Will Rogers once said that, "good judgment comes from experience, and a lot of that comes from bad judgment."
Unfortunately, many people have a tendency to suspend their otherwise good judgment when someone they don't know from a company they've never heard of offers them something "free."
Usually, these "free" offers only result in you being separated from your money. Many an otherwise savvy consumer has been taken to the cleaners by offers that promise pre-approved loans, lottery winnings or other "free" money. All you have to do is to provide a complete stranger with your personal financial information (say, like account numbers to your financial institution and Social Security number). You may even be asked to provide the caller with a small deposit to guarantee the funds being given to you.
If the wrong people get your personal financial information the best that may happen is that you lose some of your hard-earned money. The worst case could involve your identity being stolen and your good credit and reputation used for criminal activity. The creativity and the depths to which these ripoff artists will go is impressive, such as this scenario:
You receive a check in the mail for $5,000, along with a letter congratulating you on winning the "I'm-gonna-rip-you-off lottery." All you have to do is cash the enclosed check and send back $1,000 of it via Western Union within 72 hours (in order to cover the tax and transfer charges). After you send the $1,000, they'll send you the remaining lottery winnings. Oh, and provide them with your account number from your financial institution so they can directly deposit the remaining "winnings."
Sounds great! Never mind that you don't recall entering the lottery or have never heard of the company. What have you got to lose?
Imagine this: The check is stolen or forged. The $1,000 is now gone (Western Union is difficult, if not impossible to trace) and the check comes back for any of a multitude of reasons. Guess who is on the hook for the $1,000? Not the financial institution. Not the maker of the check. Not the issuer of the check. It's you, as the negotiator/depositor of the item that has the responsibility, and your financial institution is not going to take an I-O-U from Y-O-U.
Adding insult to injury, the "I'm-gonna-rip-you-off lottery" just automatically withdrew the remaining funds out of your account (based on the information you gave them). Ouch. Now you're bouncing checks from here to Bangladesh.
A variation of this same scenario could happen when you sell something over the internet. The "buyer"sends you a money order or cashiers check for an amount above the sales price and asks you to send the difference back with the merchandise. Upon learning of the situation, your first reaction may be to use several unflattering and otherwise unspoken euphemisms targeted at the rip-off artist or even your local financial institution, but in the end only your good judgment can save you from the consequences of being ripped off.
How can you protect yourself? Practicing a few common-sense rules can help.
Never give out your personal or banking information to anyone you don't know or trust, especially if they call you! Ask to call them back; this will allow you to verify who you're talking to.
Remember that there's no free lunch. If someone is offering you something for nothing, ask questions. Insist on knowing who you're doing business with.
Know thy banker. If you don't personally know someone at your financial institution, introduce yourself. Ask them for advice.
Fight fire with fire. Take advantage of today's technology. You can have near-instant account information via the phone or computer. When you know daily what's happening in your account, you can do something about it sooner.
Don't think you're immune because you: Live in a small town/don't use the computer/don't have a phone/are generally cranky. I can recall at least a dozen cases of fraud attempted (unfortunately, several successful) on your friends and neighbors in the last 12 months, right here in Grant County.
Above all, practicing good stewardship of the resources we have been given allows us to benefit ourselves, our families and the people around us, and leads to a sense of well-being and purpose.
"I've got all the money I'll ever need, if I die by four o'clock."
- Henny Youngman
Ken Olson is executive vice president of Old West Federal Credit Union and lives in Grant County.