At the end of the day, the actual operating system (Windows 7 or Mac OS X) is less significant than the applications that you plan to run on the computer, so that's where everyone struggling with this decision should start.

Since you're coming from the Windows world, one of the first questions to ask yourself is are you prepared to re-buy some or all of your primary productivity programs such as word processors, spreadsheets, photo editing, etc?

If you already own Microsoft Office, Photoshop Elements, Quicken for Windows or a number of other common Windows programs, you will have to add the cost of purchasing the Mac versions to your calculations.

Additionally, you will need to be prepared for the learning curve of switching to new programs and operating systems (not really that big of a deal if you possess a little patience).

If you don't have any legacy software to consider, you don't do much more than surf the web and shoot off e-mails or you're starting over anyway, then these issues are irrelevant.

If you have existing printers, scanners, digital cameras or other hardware peripherals that you want to continue using, you must determine if they are Mac compatible as well. If not, you may also end up replacing some items that are still working but not compatible in the Mac OS.

The next consideration is whether your computer (and the associated programs and data files) need to interact with other computers, such as your work computer or other computers on your home network.

If, for instance, your company requires you to connect to the office network through a VPN (Virtual Private Network), you must ensure that your IT department supports a remote Mac on the corporate network.

If you need to constantly exchange files with other Windows users, you need to make sure that your new Mac OS programs can exchange files without a lot of complications or conversions (most common files like word processing and spreadsheets are no problem).

Another major consideration is your circle of support. Most of us call a friend or family member when we encounter a computer issue, so if you have others you rely upon to help you, make sure they can help you with the Mac before you make the switch (or be comfortable that all of your questions can be addressed by Apples various support mechanisms, which generally receive high ratings).

One of the main drivers for switchers is the very effective messaging about how the Mac OS is safer than Windows, which at this point in time is absolutely true.

The primary reason the Mac OS is safer is because the number of users worldwide is still in the 5%-6% range while Windows is used by over 90% of users ( details at http://bit.ly/1HbdQx ). Pirated copies of Windows are also widely in use around the world and tend to be missing security updates, making them easy targets.

If you were a cyber-criminal and wanted to exploit others, why would you waste time on the small group when your chances of snaring someone are exponentially higher by targeting the majority? Security experts are warning that an acceleration in exploiting Mac vulnerabilities is forthcoming as the market share grows - http://bit.ly/dRP9l .

Additionally, we are seeing more sophisticated attacks these days that don't rely so much on the operating system, but target browsers (Internet Explorer, Firefox, Safari, etc.) which can be exploited on any platform.

Fooling users into giving up information (phishing scams) isn't specific to operating systems either, so be sure to manage your expectations on the constantly evolving safety issues if you decide to switch.

The Apple commercials have done a great job in planting the "should I switch?" question in peoples minds, but now you know how complex this question really is, so do your homework before deciding!]]> Wed, 18 Nov 2009 12:02:54 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21744 http://datadoctors.com/help/kenscolumns/column.cfm?id=21743 Retailers and manufacturers know since most consumers can't decipher the technical details when making a decision, most default to the price.

In technology especially, often times the price you see advertised is not what it will actually end up costing you.

Here are my top 5 tech shopping 'gotchas' that you should be aware of:

Be Cautious of the 'cheapest'

In order for any item in technology to be the cheapest in any category, corners have to get cut. In some cases, those corners aren't important on the surface, but the biggest games are played with the cheapest items in tech, so be suspicious and do your homework. If it sounds too good to be true, there's probably a catch, so be alert.

Beware the Battery

Batteries are a profit center for manufacturers and retailers. Low cost technology often comes with low capacity batteries. For instance, a cheap laptop may run for less than an hour on the battery that comes with it, forcing you to buy the upgraded battery at a premium. Always ask if an 'upgraded battery' is available for any device you are buying, and compare the difference. This can quickly expose any tricks being played in this area.

Avoid the 'Premium Cable'

Cables are another big profit center for retailers, which is why you will see really cheap printers advertised that don't come with a cable. Unlike analog cables (like speaker wire) there is no improvement when buying 'premium' cables for connecting digital devices. Digital signals are either on or off; there is no 'quality' improvement possible. O's and 1's either make it across the cable or they don't, there is no in between.

Bypass the 'B.S.' - Bundling & Subsidies

A very common ploy in recent times is the use of 'bundling' or 'subsidies' to attract customers that aren't paying attention. Bundling is the practice of requiring a customer to purchase the 'bundle' in order to get the price on the base item. For instance, you may see a digital camera advertised at a really low price, but the fine print disclaims that only a handful of units are available at the price unless you also buy the optional carry case, memory card & spare battery bundle along with it.

Subsidies are how the cell phone industry has tied their customers to long term contracts for years and now we are seeing computer 'deals', especially in Netbooks that are using the same tactic but with caps and overage fees if you use the Internet too much!

Eyeball Extended Warranties

Extended warranties continue to be one of the most confusing purchases for tech buyers because the 'what's covered & what isn't covered' isn't that clear at the point of purchase. Let's be very clear on this; Extended Warranties are a big profit center for retailers.

To make things worse, the salesman that sells you the warranty has nothing to do with executing the warranty (and probably won't even be working there anymore when you try to make use of it down the road.)

That is not to say that all extended warranties are bad, after all it's like any other insurance policy; it's great if you have a problem and a waste if you never end up using it.

In computers, extended warranties typically cover the hardware but not the most common problem you will likely have: operating system corruption, infection or other software related issues.

Expensive laptops are one of the few exceptions to the rule, since laptops are proprietary, expensive to repair and more likely to suffer physical damage because of their portability, but make sure you understand the details.

Bonus tip: Don't get Flogged!

The Internet is a great resource for researching your potential purchases and getting recommendations from others is a great help. The popularity of blogs has created a new category of 'informational' sites known as 'flogs' (fake blogs). What appears to be a personal recommendation for a product or service is nothing more than a clever marketing strategy by some organizations.

One of the easiest ways to spot a flog is if the only topic being discussed in any of the postings is this one product or service, especially if there is only one post. Most bloggers generate new posts on a regular basis and discuss a variety of topics.]]> Wed, 11 Nov 2009 11:30:54 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21743 http://datadoctors.com/help/kenscolumns/column.cfm?id=21742 This scenario is more likely to play itself out in business environments, but some consumers may also have special software or older peripherals that would benefit from this feature.

For those that tried to migrate to Windows Vista in the past and ran into a compatibility issue, this feature was specifically added to address your situation.

Certain versions of Windows 7 have an optional feature called Windows XP Mode, which unlike the 'XP Compatibility mode' that was in Windows Vista, is an actual complete copy of Windows XP with SP3 (Service Pack 3) that can run as a 'virtual' system within Windows 7.

This means that older or outdated applications and peripherals that would only work in Windows XP can run in a virtual session that will appear as just another icon in Windows 7 (and it's really cool how smooth it works!)

But, before you get too worked up about this creative approach to migrating older users and applications, there are some 'requirements' that you should know about.

If you have old XP based applications, then you probably have old XP level hardware, which isn't likely to support this new feature.

In order to support XP Mode, you will need a newer computer with a processor capable of 'hardware virtualization' (AMD-V or Intel VT), at least 2 GB of RAM and a recommended 15 GB of free drive space.

Note: Hardware virtualization support must be turned on in the computer's BIOS, which is generally off by default.

If you want to see if your computer is capable of supporting Windows XP Mode, you can run Microsoft's Hardware-Assisted Virtualization Detection tool here: http://bit.ly/1qPcbl .

In addition, the only versions of Windows 7 that support XP Mode are Professional, Ultimate & Enterprise edition which means that if you get the Home Premium version, which is the least expensive, you don't have this option.

The reality is, you won't need this feature to simply surf the web, exchange e-mails and write some letters; it's only for those will special programs and older peripherals.

Microsoft did a much better job of addressing the compatibility issues that were created when they released Vista and has an easy to use Windows 7 Compatibility Center that allows you to check the compatibility of most popular hardware components and software programs here: http://bit.ly/uD96n .

The XP Mode feature is a godsend to corporate IT departments as it provides a much more comprehensive way to migrate to Windows 7 without the expense of updating old custom programs that were designed to run in Windows XP.

What is very important to understand is that this is not a replacement for Windows 7 and should only be used for specific programs or devices that won't work in Windows 7.

For instance, if you plan on using XP Mode, you wouldn't want to surf the Internet from within the XP session because it would expose you to all of the vulnerabilities that Windows XP has.

Windows 7 is significantly more secure for web browsing in today's hostile Internet environment (keep in mind, Windows XP was designed to deal with security threats that existed in 2001), so minimizing what you do in XP Mode is prudent.

As you may have already realized, this feature is not designed to be setup by the casual user, so if you think you might have a need for the feature, consult a knowledgeable technical resource or your local computer expert to review your specific situation before you spend the money on something you don't actually need!]]> Fri, 6 Nov 2009 15:24:12 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21742 http://datadoctors.com/help/kenscolumns/column.cfm?id=21741 Without question, the future of personal computing is in the 64-bit realm. 64-bit processors and operating systems have been out for quite a long time, but primarily only useful to very knowledgeable techies that had specific tasks they needed to address (such as video editing, computer aided design, graphic design or gaming).

Windows 7 is poised to change all of that for even casual users, but in my opinion, if you commit to it right now, you are on the back end of the 'leading edge' (which is often translates to the 'bleeding edge' because of the problems that come with new technologies).

Here is why I view 64-bit computing in the late stages of the leading edge:

- 64-bit Operating Systems require 64-bit processors (which you have, but most older computers don't)

- In order to take full advantage of the 64-bit platform, you must also have 64-bit applications, which are few and far between for the casual computer user

- You must have 64-bit drivers for all of your hardware and peripherals (forget about support for really old components, printers, scanners, etc.)

- You must have 64-bit Anti-Virus software & other vital security software

- You're wasting your time if you don't have more than 3Gb of RAM (and actually 4-8 Gb to really make it worthwhile)

- You must be willing to put up with companies that are still trying to get their drivers and software compatible with 64-bit operating systems (which, thanks to Vista, is becoming much less of an issue)

While having a 64-bit operating system can be viewed as 'future-proofing', the question you have to ask yourself is: are you willing to take the chance of compatibility problems in order to be ready for the future? (iTunes seems to be a common configuration issue for many 64-bit converts on Internet forums.)

For most folks, seeing any appreciable difference between a 32-bit & 64-bit system while surfing the Internet, checking e-mail & writing letters is likely to be slim to none. Power users, hardcore gamers and vertical application business users are a different story, but that's not who reads my column.

None of the 'average user' tasks really stress a properly configured 32-bit system. With all the 64-bit hype, too many users are improperly blaming the '32-bit limitation' as the reason why their computers are running so slow.

The reality is that most folks don't properly maintain their computers and are inundated with unnecessary programs, hidden malware and cheap hardware (that wouldn't have a prayer of running a 64-bit OS anyway!)

For those buying a new computer with lots of 64-bit friendly hardware and lots of RAM, you're in a much better position to make the transition than those with older systems that have just barely enough hardware to run a 64-bit OS.

As to your upgrade question, you can purchase the upgrade version of Windows 7 64-bit, but you will have to do a 'clean install' (wipe everything out and start from scratch) as you cannot perform an 'in-place' upgrade going from Vista 32-bit to Win 7 64-bit.

In review, 64-bit is absolutely the way to go if you can verify your hardware, peripherals, drivers and programs are all compatible with a 64-bit environment.

If you are technically incapable of determining these things, too lazy to do the homework or don't want to have to wipe out your existing Windows Vista installation, stick to the 32-bit version (or consult a knowledgeable professional).

If you are somewhere in-between, wait a little while so that more of the issues can be discovered and you can benefit from the learning curve forged by others.]]> Fri, 30 Oct 2009 18:07:58 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21741 http://datadoctors.com/help/kenscolumns/column.cfm?id=21740 This is just another example of the creative methods that are constantly being generated to trick folks into installing fake security software onto their computer, which then coaxes them to purchase the 'fix' for a fake infection.

A recent study claimed that over 250 different types of 'scareware' programs are in circulation and this is just the most recent attempt to get people to give up credit card information for a fake infection.

In general the subject line refers to a 'Conficker.B Infection Alert' and the body of the message reads:

Dear Microsoft Customer,

Starting 18/10/2009 the 'Conficker' worm began infecting Microsoft customers unusually rapidly. Microsoft has been advised by your Internet provider that your network is infected. To counteract further spread we advise removing the infection using an antispyware program. We are supplying all affected Windows Users with a free system scan in order to clean any files infected by the virus.

Please install attached file to start the scan. The process takes under a minute and will prevent your files from being compromised. We appreciate your prompt cooperation.

Regards,

Microsoft Windows Agent #2 (Hollis)

Microsoft Windows Computer Safety Division

_________________________________________________________________________________

The message is accompanied by a file attachment that has varying names, but usually has the .zip extension.

If you are paying attention, you should be able to spot many red flags from this message.

The first one is the date format (18/10/2009) which is not common in the U.S. and the second is the poor grammar (unusually rapidly).

What isn't as obvious to non-technical users is that Microsoft would never be contacted by your Internet provider if your network was truly infected. If anything, your Internet provider would shut your connection down or disable your ability to send e-mail if your system was infected with many of the silent malware programs that silently spew out spam.

Microsoft would never send a file attachment (they always use links back to their website) and you should never trust any .zip files (compressed files that could contain virtually anything inside) unless you are absolutely certain of the contents.

Finally, I have yet to see any official Microsoft e-mail messages that had a salutation that started with 'Regards' and there is no such thing as the 'Microsoft Windows Computer Safety Division'.

The only security warnings that you will ever get e-mailed to you from Microsoft would come as a result of you pro-actively signing-up for their 'Security Bulletins' and the format of the messages always starts with "Begin PGP Signed Message".

A good practice for the future whenever you receive any suspicious e-mail warnings is to copy the first paragraph and paste it into Google as a search. If the information is legit, you will find websites that will confirm the information and if it's a fake, you will quickly get confirmation as well.]]> Fri, 23 Oct 2009 14:07:51 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21740 http://datadoctors.com/help/kenscolumns/column.cfm?id=21739 No matter how much users like Windows XP, there will come a time when Microsoft won't support it, including the very important security patches that plug security vulnerabilities. With this in mind, the Windows 7 question isn't really a question of WILL you upgrade, but WHEN will you upgrade (a month, a year, 5 years?).

By all accounts, Windows 7 is a significant improvement over Windows Vista, primarily because Microsoft got to strip out the bad and add lots of new good to what is essentially Windows Vista 2 (but they knew better than to call it that!)

Regardless of how they got here, Microsoft listened to the complaints of Vista users and continued to improve the built-in security and the combination has created a pretty solid operating system.

Here are some of the major improvements:

It actually requires less hardware than Windows Vista. For those of us that have been around since Windows 1.0, we were shocked to learn that Microsoft didn't ratchet up the hardware requirements like they have with every previous version. Systems light on power that struggled to run Windows Vista will likely run better with Windows 7 (you will even see lots of Netbooks running Windows 7 shortly, which would be unimaginable for Vista).

A kinder, gentler and more flexible UAC (User Account Control). In Windows Vista, the UAC feature was so over-bearing (remember the humorous 'accept or deny' Apple commercials?) that many users simply turned it off, which disabled one of the best features that made Vista much more secure than Windows XP. In Windows 7, you can decide where and how this very useful and powerful tool is implemented (a great way to control what the kids can and can not add to the system).

With the sneaky malicious software that is plaguing the Internet at the moment, this updated version of the UAC is just what most consumers and small businesses need to fight the malware battle.

Faster boot times. The goal from the engineering side at Microsoft was to target a 15 second startup time, which may or may not be possible for everyone (your start time will have more to do with what you install) but by all measures, the tech community agrees that 7 boots faster than Vista.

Easier home networking setup. Anyone that went through the nightmare of trying to integrate a Vista system into an existing Windows XP network will appreciate this improvement.

Better support for multi-monitor configuration. If you haven't experienced the joy of having dual monitors installed on your home or office computer, you are really missing a huge improvement in productivity (add it to your holiday wish list, you will thank me for it!) Windows Vista was pretty picky about what it would support, whereas Windows 7 has wider support for different video cards coexisting in the same computer for a dual display configuration.

There are a whole host of other improvements such as auto-sizing side-by-side windows, consolidated and clearer security messages, Taskbar previews that are actually viewable and control over those irritating balloon notifications in the bottom right corner that make Windows 7 worth considering.

At the end of the day, if what you are using is working fine, don't be in a huge hurry to fix what ain't broken, however, if you are struggling with security, stability or performance, Windows 7 may be just what the doctor orders!]]> Wed, 14 Oct 2009 18:47:16 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21739 http://datadoctors.com/help/kenscolumns/column.cfm?id=21738 The reality is that, by following a few simple rules, Internet based transactions can actually be one of the most secure ways to use your credit card (because no human other than you is involved in the transaction).

Credit card fraud schemes have been around a lot longer than the Internet and the time tested methods of gaining access to your credit cards (stolen wallets and purses, dumpster diving, etc.) are still the most likely way that you will become a victim of credit card fraud.

When it comes to shopping online, retailers that offer e-commerce always use secure pages in order to complete a transaction (or you should run away from them!)

If you make sure that the page that you are about to enter credit card info onto has the https:// instead of just http:// (should also display an image of a yellow lock either in the bottom right corner or next to the address bar) then you are working with a "secured" page.

The real threat from online transactions are a lot less about the sites that you do business with and lot more about how you use and maintain your computer.

If you don't keep your operating system updates current, keep your anti-malware programs up-to-date or fall for any of the thousands of e-mail phishing or fake download scams, then you could easily allow a silent "keylogger" to be installed to record every keystroke that you make.

If you notice that your computer is taking a long time to startup and that it seems to be very slow, especially when you try to do things on the Internet, you may want to avoid any kind of electronic transactions or online banking until you get your system inspected.

These hidden programs are getting more and more sophisticated and depending upon which scam you fell for, they can side-step your protection programs because they got you or your children to download something that had a hidden Trojan program in it.

Credit card companies have done a really good job of making it easy to report fraud and shield their customers from any financial losses (most every company has a 0 liability policy when fraud has been determined).

As a side note, debit cards typically carry similar coverage for fraud, but if someone uses your debit card fraudulently, the amount in question is tied up until things get cleared up, meaning that your checking account balance is impacted immediately. Be careful where and how you use your debit card (not just online).

Another common non-Internet scam that is on the rise is credit card 'skimming'. Credit card thieves are bribing restaurant and retail employees into double swiping cards on a small portable recording device and paying them for each card they skim (much easier to find willing participants in a down economy).

Do your best to watch anyone that you give your credit card to and try not to allow your card to leave your site if you can help it (or pay cash if you aren't comfortable with the situation).]]> Fri, 9 Oct 2009 15:41:18 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21738 http://datadoctors.com/help/kenscolumns/column.cfm?id=21737 No matter what you install for protection software, your behavior will have the greatest impact on whether you get exposed or infected by many of today's scams and fake alerts.

In fact, the more active you are on the Internet, the more important it is to have higher levels of malware protection (are you parents with 'screenagers' paying attention?)

Fake security alerts are one of the most common ways to fool users into allowing malware to be installed on their computers and it's natural to assume that only novice computer users fall for these types of attacks, but the data suggests something quite different.

A recent survey of a wide range of computer users by Webroot found some surprising key findings:

• Advanced users clicked on suspicious messages at a greater rate than less experienced users

• 20 percent of respondents strongly trust the first page of search results - a common target for fraudulent links

• Nearly one fifth reported varying levels of financial or data loss following infection

• Over half experienced infections consistent with those of fake alert-related malware

The sophistication of your protection software is critically important no matter how seasoned you are, because the authors of malware are constantly figuring out ways to get around protection software, especially those that look for specific lines of code (signature based detection).

Microsoft's latest attempt to provide protection is called Microsoft Security Essentials (ver 1.0) and it replaces their last attempt called Windows Live OneCare.

While Microsoft's efforts to provide free protection is noble and worthy of our recognition, it isn't quite getting the stellar reviews in its first iteration. Let's face it, their track record for this type of software isn't the greatest.

PCMag.com gave it a score of 3 out of 5 and called it an average malware removal tool and a one-dimensional malware blocker.

While the interface is clean and simple to understand, the specific tests that both PCMag.com and independent testing lab AV-Test.org conducted when it came to detection and removal was less than stellar.

It seems to be on par with other free offerings from companies like AVG and Avast but has the same hole in the protection provided by all the free options: detecting malware based on behavior instead of a signature (I wrote in detail about this in my column on Free vs Pay Anti-virus - http://bit.ly/10PlWV) .

At the end of the day, MSE 1.0 is certainly much better than no protection at all and if you are going to opt for free anti-virus, it seems to be as good of a choice as any of the others.

Keep in mind, this is a new technical approach by Microsoft and it is only version 1.0, so much can change or improvements could make it substantially better.

It is a quick download and installation process and I have not seen the slow down effect that many 'Internet protection suites' (we refer to them as 'bloatware') can produce.

I have been working with anti-virus programs for almost 20 years and have seen the rise and fall of many programs in this sector as they release new versions. No matter how good or bad a product is today, it can become better or worse with the next release.

For instance, many years ago, I would have recommended against installing Webroot's protection software and today I highly recommend it as a solid pay solution because they listened to feedback and made the necessary improvements.

The lesson here is that the protection software world is a moving target that is in a constant state of flux. If you want someone to keep you up-to-speed on the changing landscape, keep reading this column!]]> Fri, 2 Oct 2009 14:38:02 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21737 http://datadoctors.com/help/kenscolumns/column.cfm?id=21736 The process of backing up critical files is one of the most overlooked essentials of owning a computer even though everyone realizes how important it is. It's astonishing how many people fall victim to human nature every year (I'll get around to it... )

Data recovery on a severely crashed hard drive can cost several thousand dollars to recover, so addressing this before your next crash is a lot less expensive.

The fact that you're asking if it's working suggests that you may not completely understand what you bought.

Here are the top backup mistakes made by most users:

Mistake #1 - Buying an external hard drive but not buying any backup software

Too many companies are selling external hard drives as 'backup systems' but they don't bother to include the all important backup software that is essential to success.

The reason they don't include the software is to appear to be a cheaper alternative and assume that the user understands that some form of backup program needs to be setup.

Add to the equation that most folks don't read instructions and you have a recipe for disaster.

THE most important part of the backup process is the backup software, but the industry knows that people buy based on price and they don't read packaging or instructions, so they play on those behaviors.

Mistake #2 - Installing backup software but not setting up the automatic scheduler

If you think that you can rely on a human remembering to run the backup software, you should think again. In our service business, the most common thing we hear from folks in need of data recovery is "I meant to run a backup, but never got around to it".

How often should you set your scheduler to backup? The answer is based on what you are willing to lose. If you backup once a week, you are saying that you are OK with losing up to a weeks worth of work.

Mistake #3 - Not verifying your backups

Assuming that everything is working fine is a very dangerous way to live. The only way you will ever know if your backup system is actually doing its job is to verify the data that is being backed up.

It can be as simple as manually looking for a recent picture or document that you created to see if it's on the backup drive or better yet, turning on the 'verify' option in your backup program.

If you turn on the verify option, after each backup the program will go back and compare the files against the originals to make sure they are the same (this is also a good way to be alerted to a failing backup hard drive).

Activating this option essentially doubles the amount of time that it takes to backup, which is why many folks turn it off, but that's a huge mistake. Set your scheduler to backup and verify in the middle of the night so you don't care how long it takes.

Mistake #4 - Only having one copy of your data

Redundancy is a critical part of a good backup strategy or you will have very little time to discover file corruption issues. If you backup over yesterday's backup with today's data, you won't have any recourse if you corrupted a file during the day (the bad file will overwrite your last good version).

Understanding the difference between a full backup and incremental backup sessions and how to schedule them is critical (read your manual or get some help!)

BIGGEST BUSINESS BACKUP MISTAKE - No off-site data sets

Businesses should especially incorporate some form of off-site data sets in case of fire, flood, theft or any number of business interruption possibilities.

With today's plethora of online backup services, both consumers and businesses would do well to include an online backup of some sort to compliment any localized external backup system.

A well designed backup strategy is one of those fairly complex issues, so don't take it lightly. If you're not comfortable making decisions on what to use or on how to setup a good backup system, ask someone for help. This one is far too important to leave to chance!]]> Thu, 24 Sep 2009 07:45:40 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21736 http://datadoctors.com/help/kenscolumns/column.cfm?id=21735 P2P networks exist for music, video, sewing patterns, recipes and now for lending and borrowing money.

The concept of lending money via the Internet evolved from the successful use of micro-lending in third world countries (www.kiva.org). Loans as small as $25 were capable of assisting entrepreneurs in third world countries get a start in a small service business.

The P2P lending concept (also referred to as person-to-person lending or social lending) took it to the next level, which was to get many folks that were willing to invest $25 -$100 to pool their investment capital to fund larger projects.

You can seek funding for everything from student loans to paying off credit cards to home improvements to small business loans. Virtually any borrowing need that in the past required a traditional lender is possible via P2P lending sites and usually in a much shorter period of time.

Today, there are two distinct ways to use these Internet lending sites: to create a structured loan program to pitch to your friends and family or to pitch total strangers for funding.

Think of these sites as providing the same service that Ebay provides: an online way to get buyers and sellers together. P2P lending opens up the opportunities for both borrowers and lenders of all types anywhere on the Internet to connect.

As with any lending situation, there are pros and cons for both borrowers and lenders.

Borrowers will likely pay a higher interest rate or be required to secure the loan in ways that a traditional lender or credit card company wouldn't, but because you get a more direct opportunity to connect and discuss with lenders, your personal situation might be more of a factor.

For lenders, you can generate a higher rate of return than CDs or money market accounts, but clearly there is much more risk. On the other hand, lenders have the ability to perform due diligence via the Internet along with spreading the risk with many other lenders.

Here are few of the more popular sites that have been in this arena for a while:

http://VirginMoney.com - Part of the Virgin empire created by Sir Richard Branson, this site can assist you in putting together a 'social lending' package to get loans from people you know for real estate, business, personal or student loans.

http://LendingClub.com - One of the largest gathering places for P2P lenders and borrowers with one of the better reputations with the online community. Unsecured personal loans ranging from $1,000 to $25,000.

http://Prosper.com - Much like LendingClub.com but less stringent requirements for both lenders and borrowers (likely higher risk for lenders).

http://GreenNote.com - Student loan specific P2P lending and investment site.

The cons of P2P lending are definitely more substantial for lenders than it is for borrowers, so if you think you want to give it a try as a lender, be very careful about the hype on the returns and default rates.

Most of the negative comments online from those that have invested via P2P sites was in the 'higher than publicized' default rates and the relative return on their money after fees and defaults being less than advertised.

The biggest thing to watch as a borrower is all the potential fine print that could allow for the terms of the loan to be changed if you don't make payments.

For those that want to formalize lending arrangements with friends and family (including automatic payments direct from the borrower's bank account) these sites could prove to be very helpful, but as always: Do Your Homework First!]]> Fri, 18 Sep 2009 17:52:36 +0700 http://datadoctors.com/help/kenscolumns/column.cfm?id=21735