Volume 3, Number 1, January 2, 2006
Personal financial decisions are always an individual’s personal responsibility, but education can also help. The Department of Financial Services has an education initiative available online that can help Floridians make better informed decisions for themselves and their families. Your Money, Your Life gives virtually everyone access to high-quality information on a wide range of financial topics as it details choices, benefits, and pitfalls in easy-to-understand language.
Read the savings tips below, and visit the Your Money, Your Life website to learn more.
SAVE MORE IN 2006
Make additional monthly payments.
Review your bank account to determine if it is the best product for you.
Pay bills on-line.
Change your computer passwords.
Check Your Credit Report.
CAREFULLY CHECK CREDENTIALS OF 'SENIOR SPECIALISTS'
According to Patricia D. Struck, NASAA president, individuals may call themselves ‘senior specialists’ to create a false level of comfort among seniors by implying a certain level of training on issues important to the elderly. But the training they receive is often nothing more than marketing and selling techniques targeting the elderly.
Sales people and the alphabet soup of letters after their names can be confusing, and in some cases, may even be deceptive to seniors.
NASAA’s Investment Adviser Operations Project Group has observed a significant increase in designations claiming to provide the holder with expertise in providing services to investors 55 years and older. Although there are legitimate organizations whose members must complete rigorous programs of study, pass extensive examinations, and have practical experience in order to receive their designations, a number of entities formed in the last few years have created designations with less stringent requirements. Without reviewing the course material for each of these designations, it is difficult to verify the claims made by the promoters.
Securities regulators have opened 26 cases in the past year involving “senior specialists” in the eastern half of the United States alone. Most of the cases involve securities recommendations by individuals who are not properly licensed by state securities regulators.
In many jurisdictions, these recommendations may be viewed as providing investment advice for compensation. The senior specialist would be offering investment advice as an unregistered investment adviser and, therefore, be subject to enforcement action by regulatory agencies.
A recent enforcement action by Massachusetts securities regulators against Investors Capital Corp. illustrates how a “senior specialist” designation can be used to hoodwink seniors. According to state regulators, one of the firm’s representatives stated during a seminar that his “Certified Senior Adviser” (CSA) designation – received by taking a three-day course or a home course, followed by a multiple-choice exam –indicated that he had been specifically trained to manage and solve financial problems facing seniors. According to the state, the seminar steered investors toward investing in equity-indexed annuities as the best way to participate in stock market gains without risk. Equity-indexed annuities are complex insurance products with high commissions and long holding periods (as well as stiff penalties for early withdrawals), which make them unsuitable for many older investors. In November, the state charged the firm with misleading investors, especially seniors, into buying equity-indexed annuities.
In another case, the Pennsylvania Securities Commission issued a cease and desist order in June 2005 against the Association of Senior Counselors and an agent to halt the offer and sale of unregistered securities. According to the state, the agent appeared at a senior’s home with materials saying he had “credentials you can trust,” among which included a “CSA” designation. An investigation determined that the agent had been charged in Connecticut in 2004 with selling unregistered securities and failing to register as an agent of a securities issuer in connection with the alleged sale of promissory notes.
Before doing business with any investment professional, all investors, especially senior investors, should check with their state securities regulator to determine whether the individual is properly licensed and if there have been any complaints or disciplinary problems involving the individual or his or her firm.
NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, the U.S Virgin Islands, Puerto Rico, the provinces and territories of Canada, and Mexico.
EMERGENCY FINANCIAL FIRST AID KIT
Operation HOPE, Inc. (OHI) is a non-profit, public benefit organization, founded in 1992. OHI is America’s leading provider of economic tools and services and an effective facilitator, lender, advocate and educator for and on behalf of the other America.
The companion piece to the EFFAK is the Personal Disaster Preparedness Guide (PDPG) which guides individuals through the survival and recovery steps to be taken prior to an emergency.
(To view and print the EFFAK and PDPG, you must have Adobe® Reader®. If you do not have this software, you can download it for free here.)
CREDIT CARD TELEPHONE SCAM
Be warned on this sneaky scam that the caller does not ask for your credit card number because the number is already in the scammer's possession. This information is worth understanding to be prepared to protect yourself.
Here is how the scam works. The person calling on the phone says, "This is (name), and I'm calling from the Security and Fraud Department at VISA. My badge number is 12460. Your card has been flagged for an unusual purchase pattern, and I'm calling to verify. This would be on your VISA card which was issued by (name of bank). Did you purchase an anti-telemarketing device for $497.99 from a marketing company based in Arizona?"
When you say no, the caller continues, "Then we will be issuing a credit to your account. This is a company we have been watching and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement is issued, the credit will be sent to (your address); is that correct?" After your assent that the address is correct, the caller continues, “I will be starting a fraud investigation. If you have any questions, you should call the 1- 800 number listed on the back of your card and ask for security. You will need to refer to this control number.” The caller then gives you a six-digit number.
Here's the key to the way the scam works. The caller then says, "I need to verify you are in possession of your card. Turn your card over and look for the numbers by your signature." There are seven numbers; the first four are the last four digits of your card number; the next three are the security numbers that verify you are the possessor of the card.
The caller will ask you to read the three numbers to him. After you tell the caller the three numbers, the response will be, "Correct, I just needed to verify that the card has not been lost or stolen, and that you still have the card in your possession. Do you have any other questions?" The caller then thanks you, says not to hesitate to call back if any questions arise and hangs up.
You actually say very little, and the full credit card number is never mentioned. Calling back to ask a question, the real credit card security department reveals that it was a scam and in the past few minutes a new purchase of $497.99 had been charged to the card.
A real fraud report was made and the VISA account closed and reissued with new cards and numbers. What the scammers need is the three-digit PIN number on the back of the card to go along with the credit card number.
Don't give it to them. Instead, tell them you'll call VISA or Master card directly for verification of this conversation. The real VISA said that they will never ask for anything on the card as it is information in their files. You may give the scammers your three-digit PIN, fooled into thinking that you are receiving a credit. However, by the time your statement arrives charges will appear for purchases you didn't make, and then it is necessary to file a fraud report with the credit card company.
Also file a report with the police, which the credit card companies will instruct you to do. According to the police, several of these scams are being reported daily.