Financial Literacy Skills

1. Financial Literacy Skills Unit 6: Understanding Consumer Fraud and Identity Theft

2. Objective 1: Select guidelines for making purchases. • Buy according to priorities of needs and wants. • Compare quality and prices of products and services. • Check for any “extra” charges added to the base price. • Read and understand guarantees, warranties, and contracts. • Compare credit/cash costs and decide which to use. • Ask for recommendations from friends and family. • Ask the salesperson to explain the store’s return or exchange policy. • Research consumer magazines and online sources.

3. Objective 2: Distinguish advantages and disadvantages of advertising. Advantages • Informs consumer about new products and services, changes in technology, and how some products and services work • Promotes the individual’s right to choose • Increases demand for products and services, which helps the economy • Helps support the media by paying for space or time • Saves consumer time and money by telling when, where, and for how much money products and services are being sold

4. Objective 2: Distinguish advantages and disadvantages of advertising. Disadvantages • Encourages materialism • Tempts people to buy goods and services they cannot afford • Wastes resources • Gives sponsors (those who place ads) control over the media • May appeal to emotions more than reason (such as fad items, or those endorsed by celebrities) • Can be misleading

5. Objective 3: Evaluate advertising.

6. Objective 4: Analyze sales techniques.

7. Objective 5: Match consumer fraud techniques to their descriptions. • Bait-and-switch • Contest • Deceptive pricing • Door-to-door • Earn at home • Mail-order • Misrepresentation • Phishing • Multi Level Marketing (MLM) • Referral sales • Unordered product • Vanity listing

8. Objective 6: Identify consumer fraud techniques.

9. Objective 7: Analyze consumer problems.

10. Objective 8: Put in order the steps in making a consumer complaint. • Keep sales receipts and cancelled checks. • Set up a file for guarantees, warranties, contracts, etc. • Fill out the warranty card and send to the manufacturer. • Follow instructions and safety warnings. • Formulate your complaint and a fair solution. • Return a product to the point of purchase if it does not work. • If the problem is not resolved at the local level, call or write a letter to company headquarters. • Keep trying. If necessary, seek assistance from other sources.

11. Objective 9: Identify sources of consumer protection. • Federal agencies • State, county, and city agencies • Corporations • Trade and professional associations • Better Business Bureaus (BBBs) • Occupational and professional licensing boards • Mass media • Legal system • Private and voluntary consumer groups and testing agencies • Publications • Internet resources

12. Objective 10: Write a letter of complaint.

13. Objective 11: Identify types of information identity thieves look for. • Social Security number • Driver's license • Identification card • Birth date • Credit card number • Bank account number • Personal identification number (PIN) • Passwords • Retail/business account number • Miscellaneous personal information

14. Objective 12: Discuss ways in which thieves steal information. • Telephone/telemarketing • Online/e-mail • Mail theft • "Dumpster diving" • Theft of wallet or purse • Theft of information from businesses • Impersonation

15. Objective 13: List ways that thieves use stolen information. • Open a bank or credit account • Change the address on an existing account • Divert mail by completing a "change of address" form • Begin utility services • Rent or lease goods • Write checks against an account • Obtain loans and mortgages • File bankruptcy • File taxes • Commit crimes anonymously

16. Objective 14: Select from a list ways to protect yourself from credit card fraud. • Keep a list of your credit card numbers and toll-free numbers in case your card is stolen or lost. • Never give out your credit card number to someone who calls you. • Never give out other identification, such as mailing address, telephone number, or social security number, with a credit card charge. • Be conscientious about getting your credit card back from salespeople.

17. Objective 14: Select from a list ways to protect yourself from credit card fraud. • Never let a salesperson throw away carbons from a credit card receipt; take them with you and tear them into tiny pieces yourself at home or put them in a shredder. • Shred any credit card mail offers that you do not want to accept. • Make sure handwritten charge slips do not leave an empty space between the charge and the total.

18. Objective 14: Select from a list ways to protect yourself from credit card fraud. • Report a lost or stolen credit card immediately. • Never keep your automated teller machine (ATM) personal identification number (PIN) in the same location as your credit card. Do not carry them both; memorize your PIN. • Take ATM transaction slips with you when you leave the ATM.

19. Objective 14: Select from a list ways to protect yourself from credit card fraud. • Be very careful and responsible about taking your credit card from the ATM and putting it in a secure place. • Cut up credit cards you do not wish to use, even if the card has expired. • Check your monthly statement carefully to compare it with your receipts. Notify the credit card company in writing for any amount that is in error.

20. Objective 15: State guidelines for protecting your identity. • Keep an eye on your mail. • Pay attention to billing cycles. • Keep your passwords private. • Avoid using the same information and numbers when you create a Personal Identification Number (PIN).

21. Objective 15: State guidelines for protecting your identity. • Order a copy of your credit report from the three credit bureaus every year to check on their accuracy. • Shred pre-approved credit card offers and any documents that contain personal information. • Do not give out personal information on the phone or over the Internet unless you know who are dealing with. • Weed out your wallet.

22. Objective 15: State guidelines for protecting your identity. • Install “firewall” software on your personal computer. • At work, become familiar with your employer's policies about protecting personal information. • Make sure that your employer keeps sensitive information in a safe place. • Before doing business with a new company, contact the Better Business Bureau or state and local consumer agencies to make sure the company has a good customer service record.

23. Objective 15: State guidelines for protecting your identity. • When businesses ask for your personal information, ask how the information will be used. • Make sure that businesses keep applications and other sensitive documents secure. • Make sure that mailings and identification cards have as little information printed on them as possible.

24. Objective 15: State guidelines for protecting your identity. • Never have your phone number or your Social Security number printed on your checks. • Request that additional passwords be used to access your credit, bank, and telephone accounts. • Most companies will not offer extra security options, so always ask a representative what is available when signing up for a service or beginning an account.

25. Objective 16: List the effects of identity fraud on victims. • Financial loss • Poor credit rating • Lost time • Terminated services • Lawsuits • Fines • Suspension of driver's license • Arrest • Emotional pain and stress

26. Objective 17: Determine the risks of shopping online by examining an internet business.

27. Objective 18: Distinguish among federal laws that address identity theft. • Identity Theft and Assumption Deterrence Act • Fair Credit Reporting Act • Fair Credit Billing Act • Electronic Fund Transfer Act • Fair and Accurate Transactions Act • Fair Debt Collection Practices Act • Graham-Leach-BilleyAct

28. Objective 19: Research laws in your state that address identity theft.

29. Objective 20: List effective ways to determine if you are a victim of identity theft. • Order and examine credit reports. • Register fraud alerts with credit reporting institutions (CRAs). • Watch billing cycles for stolen or diverted mail. • Account for each expenditure on credit card bills, bank statements, and receipts. • Do a background check on yourself.

30. Objective 21: Explain steps to take if you are a victim of identity theft. • Contact the major national credit reporting agencies (CRAs). • Contact institutions, businesses, and agencies that provided goods, services, or credit in your name. • Contact local law enforcement. • Contact the Federal Trade Commission (FTC). • Contact any agency associated with the crime.

31. End of Unit 6