Chapter 5

MUSEUM OF SAVING

Posted on September 30, 2023 by Melissa Hart

With an increasing influence of finance, credit, and business on our lives, the Museum of Saving is an innovative, entertaining location. Families, adults, teens, and children are provided with a clear-and-simple approach to saving and investing for improved financial literacy. The museum’s mission is “to contribute to spreading financial education to help people make rational and informed decisions and act in ways to achieve the priorities of their lives.”

Through a combination of education and entertainment, the learning through play approach of the museum uses technology and interactivity to offer:

  • An introduction to economic history that includes the role of money, trade, loans, early banking activities, and major financial crises.
  • An overview of the most common financial instruments. 
  • Themed tours with audio-visual and interactive labs.
  • A multidisciplinary (economics, literature, cinema) view of famous people.
  • Gamification videos and apps to test and reward money management knowledge and skills.

While the Museum of Saving is based in Italy, you can access the exhibits online.

For additional information on the Museum of Saving, click here.

Virtual Tour:  

Teaching Suggestions

  • Have students talk to others to obtain advice on how to best learn about saving and investing.
  • Have students take a virtual tour of the Museum of Saving. What features do students consider to be most interesting and informative?

Discussion Questions 

  1. What actions do you recommend for a person to learn more about successful saving and investing?
  2. Describe factors a person might consider when evaluating different savings and investing alternatives.
Categories: Chapter 1, Chapter 3, Chapter 5, Chapter_11, Chapter_12, Chapter_13, Investments, Savings | Tags: , | Leave a comment

10 Ways to Protect Your Personal Information

Posted on August 19, 2023 by Melissa Hart

Identity theft affects millions of people each year and can cause serious harm. Protect yourself by securing your personal information, understanding the threat of identity theft, and exercising caution.

Here are 10 things you can start doing now to protect yourself and your loved ones from identity theft: 

  1. Protect your Social Security number by keeping your Social Security card in a safe place at home.
  2. Be careful when you speak with unknown callers.
  3. Create strong, unique passwords so others can’t easily access your accounts.
  4. Never give your personal or financial information in response to an unsolicited call or message, and never post it on social media.
  5. Shred paper documents that contain personal information, like your name, birth date, and Social Security number.
  6. Protect your mobile device from unauthorized access by securing it with a PIN, adding a fingerprinting feature, or using facial recognition.
  7. Regularly check your financial accounts for suspicious transactions.
  8. Avoid internet threats by installing and maintaining strong anti-virus software on all your devices—including your mobile device and personal computer. Use a virtual private network (VPN) to stay safe on public Wi-Fi.
  9. Protect yourself on social media by customizing your security settings and deleting accounts you no longer use.
  10. Never click on any link sent via unsolicited email or text message—type in the web address yourself. Only provide information on secure websites.

The Social Security Administration encourages you to create your own personal my Social Security account to track your earnings record. For more information, read Social Security Administration (SSA} publication, Protecting Personal Information. Contact SSA if you see suspicious work activity on your record–you could be a victim of identity theft.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends, or relatives have been a victim of an identity theft? If so, what was their experience?
  • How often do you check your credit reports and why should you check your credit reports at least once a year?

Discussion Questions

  1. What actions have you taken to protect your personal information from being stolen by scanners?
  2. Why is it not advisable to carry your Social Security card in your wallet or your purse?
Categories: Chapter 4, Chapter 5, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Stop the Robocalls

Posted on June 24, 2023 by Melissa Hart

Tired of getting endless robocalls? Robocalls aren’t just a pain to get, they’re often pushing scams for bogus services such as fake extended auto warranties and debt relief. But robocallers can’t do it alone. That’s why the Federal Trade Commission is taking action against Stratics Networks, a company that supplied the technology for telemarketers to make tens of millions of robocalls. But that’s not all — the FTC is also suing the debt relief companies that hired Stratics to make robocalls for their illegal debt relief services.

According to the FTC,  Stratics delivered illegal robocalls for telemarketers promoting offers for credit card and student debt relief, home buying, health insurance, and cable TV discounts. Many robocalls were “ringless voicemails” — where your phone doesn’t ring but you get a voicemail with a robocall message.

Here’s what to know: a robocall trying to sell you something is illegal unless the company has your written permission to call you. Scammers use robocalls to get your money or your personal information so they can steal your identity. They might try to convince you the call is from the government, tech support, or your auto warranty company. Don’t buy it. Even if the name or number on the caller ID looks real, it could’ve been faked.

If you get an illegal robocall:

For more information, click here.

Teaching Suggestions

  • Make a list of common scams that target personal information and discuss how to detect and stop illegal robocalls.
  • Ask students what they do when they receive unwanted calls, emails, and text messages that are annoying, might be illegal, and are probably scams?

Discussion Questions

  1. Why should one think twice before buying an extended auto warranty from a robocaller? Or, a debt relief service?
  2. What actions can you take to minimize the number of robocalls you receive from scammers? How can you fight back and lower your risk of being a victim?
Categories: Chapter 4, Chapter 5, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

“Buy Now, Pay Later” Users

Posted on May 27, 2023 by Melissa Hart

The Consumer Financial Protection Bureau (www.consumerfinance.gov) recently conducted a study of Buy Now, Pay Later (BNPL) users.  While many of the respondents did not encounter significant financial stress, BNPL users were much more likely to:

  • be highly indebted; have lower credit scores.
  • have high credit card utilization rates and revolve the balance on their credit cards.
  • have delinquencies with traditional credit products.
  • use high-interest financial services such as payday, pawn, and overdraft compared to non-BNPL borrowers.

BNPL borrowers generally have access to traditional forms of credit, using credit and retail cards, personal loans, student debt, and auto loans. The report estimates that a majority of BNPL borrowers would encounter annual credit card interest rates between 19 and 23 percent.

BNPL users tend to be younger. About 22 percent of consumers under age 35 borrowed using BNPL, while approximately 10 percent of those over the age of 65 used the service. Renters (22 percent) were more likely to be a BNPL user compared to homeowners (15 percent).

BNPL borrowing is viewed as less costly than other credit sources, such as credit cards or payday loans. However, consumers need to be aware of the potential concerns. While advertised as “no interest,” late or missed payments can trigger high fees, which can result in paying more than the original cost. BNPL will not improve your credit score, but it could damage it due to missed or late payments. BNPL can be a doorway to financial difficulties, especially if you use it for more than one purchase at a time.  

For additional information on buy now, pay later, click here.

Teaching Suggestions

  • Have students talk to someone who has used BNPL to learn about the person’s experience with this credit source.
  • Have students create an audio file or podcast with a summary of the benefits and drawbacks of BNPL borrowing.

Discussion Questions 

  1. What features of BNPL services are most attractive to consumers?
  2. What advice would you give a person who is considering using BNPL?
Categories: Chapter 4, Chapter 5, Financial Services | Tags: , | Leave a comment

Consumers Lost Nearly $8.8 Billion to Scams in 2022

Posted on May 13, 2023 by Melissa Hart

Newly released Federal Trade Commission data show that consumers reported losing nearly $8.8 billion to fraud in 2022, an increase of more than 30 percent over the previous year.

Consumers reported losing more money to investment scams—more than $3.8 billion—than any other category in 2022. That amount more than doubled the amount reported lost in 2021. The second highest reported loss amount came from imposter scams, with losses of $2.6 billion reported, up from $2.4 billion in 2021.

The FTC received fraud reports from 2.4 million consumers last year, with the most commonly reported being imposter scams, followed by online shopping scams. Prizes, sweepstakes, and lotteries; investment related reports; and business and job opportunities rounded out the top five fraud categories.

The FTC’s Consumer Sentinel Network is a database that receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies, the Better Business Bureau, industry members, and non-profit organizations. Sentinel received more than 5.1 million reports in 2022.

The FTC uses the reports it receives through the Sentinel network as the starting point for many of its law enforcement investigations, and the agency also shares these reports with approximately 2,800 federal, state, local, and international law enforcement professionals.

For more information, click here.

Teaching Suggestions

  • Ask students what actions they have taken to keep their security software, internet browser, and operating system up to date.
  • Suggest that students use multi-factors authentication for extra security when they log into their accounts.

Discussion Questions

  1. What is the purpose of Consumer Sentinel Network  and why does it provide free data to any federal, state or local law enforcement agencies?
  2. Do you know how to lock down your smart phones, network, and information? 
Categories: Chapter 4, Chapter 5, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

Personal Finance Simulations for Budgeting and Investing

Posted on December 17, 2022 by Melissa Hart

Question:  What is a Personal Finance simulation? 

Answer:  A Personal Finance simulation allows students to fine-tune their decisions when they encounter real-life scenarios while taking a Personal Finance course. 

The authors of Personal Finance, 14e and Focus on Personal Finance, 7e have partnered with StockTrak.com to provide students with an interactive learning experience before they leave the classroom.   

The simulation that accompanies the Kapoor Personal Finance texts includes two components–a personal budgeting simulation and an investing simulation.

The Budgeting Simulation

  • Students assume the role of a full-time employee or part-time employee living on their own.
  • Over a virtual 12-month period, students review their estimated income and expenses, create monthly budgets and savings goals, and try to build an emergency fund. Each month takes about 20 minutes to complete.
  • Each month students manage their checking, savings, and credit card accounts as they deal with life’s expected and unexpected events that affect their budget.  
  • Within the simulation, additional personal finance tutorials are available to make sure students are learning about budgeting, banking, credit, employment, taxes, insurance, and more.
  • A class ranking based on net worth, credit score, and quality of life keep the students fully engaged and professors informed of each student’s progress.

The Investing Simulation

  • Students receive a virtual $25,000 in a brokerage account.
  • They can research U.S. stocks, ETFs, bonds and mutual funds and create their own investment portfolio.
  • All investment trades are based on real-time market prices.
  • Within the simulation, interactive tutorials help students get started and provide additional information during the simulation.
  • Students can monitor their performance versus their classmates.  At the same time, professors can track each student’s progress.

And BEST of ALL, with the new partnership between Stock-Trak and McGraw Hill, classes using the Kapoor Personal Finance textbook get a 50% savings when students register for the simulation – only $9.99 per student instead of retail price of $19.99.

Teaching Suggestions

  • Visit StockTrak.com/kapoor to learn more about the Personal Finance Budgeting and Investing Simulation.  You can learn even more by watching a short video or accessing the Kapoor demo materials located toward the bottom of the above site. 
  • It’s easy to get started.  All you need to do is access the above site, register your classes for Spring 2023, and indicate the dates you want your student to have access to the Personal Finance Simulation.  The site will generate a unique link for you to give to your students.
Categories: Budget, Chapter 1, Chapter 2, Chapter 3, Chapter 4, Chapter 5, Chapter 6, Chapter 7, Chapter 8, Chapter 9, Chapters, Chapter_10, Chapter_11, Chapter_12, Chapter_13, Chapter_14, Financial Planning Topics, Teaching Tools | Tags: , | Leave a comment

Beware of Credit-Repair Scams

Posted on September 24, 2022 by Melissa Hart

According to the Federal Trade Commission (FTC), Financial Education Services (FES) has bilked people out of more than $213 million with a scheme that combines charging people for worthless credit repair services and recruiting them to sell the same bogus services to others.  FES also does business as United Wealth Services.

FES claims it can boost people’s credit scores by hundreds of points quickly by permanently removing negative information from their credit reports and adding positive information. But the FTC says FES’s services accomplish little or nothing. For example, FES sends clients form letters to send to credit bureaus to dispute negative items, but the letters don’t include supporting documents so they rarely result in removal of the items.

The complaint says FES charges people $99 up front for its services, plus up to $89 each month. It’s illegal for a credit repair company to charge people before fully performing the services it promises. Also, the complaint alleges, FES doesn’t give people important information they’re entitled to by law, including written information about the total cost of its services and its refund and cancellation policies.

According to the complaint, FES also pressures people to become FES “agents,” telling them they can make tens of thousands of dollars a month selling FES services to other consumers and recruiting them to become FES agents themselves. But, the FTC says, FES’s purported business opportunity requires its agents to pay hundreds of dollars to join and advance in the business. And, the FTC alleges, in classic pyramid scheme style, FES incentivizes recruiting new agents over selling credit repair services. The complaint charges that few people, if any, make the income promised, and many lose money as FES agents.

If you want to repair your credit, Fixing Your Credit FAQs has information about building your credit and spotting scams. And, if you’re thinking about investing in a business that requires you to recruit other investors, read this information about spotting a pyramid scheme.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of the legal steps to take to improve their credit scores.
  • What are the legitimate resources for low-cost or no cost help to repair your credit?

Discussion Questions

  1. Is it possible for you to boost your credit score by hundreds of points quickly by permanently removing negative information from your credit reports and adding positive information?  Explain your answer.
  2. Discuss the statement: “Sometimes doing it yourself is the best way to repair your credit.”
  3. What is one of the most important step you can take to improve your credit score?
Categories: Chapter 5, Credit Scores, Frauds and Scams | Tags: , | Leave a comment

Is a credit freeze or fraud alert right for you?

Posted on June 18, 2022 by Melissa Hart

Credit freezes and fraud alerts can help reduce your risk of identity theft. Both are free and make it harder for identity thieves to open new accounts in your name. One may be right for you.

Credit freezes

A credit freeze is the best way you can protect against an identity thief opening new accounts in your name. When in place, it prevents potential creditors from accessing your credit report. Because creditors usually won’t give you credit if they can’t check your credit report, placing a freeze helps you block identity thieves who might be trying to open accounts in your name.

A freeze also can be helpful if you’ve experienced identity theft or had your information exposed in a data breach. And don’t let the “freeze” part worry you. A credit freeze won’t affect your credit score or your ability to use your existing credit cards, apply for a job, rent an apartment, or buy insurance. If you need to apply for new credit, you can lift the freeze temporarily to let the creditor check your credit. Placing and lifting the freeze is free, but you must contact the national credit bureaus to lift it and put it back in place.

Place a credit freeze by contacting each of the three national credit bureaus, Equifax, Experian, and TransUnion. A freeze lasts until you remove it.

Fraud alerts

A fraud alert doesn’t limit access to your credit report, but tells businesses to check with you before opening a new account in your name. Usually, that means calling you first to make sure the person trying to open a new account is really you.

Place a fraud alert by contacting any one of the three national credit bureaus. That one must notify the other two. A fraud alert lasts one year and you can renew it for free. If you’ve experienced identity theft, you can get an extended fraud alert that lasts for seven years.

Learn more about credit freezes, fraud alerts, and active duty alerts for service members. And, if identity theft happens to you, visit IdentityTheft.gov to report it and get a personal recovery plan.

For More Information, click here.

Teaching Suggestions

  • Ask students if they, their friends or relatives have placed a credit freeze or a fraud alert.  If so, what has been their experience?
  • Ask students to make a list of downsides to a credit freeze and to fraud alerts.

Discussion Questions

  1. What is the difference between a credit freeze and a fraud alert?
  2. Under what circumstance a credit freeze can be helpful?
Categories: Chapter 5, Credit Scores | Tags: | Leave a comment

Gift Card Scams

Posted on March 12, 2022 by Melissa Hart

Someone might ask you to pay for something by putting money on a gift card, like a Google Play or iTunes card, and then giving them the numbers on the back of the card. If anyone asks you to do this, they’re trying to scam you. No legitimate business or government agency will ever insist you pay them with a gift card. Anyone who demands to be paid with a gift card is a scammer.

What Gift Card Scams Look Like

Gift cards are for gifts, not for payments. But these cards are popular with scammers because gift cards are easy for people to find and buy, and cards have fewer protections for buyers compared to some other payment options. Gift cards are more like cash: once you use the card, the money on it is gone. Scammers like this.

If someone calls you and demands that you pay them with gift cards, you can bet that a scammer is behind that call. Once they have the gift card number and the PIN, they have your money. Scammers may tell you many stories to get you to pay them with gift cards, but this is what usually happens:

  1. The caller says it’s urgent. The scammer says you have to pay right away or something terrible will happen.
  2. The caller usually tells you which gift card to buy. They might say to put money on an eBay, Google Play, Target, or iTunes gift card. They might send you to a specific store — often Walmart, Target, CVS, or Walgreens. Sometimes they tell you to buy cards at several stores, so cashiers won’t get suspicious. And, the caller might stay on the phone with you while you go to the store and load money onto the card. These are all signs of a scam.
  3. The caller asks you for the gift card number and PIN. The card number and PIN on the back of the card let the scammer get the money you loaded onto the card. And the scammer gets it right away.

 For more information, click here.

Teaching Suggestions:

  • How do scammers convince you to pay with gift cards?  Make a list of common gift card scams and schemes, and share it with others.
  • Ask if anyone has paid someone with a gift card.  If so, what was their experience?

Discussion Questions:

1.  What are signs of a gift card scam and how can one spot a gift card scammer?

2.  What steps should you take if you paid a scammer with gift cards?

Categories: Chapter 5, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

THE NEW “BUY NOW, PAY LATER”

Posted on February 26, 2022 by Melissa Hart

For a long time, “buy now, pay later” (BNPL) has referred to the use of credit. However, recently a new BNPL approach has surfaced, and is growing. Today, financial technology (FinTech) companies are using a different method to finance consumer purchases.

BNPL providers include Affirm, Afterpay, Klarna, Zip, and PayPal. The BNPL plan allows consumers to obtain a purchase immediately and then make a series of equal payments, often four payments each due two weeks apart. The first payment is due at the time of purchase.

Most BNPL plans charge interest and late fees. These plans often offer financing to customers with bad credit or no credit. BNPL is used mainly for online shopping although the plan is also available in some stores. Purchases of technology, furniture, clothing, beauty care products, groceries, health care services, and to eat at restaurants are the most common uses of BNPL.

The main benefits of BNPL mentioned by consumers, include to:

  • spread cost of expensive items over time.
  • buy items that they might not otherwise be able to afford.
  • avoid credit card debt.
  • try out the BNPL method.
  • not have to wait until payday to buy an item.

When selecting a BNPL plan, search for those with low or no interest and low or no late fees. Remember when using BNPL, you are still taking on debt. This easy access to credit often results in overspending. Some people will make purchases through multiple plans resulting in greater financial difficulties.

Be sure you can pay on time to avoid late fees and interest charges. Unlike traditional loans, BNPL providers may not report to credit bureaus, so you are not building a credit record.

For additional information on BNPL, click on these articles:

Article #1

Article #2

Teaching Suggestions

  • Have students ask if any friends or relatives have used a BNPL plan. Obtain information about their experiences.
  • Have students create a visual poster, slide presentation, or video with the benefits and drawbacks of BNPL plans.

Discussion Questions 

  1. What aspects of BNPL might create financial difficulties?
  2. Describe actions a person might take to evaluate a BNPL plan.
Categories: Chapter 4, Chapter 5, Financial Services | Tags: , | Leave a comment

Blog at WordPress.com.