When is Debt Collection Illegal?

Posted on August 27, 2014 by Melissa Hart

If you do not pay your bills, you’ll probably get calls from debt collectors.  Their job is to force you to pay or make arrangement s to pay.  But any debt collector who harasses or threatens you is breaking the law.

In August 2014, the Federal Trade Commission alleged that Credit Smart used illegal tactics to pressure people into paying debts.  According to the Federal Trade Commission’s complaint, the company threatened to garnish peoples’ wages and sue them for nonpayment.  The Federal Trade  Commission’s complaint alleges that sometimes Credit Smart told people they owed debts and interest without having  a reasonable basis to say so, misrepresented themselves as working for attorneys or a financial relief counselors, and failed to tell people they were debt collectors.

For additional information, go to

http://www.consumer.ftc.gov/blog/when-debt-collection-illegal-0

Teaching Suggestions

  • Ask students what is the best way to solve debt problems before the delinquent account is turned over to debt collectors.
  • What can people do to avoid debt problems in the first place?
  • Why should people with debt problems seek the assistance of Consumer Credit Counseling Services?

Discussion Questions

  1. How can companies, such as Credit Smart, harass people when they know it is illegal to engage in such practices?
  2. What are the major provisions of the Fair Debt Collections Practices Act that specifically prohibit certain actions by debt collectors?
Categories: Chapter 5, Debt | Tags: | Leave a comment

Russian Hackers Might Have Your Information

Posted on August 23, 2014 by Melissa Hart

You first heard the reports in August 2014: reports that Russian hackers have stolen more than a billion unique username and password combinations, and more than 500 million email addresses, grabbed from thousands of websites.

How do you know if your information was part of this hack?  You really don’t, but don’t take any chances.  Change the passwords you use for sensitive sites like your bank and email account–really any site that has important financial or health information.  Make sure each password is different so someone who knows one of your passwords won’t suddenly have access to all your important accounts.

Can you make sure this doesn’t happen to you again?  Unfortunately, you can’t.  But take all precautionary steps and lessen the odds scammers will get a hold of your information.

For additional information, go to

http://www.consumer.ftc.gov/blog/russian-hackers-might-have-your-info-now-what

Teaching Suggestions

You may want to use the information in this blog post and the original article to discuss

  • Ask students if anyone they know has had sensitive information hacked.
  • Have students present proposals on how to protect themselves from hackers.

Discussion Questions

  1. Is creating new passwords enough to keep your information safe?
  2. Is there anything else you can do to protect your sensitive information?
Categories: Chapter 5, Identity Theft | Tags: | Leave a comment

Brokerage Services Buying Guide

Posted on August 20, 2014 by Melissa Hart

“Whether you’re a seasoned investor, a newbie, or someone retesting the waters after a scary loss, financial services companies want your business.”

In this article, Consumer Reports evaluates a number of factors that investors should consider when choosing a brokerage firm to help them achieve their financial and investment goals.  Brokerage firms were rated for customer satisfaction.  (FYI, USAA was number 1 and Scottrade and Vanguard tied for second place.)  In addition to customer satisfaction ratings, other factors discussed in this article include

  • The amount of professional advice and if there were costs or requirements for free advice.
  • A discussion of retirement plans offered by various brokerage firms.
  • Steps you should take when choosing a brokerage firm.
  • Questions you should ask when choosing a brokerage firm.
  • Sales tactics that raise a “red” flag when choosing a brokerage firm.

For more information go to http://www.consumerreports.org/cro/brokerage-services/buying-guide.htm

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Point out to students that not all brokerage firms are the same and that the information in this article can help them choose the firm that can “best” help them obtain their investment goals.
  • Because this is a lengthy article, you may want to assign this as a homework assignment with students answering the questions below.

Discussion Questions

  1. What types of advice were offered by different brokerage firms?
  2. Did the information in the article help you understand the advantages and disadvantages of retirement plans?
  3. What specific steps should you take before choosing an advisor or a brokerage firms.
  4. What were some of the “red” flags you should watch for when choosing a brokerage firm?
Categories: Chapter_11, Chapter_12, Investments, Mutual Funds, Purchasing Strategies, Stocks | Tags: , , | Leave a comment

Can You Pass a Personal Finance Test?

Posted on August 16, 2014 by Melissa Hart

This quiz can be used as a lecture launcher to start your Personal Finance course.

Originally given to 5,000 high school seniors that participated in the JumpStart Coalition for Personal Financial Literacy, the 12 questions in the survey test students on their ability to manage financial resources such as

  • Credit cards
  • Insurance
  • Retirement planning and investments
  • Savings and spending options
  • Educational loans
  • Taxes

For more information go to  http://www.bankrate.com/brm/news/pf/20060421c1.asp

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • As a lecture launcher for the first day of your Personal Finance course.
  • To preview important personal finance topics that will be covered in the course.
  • Stress why everyday decisions can make a “big” difference in the quality of a person’s life over a long period of time.

Discussion Questions

  1. How many of the 12 questions did you get right? (Note:  Correct answers are provided for all 12 questions.)
  2. Do you understand why your incorrect answers are wrong and why there is a better answer?
  3. How can the questions in this quiz help you improve your ability to manage your personal finances and improve the quality of your life now and in the future?
Categories: Chapter 1, Teaching Tools | Tags: , | 1 Comment

Survey Says: Investors Are Getting Scared

Posted on August 13, 2014 by Melissa Hart

“As world unrest surges and the stock market wobbles, investors have gotten nervous.”

At least three separate sentiment polls indicate stock investors are worried about the trouble in Ukraine, the Middle East violence, continuing projections for a long-overdue correction or worse in the financial markets, and frustration with Washington politics.

For example, respondents to the weekly American Association of Individual Investors survey indicated their strongest levels of pessimism in almost a year.  A survey by Investors Intelligence (which polls investor newsletter editors) indicates a drop in investor bullishness compared to the previous survey.  And, a Bank of America/Merrill Lynch survey of investment strategists indicated heavy bearishness on Wall Street.

For more information go to http://t.money.msn.com/top-stocks/survey-says-investors-are-getting-scared-1

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Reinforce the relationship between world affairs, the economy, and the financial markets.

Discussion Questions

  1. At the time of this post, the world situation is troublesome to say the least. What is the relationship between world events, the economy, and the financial markets?
  2. These three recent sentiment surveys indicate that there are more bears than bulls? How would you define a bear?  A bull?
  3. Even though the sentiment surveys indicate investors are pessimistic about the market, some analysts view the market’s bearishness as a buying opportunity. Why could pessimism in the financial markets signal a time for investors to purchase stocks or mutual funds that invest in stocks?
Categories: Chapter_11, Chapter_12, Chapter_13, Investments | Tags: , , | Leave a comment

Is Your Credit Card Denied By Mistake?

Posted on August 9, 2014 by Melissa Hart

When your credit card issuer suspects fraudulent activity on your credit card, it triggers a red flag to deny the charge.  Generally, it is a great protection.  But if you are making the purchase and not a thief, it can be frustrating.  Some purchase patterns that could cause your purchase to be denied include:

  • A purchase for a small dollar amount, followed by a large purchase. Credit card thieves sometimes make a small dollar “test purchase” followed by big ticket items, so this raises a red flag.
  • Multiple purchases back-to-back in a short span of time.
  • Making purchases in a new city, in a different part of town, or in stores where you do not normally shop.

Though inconvenient, these protections are to keep you from being a victim of fraud.  Take these steps to prevent or deal with a credit card purchase being denied by mistake:

  • Inform your credit card company if you will be using your card out of town (especially internationally).
  • Update your billing address if you move, so that the company recognizes the new pattern of purchases as a new normal.
  • Make sure the company has your cell phone number so that it can contact you faster to verify or authorize a purchase.
  • Contact your credit company immediately if your purchase is denied.

For more information go to http://www.usa.gov/topics/consumer/consumer-action-handbook.pdf

Teaching Suggestions

  • Ask students if their credit card was ever denied in error.
  • If the transaction was denied, how did they resolve the problem.

Discussion Questions

  1. What are a few reasons that your credit card purchase might be denied?
  2. What can you do to avoid such an embarrassment at the check-out counter?
Categories: Chapter 5, Credit Cards, Credit Mistakes | Tags: , | Leave a comment

Health Scams: Don’t Take Risks With Your Health and Your Money

Posted on August 6, 2014 by Melissa Hart

Lots of people are fooled with buying health products that sound great, but are really fakes.  These products may cause serious health problems, such as pain, suffering, or even death.

Watch out for the following fraudulent claims:

  • It’s Natural. Just because a product is “natural” does not mean it is safe.
  • It’s So Easy. Don’t believe the promises of “lose weight while you sleep.”  If it sounds too easy, it might be a scam.
  • Miracle Cure. Generally, one pill will not treat or cure many different illnesses such as cancer, diabetes, AIDS, or arthritis.
  • It Worked for Me. Personal success stories by “real people” or doctors are easy to make up.
  • They Don’t Want You to Know. Always ask your health care providers what is best for your health.

 

For additional information on health fraud and scams go to http://www.fda.gov/healthfraud, http://www.fda.gov/medwatch, and http://www.ftc.gov

Teaching Suggestions

  • Ask students if they have fallen prey to health care scammers.
  • Have students make a short presentation with a summary of actions that might be taken to avoid health scams.

Discussion Questions

  1. Why do health scammers continue to prey on unsuspecting consumers?
  2. What can consumers do to avoid being victimized by health scammers?
Categories: Chapter 9, Frauds and Scams | Tags: , , , | Leave a comment

Increased Oversight Needed For Growing Managed Care Expenditures

Posted on August 2, 2014 by Melissa Hart

In fiscal year 2013, the Medicaid program covered about 71.7 million people at a cost of $431.1 billion, of which Centers for Medicare and Medical Services (CMS) estimated that $14.4 billion (5.8 percent) were improper  payments.  In 2014, the Government Accountability Office (GAO) examined how state and federal agencies ensure comprehensive integrity efforts, such as payment review, auditing, and investigating fraud.  To improve the efficiency and effectiveness of Medicaid program, the GAO recommends that the Administrator of CMS should:

  • update its Medicaid managed care guidance on program integrity practices,
  • provide the states with additional support in overseeing Medicaid managed care program integrity, and
  • require states to audit payments to and by managed care organizations.

For additional information and complete GAO report go to http://www.gao.gov/products/GAO-13-34.

Teaching Suggestions

  • Ask students what are typical benefits that Medicaid provides.
  • Ask students to prepare a summary report on how to prevent or reduce the Medicaid fraud.

Discussion Questions

  1. What is Medicaid and how it assists low-income individuals and families?
  2. How is Medicaid financed?
  3. Do people with Medicaid need to buy supplemental medical insurance?
Categories: Chapter 9, Health Insurance | Tags: | Leave a comment

Procter & Gamble’s Allen Lafley on Activist Investors’ Watch List

Posted on July 30, 2014 by Melissa Hart

“With most of the Dow 30 companies up for the year, investors should be heartened that P&G remains in the ‘bargain bin.'”

In this article, Marc Courtenay describes the financial information investors can use to evaluate an investment in Procter & Gamble, a large global company with a worldwide customer base of 4.8 billion people.  Information in this article includes a discussion of P&G’s

  • Efforts to reduce costs by $10 billion.
  • Current stock price and future price predictions.
  • Decision to increase its dividends to stockholders.
  • Projections for earnings growth and the anticipated effect on the stock’s share value.

For more information go to  http://www.thestreet.com/story/12766334/1/procter-gambles-alan-lafley-on-activist-investors-watch-list.html

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the importance of using financial information when evaluating a corporate stock for investment purposes.
  • Discuss how financial information (dividends, earnings per share, dividend payout, etc.) relate to the share value for a stock like P&G.

Discussion Questions

  1. Because P&G is a large global company with a customer base of 4.8 billion people and is a component in the Dow Jones Industrial Average, do investors still need to evaluate the company before investing in its stock?
  2. Why are financial measures like dividends, earnings per share, dividend payout, and projections for earnings growth important when evaluating a stock investment?
Categories: Chapter_12, Stocks | Tags: , , , | Leave a comment

Retirement Catch Up: Saving After 50

Posted on July 26, 2014 by Melissa Hart

“. . .more than a third of people 55 and older have saved less than $10,000.”

According to Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation and daughter of Charles Schwab, there are a number of steps anyone can take to get their financial house in order.

For example, Ms. Schwab-Pomerantz suggests that savings should be non-negotiable–it’s that important.  To increase the amount saved, people should take a hard look at where they are spending their money.  For example, do you really need cable television or that new car?

She also suggests that a person in their 20s should save 10 percent of income in order to save the money needed for a comfortable retirement.  If the same person waits until she or he is in their 30s, the percentage for savings increases to 20 percent while someone in their 40s will need to save 30 percent of their income.  Finally, a person in their 50s will need to save 40 percent of income to provide for retirement.   The Bottom Line:  The percentage a person must save for a comfortable retirement increases if they wait to begin a savings and investment program.

For more information go to http://finance.yahoo.com/news/retirement-catch-up–saving-after-50-043631641.html

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Remind students how small changes in how they manage their financial affairs can change their lives both now and when they reach retirement age.
  • Stress the importance of beginning a savings and investment program sooner rather than later.
  • Use a Time Value of Money calculation to show how regular savings can increase over time.

Discussion Questions

  1. Why is it important to begin a savings and investment program when you are in your 20s?
  2. Where does the money come from to begin a savings and investment program?
Categories: Retirement Planning, Savings, Time Value of Money | Tags: , , | Leave a comment

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