Category: Financial Scams

Financial Education Explained by Danielle: The Cost of Trust

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Nov 14, 2017
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Financial Scams, Budgeting, Payment Types, Article, Personal Finance, Savings
Last week, one of my friends experienced a financial pitfall that most of us only ever hear about and hope to avoid. For the past five months, my friend's monthly rent money was not making it to their landlord because their roommate had been pocketing it. To give some context: most landlords require a single rent check for each unit that they own. To achieve this in a multiple person apartment, one roommate—typically the original or most responsible tenant—usually inherits the...

Finance In Our Life: What's the Catch?

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Oct 31, 2017
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Personal Finance, Financial Scams, Credit Cards, Investing
Laura and I were exchanging notes about recent items we received in the mail. We thought it would be a good exercise in having students figure out "What's the catch?" with these financial offers: From my mailbox (apologies for the poor photo): Questions: What is this a "special invitation for?" Who is hosting the event? What do you think they are selling? Why do you think they invite both spouses to attend? What are examples of how they are using psychological tactics to get me...

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

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Jan 31, 2017
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Identity Theft, Activity, Credit Cards, WebQuest, Debit Cards, Current Events, Financial Scams, Activities
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...

Personal Finance in Your Life: "The Work From Home" Scheme

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Nov 07, 2016
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Financial Scams, Career, Current Events, Employment
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!):   ...

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

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Oct 24, 2016
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Behavioral Finance, Question of the Day, Investing, Current Events, Video Resource, Financial Scams, Ethics
From 60 Minutes (14 minute video): Questions: What was the investment idea that burned so many NFL players? Why do you think the NFL players were so attracted to this idea? How much money did Mr. Rubin raise for the Country Crossing project? What were Mr. Rubin’s incentives? Did he make money even if the investment failed? How? Why did the investment fail? Based on the fact that some players lost their homes after this investment failed, how much of their wealth do you think they...

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

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Sep 28, 2016
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Article, Credit Scores, Credit Cards, Current Events, Credit Reports, Audio Resource, Financial Scams, Ethics
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...

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

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Sep 28, 2016
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Video Resource, Research, Purchase Decisions, Current Events, Article, Financial Scams
I 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:...

Why Do Incentives Matter In The World of Financial Services?

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Sep 14, 2016
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Ethics, Activity, Behavioral Finance, Credit Cards, Checking Accounts, Teaching Strategies, Current Events, Article, Financial Scams
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...

Looking At A Checking Account Through a Teen's Eyes

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Sep 12, 2016
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Activity, Budgeting, Identity Theft, Savings, Checking Accounts, Debit Cards, Financial Scams
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...

Play the Lottery Simulation: Is It Worth the Investment?

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Jul 18, 2016
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Activities, Activity, Behavioral Finance, Purchase Decisions, Financial Scams, Interactive
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...

What's the Catch? GET STUDENT LOAN FORGIVENESS NOW!

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May 25, 2016
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Behavioral Finance, Paying for College, Student Loans, Current Events, Video Resource, Financial Scams
How could you resist this offer if you had student debt and wanted to reduce your burden (average college grad has about $30,000+)? What could possibly go wrong? Here’s a video and press release to show you the catch. Oh, and did you catch the grammatically incorrect “Streamed Lined?” _______ Be sure to check out the recent NGPF podcast with Mark Kantrowitz, the leading expert on financial aid and student loans in the US.     ...

What's The Catch? Five Ways To Engage Your Students!

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May 17, 2016
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Activities, Behavioral Finance, Career, Question of the Day, Credit Cards, Checking Accounts, Purchase Decisions, Financial Scams
Yes, it’s the end of the school year so time to get creative in the classroom. I love “What’s the Catch?” activities because it requires students to put on their critical thinking caps to figure out “the catch.” These are all situations that students are likely to encounter in their lives that sound too good to be true. Students enjoy playing detective in these activities. So, without further adieu, the five most popular “What’s the Catch?”...

Before You Take Money Out of the Convenience Store ATM, Read This...

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Apr 29, 2016
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Research, Identity Theft, Checking Accounts, Debit Cards, Financial Scams
‘ ‘             Disturbing news about the increased prevalence of skimming at ATM locations (from NY Times): Skimming involves stealing debit card numbers by putting an illegal card reading device on an A.T.M. Criminals use the devices in tandem with hidden cameras that record personal identification numbers entered onto the keypad. They then make duplicate cards using the information and drain cash from bank accounts. FICO Card Alert Service, which...

What's The Catch? Make Lots of $ Working from Home

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Feb 02, 2016
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Behavioral Finance, Career, Current Events, Audio Resource, Financial Scams
If you have spent any time paying attention, you have probably seen one of these ads. Ask your students what they think the catch might be to this sales pitch… Then have them listen to this 22 minute Planet Money Podcast “Anatomy of a Scam.” Have the students jot down notes to these questions as they listen: What are the stages of the sales pitch he uses to lure her in? What attributes make the salesperson effective? How is he able to get her to share her financial...

Video Resource: What Are Boiler Room Sales Tactics?

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Jan 31, 2016
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Behavioral Finance, Question of the Day, Investing, Current Events, Video Resource, Article, Financial Scams
This Economist article “The Cockroaches of Finance” highlights trends indicating that “boiler room” financial outfits, employing high pressure sales tactics, still persist even after their heyday in the 1990s: Boiler rooms trade on coercion and intimidation, and this one was no exception, say prosecutors. Victims were told that their conversations had been recorded and were legally binding agreements to buy, and that if they reneged they would face late fees and...

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