Beware These Predatory Lenders
Protect Against Identity Theft
Pyramid Schemes: Don't Be Fooled
A Few Common Frauds
Protect Your Money On The Net

Beware These Predatory Lenders
There are all sorts of lenders out there. Learn to recognize the ones that may cost you more than you realize:

1. Title loan companies. For a quick, short-term loan, you give the lender the title to your car — while you still drive it. The amount you borrow is based loosely on the value of your car. Payment usually is due in a month. Rather than quote an interest rate, the lender mentions a fee. Often as high as 22 percent You assume it's a one-time fee. It's not. Now suppose you can't repay on time. For every month you miss, you're charged the 22 percent fee. In 12 months, you'll owe $3,640 on your $1,000 loan. For a whopping interest rate of 264 percent! Default on the loan — and the lender takes your car.
2. Rent-to-own places. These lenders charge you per month to rent furniture, stereo equipment, appliances — and more. At the end of the contract, you can continue renting the items, return them — or buy them. Each month, you not only pay a rental fee but a hefty service charge. Common is 10 percent of the monthly rental. Rent for a year — and you pay a 120 percent fee!
3. Check-cashing outlets. Want to cash a payroll or personal check? Stay away from these folks. They'll charge you between 2 percent and 10 percent for the privilege. On a $200 check, that's anywhere from $4 to $20. At check-cashing stores, you also can write post-dated checks. You get cash back — minus an unusually high service charge. The lender holds your check — usually until your payday. You then buy back the check or let the lender cash it. Your other option: Write another post-dated check and again pay a hefty fee.
4. Advance-fee lenders. These lenders advertise in newspapers and on the Internet. Or, they call you. Once in contact with you, they ask for personal information like social security number, driver's license and account numbers. They then call back with an approved $5,000 or more loan. But first you must send a certified check or money order. Unfortunately, you never get the loan. You also lose the fee — which can be several thousand dollars.

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Protect Against Identity Theft
Thieves can steal your name, social security number, credit card number and/or your other identities. With the information, they then take out loans, charge items — even buy cars in your name — and, of course, skip out on the bills. Leaving you responsible. Thieves can:

• Grab your wallet, purse and/or mail.
• Complete a "change of address" form to divert your mail to another location.
• Ask you to update or revalidate your credit card or Internet Service Provider (ISP) account information.Go through your trash for financial and other personal papers.
• Pose as landlords, employers, etc., to get your credit report.
• Find personal information in your home.
• Use information shared on the Internet.
• Buy information from store employees.

Here's how to protect yourself:

• Do not use your social security number as identification. Retailers, for example, don't need it. If one does, refuse — or don't shop there.
• Keep your social security card in a safe place. Do not carry it with you.
• Limit the identifying information, including credit cards, you carry.
• Ask card issuers not to send unsolicited convenience checks. If you receive any, shred them rather than throw them out.
• Shred all financial information before tossing.
• Do not give out information by phone, unless you initiated the call or know the person.
• Pay attention to billing cycles and follow up if bills don't arrive on time.
• Use our bill paying program rather than an unprotected mailbox.
• Ask us about "identity-theft" protection.

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Pyramid Schemes: Don't Be Fooled
If offered an opportunity to sell products — and also make money by bringing in others — you're probably dealing with a pyramid scheme. They're often disguised as buying clubs, motivational companies, chain letters, mail-order operations or multi-level business plans.

All promise quick riches. You pay an up-front fee (sometimes called "gifting") or invest in their products, services and/or training. Then you sell their products and recruit others to the company.

Recruiting new participants (like friends and relatives) typically is more important to potential income than product sales. You'll see math like this: If you recruit 10 people and they recruit 10 more each, and so on, you'll be rich.

Does it work? Not for long. The products for sale rarely have a broad market. So sales are poor. It becomes difficult to convince others to join. Nearly everyone who participates loses money — except those at the top. When there aren't enough new recruits, the pyramid collapses and the schemers start a new pyramid.

Here's how to protect yourself:

• Always ask for business and financial statements. Then review them with your tax advisor or lawyer.
• Get and check references. Just beware: References from the company could be shills.
• Avoid out-of-state companies; they're more difficult to track down.
• Beware statements that the company is approved by the government, Better Business Bureau, etc. These organizations never endorse or approve specific marketing plans.
• Check out the company with your attorney general's office or local Better Business Bureau. But remember: Not all pyramid schemes are illegal. Even when legal, they're likely to lose you money.

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A Few Common Frauds
There are plenty of fraud artists out there. Here are just a few of the scams you should watch out for:

• "We Need Your Help" — What happens: A person claiming to be a bank or credit union examiner or auditor asks you to withdraw money from your account and give it to him or her to hold to lure an embezzler.How it works: The person takes your money and disappears.What to do: Call the financial institution and the state or federal supervisory agency to report the request. Don't withdraw the money. Remember: No legitimate official would involve a customer or risk the customer's funds.
• "You've Won A Prize" — What happens: You're told you won a vacation, auto or other prize — if you send money or call a certain number. You may be asked to give a checking or credit card account number.How it works: The prize is worthless; you receive a catalog of overpriced, even nonexistent, products — or get nothing. If you respond to an Internet pitch, you may be giving your e-mail address to other scam artists.What to do: Ignore the pitch; hang up if called or, if the offer comes by computer, delete the e-mail. Never give out your checking account or credit card number.
• "We Need Your Number" — What happens: Someone contacts you and asks for your credit, debit or phone card number. The excuse: He or she may offer a product or may claim to be checking on unauthorized charges. How it works: Your product never arrives or is of inferior quality. Or, unauthorized purchases or calls are later made using your account. What to do: Never give card numbers to strangers who contact you. Only give out the information if (1) you initiate the contact, (2) you can verify the company's or person's legitimacy and (3) you're satisfied with the company's security and privacy policies.
• "A Guaranteed Loan For You" — What happens: You're "guaranteed" a loan if you pay an up-front fee. It may be offered on the Internet, in a newspaper ad or from a telephone call. You may be asked to call a 900 number for the information (so you pay an extra fee for the call). How it works: You pay the fee and get only a list of potential lenders — or nothing at all. Or, you get a loan at an exorbitant interest rate. The 900 number call can cost you an extra $10, $50, even $200 or more. What to do: Never give out credit card or account information. Never call a 900 number. If you need a loan, call us.
• "Uncle Sam Wants You" — What happens: Firms with names or logos similar to government agencies ask you to do or buy something. Identifying with the Social Security Administration is especially popular. How it works: Services aren't from the government, aren't required, aren't needed or can be obtained free from the real government agency. What to do: Get the number from your phone book and contact the real agency. Ask about the group that contacted you. Or, call your state's attorney general's office.
• "Call Back For Information" — What happens: Products, services or important information are offered if you call a special 900 number. Or, you are asked to call a number in an area code you don't recognize. How it works: Most of the time there is no product, service or information. Instead, the company makes money from the call itself. You pay extra fees when you call a 900 number. Or, the unrecognized area code is for some country where you can be charged exorbitant extra fees. What to do: Never call a 900 number. Never call an area code you can't identify. Never call out of the country if you don't know who you are calling. If you must place a 900 call, verify costs before you call.

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Protect Your Money On The Net

1. Treat personal information like money. It's as valuable as that! With information about you, others can charge you fees. Or, by pretending to be you, buy things you'll never see. Fixing the problem will take time. At worst, it will cost you money. So don't ever give out your social security number. Create hard-to-decipher passwords. Then protect and change them often. Pay with a credit card. The most you can be liable for is $50.
2. Know the site — Creating a professional-looking site is easy. Delivering products and services isn't. Make sure the sites you buy from have financial data protection (called encryption) — and can deliver what they promise. Also, find out what kind of user support they give.
3. Know the tricks — Here are two: Some fraudsters offer "bargains" privately — through a chat room, for example, or on-line auction. You pay with check or cash, but you don't receive anything. Or, what you do receive is worthless. Another scam: A chain letter or buying club promises quick money if you pay an up-front fee. You're also asked to recruit friends and relatives. Don't bother. Nearly everyone who participates loses money.
4. Use all your security Your software has protections — so use them. Turn on secure site software warnings. Also use "site certificate verification" and "notification of redirection of submitted forms." Read site privacy and security statements. Never use a site that doesn't protect you.

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