The Stick Approach Is More Effective

In a previous post I mentioned the carrot versus the stick approach regarding reusable bags.   Some stores in the DC Metropolitan Area for the past few years have encouraged customers to carry reusable bags by deducting 5 to 10 cents per bag at the time of purchase.

Well, DC instituted a new law in January.  If a customer does not have a reusable bag and requests a paper or plastic bag from certain grocery or convenience stores, the customer is charged 5 cents per bag.

An article by Tim Craig in the Tuesday, March 30, 2010 edition of The Washington Post demonstrates how effective the “stick approach” is.

The District’s 5-cent bag tax generated about $150,000 during January to help clean up the Anacostia River, even though residents have dramatically scaled back their use of disposable bags, according [to] a report city officials issued Monday.

In its first assessment of how the new law is working, the D.C. Office of Tax and Revenue estimated that food and grocery establishments gave out about 3 million bags in January.  Before the bag tax took effect Jan. 1, the Office of the Chief Financial Officer had said that about 22.5 million bags were being issued each month in 2009.

Council member Tommy Wells (D-Ward 6), sponsor of the bag tax bill, said the new figures show that city residents are adapting to the law far more quickly than he or other city officials had expected.

“While it’s difficult to project the annual results based on just the first month ‘s experience, the report shows that residents are making great strides in reducing disposable bag use,” Wells said.

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District officials had estimated that the tax would generate $10 million over the next four years for environmental initiatives.

The money will go to the newly created Anacostia River Cleanup Fund, which will spend it on various projects.

But in January, the tax generated only $149,432, suggesting that it might fall short of revenue projections.

Page B1.

Okay.  So the District of Columbia government imposes a new tax, no matter how small, during the Great Recession.  The unemployment rate in the District of Columbia is double digits.  And City officials are surprised how quickly people are adapting?

I’m glad people have decided  not to a pay an extra penny unnecessarily and thus they carry reusable bags.   Great!  More effective than reducing a customer’s total bill by 5 – 10 cents per bag.

It’s ironic that the city’s treasury won’t be overflowing with refunds from the tax.  Maybe city officials assumed District of Columbia residents are stupid, would not change their habits,  and thus would willingly pay extra money.  I guess city officials underestimated the constituency.


Lawsuits & the SSN

If you initiate a lawsuit or are sued, there is a phase of litigation called discovery.  During this phase each side will attempt to learn or discover information from the other side to support the party’s claims or the party’s defenses.

During discovery, let’s say the defendant serves interrogatories [written questions which must be answered in writing under oath] on plaintiff.  Two of the questions are (a) what is your date of birth and (b) what is your social security number.  Without hesitation plaintiff answers these questions.

Also during discovery let’s say plaintiff deposes defendant.  A deposition is basically sworn testimony taken outside of court.  A court reporter or stenographer is present recording verbatim the questions and answers.

The court reporter or stenographer will administer the oath to defendant before plaintiff’s counsel begins questioning the defendant.  The deposition then begins.  Plaintiff’s counsel will likely ask defendant if he has ever been deposed.  If not, plaintiff’s counsel will explain the process to the defendant.

Plaintiff’s counsel will attempt to make defendant comfortable.  Plaintiff’s counsel will ask easy questions including (a) where do you presently live, (b) what is your date of birth and (c) what is your social security number.  Defendant answers all three questions.

Now, let’s say, the phase of discovery has ended.  Defendant moves for summary judgment, in essence, seeking a ruling from the Court, before a trial, that plaintiff cannot prove her case and that justice thus requires judgment be entered in favor of defendant.

In filing the summary judgment motion, defendant’s counsel attaches as an exhibit plaintiff’s interrogatory answers including her date of birth and social security number.

In filing the opposition, plaintiff’s counsel attaches portions of the transcript from defendant’s deposition including where defendant identified his present address, his date of birth and his social security number.


Not sure how many of you realize that many papers, which previously were mailed to the court or hand delivered to the court, are now filed electronically.   Attorneys are electronically filing exhibits such as answers to interrogatories and deposition transcripts which may contain sensitive personal information such as dates of birth and social security numbers.   Courts do advise counsel to redact or remove such information before filing documents electronically.

If you are involved in a lawsuit and your social security number is requested, don’t hesitate to question the need for that information.  If the opposing counsel explains the reason for the need and your counsel confirms the information must be provided, then before disclosing the information, question counsel  – – is it possible the information may be filed electronically as part of a brief or motion?   If the attorney responds yes, then ask counsel, will he provide you a year’s worth of free credit report monitoring if his office/firm inadvertently files your social security number electronically?

An attorney reading this may roll his/her eyes.  But YOU must take steps to PROTECT your social security number.  Attorneys and their staff are not always diligent in protecting this critical identifier.

Jury Summons & the SSN

A few weeks ago I received a summons from the Superior Court (District of Columbia) to report for potential jury service.  A portion of the summons included a questionnaire which had to be completed and returned, I believe, within five days of receipt.

The questionnaire sought information such as address, date of birth, ever convicted of a felony, do you speak English, your social security number.  What?  Why does the Court need my social security number?

Hmmm.  I didn’t want to list my full social security number on the form which would be mailed (when it comes to my social security number, I trust NO ONE).  I noticed I had the option to register online so I opted to do so.

I was pleased to discover, for the online questionnaire, I had to provide the last four digits only of my social security number.  But it still begs the question, why does the Court needs my social security number?  And what measures are taken by the  Court to protect my sensitive information.  Keep in my mind, the Court has critical information – my present address, my telephone number,  my date of birth and the social security number.   That’s enough information for an identity theft to attempt to obtain credit under my name.

Social Security Number & Colleges/Universities

When I attended college, I was issued a six digit student identification number. Still remember to this day.  Amazing.  The numbers are hard-wired in my brain.

Several years later, I needed to provide an employer  with my college transcript.  I wrote to my college and included my six digit student identification number and a check for the cost of the transcript.

When the transcript arrived, one thing caught  my attention.  My student identification number was no longer the six digit number I had to write or cite repeatedly during my four year of college.  Instead, the university was now using my social security number as my student identification number.  I never used my social security number as my student identification number during college.  Very unhappy to learn the university had decided the social security number would be the identifier, even for those students who had an assigned identification number.

In March of 2001 however the university was contemplating changing from using SSN as a student’s identifier to a unique student identification number.   Hmm, the  university should have never switched to the SSN,

Link below

A lot of government agencies and private businesses, due to sheer laziness,  started using the SSN as a persona identifier. THIS MUST STOP.

With an explosion  in the rate of identity thefts cases, many government agencies and higher learnings of instruction must go on the offensive .  The first STOP using the SSN.

The Military Has Dumped the SSN as an Identifier

I served in the military (United States Air Force) for just over seven years.

I was surprised when I joined the military that my Social Security Number was  my serial number.

I  learned from two colonels I worked for that in the late 1960s the change was made from serial number to social security number.  These two colonels had joined the military shortly after the  military decided to make the switch.  So they had serials numbers as well as their social security numbers as identifiers.

There’s an obvious problem with using the Social Security Number as an identification number:  IDENTITY THEFT.

Below are excerpts from an article Thomas E. Ricks, then a Staff Reporter of The Wall Street Journal, wrote on December 8, 1999.  The article is entitled The Pentagon Says Web Site Made Credit-Card Scam Easier.

For decades, American soldiers have been taught that, if taken captive, they should provide just their “name, rank and serial number.”  But in the Internet age, disclosing even that minimal amount of information turns out to be dangerous.

The U.S. Secret Service is leading an investigation of a sprawling fraud case in which someone applied for and obtained hundreds of credit cards in the names of top U.S. military officers, including more than 75  generals and admirals.  The cards were then used to obtain cash.  Among those who have been officially informed that attempts were made to have cards issued in their names are Army Gen. John Tilelli, commander of U.S. forces in Korea, and retired Army Gen. John Shalikashvili, former  chairman of the Joint Chiefs of Staff.

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The credit cards were obtainable because the “service numbers” – – or serial numbers – – of officers were carried in the Congressional Record as part of the process of promotions.  For convenience, the U.S. military has for years used Social Security numbers as service numbers.

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The incident is prompting the Pentagon to reassess the sort of data it  keeps and releases on military personnel.  The Geneva Convention rules of war require prisoners of war to provide their serial numbers to captors.  When that number is a Social Security number, a savvy captor could use it [to] find out all about a POW’s family, finances and personal history, and then manipulate the prisoner with that information. The Pentagon is seriously considering switching to service numbers unrelated to Social Security numbers, says Gen. Composto.

Ten years later, PROGRESS.  According to a April 21, 2009 edition of Fierce Government IT, in an article entitled Pentagon removes SSNs from military ID cards, the first three paragraphs state

Social Security numbers used to be the rock solid way of identifying someone in the military and their depend[e]nts.  But not anymore.

The Defense Department is planning to remove SSNs from military and dependent cards in the United States and overseas by the end of this year.  The reason is simple.   It’s called identity theft.

With the growing theft of personal IDs, especially easy-to-get SSNs, it is a precautionary move for the Pentagon to take.  Starting at the end of this year, SSNs will no longer be used, according to the Defense Department’s Social Security Number Reduction Plan.

It took some time but the military “has seen the light.”

The Genie’s Out of the Bottle: The Frequent Use of the Social Security Number

** You visit the doctor’s office and are given forms to fill out.  Your social security number is requested.

** You’re at the department store ready to make a purchase.  You’re offered a 10% discount if you sign up for the department store’s charge card and the sales clerk asks for your social security number.

** You fill out an application for a job.  Among the items requested is your social security number.

It seems like, in today’s society, one’s social security number is often requested.  What’s the history behind the social security number?

On November 22, 1943, President Franklin D. Roosevelt issued Executive Order 9397: Numbering System for Federal Accounts Relating to Individual Persons.

Hmmm, the first thing I notice is this numbering system is for federal accounts.  However, today, not only the federal government, but state and local governments, private businesses and universities demand individuals disclose their social security numbers.  So, what did Executive Order 9397 state?

WHEREAS certain Federal agencies from time to time require in the administration of their activities a system of numerical identification of accounts of individual persons; and

WHEREAS some seventy million persons have heretofore been assigned account numbers pursuant to the Social Security Act; and

WHEREAS a large percentage of Federal employees have already been assigned account numbers pursuant to the Social Security Act; and

WHEREAS it is desirable in the interest of economy and orderly administration that the Federal Government move towards the use of a single, unduplicated numerical identification system of accounts and avoid the unnecessary establishment of additional systems:

NOW, THEREFORE, by virtue of the authority vested in me as President of the United States, it is hereby ordered as follows:

1.  Hereafter any Federal department, establishment, or agency shall, whenever the head thereof finds it advisable to establish a new system of permanent account numbers pertaining to individual persons, utilize exclusively the Social Security Act account numbers assigned pursuant to Title 26, section 402.502 of the 1940 Supplement to the Code of Federal Regulations and pursuant to paragraph 2 of this order.

2. The Social Security Board shall provide for the assignment of an account number to each person who is required by any Federal agency to have such a number but who has not previously been assigned such number by the Board.  The Board may accomplish this purpose by (a) assigning such numbers to individual persons, (b) assigning blocks of numbers to Federal agencies for reassignment to individual persons, or (c) making such other arrangements for the assignment of numbers as it may deem appropriate.

3.  The Social Security Board shall furnish, upon request of any Federal agency utilizing the numerical identification system of accounts provided  for in this order, the account number pertaining to any person with whom such agency has an account or the name and other identifying data pertaining to any account number of any such person.

4.  The Social Security Board and each Federal agency shall maintain the confidential character of information relating to individual persons obtained pursuant to the provisions of this order.

5.  There shall be transferred to the Social Security Board, from time to time, such amounts as the Director of the Bureau of the Budget shall determine to be required for reimbursement by any Federal agency for the services rendered by the Board pursuant to the provisions of this order.

6.  This order shall be published in the FEDERAL REGISTER.

My posts this week (and possibly next week) will be about excessive use of social security numbers, identity theft,  the institutions that typically request your social security number, protecting your social security number, etc.

The Car Maintenance Fund

When your car needs an “unexpected, unannounced, unplanned” visit to the mechanic, do you whip out your credit card?  Or do you have money to pay for maintenance or an  emergency with a debit card or a check card linked to your checking account?  If the latter, terrific, you can skip reading this post (only kidding 🙂 ).   If you don’t have funds to cover the car maintenance expense, please seriously consider establishing one  [because, how will you ever get out of credit card debt, if you use your credit card for “unexpected expenses” such as regularly scheduled car maintenance or an emergency]?

First, let’s begin with the concept that car maintenance is an expected price of owning a car.  You are living in a fantasy world if you believe, when buying a new car, there will be no maintenance issues or that all maintenance issues will be resolved by the time the warranty expires.

The  best way to ensure you have a well-funded car maintenance fund is to deposit or transfer money the fixed dollar amount to a designated account every pay period.  As an example, with my credit union account, I’m allowed to open three types of savings:  share savings, additional savings  and holiday savings.  I selected the “holiday savings” as my car maintenance fund.  Each pay period I transfer a fixed amount from my checking to the holiday savings for car maintenance.

Second, how much should you set aside?  How new or old is your car?   Is it still under warranty (or extended warranty)?  If all dealership warranties have expired, a car maintenance account is a necessity.  So, how do determine the amount to set aside?  I recommend looking over your receipts  for the last two to three years to determine an average monthly amount as car maintenance.  Presently I am transferring $50 per pay period to my car maintenance fund.

What has been my experience?  Using Dave Ramsey’s speak,  I haven’t seen Murphy.  Though, last November, Murphy seem to be playing games with me.

Before departing for Virginia Tech, I had my mechanic check my vehicle on Veterans’ Day (11 November 2009).   The total cost of the service was $156.86.

On 16 November 2009 I drive from Washington DC to Virginia Tech.  I can’t recall the exact distance but I believe the trip was more than 300 miles.  That evening my check engine light came on.  I’m nervous because I’ve driven to an unfamiliar area.   I hope the check engine  light would go off after I feel my vehicle’s tank.  No such luck.  When I turned the ignition the check engine  light reappears and remains steady.

I arrive at the hotel, called AAA and ws  provided the name, telephone number and address of a relatively close  AAA-approved dealer.  On 17 November 2009 I take my car to this AAA-approved dealer.  Total cost $361.47 (I was not a happy camper).

I depart Virginia Tech the next day and return safely to Washington DC.

Less than a week later, my car, sitting in front of my house, doesn’t start.  I tried multiple times without any luck.   I call my mechanic.  Later when he comes to check out the car, it starts without a problem.  My mechanic nevertheless inspects my vehicle on 24 November 2009.  Total cost is $134.06.

In less than two weeks I had to deduct $652.39 from my car maintenance fund.  I was rather displeased but, because I am so disciplined about setting aside money for the car maintenance fund, I had cash available and did not have to use a credit card.   Luckily I had built up a $1,200 car maintenance fund.  Though I had to use a little more than half of the money I save, the point is I had the money available.

Presently I have about $920 in this fund.

$50 a may be too large of an amount to set aside each pay period.  Well then, select a smaller amount.  But make sure you are disciplined enough to set aside the money every pay period (or have it automatically debited from your account).

Ready to start?

I Cry “Uncle”

I’ve spent more than a few posts discussing charitable organizations and their practices.  On one day last week  I received six, that’s right, six unwanted solicitations from different charitable organizations.  Enough already!  I decided to make it crystal clear to these charities – stop sending me solicitations – by marking each envelope return to sender.  I deposited those six unwanted solicitations in the mail on Tuesday.

Today four of those letters were returned.  Yikes!  Even the postal service won’t assist me.  On top of that, I received an additional three unwanted solicitations from charities in today’s mail.

Apparently my predicament is my own fault.  According to Charity Navigator if one sends $15, $25, $50 to several charitable organizations, one’s name and address are sold to lots of other charities.  Apparently if you send funds to Charity A, B or C, there is an expectation that you will open your wallet for Charity X, Y or Z.  Not!

I’ve tried being polite by returning unwanted solicitations to charities.  I’ve returned, at my own expense, unwanted “gifts” from charities.  Those organizations that seek to entice you to give by including coins with their requests for a donation, I’ve actually returned such letters with the coins (without a donation) to the charities at my own expense.  Well, not anymore.

So what do I plan to do with unwanted solicitation, i.e., junk mail, henceforth?  If I don’t recognize the name of the charity, I will toss the letter in the trash (recycling).  If the letter include coins, I will remove the coins before recycling the letter and envelope.  The coins will be used toward paying off one of my mortgages.

A DO NOT SOLICIT LIST should be established with regard to charitable organizations.  If one already exists (hey, please let me know), I plan to register.  If one doesn’t, I’ll start one.

Cease Using Credit Cards?

If you’ve ever listened to Dave Ramsey, you know what he thinks – cut up those credit cards!  Dave Ramsey would encourage listeners to send in their video/DVD of how they creatively destroyed their credit cards.  I recall someone putting their credit cards in the blender.

Dave Ramsey believes Americans should live without credit cards.  He urges Americans to use debit cards instead.

Suze Orman, just before the New Year, had a show complaining about all the tactics the credit card issuers were using to get more money from card holders.  Suze was fed up with these credit card issuers, considering that our taxpayers’ dollars saved their behinds! She encouraged her viewers to take a pledge and stop using their credit cards.

So with two personal finance gurus encouraging Americans not to use their credit cards, I unofficially have pledged my allegiance.

I say “unofficially” for two reasons.  First I didn’t sign up on Suze Orman’s website pledging not to use my credit card.  Second, Dave Ramsey would be displeased to learn I have a credit card (just one with a $2,000 line of credit; I didn’t want a higher maximum).

But so far, in 2010,  I’ve not used my credit card.  When I purchase an item online or order something over the telephone, I use my debit card or my “check card” linked to my checking account.  Even though my “check card” gives me the option to pay by “credit,” since the money is deducted from my checking account, typically within 48 hours, it definitely is not a standard credit card.

It has not been hard living without a credit card.  And I love the fact that I don’t have to think about “paying my bill” by a certain date.  The debt doesn’t hang around my neck for years.

By using a debit card or my “check card” linked to my checking account, I’m forced to really think about whether I can afford what I want to get before purchase.  This forces me to live within my means.

Adverse to ATM Fees

It’s amazing what we, as customers, have to pay to get our money out of the bank.  First, banks offer inconvenient hours of service.  Do you always have time to rush to the bank during your lunch hour?  Or maybe visit before reporting to work?  Banks’ hours are not very customer friendly.

But then banks provide ATMs as a convenient way for you to withdraw your money from your account at any time.  Of course, if you happen to withdraw money from an ATM not associated with your bank, you are charged a fee.

So, how far will I go to avoid the dreaded ATM fees?  Well, let’s say family members have teased me about driving a considerable distance to withdraw money free from my credit union.  I’ve been told I could have saved gasoline by just paying the ATM fee.  No way, Jose.   I don’t think I’m spending a comparable amount in gasoline to the ATM fee I avoided.  The drive from my house to the credit union is approximately 8 miles.  Plus, when I do drive to the credit union, I make sure I have other errands in the local area so it’s not a wasted trip.

But I don’t drive too much now to the local branch.  That’s because I’ve located a relatively close ATM where I can withdraw money for free.  On my credit union’s website, one can type one’s zip code, and one’s given the closest branches and ATMs where one can withdraw money without a fee.  I learned of an ATM about 10 blocks from my home.  So, when I need money, I walk (most of the time) & kill two birds with one stone:  getting additional exercise & reducing my carbon footprint.

I believe most consumers are smart enough to avoid ATM fees.  One strategy is to withdraw enough money each pay day so you avoid having to visit an ATM, especially one not associated with your bank, between pay periods (this is my personal favorite).  Or shop at your local grocery store or convenience store and get cash back.

I have to give “a shout out” to my credit union.  When I visited Montreal in 2003 I was a little short of cash and thus used the ATM to obtain Canadian dollars.  I expected some outrageous ATM fee upon my return to the States.  I was shocked, indeed, SHOCKED that no ATM fee was assessed.  Thus, when I revisited Montreal in 2006, I wasn’t concerned about carrying lots of cash on me because I knew I could withdraw money without a fee.

If  you’re the type who withdraws money when the need strikes, then try to find a bank or credit union that will not assess a fee when you withdraw money from a foreign ATM.  At such a bank, only the foreign ATM charges you a fee.  But if you bank doesn’t waive the ATM fee, can you image withdrawing $20.00, and the foreign ATM charges you $2.50 and then your own bank charges you $2.50.  It’s costs $5.00 to withdraw $20.00 or essentially you received $15.00.

Another option is to find a bank or credit union that allows you so many “free” ATM withdraws per month.  USAA Bank offers its customers up to 10 free ATM withdrawals monthly.

Maybe I’m a little extreme, but I’m not having Big Corporation (the flip side of Big Brother) profit from me.  Avoid ATM fees.  Keep the money you earn!!

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