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Threats To financial security ppt

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					OBJECTIVE 2.02
           E SSENTIAL Q UESTIONS


   What consumer behaviors can threaten a
    person’s financial security and lead to financial
    losses?

   What scams and schemes can lead to financial
    losses?

   How can a consumer communicate caution and
    report incidents of fraud?
                                             Threats to personal and family
                                          financial security come from within
              T HREATS                   the consumer and without (outside).




 Threats from within are:             Threats from without are:

 the result of consumers behaviors    the result of deceitful, sometimes
  that lead to financial problems       even fraudulent, scams and
                                        schemes designed to manipulate
 often the result of lack of           or trick consumers in ways that
  knowledge                             lead to financial loss.
 YOU must be your own best            YOU must be your own best
  ADVOCATE!                             ADVOCATE!
   How? Educate yourself in           What is FRAUD? A material
    financial matters                   misrepresentation with intent to
                                        take advantage of another party
   How? Use your brain.  If it
    seems too good to be true…it
    probably is!
C ONSUMER 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 (budget),
     which often leads to overspending
    C ONSUMER BEHAVIORS THAT LEAD
                         TO FINANCIAL LOSSES
Examples: Failure to plan
   Judy accepted a great modeling job in NY City. Her
    apartment rent in Charlotte was $800, but the shared cost
    of a smaller apartment is over $2000 monthly. She is having
    trouble making ends meet.
   Meg and her two children took $300 to shop for back to
    school clothes. Purchases included a new basketball and 2
    video games for her sons.
   Tony and Lana charged $300 in restaurant bills on their
    weekend anniversary fling because they stayed at a 4 star
    hotel that used up their cash.
C ONSUMER BEHAVIORS THAT LEAD
                    TO FINANCIAL LOSSES

 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
C ONSUMER BEHAVIORS THAT LEAD
                      TO FINANCIAL LOSSES

 Examples: Failure to protect
    Fran dumped old credit card statements and other bills
     into her garbage can without shredding any of them.

    Neta parked her car in the parking garage after work. She
     did not lock the car. When she returned her cd player, cds,
     and a wedding present she had purchased had been
     stolen.

    Sarah used a simple pass code and did not change it for
     over 5 years. She was surprised when a hacker accessed
     her computer and got personal banking information.
C ONSUMER BEHAVIORS THAT
LEAD TO FINANCIAL LOSSES

 Failure to be informed
    Not reading the fine print in sales agreements,
     product labels, contracts
        ALWAYS read and understand contracts BEFORE
         signing

    Not researching sales offers in depth before making a
     commitment

    Not separating facts from opinions in considering
     advertisements
C ONSUMER BEHAVIORS THAT
LEAD TO FINANCIAL LOSSES

Examples: Failure to be informed
   Kevin and Nate are friends. Kevin got a new cell phone. Nate
    wanted a new cell phone like it. He signed the 2 year contract
    without reading it. When the first bill came, he found he only had
    100 free text messages per month. All texts over 100 cost $.15
    EACH. His first bill was over $300.
   Nate realized that he should have shopped several companies and
    reviewed various plans to find one that would meet his texting
    needs.
   Kevin bragged to Nate that his phone would access internet and 50
    other apps for free. Nate tried the apps and there were minimum
    monthly fees for each one. Kevin did not know the cost because his
    mom still paid his bill.
C ONSUMER BEHAVIORS THAT LEAD
                     TO FINANCIAL LOSSES
 Failure to communicate
    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
                                          video link- Grover's
     pressure                             high pressure sale

    Not saying “no” when needed
               C ONSUMER BEHAVIORS THAT LEAD
                                        TO FINANCIAL LOSSES

Examples: Failure to communicate
   Tom forgot to ask about the truck’s warranty and
    thought it was 100,000 miles. It was only 70,000
    mile and excluded the 4WD components.
   When Tom arrived at home with the new truck, his
    wife was very upset that monthly payments would
    be over $300. Their agreed upon budget was only
    $250.00.
   Tom told his wife that the salesman was so helpful
    and nice that he just could not say no after taking up
    his time. Can you say “no”?
   The salesman said he had another customer wanting
    this truck and if Tom really wanted it he should
    commit before the other buyers returned later that
    day.
         T YPES OF D ECEITFUL , FRAUDULENT
 SCAMS THAT LEAD TO FINANCIAL LOSSES
 Vague offers---e.g., expecting you to pay up front in order to receive full
  information about a product or service

   Television infomercials to order cd’s or books and make a lot of $!

 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;

once paid for, nothing arrives

  Television infomercials to order cd’s or books
           T YPES OF D ECEITFUL , FRAUDULENT
   SCAMS THAT LEAD TO FINANCIAL LOSSES

 Winning bid in auctions---you pay the
  bid amount, but never receive the item
  bought

 Identity theft---stealing one’s personal
  information in order to commit theft or
  fraud
                                             video link How-To-Prevent-Identity-Theft
 Sweepstakes letter---states that you
  have won a valuable prize, but need to      video link to citibank theft commercial
  pay a processing fee to claim the prize
                                                 video link - ftc.gov identity-theft
 Wide variety of other unsolicited online
  offers                                     video link - id theft fbla national winner
   T YPES OF D ECEITFUL , FRAUDULENT
SCAMS THAT LEAD TO FINANCIAL LOSSES
           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

            video - charlotte sales scam-BBB "F"

           Concealing information---e.g., sellers  not willing
            to state their physical addresses, only POBoxes or
            Internet sites
   T YPES OF D ECEITFUL , FRAUDULENT
SCAMS THAT LEAD TO FINANCIAL LOSSES
             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
                        video clip- how ponzi scheme works

             Chain letter---a variation of the pyramid scheme that
              involves postal correspondence, also illegal

             High-pressure sales approaches---e.g., claiming the
              offer is only good for one day, or if you call in the next
              15 minutes, or stay with you until you purchase


                            Video link: Is this a high pressure car sale?
                       W HAT TO DO ABOUT SCAMS ?
    Communicate or report deceitful/fraudulent scams
    and schemes to fellow consumers
 Use available communication media---live
 conversation, telephone, texting, emails, etc.
 Contact the local media to get attention to the topic

 Be specific, include key details

 Report to government agencies and other consumer
 advocates
 Go to the Federal Trade Commission (FTC) website;
 complete a Consumer Complaint Form
                           T HE F EDERAL T RADE
                                    C OMMISSION
   The FTC works for the consumer
    to prevent fraudulent, deceptive
    and unfair business practices in         To file a complaint or to
    the marketplace and to provide           get free information on
    information to help consumers            consumer issues, visit
    spot, stop, and avoid them.              www.ftc.gov or call toll-
                                             free, 1-877-FTC-HELP (1-
   The FTC enters Internet,                 877-382-4357); TTY: 1-866-
    telemarketing, identity theft, and       653-4261.
    other fraud-related complaints
    into Consumer Sentinel, a secure
    online database available to         video link- filing a claim with FTC
    hundreds of civil and criminal law
    enforcement agencies in the U.S.
    and abroad.
              W HAT TO DO ABOUT SCAMS ?
Communicate or report deceitful/fraudulent scams
and schemes with fellow consumers

                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

				
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posted:5/15/2013
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