Category Chapter 7

Jul 16 2014

Text Message Spam

Spam text messages are not only annoying but also illegal. Many con artists use text messages to obtain your personal information by offering a free gift card or vacation. As a result, you become very vulnerable to identity theft.

To avoid becoming a victim of text message spam, register your number on the Do Not Call List.  Also, never click on links in spam messages, which often carry malware or send you to fake websites.

Never reply to these text messages or give out your personal information.  Report the text spam to your cell phone carrier by forwarding the message to 7726 (SPAM).

You can report unwanted commercial text messages and other complaints related to consumer fraud to the Federal Trade Commission at https://www.ftccomplaintassistant.gov/#crnt&panel1-1

For additional information on text message spam, go to:

http://blog.usa.gov/post/89152807112/protect-yourself-from-text-message-spam

http://www.consumer.ftc.gov/articles/0350-text-message-spam

Teaching Suggestions

  • Have students conduct research to obtain information on various types of scam and frauds.
  • Have students create an in-class presentation or a video communicating actions to take to avoid becoming a victim of consumer fraud.

Discussion Questions 

  1. Why do some people easily become victims of text message spam and other consumer frauds?
  2. Describe various types of frauds and scams.
  3. What actions can be taken to avoid becoming a victim of consumer fraud?

 

Jul 12 2014

Learning about High-Cost Financial Services

Brian Page, a teacher in Reading Ohio, wants his students to understand the drawbacks of check-cashing services, pawnshops, rent-to-own stores, payday loans, and other shadow banking services.  As a result, he scheduled a field trip for his students to visit these sources of high-cost financial services in their community, which are used by many unbanked consumers.

At LoanMax, they observed people getting loans with their auto titles serving as collateral.  One missed payment could lead to repossession of the vehicle. Next, at CheckSmart, students learned about payday lending and tax refund anticipation loans.

At CashAmerica people were making loan payments on money borrowed, which used jewelry, electronics, and sports memorabilia as collateral. Finally, the visit to the Rent-A-Center store demonstrated the exorbitant costs of furniture, appliances, and electronics when using a rent-to-own payment program.

For additional information on teaching about high-cost financial services, go to:

Teaching Suggestions

  • Have students talk with someone who has used one of these high-cost financial services. Obtain information about their experiences.
  • If appropriate, have students visit a high-cost financial service provider to obtain information about their services and fees.
  • Have students create a video presentation with suggestions on how to avoid using costly sources of financial services.

Discussion Questions 

  1. Why are an increasing number of people using high-cost financial services such as pawnshop loans, payday loans, and rent-to-own programs?
  2. What alternatives might used by consumers instead of these high-cost financial services?
  3. What actions might a person take to avoid these high-cost financial services?
Jul 2 2014

Beware of Credit Card Surcharges

Did you know that retailers are permitted to charge or surcharge up to 3 percent on your credit card purchases?   However, if a retailer imposes a surcharge, it must be clearly disclosed in the store and on your receipt.

These checkout fees may also give you a discount if you pay with cash. Retailers in CA, CO, CT, FL, KS, MA, ME, NY, OK, and TX are not permitted to charge credit card surcharges.

Retailers are also allowed to set a $10 minimum purchase amount for credit card purchases. However, they can’t charge fees or set minimum purchase amounts on debit card purchases.

For more information on credit card surcharges, go to http://www.knowyourcard.org.

Teaching Suggestions

  • Ask students if they have personally experienced credit card surcharges on their purchases.
  • Have students make a short presentation with a summary of what actions might be taken to avoid credit card surcharges.

 

Discussion Questions

1. Should retailers charge extra 3 percent surcharge when they display a sign “Your VISA and MasterCard are accepted here”?

2. What can you do to avoid credit card surcharges?