Scams and Schemes

1. 2.02 – Understand Threats to Financial Security Gwishiri Scams and Schemes

2. Types of Behaviors that Lead to Financial Losses • Failure to plan • Not comparing job offers carefully in light of expected expenses • Shopping without a list, which often leads to impulse buying • Spending without using a spending plan, which often leads to overspending • Failure to protect • Making personal information available that can lead to identity theft • Not securing life, health, and property to minimize risks of crimes and emergencies • Not following Internet safety practices

3. FAILURE TO BE INFORMED Failure to Communicate • Not reading the fine print in sales agreements, product labels, contracts • Not researching sales offers in depth before making a commitment • Not separating facts from opinions in considering advertisements • Not asking sufficient appropriate questions to inform financial decisions • Not discussing financial decisions with all parties/family members involved • Not taking enough time to make a careful decision because of sales pressure • Not saying “no” when needed Types of Behaviors that Lead to Financial Losses

4. Lying---e.g., accepting money for a stated purpose, then using it for a different purpose; • selling a product or service that will not perform as promised • Concealing information---e.g., sellers not willing to state their physical addresses • Deals that are too good to be true---e.g., a PYRAMID SCHEME, • An illegal scheme that influences people to contribute money based on the false promise that they will get rich quickly; the pyramid collapses and money is lost, not gained • Chain letter---a variation of the pyramid scheme that involves postal correspondence, also illegal Types of Deceitful/ Fraudulent Scams and Schemes That Lead to Financial Loss

6. High-pressure sales approaches---e.g., claiming the offer is only good for one day • Vague offers---e.g., expecting you to pay up front in order to receive full information about a product or service • Sweepstakes letter---states that you have won a valuable prize, but need to pay a processing fee to claim the prize • Lotteries---prizes awarded by chance after purchase of ticket; very small chance of winning • Earn-money-at-home offers---on the condition that you purchase software, etc.; once paid for, nothing arrives • Winning bid in auctions---you pay the bid amount, but never receive the item bought • Identity theft---stealing one’s personal information Scams/Schemes Continued…

14. Communicating and Reporting Deceitful/Fraudulent Scams and Schemes • Communicating with fellow consumers • Use available communication media---live conversation, telephone, texting, emails, etc. • Be specific, include key details • Reporting to government agencies and other consumer advocates • Go to the Federal Trade Commission (FTC) website; complete a Consumer Complaint Form • Call or visit the website of the National Fraud Information Center of the National Consumers League • Contact local consumer protection agency • Contact Better Business Bureau • Contact State Attorney General’s office • Contact the post office if you receive a fraudulent offer by mail • Contact the local media