Moving out on your own

 

Now you are ready to enter back into the community as an adult, and as a consumer.  This can be both exciting, and bit scary.  There are many traps and situations that you can get yourself into if you are not careful.  Scams, spoofing, smishing, spyware, vishing, skimming, phishing, lottery, fraud, theft, and any thing else that can make someone money, await a would-be victim if not careful.  This mod will quickly go over some things that you need to be careful of, as well as some ideas and information about being a savvy consumer. 

Always remember, ignorance is NOT bliss.  In other words, it is your responsibility to become an informed consumer before you enter into any agreement, or hand over any money to another person or business. 

 

If it is too good to be true

 

The old adage, “If it looks too good to be true, it probably is”, still holds true.  Always trust your gut over your emotions.  9 times out of 10, you will be emotionally invested in the scam.  They are designed to get you excited about making a boatload of money in a seemingly simply way.  You begin fantasizing about how you will spend your new found wealth, and start pushing all of the little red warning signs to the back of your mind, and out of the picture.

Your gut, on the other hand, will begin churning, and sending you messages to BEWARE!  That is because, almost all of us have an intuition built in to our wiring that sniffs out scams, and sends up warning signs.  The scam artist relies on the ability to have your emotional excitement override your gut instinct, and force you into a quick (bad) decision, in the hope of becoming rich.

In addition to trying to take your money, there are those who will be attempting to steal your identity.  If someone can temporarily become “you”, they can apply for credit, run up some massive debt, ruin your credit score, and be gone in the night.  You are left with a mess to clean up that could potentially take years, and affect your ability to get loans, housing, transportation, and in some cases, a job!

Computers, cell phones, ipods etc.

 

Electronic devices (computers, ipods, cell phones, etc.) are wonderful and useful devices.  They are all designed to transfer information, and in most cases, can talk to each other wirelessly.  While this is very convenient, it can also be quite dangerous. 

Nothing is completely secure.  This is especially true in the world of electronic information transfer.  Wireless devices are constantly searching for networks, modems and other devices they can talk to.  Devices that are protected from this access may have a WEP (Wireless Encryption Protocol) key assigned to it.  Even this security is not completely fool proof.  Every time someone builds security to protect something, someone else builds the hack to get into it.  It is the nature of the beast.  You must, therefore, take steps to protect what is important to you, namely your identity.

Never keep your social security, birth certificate, banking records, etc., on your electronic devices.  If you must keep these records electronically, put them on a flash drive and keep it locked away, separate from your device.

Make sure you are running some sort of antivirus, antispyware, and/or firewall on your computer.  Anytime your computer is powered on (even in standby or hibernate mode), it is capable of accessing (and being accessed) by the Internet.

Cell phone numbers are being released to telemarketing companies (as of 3/12/2009).  You may be charged for calls made to your cell phone if a telemarketer chooses to call you.  To prevent this, call the following number FROM YOUR CELL PHONE (888-382-1222).  It is the national do not call list.  It will only take you a minute to block your number for (5) years.

 

Cleaning up the mess

 

There are organizations and companies that you may elect to sign with, who’s job it is to protect your identity (such as “ProtectMyID” or “LifeLock”).  If you become a victim of fraud or identity theft, you have your work cut out for you.  First, place a fraud alert with the three credit bureaus (TransUnion, Experian and Equifax).  When you place an alert, you are entitled to a free copy of your credit report.  After that, take advantage of the free annual reports that the bureaus are required to give all consumers.  Stagger your requests so that you get a report every fours months.

Next, make an identity-theft report to the police.  File a complaint with the Federal Trade Commission and contact the state’s attorney general.  Close accounts that have been tampered with.  Contact each company by hone and send then a certified letter disputing any charges. You may want to “freeze’” your credit if the damage is significant.

 

Getting into and out of a contract (deal)

 

While you are responsible to know, understand, and abide by the terms of any contract you sign, there are occasions when you may need to get out of the deal you entered into.  These reasons may include: loss of employment, not understanding the deal you entered in to, you find that the deal was misrepresented (such as an apartment full of rats). 

To start with, always read the fine print.  Don’t “overplay” your hand (threatening people with lawsuits).  Be courteous and speak with a manager or supervisor who is authorized to fix, or make adjustments to your contract.  In the case of renting an apartment, there are 4 basic reasons for canceling a lease.  1.) Serious defects (your apartment is not “fit and habitable” i.e. Heat, lights, plumbing vermin infestation etc.), 2.) Call to duty (military or public health service, 3.) domestic violence (you will need a protective order, and 4.) the landlord must make a ‘reasonable effort’ to re-rent your apartment once you move-out (rent can be charged until the lease expires, or the apartment is rented).

An auto lease is difficult to get out of.  You may be able to get someone to take over the lease, negotiate to buy the car and then sell it, exchange the lease for buying or leasing a different car, turn the car in and pay it off (not a good option if you have not money).  Keep documentation of any problems you are having.  Keep in mind; the dealership is not interested in helping you unless there is something in it for them.

Cell phones typically have a 30-day trial period.  Most companies will pro-rate your contract after 12-months if you wish to cancel.  Most will now let you “step-down” to a less expensive plan, without signing a new contract.  Make sure you document any problems (dropped calls, poor reception etc.  You will need a pile of paperwork to support your claims.  Remember, sometimes paying an early-termination fee is the smartest way to go.

 

Credit, and 7 ways to wreck your credit

 

Your credit score (or FICO score) may be the most important number (next to your girlfriends cell phone and your social security number) that you will ever have.  This three-digit number (between 0 – 850) represents your future ability to borrow money, rent an apartment, and in some cases, get a job.  The difference in only 100 points can represent $100,000 or more over your lifetime.

A credit score is simply a predictor of how you will pay for credit in the future.  These days, wrecking your ability to get credit is about as easy as blowing over a house of credit cards.  Here are seven things to avoid:

1.)  Closing credit card accounts (your score looks at available credit, and closing an account reduces that available credit line.

2.)  Letting credit cards collect dust (you should charge something every month or two, and pay it off.  If you don’t the credit company may close your account, which will count against you).

3.)  Running up high balances (using too much credit is a warning sign to the credit company).

4.)  Applying for new credit repeatedly (shows that you are in need of credit, and things may not be going well for you financially).

5.)  Not paying fines or other bills (overdue book fines, parking tickets, cell phone bills etc.).

6.)  Ignoring mistake on your credit report (it is now easy to dispute inaccuracies on line).

7.)  Making late payments or skipping them (DO NOT make a late or skipped payment!  This decision will absolutely kill your credit score).

New laws (effective July 2010) put in place, some protections for the consumer.  You may now enjoy, limited interest rate hikes, more time to pay monthly bills, pay on the highest interest balances first, limit ‘over-limit’ fees, and make disclosures about what happens if you only make the minimum payment.  While these protections are a step in the right direction, it is likely that credit card companies will put new fees in place to make up the lost revenue from these changes.

 

Buying a car

 

Next to buying a house, this may be the most important, and exciting purchase you will make.  Put yourself in the drivers seat.  You have the ability to walk away from a sale any time you want.  There are hundreds of dealers and private sellers, dying to sell you a vehicle.  Here are some simple things to remember when you are ready to shop for a car.

Always check the value (KellyBlueBook.com) of the car you are interested in.  Go n the computer, or request a Carfax (record of whether or not the car has been in an accident) on the vehicle.  If you are working with a dealer (as apposed to a private seller), don’t let them know if you are a ‘cash buyer’ or a credit union member in advance.  This will likely influence their price negotiation of the vehicle.  Remember, every car has a sticker price, and the price you will pay.  Your job is to find the lowest prices you will pay (understanding that the dealer has to make something on the deal). 

Watch out for “AS IS” deals.  Cars are sometimes wrecked (or totaled), and repaired and sold.  You can search the VIN (Vehicle Identification Number – located on the dash board of a car) to see if it has been totaled.  The title to the vehicle must say ‘totaled’ or ‘salvaged’ if applicable. 

When you are ready to buy, pay in cash if you can.  If not, go to your bank, or credit union for financing.  As a last resort, consider dealer financing with the following considerations.  Beware of fees due to poor credit.  Beware of a dealer calling you a few days after leaving, stating that your “loan fell through”.  Always run your own credit a few days before making a credit purchase.

 

Why invest for retirement

 

It’s never to soon to start thinking about retirement, and never too late to start investing.  Retirement may be 40 or 50 years away, but if you begin thinking about what it means, you will begin thinking about the steps necessary to get there, namely investing.

While most of us invest for the purpose of one day being able to retire, more and more people are investing as a way to make money, and protect themselves from the roller coaster ride of a volatile economy.  Online organizations such as: E-trade.com, or Ameritrade.com make it easy for the average person to buy and sell stocks.  Not unlike gambling, never trade stocks online with money you can’t afford to lose.  If you are investing for your retirement, go with a reputable funds manager, and allow their professional knowledge of the marketplace due the work for you.  Investing for retirement is a long-term ordeal, and is meant to last for many years.  If you are ‘playing the market’ to make a quick buck, remember that it is not easy, and many investors who are much more experienced then you, lose money every day.

If you are prepared to invest, the sooner you start, the better.  Ask your employer if they have a retirement plan (usually referred to as a 401K, or pre-tax retirement plan).  You will never be able to make up the money later, that you could put away by investing early.

 

Caveat Emptor

 

Lastly, always remember: BUYER BEWARE – ‘Caveat Emptor’

At the end of the day, you have only yourself to trust and rely upon.  Assume all transactions, information, agreements, etc., have the potential to be fake.  This is not to say that you should go through life afraid to enter into an agreement for fear of becoming a victim.  It is to say that you should be skeptical, ask questions, and do research before you commit any of your hard earned money to a purchase, or your valuable signature to a contract.  For every 9 honest people who are ready to offer you products and services on the up-and-up, there is 1 person who is ready to scam you.

 

Be a smart consumer. 

 

QUIZ – Please answer the following:

 

1.)  As a consumer, it is your responsibility to: ________________________________________

2.)  What is meant by, “If it looks too good to be true, it probably is”? ______________________

 


3.)  What does a scam artist rely on to get you interested? ______________________________

 


4.)  In addition to stealing your money, what else must you protect? _______________________

5.)  What are 3 common electronic communication devices? _____________________________

 


6.)  Is your device safe if you have a WEP key? _______ Why? __________________________

 


7.)  What information should you never keep on your electronic device? ____________________

 


8.)  What protection should you take with your computer? _______________________________

 


9.)  Is your computer safe when it is in Hibernate mode? ________________________________

10.)       Can you be charged if a salesman calls your cell phone?  _________________________

11.)       How can you stop this for up to (5) years at a time? ______________________________

12.)       If you become a victim of identity left, what is the first thing you should do? ____________

 


13.)       What are the three credit bureaus? ___________________________________________

14.)       What do you get free with your fraud alert? _____________________________________

15.)       What should you close if you become a victim? __________________________________

16.)       What can you do if the damage is significant? ___________________________________

 

17.)       What are 3 reasons that you may want to get out of a contract that you have signed? ____

 

 


18.)       What should you always read before signing a contract? ____________________________

19.)       What does it mean to “overplay” your hand? _____________________________________

20.)       What should you be when speaking to a manager? ________________________________

21.)       What are 4 basic reasons for canceling a lease? __________________________________

 


22.)       What are 3 things you might do with an auto lease? _______________________________

 


23.)       How long do most cell phone companies give you to cancel a contract? ________________

24.)       What is a “step-down” cell phone plan? _________________________________________

 


25.)       What must you have if you intend to cancel a cell plan? ____________________________

 


26.)       What is a FICO credit score? _________________________________________________

27.)       What does a credit score predict? _____________________________________________

28.)       What will absolutely kill your credit score? _______________________________________

29.)       What should you do when buying a car? ________________________________________

30.)       What is an “AS IS” deal? ____________________________________________________

31.)       What is a VIN number? _____________________________________________________

32.)       Why is gambling similar to investing on your own? ________________________________

33.)       What is a 401K? __________________________________________________________

34.)       What is meant by ‘Caveat Emptor’? ___________________________________________

35.)       What should you do before committing any of your hard earned money to a purchase? ___