Safeguarding Money and identity during a recession

Home
Information Sources
Million Dollar Recession Research
Safeguarding Money and identity during a recession

Safeguarding your money and identity during a recession

How can consumers work to become aware of the fees their banks are charging them? Are there ways these fees could be avoided?

a. Since the late summer/ early fall of 2007, the economy has slumped beyond any analysts expectations. Because of this slump, hundreds of thousands have lost their job, home, savings, and many have lost all three. In a time of recession, people are trying to find ways to stretch every dollar in their portfolio. Limiting expenses is the key to saving, and finding unnecessary fees are another great way to save as well. Banks have done some pretty creative things to find money. Earlier in 2009, JPMorgan Chase decided to charge a $10 monthly fee to everyone including those who had “No annual fee” credit cards. Obviously outraged, consumers got defensive. New York Attorney General Andrew Cuomo pressured JPMorgan into refunding the previously taken fee. With this example, it makes one realize just how much banks are scraping to get by. Are your “No annual fee” credit cards in danger of becoming annual fee cards? Without the annual fee, does my bank go into bankruptcy and I lose my liquidity or credit line? There are many questions facing consumers nowadays. With expenses piling up quickly during this economic downturn, how do we know exactly where every penny of our money is going?

b. There are ample websites that are trying to assist consumers in protecting their accounts. The best way to prevent financial institutions from getting your money via fees is to be completely informed. Read every part of a credit card, debit card, loan, CD application. Within that contract lies the law that cannot be tampered with legally. Some applications have caveats that will allow a fixed rate of interest to adjust into an adjustable rate in a given economic circumstance. Thus, becoming informed is the best way to prevent “surprise” fees. The best way to become informed is to call up or go and visit your personal banker. They can sit down with you and discuss any current situation or future preventable situation that may bring fees. Improving your relationship with your banker will ultimately improve your ability learn of fees and bank dealings.

Another thing one could do is to look at all your receipts as you are leaving the gas station or grocery store. The receipt might show a transaction fee that might not come up in any other way. Look at your receipts.

The last step one could take is enrolling in an online or offline financial portfolio tool such as mint.com, or Quicken. These tools usually are so into detail that they can potentially separate a transaction fee from the rest of the bill. These tools might even have special alerts that will notify you of anything other than what you budget or input into your settings.

Be on the offensive, stay up-to-date and be ready to jump at anything unordinary on your bills. Asking questions and digging deeper usually will let your financial institution know you are serious about fees and costs.

c. The following website: http://www.scambusters.org/creditcardfees.html contains the best information on becoming aware of the ways to avoid numerous fees and costs that banks and financial institutions are secretly collecting. The website provides solutions, or action plans to prevent these institutions from getting your money. It’s a huge wealth of information.

I would suggest staying on top of all your transactions and dealings. I also suggest that you work very closesly with your financial advisor, if applicable, or a mentor to help you learn to not be cheated. If you are prepared you shall not fear.

How can consumers work to effectively safeguard their identity during an economic downturn when cyber criminals abound?

Effectively safeguarding your identity during this economic downturn can save you a lot of time as well as money problems! It is important because as the economy is shaky, cyber criminals do everything they can to use other’s identity to benefit them. This is not only limited to credit cards (though this is definitely one way), but also attacks on loans, bills, or other crimes in your name. Some of the inconveniences of having an identity stolen can be charged higher rates for insurance and fees for credit cards, rejected for student loans or home mortgages, arrested for crimes they did not commit, and unable to get or keep a job. In 2002 alone, the victim total due to identity theft climbed to 10 million, a new high. Some of the following can help keep you safeguarded from cyber criminals and keep your identity safe.

How to prevent identity theft:

1. Periodically check your credit report for suspicious activities. Americans are now entitled to a free annual credit report from each of the three bureaus: Experian, Equifax, and TransUnion. You can get one free report every 4 months.

2. If you elect to shop online, use a credit card rather than a debit card. With a credit card, you have the extra protection of maximum liability of $50.00 for unauthorized purchased. If someone steals your information you can fight it. With a debit card the money is gone and it is too late.

3. Learn more about "phishing" email scams, and other schemes, frauds, and cons to separate you from your identity and your money. For more information about these scams and about resources at your disposal, visit the Protecting Your Identity site.

4. Keep your operating system up to date. Often updates to operating systems are upgraded to block hackers and malware.

5. Use up-to-date anti-virus, anti-adware, anti-spyware programs. This can help keep you safe from viruses and other problems that can come over the internet.

6. Use strong passwards. The stronger the password the more difficult it will be for a hacker to break through and steal your identity.

7. Learn how to tell if a Web site is secure. When you provide your credit card account number to a shopping site, you want to be sure that the transmission is secure. Look for the unbroken padlock at the bottom right of the screen. You can right click on the padlock to make sure the security certificate is up-to-date. If it is not, you should not order from that Web site. Also make sure the Web address has the letter 's' after http in the address bar at the top of the page. The ‘s’ indicates that your financial information will be encrypted during transmission.

8. Start reading privacy policies. Get in the habit of reading a Web site’s privacy policy. A link to the privacy policy is usually found at the bottom of the home page. This policy should alert you to how your information is shared and sold. Additionally, the policy outlines what rights you have. If a company violates its own privacy policy you can complain to the FTC.

9. Spyware: Cyber-thieves use software applications that can be remotely installed on your computer without your knowledge. This special snoopware provides the thief with access to everything you do online.

10. Be stingy with your personal information: Don't give it away without careful consideration. Question businesses that claim they need your social security number and ask for an alternate identifier whenever possible. Avoid online and real-world scams by refusing to give out information if you didn't initiate the contact. If someone emails or calls you with an offer you may be interested in, decline their requests for personal information, then look up the company's phone number or Web site and contact their customer service department to verify the offer.

Be smart with your personal information. You do not necessarily need to be paranoid about identity theft, but know that it is real and take some of these steps to secure your identity. To learn more about privacy and how to protect yourself you may visit http://www.privacyrights.org/fs/fs18-cyb.htm#PART_THREE .

What are the leading indicators that an investment will be fraudulent? What are the leading indicators that show a person will be taken in by a fraudulent investment?

Importance:

During these financial times it is important to know how to be aware of the prevalence of fraudulent investment opportunities. If you were to become involved in a fraudulent investment it could make these tough times even worse; it could make your financial problems even worse.

Warning signs of investment fraud:

1. Beware of unexpected phone calls, letters, internet messages, even personal visits from anyone offering a quick-profit, low-risk opportunity that requires your immediate attention. When hounded on the phone by a promoter, don't be afraid to hang up without explanation. You do not owe the caller anything - in fact this kind of solicitation is an invasion of your privacy.

2. High pressure sales tactics. Common examples of high pressure sales pitches include:

• "Act now, there is a waiting list of others who want to invest"

• "Hurry, or it will be too late"

• "Don't delay, this investment is as safe as a CD (certificate of deposit)"

3. The promise of incredibly high profits. Look with doubt on promises that you can double your money or earn a high return on your investment within a short period of time.

4. Be suspicious of an investment that is supposedly risk-free, low-risk or "secured" but promises high returns.

5. Watch out for people who prey on your fears. It is common for swindlers to pitch their schemes as a way to eliminate your financial fears for the future. Fear and greed can cloud your good judgment.

6. Be extra cautious of investments or products endorsed by groups. Many swindlers will attempt to obtain the endorsement of churches, fraternal and other organizations to lend credibility to their sales efforts. Just because an investment is endorsed by some group does not mean it is legitimate!

7. If you have any suspicion of a fraudulent investment, you should immediately contact the SEC and County Court house to get a criminal background check and to see if the agent has had any legal issues involved with the trading commission and/or with private investors.