyable as it has always been.


CFO Sink hears from seniors, financial experts in Daytona, gets ideas for safeguarding our seniors

Sink is hosting open forums in communities across Florida as part of her SOS Task Force

As part of ongoing efforts to meet with seniors about her new Safeguard Our Seniors (SOS) Task Force, Florida Chief Financial Officer Alex Sink hosted a roundtable discussion with several seniors and financial experts in Daytona Beach on Thursday. The roundtable discussion is one of several CFO Sink is hosting to help better protect Florida seniors against financial fraud, with an immediate focus on annuity fraud.

CFO Sink heard from several seniors Thursday, including Rose Todisco, an 85-year-old senior from Palm Coast. For several years, Rose had worked with a local agent in preparing her tax returns. In 1998, and again in 2003, the agent convinced Rose to replace existing annuities with new ones from another company, promising great returns but failing to disclose the limitations she would face if she needed the funds for emergencies. Rose was 80 years old when a contract was issued with a ten-year surrender penalty period, effectively cutting her off from her savings until her 90th birthday.

Following an investigation by CFO Sink’s Division of Agent and Agency Services, Rose was able to recover her savings plus interest with the help of investigators. The agent was put on probation for one year and fined $2,500.

Several local financial experts participating in the forum offered several ideas that CFO Sink will discuss during the following SOS Task Force meeting, including:

The SOS Task Force is scheduled to meet again in mid-November in Ft. Myers. In addition to considering solutions to better protect seniors against annuity fraud, task force members will also deliberate ways to safeguard seniors against problems associated with Stranger-Owned Life Insurance (STOLIs) products and reverse mortgages.

To learn more about the SOS Task Force or what to consider when purchasing annuities, visit www.flseniors.net. Floridians who believe they may have been the victim of annuity fraud should call 1-877-MyFLCFO or log on to www.MyFloridaCFO.com to file a complaint.


CFO Sink's My Safe Florida Home Campaign receives Emmy nomination

Over 425,000 Floridians received free wind inspections as part of the program’s success

Chief Financial Officer Alex Sink’s My Safe Florida Home program commercials have been nominated for an Emmy Award by the Suncoast Chapter of the National Academy of Television Arts and Sciences.

The public awareness campaign, which was launched by the Department of Financial Services in March, highlights MySafeFloridaHome.com – a Web site where Floridians applied online for a free wind inspection and learned how to strengthen their homes against hurricanes and windstorm damage.

The commercials, which questioned “How fast can you save money?” showed the ease of applying for a free wind inspection, which can lead to discounts on homeowners’ wind insurance, along with other simple tips on what people can do to save money. Floridians in every part of the state were exposed to the humorous promotional campaign on either TV or radio from March through May, including commercials in Spanish and Haitian-Creole.

“The My Safe Florida Home initiative did a tremendous job of getting the message out to over 425,000 Floridians, and I hope we’re able to continue the effort in the future,” said CFO Sink. “In the meantime, I would encourage all Floridians to pay for a wind inspection to identify how they can harden their homes and also to see if they’re eligible to save money on their wind insurance premiums.”

The MSFH program was so successful that it exceeded the Legislature’s goal a year in advance. In total, it provided over 425,000 wind inspections, and more than 38,000 homeowners were approved for a matching grant with the program. Statewide, the program has reimbursed more than 15,000 homeowners for more than $49 million to date.

Although the MSFH program is no longer accepting applications, it still continues to serve homeowners previously enrolled in the program. While CFO Sink is urging the Legislature to continue funding for the program, she also encourages homeowners to pay for a wind inspection, as they frequently offer homeowners discounts on their insurance premiums.

The Suncoast Chapter of the National Academy of Television Arts and Sciences is a nonprofit Florida corporation dedicated to excellence in television. The annual Suncoast Regional Emmy Awards consider television markets in the entire state of Florida, and also regions of Louisiana, Alabama, Georgia and Puerto Rico.


Mortgage scheme probe prompts dozens of calls, second search warrant executed

Jensen Beach mortgage broker, pastor now investigated in Orlando ‘deal’

Florida Chief Financial Officer Alex Sink reported that fraud investigators with the Department of Financial Services (DFS) have received approximately 65 calls relating to their ongoing investigation of a Jensen Beach husband and wife accused of using a church and a radio show to scam followers out of as much as $5 million in real estate schemes in south and central Florida.

Shalonda and Rodney McGill were arrested September 16, 2008, on allegations that they saddled investors in their “Fab 5” club with more than $1.15 million in mortgage loans by “flipping” properties in Martin and St. Lucie counties that the McGills sold using fraudulent loan applications.

The media coverage of the McGills’ arrests resulted in new information and dozens of new complaints regarding the McGill’s alleged activities. Complaints involve allegations of an Orlando condominium scheme and unfulfilled returns in various real estate transactions. A second search warrant was executed Wednesday at the McGills’ business property located at 2110 Arch St. in Jensen Beach. A preliminary search warrant was executed immediately following the McGills’ arrests.

“It is crucial that we hear from as many affected Floridians as possible so that investigators can find valuable evidence to help solve cases,” said CFO Sink, who oversees the DFS. “We will follow every trail and every tip as we work to find any and every stolen dollar.”

The McGills allegedly garnered victims through various companies they operated including the Young Millionaire’s Group, Inc. (YMG); RSM Investment and Mortgage (RSM); and New Hope Outreach Center, Inc. (New Hope), all of which operated out of the same Jensen Beach facility.

The McGills remain in the Martin County Jail, with bond set at $730,000 each.

Anyone with information is asked to contact Detective Ted Padich at (561) 837-5635 with the Division of Insurance Fraud (DIF) or Investigator Steve Brignola at (561)837-5233, with the Office of Financial Regulation (OFR). The Office of Statewide Prosecution is prosecuting the charges.


CFO Sink addresses Space Coast Tiger Bay Club

At the Space Coast Tiger Bay Club luncheon meeting in Melbourne on October 24, Florida Chief Financial Officer Alex Sink spoke to members about the state of Florida’s economy in the face of declining revenues, increased foreclosures, and increasing unemployment rates.

“At this time last year in Brevard County, there were over 5,000 foreclosures, and this year so far, there have been over 7,000,” CFO Sink said. “In just the past month, there were 850 foreclosure filings in your county.”

The CFO also pointed out that Florida’s unemployment rate, at 6.6 percent, is now higher than the national average, and that decreasing revenues have brought the state’s budget down $10 billion over the past two years.

“We have to get back to the Florida that I know – where entrepreneurship, small businesses and innovation lead our economy, just like you’ve always done here in the Space Coast,” she said.

While acknowledging the many challenges facing the state in light of the difficult financial environment, she also informed the group of recent advancements she has made to help the state weather the storm.

“For the first time, I have brought together a working group from the State Treasury, the Division of Accounting and Auditing, the Governor’s Economic and Demographic Research Group, and the House and Senate Budget Offices to ensure that the state is prepared to respond to further slows in the economy,” said CFO Sink. “I think it will almost definitely become necessary to have a special session on the budget, so at least when that happens, we will be prepared.”


My Family CFO

Are you the chief financial officer of your family? Are you always looking out for the best deals, wise investments and smart moves for your family's financial security?

As your family's fiscal watch dog, keep an eye on this column for money-smart ideas from the Chief Financial Officer of Florida, Alex Sink.

Idea: Is Florida holding money that belongs to you?

Search the Florida Unclaimed Property Web site for missing money or assets.

Everyone is looking for extra cash these days, but did you know that extra cash could be just a mouse click away?

By visiting www.FLTreasureHunt.org and typing in your name, you could find out about lost, forgotten or even unknown assets that the state is holding for you. The Department of Financial Services, Bureau of Unclaimed Property, actively works to reunite owners with property reported to the state as unclaimed. Currently, about 7.8 million accounts worth about $1 billion are waiting to be claimed. You can also call 1-888-Valuable (1-888-

Common types of unclaimed property include:

There is no statute of limitations on unclaimed property in Florida. Account owners, or their heirs, can claim their property anytime, free of charge. And here’s a tip: don’t just check your current name, check any previous names you used and consider any common misspellings.


State Fire Marshal Sink: Follow these tricks for a safe Halloween

Chief Financial Officer and State Fire Marshal Alex Sink urges parents to remember that while Halloween is fun, it also can be hazardous. Sink warns that trick-or-treaters should not carry candles or other burning devices and should not wear loose or ill-fitting costumes.

Sink is joining the National Association of State Fire Marshals (NASFM) in trying to reduce Halloween-related fire injuries. Common Halloween decorations include candles and jack-o-lanterns, and even momentary contact with certain Halloween costumes can be tragic.

“When it comes to fire, tragedy can occur in an instant,” said Fire Marshal Sink. “Big or flowing costumes can pose a fire risk, and some costume materials simply are not flame-resistant. Parents must take steps to ensure costumes are safe and appropriate.”

Sink and the NASFM offer the following safety advice:

For more information on Halloween safety or the National Association of State Fire Marshals, visit the NASFM Web site at www.firemarshals.org. For more information about Florida’s Division of State Fire Marshal, visit www.MyFloridaCFO.com/sfm.


Saving Energy, Saving Money

Energy tips for Florida families - these actions represent ways to behave kindly toward Mother Earth, AND save money as well as energy.

These tips are presented by CFO Alex Sink's science advisor Meg Lowman, Ph.D., on the faculty at New College of Florida. Dr. Lowman has written numerous award-winning books and is an expert on the rainforests of the world.

House temperature can make a dent!

Make a dent in your energy bill by turning down the heat in the winter. Lower the thermostat five to 10 degrees F when you're sleeping or are out of the house. According to Consumer Reports, a 10 degree decrease can cut your heating bill by as much as 20 percent. Turn up the cool in the summer. Consider that for every degree you raise the thermostat setting you can expect to cut your cooling costs by at least 3 percent.

Install and use a programmable thermostat. Since about half of the typical home's energy bill goes for heating and cooling, according to the Department of Energy, the easiest way to save is to vary the temperature in the house according to time of day by programming the thermostat.

A cold hearth for a warmer house. A conventional fireplace draws a small gale out of the room and sends it up the chimney. Assuming the indoor air has been warmed by your central heating system, that means your energy dollars are going up the chimney, too.

To replace the wood-burning fireplace, consider a direct-vent, sealed-combustion gas fireplace. Consumer Reports finds these units have an energy efficiency of about 70 percent. The flames warm like a wood fire and chopping wood is no longer a chore!

A tighter home is a more efficient home. Seal the leaks. Use inexpensive foam strips and caulking to Weather-strip doors, windows, pipes and ducts. Paying attention to these details can cut your heating and cooling bills by 5 to 30 percent.


CFO Sink's free workers' comp classes draw 75 employers; seven more classes available this quarter

About 75 Florida employers and contractors have participated in free classes that Florida Chief Financial Officer Alex Sink launched on October 1 to help employers better understand their responsibilities under Florida’s workers’ compensation laws. Sink reminds employers that seven additional classes are scheduled through next month, and announces that the class has been approved to provide a second continuing education credit to licensed contractors.

“We are helping to keep Florida businesses strong and thriving by making sure employers know what is required regarding workers’ compensation coverage, and what resources we have available to help them comply,” Sink said.

Up to 11 classes will be held quarterly in locations throughout Florida. Remaining scheduled classes for this quarter are:

The classes provide information on what is required under Florida’s workers’ compensation law, when exemptions apply and provides training on workplace safety. Contractors earn one hour toward their required continuing education (CE) credits, and in recent weeks the class has been approved for one hour of workplace safety CE credit by the Occupational Safety and Health Administration.

Under Florida law, non-construction businesses with four or more employees must have workers’ compensation coverage, and construction-related businesses with one or more employees must have the coverage.


Think Twice About Replacing Annuities

Consumers Cautioned About Being Pressured to Cancel AIG Policies

In the light of recent market issues, consumers may be approached to replace their insurance products, especially those products underwritten by one of the American International Group (AIG) insurance companies. Before replacing a policy consumers should consider the following:

Information on AIG

The financial trouble with AIG is with its non-insurance parent company, which is not regulated by the states and therefore not held to the same investment, accounting and capital adequacy standards as its state-regulated insurance subsidiaries. The AIG insurance companies are separate entities, regulated by state insurance departments.

These AIG insurance companies are financially solvent and paying policyholder claims. If an agent tells you to replace any policy because an AIG insurance company is in trouble and may not be able to pay your claim, this statement is false and could be a violation of the Unfair Trade Practices Act in most states. If such a claim is made as part of a sales pitch, consumers can check the financial health of the insurance company by contacting their state insurance department, or by using the financial information tools on the NAIC’s Consumer Information Source (CIS) at: https://eapps.naic.org/cis/.

Information on Guaranty Associations

If it appears that an insurer is not going to be able to fulfill its promises to policyholders, your state regulator can take over management of that insurer through conservation or rehabilitation. Even if liquidation of an insurance company is necessary, policyholder claims will generally be paid either by the insurance company or by a guaranty fund, which all states have in place to provide coverage to policyholders. This protection applies to direct business written by authorized licensed insurers. For more information, visit the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) at www.nolgha.com or the National Conference of Insurance Guaranty Funds (NCIGF) at www.ncigf.org.