Category Chapters

Sep 14 2024

Government Impersonation Scammers

New Federal Trade Commission data reveals that government impersonation scammers are targeting consumers for payments in cash, with the amount of cash reported lost to these scams nearly doubling from 2022 to 2023.

The FTC data shows that consumers reported losing $76 million when paying cash to government impersonation scammers in 2023, up from $40 million in 2022, an increase of 90 percent. In just the first quarter of 2024, consumers have reported losing $20 million to government impersonation scams when paying with cash.

The median loss for consumers who reported paying cash to government impersonation scammers in the first three months of 2024 was $14,740 – far higher than for any other method of payment. Consumers have reported mailing cash as well as handing cash to drivers sent to collect the money.

Scammers frequently impersonate government agencies, from local police to federal agencies, and while details of the pitch may vary, a common element is that the consumer they are targeting needs to send or transfer money to address an urgent issue or serious problem. This news is usually accompanied with a combination of dire warnings or threats designed to put their target in a state of mind where the urgency of the moment bypasses any doubts they have.

The key fact is this: government agencies will never call, email, text, or message you on social media to ask for money or personal information, and they will never demand a payment. Only a scammer will do that.

The FTC recently put into effect a new rule that gives the agency stronger tools to combat and deter scammers who impersonate government agencies and businesses, enabling the FTC to file federal court cases seeking to get money back to injured consumers and civil penalties against rule violators.

Consumers who are targeted by a government impersonation scam should report it to the FTC at ReportFraud.ftc.gov. More data about government impersonation scams is available on the FTC’s data dashboards.

For more information, click here.

Teaching Suggestions

·         Ask students if someone they know has been scammed by government impersonation scammers. If so, what was their experience?

·         Ask students to prepare a list of actions they might take if a government impersonation scammer approaches them.

Discussion Questions

1.      What can governmental agencies do to stop these impersonators?

2.      Once apprehended, should the perpetrators be fined or sent to prison? Any other penalties?

3.      What should you do if you are targeted by a government impersonation scammer?

Aug 31 2024

Home and Auto insurance costs

Each insurance company uses many factors to calculate what they charge a customer for home and auto insurance.

Some factors are about you, your home, or your car.

For home insurance, common factors include:

  • Your home’s age.
  • How old your roof is and what it’s made of.
  • Where you live.
  • The cost to replace your house.
  • Your claim history.
  • Your credit score.

For auto insurance, common factors include:

  • Your driving record and claims history.
  • Where you live and how much you drive.
  • Your age, gender, and marital status.
  • Your occupation.
  • The cost to replace the car you drive.
  • Your credit score.

A change in any factor can raise or lower your premium. This includes characteristics that change over time, such as the value of your home or auto.

For More Information, click here.

Teaching Suggestions

  • Ask students to make a list of major factors that most insurance companies use to calculate your premiums for home and auto insurance.
  • Have students talk with an insurance agent or financial planner to obtain recommendations about the types of insurance you may need for home and auto insurance.

Discussion Questions

  1. Why do insurance companies consider your credit score in determining your home and auto insurance premiums?
  2. In your opinion, what should be the main factors used to determine the amount a person pays for auto insurance?
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?
Aug 3 2024

SHRINKFLATION AND SKIMPFLATION

Over the years, companies have raised prices through shrinkflation, in which the price of an item stays the same while the package size is reduced. A sports drink bottle is now 28 ounces instead of 32 ounces, or the “half gallon” ice cream carton is now 1.5 quarts or smaller. However, the price has stayed the same or perhaps increased. 

Other examples of companies downsizing products without downsizing prices include air-filled chip bags, smaller soup cans, and reduced size detergent packages. This marketing strategy is not new.  One of the first examples was years ago when a coffee company reduced its one-pound can to 13 ounces.

Similarly, skimpflation occurs when lower-quality materials are used in products like paper towels or cheaper ingredients in microwave dinners and restaurant meals, while prices remain unchanged. This also occurs when a hotel reduces the frequency of room cleaning or offers fewer food options for the complimentary breakfast.

While shrinkflation can be measured in government cost-of-living statistics, skimpflation is much harder to compute. If a paper towel roll costs the same with fewer sheets (shrinkflation) that will show up as a unit cost increase (inflation). However, if the paper towel roll is the same size but with inferior material quality (skimpflation), this change is not reflected in inflation statistics.

To get the best value for your money, consumers are encouraged to: (1) continue to use unit pricing to compare package sizes; (2) compare prices at several stores; (3) search online for digital coupons and rebates; and (4) read reviews of other consumers for information on changing product quality.

For additional information on shrinkflation, click here.

Video link: click here.

Teaching Suggestions

  • Have students find examples of shrinkflation and skimpflation for various products and services.
  • Have students create a visual (poster or slide presentation) that compares examples of shrinkflation and skimpflation.

Discussion Questions 

  1. Describe actions a person might take to stay aware of shrinkflation and skimpflation.
  2. How can a person assess changes in product or service quality to continue to make wise consumer choices?
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?
Jul 6 2024

SKILLS FOR FINANCIAL WEALTH

While being rich means different things to different people, certain skills and personal qualities will help you achieve financial success. These competencies include:  

  • Financial Literacy. Ongoing learning of basic money management activities will provide the foundation for wealth building.
  • Leadership and Management Skills. An ability to motivate and guide individuals and teams is required for business leadership and career growth.
  • Decision-making and Problem-Solving. Offering creative and effective solutions, especially in high-stress situations, will always be a valued leadership and career skill.
  • Negotiation Skills. Your bargaining ability will often result in more money in business and career situations.
  • Entrepreneurial Mindset. A vision for identifying and implementing business ideas requires a skillset that can be of value in nearly every life situation. The creativity, curiosity, persistence, and motivation of effective entrepreneurs will result in financial and career success.
  • Self-Discipline and Time Management. Wise time use and consistency in achieving your financial goals are fundamental for long-term money success. Committing saving and investing allows you to build wealth through the compounding effects of time value of money. 
  • Curiosity and Ongoing Learning. Awareness of new trends, technology, and markets provides guidance for both investing and emerging career opportunities.
  • Networking. Connections with others are vital for professional success and personal development. Your network can uncover opportunities and resources. Making friends, especially those in different socio-economic situations can help grow your financial potential. When low-income people interact with those with a higher income, this often results in less-affluent people considering ways to expand their saving and investing.  Bottom of Form

For additional information on skills to build wealth, go to:

Link #1

Link #2

Teaching Suggestions

  • Have students talk to others to obtain suggestions for building wealth.
  • Have students create a visual proposal (poster, slide presentation, or video) to communicate actions that would help people improve skills for building wealth.

Discussion Questions 

  1. Which of these skills are your strongest? Which skills need to be improved?
  2. Describe actions a person might take to improve one or more of these skills.   
Jun 22 2024

BEWARE OF FAKE ONLINE STORES

Careless online shopping can result in lost money and identity theft. Many fake companies attempt to attract and scam online customers.

To determine the legitimacy of an online store

  • Examine the URL for spelling errors, strange characters, and confirm you are on the correct website.
  • Look over the website design for poor grammar and low-quality images.
  • Click the padlock icon in the address bar; the dropdown box will tell if the site is secured with a digital certificate.
  • Use a website checker such as UrlVoid.com to inform you of any warning signs for the site.
  • Keep your browser and antivirus software updated to help identify unsafe sites.
  • Read reviews from multiple sources to confirm the credibility of the seller.

Each day, scammers create new ways to trick browsers and shoppers. Following these suggestions can help you reduce the chance that you will be a victim of an online scam.

For additional information on fake online stores, go to:

How To Spot a Fake Online Store in 6 Easy Steps

Video link:

Teaching Suggestions

  • Have students talk with others to learn about any experiences with fraudulent online shopping sites.
  • Have students create a recorded podcast with information on how to avoid fake online sellers.

Discussion Questions 

  1. What features of a shopping website have you observed that might be considered suspicious for a scam?
  2. Of the actions listed, which have you taken to prevent identity theft and online shopping scams?   
Jun 8 2024

Making artificial intelligence (AI) work for workers

AI, like other technological advancements, will transform the way that many of us work. It holds enormous potential both to enhance opportunity and prosperity for workers and to exacerbate inequity, bias and job displacement. 

On Oct. 30, 2023 President Biden issued a landmark Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. This executive order advances the comprehensive strategy for governing the development and use of artificial intelligence safely and responsibly. A key component of that strategy is the commitment to support our nation’s workers. This commitment involves ensuring that workers not only benefit from AI’s opportunities, such as new jobs and improved job quality, but are also protected from its dangers, including job displacement, discrimination, the undermining of workers’ rights and worsening job quality.

The scope of AI use in the workplace, both now and in the future, is expansive and dynamic. AI encompasses machine-based systems capable of learning human-like tasks, such as making predictions, recommendations or decisions. It can track workers, measure and predict their output, set performance goals, and recommend performance-based rewards or sanctions. AI systems can also process job applications, assess qualifications and identify top candidates for an HR professional. Generative AI capable of creating original content can, for example, draft new emails to clients based on previous exchanges, provide enhanced support to customer service agents and write new software code. While these examples demonstrate AI’s potential to increase workers’ productivity and efficiency, this technology also poses risks of deteriorating job quality, embedding bias or replacing workers altogether.

For more information, click here.

Teaching Suggestions

  • Ask the students to make a list of risks that Artificial Intelligence AI) poses to workers.
  • Ask students if state and federal governments should engage with employers, AI developers, unions, worker advocates and researchers in order to develop best practices of the use of AI.

Discussion Questions

  1. Why is the federal government concerned with the use of AI in the workplace?
  2. What are potential benefits of AI in the workplace?
  3. What might be implications of employers using AI to collect data on workers, including issues such as data privacy, ownership and transparency?
May 25 2024

Dark Patterns to Trick Consumers

“Click to verify your free trial and subscription.”  Dark patterns are online designs to fool a person into buying items or giving up privacy. These deceptions include disguised ads, hiding junk fees, difficult to cancel subscriptions, pre-checked boxes, hard-to-find disclosures, and tricks to get you to share personal data.

A recent Federal Trade Commission study reported that companies are using more and more sophisticated practices to trick and trap consumers. The study “examined how dark patterns can obscure, subvert, or impair consumer choice and decision-making and may violate the law.”  The report highlighted four digital dark pattern tactics:

  1. Disguised ads to mislead consumers. These deceptive ads include promotional information designed to look like independent, editorial content.  Comparison shopping sites claiming to be neutral, but rank companies based on advertising fees paid. Countdown timers are used to get consumers to believe they only have a limited time to purchase an item.
  • Difficult to cancel subscriptions or charges. Companies attempt to trick consumers into buying items.  A deceptive subscription seller may persist with ongoing charges for an item a person never intended to buy. The company will likely make it very difficult to cancel free trials and subscription plans. Consumers may be required to navigate a confusing and lengthy cancellation website path. As they click through several pages of promotions and links, they may be directed away from the cancellation path. 
  • Hidden key terms, junk fees.  Some dark patterns hide key product limitations among extensive terms of service documents, which may also conceal junk fees. Companies advertise only part of the total price to lure consumers; other mandatory charges are not mentioned until late in the buying process.
  • Personal data sharing trickery.  Presented as a choice for privacy settings or sharing data, a website will steer consumers to an option that gives away personal information. In one situation, a company used default settings to collect and share a person’s viewing activity with third parties; consumers were only provided a brief notice that could easily be missed.

Awareness of these tricks can help consumers avoid being scammed.  Victims of these deceptive tactics may file a complaint with the Federal Trade Commission at ReportFraud.ftc.gov.

For additional information on dark patterns, click here:

Article #1

Article #2

Teaching Suggestions

  • Have students talk to others to learn about their experiences with deceptive online buying.
  • Have students create a visual summary (poster or slide presentation) to warn consumers of dark patterns.

Discussion Questions 

  1. What are possible examples of the tactics discussed in the article that might be used to deceive consumers?
  2. Describe actions a person might take to avoid deceptive online marketing tactics.
May 11 2024

THE BEST TIME TO BUY A CAR   

Car prices and availability are still being affected by the COVID-19 pandemic. Money management experts continue to recommend keeping your current vehicle. Even if repair costs are higher than what you owe on the vehicle, it may be worth getting it fixed to avoid the high prices.

However, if you plan to buy a car, to get the best deal consider the following:

  • Try to purchase a vehicle early in the week. Sunday has been the best day for a purchase, with an average savings of 10 percent off the manufacturers suggested retail price. In states that restrict auto sales on Sunday, Tuesday is the best day. Research indicates that Thursday is the worst day to buy a car.
  • Buying a vehicle closer to the end of the month may have advantages. Salespeople may be trying to make their monthly quota. View potential purchases between the 16th and the 20th of the month, and then negotiate your purchase the last two or three days of the month.
  • Some holidays that occur earlier in the month (President’s Day, Independence Day, and Labor Day) may result in better deals.
  • Some of the best car deals may be obtained at the end of each quarter of the year (March, June, September, December), especially at year end. Discounts are traditionally highest in December. The last quarter of the year can be the best time to buy a car, both new and used. December 31 can be the day to get the best deals.

Be aware that the calendar will only get you so far when obtaining the best deal. Doing online and in-person research is vital. Seek out incentives for vehicles in which you are interested. Also important, if buying on credit, is being pre-approved for a loan.

For additional information on the best time to buy a car, click here.

Teaching Suggestions

  • Have students talk to others about actions they have taken when buying a car.
  • Have students create and role play a car buying negotiation situation based on their experiences and research.   

Discussion Questions 

  1. How might a person reduce the automobile and transportation costs in their budget?
  2. Describe actions a person might take before meeting with a car salesperson?