Category Chapter 6

Mar 15 2025

Protect Your Social Security Number

Identity theft is one of the fastest growing crimes in America. Scammers use your Social Security number (SSN) to get other personal information about you. They can use your SSN and your good credit to apply for more credit in your name. Then, when they use the credit cards and don’t pay the bills, it damages your credit. You may not find out that someone is using your SSN until you’re turned down for credit, or you begin to get calls from unknown creditors demanding payment for items you never bought.

 Your SSN is confidential.  The agency protects your SSN and keeps your records confidential and it does not give your number to anyone, except when authorized by law. You should be careful about sharing your number, even when you’re asked for it. You should ask why your number is needed, how it’ll be used, and what will happen if you refuse. The answers to these questions can help you decide if you want to give out your SSN.

How might someone steal your SSN? Scammers get your personal information by:

• Stealing wallets, purses, and your mail (bank and credit card statements, preapproved credit offers, new checks, and tax information).
  • Stealing personal information you provide to an unsecured site online, from business or personnel records at work, and personal information in your home.
• Rummaging through your trash, the trash of businesses, and public trash dumps for personal data.
• Buying personal information from “inside” sources. For example, a scammer may pay a store employee for information about you that appears on an application for goods, services, or credit.
• Posing by phone, email, text, or direct messages in social media as someone who legitimately needs information about you, such as employers, landlords, or government agencies.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of actions they can take to protect their Social Security number.
  • Ask students if they or their family members have their Social Security number stolen.  What was the outcome and how they might be protecting their number now?

 Discussion Questions

  1. Why is it important to protect your Social Security number?
  2. How most people discover that their Social Security number has been stolen?  What should they do?
Feb 15 2025

Plan ahead for the New Year

For many, December means spending lots of money on presents, food, travel, and other things to get you through the end of the year. And after we stretch our wallets, January’s often for taking stock and planning for the year to come.

If that’s true for you, here are some things to hopefully save you time as you transition from holiday festivities to financial goals in the New Year.

Are you:

Looking for more? The FTC’s consumer.gov site has tools to help you in the New Year and beyond. Get the basics on these and other topics like avoiding scams and identity theft at consumer.gov in English, Spanish, Chinese (Simplified), Korean, and Vietnamese. You’ll also find videos and free, one-page handouts to share in your community. 

For more information, click here.

Teaching Suggestions:

  • Ask students to get their free credit reports from Equifax, Experian, and TransUnion, and sign up for free credit monitoring with Credit Sesame or Credit Karma.
  • Ask students to list the main steps in creating a budget.  What are commonly recommended qualities of a successful budget?

Discussion Questions:

  1.  Why is it important to check your credit reports regularly?
  2.  What are the most frequent reasons for indebtedness?
  3.  What are common danger signals of potential debt problems?
Dec 21 2024

How to recover from identity theft

   You hoped the day would never come when you learned someone used your personal information to open new credit accounts in your name. But it did. So now what? Act fast. It can help reduce the damage identity theft can cause. Here’s how to get started.

Step 1: Call the companies where you know fraud occurred.

  • Call the fraud department. Explain that someone stole your identity.
  • Ask them to close or freeze the accounts. Then, no one can add new charges unless you agree.
  • Change logins, passwords, and PINs for your accounts.

Step 2: Place a fraud alert and get your credit reports — even if you already have a credit freeze in place. (If you haven’t frozen your credit, do that, too.) When you have a fraud alert on your credit report, a business has to verify your identity before it opens a new credit account in your name. A fraud alert lasts one year, but you can renew it.

  • Place a free, one-year fraud alert by contacting one of the three credit bureaus. That company must tell the other two.
  • To get your report, call Annual Credit Report at 877-322-8228, or go to AnnualCreditReport.com. Federal law gives you the right to get a free copy of your credit report every 12 months from each of the three nationwide credit bureaus. The three bureaus also let you check your credit report once a week for free at AnnualCreditReport.com. Review your reports. Looks for accounts or transactions you don’t recognize.

Step 3: Report identity theft to the FTC. You’ll get a free personal recovery plan with next steps.

  • To report in English, go to IdentityTheft.gov
  • To report in Spanish, go to RobodeIdentidad.gov
  • If you’re more comfortable reporting in another language, call 877-438-4338 and press 3 to report in your preferred language. Interpreters are available from 9:00am – 5:00pm ET.

For more information, click here.

Teaching Suggestions:

  • List the steps you should take to prevent an identity thief to steal your personal information.
  • Ask students to get their free credit report from Annual Credit Report, or call 877-322-8228. Review your reports to look for accounts or transactions you don’t recognize.

Discussion Questions:

  1. If someone has stolen your identity, what are the three actions you must take immediately?
  2. What is the difference between a credit freeze and a fraud alert?
Dec 7 2024

RENT-TO-OWN A CAR

For people who can’t qualify for a conventional auto loan or leasing, rent-to-own may be an option. This financing plan allows a person to rent a car with a portion of the payment going toward the purchase of the vehicle. 

The main benefits of a rent-to-own program for buying a car are no credit checks along with the opportunity to own the vehicle at the end of the rental term.  However, several drawbacks of this car-buying option usually include:

  • a higher total cost for the vehicle than for other used cars because of mark-ups for paying over time
  • requirement of a down payment
  • no warranty on the vehicle
  • more frequent payments, usually weekly or bi-weekly instead of monthly; this increases the chance of a late payment
  • may be charged a fee for late payments
  • ownership does not occur until payments are completed

Also beware of an early termination fee, which may be in the rent-to-own contract. If the car needs many repairs before the completion of payments, you might decide to end the rental. This action might result in loss of your down payment and other charges. 

Another option for a person with a poor credit history is a subprime loan; however, this would have a higher rate and result in paying several thousand dollars more in interest over the loan term. Instead of a rent-to-own car deal, become a credit union member, which may allow you to obtain an auto loan at a more favorable interest rate.  

For additional information on rent-to-own car programs, click here.

Teaching Suggestions

  • Have students talk to others to learn about actions they took to finance the purchase of a car.
  • Have students research current rates for financing a car purchase.

Discussion Questions 

  1. Why might a person avoid using a rent-to-own car buying option?
  2. Describe actions for avoiding a rent-to-own car buying option.   
Aug 17 2024

CREDIT DENIED?

Did you apply for credit and get turned down? Or did a lender offer you less favorable terms for credit? If so, they have to give you a notice with certain information. Improving your credit may take some time, but taking some steps will help you do it.

How to improve your credit? If your report is accurate but you want to improve your credit:

  • Know how to find legitimate help. A reputable credit counseling organization will spend time discussing your entire financial situation with you before coming up with a personalized plan to handle your money problems. They won’t promise to fix all your problems or ask you to pay before doing anything.
  • Know what negatively impacts your credit score.
    • Paying bills late. If you think you might be late on a bill, call the company you owe money to. Explain that you’re having trouble paying your bill and ask for a payment plan.
    • Keeping balances high. Credit scoring models look at how close you are to being “maxed out,” so try to keep your balances low compared to your total credit limit. Check your credit card limits — and pay down your balances, if you can. If the creditor says you were denied credit or more favorable rates because you’re too near your credit limits on your credit cards, you may want to reapply after you pay down your balances.
    • Frequent credit applications. Many scoring models look to see if you’ve applied for credit recently. If you’ve applied for too many new accounts, or taken out large amounts of new credit, it could hurt your score.

For More Information, click here.

Teaching Suggestions

  • Have students talk to others to determine how they first established credit.
  • Ask students to make a list of actions they can take to improve their credit.

Discussion Questions

  1. What factors can affect whether you can get credit, as well as the price you pay to get it?
  2. Should you hire a credit repair company to help you fix mistakes in your credit report? Or, can you do it for yourself at little or no cost?
Jul 20 2024

PRICE COMPLEXITY FOR FINANCIAL SERVICES

Many bank accounts, credit cards, mortgages, and auto loans have add-on fees to confuse consumers resulting in higher amounts paid for these services. A recent experiment conducted by the Consumer Financial Protection Bureau (CFPB) was designed to study these fees. The research results suggested that consumers pay more when prices are separated into multiple fees with a complex pricing structure.  

While the study may not exactly reflect real-world transactions, the CFPB study indicated that more complex pricing mostly led to more expensive outcomes. Key findings included: (1) higher total prices with sub-prices than one total price; and (2) difficulty in comparing prices among different financial-service providers.

The fees and charges that consumers may encounter with financial services include:

  • Credit cards are affected by interest rates, late fees, balance transfer fees, annual fees, cash advance fees, and foreign exchange fees. Cards with introductory 0% APR periods are usually followed by much higher APRs. Credit card reward programs often have varied methods for earning points and redemption rules.
  • Checking and savings accounts can have monthly maintenance fees, minimum balance fees, overdraft fees, and wire transfer fees; complex tiered interest rates based on account balances; and “free” checking accounts” may require minimum balances, recurring direct deposits, or other restrictions.
  • Mortgages are available with a wide range of interest rates, fees, and terms affected by loan type, credit score, down payment, and closing costs.
  • Auto loans will have varied interest rates based on a credit score, loan term, down payment, and vehicle type. Lenders may offer promotional rates or cash-back incentives, or add-on products such as extended warranties, gap insurance, and credit life insurance.

To guide wise use of financial services, be sure to: (1) ask for a total cost with clear information of what is included; (2) compare different financial-service providers, including banks, credit unions, and FinTech companies; (3)Bottom of Form search for no- or low-minimum balance checking accounts and no-fee credit cards; (4) use ATMs in your bank’s network; and (5) avoid overdraft charges by linking your checking account to savings.

For additional information on complexity of financial service fees, go to:

Link #1

Link #2

Teaching Suggestions

  • Have students talk to others to learn about their experiences with high fees for various financial services.
  • Have students conduct online research to compare fees and restrictions for various financial services at banks, credit unions, and other financial-service providers.

Discussion Questions 

  1. When selecting a financial service, what factors would you consider when making your final choice?
  2. What actions can a person take to avoid high banking fees?
Mar 2 2024

DANGERS OF DEBIT CARD USE

Debit cards do not provide the same protection as credit cards when lost or stolen. As a result, money experts recommend not using a debit card in these situations:

  • When buying airline tickets; if the airline goes out of business, you may have no recourse for a refund.
  • Non-bank ATMs are more likely to have skimmers that steal debit card information.
  • When making a gas station purchase a hold may be put on funds in your bank account, which could result in Bottom of Forman overdrawn balance when trying to make other purchases.
  • Use a credit card for online buying for stronger legal protection to dispute a charge.
  • In restaurants with high turnover, a dishonest employee may get access to your card number; again, a credit card provides more protection.
  • When buying appliances a credit card may give you an extra warranty, which would not be

available with a debit card.

With a debit card you can be responsible for up to $50 of unauthorized transactions if you report a lost or stolen card within two business days. Then, your liability can be as high as $500 for fraudulent charges if you don’t report the situation within 60 days after receiving your statement.  After that, you have the potential of unlimited losses for unauthorized use of your debit card.  In contrast, with a credit card, you are not responsible for unauthorized charges of more than $50.

Consider only using your debit card to withdraw cash to make purchases. Since not everyone will take a cash-only approach to control spending, there is another action to protect yourself. Use a second checking account for your debit card. Fund this second account only with money that you plan to use for debit card activity. Then, in case of a lost card or fraud, you would only lose the smaller amount kept in that second account with your main checking account not at risk. 

For additional information on debit cards, click here.

Teaching Suggestions

  • Have students survey several people to determine common uses of debit cards.
  • Have students create a podcast to warn others of the dangers associated with debit cards.  

Discussion Questions 

  1. Why should consumers become more aware of the potential dangers of debit cards?
  2. What actions do you take to protect your debit and credit cards?
Aug 19 2023

10 Ways to Protect Your Personal Information

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?
Jun 24 2023

Stop the Robocalls

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?
May 27 2023

“Buy Now, Pay Later” Users

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?