Wednesday, July 15, 2009
Monday, July 13, 2009
Texas State Securities Board offers warning signs for investors
TOP 10 WARNING SIGNS FOR TEXAS INVESTORS
- Investment Seminars. Free lunch, breakfast, and dinner seminars often get an audience in the door to secure a one-on-one meeting with the attendee to gain information about their personal finances. The seminars are positioned as educational in nature – estate planning, tax planning, living trusts, etc. and are increasingly being used to initiate a relationship that builds trust and confidence in an educational setting that may be a ruse for a future high-pressure or targeted investment presentation.
Promotors of these seminars may also say they have some sort of “Senior Specialist Designation” that is not accredited which implies that the holder has special training that builds trust so they are more apt to be able to sell their product. The Texas State Securities Board adopted a rule concerning the use of senior-specific designations which prohibits the misleading use of designations that imply that a registered dealer or agent has special training in providing brokerage services to senior citizens or retirees. Remember: There’s no such thing as a free lunch. - Unlicensed Individuals & Unregistered Products. Anyone selling securities or providing investment advice about buying or selling securities must be appropriately licensed. Anyone engaging in these activities without a valid license to do so should be a red alert for investors. Con artists also bypass stringent state registration requirements to pitch investments with "limited or no risk" and high returns. Remember: Carefully check out anyone providing investment advice or offering to help you buy or sell securities.
- Affinity Fraud. Con artists are targeting religious, ethnic, cultural and professional groups. Some may be members of the group or pretend to be members in order to gain trust. Con artists often recruit a respected member of a community or religious congregation to promote their schemes by convincing them that a fraudulent investment is legitimate. In many cases, even these leaders become victims of what turns out to be a Ponzi scheme. Remember: Investigate before you invest – no matter who is selling.
- Energy Scams. Recent energy prices, coupled with the media attention and a growing national concern over alternative energy sources, have created a fertile ground for promoters of fraudulent energy schemes. Fraudulent energy offerings often appear sophisticated and use complex terminology. Potential investors are often provided with glossy brochures that contain geological reports, maps, plats, tax opinion letters prepared by attorneys and other documents that tend to appear legitimate and professional. Remember: Con artists tend to follow the headlines.
- Viaticals or Life Settlement Contracts. Viatical or life settlement contracts allow life insurance policy holders to sell their policies to investors for an immediate cash benefit. In many instances, companies are offering and selling life and viatical settlements that have an additional component that provides a guarantee to an investor that they will receive a return, even if the insured does not die during the projected life expectancy. This product is a complex financial arrangement which may require professional guidance. Remember: It is critical that you understand the risks involved, how your investment will be used, and what the likely return will be.
- Unsuitable Sales. What is a suitable investment for one investor might not be right for another. Securities professionals must know their customers’ financial situation and refrain from recommending investments that they have reason to believe are unsuitable. For example, some products are often unsuitable for senior citizens because they might be long-term investments that limit access to invested funds.
Sometimes sales agents stand to earn such high commissions on certain investment products that they do not always adhere to the suitability standards—with potentially dire consequences. Remember: Make sure your investments match up with your age, your need for access to money, and your risk tolerance. - Real Estate Investment Contracts. Real estate investment contracts come in many forms, such as investments in real property, notes used in “flipping deals”, timeshare agreements, real estate investment trusts and investments in commercial or apartment buildings. Some real estate investments are securities subject to full regulation under the state and federal securities laws, including registration requirements and antifraud rules. Remember: Just because an investment involves real estate, whether it be in the form of real property, timeshare agreements or apartment buildings, it still may be a security.
- Foreign Exchange Trading, Options Trading, Puts and Calls. These are all highly sophisticated investments and the profitability is typically tied directly to the abilities and qualifications of the promoter. The average investor should be wary when it comes to these complex markets.Remember: If you don’t understand an investment, don’t invest!
- Prime Bank Schemes. Often promising high-yield, tax-free returns, promoters of these schemes offer to let the “little guy” in on what they claim are financial instruments from elite overseas banks usually offered only to the world’s wealthiest investors. “Prime” banks do not exist and the scam artists have no intention of creating a profit for anyone but themselves. Remember: Often the most sophisticated sounding investments are just false promises in fancy garb.
- Internet Fraud. Unscrupulous promoters are using the internet to either conceal their identity, establish an electronic presence that provides legitimacy to their enterprises or to easily and effectively advertise on a legitimate website to reach a large audience of potential customers.Remember: The internet can be a con artist’s dream—easy access to you and your money, with no “return address” if the deal goes sour.
Before investing, call the Texas State Securities Board and ask if the individual selling the investment or seeking to manage your money is licensed to do so and whether the investment itself is registered.
To check out an investment, salesperson, or adviser, contact the Texas State Securities Board by calling 512-305-8300 or visiting our web sites atwww.ssb.state.tx.us and www.TexasInvestorEd.org.
Friday, July 10, 2009
FLCCT Treasurer Position Filled
The Board of Directors of the Financial Literacy Coalition is pleased to announce that the vacant Treasurer position has been filled.
Chris Riley is the new Treasurer for FLCCT and comes to us with the following credentials:
· 10 years of successful fiscal-related experience including data analysis, fiscal monitoring and contract compliance, financial records maintenance and reporting
· Created
· Created comprehensive grants management and administration processes
· Fiscally managed a portfolio of 31 grantees with annual funds totaling over $11 million
· Extensive knowledge of and experience with Microsoft Excel, Word, PowerPoint and Access
· Created financial teaching tools for trainings via conference calls, webinars and large training events
· Proven ability to multi-task while working within strict deadlines
· Successful educational background in Business Administration
Welcome Chris to FLCCT
Monday, July 6, 2009
Some Resources in Financial Literacy from the OCC
To subscribe to the OCC yourself:
Subscribe: Sign up for the OCC’s “Financial Literacy Updates” by visitinghttp://www.occ.gov/canewslistserv.htm.
Resources:
The Association of Credit and Collection Professionals International’s Education Foundation provides a free and confidential resource for helping consumers find solutions to credit and debt issues.
MetLife released a new publication, The Benefits Edge: Honing the Competitive Value of Employee Benefits, written by industry expert Dr. Ron Leopold. Grounded in MetLife research, The Benefits Edge contains pragmatic principles and ideas designed to help employers make more strategic investments in employee benefits with an eye toward optimizing return on benefits investment and delivering greater competitive advantages.
CardRatings.com offers free educational materials and resources in addition to free credit card ratings and reviews. The U.S. Citizens for Fair Credit Card Terms maintains this Web site.
The Cooperative Extension System’s Financial Security for All Community of Practice hosts a series of informational chat sessions through the University of the District of Columbia. Visitors to the site can ask questions and get answers from extension personal finance experts. Also available on the site is a locator for local extension offices and institutions.
The National Foundation for Credit Counseling has launched Debt Advice, an interactive Web site that gives consumers access to numerous financial education tools and helps them find a certified credit counselor closest to them.
The Federal Reserve has created a Credit Card Repayment Calculator. Based on the information the user provides, the calculator will give an estimate of how long it will take to pay off the credit card balance. A second calculation helps the user develop a plan for paying off the balance sooner.
The FDIC has released the Money Smart Podcast Network, the portable audio (MP3) version of the award-winning Money Smart financial education. The new version of Money Smart is suitable for use with all MP3 players, enabling consumers of all ages to learn to make informed and prudent financial decisions while “on the go.”
The FDIC has issued a variety of tips to help consumers stay on guard financially in the current economy, in areas ranging from foreclosure rescue and loan modification scams to deceptive offers of FDIC-insured certificates of deposit. The FDIC published these tips in the spring 2009 issue of FDIC Consumer News, the agency’s quarterly newsletter for consumers, which is available on the Web site.
In its winter 2008/2009 issue of FDIC Consumer News, the FDIC issued tips to help consumers spend less, save more, protect against fraud, and borrow wisely at any time but especially during a difficult economy.
The Financial Literacy of Young American Adults, an analysis of the Jump$tart Coalition’s 2008 biennial survey, is available in PDF on the Jump$tart Web site. The survey, which launched in 1997 and has been conducted every other year since 2000, focuses on high school seniors but included college students for the first time in 2008. The results of these surveys (and comparisons with earlier surveys) are included in the book. Also available on this site is Making the Case for Financial Literacy, 2009, a collection of personal finance statistics that Jump$tart compiled from other sources.
Financial Literacy Online is a product of National Student Loan Program, a nonprofit student loan guaranty agency dedicated to financial literacy, based on the belief that education helps all consumers manage debt and other financial matters. Financial Literacy Online is a comprehensive and convenient online learning center that teaches students the basics of personal money management. Courses are for students planning for college, enrolled in college, planning to graduate from college, or recently graduated from college. Anyone interested in money management—including parents—may take the courses.
Investor Education Fund, in partnership with the Investment Industry Regulatory Organization of Canada, sponsors “Funny Money for High Schools Assembly Program,” an entertaining show that takes students on a financial literacy tour through the basics of balancing a checkbook, reconciling a debit card statement, learning credit card fundamentals and more.
Junior Achievement and the Allstate Foundation have created a new series of free, downloadable teaching tools to help parents talk to their children about smart money management. Lessons cover budgeting, the importance of saving, understanding the cost of credit and how to use it, and more.
The National Theatre for Children has developed a communications strategy that combines live theater and multiplatform educational materials to communicate complex messages to hard-to-reach audiences. Mad About Money is a four-part program that teaches children about forming savings habits, evaluating risks, and the difference between a debit card and a credit card.
My Money Management is a unique industrywide effort to provide consumers with comprehensive financial education resources to help guide their personal finance decision-making process. This Web site provides consumers with tools and resources from a variety of sources, including financial service companies, advocacy organizations, and personal finance experts. My Money Management is an initiative of the Financial Services Roundtable.
Smarty Pig is a free, online savings account for people who want to save for specific goals. The account also is FDIC-insured. A person types in the dollar amount they wish to save and the time frame in which they would like to reach their goal. The Web site technology suggests a monthly deposit amount to the account holder to reach that goal.
The U.S. Social Security Administration offers a wide variety of new and important publications and other resources and tools for the public about retirement, benefits, and support for family members in the event of disabilities or death.
Wells Fargo recently launched a free virtual world, “Stagecoach Island,” an entertaining and interactive companion site to Hands on Banking, its free financial education program. Teens can explore the island and its hidden secrets, connect with friends and make new ones, and learn smart money management. Educators can use the “Stagecoach Island” virtual world in the West Texas Center for Economic Education classroom to teach important lessons in budgeting, saving, managing credit, buying a home, and getting a job. Participants earn virtual money by visiting the Learning Lounge, and answering questions about money management. They can also obtain virtual jobs, credit cards, and home loans giving players the opportunity to learn, earn, build and, play in a virtual world.
The American Bankers Association has launched “Teach Children To Save,” a Web site designed to make classroom lessons for children available to everyone. The site offers tips for young people and their parents on how to establish a budget, start a savings account, and make regular deposits.
The National Endowment for Financial Education has developed a new Web site dedicated to help people optimize their retirement paycheck by making wise decisions.
HelpWithMyBank.gov - The OCC’s Web site that provides answers to more than 300 commonly asked banking questions. While targeted at national bank customers, the site answers many questions common to all banking consumers and provides useful information about contacting regulators of state banks, thrifts, and other financial institutions. A link from HOPE NOW to HelpWithMyBank.gov has been established.
MyMoney.gov - The U.S. government's Web site dedicated to teaching all Americans the basics of financial education. The site houses important information from 20 federal agencies on such topics as buying a home, foreclosure prevention, deposit insurance, privacy, fraud, scams, balancing a checkbook, and investing in a 401(k).
Subscribe: Sign up for the OCC’s “Financial Literacy Updates” by visiting http://www.occ.gov/canewslistserv.htm.
New Membership Orientation Set for July 15, 2009
If you are interested or know someone who is interested in becoming a member of the Financial Literacy Coalition Central Texas, plan to attend the New Member Orientation Training set for July 15, 2009 at the Travis County Extension Office, 1600 B. Smith Road, Austin 78721. See the website for an application or email at travis.flcoalition@gmail.com.
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