CFO Alex Sink's Consumer eViews Newsletter

FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S NEWSLETTER

Volume 5 Number 50 December 12, 2008

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This week, Florida’s state senators gathered to discuss the state’s economic crisis; the House will meet in the week ahead. Faced with a $2.3 billion deficit, it is an important move toward beginning the discussion about Florida’s budget shortfall. CFO Sink has been advocating for a special session during the last several weeks, citing the urgency of Florida’s dire economic budget, and it is encouraging that lawmakers have begun this process.

As unemployment continues to rise, more Floridians need assistance. It is important during economic downturns that critical services and programs maintain their funding, and CFO Sink encourages lawmakers to look at reducing our state’s expenditures in a responsible manner. Now that the conversation has started, it is promising that the Legislature will look at wise solutions to solving Florida’s economic challenges.


CFO speaks to Florida Insurance Council about upcoming legislative session

On Tuesday, CFO Sink joined the Florida Insurance Council (FIC), Florida’s largest insurance trade association, at a meeting the organization held to discuss the upcoming legislative session. CFO Sink spoke to the group about consumer-oriented issues she would like to see on the agenda when legislative leaders reconvene in the spring.

“We must reform the Florida Hurricane Catastrophe Fund,” said CFO Sink. “The state is overexposed in the Cat Fund and if a bad storm hits, we might not be able to pay the claims to which we are obligated.”

CFO Sink also took into account what consumers can do to work with insurers to harden their homes against potential hazards. “I would like for Florida to become like the Silicon Valley of mitigation techniques,” she said.

Lastly, CFO Sink said she will also promote legislation that increases penalties against criminals who commit annuity fraud. “It is unfortunate that there are bad actors out there that prey upon innocent seniors by selling them inappropriate financial products,” she said. “I would like to see those criminals behind bars.”


Jimmy Peters photograph given in honor of Governor Crist

On occasion of Governor Crist’s upcoming nuptials, CFO Sink, along with General McCollum and Commissioner Bronson, presented the governor with “Cracker Pack,” a black-and-white photograph by Florida artist Jimmy Peters. The photograph, which is being donated to the Governor’s mansion, captures a significant part of Florida’s culture both in times past and still today. The photograph is from the series “Florida Cowboys,” which is on display in the Cabinet room through the end of January.

CFO Sink explained the history displayed within the photograph including the dog Tango, a strain of the Florida cur cow dog whose line dates back over a hundred years, and the cracker cows, direct descendents of the first cattle brought to the new world by Juan Ponce de Leon in 1521. The artist Jimmy Peters and his family were in attendance for the presentation.


CFO Sink holds Professional Learning Fair 2008

Personnel in the Department of Financial Services (DFS), Office of Financial Regulation (OFR) and Office of Insurance Regulation (OIR) had the opportunity to learn how the different divisions and offices of DFS, OFR, and OIR work together to serve the citizens of Florida.

Training opportunities were discussed that are available such as professional development, continuing education and college classes. The Learning & Development Council Members and the Office of Learning & Development Team were on hand.


Marines collect Toys for Tots in the spirit of the season

Local Marine Corps representatives were honored at the Cabinet meeting for their exemplary support of the Toys for Tots campaign. The Marine Corps adopted Toys for Tots in 1948 and have helped coordinate the program ever since. The main goal of Toys for Tots is to give gifts to children of low-income families.


State arson detectives arrest Zellwood arsonist

Florida Chief Financial Officer and State Fire Marshal Alex Sink today announced that three men have been charged in a series of fires in the Zellwood neighborhood that began in the summer. No one was injured, but all of the fires involved residential dwellings.

Joel Reed, 21, and twin brothers Christopher R. Headdy and Michael R. Headdy, 22, are charged with arson of a dwelling, conspiracy to commit arson and burglary of a dwelling. Reedy was arrested on Tuesday and was booked into the Orange County Jail. The Headdy brothers are still being sought. If convicted, they each face up to fifteen years behind bars. The arrests are the result of an investigation by the Division of State Fire Marshal, Bureau of Fire and Arson Investigation, one of two law enforcement agencies Sink oversees.

“Arson is a serious crime that puts innocent citizens and rescue personnel at great risk,” said CFO Sink. “I commend the detectives who have been working this case diligently and the citizen who provided critical information that helped crack the case.”

During the investigation, Detective Michael Vitta received an anonymous tip that a resident of the neighborhood was involved with the fires. Detective Vitta identified this neighbor as Reed; when questioned, Reed allegedly implicated himself and the Headdy brothers.

To date, five of the Zellwood arsons have been linked, and three have allegedly been linked to the Reed and the Headdy brothers. The three fires they are accused of occurred on June 16, 2008, at 5106 Mc Donald Street; August 13, 2008, at 2803 Round Lake Road, and on November 11, 2008, at 5111 Mc Donald Street in Zellwood.

The investigation into the remaining two fires in Zellwood continues. These fires occurred on December 1, 2008, and involved two unoccupied dwellings. Anyone with information about the Zellwood fires or the location of Christopher and Michael Headdy are asked to contact Detective Michael Vitta at the State Fire Marshal’s Office, 407-893-3664 or1-877-NOARSON (1-877-662-7766). Information can be provided anonymously.

The Bureau of Fire and Arson Investigations is the law enforcement branch of the Division of the State Fire Marshal that assists other state and local agencies in the investigation of fires of suspicious origin.


Aventura woman charged with organized fraud for filing hundreds of fraudulent insurance claims

Florida Chief Financial Officer Alex Sink today announced the arrest of a South Florida woman on one count each of organized fraud and grand theft after an investigation by the Department of Financial Services, Division of Insurance Fraud (DIF), uncovered evidence that she had submitted more than 480 fraudulent medical claims and received more than $640,000 on those claims.

Susan Lerner Gluckman, 64, surrendered this morning and was booked into the Turner Guilford Knight Correctional. The Miami-Dade State Attorney’s Office is prosecuting the charges. If convicted, she faces up to 30 years on each count.

“We will aggressively pursue anyone who commits insurance fraud because it is a costly crime that affects all Floridians’ premiums,” said CFO Sink, who oversees the department and two law enforcement agencies. During the last fiscal year ending June 30, 2008, DIF investigators made more than 800 arrests.

From September 2005 through October 2007, Gluckman allegedly defrauded Cigna Healthcare of Florida by submitting hundreds of fraudulent receipts and health insurance claim forms to the insurance company from her home. The claims were for treatments she claimed her husband received from Dr. Seymour Nash, who had already been paid a little over $5,000 for the 14 treatments her husband actually received. Cigna Healthcare of Florida paid Gluckman an additional $640,246.

Insurance fraud in Florida has been estimated to cost Floridians as much as $1,400 a year per person. The DIF investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance. Depending on the estimated loss amount, the department will pay up to $25,000 for information directly leading to an arrest and conviction. Anyone with information about this or any other suspected insurance fraud is asked to call the department's Fraud Fighters Hotline at 1-800-378-0445 or log on to www.MyFloridaCFO.com/fraud. Complaints can be tracked online.


State Fire Marshal announces arson arrest

Florida Chief Financial Officer and State Fire Marshal Alex Sink announced today that the Bureau of Fire and Arson Investigations (BFAI), in cooperation with the Federal Bureau of Alcohol, Tobacco, and Firearms (BATF), has arrested a man who set four separate fires at an electronics store.

Thomas Litton Hartman, 28, is charged with four counts of Arson to an Occupied Structure; charges are being prosecuted by the Duval County State Attorney’s Office, and Hartman is being held in the Duval County Jail. If convicted on the charges, he faces up to 25 years in prison on each count.

“Arson is a dangerous crime that puts innocent citizens and rescue personnel at great risk,” said CFO Sink. “The State Fire Marshal’s Office urges citizens to report any suspicions or information regarding arson so we can hold these criminals accountable for their violent and costly actions.”

Employees and customers were in the store during each fire, but no injuries were reported. The fires occurred between November 21 and December 1 at the HH Gregg store located at 8380 Merchant’s Way. The fires were set to a trash compactor, the loading dock, the electrical service box on the exterior of the building, and a bathroom, resulting in several thousand dollars’ worth of damage and lost business.

BFAI Detective James Little and BATF Special Agent Jeff Brown led the investigation. Closed-circuit video surveillance footage from the store allegedly identified the suspect, an employee of the store. Investigators said the suspect confessed to having set all of the fires.

The Bureau of Fire and Arson Investigations is a law enforcement branch of the Division of State Fire Marshal that assists other state and local fire and law enforcement agencies in the investigation of fires of suspicious origin. Anyone with information about arson or any suspicious incident of fire is asked to call 1-877-662-7766 (1-877-NO-ARSON). Rewards are offered for information leading to an arrest and conviction.


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.

If you have a creative way to be fiscally smart, share it with us for this column!

MyFamilyCFO@MyFloridaCFO.com

Idea: Shop wisely for the holidays

It’s that time of year again and Floridians are making holiday lists and checking them twice. A checklist to protect your purchases and your identity during the holiday shopping season is worth a second look as well.

Tips for saving time and money during the holidays

Shop carefully to get the best deals and avoid paying more for items than necessary. Comparison shop for items and save money on gasoline by calling ahead or checking on-line with retailers to check availability and prices. Check receipts carefully after making purchases, ensuring that the charges are correct; and keep them in a safe place in case you need to return items.

Before You Buy a Gift Card

If buying gift cards or gift certificates this season, research the vendors you’ll be purchasing them from to avoid buying gift cards from retailers, even major retailers, who may not be in business a few months from now. Gift card holders have no recourse when a retailer declares bankruptcy. Some retailers charge a monthly fee or decrease the value over time for unused gift cards. Be sure you understand all the details and redemption schedules before you make a purchase.

The credit card gift card, an alternative to individual retailer’s gift cards, can be a great choice as the recipient can usually use it anywhere the credit card is accepted. The biggest drawbacks to these gift cards is that unlike retail or restaurant cards, credit card gift cards generally have activation fees ranging from $2.50 to $6.00.

Other tips for buying gift cards:

Holiday Shopping Online

Shopping online is convenient and popular. Unless you’re familiar with retailer’s Web sites and policies, it may be helpful to check out Consumer Reports ratings before making your online purchases. Go to www.consumerreports.org to see how retail sites score on buyer-friendly criteria such as Web site security and policies for returning purchases, shipping costs and easy site navigation.

If shopping on-line, make sure you are using a secure Web site before disclosing personal financial information and remember to:



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 world rainforests.

Trees for the holidays

The tradition of decorating a holiday tree can pose an ethical dilemma for citizens who are counting their carbon footprints. Approximately one hectare (translation: just slightly more than 2 acres) of broadleaf trees is estimated to capture 6.5 tons of carbon, representing the average energy footprint of citizens from developed countries such as England, America, or Australia. So how can we enjoy a holiday tree and also minimize our carbon emissions?

A plastic tree is manufactured with fossil fuels, so that is not the best option. Purchasing a cut tree removes one of nature’s best carbon storage machines out of operation. The best solution is to purchase a live tree, decorate and enjoy it through the holiday season, and then plant it afterwards. If you have a location where a tree will grow and absorb carbon dioxide for many decades, then you will have invested in the next generation. Many Florida yards have few trees, especially in newer developments – so planting a tree in these open areas will also enhance your real estate values in the future.


National Association of Insurance CommissionersHOLIDAY MISHAPS: Review Your Insurance to Make Sure You're Covered

Holiday season mishaps might be humorous in movies like National Lampoon’s "Christmas Vacation.”  They are not so funny when they happen to you. So, before your family and friends gather to celebrate the season, the National Association of Insurance Commissioners (NAIC) suggests you take the time to review potential mishaps and understand how your insurance might apply.

Auto Insurance

What if you and a family member are taking turns driving your car to a family gathering and you get into an accident while your relative is driving?

Auto insurance coverage follows the vehicle, so your car will generally be covered while your relative is driving, the same as if you were driving. For example, if your family member slides off the road due to a patch of ice, and you only have liability coverage, there would not be coverage for any damage to the car itself, no matter who was driving. In addition, keep in mind that your premiums might increase due to the accident.

What if you take someone else’s car (with their permission) to the store because it was the last one in the driveway, and you accidentally back it into your neighbor’s car parked across the street?

The existing auto insurance policy on the borrowed vehicle would provide primary coverage in the event of a claim. If no coverage exists, your auto insurance policy might provide coverage. Talk with your insurance agent or company to find out if your auto insurance coverage will extend to a friend or family member's car you plan on operating.

What if you decide to visit your extended family in Canada or Mexico? Will you have coverage for your vehicle there?

Auto insurance policies often do not provide coverage when the vehicle is driven outside of the United States. Check with your insurance agent or company to ensure that your auto insurance coverage will apply outside the United States. Most policies afford coverage while driving in Canada, but not in Mexico. Check with your insurance agent or company regarding coverage limitations.

What if you loan your car to a family member and they get pulled over for driving while intoxicated?

Your automobile coverage will not be affected if another driver is simply ticketed for a driving violation. However, if the person to whom you loaned the vehicle has an accident while intoxicated, the company might non-renew your policy or charge a higher premium.

Homeowners Insurance

What if someone breaks your car’s window and steals gifts from the back seat while your car is parked at the mall?

Standard homeowners and renter’s insurance policies provide coverage for this peril, subject to the policy deductible and coverage limits. Some automobile policies also provide coverage. If this happens to you, talk with your insurance agent or company to find out under which policy you should file your claim.

What happens if your coworker, a guest at your holiday party, slips and falls on your icy driveway?

Standard homeowners insurance policies provide limited medical payments coverage if your seeks medical attention. If the coworker sues you for additional damages, your standard homeowners insurance policy should provide liability coverage. Check with your insurance agent or company to be sure you have adequate liability limits.

What if an ice or snow storm causes a tree to fall through the front window of your house?

Standard homeowners insurance policies generally provide coverage for damage to the home — as well as the cost to remove the tree (generally up to $1,000) — if the tree fell due to the weight of ice or snow, minus your deductible. Check your policy to find out what limit of coverage you have. However, your homeowners policy will not help you purchase a new tree.

What if your presents are stolen from under the Christmas tree in your living room?

Standard homeowners insurance policies provide coverage subject to the deductible and special sublimits for certain goods, such as electronics and jewelry. For example, if the wrapped package was a $300 gift card to an electronics store, there might only be $200 coverage; if the package contained $2,000 worth of jewelry or furs, there might only be $1,500 coverage; and if the package contained a silver-plated tea set, there might only be $2,500 coverage. Standard condominium and renter’s insurance policies provide similar coverage. Check your homeowners policy for specific sublimits.

What if someone steals the holiday decorations in your front yard?

Under a standard homeowners insurance policy, decorations are generally covered, subject to your policy deductible and coverage limits. These items would also generally be covered if you have a condominium or renter’s insurance policy.

What if your holiday candles cause a house fire?

Under a standard homeowners insurance policy, your home and belongings will be covered if they are destroyed by a fire, subject to your deductible and policy limits. Standard policies typically provide additional living expenses if you are unable to live in your home due to damage from a fire or other disaster.

Credit Card Theft

What if you lose your credit card and someone uses it to buy a big screen television?

Credit card theft might be covered as part of your credit card contract. Standard homeowners insurance policies typically provide up to $500 of coverage toward your legal obligation to pay your creditor. However, coverage is not provided if a family member, entrusted with the card, buys a big screen television. Federal law also limits a cardholder’s responsibility as long as the issuer of the credit card is promptly notified in accordance with the terms and conditions of the cardholder agreement.

Health Insurance

What if the holiday eggnog is bad and you end up in an urgent care while you are out of state?

Most health insurance policies provide coverage for urgent care and emergency room visits while traveling, if they provide for such coverage at home. If you plan to travel, be sure to take your health insurance information for all family members — including your identification cards and contact details — with you. Co-payments associated with urgent care visits are typically lower than co-payments for emergency room visits. Prior to leaving town, it is also a good idea to check with your insurance company about in-network healthcare providers at your destination. If you receive medical care from an out-of-network provider, you might be subject to higher deductibles and/or co-payments.

More Information

Get more information about your changing insurance needs and tips for choosing the coverage that is best for you and your family at www.insureUonline.org.


Internal Revenue Service

IRS Offers Tips for Year-End Donations

IR-2008-138, Dec. 9, 2008

Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years.

One provision offers older owners of individual retirement arrangements (IRAs) a different way to give to charity. There are also rules designed to provide both taxpayers and the government greater certainty in determining what may be deducted as a charitable contribution. Some of these changes include the following.

Special Charitable Contributions for Certain IRA Owners

An IRA owner, age 70 ½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charitable organization. This option, created in 2006 and recently extended through 2009, is available to eligible IRA owners, regardless of whether they itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.

To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the amount given to the charity.

Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.

Transferred amounts are counted in determining whether the owner has met the IRA’s required minimum distribution rules. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.

Rules for Clothing and Household Items

To be deductible, clothing and household items donated to charity must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to be in good used condition or better if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances, and linens.

Guidelines for Monetary Donations

To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Donations of money include those made in cash or by check, electronic funds transfer, credit card, and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

These requirements for monetary donations do not change or alter the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet the requirements of both provisions.

To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:

For additional information on charitable giving: