Episode Transcript:

Welcome back to the Meadowsweet Money podcast! I’m your host, Mimi Cirbusova. 

On today’s episode, we’re getting serious about protecting yourself from scams, fraud, and theft. Because financial safety is a major component of financial wellbeing.

Before we dive into the episode, I want to take this moment to remind you that starting in 2024, I am launching a Patreon! And you can get on the waitlist now to be the first to know when my Patreon is live. 

As a patron, you are directly supporting the Meadowsweet Money Podcast and will get access to exclusive content, patron-only discounts and events, as well as benefits of my private Discord server community.

If you’re ready for a shame-free money mentor that can walk alongside you on your financial journey, I am excited to be yours. 

To sign up for the waitlist, check out the link in the show notes, or head to patreon.com/meadowsweetmoney and enter your email. 

With all that said, let’s dive into today’s episode. 

While it may not feel super sexy to talk about financial fraud and scams, as a financial educator, this topic is one that kinda keeps me up at night. And I want to preface this all by saying that if you have ever been a victim of financial fraud or a scam, it’s so not your fault. 

The individuals and organized groups that are committing these scams are savvy. These folks spend far more time thinking about how to trick you, than you probably spend thinking about how to protect yourself. So I want to help you have a leg up.

In this episode, I’m going to share about some common scams out there right now, how we can make some small changes to protect ourselves from becoming a victim in the first place, what to watch out for, and ultimately, what to do if you or someone you love falls victim to one of these schemes.

You might be wondering, ok, Mimi, I’ve heard a lot about these scams. They mostly impact older people right? Well, that fact is, these things can impact folks of any age. The Federal Trade Commission noted in a 2021 report that Gen X, Millennials and Gen Z (so, 18-59 year olds) were 34% more likely than older adults (those 60 and up) to report money be lost to fraud.

The biggest culprit was online shopping fraud. Basically, clicking an ad on social media, making an order, and never getting the item. Similarly, 18-59 year olds were more likely to fall for an invest scam, particularly bogus crypto investment schemes. They’re also more likely to become a victim of job scams – basically where you’re promised a job but they steal your personal information.

The Consumer Financial Protection Bureau, which is an amazing resource by the way, warns consumers of quite a few common types of fraud and scams, including the ones I mentioned, but also scams involving fake charities, debt settlement or debt collection, mortgage or loan modifications, and romance scams.

Overall, Gen Z, Millennials, and Gen X aren’t falling for scams over the phone the way older adults are, but rather through websites and social media.

So what can we do?

First, let’s talk about prevention. The stuff we can do long before someone tries to scam us. 

There’s kind of obvious stuff, like protecting your passwords and making them really strong. And of course, not using the same password across multiple websites. Turning on two-factor authentication is also always a good idea. And checking your bank accounts and credit card accounts regularly, at least once a month, is also a very good idea.

Once I was driving back home from a day at Disney, and had to stop for gas somewhere I don’t normally go to. It was pretty urgent. And I used my credit card at the pump because I didn’t have any cash. The next day, I saw two pending charges on my credit card account for a website I had never heard of. Because I check my accounts regularly, I was able to call the credit card company, get a new card issued right away and have those pending charges flagged for fraud.

I think there’s a couple of habits that can be really beneficial that aren’t mentioned as often as the stuff we hear all the time. Things like checking your credit report once a year. And I usually like to do this in the fall when the clocks change, because that’s also the time I usually check our fire alarms. 

Checking your credit report isn’t just about reporting fraudulent information, but also making sure these giant for-profit companies aren’t messing up the basics like misspelling your name, or have an address on there that you never resided at. I’ll leave a link in the show notes so you can access your free credit report, but please know – the only place to go is annualcreditreport.com. This is the site that is guaranteed by federal law to give you access to your free report. Side note here: your credit report is not the same as your credit score. But that discussion is a whole other podcast episode, but I have to at least mention it.

I’ll also say, putting a freeze on your credit, which has zero impact on your credit score, is an awesome way to protect yourself. While you do have to contact the three credit bureaus – that’s Equifax, Experian, and TransUnion – it’s definitely worth the effort. And if you need to temporarily lift the freeze, you can usually do so within one hour of your request. Doing this can prevent a fraudster from opening a new account in your name. But be warned here – a freeze won’t stop them from accessing existing accounts.

So here’s a few other things you can do. A few basic practices to start implementing or get back into the habit of doing. Hopefully you have already put your phone number on the National Do Not Call Registry, which you can do online now. I’ll leave that link in the show notes as well.

But if someone calls you out of the blue from an organization you are familiar with, like your bank, or the IRS, or even a charity you recognize, tell them you’ll give them a call back. And look up the phone number through their actual website. If they don’t match, there’s a good chance it’s fake. Financial institutions in particular, understand this and want you to be safe. They will not pressure you to stay on the line. 

And please tell your parents and grandparents that Medicare and the Social Security Administration will NEVER call them out the blue. Never ever. These agencies only send mail or have pre-scheduled appointments over the phone.

Always be wary of sharing your personal information, particularly PIN numbers, passwords, and one-time passcodes. And while I know it feels inconvenient, for the love of god, please don’t store your credit card information on shopping websites. I know it’s convenient. But hey, not only does this keep you protected against data breaches, it can also help curb regrettable and forgettable spending.

Speaking of online shopping, it’s always best to avoid using public wi-fi networks or shop online while in public, including on your phone. Avoid situations where others could potentially overhear or observe you entering account information. And never use a debit card for online shopping. Credit cards are safer, and have far more protections.

Now, what should we do if we suspect that someone is trying to scam us or someone we love? 

There’s a few warning signs. The Federal Trade Commission cites four warning signs that something is a scam. They go by the four P’s – as in Pretend, Problem or Prize, Pressure, and Payment. Here’s the nitty-gritty:

  1. Scammers usually pretend to be from an organization you’re familiar with, like Social Security, Medicare, the IRS, or even businesses, like your utility company or a charitable organization. 
  2. The next thing is that scammers will tell you there’s a problem or that you won a prize. So they might say that you owe money to the government, there’s an emergency with someone in your family, a virus on your computer, or there’s a warrant for you. They might pretend to be someone from your bank and say there’s a problem with your accounts. Others will say you won a prize through the lottery or a sweepstakes (but, of course, you gotta pay a fee to claim it.)
  3. Third, scammers love to pressure you. They don’t want to give you the time or energy to stop and think. They may even say, don’t hang up or disconnect the chat because doing so will get you into even more trouble. They might threaten to arrest you or sue you, take away something that is important to you, like a business license. For immigrants, they might say you will be deported if you don’t follow their orders. Any number of excuses to get you to act fast and without analyzing the situation.
  4. Lastly, scammers always want you to pay in a super specific and often kinda weird way that’s harder to trace. So insisting you need to pay in gift cards, or through wiring money using MoneyGram or Western Union, or paying with crypto. These are red flags. They might even send you a check to deposit, and then insist you send them money. The checks are fake of course, but it buys them time to skedaddle long before you and your bank realizes it.

Whew. I know this is a lot. And believe me, I really wish I didn’t have to talk about any of this. But it’s far too common of an occurrence. Personally, since becoming a financial educator, the number of times I get messages asking for advice or support after people have been scammed…ugh. It breaks my heart.

So as much as I wish I didn’t have to, here’s what to do if you suspect you or someone you love has been impacted. 

In the show notes, I’ll leave a great article about what to do, but here’s the highlights. First and obviously, contact any bank where you may have been impacted. If you need to lock down accounts or request a new card, do so immediately. 

If you have been a victim of identity theft, you might need to put a fraud alert on your credit.

First, you should contact your local police or sheriff’s office and report it to your state’s attorney general’s office, as well as submitting a complaint to the Federal Trade Commission. I know that it feels silly or that you might worry they won’t listen to you. And maybe nothing will happen right away. But when multiple reports about similar schemes come forward, agencies have something to off. And your report just might be the straw that breaks the camel’s back, so to speak. 

When people are brave enough to come forward, local, state, and federal agencies can advocate for funding to prevent crimes and enforce consumer protection laws. So even if you’re embarrassed, reporting financial fraud can protect someone else.

I’ll leave this topic for one final thought. It sucks to have to think about any of this. Honestly, I totally get why so many of us want to just bury our heads in the sand when it comes to finances. But of all the reasons why I think learning financial literacy is vital – particularly if you are in a marginalized community – this is the most important.

I’m a financial educator because I want to protect you from the greatest harms that are created by the profit-above-all, capitalist b.s. that we all have to navigate. 

And if you made it this far in the episode, I encourage you to implement just one thing this week that I shared. Because, you just never know. And friend, like I always say, you’re doing great. And I am so proud of you.

Oof. That was heavy. Let’s lighten it up with some “easier and better” segment.

This one is going to be a little embarrassing, but I honestly don’t care. This has truly made my life so much better. A few years ago, I convinced my husband to install a bidet in our bathroom. It was definitely one of those social media influencers that made me buy it things, but y’all, it took a LONG time to convince me. And to get really bougie, we also got one of those toilet footstool things. It came as a set, and even though I was skeptical, friend, I’m telling you…life changing.

We got the Tushy brand, and believe me, this is not an endorsement of them specifically, but rather just the concept of prioritizing your pelvic floor health. Other people have told me that I am really good at taking care of my health in general, which surprises me at times, but it’s important. No matter how much money I have or don’t have, my health isn’t something I can get back once it’s gone. And my body works really hard for me, so why not take care of it too?

It’s sort of weird in a way. As an American, the idea of a bidet was so just foreign to me. But it makes total sense. I mean, I was once walking through a park and got pooped on by some critter – not sure if it was a bird or a squirrel, but regardless, the first thing my friend did to help me was pour some of my bottled water on it before wiping it off. So when I think about it, the idea that we’re all just only using toilet paper…I dunno.

What I can say for certain is that when we travel, I really miss my bidet and little foot stool. I just feel cleaner, and have a lot less tummy problems. 

By the way, there’s a TikTok account I like called the pelvic dance floor by Dr. Alicia Jeffrey-Thomas. She talks a lot about these things that many of us can be really embarrassed about, but makes it less scary and less awkward. I think it’s a good thing to follow accounts of doctors and other professionals that can help us deconstruct some of the stuff we’ve been taught by society we’re supposed to be ashamed of. Heck, that’s why I talk about money. 

So yeah, go give her a follow. And maybe look into a better way to keep your bottom clean.

Alrighty. With that, let’s get back to some basics.

It has been a minute since I did a back to basics chat with y’all. And I can think of no better topic than that of debt payoff. Considering it’s basically the holiday season already, we need to talk about what to do to stop paying for our past decisions. According to a 2022 NerdWallet survey, close to a third of their 2,000 respondents said they were still paying off the credit card balance from holiday shopping the year before. 

And look, your debt might come from credit cards, personal loans, student loans, or something else entirely. But if you want to get out of debt, for whatever reason, let’s talk about the two strategies you can use to make it happen: the debt snowball or the debt avalanche.

Let’s start with the more commonly known one – the debt snowball. This strategy is all about mindset. It gives you quick wins, which can be really motivating. You basically list out all of your debts, from the lowest to highest balance. What you do is you make minimum payments on all your debts EXCEPT the debt with the lowest balance. On that debt, you pay extra until it’s completely paid off. Rinse and repeat.

With the debt avalanche on the other hand, you list your debts from highest to lowest interest rate. This strategy mathematically makes the most sense because over time, you pay less in interest. So similarly, you make minimum payments on all your debts, EXCEPT the debt with the highest interest rate. With that one, you pay extra until that debt is done. And again, rinse and repeat.

So let’s look at an example.

Let’s say you have a student loan, a credit card, and a car loan. The student loan is $4,000 with a 4.9% interest rate. The credit card is $6,000 with a 15% interest rate. And the car loan, at $10,500 has a 6% interest rate. The total minimum monthly payment for all of that is $820.

With the debt snowball, you’d pay off the student loan first, then the credit card, then the car loan.

With the debt avalanche however, the credit card would get paid off first, followed by the car loan, then the student loan.

I will say that there are a ton of debt snowball versus debt avalanche calculators out there. Truly, just google “debt snowball vs. avalanche calculator”. Plug in your numbers and see if one strategy makes more sense for you than the other. 

Again, I think the key here is to understand what YOU need to be successful. If you need those quick and immediate wins to stay motivated, then pick the snowball method. But if you want to get to the finish line faster and spend less, then pick the avalanche method. Heck, you could totally mix and match if that’s even better for you.

What I want to emphasize is that this journey is yours. Anyway, if you want more details on this, hit me up on Instagram. Let me know.

Anyhow, thanks for listening. I’ll see you next time. And remember, you’re doing great and I’m proud of you.