Financial scams and fraud can be devastating, and it’s important for kids to understand the common types of scams and how to protect themselves against them. Protecting from financial scams and fraud by being vigilant and cautious when it comes to unsolicited offers, emails, and phone calls. Verify the legitimacy of any requests for personal or financial information, and never share sensitive information with anyone you don’t trust.Here are some tips for recognizing and avoiding financial scams and fraud:
Phishing Scams:
Phishing scams are one of the most common types of financial fraud. These scams usually take the form of an email, text message or phone call from someone posing as a legitimate company or organization.By including financial literacy classes in kids curriculum can teach students about the importance of protecting their personal information and the potential consequences of falling victim to a phishing scam.
1.Be wary of unsolicited emails, text messages or phone calls. Don’t give out any personal information unless you have initiated contact and are sure that the person or organisation you are dealing with is legitimate.
2.Check the sender’s email address or phone number carefully. Scammers will often use a fake email address or phone number that looks similar to a legitimate one.
3.Don’t click on links in unsolicited emails or text messages. Instead, type the website address directly into your browser to make sure you’re visiting the legitimate website.
Identity Theft:
Identity theft is another common type of financial fraud. It occurs when someone steals your personal information, such as your social security number, and uses it to open credit card accounts, loans or other financial accounts in your name.Teaching kids about identity theft as part of financial literacy helps them understand the value of their personal information and how to protect it.
1.Keep your personal information safe. Don’t share it with anyone unless you trust them and know why they need it.
2.Shred any documents that contain your personal information before throwing them away.
3.Monitor your credit report regularly.
Ponzi Schemes:
Ponzi schemes are investment scams that promise high returns with little or no risk. Scammers use money from new investors to pay profits to previous investors, making it look like a profitable investment.Eventually, the scheme collapses when there are no new investors to provide funds to pay earlier investors.
1.Be wary of investments that promise high returns with little or no risk.
2.Research any investment opportunities carefully. Check the company’s reputation and history, and read any available reviews or news articles.
Tips if you are a victim of financial fraud:
- a) Display fraud alerts on your credit report. This makes it more difficult for someone to open a new account in your name.
- b) File a report with the Federal Trade Commission (FTC). The FTC maintains a database of fraud reports that law enforcement agencies use to investigate scams.
Upsurge is a platform which teaches how to protect oneself from financial scams and fraud which is an essential component of financial literacy for kids. Understanding common scams and how to avoid them can help students develop a better understanding of financial risks and make informed decisions about managing their money.
