7.7 Financial Fraud and Identity Theft

What occurs when you are deceived into believing that you will receive something that does not actually exist?

• pyramid scheme

• ponzi scheme

• fraud

• theft

Tags

CCSS.RL.5.6

Bart has been a sccessful financial advisor for more than 10 years. During that time, he has generated returns that have never been less than 5% annually. He does not advertise but that has not stopped investors from opening new accounts with his firm. It turns out that Bart has been taking the deposits of new investors, keeping a portion for himself, and sending the rest to earlier investors. Bart is running a(n):

• pyramid scheme

• ponzi scheme

• telemarketing scheme

• identity theft

Which of the following is an indication of a fraud?

• hearing a investment advisor claim that he has consistently earned 15% annually for his clients over the last 10 years

• learning that a bank is offering a 2% yield on 3-year certificates of deposit

• listening to a stockbroker tell you that she believes the value of stocks is too high and that you should buy bonds

• receiving a promotional letter from an investment advisor saying that the advisor can match the return of the stock market

A fraud that entails recruiting new members to sell products or services and to also recruit additional new members is called a(n):

• telemarketing fraud

• ponzi scheme

• pyramid scheme

• identity theft

Which of the following statements indicates a possible fraud?

I. Fill out this email survey to receive a free gift

II. Be one of the first 30 callers to receive three days and two nights at a famous Las Vegas hotel

III. Your wealthy uncle recently died; send $250 to obtain details about your inheritance

• II only

• III only

• II and III only

• I, II, and III

Tags

CCSS.RF.3.3B

CCSS.RF.3.3C

CCSS.RF.3.3D

CCSS.RF.4.3A

CCSS.RF.5.3A

One strategy to avoid prize scams from telemarketers is to:

• never pay anything to receive a free prize

• always check your credit report at least twice a year

• never give your credit card number out over the phone unless you initiated the phone call

• never pay anything to receive a free prize, always check your credit report at least twice a year, and never give your credit card number out over the phone unless you initiated the phone call

Which one of the following statements regarding identity theft is INCORRECT?

• identify theift results in losses of more than $13 billion per year

• the occurrence of identity theft has decreased dramatically since it was designated as a federal crime

• little can be done by individuals to stop identify theft from occurring

• more than one-third of households have experienced some form of identity theft

Tags

CCSS.RI.11-12.5

CCSS.RI.9-10.5

CCSS.RI.6.5

CCSS.RI.7.5

CCSS.RI.8.5

Which of the following is NOT a strategy to protect against identity theft?

• never respond to unsolicited emails asking for credit cards, passwords, or other financial or security information

• always shred financial statements and receipts that show account-related information

• reconcile your monthly account information to make sure there are not any unauthorized transactions

• never use credit cards online since nearly all identity theft occurs online

How might someone gain information about you to commit identity theft?

I. Going through your garbage looking for personal information

II. Sending a phishing email to obtain personal information

III. Stealing your wallet or purse

• III only

• I and II only

• II and III only

• I, II, and III

A(n) ____ seals your credit reports so that ____ cannot be opened.

• fraud alert; credit cards

• credit hold; credit reports

• credit freeze; new accounts

• account password; unauthorized accounts

Tags

CCSS.RI.11-12.5

CCSS.RI.9-10.5

CCSS.RI.11-12.3

CCSS.RI.8.3

CCSS.RI.9-10.3