April Is Financial Capability Month

Financial Capability Month, which is observed during the month of April every year, is a time to highlight the value of high-quality financial education to improve your financial capability.

The first step toward a brighter financial future is to educate yourself and be aware of your possibilities. Part of your financial education should come from taking proactive steps to protect your investments and personal information.

To assist you, the Tennessee Department of Commerce & Insurance’s Securities Division is sharing some important consumer tips that can help protect your personal and financial information.

Learn Some of the Common Red flags of Financial Scams

• Never buy an insurance policy, make an investment, or give money to a stranger who contacts you or visits you unannounced. If someone calls you and threatens you with arrest or harm unless you pay them via wire transfer or a gift card, hang up immediately. You’re dealing with a scammer. Report the call to your local law enforcement agency immediately.
• “This investment has guaranteed high returns – no risk!” There’s no such thing – the higher the returns, the higher the risk. This type of sales pitch is often aimed at people who are non-risk takers, particularly those individuals who are on a fixed income or those who are near retirement and are worried about not having a large enough nest egg. Even with legitimate investments, know the risk level you are taking and invest only what you are willing and can afford to lose.
• “You can profit like the experts – get the secrets to success!” If the investment is so profitable, why do the investment promoters need to contact YOU out of the blue? Promoters utilizing this tactic are trying to convince you that he or she has access to inside information known only to a select few who are said to be making a lot of money. If you hear phrases like “secret markets,” “prime bank guarantees,” take your checkbook and run because secret prime bank markets simply don’t exist.
• Unlicensed investment advisers and insurance agents. Make sure your investment adviser or insurance agent is licensed to work in Tennessee before doing business with them. Always check whether the person offering to sell you an investment is currently registered and/or licensed, even if you know them personally. Use contact information available from BrokerCheck (https://brokercheck.finra.org) and IARD (adviserinfo.sec.gov) to independently verify the identity of someone who solicits you to provide personal information or investment funds.

Establish A Trusted Contact

A trusted contact may be a family member, attorney, accountant, or another third party who you believe would respect your privacy and know how to handle that responsibility. One or more trusted contacts may be established.

A trusted contact may be asked to confirm your current contact information, health status, or the identity of any legal guardian, executor, trustee, or holder of a power of attorney. U.S. broker-dealers are required to provide a written disclosure that explains these details.

Using A Credit Freeze

A credit freeze, also known as a security freeze, is a free tool that allows consumers to restrict access to their credit reports, making it more difficult for identity thieves to open new accounts. In 2017, Tennessee lawmakers passed a law giving parents and guardians the right to freeze the credit of a minor under 16 years of age or an incapacitated person under the care of a guardian or conservator at no charge. A credit freeze does not affect your credit score.

Even under a credit freeze, your credit report can be released to existing creditors or to debt collectors acting on their behalf.

Credit freezes do not prevent government agencies from accessing your credit report in response to a court or administrative order, subpoena, or a search warrant.

Avoiding Identity Theft Scams

• Scammers frequently target seniors for identity theft. To prevent identity theft scams, remember:
• Never buy an insurance policy, make an investment, or give money to a stranger who contacts you or visits you unannounced.
• Shred all paperwork containing any identifying information, healthcare information, banking information, or passwords.
• Monitor bank and credit card statements.
• Monitor your credit report.
• Use direct deposit for benefit checks to prevent checks from being stolen.
• Never give your credit card, banking, Social Security number, Medicare number, or other personal information over the phone, unless you initiated the call.

Consumers who have questions and an investment or investment adviser should contact the Securities Division at tn.gov/securities or 800-863-9117 for more information.

Rachel Carden serves as the Director of Investor Education for the Securities Division of the Tennessee Department of Commerce and Insurance.

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