Category: FINANCIAL LITERACY,

With the holidays quickly approaching, criminals are looking for ways to trick unsuspecting people. Many individuals might be increasing their shipping activity, which could make a text message asking you to verify your package with UPS or USPS seem valid. While the message might look fairly legitimate at first glance, there are several red flags that scream “fraud”. First, look at the link to see if it is suspicious. Never click on a link without knowing it’s 100% reliable. Secondly, ask yourself if the additional instructions for how to activate the link are reasonable. Be on guard! The objective from the criminal is all the same, to obtain your personal information or to get you to send money. If you receive a text with a link or instructions on how to activate the link, do not click on the link nor respond. Instead, look up the number and call to verify. While it might take a few extra steps, it will save you a lot of time and headaches in the end.

An individual’s personal and financial information is a valuable commodity, and protecting it is key to maintaining financial security. Being able to recognize the signs and understand the differences between frauds and scams is essential in safeguarding oneself from having their hard-earned money taken away by scammers and fraudsters. Here are the differences and some practical tips to help people avoid falling victim to deceitful practices.

Fraud:

Fraud is financial theft without one’s permission or knowledge. Fraud refers to the deceptive and dishonest activities carried out with the intention of gaining financial or personal benefits––all while breaking the law. Examples of fraud include unauthorized use of someone’s credit or debit card, stealing someone’s identity and opening accounts in their name, and taking over an unsuspecting person’s financial accounts. Fraud is more difficult to protect oneself from than scams, as it happens without people knowing about it. However, regularly keeping an eye on financial accounts for suspicious activity is key to spotting it quickly.

Scams:

A scam is financial theft with one’s permission or knowledge. It’s a trick that is designed to persuade people into believing false information or promises, with the goal of gaining their money, personal information, or other valuables. Scammers often manipulate their victims by exploiting their trust. Examples of scams include people pretending to be debt collectors, offering fake investment opportunities, or promising fake lottery or prize winnings. For example, a scammer could mail, call, text, or email someone to tell them they’ve won a prize through a lottery or sweepstakes and then ask them to pay an upfront fee to receive the rest of the money. There is no prize. The scammer simply wanted quick payment from the victim. One of the most important ways people can avoid falling victim to scams is by staying informed about the latest scams––that way they spot that something is suspicious before they agree to take action.

Tips to Avoid Becoming a Victim:

Be Caution When Sharing Information – People should be cautious about sharing personal or financial information, whether online or offline. They should avoid revealing sensitive information, such as banking information, passwords, Social Security numbers, addresses, and phone numbers to unfamiliar callers, email senders, or unfamiliar websites.

Strengthen Online Security – People should use strong, unique passwords for each online account and use two-factor authentication whenever possible. Two-factor authentication is an extra security step in the process of logging into an account. As usual, people enter either their username or email address––followed by their password. However, instead of being granted access to their account after entering the password, the user needs to confirm their identity via another specified method. For example, the user may receive a text message or an email with a one-time code that must be entered to complete the login process. Other two-factor authentication methods include biometric information, such as fingerprint or facial recognition scanning.

Resist Pressure to Take Immediate Action – Acting in urgency is a warning sign of a scam. Scammers want people to act quickly and make payments without taking the time to think the situation through. Honest organizations will give people time to make a decision.

Avoid Unusual Payment Methods – If someone is asked by an unfamiliar person or business to send a payment via a wire transfer, prepaid card, or cryptocurrency, they should not do it. These methods are nearly untraceable, and once the money is sent, it’s usually gone for good.

Develop Awareness – People should regularly educate themselves about the latest tactics being used by fraudsters and scammers. Common frauds and scams are regularly shared on the Consumer Financial Protection Bureau’s website. This can help people spot common warning signs and red flags that might indicate a fraudulent attempt to obtain their financial or personal information before it happens.

Trust Any Instincts – If something seems too good to be true, it probably is. If someone is suspicious about something, they should talk with a trusted friend, family, or their financial institution before taking action.

The Bottom Line:

Knowing the difference between frauds and scams is an important part of understanding the full picture in regard to the deceptive practices that exist in today’s world. By educating themselves and being prepared to spot the red flags, people can avoid falling victim to fraudsters and scammers.

Wants are things someone would like to have but can live without. Needs are things someone must have to survive, such as food, water, or shelter. When learning the differences between the two, people are often told the key to budgeting is simply spending money on needs instead of wants. While needs are more important and should be prioritized, it’s okay to spend money on wants––as long as one’s necessities, savings, and debt repayment plans aren’t impacted. By following the popular 50/30/20 model, people can budget for both wants and needs!

First, what is a budget? It’s a plan that outlines where each dollar someone has will go. However, if a budget is too complicated or overwhelming to follow, people may decide to stop referencing it. The 50/30/20 budget model is a simplified budgeting method that is easy to follow and stay committed to. In addition to being easy to follow, it’s an effective financial strategy. People following the 50/30/20 model divide their take-home income into three categories: 50% for needs, 30% for wants, and 20% for savings and debt repayment.

People should begin by determining what their take-home income is each month. This is what they earn for income after the deductions of taxes, benefits, or contributions from a paycheck. Next, they should write a list of all the things they pay for each month. That means everything from hand soap to health insurance. After all the expenses have been listed, people must decide whether each expense is a want or a need. Most expenditures may be obvious and easy to categorize, but others may be more difficult. For example, water is a need. However, seltzer water is a want. As another example, someone commuting from outside the city would categorize a vehicle as a need. For someone living in the city with access to public transportation, a vehicle may be a want. After the expenses have been categorized, the 50/30/20 model can be used to budget upcoming expenditures.

Needs: 50%

These are expenses that are essential for people to be able to live and work. Some common expenses may include:

• Rent or Mortgage
• Transportation (personal vehicle or transit pass)
• Groceries
• Basic utilities
• Insurance
• Loan payments
• Childcare

Wants: 30%

These are expenses that aren’t essential to living and working. They’re luxury items, not necessities. Some examples of wants include:

• Video game consoles
• Coffeehouse drinks
• The latest iPhone
• Designer clothing
• Cable or streaming subscriptions
• Gym memberships

Savings and Debt Repayment: 20%

The final 20% in the 50/30/20 model is reserved for savings and paying down extra on any debt. Examples could include:

• Starting an emergency fund (people should aim to save away at least 3 months’ worth of expenses)
• Investments
• Saving for retirement
• Paying off debt (loan payments are categorized as needs, but extra payments should be factored in here)

Using the 50/30/20 model, someone taking home $3,000 a month would budget for spending $1,500 (50%) on needs, $900 (30%) on wants, and $600 (20%) on savings and debt repayment.

While calculating the 50/30/20 rule can be done on paper, an online 50/30/20 budget calculator provides people with access to an easy, streamlined budgeting strategy that can help them stay on top of their finances. Find it at https://moneyfit.org/50-30-20-budget-calculator.

A home is often considered a person’s most valuable asset. But what happens to your home after you die? Estate planning is an important and often overlooked process that can greatly benefit you and your loved ones once you’ve passed away. Here is a checklist to help:

• Itemize your inventory
• Follow with non-physical assets
• Assemble a list of debts
• Make a list of memberships
• Make copies of your lists
• Review your retirement accounts
• Update your insurance
• Assign transfer on death designations
• Select a responsible estate administrator
• Draft a will
• Regularly review your documents
• Visit an estate attorney and/or financial planner
• Simplify your finances
• Complete other important documents
  • Power of attorney
  • Healthcare proxy
  • Living will/Trust
• Take advantage of college funding accounts for your grandchildren

Estate planning is never easy and often overwhelming. However, it’s best not to put this off. Set time aside to tackle this so you will have the peace of mind knowing you are prepared.

We have provided some information and tips on how you can protect yourself from phony emails and phishing scams. In this article, we will be focusing on the latest scam published by the FBI’s Internet Crime Complaint Center (IC3), Tech Support Scams. Based on a Public Service Announcement published in July, this particular scam is on the rise. IC3’s 2022 Internet Crime Report shows this type of scandal had a 27% increase over 2021 and totaled in over $1B in losses.

How do you know if you’re being targeted:

The scammers will initiate contact with their victim through a phone call, text message, email, or popup window posing to be support from a company. They hook their victims by telling them they are eligible for a refund and that they need to gain access to their computer so they can guide them through the transfer. They will urge their victim to log into their bank account, and then take over control. During this process they will intentionally transfer more money than what was said to be refunded and play on their victims’ emotions by telling them they could lose their job if they do not receive the funds back. They will instruct their victim to send the money via cash disclosed in a magazine or to a pharmacy or retail business which will accept packages like this.

How do you protect yourself against the threat, below are some tips provided from IC3:

• Never download software at the request of an unknown individual who contacts you
• Never allow an unknown individual authorization to access or control your machine remotely
• Do not click on unsolicited popups, links, text messages or even attachments.
• Never send cash via mail or shipping companies

What do you do if you’ve fallen victim, or suspect you’ve been targeted:

If you suspect you have been a victim of this attack, you should report this activity to the FBI Internet Complaint Center at www.ic3.gov. You will need to include as much information as possible, and this should include.

• The name of the person or company that contacted you
• Methods of communication used, in include websites, emails, and phone numbers
• The address where the cash was shipped and the recipient name

The source of this information was gathered from the FBI’s IC3 website and can be reviewed in more detail at https://www.ic3.gov/Media/Y2023/PSA230718.

Compass Community Credit Union is dedicated to protecting our members and the safety of your information. If you have any questions or concerns, please call us at 707-443-8662.

Every year, scammers inundate senior Americans with all kinds of fraudulent schemes. Here are just a few:

1. Phony investment schemes
2. Bogus charity fundraisers
3. Medicare fraud
4. Fraudster posing as a family member in need
5. Predatory reverse mortgages
6. Sweepstake scams
7. Fictitious surveys

Be wary of emails requesting personal information. Scammers send bogus emails that look like they come from a company you recognize. They include the company’s branding and logo so you think it’s legitimate. These scams are designed to trick you into providing your username and password. Do not click on any links in the email. Contact the company directly through their website by typing the web address yourself. You can also call the phone number that you have on file or the number listed on their website.

Crooks like to create fake websites that look genuine. They can be very impressive to deceive you into thinking it’s real. Then, they try and trick you into providing your debit/credit card number or your username and password. The best thing to do is go directly to the website by typing the web address yourself rather than from the link. Look at the website address and make sure it matches the site you’re trying to access.

Tip: Scammers usually misspell or add an extra letter to the website address. An example is Amazon becoming “Amazone” or “Amazne.”

Fraudsters con people every year. It can be difficult for some to admit they may have been victimized. According to AARP, there are several telltale signs to watch for:

1. Money and valuables are disappearing for no good reason.
2. Bills aren’t paid, and a parent seems confused about finances.
3. They are being secretive about money and asking for more. There may be strange credit card charges.
4. A family member won’t answer questions about your parent’s money.
5. Someone new befriends your parent and manages to take joint title to accounts and property.

To help keep our seniors safe, the Consumer Financial Protection Bureau has created some free materials at www.consumerfinance.gov.

For additional tips, visit https://compassccu.org/securitytips/

According to the United States Department of Agriculture, Americans spend an average of 9.9% of their disposable incomes on food. If you factor in expired and wasted groceries, and poor money management, you could be spending even more. If you’re looking to stretch your food dollars, here are four ways that can help you save at the grocery store:

Stick to Your List

Before heading to the grocery store, put together a shopping list. It’s easy to end up impulse buying when shopping without a list, and even more so when you’re hungry. With strategically placed displays, samples, and all the sweets near the checkout lane, it can be difficult to ignore those temptations. Every grocery store is laid out differently, but you become familiar with it after a few trips. If you know the layout, try to write your list in the order that you will find the product in the store. This will prevent you from any backtracking and reduce your temptation to grab other items not on your list. You can also avoid grabbing items not on your list by ordering online for pick up. While there may be a small fee, it can be cheaper than impulsively buying a bunch of food you don’t really need. Sticking to your list will give you a better estimate of your cost at checkout and can help prevent you from leaving the grocery store with too much food and too little money.

BYOB

Bringing your own reusable shopping bags to the grocery store is not only better for the environment, but it’s better for your wallet as well. Some grocery stores offer a discount on your grocery bill if you bring your own reusable bags from home to pack your food in. While a $.10 discount or being charged an additional $.05 here and there doesn’t sound like a lot of money, it certainly adds up.

Keep an Inventory

According to CNBC, the average American family loses around $1,500 a year on wasted food. You wouldn’t throw $1,500 in cash into a garbage bin, would you? However, it’s not uncommon to find something in the back of the fridge or pantry, but have no idea how long it’s been there, or worse, what it even is. To cut back on waste and extra food spending, consider creating and maintaining an inventory of all the items in your kitchen. You can plan cost-effective meals around what’s in the pantry and save money by identifying when you’re running low on something. If you see you’re starting to run low on something, you can plan ahead and replace that item while it’s on sale instead of when you’ve completely run out.

Shop for Seasonal Items

Fresh produce is delicious, but your favorite fruits and vegetables aren’t always in season. And when they aren’t in season, the prices are considerably more expensive. The cost of travel and shipping increases, and the stores pass the cost on to customers to balance out their return on investment. When you do buy fresh produce, make sure you stick to what’s in season. Strawberries and grapefruits are at peak season in the spring, while apples and pears are at their peak in the fall. Also, don’t be afraid to substitute fresh produce with frozen. If you find that your produce spoils because you can’t eat it in time, choosing frozen fruits and veggies can prevent that.

Today, doing anything and everything on your mobile phone is extremely easy – often too easy.  Here are some simple tips to help keep your money, and personal information, safe.

Treat your phone like a computer: It may be smaller but contains similar confidential information.   Set a logon password to protect your information should you lose your phone. In addition to setting a password, enable the fingerprint security and/or facial recognition settings on your phone to better protect your information.”

Be careful when you connect to open Wi-Fi; you may be exposing your information to hackers. Only connect to known, secure Wi-Fi when conducting business that exposes sensitive data.

Never save passwords in a text document: Never save sensitive data or passwords to a text document on your phone.

Think before you download: Only download apps from trusted sources.

Equip your phone with protection: Take advantage of malware and virus protection. Avoid leaving your phone unattended:  If you don’t, “hacking” can be as simple as someone else turning on your phone.

To learn more about the Compass app, click here.