Financial Scams

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WebQuest: How To Protect that Credit (and Debit) Card!

I am always amazed when I am searching Google for interesting news stories about credit cards how frequently the articles detail how the “bad guys” manage to steal credit card information. Identity theft can seem like an adult problem to many teens (unless their parents or they have been personally victimized), so I thought this quick WebQuest might bring the topic home to them.  I thought it would be interesting to provide an update to my earlier 2015 post titled (apologies to Paul Simon) “50 Ways to Swipe Your Credit Card (or Debit Card) Number.”

So, here’s the assignment:

Personal Finance in Your Life: “The Work From Home” Scheme

I was reminded of an earlier blog post (What’s the Catch? Make Lots of Money Working from Home) after seeing this sign at a hotel. A good example of “if it sounds too good to be true…well, it probably is!):

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By |November 7th, 2016|Career, Current Events, Employment, Financial Scams|

Video: How Did These NFL Players Lose $43 Million?

From 60 Minutes (14 minute video):

Questions:

Question: How Can Fake Bank and Credit Accounts Impact Your Credit Score?

For those of you following the Wells Fargo fake account saga (some Senators might use more choice terms to describe their actions), your probably familiar with the details of millions of fake bank and credit cards that were set-up by overzealous branch employees trying to hit their sales quotas (I posted how this case is emblematic of why consumers better understand the sales incentive structure for financial products).

Hat tip to Jessica Endlich for pointing out the additional harm that may have been caused to customers’ credit scores as a result of Wells actions. To understand how they might have been harmed, we turn to NPR (3:37 audio):

Question (with a Few Videos too): How Do Slot Machines Hook Gamblers?

download-16I am flying back from Oklahoma after a great workshop organized by Oklahoma Council of Economic Education (thanks to Amy Lee and team!) and Oklahoma Jump$tart (thanks to Melissa Neal!). Among Oklahoma’s 14 financial literacy standards is this one: “ Understanding the financial impact and consequences of gambling.” I think that this is quite unique among the state standards that I have come across. With that thought still fresh in my mind, this headline caught my attention: “How Slot Machines Mess With Your Brain To Get You Hooked On Losing (Bloomberg).” 

Here were a few research findings in the article:

Why Do Incentives Matter In The World of Financial Services?

You might want to add another question to ask that well-dressed salesperson who is selling you a financial product (or any other product for that matter):

How are you being compensated?

I bring this up as the clouds continue to darken over a certain financial institution who has been in the headlines recently:

  • Wells Fargo opened a couple million false accounts (Bloomberg)
  • Wells Fargo fired 5,300 workers for improper sales push. The executive in charge is retiring with $125 million. (Chicago Tribune)
  • Wells Fargo fined $185 million for fraudulently opening accounts (NY Times)

Here’s a brief summary of what happened (from NY Times):

Looking At A Checking Account Through a Teen’s Eyes

One trap I am constantly trying to avoid in my work is what I would call the “specialist’s mindset.” It comes from studying a subject for a long period of time and manifests itself in several ways, including heavy use of jargon and terminology. Oh, and it also comes with a belief that everyone somehow has a similar level of knowledge about your specialized topic. This leaves the specialist wondering why you might get a quizzical look when discussing the merits of index investing compared to active management. It all seems so obvious, doesn’t it?

I had the gift of observing a “beginner’s mind” this weekend when I took my teenage daughter to sign up for her first checking account. She already had experience with a savings account but now it was time to move up to the big leagues. What I learned from this experience is how this one account ties together so many key financial concepts which can seem so overwhelming to a financial newbie. Let me explain. 

Play the Lottery Simulation: Is It Worth the Investment?

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Hat tip to Charles Kafoglis of Incarnate Word Academy in Houston (and a 2016 NGPF Fellow) for pointing out this Texas Lottery resource to me.

Here’s an idea on how you can use this interactive to create a mini-activity to experience the lottery (at no cost):

  • Tell students that they are going to calculate their return on investment (ROI) for purchasing lottery tickets over the past 6 months.
  • The minimum wager for PowerBall is $2 per ticket
  • There are two drawings per week, so students will have 52 opportunities to win (or lose!)
  • Therefore their total investment over the six month period will be $104 (52 games X $2 per game)
  • Assume that students play the same six numbers over this period (most lottery players seem to have their “lucky” numbers).
  • Have students select their six numbers to be played over that period (no peaking at previous winning numbers!)
    • First five numbers are non-repeatable and must be between 1-69
    • Powerball (the sixth number) must be between 1-35
  • Students enter their numbers in the grid in upper right hand corner of Texas Lottery page (I input my own random numbers):