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21 Jun 2019 | News
Tax time is just around the corner, which means ATO impersonators are pulling out their bag of tricks to try and scam you. Here are the main scams currently doing the rounds.
It’s fair to say that no one likes getting on the wrong side of the ATO. And this is one of the main reasons why ATO tax scams are so effective.
The other main reason is that these scams are becoming increasingly sophisticated and tech-savvy.
Not only do they look more convincing, but they’re also reaching more people through a wider number of distribution channels, such as SMS, robo-calls, and emails.
Below we’ve outlined some of the latest scams to ensure your monthly budget, mortgage repayments or savings account doesn’t get thrown into disarray.
Fake tax agent (phone scam)
The scam: a scammer pretending to be from the ATO sets up a three-way phone call between themselves, the victim and another scammer, who pretends to be an accountant who works at the same practice as the victim’s tax agent (the fake tax agent advises that the victim’s actual tax agent is currently unavailable).
The two scammers then work together to convince the victim that they owe thousands of dollars to the ATO, and that they need to immediately pay off the debt to avoid going to jail.
They’ll then ask the victim to pay using unusual methods of payment such as iTunes, Bitcoin cryptocurrency, store gift cards or pre-paid visa cards.
Avoid being scammed: know the status of your tax affairs by checking your details via myGov. Or hang up and independently call your tax agent or the ATO on 1800 008 540.
Extra tip: a variation of this scam is when the scammer offers a tax refund but advises that you have to provide a personal credit card number for the funds to be deposited into. Instead of the scammer depositing money they’ll instead steal funds from these cards.
Tax refund notification (SMS scam)
The scam: scammers are texting people informing them that they are due to receive a tax refund.
However, if you click on the link it will take you to a fake ‘Tax Refund’ form, where it will ask you to fill out your personal information (which the scammers will then steal!).
Avoid being scammed: the ATO doesn’t have an online ‘Tax Refund’ form and will never send you an email or SMS that asks you to access online services via a hyperlink.
Extra tip: all online management of your tax affairs should be carried out via your genuine myGov account, which you should only ever access by typing out my.gov.au into your URL address bar.
Imitating ATO phone numbers (phone scam)
The scam: the ATO is reporting an increased number of scammers contacting people using phone numbers that make it look like they’re genuinely from the ATO.
The numbers that have been appearing most frequently are 6216 1111 and 1800 467 033, but numbers for individual ATO staff members have been used as well.
The scammer will usually claim the potential victim has an outstanding tax debt and threaten them with arrest if it’s not paid immediately. Sometimes voicemail messages are left.
Avoid being scammed: remember that the ATO will never threaten you with arrest, demand immediate payment, refuse to allow you to speak with a trusted advisor or tax agent, or present a phone number on caller ID.
Extra tip: never call a scammer back on the number they provide. If you are in any doubt about an ATO call, hang up and phone the ATO directly (on 1800 008 540) to check if the call was legitimate.
myGov tax refund notification (email scam)
The scam: scammers are emailing people from a fake myGov email address, asking them to fill out an application to receive a tax refund – similar to the SMS scam above.
This scam is currently tricking victims because it displays the ATO’s myGov logo and the links look as though they’ll send you to the myGov website (spoiler: they don’t).
Avoid being scammed: do not click anywhere in these emails as they contain malicious links. As mentioned in the SMS scam, the ATO doesn’t have an online ‘Tax Refund’ form.
Extra tip: if the bottom of the suspected scammer’s email contains a line that says ‘If you feel you received this email by mistake or wish to unsubscribe, click here’, don’t click. It’s most likely another nefarious link.
Final word
If you ever suspect that you’re being scammed, don’t feel obliged to stay on the phone to be polite.
Simply hang up the phone straight away (or close the email) and either check your myGov account or directly contact your accountant or financial adviser.
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14 Jun 2019 | Home Loans, Interest Rates
Fixing your home loan while interest rates are dropping is a bit like pulling the ripcord on a parachute. If you do it early you’ll get a steady ride but may miss out on a bit of action. But if you leave it too late things might get a little messy.
To fix the rate or not?
That seems to be the question on a lot of people’s lips at the moment.
We’re half way through 2019 and already 44 lenders have dropped rates on more than 500 fixed-rate home loan products.
These discounts aren’t just being offered by smaller lenders trying to attract new customers, either.
Commonwealth Bank, Westpac and NAB have all announced significant fixed rate cuts, over the last couple of months.
To fix or not to fix?
When there are so many lenders scrambling over each other to cut rates, a question we often hear from clients goes something along the lines of: “Is now a good time to lock in a rate?”
While we’d love to be able to give you a definitive answer on this, the fact of the matter is that it depends on your individual circumstances, preferences and home loan.
Let’s quickly run you through a few important considerations below.
What will the RBA do?
The first factor to consider is that these cuts were made out-of-step with the RBA.
That’s because June was the first time that the RBA has changed the cash rate since August 2016, to 1.25%.
Some economists, including AMP’s Shane Oliver and NAB’s Ivan Colhoun, predict the RBA will cut the official cash rate twice to 1% before the year’s end.
With that said, nothing is certain. It wasn’t too long ago that most pundits were predicting that the RBA was going to move the cash rate upwards rather than downwards.
The pros and cons
Locking in a fixed home loan means that it doesn’t matter whether or not the official rate goes up or down, you won’t be affected.
It can give you a sense of clarity and certainty, and as such, can help you budget and plan ahead for up to the next five years.
You might prefer a fixed home loan rate if you:
- are comfortable with the interest rate offers being currently spruiked by lenders and won’t suffer from FOMO (fear of missing out) if rates drop further
- prefer to accurately plan your finances in the short and mid-term
- are concerned that you would be unable to make your repayments if rates were to rise.
However, you might prefer not to lock in a rate if you:
- are confident interest rates will continue to fall over time
- don’t mind having some unpredictability in your financial planning
- prefer to go with market rates.
Give us a call
If you’re still unsure on what’s the best option for you, or you’d like us to run you through some of the home loan rates currently on the market, then give us a call.
As we touched upon earlier, lenders have dropped rates on more than 500 fixed rate home loan products so far this year, so the market is constantly shifting.
We’d be happy to look at your current home loan and run you through how it compares to some of the other products on the market.
Social media teaser: Lenders have dropped rates on more than 500 fixed-rate home loan products this year, but is now a good time to lock in a rate? We discuss in our latest article.
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7 Jun 2019 | Home Loans, Interest Rates
The RBA has cut the official cash rate to a new record low of 1.25%. But hang on a sec… Will lenders even pass on the cut in full? Today we’ll look at how you can make the RBA rate cut work for you.
The Reserve Bank interest rate cut to 1.25% – down from 1.5% – which is the first rate cut in almost three years (since August 2016).
“The Board took this decision to support employment growth and provide greater confidence that inflation will be consistent with the medium-term target,” said RBA Governor Philip Lowe in a statement.
But will the banks pass the cuts on?
Well, that’s to be determined by the banks. However, the government has urged them to pass on the cuts in full to customers.
Treasurer Josh Frydenberg met with Commonwealth Bank chief executive Matt Comyn the day before the cut was announced after similar meetings with other major bank CEOs.
“I expect all banks to pass on the benefits of sustained reductions in funding costs,” said Mr Frydenberg.
What next?
Well, on the back of the RBA decision, you may see a number of lenders advertising interest rate cuts.
What can be hard to determine is if they’re offering to pass on the full cut, a partial cut, or simply re-advertising a rate they’ve been offering for months.
So what to do?
Well, the good news is that we’re following the market closely. We’ll know which lenders are passing the rate cut on to their customers in full, and which lenders aren’t.
So if you see or hear about a rate cut from a lender that you want to know more about, your best bet is to get in touch with us and we can give you a good idea of how it compares to other lenders in the market and/or whether there are other options that are more suited to your situation.
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24 May 2019 | News
Banks’ unclear pricing costing frustrated borrowers thousands
Borrowers who don’t shop around due to the banks’ unclear pricing tactics are losing out on an average of $850 a year, an ACCC report has found.
Get a load of this. The tactic which the banks use to makes it “difficult” for borrowers to discover the best rates on offer. Banks including ANZ, CBA, NAB and Westpac.
The tactic is called discretionary pricing. The Australian Competition and Consumer Commission (ACCC) has just released a scathing report on it.
So what is discretionary pricing?
The banks don’t really advertise their best home loan deals. But there are two kinds of discounts that they do offer.
The first is their “advertised discounts”, which are generally published on their website and relatively easy for borrowers to discover.
The second is “discretionary discounts”, which are much harder to find.
Discretionary discounts are offered on a case-by-case basis to individual borrowers. Usually after a separate request to the lender has been assessed.
The criteria for discretionary discounts is generally not disclosed to borrowers.
So what’s the problem?
Basically, the banks are intentionally making it pretty damn hard and time-consuming for borrowers. They don’t want you to obtain accurate lowest interest rate offers from multiple lenders.
They’re hoping you’ll just get too frustrated and put the whole ‘searching around for a better deal’ thing in the too-hard-basket. Or even better that you just go with the advertised rate and increase their margins.
The ACCC says that’s how it was for 70% of recent borrowers from one bank. They obtained just one quote before taking out their residential mortgage.
“The lack of transparency in discretionary discounts makes it unnecessarily difficult and more costly for borrowers to discover the best price offers,” says the ACCC.
This adversely impacts borrowers’ willingness to shop around. Whether for a new residential mortgage. Or when they are contemplating switching their existing residential mortgage to another lender. The unnecessarily high cost that prospective borrowers incur to discover price information from lenders causes inefficiency.
How effective is this tactic?
Extremely so.
The rate of borrowers switching lenders remained extremely low last financial year.
In fact, less than 4% of borrowers with variable rate residential mortgages with the top five banks refinanced to another lender, says the ACCC.
That’s just 1 in every 25 mortgages.
(Note: only 11% of people got a better home loan deal from their current bank. Either asking for it or being offered it.)
“The big four banks profit from the suppression of borrower incentives to shop around and lack strong incentives to make prices more transparent,” says the ACCC.
How much are these opaque tactics costing some borrowers?
In two words: A lot.
The ACCC believes an existing borrower with an average-sized residential mortgage who negotiates to pay the same interest rate as the average new borrower could initially save up to $850 a year in interest.
“This could add up to tens of thousands of dollars over the full term of their residential mortgage in net present value terms,” the ACCC adds.
So will the banks stop doing it?
Unlikely. Well, anytime soon that is. Here’s what the ACCC say about it:
“At least one Inquiry Bank appears to be aware of borrower frustration with discretionary pricing. There is little evidence of any Inquiry Bank responding to that frustration by moving away from the practice,” the ACCC says.
“More generally, the Inquiry Banks, particularly the big four banks, lack a strong incentive to reduce the cost that prospective borrowers incur to discover price information because they profit from the suppression of borrowers’ incentives to shop around.”
So what can I do about it then?
That’s the easy part. Get in touch with us to discuss your refinancing and/or renegotiating options.
By teaming up with us, not only can you save yourself the headache of having to research the best available discount’s. We happily negotiate for it on your behalf.
So if you’re interested in potentially cutting down the amount of interest you pay each year. Give us a call today on 07 3911 1190.
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17 May 2019 | Personal Finance
Three financial tips for the savvy Millennial
It takes more than just cutting back on avocados to make it financially in Australia. Here’s what the under 35s really need to know.
A Deloitte 2017 Millennial Survey paints a less than rosy picture of the financial outlook for millennials in Australia – at least, from a millennial’s perspective.
It states that only 8% of young Australians (born after 1982 but before 2000) believe they will be financially better off than their parents.
However, there are several ways in which Millennials can proactively tackle these concerns and start working towards a financial future which could match – or indeed surpass – that of their parents.
Three financial tips for the savvy Millennial
1. Use tech to help you save
Millennials have one up on their boomer parents in the tech stakes, and the smart use of technology can seriously help you manage your money.
There are literally hundreds of free apps available to help you track your spending, save, and invest.
Here are a few of them:
Pocketbook is an Australian app which lets you to track expenses and set spending limits.
Money Smart’s TrackMyGOALS allows you to set, plan, track and manage your savings goals and visualise your progress.
Expensify allows you to scan receipts and track time or mileage for tax deductions.
2. Set up a budget
The single most important step a Millennial can make in terms of taking control of their finances is setting up a budget and tracking income and expenses.
This is because as soon as you start to see where your money is going – on takeaway coffee, on drinks and the pub, or on yes the ubiquitous avocado toastie – you’ll realise how much you can save by making a couple of small, but key, lifestyle changes.
Even as much as $5 a week in savings can start to quickly add up.
Setting up a budget is quick and easy and can now be done online, allowing you to add to your expense list when you’re out and about.
Use our free and user-friendly online budget planner.
3. Define clear financial goals
It’s never too early to start planning for your future. Indeed, the earlier you start, the more you’ll save and the quicker you’ll start racking up financial wins.
When setting your financial goals, the key is to make them achievable and time-bound.
With so much time to accumulate wealth over your lifetime, it’s also important to set yourself short, medium and long term goals, so you feel rewarded and satisfied throughout your financial journey.
Want to go on a trip to the States, or buy a new car? These might be your short to mid-term goals.
Want to have enough in the bank for a comfortable retirement? This is an important long-term goal which you need to start planning for now.
I’m still going to need some help
It’s normal for younger people to put their head in the sand when it comes to their financial future. It’s wise to dig it out as quickly as possible and start planning.
If you need help in setting yourself up for a healthy financial future, come and talk to us.
There are many more ways we can help you set out on the path to wealth as soon as possible.
