Protect Your Identity

According to its last Consumer Sentinel report, the Federal Trade Commission received 371,061 identity theft complaints in 2017, down from 399,222 the previous year.  That’s good news, but the 2018 Identity Fraud Study issued by Javelin Strategy & Research tells a darker tale.  Based on random survey of Americans, it revealed that there was an 8 percent increase in identity fraud (the fraudulent use of someone’s personal information) from 2016 to 2017, and losses rose from $16.2 to $16.8 billion.  Javelin also notes that while the chip cards have cut down on fraud terminals or by cloning devices, the drop has been more than offset in online theft and fraud.

For More Information, click here.

Teaching Suggestions

  • Ask students if anyone has his/her identity stolen. If so, what has been their experience?
  • Ask students to prepare and then share a list of steps that they can take to reduce chances of becoming identity theft victims?

Discussion Questions

  1. How can you detect if you are a possible victim of an identity theft?
  2. If you become a victim of identity theft, what steps must you take immediately?

Receipt Savings Trick

It’s possible to add $500 or $1,000 to your savings with a simple action. Clark.com suggests using store receipts to save for the future. Many retailers display a “You Saved” amount on a receipt for items on sale and store discounts. By putting this amount in a savings account you can avoid spending the “saved” money on other items.

Collecting receipts in an envelope or box, or scanning them to an app, can also help analyze buying habits to make wiser purchases in the future and not make as many trips to the store. This action can result in an extra amount each month added to your savings. This money can be added to your emergency fund or retirement account.

For additional information on the receipt savings trick, click here.

Teaching Suggestions

  • Have students locate examples of receipts that show “amount saved.”
  • Have students talk to others to obtain ideas for methods for building a person’s savings account.

Discussion Questions 

  1. What do you believe are the benefits and drawbacks of using this system?
  2. Describe other actions that might be taken to motivate you and others to build your savings?

Banking Activities of the Future

As you walk into your bank, you are met by a video teller. These robo-banks allow you to connect with financial specialists based on your needs through a virtual concierge and videoconferencing. These banking staff members are located hundreds and thousands of miles away.  Banks benefit from these actions with fewer branches and fewer employees covering customers in many geographic settings.

Other actions being taken by banks and other financial institutions to better serve customers include:

  • A variety of services to enhance the banking experience, such as offering co-working spaces for customers who work remotely.
  • Payment systems in the athletes’ Olympic pins to complete purchases transactions at the 2018 Winter Games.
  • Customers can pay with a facial recognition scan in some retail settings.
  • Financial services offered through Alexa (Amazon), Siri (Apple), and Google Assistant allowing bank and credit card customers to check their balances, pay bills, and send money.

For additional information on technology banking trends, click here.

Teaching Suggestions

  • Have students talk to two or three others to obtain their ideas about: (a) future banking technology, and (b) the setting and services of the bank branch of the future.
  • Have students create a presentation or video that communicates future banking activities.

Discussion Questions 

  1. What technology services do you desire from a bank for your financial services?
  2. Describe actions banks might take to better serve the needs of customers.

Smart Financial Planning Actions

While every person and every generation has something to learn, we all also have ideas and information that can benefit others.  Those skillful in asking questions have an advantage for planning and implementing financial activities.  Asking questions usually results in useful knowledge before taking action and being less intimidated about unknown topics.

Other actions with strong benefits for better money decisions include:

  1. Joining groups through social media and online communities resulting in connections and information to support financial concerns and decisions.
  2. Not being overly confident, but researching a topic carefully before making a financial decision to take action.
  3. Maintaining a minimal competitive nature; instead identify actions and investments that best meet your financial goals.
  4. Manage spending and saving with the use of debit cards, instead of credit cards, and automating your savings with online deposits or an app.

For additional information on successful financial planning actions, click here.

Teaching Suggestions

  • Have students survey friends to determine which of the actions in this article are commonly used.
  • Have students create role playing situations or a video to communicate the benefits of the actions discussed in this article.

 Discussion Questions 

  1. What do you believe are the benefits and drawbacks of these suggested actions?
  2. Describe other actions that might be taken for successful financial planning.

Millennial Money Habits

According to a recent study, the financial activities of today’s young adults (ages 23-37) include the following:

  • One in four millennials are concerned about not having enough money saved.
  • Over 70 percent of these young people believe their generation overspends, and 64 percent believe that their generation is bad at managing money.
  • Over 60 percent of millennials are saving, and 67 percent are consistent in working toward a savings goal.

These money attitudes and behaviors are reported in the fifth edition of our Better Money Habits Millennial Report, with these additional findings:

  • A reported 73 of millennials who have a budget, stay within their budget every month or most months.
  • Nearly half (47 percent) of millennials have $15,000 or more in savings.
  • While 16 percent millennials have $100,000 or more in savings.

Millennial parents are sensitive to child-raising costs. While older generations report that finances weren’t a main factor in the decision to have children, millennial parents believe the opposite. While many are paying off their own student loans, nearly a quarter of older millennials are saving for their children’s education.

For additional information on money habits of millennials, click here.

Teaching Suggestions

  • Have students talk to friends to obtain information about their budgeting and saving habits.
  • Have students locate and report on an app that would help guide their spending and saving activities.

Discussion Questions 

  1. What attitudes and behaviors did you learn when you were young that influence your spending and saving habits today?
  2. Based on these research results, what money management suggestions would you offer to others?

Lifestyle Inflation

Quite often, when a person receives a raise or promotion with an increased salary, overspending is the result. In those situations, financial experts recommend maintaining frugal spending patterns. This path will allow a person to avoid becoming a victim of “lifestyle inflation.”  Many households earning hundreds of thousands of dollars have trouble avoiding debt and saving for the future.   To prevent this situation, the following actions are recommended:

  • Maintain your lifestyle and spending habits as you receive raises. Instead of a bigger house or new car, the increased income can be used to stabilize your financial situation and increase saving for future needs.
  • Keep your average daily spending low.To avoid lifestyle creep, simply keep your typical day spending at a frugal level.
  • Increase your automatic savings amounts. Consider saving an amount from each paycheck equal to the amount of your raise.  This will allow you to put aside money for major financial goals and long-term financial security.
  • Keep housing costs low. Instead of upgrading, maintain and improve your current home. Housing is a major cause of lifestyle creep when a more expensive home results in higher property taxes, maintenance costs, insurance, association fees and other expenses.
  • Remember and review often your financial goals.Do not take your focus off long-term money goals.  Short-term desires and impulsive spending can easily undermine your financial future. Create a way to remind yourself of those goals each day.

For additional information on lifestyle inflation, go to:

Article #1

Article #2

Teaching Suggestions

  • Have students ask another person of what actions might be taken when a salary increase is received.
  • Have students create a video contrasting wise and unwise actions when receiving a salary increase.

 Discussion Questions 

  1. What factors influence “lifestyle inflation” in our society?
  2. In addition to the suggestions in the article, what actions might be taken to avoid lifestyle creep?

 

Car Subscription Services

The opportunity to change cars like you change clothes is now possible.  For a monthly fee, car subscription services are an alternative to motor vehicle buying and leasing.

With an upfront fee is usually involved, the monthly fee covers the car payment, insurance, maintenance, and roadside assistance.  Subscribers can manage their plan online with the vehicle delivered to your home.

Car manufacturers that offer this service are Cadillac, Ford, Volvo and Porsche. Other companies specializing in offering a variety of makes and models are Fair, Flexdrive, Clutch and Carma.

Unlike leasing for 24 or 36 months, car subscription can be for as short as a month. However, some programs require a two-year contract, and only allow a trade-in (exchange) after 12 months.

The greatest benefit is the “negotiation-free” way of obtaining a car. And, if you don’t like the car, you can get a different vehicle. Car subscribers are reminded it’s not your car.  Smoking is usually prohibited and pets should be kept in carriers.  Not all cars are brand new but most are low mileage and less than six years old.

For additional information on car subscriptions, click here.

Teaching Suggestions

  • Have students talk to two or three others to obtain their opinions on the benefits and concerns of car subscription services.
  • Have students compare cost of various car subscription services with buying or leasing a vehicle.

Discussion Questions 

  1. What do you believe are the benefits and drawbacks of using a car subscription service?
  2. Describe life situations that might be most attracted to using a car subscription service.

Is Your Debit or Credit Card Compromised?

What should you do if you believe your debit or credit card has been compromised?  Yes, there are consumer protection regulations that can help.  For example, the Electronic Funds Transfer Act (EFTA) and the Consumer Financial Protection Bureau’s (CFPB’s) “Regulation E” limit your liability for losses from unauthorized transactions.

If your debit or credit card number is used to make an unauthorized withdrawal from a checking or savings account, minimize your losses by contacting your bank as soon as possible.  Your maximum liability under EFTA is $50 if you notify your bank within two business days after learning of the loss.  If you wait longer, you could lose more, according to the law.

If your credit card number is used without your authorization, your liability is normally capped by the Truth in Lending Act (TILA) and the CFPB’s “Regulation Z” at $50 for all unauthorized transactions, and remaining credit card losses are typically absorbed by the card issuer.  Some other worthwhile precautions you can take include:

  • Do not use ATMs in remote places, especially if the area is not well lit.
  • Go elsewhere if you see a sign directing you to only one of multiple ATMs in a location.
  • Shield the keypad with your hand when typing your PIN at the ATM or a retailer’s checkout area.
  • Regularly check your bank and credit card accounts for unauthorized transactions, even small transactions that you might think might not be worth reporting to your bank.

For more information, click here.

Teaching Suggestions

  • Ask students to summarize the major provisions of the Electronic Funds Transfer Act (EFTA).
  • Why is it important to notify your bank as soon as possible when your account has been compromised?
  • Let students debate the issue, “Use cash, why use a debit card?

Discussion Questions

  1. What is the Truth and Lending Act and how does it protect you if your debit/credit card is compromised?
  2. How can you determine if an ATM has a false cover or it has been tampered?

Activities to Combat Illegal Debt Collection Practices

In March 2018, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) reported on their 2017 activities to combat illegal debt collection practices.  The CFPB handled approximately 84,500 debt collection complaints, making it one of the most prevalent topics of complaints about consumer financial products or services.  The Bureau offered five sample letters that consumers may use when they interact with debt collectors.

The FTC resolved 10 cases against 42 defendants and obtained more than $64 million in judgements, focused on curbing egregious debt collection practices, including phantom departments, schools, non-profit organizations, banks, credit unions, other businesses and government agencies.  The agency logged more than 60 million views on its webpages, with its videos seen more than 581,000 times at YouTube.com/FTC, and its consumer blogs reaching 199,860 (English) and 50,480 (Spanish) email subscribers.

For more information, click here.

Teaching Suggestions

  • Ask students to review the major provisions of the Fair Debt Collection Practices Act.
  • Let students debate the issue, “Can governmental agencies stop unlawful practices of the debt collection agencies that harm both consumers and legitimate business”.

Discussion Questions

  1. Is it possible to live without using any form of consumer credit?
  2. What can the governmental agencies do to protect the legal rights of all consumers in a manner that is efficient, effective, and accountable?

How to Dig Out of Debt? Grab More Than One Shovel

Millions of Americans are dealing with debt overload every day.  If you’re struggling to pay your loans, credit cards or other bills, here are some steps you can take to begin managing your debt problems.

  1. Create a budget.
  2. Try to get a clear picture of your monthly income and expenses.
  3. Contact your creditors about easier ways to make your most important bill payments.
  4. Have a strategy for saving money on interest and fees.
  5. Consider getting help from a reputable credit counselor.
  6. Know your rights if a debt collector contacts you.

For more information, click here.

Teaching Suggestions

  • Have students debate this issue “Is it possible to live without using any form of consumer credit”.
  • Ask students if they have created a budget, borrowed to finance a car, and have a strategy for saving money on interest or fees.

Discussion Questions

  1. What factors should be considered when a person is determining the amount of credit he or she should take on?
  2. What actions are commonly recommended if a person has difficulty making credit payments?