2007 September archive at ProBargainHunter.com

Archive for September, 2007

Downloadable coupons come with sneaky extras

Published September 30th, 2007 in Business: Strategy. 3 Comments

An article has surfaced on SlickDeals forums that describes Coupon.com spyware like practices. It was quite an eye opener for me to learn to what extends Coupon.com goes to limit/track the coupons you print using their Coupon Printer. In addition there is some interesting information about possible privacy issues with the software. Here are some:

Installing with deceptive filenames and registry entries that hinder users’ efforts to fully remove Coupons’ software.
Failing to remove all Coupons.com components upon a user’s specific request.
Assigning each user an ID number, and placing this ID onto each printed coupon, without any meaningful disclosure.
Allowing third-party web sites to retrieve users’ ID numbers, in violation of Coupons.com’s privacy policy.
Allowing any person to check whether a given user has printed a given coupon, in violation of Coupons.com’s privacy policy.

As I understand, this whole story is a result of a Coupons.com’s litigation against John Stottlemire, a guy who reverse engineered Coupon.com’s Coupon Printer and published online instructions on how to completely remove the code off of your computer. Doing so would allow you to reinstall the software unlimited number of times and hence print unlimited copies of coupons, something that would ruin Coupon.com business model.

The company wants Stottlemire to turn over the names of people he knows downloaded his software, and is seeking damages from the coder that could amount to hundreds of thousands — or even millions — of dollars. And it’s not offering him 10 percent off.

Sources:

Harvard Business School assistant professor Ben Edelman takes a closer look at Coupons.com

Wired.com coverage: here and here

John Stottlemire’s side of the story: link

Fed Funds Rate affect on Bank Savings Accounts

Published September 30th, 2007 in Interesting / Other. 0 Comments

Jonathan from MyMoneyBlog has touched the topic that has always interested me personally: how Fed Funds Rate affects all these savings accounts.

Banks make money by borrowing and reinvesting funds and I would assume Feds Fund Rate is the benchmark they don’t want to go over when borrowing since this is the rate at which they can borrow from the government or from each other. On the other hand if they attempt to borrow at low rate (offer low interest rates on savings) they will have trouble attracting deposits from people.

To see the relation on a live example, Jonathan has collected historical data for savings rate at two popular online banks: ING Direct and Immigrant Direct. The result of his work is this chart:

Fed Rate and Savings

You can definitely see some correlation, but it’s not perfect. It looks like ING was more aggressive in 2002-2004, and then gradually become satisfied with fatter margins. Emigrant seems to be following the curve closely, which would indicate an interest rate drop soon.

The bottom line is that while there certainly is a correlation, each bank sets its marketing strategy differently and can offer savings rate higher or lower than Fed Funds Rate depending on how aggressively they need to attract deposits. Higher rate means more money coming in to the bank but less profits to make. Lower rate means less people opening deposit accounts but also means fatter margins for the bank. For more ideas on the subject read Jonathan’s blog post.

Extreme saving: hide your money from yourself

Published September 27th, 2007 in Money Saving Tips. 6 Comments

Stone wallet I will confess, I lied to you when I said I would pass on that ING promotion. I couldn’t resist a good deal and applied. Guess what, my application was turned down because I am ineligible. When I called the support I was told that I already have an account with ING. This came to me as a surprise since I don’t recall ever opening it. It appears not only I have an account at ING, I actually have a few hundred dollars stashed in it.

This discovery made my day today and I immediately thought of this new money saving technique that will work best for compulsive and disorganized yet motivated to do something people like myself.

Extreme money saving for compulsive and disorganized

Find good bank savings or CD promotion
Apply for it using your usual credentials
Stash your money away and do your best to forget about it
Repeat the procedure from step 1.

This is somewhat similar to what squirrels do when they hide food for winter in random places. The step 2 is actually somewhat important since it will make it easier for you to recover your money later when you need it. Not that you cant get it w/o the credentials but it will save you some time.

I see several advantages to this “squirrel style” saving. First, you are not tempted to spend the money since you don’t keep thinking about (having) it. Second, you don’t feel accomplished since you never exactly know how much you have and hence you keep saving. Third, well, if you ever discover your own money like I did today, you will have so much fun!

Now, I wouldn’t probably do this for my primary savings (retirement) but I think it is a very good way to build an emergency fund of some sort. In fact, I would have none if I wasn’t forgetting about accounts and missing CD maturity dates. The temptation to spend is just too strong!

Are you nuts? How do I find my money when I need it?!

I knew you would ask it. In practice however you will have more problems hiding than not finding it. Bank statements, emails, 1099-DIV forms, and credit reports, everything will remind you of it. Here are a few tips that will help you hide your money more effectively:

Hide small amounts. They are easier to forget about
Use smaller banks, they tend to send less ads
Sign up for paperless statements
Use an email address you rarely check

And the last, but not the least. If you ever find your money by accident, resist the temptation to celebrate by spending it on that trip to Las Vegas. Instead re-hide it in a better place and keep the game going. ;-)

Update: I gave my wife to read this post. According to her, the best way to hide your money is in the pocket of your winter coat when you are about to change for spring weather. :-)

Disclosure: I am not a financial adviser and this is not a financial advice. Hide your money at your own risk!

Photo courtesy of TruShu @ Flickr

ING Direct savings account $50 signup bonus

Published September 27th, 2007 in Shopping Promotion. 3 Comments

Ever since Mint tipped me to the possibility of earning interest on my checking account I can’t stop thinking about alternatives to Citibank, my primary bank at the moment. I am not ready to jump the ship just yet but offers like this make it very tempting.

This particular promotion is exclusively for New York Times readers and requires you to open a savings account and make an initial deposit of $250. If you are not NY Times reader yet, no worry, it is never late to start. ;-) Here is a ink to the newspaper. The ING Direct banner is readily available on the top that page and will probably stay there until October 1, 2007 when it expires.

To apply, ~~click on the image~~ (the offer has expired!) below and enter NY3 for the offer code (or just click on that banner at nytimes.com). Before you do however, here are a few (important for me) things I would have to sacrifice if I moved all my accounts to ING (including checking):

Can’t write my own checks (ING Direct sends all checks for you)
No local branch (what did I expect?, it is an online bank after all!)
No ATM deposits (important if you ever need to deposit fast)

Alternatively I could go ahead and make a quick buck by opening just a saving account (and I just have the money for it - my 8 y.o. daughter’s birthday gift - she is saving for around the world trip :-) ), however from my past experience, banks are a lot of pain to deal with if/when you decide to close the account, hence I might skip this offer and wait for a good credit card promotion instead.

ING Direct $50 Signup Bonus

Chase, Mint viability, and web scraping

Published September 25th, 2007 in Business: Strategy. 5 Comments

Chase Verification It is interesting how much attention this small company captured over the past week. Search for mint money management on Google and you get almost 2 million results. I made my own contribution just yesterday where I was questioning the viability of this service. Using web scraping for obtaining financial data is one of the problems.

Web scraping is a technique that allows web services (often called web bots) to take web pages apart and filter out information, banking transactions in this case. My understanding is that when Yodlee is doing it on Mint’s behalf, the banks don’t necessarily know their pages are being scraped. (more on web scraping from Wikipedia)

I gave it some more thought today and I think I know why Mint (and Yodlee) are having problems fetching Chase credit card transactions. If you have an account with Chase, you probably noticed the extra layer of security Chase introduced recently. Now every time you access your account from a new computer/browser you have to confirm that this is a trusted location by entering a verification code they send to your e-mail or cell phone. Since Mint (Yodlee) has to login to your account before they can scrap transactions from the web pages, they have to go through the same verification process as you do and since they have no access to your email they obviously can’t pass it.

The bottom line is, Mint will continue having these issues unless Yodlee is able to strike a deal with Chase (and other banks in the future) to allow them retrieve your transactions through other means or passing around this extra security verification. Is it likely? I don’t know but from my own experience I can tell you a lot about how slow and self-protecting large corporations are.

This situation probably puts Mint in very uncomfortable position at very inconvenient time. It is ironic how life of a startup can depend on such a seemingly small thing. Web scraping has always been a shady business and I am surprised that Yodlee has gone with it so far.

Related: Web 3.0: When Web Sites Become Web Services from ReadWriteWeb

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