ever since i can remember i've been fascinated with money, making it, saving it studying it. by the time i was 31, i'd earned enough to retire. so i embarked on a new mission, helping you take care of your money, so you can save more, spend less and avoid getting ripped off. now your money expert, clark howard. >> why am i smiling? when you hear what i'm going to talk about, you'll think -- have i lost my mind? foreclosure rates are likely to rise according to experts the rest of this year and through

2010. why would that make me smile? because i don't believe it. in spite of the fact that increasing numbers of americans are delinquent on their home loans as and you move up the price point in house, you have an increasing number of people in trouble, the reality is that lenders are finally getting smart about another way out. throughout the first half of this year, the idea of doing a short sale, where a lender agrees to negotiate a lower selling price for a house, and they take a hit on the mortgage balance, was really something talked about that really didn't happen. real estate agents were frustrated beyond belief. but now to the benefit of home owners and, yes, banks, and especially for people buying homes, short sales are actually working. so are we going to see the millions and millions of foreclosures? i don't think so. but are they going to be great deals on houses throughout the rest of this year and next year? you better believe it. get out there and find the deals. and now, what's on your mind? what deal are you dealing with?

nancy, how are you? >> caller: i'm fine, thank you. >> what's happened to you? >> caller: well, i got a letter yesterday and my husband worked for a big corporation for 32 years. and they're telling me now that since october of '04 to 2009 of april, they found mistake on his pension money. and what it is, is $450 a month, and they want me to pay that through those years, plus interest. >> wait, wait, wait a minute. you're telling me the pension administrator -- >> caller: yes. >> almost five years ago made a mistake in computation. paid $450 too much. >> reporter: too much. >> they say now they want, let's

see, what is that over -- >> caller: that's close to $25,000. >> and they want all $25,000 -- >> caller: plus interest. >> for their error? how do you know they even did make a mistake? >> well i went back through his retirement papers and i did find that it states when he turned 62, if he's drawing social security, they would take $450 off of his check a month. he got sick in early 2000, he had ramsey disease which did a number on his brain, which causes dementia. well, if he had been in his right mind, he would have known that this was supposed to happen and he would have called. i haven't been in this position in over 20 years. where i owed anybody anything. >> the company that your husband worked for for the 32 years, was he a union employee or a

nonunion? >> caller: yes, he was, he was a union member. >> have you consulted the union? >> caller: no. >> i would request that you contact the union that he worked for. the union should get involved. and that's why your husband paid dues all through the years. >> caller: right. >> and the union should be his and his fellow retirees advocates in dealing with the pension administrator for messing up and coming up with a reasonable way for that money to be recouped over time. >> caller: right. >> i would like for you to double back with me nancy, once you've talked to the union. and if the union is not of help to you and the other retirees, i would like to see what i might be able to do to be of help. lola, what's happened, lola? >> caller: well, to make a long story short, there was this young man that my daughter knew and he ended up homeless, gave us a sad story. we brought him to our home. and to give him a place to live. settled up on the rent. and he was working, not too long after that. the transmission went out on his

car. and i felt sorry for him, because he did not have a way to work. well, i had just got the transmission fixed in my truck, and i told him he could use my truck as long as he promised me one thing -- he would never drink and drive my truck. well, needless to say he wrecked my truck. he did over $3,000 worth of damage to it. and got a d.u.i., thrown in jail and my truck was impounded. he paid about half of it. and once i moved, of course now he's not making payments. he refuses to answer my calls. he refuses to do anything. >> let's talk for a second. first thing i want to tell you -- don't ever give up that wonderful heart of yours. >> caller: okay, yes. >> you can sue him in small

claims court for the $1,500 still unpaid. >> okay. >> and you would file suit the filing fees, in most jurisdictions are not that high. >> caller: okay. >> and he's going to have to come explain to the judge why he's being such a deadbeat. >> caller: okay. >> and it will be up to the judge, because a lot of what you're talking about is not in writing anywhere. you didn't get a note from him. >> caller: yes, i do. >> then it's not hearsay. >> caller: i do, i do, i have a signed piece of paper that he promised to restore my truck and pay all the damages. >> well, see, the judge is really not going to have a lot of trouble being on your side on this. i'm going to give you a website to go to to read some of the how-to's of small claims court. >> caller: okay. >> nolo.com and read their small claims court guide. and then after the appeals period is ended, you, then, can go get what's called in many

jurisdictions a fifa, although it varies by jurisdiction, you can serve his employer and take his pay. next on "clark howard" -- >> how much for downloading this movie? >> caller: $62,000. >> $62,000 to download a single movie?

do you have a money dilemma this you don't know how to solve? it's so easy to ask me your question. all you do is go to cnn.com/clarkhoward and click the video submission and send me a little video clip of what you want solved. that's what melba has done. >> i'm an environmental scientist at the epa and i need a money coach. my biggest debt is my

educational loan debt. after i finished school, i was like, there's no way that i can pay this loan back. i don't have a job. i have approximately $150,000 worth of student loan debt. my loans are like -- the thing that i never think about. my question is, how do i pay off all of my student loans. or what's the best way to pay off all of my student loans? >> melba, you got a lot of student loans, but do i have great news for you. there is a brand-new federal program, and since you work for the federal government, if you stay with the feds, you're going to love this. it is an income-based repayment plan. and after ten years' employment with the feds, all your federal loans, whatever remains balance of those, will be forgiven. all right. here's what i want you to do. i want you to pay the minimum

that's required under the income-based plan toward your federal loans, and throw every last dollar you can towards your private loans. and big priority for you. on the student loan front, here's my rule if you are in school -- parents of kids getting ready to go to college, do not in four years take out more student loan debt in total than what you're likely earnings are going to be in the first yea years' employment after college. use that as a maximum ceiling of how much money you borrow. you'll really thank me later if you follow that. you have a complaint about one of the giant cell phone companies. what have they done to you, alberto? >> caller: clark, i recently

purchased a wireless card for my computer. because i was moving to, i was going to mexico to pack my belongings. i managed a resort that closed down due to the financial crisis. a downloaded a movie and they billed me for $62,000. >> wait, wait, wait, wait. how much for downloading this movie? >> caller: $62,000. >> $62,000 to download a single movie? what did they tell you -- >> caller: they adjusted it to $17,000, which they told me was their cost. for the movie ""wall-e"" by disney that my nephew wanted to watch. not only that, clark, but after we got to the $17,000, they said that they were going to cancel my cellular phone, which was also with them. and i was never told of the consequences of downloading a movie overseas, because they charge by megabytes rather than

by roaming minutes. >> how high up in the bureaucracy at this cell phone company have you gone to? >> caller: i have sent a letter to the chairman and chief executive officer. to the executive vice president and general council. >> and what answers have you received? >> caller: none, other than a call by supposedly a customer care professional, that told me that the bill was fair and equitable. >> wait a minute. they said that the bill is fair and equitable at the reduced rate of $17,000 for a single movie. >> caller: that's correct, sir. >> we're going to call your cell phone company and hear their explanation for how it's fair and equitable to charge you first, $62,000 for a copy of the

movie, "wall-e" and let's see what your cell phone provider has to say, who has also shut off your service. what wonderful, wonderful people. >> next on "clark howard" -- >> i am very happy, but it couldn't have happened without your interaction. >> well and that's a shame. hate that we had to get involved. because you know, there should have been somebody with more judgment and common sense at the cell phone operator.

welcome back to "clark howard." if you are just tuning in, you missed alberto's story. alberto was charged $62,000 for downloading a children's movie to his laptop using his cellular service. i have put team clark to work. let's see the results. now alberto, it did work out in this case that you called this. >> caller: yes. >> you know that, huh? >> caller: yes. >> what's happened?

>> caller: they have absolutely adjusted everything. i am very happy, but it couldn't have happened without your interaction. >> well, and that's a shame, i hate that we had to get involved. because you know, there should have been somebody with more judgment and common sense at the cell phone operator. but the important thing here is you're out of trouble, you're not going to have that problem anymore. but everybody, you're on warning now, be very, very careful, these laptop cards are dangerous to your financial health. and not everybody is going to be able to be as lucky as alberto who went from being very unlucky to very lucky. so be careful. what risk are you at of identity theft? we hear so much about it. you see all the commercials about how there's this great way for you to keep your identity from being stolen and all that stuff.

but how would you figure out how much risk you are actually at? well, there's now a mathematical formula for free, you can run yourself through, and see how much risk you're actually under based on your profile of having your identity stolen. you go to a website called myidscore.com. when you get there, you fill out a short amount of information about yourself. and if you're trusting enough, your social security number. i chose to put it in there to see what it would show for me. guess what it showed for me, i was at pretty high risk of identity theft. thank goodness i've already frozen my credit score. take your look. i've been on the air 22 years and just when i think i've heard it all -- i hear something you're not going to believe.

the call you're going to hear next is one that combines two of my least-favorite things. payday loans and bill collectors. and wait until you hear this story. michael's with us. michael, how are you doing? >> caller: i'm doing great, clark. how are you? >> wonderful, thank you. you have some collectors that are bugging you. let's talk about them. >> caller: about six years ago, my wife and i got into some financial problems that we're working through. she made a very bad decision. and she did a payday loan over the internet. >> oh. >> caller: we knew it was a problem. we got it taken care of and everything. but actually about six years after that, we start, she gets a call at work from someone representing a bogus bank. it turned out these people were from the philippines. they told her if she didn't give them a credit card number over the phone and pay a certain amount, that they were going to have the cops come down and arrest her? >> really. >> caller: yes, that was about six months ago.

so they started calling back again. >> the same people from the philippines calling you? >> caller: yes. and at this point i'm just -- they're calling our family members and stuff. >> they're calling your family members? >> caller: yes. >> what are they saying to your family members? >> that my wife needs to call them. >> so they're not telling the family members that your wife owes money or anything like that? >> caller: no, they say that my wife owes money and she needs to call them. >> they are saying that? >> caller: that's against the law. >> yeah. i went to the police and told them what happened. that's not much they can do anything about it. anyway, what happened was i started, i had their number that they left and i started calling them and i told them we weren't going to pay any money and i actually started having fun with them and they got really mad and said they were going to cut my wife's hands off and going to watch her bleed.

they were being very violent. >> what? they said they were going to cut your wife's hands off? >> caller: yeah. and some other things that i'm going to say over the line about abuses they were going to do, and this, that and the other. >> and you think this whole thing ties back to that payday loan your wife took out six years ago? >> caller: what i think is the payday loan people, we called them and they said that they sell the information that we get after six years. >> so the payday lender just sells their customer list, to this phony collection agency in the philippines, that then threatens to harm your wife physically, even in ways that are so awful, that you can't even say them out loud? >> caller: yes, the payday loans want to make money any way they can. and apparently they sell contact information after six years. >> michael, you know there are times i think i've heard it all and then you call and let me know i have not heard it all.

next on "clark howard" -- >> i noticed that the store brand anti-dandruff shampoo was quite bit cheaper. so i went ahead and i got that. and my head started itching and having dandruff problems after that. i really did not know what was going on. #ñ#ñ#ñ#ñññññññññ

ever since i can remember, i've been fascinated with money, making it, saving it, studying it. by the time i was 31, i earned enough to retire. so i embarked on a new mission -- helping you take care of your money so you can save more, spend less and avoid getting ripped off. now from his radio studio, your money expert, clark howard. >> you see the car ads on tv, and you think when you see the keelers are going to have great deals on the cars.

the car market has been completely fouled up from its normal sales patterns this year, because of cash for clunkers. normally we're in a cycle where in september we would have had great deals. but this year, the great deals are delayed. we're going to have phenomenal offerings from mid-november to probably about mid-january, because of the way the car cycle was modified by cash for clunkers. and really great news -- not only will you get a really good price on a new vehicle, for almost all models out there. but your trade-in, again because of cash for clunkers, should likely bring you a higher amount of dollars than it would have in the past. why? because so many cars were destroyed as part of the cash for clunkers program, raising the value of your trade-in. richard's with us. richard, you want to talk about your mom, is that right? >> caller: recently my

90-plus-year-old mother came to live with me and i've been helping her out financially for well over ten years. she was always very secretive about her finances. and what i have found out recently to my shock and dismay, is that she has been playing these mail-order lotteries. she lived by herself for a long time. and was got caught up in these lotteries overseas. >> i'm so sorry. >> caller: as a matter of fact, she has run up credit card debt totaling about $34,000. >> no! >> caller: and she has social security, she gets $923 a month. but she had been, practically all the social security goes out to make her monthly payments. so she's now become my dependant. should i have her declare bankruptcy? should we just stop making payments? i hope this doesn't, i hope it doesn't come to the point that i'm going to have to make payments on this in any way.

>> there are a couple of scenarios i wanted to run by you. one is that you have no legal liability for any of these credit cards. there is no need to file for bankruptcy in this case. she has no assets. >> caller: okay. >> so making -- eating up her whole social security payment to service these credit cards is crazy. now there is something i talked about recently on the show, called a hardship claim. that is something that she may be eligible for through a local affiliate of the national foundation for credit counseling. but generally what happens is the interest rates go to zero. and there's no fees associated with it at all. and if over time she can pay off the balance, she pays off the balance. if there's any issue that a creditor may at some point attempt to seize money in a bank account, direct deposit of

social security should stop and people should go back to receiving a paper check and that's what she should do. mike is with us. mike, you're having a problem with a bankrupt cable company? >> caller: it's bankrupt, i wasn't aware of that. yeah, back in may i was paying my bills online through my bank. and inadvertently paid the cable company the amount of money i was paying to pay off my credit card. they were one below the other. and didn't think anything of it. clicked pay the way i normally do, until several days later the bank sent me an email notifying me that it had actually paid the bill and i looked to see that it was the cable company and i panicked. and they since may have had $938.70. i can't get it back. >> $938.

>> caller: and 70 cents. >> you know, when a company is in severe financial trouble, once they have money from you, it is very, very hard to get it back. what have they said to you? have they pled poverty? what has the cable company said about not giving you your money back? >> caller: the first time i called in may and explained to them in tears what i had done, they told me that it would take four to six weeks to get the check back because of the amount of money it was. it was over a certain amount and it would take four to six weeks. so when i called back after the six weeks, the person i talked to said well, they didn't know what they were talking about. it takes six to eight weeks, so you have two more weeks to wait. >> i'm going to do something in this case, with everything you've been through, that normally i would suggest additional steps for you. but considering the fact that this is a bankrupt enterprise that you're trying to get money out of, with your permission, i

want us to call this cable operator and see if there's anything we can do to get you your money back. >> caller: i would love that. >> i don't know if you were allowed to have your money back, because of the bankruptcy filing, if that is any part of why your $1,000 seems to be lost in space. what an odd and unusual set of circumstances for you to end up out $1,000. hang with me. next on "clark howard" -- >> we called your cable operator and what happened after we called? >> caller: that afternoon, i probably received five phone calls to keep me updated on the progress. >> started saving for college for our son and we aren't sure if we're doing enough.

>> caller: i was paying my bills online through my bank and inadvertently paid the cable company the amount of money i was paying to pay off my credit card. and they since may have had $938.70. i can't get it back. >> hang on just a second because we are going to call them on your behalf and see what we can make happen for you. we called your cable operator. and what happened after we called? >> caller: i got the first phone call, and they asked me to send them a copy of the bank statement that shows where this amount of money had cleared. and she was very clear.

we don't want your account number, cross it off. so i immediately e-mailed them the statement with it on. and with a little request that please keep me updated on the progress of this. that afternoon i probably received five phone calls to keep me updated on the progress. the first was that they had the statement and didn't know when they would get approval for it. but apologizing that i had waited so long. a little while later they called back and said, well we have the approval. don't know how, you should have the check by the end of the week. we'll get back to you. finally called back and said, i've actually seen the check. and you will have it tomorrow. it's going to be fedexed to you. i'll call you back when i have the tracking number. so finally she called back with the tracking number.

because i'm still not believing this. she called me back with the tracking number. and told me i would have it you know, wednesday morning. and that she would call me in the morning or sometime on wednesday to make sure that i got it. and lo and behold, at 11:30 fedex showed up at my door and there was the check. >> i will tell you the truth, this is one of those cases where i think that we did make a difference. and i really believe you would have never seen this money. >> i'm sure i wouldn't, either. >> and i hate that it took us getting involved. because, you know, my whole deal here, is to give people the tools and the knowledge and the confidence to go fight your own battles. and you had done everything i could have expected of somebody. and still ran into a brick wall, which is why we got involved. >> well i so appreciate it and my hat's off to all of you. because i know, as you said, i never would have seen the money otherwise. it's time for "money coach."

that's where you get to ask me your money question for the goals you have in your life. see if i have a good answer for you. let's visit with dan and heather. >> my name is dan. >> my name is heather and we need a money coach. >> we started saving for college for our son. and aren't sure if we're doing enough. we started with a 529 plan. and just put a little bit of money in there. and of course with the economy, the market going down, we lost money on that. and decided to lock into the florida prepaid tuition. we'll be paying on that for five years. but that only does cover tuition. >> we're hoping we're doing the right thing. but again with the way the economy going, we decided to with hold putting any money in the 529. dan and i both paid for our college with student loans and other things that sort of hinder our opportunities now. obviously we want to avoid that for him. our question is, what more can we do to save for our child's college education? >> wow, you got a lot of mouths to feed in that household.

now another one on the way, three children that you're going to have to raise and pay for college for. but the thing is, do you know what? you paid for your own college. you said that set you back. but the truth is, there are so many ways to pay for college. but you know what? there's only one way to pay for your own retirement. so you love your children. you want the best for them. but key thing -- your primary focus and goal should be to beef up your savings for retirement. you need to contribute more each and every month to that, and then if there's money left over, put it towards your kids' college and the prepaid plan. or in a 529 plan. this conflict i've just talked about, do i hear this over and over and over again. and when i talk with older couples, whose kids are now grown, and then i ask what have you saved for retirement? and they kind of can't look at

me because they took all the money and put it toward their kids' college. remember what i've just said. your primary goal with your long-term savings is not -- it is not your kids' college. there's work, there's loans, there's grants, there's scholarships. but for retirement? you got one thing, and that's you. next on "clark howard" -- >> what is it that this investment advisor is recommending to your mom? >> caller: a variable annuity. >> what? what? are you serious? >> caller: yes. >> no, no, no, no!

arthur is with us. hi, arthur, how are you doing? >> caller: i'm doing well, thanks, clark. >> so you're watching out for your mom. that's a good son, watching out for her. >> caller: thank you. i'm trying to. she has subsequent to the death of my father, is taking care of her financial matters. and -- >> first, i'm sorry about the the loss of your dad. >> caller: thank you.

and an investment advisor recommended investment product to her. that i'm somewhat skeptical of. >> would you tell me how old your mom is? >> caller: she's 72. >> and what is it that this investment advisor is recommending to your mom? >> caller: a variable annuity. >> what? what? are you serious? >> caller: yes. >> no, no, no, no, no! that is wrong! i don't know if that individual investment advisor is just misguided or is a dishonest individual. but there is absolutely never a circumstance -- never -- where a variable annuity would be proper for someone in her 70s. variable annuity is a type of insurance product that has massive commissions, and massive

ongoing expenses and huge, what are known as surrender charges. the idea at 72 is that normally your mom is not looking for something that might generate an income for her at 100. your mom is looking for something that will cover her needs for the remainder of her lifetime. >> caller: well is this advice so egregiously bad -- >> yes. >> caller: -- that we should take our business elsewhere? >> i would consider that. there's not even a reasonable difference of opinion on this. flat-out bad, rotten, terrible, crooked advice. our next caller, joyce, has a real dilemma. a tough one within a family. almost biblical. she has to make a decision whether she should do what's best for her or what's best for her daughter. joyce, what's going on in your life? >> caller: okay.

we gave our daughter a five-acre piece of property about ten years ago. and she has put a home on it. now she has a first and second mortgage and is unable to make the payments. and they're getting ready to foreclose. with the first and second mortgage, would it be best for us to contact these folks and ask about how we can refinance it, take it over, or would it be best for them to foreclosure? and then for us to wait until the foreclosure takes place? would we get a better deal then? >> for your daughter, having late pays and the house being rescued by you for her, short of foreclosure, is much better for her credit than her going through foreclosure. >> caller: yes. >> and that's number one. number two, though, you will be able to obtain the property

after the foreclosure, once it becomes what's known as reo, or real estate owned. what will happen is the holder of the second mortgage will be wiped out by the claim of the first mortgage at the foreclosure. and the foreclosure will end up in the hands of the bank that has the first mortgage. it will then go into their reo department and you will be in a position in the reo department to buy the property back for potentially a lot less than what even the first mortgage was. you would absolutely get a better deal on the property if you're quiet and wait until it goes to the reo status. the only downside risk from your perspective is if for some reason there was somebody that had his or her eye on the

property and once it goes into reo, they end up buying it right out from under you. how much do you want to keep your daughter out of harm's way, versus how much do you want to keep the property and maybe get a good deal on it? >> caller: those are some real difficult questions? >> yeah, they are different. that's the thing. we are dealing with an ethical dilemma, a family dilemma here. that's a call for you to make. if you would like to step in and prevent the financial harm that comes with the financial foreclosure to your daughter, know you will have to pay pretty much the full balance on the loan. you are not going to get large concessions once you step in.

>> that's a decision you have to make. >> you spent these years well below your income, and you made a personal change by toughing it out and paying it off.