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?

Romance Scams

What are some signs that a romance scam could be taking place?

  • a new love living far away requests money or use of your credit card number
  • being asked to sign a document giving a new romantic interest control of your finances
  • a new sweetheart wants you to open a joint bank account with them

While romance scammers usually focus on single, older people, anyone seeking a new relationship is a possible target. These scams can happen in person, but more often through social media, dating websites, smartphone apps. These scams happen when a new love pretends to be interested in you as a way to get your money. In fact, they may not even be who they say they are.

Beware of Cupid’s arrow striking your wallet instead of your heart!  To protect you, friends, and family from romance and other scams, consider these actions:

  • Avoid giving a new friend access to credit cards, bank accounts, or other financial assets.
  • Report crimes or financial exploitation to local law enforcement agencies or to Adult Protective Services (APS); information available at gov.
  • Contact your state attorney general and the Federal Trade Commission to report cases of financial abuse.

For additional information on romance scams, click here.

Teaching Suggestions

  • Have students create and present possible scam situations to create awareness among various potential victims.
  • Have students create a visual presentation (using computer software or a poster) to communicate actions to avoid scams.

Discussion Questions 

  1. What are common warning signs that may indicate that a possible scam is taking place?
  2. Describe actions that might be taken to avoid various scams and frauds.

Tax Identity Theft Awareness Week

Are you looking forward to getting your tax refund in the New Year? Tax identity thieves may be looking forward to getting your refund too. That’s why the Federal Trade Commission has designated January 29-February 2, 2018 as Tax Identity Theft Awareness Week.

Tax identity theft happens when someone uses your Social Security number (SSN) to get a tax refund or a job. You might find out it’s happened when you e-file your tax return and discover that a return already has been filed using your SSN. Or, the IRS may send you a letter saying more than one return was filed in your name, or that IRS records show you have wages from an employer you don’t know.

Learn to protect yourself from tax identity theft and IRS imposter scams, and what to do if someone you know becomes a victim. The FTC and partners including the IRS, the Department of Veterans Affairs, and the Treasury Inspector General for Tax Administration will be co-hosting free webinars and Twitter chats during Tax Identity Theft Awareness Week. Visit ftc.gov/taxidtheft for details about the events and how to participate.

For more information, click here.

Teacher Suggestions

  • Ask students if filing early may avoid e-file tax identity theft fraud if someone files before they do.
  • Ask students what steps should they take if their identity is stolen?

Discussion Questions

  1. How can one protect from tax identity theft and IRS imposter scams?
  2. What can you do if you or someone else you know becomes a victim of identity theft?

Protect Your Social Media Accounts

The Internet has made our lives easier in so many ways. However, you need to know how you can protect your privacy and avoid fraud. Remember, not only can people be defrauded when using the Internet for investing; the fraudsters use information online to send bogus materials, solicit or phish.

Here’s what you can do to protect yourself when using social media:

Privacy Settings: Always check the default privacy settings when opening an account on a social media website.

Biographical Information: Consider customizing your privacy settings to minimize the amount of biographical information others can view on the website.

Account Information: Never give account information, Social Security numbers, bank information or other sensitive financial information on a social media website.

Friends/Contacts:  Decide whether it is appropriate to accept a “friend” or other membership request from a financial service provider, such as a financial adviser or broker-dealer.

Site Features: Familiarize yourself with the functionality of the social media website before broadcasting messages on the site. Who will be able to see your messages — only specified recipients, or all users?

For More Information, click here.

Teaching Suggestions

  • Ask students to make a list of their social media accounts. How do they protect their accounts from fraudsters?
  • Why do many social media websites require biographical information to open an account?

Discussion Questions

  1. Why is it important to limit the information made available to other social media users?
  2. Is there an obligation to accept a “friend” request of a service provider or anyone you don’t know or do not know well?
  3. Why be extra careful before clicking on a link sent to you even if by a friend?

Equifax isn’t calling

Ring, ring. “This is Equifax calling to verify your account information.” Stop. Don’t tell them anything. They’re not from Equifax. It’s a scam. Equifax will not call you out of the blue.

That’s just one scam you might see after Equifax’s recent data breach. Other calls might try to trick you into giving your personal information. Here are some tips for recognizing and preventing phone scams and imposter scams:

  • Don’t give personal information. Don’t provide any personal or financial information unless you’ve initiated the call and it’s to a phone number you know is correct.
  • Don’t trust caller ID. Scammers can spoof their numbers so it looks like they are calling from a particular company, even when they’re not.
  • If you get a robocall, hang up. Don’t press 1 to speak to a live operator or any other key to take your number off the list. If you respond by pressing any number, it will probably just lead to more robocalls.

For more information about the Equifax breach, go to Equifax’s website.

 Teaching Suggestions

  • Ask students if they know someone who has received such a call. If so, how the victim responded to the imposter?
  • What advice can you provide to a victim of a scam?

Discussion Questions

  1. What should you do, if you have already received a call that you think is fake?
  2. What must you do if you gave personal information to an imposter?
  3. What can you do to protect yourself from such scams?

Hurricane Financial Toolkit

Natural disasters create a need for unique actions.  After physical safety is assured, some of the activities related to finances include:

  • contacting your insurance company – request a copy of your policy, take photos and videos to document your claim.
  • registering for assistance at DisasterAssistance.gov or call 1-800-621-3362.
  • talking with your mortgage lender and credit card companies since you may not be able to make upcoming payments on time.
  • contacting utility companies to suspend service if you will not be living in your home due to damage.

Beware of various scams that surface after natural disasters.  These frauds can include phony repairs, deceptive contractors, requiring up-front fees, fake charities, and misrepresenting oneself as an insurance company agent or government representative to obtain personal information.

Assistance for the personal and financial chaos created by a hurricane or other natural disaster may be obtained from these organizations:

For additional information on financial actions for disasters, click here.

Teaching Suggestions

  • Have students role play situations that might require actions such as those described in this article.
  • Have students create a video with suggestions to take when encountering a natural disaster.

Discussion Questions 

  1. How might the advice offered in this article be communicated to people who are victims of a natural disaster?
  2. Describe common mistakes people might make when encountering a natural disaster.

Phantom Debt Collectors

Consumers across the country report that they’re getting telephone calls from people trying to collect loans the consumers never received or on loans they did receive for amounts they do not owe.  Others are receiving calls from people seeking to recover on loans consumers received but where the creditors never authorized the callers to collect them.

The FTC is warning consumers to be alert for scam artists posing as debt collectors.  It may be hard to tell the difference between a legitimate debt collector and a fake one.

A caller may be a fake debt collector if he/she:

  • is seeking payment on a debt for a loan you do not recognize;
  • refuses to give you a mailing address or phone number;
  • asks for personal financial or sensitive information; or
  • exerts high pressure to try to scare you into paying, such as threatening to have you arrested or to report you to a law enforcement agency.

For more information, click here.

Teaching Suggestions

  1. Ask students to make a list of protections provided by the Fair Collection Practices Act.
  2. Ask students to prepare a list of steps they should take if the harassment continues.

Discussion Questions

  • If you think that a caller may be a fake debt collector, why is it important to ask the caller for his name, company, street address, or telephone number?
  • If you think that a caller may be a fake debt collector, should you stop speaking with the caller? Why or why not?

Cash or Credit?

“Currency still has its place, despite the pervasive use of plastic.”

Today, it seems that more people are using credit or debit cards to pay for everything.  And yet, this article provides reasons why cash may be a better payment option.  Those include

  1. A cashless society? Not so fast.  According to a recent Federal Reserve Bank of San Francisco study, 40 percent of consumer transactions involve cash–a higher percentage than for debit cards (25%), credit cards (17%), electronic payments (7%), and checks (7%).
  2. Currency comes in handy. Most vending machines don’t take plastic, and cash works best for all small purchases.
  3. Hamiltons can’t get hacked. With data breaches of major retailers becoming common, some consumers pay by cash to protect their credit card information.
  4. A cash fix can cost you. If you get a cash advance from an ATM outside your bank’s network, you’ll pay more than $4, on average.
  5. Cash is a great budgeting tool. If you have trouble controlling your spending when you pay with credit cards, then cash or a debit card is best for your finances.
  6. Paying by cash may be a good option, but it won’t help build your credit history. Using a credit card now and then for routine purchases can help build a good credit history.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Reinforce the concept of paying by cash.
  • Discuss what happens when people use their credit cards and overspend.

Discussion Questions

  1. Would you prefer to pay for merchandise and services with cash or credit? Explain your answer.
  2. How could paying with cash help you balance your budget and control spending?

Fraud Victims Vulnerable to Severe Stress, Anxiety and Depression

The FINRA Investor Education Foundation issued a new research report, Non-Traditional Costs of Financial Fraud, which found that nearly two thirds of self-reported financial fraud victims experienced at least one non-financial cost of fraud to a serious degree—including severe stress, anxiety, difficulty sleeping and depression. While the Stanford Financial Fraud Research Center estimates that $50 billion is lost to financial fraud every year, the FINRA Foundation’s innovative research examines the broader psychological and emotional impact of financial fraud.

“Fraud’s effects linger and cause distress well after the scam is over. For the first time, we have data on the deep toll that fraud exerts on its victims, and the results are sobering. This new research underscores the importance of the FINRA Foundation’s work with an array of national, state and local partners to help Americans avoid fraud, and assist consumers who have been defrauded,” said FINRA Foundation President Gerri Walsh.

The research report found that:

  • nearly two thirds (65 percent) reported experiencing at least one type of non-financial cost to a serious degree; and
  • most commonly cited non-financial costs of fraud are severe stress (50 percent), anxiety (44 percent), difficulty sleeping (38 percent) and depression (35 percent).
  •  Beyond the psychological and emotional costs, nearly half of fraud victims reported incurring indirect financial costs associated with the fraud, such as late fees, legal fees and bounced checks. Twenty-nine percent of respondents reported incurring more than $1,000 in indirect costs, and 9 percent declared bankruptcy as a result of the fraud.

Additionally, nearly half of victims blame themselves for the fraud—an indication of the far-reaching effects of financial fraud on the lives of its victims.

For more information, click here.

Teaching Suggestions

  • Ask students to list a few suggestions to protect themselves from financial fraud.
  • Explain how FINRA can assist consumers who have been the victims of financial fraud.

Discussion Questions

  1. What are a few indirect financial costs associated with funds?
  2. Why nearly half of victims blame themselves for being victims of financial fraud?
  3. How and where should you report financial fraud?

Does It Sounds Too Good To Be True?

A current email scam invites people to take advantage of “a little known Social Security contract” which enables you to receive “little known benefits.”  Think that sounds too good to be true? It should—there is no “little known Social Security contract.”

What are some clues that scams might not be legitimate?  Scammers insist that the situation is urgent and issue warnings.  They try to convince you to act now to avoid dire consequences.  They promise a deal or secret that the public doesn’t know about.  They come from organizations unknown to you.  They offer things the government doesn’t want you to know, but they don’t come from a .gov website.

The Federal Trade Commission’s website maintains a list of scams in the news.  You can sign up to be notified by an e-mail when new scams appear.  You can also get free consumer education materials and read the latest from consumer protection experts.  Stay well informed by visiting the FTC scam alert page.  It’s in your best interest to find out about the scams and how they work so you won’t fall a victim to one yourself.  Protect yourself by learning how to avoid scams and fraud.  You can search for “identity Theft” or “phishing scam” on Social Security website, www.socialsecurity.gov to learn more about how to protect yourself.  Then you’ll be the one who knew it sounded too good to be true.

For more information, click here.

Teaching Suggestions

  • Ask students what they would do if they received such enticing offers.
  • Ask students to make a list of agencies where they can file a complaint against these scammers.

Discussion Questions

  1. How can you determine if the offer is legitimate?
  2. What can you do to protect yourself from such bogus offers?