2.02 – Understand Threats to Financial Security
Gwishiri
SCAMS AND SCHEMES
TYPES OF BEHAVIORS THAT LEAD TO FINANCIAL
LOSSES
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Failure to plan
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Not comparing job offers
carefully in light of
expected expenses
Shopping without a list,
which often leads to
impulse buying
Spending without using a
spending plan, which
often leads to
overspending
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Failure to protect
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Making personal
information available that
can lead to identity theft
Not securing life, health,
and property to minimize
risks of crimes and
emergencies
Not following Internet
safety practices
FAILURE TO BE INFORMED
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Not reading the fine print in
sales agreements, product
labels, contracts
Not researching sales offers
in depth before making a
commitment
Not separating facts from
opinions in considering
advertisements
FAILURE TO COMMUNICATE
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Not asking sufficient
appropriate questions to inform
financial decisions
Not discussing financial
decisions with all parties/family
members involved
Not taking enough time to
make a careful decision
because of sales pressure
Not saying “no” when needed
TYPES OF BEHAVIORS THAT LEAD TO FINANCIAL
LOSSES
TYPES OF DECEITFUL/ FRAUDULENT SCAMS
AND SCHEMES THAT LEAD TO FINANCIAL LOSS

Lying---e.g., accepting money for a stated purpose, then using
it for a different purpose;
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Concealing information---e.g., sellers not willing to state their
physical addresses
Deals that are too good to be true---e.g., a PYRAMID
SCHEME,
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selling a product or service that will not perform as promised
An illegal scheme that influences people to contribute money
based on the false promise that they will get rich quickly; the
pyramid collapses and money is lost, not gained
Chain letter---a variation of the pyramid scheme that involves
postal correspondence, also illegal
SCAMS/SCHEMES CONTINUED…
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High-pressure sales approaches---e.g., claiming the offer is
only good for one day
Vague offers---e.g., expecting you to pay up front in order to
receive full information about a product or service
Sweepstakes letter---states that you have won a valuable
prize, but need to pay a processing fee to claim the prize
Lotteries---prizes awarded by chance after purchase of
ticket; very small chance of winning
Earn-money-at-home offers---on the condition that you
purchase software, etc.; once paid for, nothing arrives
Winning bid in auctions---you pay the bid amount, but never
receive the item bought
Identity theft---stealing one’s personal information
COMMUNICATING AND REPORTING
DECEITFUL/FRAUDULENT SCAMS AND SCHEMES
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Communicating with fellow
consumers
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Use available communication
media---live conversation,
telephone, texting, emails, etc.
Be specific, include key details
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Reporting to government agencies
and other consumer advocates
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Go to the Federal Trade Commission
(FTC) website; complete a Consumer
Complaint Form
Call or visit the website of the
National Fraud Information Center of
the National Consumers League
Contact local consumer protection
agency
Contact Better Business Bureau
Contact State Attorney General’s
office
Contact the post office if you receive
a fraudulent offer by mail
Contact the local media