CAN YOU STOP PAYMENT ON A CREDIT-CARD CHARGE AS YOU CAN ON A CHECK?
(MONEY Magazine) – THE ANSWER: "No. But you have 60 days to dispute the charge, and you don't pay anything until the matter is resolved."
ALSO: "It's virtually impossible for anyone to fund an IRA for you in secret."
"Your 25-year-old recording of Jackie Kennedy's getting out the vote in three languages could fetch $350."
Q. I fell in love with a sports car and used my Visa card for the down payment. The next day, the dealer's office manager called to say that my car was sold to someone else by mistake. She promised that the dealer would order another one just like it and I'd have it in six weeks. I said okay. Then after I hung up, I wondered whether this was a ploy to keep my money and not deliver my car. I called Visa to stop payment on the charge but, to my astonishment, I was told I couldn't do that. I could only dispute the charge later. Are credit-card charges really unstoppable once they get going? MIGUEL OCHOA Chicago
A. Not in the sense of Niagara Falls--or crow's feet. But you can't simply pull the plug on a credit-card charge the way you can stop a bank check. Electronic transactions proceed much too rapidly for anyone to get in their way, and we all know what happens when something is "in the computer." But you don't need to beat a merchant to the bank to hang on to your money. Credit regulations give you a leisurely 60 days after the charge is posted to dispute it; then the card issuer has another 90 days to investigate the problem. Meanwhile, you don't pay a dime, because card companies maintain a reserve fund to cover charges in dispute. This procedure seems fair to me, even though you can be sure that any fees and interest you pay on your card include the cost of this resolution process. Still, it sure beats forking over $30 to stop a check.
Q. My dad died last year and, among his papers, I found brokerage statements from Dean Witter for an IRA with my name and Social Security number on it. The account showed contributions of $2,000 a year from 1993 through 1996, but I never opened it and my dad never mentioned it. I did have a regular brokerage account with Dean Witter when I lived with my parents in the early 1990s, but I closed it long ago. When I asked Dean Witter to send me the balance ($8,000 including earnings), a representative told me that the money really belonged to someone else and had been credited to me by mistake. In short, the company refused to give it to me. How do I know the money was credited by mistake? I have my own IRA, but maybe my dad was funding one for me as a surprise. Is Dean Witter pulling a fast one? CHRISTOPHER THOMAS Gaithersburg, MD.
A. It's very unlikely and, when you hear why, you may be just as glad. First of all, while it's perfectly legal for one person to fund an IRA for another, the owner of the account--you, in this case--would have to sign the brokerage's IRA form. Obviously, you don't recall doing that. Second, IRA contributions are limited to $2,000 a year per person. (By the way, that's true whether the contributions are deductible or not.) To prevent taxpayers from exceeding the limit, the IRS requires financial institutions to report when contributions are made to an account. Since you've been putting aside $2,000 on your own, if your dad had been contributing another $2,000 for you, IRS computers would have noticed that your Social Security number appeared on two accounts. Then one of the IRAs would have been disallowed and you would have been liable for a 6% annual penalty on the contributions, plus taxes and interest on the earnings. And just possibly the IRS might have decided to audit several years of your tax returns to be sure there were no other violations.
Meanwhile, Dean Witter says it never reported the account to the IRS and claims that's proof the whole thing was a mistake. Although the company can't explain why the mistake was made and why it went on for so long, the error looks more like a mix-up than a hijack. If you're still not convinced, you'll have to produce evidence of your dad's deposits, such as canceled checks. Fortunately, brokerage regulations give you at least three more years to request an arbitration hearing on this matter. But remember, if you're right and you do have duplicate IRAs, the IRS will want to chat with you. In short, on this one, you can't win for losing.
Q. I love to travel, but it's so expensive. Recently, I heard about an Arizona travel agency called 10 Travel that will train me to be an agent. Then I'll be entitled to free and discounted trips just like the ones travel agents get. For $575, the company will sell me a mail-order course teaching me to be one of its freelance agents. If I bring in customers, the agency will pay me commissions and, as one of their agents, I'll qualify for special deals. Is it really that easy? DAVID LIN New York City
A. If it were, I'd be writing this column from Tahiti. The part about earning commissions is legitimate. Unlike the phony travel-agent "schools" that the Federal Trade Commission has issued consumer warnings about, 10 Travel is a real travel agency making a genuine offer. (The "10" is an acronym for Travel Excellence Network, which is the agency's full name.) If you take the course and then book travel arrangements for yourself or for others through the company, you'll earn commissions of 3% to 5%, based on the trip's retail cost. But first you'll have to pony up the $575. Since you're asking me, I'd say you'd probably do better surfing the Internet for travel bargains.
Getting free or heavily discounted trips through 10 Travel, however, is another matter. According to the American Society of Travel Agents, hotels, resorts and tour operators want more than a business card and a perpetual tan to convince them that you're a travel agent. Most require you to have an identification card from the International Airline Travel Agent Network (IATAN), which certifies industry professionals. Then you can flash the card when you're buying airline tickets or making hotel reservations for yourself and ask for discounts or freebies. You qualify for a card--which is renewable annually--by working for an agency with IATAN accreditation and booking at least $45,000 worth of travel each year.
Although 10 Travel is accredited with IATAN, owner Joseph Risi admits that his freelancers don't get IATAN cards unless they sell $45,000 worth of trips a year. That would be difficult for someone with a full-time job. He gives them a 10 Travel ID, which he insists will get them big discounts all by itself. I'd be skeptical if I were you. But don't feel bad. My last travel opportunity was a work-related jaunt to Kansas City, Mo. to scope out the proceedings at a bankruptcy court.
Q. Our daughter married a German and has become a German citizen. My wife and I want her to inherit our property, worth approximately $800,000, but we're wondering whether she'll get the same estate-tax exemptions that American citizens do. ROBERT TREILING Sea Cliff, N.Y.
A. It's not the heir who receives the tax break, it's the estate--and yours qualifies since you and your wife are U.S. citizens. Even better, the new tax law passed in August increases the federal exemption, now $600,000, to $625,000 in 1998. By 2004 the current value of your estate will be entirely exempt, and by 2006 your daughter could inherit up to $1 million tax-free.
By the way, the law is more territorial when it comes to spouses. Although husbands and wives who are American citizens can leave each other an unlimited amount tax-free, an estate left to a spouse who is a foreign citizen gets only the same exemption as an estate left to anyone else.
Q. In 1962, when I was working at a radio station in Springfield, Mo., I received a 33 1/3-rpm record of public service announcements by then First Lady Jacqueline Kennedy. She spoke in English, French and Spanish. On one side she urged listeners to register to vote, and on the other, to vote. I still have the record. The crazy prices paid at the recent auction of her property made me wonder if even this humble item might fetch something. Would it? JAMES FERRELL Sarasota
A. Not as much as her cake stand ($12,650) or inkwell ($14,375) but probably a lot more than my dusty copy of "Runaround Sue." Nancy Escher of the American Society of Appraisers estimates that your disk might bring between $100 and $350 from a Jackie fancier who wants a modestly priced memento. A good way to find such a person is to post your offering on the Maine Antique Digest's Website (www.maine antiquedigest.com). The magazine is geared more to antiques than collectibles, but its feature on the Kennedy auction, posted on the Website, gets more hits than any other article, up to 10 a day.
Reporter associate: Hagar Scher