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Pegasus Spyware And Citizen Surveillance: Here's What You Should Know


Pegasus Spyware and Citizen Surveillance: Here's What You Should Know


Pegasus Spyware and Citizen Surveillance: Here's What You Should Know

For digital spying technology, it's a doozy of a case. Security researchers have revealed evidence of attempted or successful installations of Pegasus, software made by Israel-based cybersecurity company NSO Group, on phones belonging to activists, rights workers, journalists and businesspeople. They appear to have been targets of secret surveillance by software that's intended to help governments pursue criminals and terrorists, and as the months go by, more and more Pegasus infections are emerging.

The most recent revelation is that Pegasus infected the phones of at least 30 Thai activists, according to a July report from Citizen Lab, a Canadian security organization at the University of Toronto. Apple warned those with infected phones in November.

To try to thwart such attacks, Apple has built a new Lockdown Mode into iOS 16, its iPhone software update due to arrive later in 2022, and into its upcoming MacOS Ventura.

The US government is one of the most powerful forces unleashed against Pegasus — even though the CIA and FBI were Pegasus customers, as reported by The New York Times in January. The US Justice Department has launched a criminal investigation, The Guardian said in February, after a whistleblower said NSO Group offered "bags of cash" for sensitive mobile phone data from a US tech firm, Mobileum. The spyware was found on the phones of at least nine State Department officials who were either based in Uganda or involved in matters associated with the African country, Reuters and The New York Times reported in December. 

Pegasus is the latest example of how vulnerable we all are to digital prying. Our phones store our most personal information, including photos, text messages and emails. Spyware can reveal directly what's going on in our lives, bypassing the encryption that protects data sent over the internet.

Pegasus has been a politically explosive issue that's put Israel under pressure from activists and from governments worried about misuse of the software. In November, the US federal government took much stronger action, blocking sale of US technology to NSO by putting the company on the government's Entity List. NSO has suspended some countries' Pegasus privileges but has sought to defend its software and the controls it tries to place on its use. NSO Group didn't respond to a request for comment, and the Justice Department declined to comment.

Here's what you need to know about Pegasus.

What is NSO Group?

It's an Israel-based company that licenses surveillance software to government agencies. The company says its Pegasus software provides a valuable service because encryption technology has allowed criminals and terrorists to go "dark." The software runs secretly on smartphones, shedding light on what their owners are doing. Other companies provide similar software.

Hulio co-founded the company in 2010. NSO also offers other tools that locate where a phone is being used, defend against drones and mine law enforcement data to spot patterns.

NSO has been implicated by previous reports and lawsuits in other hacks, including a reported hack of Amazon founder Jeff Bezos in 2018. A Saudi dissident sued the company in 2018 for its alleged role in hacking a device belonging to journalist Jamal Khashoggi, who had been murdered inside the Saudi embassy in Turkey that year.

New Yorker coverage details some of NSO Group's inner workings, including its argument that Pegasus is similar to military equipment that countries routinely sell to other countries, the company's tight ties to the Israeli government and its recent financial difficulties. It also revealed that NSO employees posted on the wall a detailed Google analysis of one Pegasus attack mechanism that concludes its NSO's abilities "rival those previously thought to be accessible to only a handful of nation states."

In the case of the Thai activists, NSO Group didn't comment specifically but told the Washington Post, "Politically motivated organizations continue to make unverifiable claims against NSO."

What is Pegasus?

Pegasus is NSO's best-known product. It can be installed remotely without a surveillance target ever having to open a document or website link, according to The Washington Post. Pegasus reveals all to the NSO customers who control it — text messages, photos, emails, videos, contact lists — and can record phone calls. It can also secretly turn on a phone's microphone and cameras to create new recordings, The Washington Post said.

General security practices like updating your software and using two-factor authentication can help keep mainstream hackers at bay, but protection is really hard when expert, well-funded attackers concentrate their resources on an individual. And Pegasus installations have employed "zero click" attacks that take advantage of vulnerabilities in software like Apple Messages or Meta's WhatsApp to silently install software. 

Pegasus isn't supposed to be used to go after activists, journalists and politicians. "NSO Group licenses its products only to government intelligence and law enforcement agencies for the sole purpose of preventing and investigating terror and serious crime," the company says on its website. "Our vetting process goes beyond legal and regulatory requirements to ensure the lawful use of our technology as designed."

Human rights group Amnesty International, however, documents in detail how it traced compromised smartphones to NSO Group. Citizen Lab said it independently validated Amnesty International's conclusions after examining phone backup data and since 2021 has expanded its Pegasus investigations.

In September, though, Apple fixed a security hole that Pegasus exploited for installation on iPhones. Malware often uses collections of such vulnerabilities to gain a foothold on a device and then expand privileges to become more powerful. NSO Group's software also runs on Android phones.

Why is Pegasus in the news?

Forbidden Stories, a Paris journalism nonprofit, and Amnesty International, a human rights group, shared with 17 news organizations a list of more than 50,000 phone numbers for people believed to be of interest to NSO customers.

The news sites confirmed the identities of many of the individuals on the list and infections on their phones. Of data from 67 phones on the list, 37 exhibited signs of Pegasus installation or attempted installation, according to The Washington Post. Of those 37 phones, 34 were Apple iPhones.

The list of 50,000 phone numbers included 10 prime ministers, three presidents and a king, according to an international investigation released in mid-July by The Washington Post and other media outlets, though there's no proof that being on the list means an NSO attack was attempted or successful.

The episode hasn't helped Apple's reputation when it comes to device security. "We take any attack on our users very seriously," Federighi said. The company said it'll donate $10 million and any damages from the lawsuit to organizations that are advocating for privacy and are pursuing research on online surveillance. That's a drop in the bucket for Apple, which reported a profit of $20.5 billion for its most recent quarter, but it can be significant for much smaller organizations, like Citizen Lab.

Whose phones did Pegasus infect?

In April, Citizen Lab also revealed that Pegasus infected the phones of at least 51 people in the Catalonia region of Spain. NSO Group Chief Executive Shalev Hulio told The New Yorker, which covered the hacks in depth, that Spain has procedures to ensure such use is legal, but Citizen Lab said Pegasus attacks targeted the phone of Jordi SolĂ©, a pro-independence member of the European Parliament, digital security researcher Elies Campo and Campo's parents, according to the New Yorker. Catalonia is seeking political independence from Spain, but Spanish police have cracked down on the independence movement.

In addition to Mangin, two journalists at Hungarian investigative outlet Direkt36 had infected phones, The Guardian reported. 

A Pegasus attack was launched on the phone of Hanan Elatr, wife of murdered Saudi columnist Jamal Khashoggi, The Washington Post said, though it wasn't clear if the attack succeeded. But the spyware did make it onto the phone of Khashoggi's fiancee, Hatice Cengiz, shortly after his death.

Seven people in India were found with infected phones, including five journalists and one adviser to the opposition party critical of Prime Minister Narendra Modi, The Washington Post said.

And six people working for Palestinian human rights groups had Pegasus-infected phones, Citizen Lab reported in November.

What are the consequences of the Pegasus situation?

The US cut off NSO Group as a customer of US products, a serious move given that the company needs computer processors, phones and developer tools that often come from US companies. NSO "supplied spyware to foreign governments" that used it to maliciously target government officials, journalists, businesspeople, activists, academics and embassy workers. These tools have also enabled foreign governments to conduct transnational repression," the Commerce Department said.

Apple sued NSO Group  in November, seeking to bar the company's software from being used on Apple devices, require NSO to locate and delete any private data its app collected, and disclose the profits from the operations. "Private companies developing state-sponsored spyware have become even more dangerous," said Apple software chief Craig Federighi. That suit came after Meta's WhatsApp sued NSO Group in 2019.

French President Emmanuel Macron changed one of his mobile phone numbers and requested new security checks after his number appeared on the list of 50,000 numbers, Politico reported. He convened a national security meeting to discuss the issue. Macron also raised Pegasus concerns with Israeli Prime Minister Naftali Bennett, calling for the country to investigate NSO and Pegasus, The Guardian reported. The Israeli government must approve export licenses for Pegasus.

Israel created a review commission to look into the Pegasus situation. And on July 28, Israeli defense authorities inspected NSO offices in person.

European Commission chief Ursula von der Leyen said if the allegations are verified, that Pegasus use is "completely unacceptable." She added, "Freedom of media, free press is one of the core values of the EU."

The Nationalist Congress Party in India demanded an investigation of Pegasus use.

Edward Snowden, who in 2013 leaked information about US National Security Agency surveillance practices, called for a ban on spyware sales in an interview with The Guardian. He argued that such tools otherwise will soon be used to spy on millions of people. "When we're talking about something like an iPhone, they're all running the same software around the world. So if they find a way to hack one iPhone, they've found a way to hack all of them," Snowden said.

What does NSO have to say about this?

NSO acknowledges its software can be misused. It cut off two customers in recent 12 months because of concerns about human rights abuses, according to The Washington Post. "To date, NSO has rejected over US $300 million in sales opportunities as a result of its human rights review processes," the company said in a June transparency report.

However, NSO strongly challenges any link to the list of phone numbers. "There is no link between the 50,000 numbers to NSO Group or Pegasus," the company said in a statement.

"Every allegation about misuse of the system is concerning me," Hulio told the Post. "It violates the trust that we give customers. We are investigating every allegation."

In a statement, NSO denied "false claims" about Pegasus that it said were "based on misleading interpretation of leaked data." Pegasus "cannot be used to conduct cybersurveillance within the United States," the company added.

Regarding the alleged infection of State Department phones, NSO Group didn't immediately respond to a request for comment. But it told Reuters it canceled relevant accounts, is investigating, and will take legal action if it finds misuse.

NSO will try to reverse the US government's sanction. "We look forward to presenting the full information regarding how we have the world's most rigorous compliance and human rights programs that are based the American values we deeply share, which already resulted in multiple terminations of contacts with government agencies that misused our products," an NSO spokesperson said.

In the past, NSO had also blocked Saudi Arabia, Dubai in the United Arab Emirates and some Mexican government agencies from using the software, The Washington Post reported.

How can I tell if my phone has been infected?

Amnesty International released an open-source utility called MVT (Mobile Verification Toolkit) that's designed to detect traces of Pegasus. The software runs on a personal computer and analyzes data including backup files exported from an iPhone or Android phone.


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What Is Signal? Everything You Need To Know About Elon Musk's App Recommendation


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What is Signal? Everything you need to know about Elon Musk's app recommendation


What is Signal? Everything you need to know about Elon Musk's app recommendation

Tech mogul Elon Musk -- known as widely for slinging cars into the sun's orbit as he is for advocating against COVID-19 safety measures -- took to Twitter earlier this month to slam Facebook over its latest privacy policy updates for its supposedly secure encrypted messaging app WhatsApp. Musk instead recommended people choose encrypted messaging app Signal. 

The tweet was then retweeted by Twitter CEO Jack Dorsey. Shortly after, Signal tweeted that it was working to handle the surge of new users. 

The Signal app was downloaded almost 1.3 million times on Jan. 11, according to data from Apptopia, a tracking firm. The app had been downloaded an average of 50,000 times a day prior to Musk's tweet. A Signal spokesperson said the report undercounted the number of downloads the service is experiencing.

Signal also attributed a temporary outage later that week to the surge in new users. 

"While we have been working hard all week to keep up with all the new people switching over to Signal, today exceeded even our most optimistic projections. We are working hard to resolve [the issue]," the spokesman told CNET in an email. 

Musk's Twitter endorsement also incidentally led shares in the biotechnology company Signal Advance to soar, despite the fact that it is completely unrelated to Signal, which is not a publicly traded company. 

This isn't the first time Musk has publicly sparred with Facebook over privacy concerns. In 2018, he not only had his own personal Facebook page removed, but those of his companies Tesla and SpaceX. His take on the long-fought battle between Signal and WhatsApp isn't off-base, though. 

Both of the encrypted messaging apps have been found to have security bugs over the years that have been resolved. For years, WhatsApp has openly collected certain user data to share with parent company Facebook. Its latest policy change just expands that. Signal, on the other hand, has a history of fighting any entity that asks for your data, and adds features to further anonymize you where possible. 

Read more: Signal vs. WhatsApp vs. Telegram: What to know before you switch messaging apps

Soon after Musk's tweet, WhatsApp published an FAQ aimed at clarifying its data collection policy, emphasizing that neither it nor Facebook can see users' private messages or hear their calls. Following mounting privacy concerns, WhatsApp announced Friday it would delay the rollout of its new policy by three months.

"We're now moving back the date on which people will be asked to review and accept the terms. No one will have their account suspended or deleted on February 8. We're also going to do a lot more to clear up the misinformation around how privacy and security works on WhatsApp. We'll then go to people gradually to review the policy at their own pace before new business options are available on May 15," the company said in a blog post. 

Here are the basics of Signal you should know if you're interested in using the secure messaging app. Plus, here are all of the differences between Signal, WhatsApp and Telegram.

Signal is a typical one-tap install app that can be found in your normal marketplaces like Google'sPlay Store and Apple'sApp Store, and works just like the usual text messaging app. It's an open source development provided free of charge by the non-profit Signal Foundation, and has been famously used for years by high-profile privacy icons like Edward Snowden.

Signal's main function is that it can send text, video, audio and picture messages protected by end-to-end encryption, after verifying your phone number and letting you independently verify other Signal users' identity. You can also use it to make voice and video calls, either one-to-one or with a group. For a deeper dive into the potential pitfalls and limitations of encrypted messaging apps, CNET's Laura Hautala's explainer is a life-saver. But for our purposes, the key to Signal is encryption.

Despite the buzz around the term, end-to-end encryption is simple: Unlike normal SMS messaging apps, it garbles up your messages before sending them, and only ungarbles them for the verified recipient. This prevents law enforcement, your mobile carrier and other snooping entities from being able to read the contents of your messages even when they intercept them (which happens more often than you might think). 

When it comes to privacy it's hard to beat Signal's offer. It doesn't store your user data. And beyond its encryption prowess, it gives you extended, onscreen privacy options, including app-specific locks, blank notification pop-ups, face-blurring anti-surveillance tools, and disappearing messages. Occasional bugs have proven that the tech is far from bulletproof, of course, but the overall arc of Signal's reputation and results have kept it at the top of every privacy-savvy person's list of identity protection tools. 

For years, the core privacy challenge for Signal lay not in its technology but in its wider adoption. Sending an encrypted Signal message is great, but if your recipient isn't using Signal, then your privacy may be nil. Think of it like the herd immunity created by vaccines, but for your messaging privacy. 

Now that Musk and Dorsey's endorsements have sent a surge of users to get a privacy booster shot, however, that challenge may be a thing of the past.


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Amid War In Ukraine, Should Ordinary Russians Be Banned From Trading Crypto?


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Amid War in Ukraine, Should Ordinary Russians Be Banned From Trading Crypto?


Amid War in Ukraine, Should Ordinary Russians Be Banned From Trading Crypto?

This story is part of War in Ukraine, CNET's coverage of events there and of the wider effects on the world.

As Russia's war on Ukraine intensifies, the US and its allies have continued to increase their economic pressure on the Russian government, to isolate the country further from the global financial system and debilitate its military capacity. Western allies have frozen Russian assets abroad, removed Russian banks from international banking networks and even banned all gas and oil imports, among other unprecedented penalties. But there's still growing concern that Russian President Vladimir Putin and his supporters might turn to cryptocurrencies to avoid economic sanctions.

With their ability to operate as alternatives to the traditional financial system, cryptocurrency exchanges -- digital marketplaces where you can buy and trade digital currencies -- have become an effective option both for Ukraine supporters to raise funds for relief efforts and for ordinary Russians to seek financial shelter from the economic sanctions imposed on their country.

That's why both the Ukrainian government and advocates for even further economic penalties against Russia have become increasingly vocal about the role crypto exchanges can play in the conflict. Hundreds of Western businesses, such as oil companies Shell and BP and tech players Netflix and Microsoft, have scaled back or halted their dealings in Russia since the beginning of the war. And some people argue that similarly stopping crypto operations in the country could significantly weaken Putin's hold on Russia's economy and its citizens.

"I'm asking all major crypto exchanges to block addresses of Russian users," Ukraine's vice prime minister and minister of digital transformation, Mykhailo Fedorov, tweeted Feb. 28. "It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users." 

Fedorov also sent letters to eight cryptocurrency exchanges, including two of the largest by volume, Coinbase and Binance, asking them to stop offering service to Russian users out of concern digital currencies are being used to evade sanctions.

The response was swift. 

"We are not preemptively banning all Russians from using Coinbase," CEO Brian Armstrong tweeted March 3. "We believe everyone deserves access to basic financial services unless the law says otherwise." And hours after getting Fedorov's letter, a Binance spokesperson told CNBC, "We are not going to unilaterally freeze millions of innocent users' accounts. Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people's access to their crypto would fly in the face of the reason why crypto exists."

But the CEOs of several exchanges, including some that got Fedorov's letter, said that though they'll continue to offer access to ordinary Russians, they're complying with US law in regard to sanctions. On March 7, Coinbase reportedly said that to facilitate sanctions enforcement, it had blocked more than 25,000 wallet addresses related to Russian individuals or entities thought to have engaged in illicit activity and had reported them to the US government.

Ukraine's request for an all-out ban on Russian users, and the unequivocal rejection from most regulated crypto exchanges, has sparked a debate about the responsibilities digital currency platforms have in an international conflict. As a growing number of Western companies decide to stop conducting business in Russia, should crypto exchanges follow suit and go beyond what they're required to do by law? And even if they did, would banning all Russian users from crypto exchanges make a difference in slowing down Russia's invasion of Ukraine?

Some crypto specialists interviewed by CNET, including executives from crypto companies and public officials working to prevent Russia from using digital assets to sidestep economic sanctions, said a full Russian ban from crypto platforms could do more harm than good in regard to ordinary Russians. And some said the volume of the whole crypto market is still too small to really help Putin's government counter the impact of Western economic penalties, even if it tried.

But other experts on the role the private sector can play in global conflicts said bringing the Russian economy to a standstill is the one nonmilitary way to thwart Putin's advance on Ukraine, and that crypto exchanges can contribute to that only if they stop operating in Russia altogether. 

Cryptocurrencies are digital assets that are recorded on a blockchain, a distributed digital ledger that can't be altered. They usually aren't backed by an underlying asset, such as fiat currency. That's why they could be an ideal safe haven amid a wave of economic sanctions. 

Why crypto exchanges won't budge on Russia

In refusing to kick ordinary Russians off their platforms, cryptocurrency exchanges argue that the move would further hurt Russian citizens who are suffering from the economic impact of the war and who might consider buying cryptocurrencies as a way to protect their financial standing.

"We all saw those photos of runs on ATMs from Russian citizens -- lines around the block in Moscow," said Todd Conklin, counselor to the deputy secretary of the US Treasury Department. "One would suspect ordinary citizens may have been looking for an alternative to the ruble." Conklin made the remarks during a March 4 webinar hosted by blockchain analytics company TRM Labs about the possibility Russia could use cryptocurrencies to avoid economic sanctions. 

The ruble, Russia's national currency, has lost nearly 50% of its value against the US dollar since the start of the year, according to Reuters. Other parts of Russia's financial system have also been impacted by the West's pressure on the country to stop its aggression on Ukraine. Digital payment services such as Apple Pay, Google Pay and Samsung Pay aren't available in Russia any longer. Visa, Mastercard and PayPal also halted operations in the country. Ordinary Russian citizens, worried that economic sanctions will devastate the Russian economy even further, have flocked to ATMs and banks, seeking to withdraw as much cash as possible before it might be too late. 

"Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed," Armstrong, the Coinbase CEO, tweeted. "Many of them likely oppose what their country is doing, and a ban would hurt them, too."

As long as US crypto businesses are complying with US laws in ensuring that sanctioned individuals or entities aren't using their platforms, "crypto could be a vital lifeline for ordinary Russians to preserve their savings [and] receive familial remittances," Michael Parker said in an email. Parker is a former federal prosecutor who's now head of anti-money laundering and sanctions practice at Ferrari & Associates, a Washington, DC-based law firm.

Jesse Powell, co-founder and CEO of Kraken Exchange, another crypto platform, tweeted that though he understood the rationale behind Ukraine's request to remove all Russians from crypto exchanges, Kraken "cannot freeze the accounts of our Russian clients without a legal requirement to do so." 

"I would guess that the vast majority of crypto holders on @krakenfx are anti-war," Powell tweeted. "#Bitcoin is the embodiment of libertarian values, which strongly favor individualism and human rights."

Given the anti-authority libertarian streak that fuels so much of the cryptocurrency sector, the refusal from crypto exchange executives to stop operations in Russia isn't surprising, said Yale University professor Jeffrey Sonnenfeld, who's the president of the Chief Executive Leadership Institute, a nonprofit focused on CEO leadership and corporate governance.

Crypto executives don't like "being told what to do," Sonnenfeld said. "And yet, there's a striking naivete [in] that they are working in support of [Putin], the greatest autocrat alive today, the most restricted world leader, [who] they are tacitly supporting by enabling a bypass, if it's even for the cognoscenti, for elites and for oligarchs, if it was as limited as some claim."

Sonnenfeld said that the reason more than 300 Western companies have pulled out of Russia so far isn't that the government told them to do so. "It's the maverick streak of these CEOs who pulled out and started this thundering herd," he said, "courageous CEOs who had the moral character to pull out."

What a full ban on Russia would and wouldn't do

Some specialists said that blocking all Russians from crypto would not only potentially inflict damage on millions of innocent citizens, but it would also do little to amplify the West's sanctions on Russia's economy. The reason? Russia doesn't have the digital infrastructure to tap into crypto assets at a level required to outmaneuver the economic penalties already imposed by the US and its allies.

"You can't flip a switch overnight and run a G20 economy on cryptocurrency," Conklin said during the webinar hosted by blockchain intelligence company TRM. He explained that in recent years, Russia has worked to bolster the ruble and build up its reserves, instead of laying the rails needed to support crypto. That's why US economic sanctions have been focused on preventing Russia from accessing the reserves it keeps overseas. "Big banks in an economy need real liquidity," Conklin said. "Conducting large-scale transactions in virtual currency is likely to be slow and expensive."

Anthony Citrano, founder of Los Angeles-based NFT platform Acquicent, pointed to crypto prices as a clue to what's going on. "If the Russian government really were using crypto as a major piece of their international finance strategy, you'd expect to see absolutely explosive growth in prices of major crypto [currencies]," he said, "which we have not seen. Time will tell, but for now there is zero evidence this is happening."

Former federal prosecutor Ari Redbord, who's now head of legal and government affairs at TRM, said the economic sanctions levied so far have been so "serious and so draconian in their measures" that Russia would need much more than crypto assets to counterbalance them. "We're talking about [the] potential loss of, or no access to, hundreds of billions of dollars in frozen [Russian] Central Bank assets. We're talking about $1.5 trillion in potential trade losses," he said. "The entire crypto market cap doesn't approach what ultimately Russia would need to prop up a G20 [economy] government and fight what is going to become a more and more costly war."

But that doesn't mean the Russian government or Putin's supporters won't try to use crypto to circumvent economic sanctions. "Russian actors are very adept at money laundering and have been for a long time," Redbord said. In the case of crypto, they'll be looking for "noncompliant exchanges in order to move those funds." 

Such exchanges include platforms like Suex, which was blacklisted by the Biden administration in September for allegedly helping launder ransomware payments. TRM has identified about 340 exchanges that are either in Russia or Russia-related and don't have compliance controls in place, "and that is where illicit actors will look to move on as on-ramps and off-ramps for crypto," Redbord said.

Those digital platforms are already operating outside the law, though. For any US business, including businesses in the crypto industry, "there is still a full compliance obligation to not deal with sanctioned parties or interests in blocked property," said Parker, from Ferrari & Associates. "US crypto businesses must, and largely do, institute robust compliance programs, including advanced analytics software, to ensure legal compliance with US sanctions."

Bringing Russia to a standstill

Yale's Sonnenfeld argues that it's beside the point whether Putin and his supporters can actually get their hands on enough digital assets to offset the impact of Western sanctions. He said that by halting all operations in Russia, crypto exchanges could contribute to putting even more pressure on Putin's government, until it reaches a tipping point.

"Government-ordered sanctions have limits," Sonnenfeld said, even if they're a coordinated effort between multiple international actors, including the US, the EU, the UK, Australia, Japan and the UN. "They work best when voluntary efforts of the private sector rally."

That's what happened in South Africa in the late 1980s, Sonnenfeld said, when international pressure contributed to putting an end to apartheid, a system of institutionalized racial segregation that had ruled the country for more than 40 years. Economic sanctions imposed by the US government had an effect only when dozens of major private companies joined in. "It brought civil society to a stop/standstill," he said.

Sonnenfeld and his research team at Yale compiled a list of companies that continued operating in Russia following its invasion of Ukraine. After the publication of a Washington Post story that mentioned that McDonald's and Starbucks were on the list, both chains announced plans to stop operating in Russia. Since the list was created and made public, it now shows "over 330 companies [that] have announced their withdrawal from Russia in protest" of the Ukraine war.

For Sonnenfeld, paralyzing Russia's economy is the only nonmilitary option the West has against Putin's advances on Ukraine.

"The humanitarian thing to do is to not go with bombs and bullets, and to strangle civil society" and dissolve Putin's image of being a totalitarian with full control over all sectors, he said. "If you can show him to be truly impotent over the economy, that he doesn't have control over civil society, then he and the oligarchs fall flat on their face, and that's what cryptocurrency mavericks can do" should they decide to halt operations in Russia. "They can be really helpful here." 

Allowing ordinary Russians to have access to digital assets through crypto exchanges is "not doing anything humanitarian," Sonnenfeld said. "People should be thrown out of work, they should be out on the street" due to an economic collapse brought on by government-ordered sanctions and to private companies denying Russian citizens access to services, goods and money. "Is that cruel?" Sonnenfeld said. "No, it is better than shooting them, than bombing them -- and that's the stage we're at right now."


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EV Tax Credits: Manchin A No On Build Back Better Bill, Putting $12,500 Incentive In Doubt


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EV tax credits: Manchin a no on Build Back Better bill, putting $12,500 incentive in doubt


EV tax credits: Manchin a no on Build Back Better bill, putting $12,500 incentive in doubt

President' Biden's Build Back Better bill is on life support following comments from West Virginia's Democratic Senator Joe Manchin. During an interview on Sunday, the senator said he plans to vote no on the spending plan, which includes a $12,500 refundable tax credit for electric vehicle purchases. With Manchin's decision seemingly final, it's unclear where the bill goes from here. Biden needs every Democrat in the Senate to vote for the measure with the party's slim majority. Read on for the latest.

Is the EV tax credit amount increasing?

As of Dec. 19, it's a solid maybe. The Build Back Better bill includes a $12,500 EV tax credit, up from the current $7,500 available to qualifying cars and buyers. Its inclusion comes as the bill sheds multiple other elements to compromise with various Democrats, though the bill could wind up dead in the coming weeks after Manchin's comments.

Here's how the proposed changes shake out, and keep in mind, they may change yet. The base amount remains $4,000, as it is today, with another $3,500 available if the EV's battery pack includes at least 40 kilowatt-hours of capacity. In the case of plug-in hybrids, the gas tank cannot exceed 2.5 gallons. This is for cars placed in service before 2027. Now comes the $5,000 boost. EVs and consumers will be able to qualify for another $4,500 in the tax credit if an automaker makes the EV in the US with a union workforce. Another $500 comes into play for automakers using a US-made battery, for a maximum of $12,500 available. Today, the only car that would qualify for anywhere near the full proposed credit is the Chevrolet Bolt EV and Bolt EUV. This provision would, notably, exclude Tesla and even the Ford Mustang Mach-E, since it's assembled in Mexico.

In other changes made last week in the House, Democrats increased the price cap for qualifying EVs. The new language allows for vans, trucks and SUVs with a manufacturer's suggested retail price of up to $80,000 to qualify for the $12,500 credit. Previously, the initial framework set a limit of $64,000 for vans, $69,000 for SUVs and $74,000 for pickup trucks. 

The Democrats also reduced income eligibility to claim the full credit. Single filers with adjusted gross annual incomes of $250,000 or more, or joint filers with AGIs of $500,000, will not be eligible for the full credit. The dollar figures are down sharply from $400,000 for single filers and $800,000 for joint filers.

The US House passed the bill back on Nov. 19 with these EV tax credit changes, but it's sat in the Senate since then. Despite discussions and president working with moderate Democrats such as Manchin, it appears it's not enough. Biden needs every single Democrat to vote yes on the bill, which would allow Vice President Kamala Harris to break a tie in the senate. There is no Republican support for the bill. The president remains keen to incentivize EV purchases as part of a $555 billion investment into actions to combat climate change, also part of the bill.

Democrats hoped to hold a vote before Christmas on Build Back Better in the senate, but that's really in limbo now.

Is the EV tax credit refundable or nonrefundable?

Currently, the tax credit is a nonrefundable credit when you file your taxes. That means that the government does not cut you a check for $7,500 -- all it does right now is reduce your federal tax bill. 

However, the latest version of the Build Back Better bill with new House language turns the EV tax credit into a refundable one. With this change, it wouldn't matter if an EV buyer owes the feds or not -- anyone who buys an EV will be potentially eligible for at least $4,000 in their pocket. The change would move the tax credit much closer to a point-of-sale incentive, and with the right qualifying EV, buyers could receive a max of $12,500 back from the government for buying a battery-powered car.

What if I owe money at tax time when claiming the credit?

Until we know if the Build Back Better bill passes both chambers, this is the best-case scenario, actually. The EV tax credit is currently a nonrefundable credit, so the government does not cut you a check for the balance. Let's say you owed the federal government $10,000 in taxes when filing your 2021 taxes. Let's also say you purchased a Ford Mustang Mach-E in 2021, which is eligible for the full $7,500 credit amount. Your federal tax balance would then fall to $2,500 owed. If you owe under $7,500, the EV tax credit would wipe that away entirely to a $0 balance, even if it takes care of the tax bill and then some. Presently, purchasing an EV can wipe away tax bills, but it does not put cash directly into your pocket. Keep that in mind if you're someone who typically receives a federal refund when filing taxes.

However, with the latest changes, the credit would become a refundable credit. So, using our Mustang Mach-E example, let's say you owed $1,000 in federal taxes and purchased the electric SUV. It's still eligible for the $7,500. The updated EV tax credit would provide you $6,500 back in your pocket at tax time.

Why is my Tesla not eligible for the tax credit?

Tesla is by far the largest EV maker in the US today. However, those who purchase an EV from the automaker will not be eligible to claim the car on their taxes. That's because the current law for the credits phases them out after a particular automaker sells over 200,000 qualifying vehicles. In Tesla's case, it sold its last qualifying vehicle back in 2019, leaving no additional tax credits to take advantage of. The same goes for General Motors. A Chevy, GMC, Buick or Cadillac EV is not eligible for the EV tax credit as of today. The automakers continue to lobby for new legislation to make credits available to them once again.

Changes to the EV tax credits would again open the door to Tesla's eligibility, and to GM's. The changes would also keep these credits open for 10 years, with eligibility for any EV in the first five years. During the last five years, the credits would only apply to US-made EVs. In other words, Tesla and Tesla buyers would benefit greatly from the Build Back Better bill.

What is the EV tax credit?

Internal Revenue Code Section 30D provides a tax credit to any person who purchased a qualifying EV during the year. It includes passenger vehicles and light-duty trucks. The credit first came to life with the Energy Improvement and Extension Act of 2008, and amendments came with the American Recovery and Reinvestment Act of 2009. The latter really gave us the tax credits as we know them today.

As it stands, the credit provides up to $7,500 in a tax credit when you claim an EV purchase on taxes filed for the year you acquired the vehicle. So, if you bought an EV this year, in 2021, you would claim the purchase when filing your 2021 taxes next year.

How do I get the full $7,500 tax credit today?

The Internal Revenue Service's Form 8936 is how you calculate how much money back you'll receive, which you'll need to fill out and file with your taxes. Every vehicle with a plug earns a minimum of $2,500 from the EV tax credit -- that includes a plug-in hybrid, not just a totally battery-electric vehicle. The vehicle must include at least 5 kilowatt-hours worth of power from its onboard battery. However, the government adds money to the credit for each additional kWh worth of energy packed into a battery. For every extra kWh, the tax credit increases by $417. This is where the dollar figures can shift around since it depends on the vehicle, not your finances.

For example, a Kia Niro plug-in hybrid is eligible for $4,543 from the tax credit, due to its battery size. PHEVs often have smaller batteries than EVs, since they share powertrain efforts with an internal-combustion engine. But, the Kia Niro EV is eligible for the full $7,500 tax credit because of its larger battery size. The government caps the credit at $7,500 maximum. Even for EVs with giant batteries, they aren't candidates for more money. In most cases, pure EVs are the target cars for the total cash back from the tax credit.

The qualifications will change with the Build Back Better bill, but we'll need to wait to see what the final changes are.

Do EVs have federal subsidies?

Biden's proposed American Jobs Plan included $100 billion in subsidies for EV buyers. However, on June 24, the president agreed to a bipartisan effort that does not include these subsidies. Subsidies then made their way into early language of what became Biden's Build Back Better bill, but they are not included any longer.

Are used electric cars eligible for the tax credit?

Like leasing an EV, buying a used electric car also does not allow you to claim the traditional EV tax credit in any way. But, the Build Back Better bill would change this. Right now, the bill includes a $2,000 credit for used EVs at least two years old that cost under $25,000. There's an extra $2,000 available if the EV includes at least a 40 kilowatt-hour battery for a total of $4,000 available for qualifying EVs.

Can I lease an EV and claim the tax credit?

There is no tax credit if you decide to lease a new electric vehicle. Instead, the tax credit actually goes back to the automaker or lender financing the leased vehicle. To earn the tax credit benefit yourself, you need to purchase an EV -- not lease one.

What are the state EV credits and incentives?

Many states and even local governments looking to speed up EV adoption rates offer their own incentives. California is a leader in incentivizing EV purchases with a direct consumer rebate up to $4,500, for example, through the Clean Vehicle Rebate Project. There is currently a waitlist for applications, however. Colorado, Washington and New England states also offer some generous state incentives that you can combine with the federal EV tax credit. Even your local utility company may subsidize an EV purchase.


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TikTok Parents Are Taking Advantage Of Their Kids. It Needs To Stop


TikTok Parents Are Taking Advantage of Their Kids. It Needs to Stop


TikTok Parents Are Taking Advantage of Their Kids. It Needs to Stop

Rachel Barkman's son started accurately identifying different species of mushroom at the age of 2. Together they'd go out into the mossy woods near her home in Vancouver and forage. When it came to occasionally sharing in her TikTok videos her son's enthusiasm and skill for picking mushrooms, she didn't think twice about it -- they captured a few cute moments, and many of her 350,000-plus followers seemed to like it.

That was until last winter, when a female stranger approached them in the forest, bent down and addressed her son, then 3, by name and asked if he could show her some mushrooms. 

"I immediately went cold at the realization that I had equipped complete strangers with knowledge of my son that puts him at risk," Barkman said in an interview this past June. 

This incident, combined with research into the dangers of sharing too much, made her reevaluate her son's presence online. Starting at the beginning of this year, she vowed not to feature his face in future content. 

"My decision was fueled by a desire to protect my son, but also to protect and respect his identity and privacy, because he has a right to choose the way he is shown to the world," she said.

These kinds of dangers have cropped up alongside the rise in child influencers, such as 10-year-old Ryan Kaji of Ryan's World, who has almost 33 million subscribers, with various estimates putting his net worth in the multiple tens of millions of dollars. Increasingly, brands are looking to use smaller, more niche, micro- and nano-influencers, developing popular accounts on Instagram, TikTok and YouTube to reach their audiences. And amid this influencer gold rush there's a strong incentive for parents, many of whom are sharing photos and videos of their kids online anyway, to get in on the action. 

The increase in the number of parents who manage accounts for their kids -- child influencers' parents are often referred to as "sharents" -- opens the door to exploitation or other dangers. With almost no industry guardrails in place, these parents find themselves in an unregulated wild west. They're the only arbiters of how much exposure their children get, how much work their kids do, and what happens to money earned through any content they feature in.

Instagram didn't respond to multiple requests for comment about whether it takes any steps to safeguard child influencers. A representative for TikTok said the company has a zero-tolerance approach to sexual exploitation and pointed to policies to protect accounts of users under the age of 16. But these policies don't apply to parents posting with or on behalf of their children. YouTube didn't immediately respond to a request for comment.

"When parents share about their children online, they act as both the gatekeeper -- the one tasked with protecting a child's personal information -- and as the gate opener," said Stacey Steinberg, a professor of law at the University of Florida and author of the book Growing Up Shared. As the gate opener, "they benefit, gaining both social and possibly financial capital by their online disclosures."

The reality is that some parents neglect the gatekeeping and leave the gate wide open for any internet stranger to walk through unchecked. And walk through they do.

Meet the sharents

Mollie is an aspiring dancer and model with an Instagram following of 122,000 people. Her age is ambiguous but she could be anywhere from 11-13, meaning it's unlikely she's old enough to meet the social media platform's minimum age requirement. Her account is managed by her father, Chris, whose own account is linked in her bio, bringing things in line with Instagram's policy. (Chris didn't respond to a request for comment.)

You don't have to travel far on Instagram to discover accounts such as Mollie's, where grown men openly leer at preteen girls. Public-facing, parent-run accounts dedicated to dancers and gymnasts -- who are under the age of 13 and too young to have accounts of their own -- number in the thousands. (To protect privacy, we've chosen not to identify Mollie, which isn't her real name, or any other minors who haven't already appeared in the media.)

Parents use these accounts, which can have tens of thousands or hundreds of thousands of followers, to raise their daughters' profiles by posting photos of them posing and demonstrating their flexibility in bikinis and leotards. The comment sections are often flooded with sexualized remarks. A single, ugly word appeared under one group shot of several young girls in bikinis: "orgy."

Some parents try to contain the damage by limiting comments on posts that attract too much attention. The parent running one dancer account took a break from regular scheduling to post a pastel-hued graphic reminding other parents to review their followers regularly. "After seeing multiple stories and posts from dance photographers we admire about cleaning up followers, I decided to spend time cleaning," read the caption. "I was shocked at how many creeps got through as followers."

But "cleaning up" means engaging in a never-ending game of whack-a-mole to keep unwanted followers at bay, and it ignores the fact that you don't need to be following a public account to view the posts. Photos of children are regularly reposted on fan or aggregator accounts, over which parents have no control, and they can also be served up through hashtags or through Instagram's discovery algorithms.

The simple truth is that publicly posted content is anyone's for the taking. "Once public engagement happens, it is very hard, if not impossible, to really put meaningful boundaries around it," said Leah Plunkett, author of the book Sharenthood and a member of the faculty at Harvard Law School.

This concern is at the heart of the current drama concerning the TikTok account @wren.eleanor. Wren is an adorable blonde 3-year-old girl, and the account, which has 17.3 million followers, is managed by her mother, Jacquelyn, who posts videos almost exclusively of her child. 

Concerned onlookers have pointed Jacquelyn toward comments that appear to be predatory, and have warned her that videos in which Wren is in a bathing suit, pretending to insert a tampon, or eating various foodstuffs have more watches, likes and saves than other content. They claim her reluctance to stop posting in spite of their warnings demonstrates she's prioritizing the income from her account over Wren's safety. Jacquelyn didn't respond to several requests for comment.

Last year, the FBI ran a campaign in which it estimated that there were 500,000 predators online every day -- and that's just in the US. Right now, across social platforms, we're seeing the growth of digital marketplaces that hinge on child exploitation, said Plunkett. She doesn't want to tell other parents what to do, she added, but she wants them to be aware that there's "a very real, very pressing threat that even innocent content that they put up about their children is very likely to be repurposed and find its way into those marketplaces."

Naivete vs. exploitation

When parent influencers started out in the world of blogging over a decade ago, the industry wasn't exploitative in the same way it is today, said Crystal Abidin, an academic from Curtin University who specializes in internet cultures. When you trace the child influencer industry back to its roots, what you find is parents, usually mothers, reaching out to one another to connect. "It first came from a place of care among these parent influencers," she said.

Over time, the industry shifted, centering on children more and more as advertising dollars flowed in and new marketplaces formed. 

Education about the risks hasn't caught up, which is why people like Sarah Adams, a Vancouver mom who runs the TikTok account @mom.uncharted, have taken it upon themselves to raise the flag on those risks. "My ultimate goal is just have parents pause and reflect on the state of sharenting right now," she said. 

But as Mom Uncharted, Adams is also part of a wider unofficial and informal watchdog group of internet moms and child safety experts shedding light on the often disturbing way in which some parents are, sometimes knowingly, exploiting their children online.

The troubling behavior uncovered by Adams and others suggests there's more than naivete at play -- specifically when parents sign up for and advertise services that let people buy "exclusive" or "VIP" access to content featuring their children.

Some parent-run social media accounts that Adams has found linked out to a site called SelectSets, which lets the parents sell photo sets of their children. One account offered sets with titles such as "2 little princesses." SelectSets has described the service as "a classy and professional" option for influencers to monetize content, allowing them to "avoid the stigma often associated with other platforms."

Over the last few weeks, SelectSets has gone offline and no owner could be traced for comment.

In addition to selling photos, many parent-run dancer accounts, Mollie's included, allow strangers to send the dancers swimwear and underwear from the dancers' Amazon wish lists, or money to "sponsor" them to "realize their dream" or support them on their "journeys."

While there's nothing technically illegal about anything these parents are doing, they're placing their children in a gray area that's not explicitly sexual but that many people would consider to be sexualized. The business model of using an Amazon wish list is one commonly embraced by online sugar babies who accept money and gifts from older men.

"Our Conditions of Use and Sale make clear that users of Amazon Services must be 18 or older or accompanied by a parent or guardian," said an Amazon spokesperson in a statement. "In rare cases where we are made aware that an account has been opened by a minor without permission, we close the account."

Adams says it's unlikely to be other 11-year-olds sending their pocket money to these girls so they attend their next bikini modeling shoot. "Who the fuck do you think is tipping these kids?" she said. "It's predators who are liking the way you exploit your child and giving them all the content they need."

Turning points

Plunkett distinguishes between parents who are casually sharing content that features their kids and parents who are sharing for profit, an activity she describes as "commercial sharenting." 

"You are taking your child, or in some cases, your broader family's private or intimate moments, and sharing them digitally, in the hope of having some kind of current or future financial benefit," she said.

No matter the parent's hopes or intentions, any time children appear in public-facing social media content, that content has the potential to go viral, and when it does, parents have a choice to either lean in and monetize it or try to rein it in.

During Abidin's research -- in which she follows the changing activities of the same influencers over time -- she's found that many influencer parents reach a turning point. It can be triggered by something as simple as other children at school being aware of their child's celebrity or their child not enjoying it anymore, or as serious as being involved in a car chase while trying to escape fans (an occurrence recounted to Abidin by one of her research subjects). 

One influencer, Katy Rose Pritchard, who has almost 92,000 Instagram followers, decided to stop showing her children's faces on social media this year after she discovered they were being used to create role-playing accounts. People had taken photos of her children that she'd posted and used them to create fictional profiles of children for personal gratification, which she said in a post made her feel "violated."

All these examples highlight the different kinds of threats sharents are exposing their children to. Plunkett describes three "buckets" of risk tied to publicly sharing content online. The first and perhaps most obvious are risks involving criminal and/or dangerous behavior, posing a direct threat to the child. 

The second are indirect risks, where content posted featuring children can be taken, reused, analyzed or repurposed by people with nefarious motives. Consequences include anything from bullying to harming future job prospects to millions of people having access to children's medical information -- a common trope on YouTube is a video with a melodramatic title and thumbnail involving a child's trip to the hospital, in which influencer parents with sick kids will document their health journeys in blow-by-blow detail.

The third set of risks are probably the least talked about, but they involve potential harm to a child's sense of self. If you're a child influencer, how you see yourself as a person and your ability to develop into an adult is "going to be shaped and in some instances impeded by the fact that your parents are creating this public performance persona for you," said Plunkett.

Often children won't be aware of what this public persona looks like to the audience and how it's being interpreted. They may not even be aware it exists. But at some point, as happened with Barkman, the private world in which content is created and the public world in which it's consumed will inevitably collide. At that point, the child will be thrust into the position of confronting the persona that's been created for them.

"As kids get older, they naturally want to define themselves on their own terms, and if parents have overshared about them in public spaces, that can be difficult, as many will already have notions about who that child is or what that child may like," said Steinberg. "These notions, of course, may be incorrect. And some children may value privacy and wish their life stories were theirs -- not their parents -- to tell."

Savannah and Cole LaBrant with daughter Everleigh

Savannah and Cole LaBrant have documented nearly everything about their children's lives.

Jim Spellman/WireImage

This aspect of having their real-life stories made public is a key factor distinguishing children working in social media from children working in the professional entertainment industry, who usually play fictional roles. Many children who will become teens and adults in the next couple of decades will have to reckon with the fact that their parents put their most vulnerable moments on the internet for the world to see -- their meltdowns, their humiliation, their most personal moments. 

One influencer family, the LaBrants, were forced to issue a public apology in 2019 after they played an April Fools' Day Joke on their 6-year-old daughter Everleigh. The family pretended they were giving her dog away, eliciting tears throughout the video. As a result, many viewers felt that her parents, Sav and Cole, had inflicted unnecessary distress on her.

In the past few months, parents who film their children during meltdowns to demonstrate how to calm them down have found themselves the subject of ire on parenting Subreddits. Their critics argue that it's unfair to post content of children when they're at their most vulnerable, as it shows a lack of respect for a child's right to privacy.

Privacy-centric parenting

Even the staunchest advocates of child privacy know and understand the parental instinct of wanting to share their children's cuteness and talent with the world. "Our kids are the things usually we're the most proud of, the most excited about," said Adams. "It is normal to want to show them off and be proud of them."

When Adams started her account two years ago, she said her views were seen as more polarizing. But increasingly people seem to relate and share her concerns. Most of these are "average parents," naive to the risks they're exposing their kids to, but some are "commercial sharents" too.

Even though they don't always see eye to eye, the private conversations she's had with parents of children (she doesn't publicly call out anyone) with massive social media presences have been civil and productive. "I hope it opens more parents' eyes to the reality of the situation, because frankly this is all just a large social experiment," she said. "And it's being done on our kids. And that just doesn't seem like a good idea."

For Barkman, it's been "surprisingly easy, and hugely beneficial" to stop sharing content about her son. She's more present, and focuses only on capturing memories she wants to keep for herself.

"When motherhood is all consuming, it sometimes feels like that's all you have to offer, so I completely understand how we have slid into oversharing our children," she said. "It's a huge chunk of our identity and our hearts."

But Barkman recognizes the reality of the situation, which is that she doesn't know who's viewing her content and that she can't rely on tech platforms to protect her son. "We are raising a generation of children who have their entire lives broadcast online, and the newness of social media means we don't have much data on the impacts of that reality on children," she said. "I feel better acting with caution and letting my son have his privacy so that he can decide how he wants to be perceived by the world when he's ready and able."


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Millions Can't Pay Their Car Loans. Here's What To Do If You're One Of Them


Millions can't pay their car loans. Here's what to do if you're one of them


Millions can't pay their car loans. Here's what to do if you're one of them

If you've skipped a car payment or two recently -- or you worry you might have to miss an upcoming one -- you're not alone. Due to the coronavirus recession and record levels of unemployment, over 7% of all car loans in the US are currently in some sort of deferment program, according to recent data released by credit reporting agency TransUnion.

Typically, missing a car payment can damage your credit score or even lead to the bank repossessing your vehicle. However, in the wake of the recent economic turmoil brought on by the coronavirus pandemic, most lenders have streamlined their financial hardship programs and are willing to be a bit forgiving if you just ask for help.

But just like the help available with rent payments and unemployment benefits, you do have to ask. The worst thing you can do is ignore the problem and assume it'll work itself out on its own. (Scroll to the end for what else you should absolutely not do.)

Here's a look at the most current information and resources we could locate to help you deal with your car payment. We'll continue to update this story as new details emerge.

First, see what assistance your lender has to offer

You'll want to know what kinds of programs your bank, credit union or other auto loan provider may have available to you. Also, if there are any state laws that might offer some protections against repossession, you'll want to find out about those, too. 

Here are the most comprehensive resources we've been able to turn up to help with both. (If you don't see your lender on any of those lists, try contacting the company directly through its website or app.)

011-asheville-nc-reopening-phase-2-small-businesses-tourist-town-coronavirus

As businesses like this soda and candy shop in Asheville, North Carolina, start to reopen, you can bet repossession companies will be back to work, too.

Sarah Tew/CNET

Most repos occur after two or three months of no payments

If you've fallen behind (or you think you're going to fall behind) on your car payment for 90 days or longer, you may very well be at risk of having your car repossessed. Your lender may be more lenient if you've never missed a payment before, but the more often you've been late in the past, the sooner they might attempt repossession. 

One way around this, however, is a deferment or forbearance program.

What are auto loan deferment programs and how do they work?

Under normal circumstances, most lenders will report a late payment to the credit bureaus once it's at least 30 days overdue, and they'll typically come to take your vehicle away after you've missed three or more payments in a row. 

A deferment or forbearance allows you to skip between one and three payments with no late fees or penalties. After the deferment period ends, either your monthly payment will either go up slightly or your loan will be extended by about the same amount of time as the deferment.  

On the downside, interest will continue to accrue during the months you skip your payment, so you'll end up paying more for your vehicle in the long run. But on the plus side, your missed payments will not show up as negative marks on your credit report, so your credit score shouldn't take a hit.

How to talk to your bank about your options 

Most lenders' programs have been streamlined to be pretty simple to apply for. Fill out a form, possibly attach some documentation (termination letter, layoff notice, etc.), send it off to your lender and wait for an approval confirmation. If your bank doesn't have it set up that easy and you have no idea where to begin, the legal services website DoNotPay has a chatbot that can help you draft a letter to your lender.

That said, you can probably handle this on your own. Just be honest and forthcoming about your situation and realistic about how much time you'll need to get back on your feet. Generally speaking, banks would rather work with you and retain you as a customer than leave you stranded without a vehicle.

2017 Ford Escape

Ford is currently offering to pay six months' worth of new vehicle payments when you purchase a new car from the company.

Wayne Cunningham/CNET

What normally happens when you miss a car payment?

In most states, a lender, like your bank, can start the repossession process the day after you miss even just one payment, but most companies give their customers a grace period. Often the lender won't even charge a late fee until the payment is at least 10 days late, and most won't report it to the three major credit bureaus until it's over 30 days late. 

If you go past 30 days delinquent -- and especially if you miss the next two payments in your loan cycle as well -- that's where you start treading into repossession, or repo, territory. 

How repossession works 

In most cases, your lender will contract with a third-party agency that specializes in repossessions. That company will use whatever information it can get -- your home and work addresses, for example -- to track down the vehicle and tow it to a secured, usually gated lot. It does not need your car keys to take your car. 

The repo company will then charge your bank for towing the vehicle, as well as a daily storage fee, usually around $25 to $75 per day. Unless you happened to have left your keys in the car, the repo company will also contract a locksmith to make a new set of keys -- then charge your bank for that service, too. When all is said and done, you'll owe anywhere from a few hundred to over a thousand dollars in charges, which you'll still be liable for whether you get your car out of repo or not. 

road-trip-nissan-leaf-electric-car-17.jpg

If you quit paying your car payment, eventually a vehicle recovery service will come tow your car.

Andrew Hoyle/CNET

Are car repossession companies even open right now?

The auto repossession industry never quite figured out whether repo companies, many of which laid off dozens of employees early on in the pandemic, were even allowed to operate in areas under strict shelter-in-place orders. The Association of Credit and Collection Professionals, a lobbying group for debt collectors, has argued that debt collection is an essential service, but lawmakers have yet to chime in.

However, as most US cities are far along in the process of reopening and orders shuttering nonessential businesses have mostly been lifted, you can probably bet that repo companies will be up and running as soon as they can be.

Your rights vs. the bank's rights 

In pretty much every instance your bank does not need a court order to attempt to repossess your car. You can view a list of every state's specific automobile repossession laws here, but generally speaking, your lending institution (or a company it hires) has the right to come onto your property and take the car so long as no one commits a "breach of the peace."

That means its representatives can't break into a locked garage, through a locked gate or otherwise use physical force against you or your property to take possession of your vehicle. They can, however, follow you to work, for example, or the grocery store, and wait until you leave your car unattended. 

How to get your car out of repo -- and what happens if you don't 

What if it's too late and your car has already been repoed? Many states have laws on the books about how long and under what conditions lenders must allow you the opportunity to get your vehicle back, but the terms aren't exactly favorable, especially if you're in the kind of financial situation that led to repo in the first place.

Generally, the law only compels lenders to release your car if you pay off the loan plus any towing and storage charges that have accrued. In practice, however, most lenders are willing to give your car back if you can at least catch up with your late payments (and, of course, even up with the repo company as well). 

cash funds running out of money change dollars wallet empty

One option if you're struggling to pay your car payment is to try and sell your car for cash to pay off the loan, but that won't work if you owe more than the car is worth.

Sarah Tew/CNET

If you leave your vehicle in repo, either because you can't afford to get it out or you just decide it's not worth it, you're still not completely off the hook. The bank will likely auction off your car to the highest bidder, then apply the revenue from that sale to your remaining balance, including repossession charges. If that doesn't cover your entire debt, the bank can come after you for the remainder, including handing your account over to a collection agency and reporting the delinquency to the credit bureaus. 

You have a few wild-card options as well 

If you're at risk of having your car or truck repossessed, there are other options available besides deferment, but none quite as simple or easy. You could do what's called a "voluntary repossession," where you contact your lender and indicate your desire to turn your vehicle over to it. Your credit will take a hit and you'll be liable for any outstanding debt the bank fails to recoup at auction, but the overall impact to both your credit score and pocketbook will be less than if you wait for the bank to forcibly repo your car.

You can refinance your car for a lengthier loan term with a lower monthly payment, but that will only work if you've already paid off a substantial amount of the principal. If you've only had your car loan for a year or two, you might actually still owe more than it's worth. Also, your credit has to be good enough for a bank to underwrite a new loan for you, which may or may not be the case anymore. 

You could also try to sell your car on the open market, or trade it in for something less expensive, but again, with the economy now in a full-blown recession, neither of these options seems very compelling.

What you absolutely should not do 

Whatever you do, don't try to hide your car from your bank or the repo company. For one, you're probably not going to beat them at their own game, and the longer it takes to find it (and the more difficult you make it), the more they're going to charge you for their services in the end. 

iowa-stop-sign

Stop! Don't just sit back and wait until the bank repos your car. Be proactive and ask and your lender may be able to help.

Shara Tibken/CNET

And don't just stop paying your loan and hope for the best. Whether or not lawmakers decide the repo industry performs an "essential" function, or if the repo man has to wait for a treatment or vaccine like the rest of us before getting back to work, eventually your delinquency will catch up with you. With banks demonstrating some compassion right now for those who've suffered financial hardship, you might as well take advantage of one of their relief programs while you can. 

Chances are if you're worried about making your car payment, you have other bills keeping you up at night, too. Here's what you need to know about rent relief during the pandemic, as well as what assistance is available if you have a mortgage. For taxes, credit cards and everything else, here's what other financial help is available.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.


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