News roundup April 6, 2024

Personal finance news roundup Apr 6 2024

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Credit Sesame’s personal finance news roundup April 6, 2024. Stories, news, politics and events impacting personal finance during the past week.

  1. FTC report highlights shifting challenge of impersonation scams
  2. Millennials become largest share of home buyers
  3. CFPB identifies financial risks in video games
  4. Bankruptcies approaching crisis levels
  5. VantageScore usage rises quickly
  6. Credit issues lead consumer financial complaints
  7. Job growth keeps a full head of steam

FTC report highlights shifting challenge of impersonation scams

The Federal Trade Commission put out a bulletin warning consumers about how impersonation scams are evolving. In 2023, the FTC received 330,000 reports of scams imitating businesses and 160,000 reports of those imitating government representatives. Losses to these scams totaled over $1.1 billion last year, which has tripled since 2020. These scams have increased in complexity, such that a fake representative of one organization might transfer you to other imposters pretending to be from banks or government agencies. The top five types of impersonation scams are 1) fake security alerts, 2) phony subscription renewals, 3) false giveaways or money to claim, 4) made-up legal problems, and 5) pretend package delivery problems. See details at FTC.gov.

Millennials become largest share of home buyers

The National Association of Realtors reported that Millennials took over from Baby Boomers last year as the largest generational cohort among home purchasers. Millennials rose from 28% to 38% of the home-buying market last year. Meanwhile, Baby Boomers slipped from 39% to 31%. As a function of their later stage of life, Baby Boomers represented the largest share of home sellers last year, at 45%. See news release at NAR.reator.

CFPB identifies financial risks in video games

The Consumer Financial Protection Bureau (CFPB) has issued a report outlining the risks gamers may face when playing video games online. The CFPB says that gamers are coaxed to exchange real-world money for in-game currencies and virtual items. These electronic assets are increasingly the targets of fraud, such as phishing tactics or unauthorized account access. Gamers have reported getting little help from gaming companies when reporting such scams. Also, the CFPB warned about the amount of data gaming companies gather. This can include personal and financial data, location details, and regular movements. As virtual reality headsets become popular, data gathering can extend to biometric information. See news release at ConsumerFinance.gov.

Bankruptcies approaching crisis levels

Major corporate bankruptcies last week were running at a pace last seen in the aftermath of the 2008-2009 financial crisis. Commercial insolvency was up by 43% in the first quarter of 2024 compared with the same quarter last year. This is part of a broader trend that has seen overall bankruptcies, including individuals and businesses, steadily rising for 20 months. Higher interest rates are cited as a factor that is making debt burdens harder to bear. Also, a backlog of potential bankruptcies built up while forbearance policies were in place during the pandemic. See article at Yahoo.com.

VantageScore usage rises quickly

VantageScore, a credit score alternative to the traditional FICO score, is gaining traction. The company reports that VantageScore usage rose by 43% last year. Users now include 3,400 different financial institutions. This includes eight of the top ten banks. In all, VantageScore was used 27 billion times last year. Growth was robust in the credit card category, with usage by card issuers jumping by 172% last year. VantageScore is a joint venture of the three major credit reporting bureaus: Equifax, Experian, and TransUnion. See article at PRNewswire.com.

Credit issues lead consumer financial complaints

The Consumer Financial Protection Bureau (CFPB) identified issues relating to credit as the source of most of the complaints it receives from consumers. In an annual report on consumer complaints, the CFPB said it received more than 1.3 million complaints last year. 81% of these were related to credit or consumer reporting. Debt collection was the second most common subject of consumer complaints. Many of the complaints the CFPB received last year related to fraudulent activity. Examples include finding unfamiliar accounts or credit inquiries on credit reports, debt collectors pursuing loans consumers claim they did not initiate, and unauthorized transfers out of deposit accounts. See report at ConsumerFinance.gov.

Job growth keeps a full head of steam

The Bureau of Labor Statistics reported that the US economy added a net 303,000 new jobs in March 2024. Job gains in health care, government, and construction led to employment growth. March’s gain of 303,000 new jobs was well above the average of 231,000 for the past 12 months. On top of March’s strong employment growth, there was a net upward revision of 22,000 to previously reported figures for January and February. Continued strength in the job market validates the Fed’s cautious approach to lowering interest rates as long as inflation remains troublesome. See employment report at BLS.gov.

Weekly news headlines from Credit Sesame

Richard Barrington
Financial analyst for Credit Sesame, Richard Barrington earned his Chartered Financial Analyst designation and worked for over thirty years in the financial industry. He graduated from St. John Fisher College and joined Manning & Napier Advisors. He worked his way up to become head of marketing and client service, an owner of the firm and a member of its governing executive committee. He left the investment business in 2006 to become a financial analyst and commentator with a focus on the impact of the economy on personal finances. In that role he has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications.

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