5.6- Demonstrate how to be a responsible consumer in the 21 st century Roll Call Question: Something that you learned in this unit

SHHHHH Quiz in Progress  When you finished, work on your budget project

Mental Floss  Objective  How to be a responsible consumer  Vocab  ID Theft  Phishing  Skimming  Credit and Debit Card Theft  Fraud Spree  Account Takeover  Application fraud  Ponzi Scheme  Pyramid Scheme  Online Fraud  Malware  Questions  1. Why would a person want a credit card?  2. What is interest in regards to a credit card?  3. How would a person protect his/her credit score?

Identity Theft  A crime in which someone wrongfully obtains and uses another person's personal data  Types:  Phishing  Skimming  Credit Card theft  video video

Phishing  attempt to acquire identity of someone by asking for sensitive information  i.e. username, password, credit card number.  Watch Out For …being asked to update personal information (password, credit card, social security number).  ** A legitimate business will always ask for the information on a secure website or in person.

Skimming  illegal copying of information from the magnetic strip of a credit or ATM card.  Watch out for… unusual devices on the ATM swipe machine

Credit and Debit Card Theft  Fraud spree: unauthorized charges on existing accounts.  Hackers can steal account information from personal computers or company computers.

2 types of Credit Card Fraud  Account takeovers  involve the criminal hijacking of an existing credit card account.  Application Fraud  opening of credit card accounts in another person's name.

Some ways thieves steal your information  lost or stolen cards  Your mailbox  Stealing your pin during a purchase  Your trash  Hacking  Over the phone  Personnel records  Employees of a business steal card info

Fraud  Deliberate deception usually for economic gain. Examples of Fraud:  Ponzi Schemes  Pyramid Schemes  Online scams

Ponzi Scheme  Named after Charles Ponzi (early 1900’s)  Convince people to invest in a fake company for great returns.  Once the scam artist feels that enough money has been collected, he disappears – with the money

How do they work? 1.Convince a few people to invest. 2.Return some money to investors 3.Convince more investors based on success… many original investors will invest again 4.Repeat steps 1 through 3 a number of times. 5.Before step 2 in one of the cycles, disappear Bernie Madoff

Pyramid Scheme  investment where each paying investor recruits two other investors. The first investor makes money from his recruits… they make money by recruiting more  People at the top make money from people on the bottom

 The main characteristic of a pyramid scheme is that participants only make money by recruiting more members. How Do Pyramid Schemes Work? Ponzi v. Pyramid

Online Fraud  Work at Home Ads  Too good to be true  Fake charity organizations  Natural disasters are popular  “Be part of one of America’s Fastest Growing Industries.  Be the Boss!  Earn thousands of dollars a month from home”

Malware  “malicious software."  It includes viruses and spyware that get installed on your computer, phone, or mobile device without your consent.  Can be used for fraud