Protect your ID

With the increasing prominence of online transactions and data management systems, identity theft has become an everyday concern for the common citizen. By hacking into bank account databases or soliciting personal information through cleverly designed schemes, prospective identity thieves now have more techniques at their disposal than ever before.

An insidious new form of ID theft is the fake check, which involves a scam artist answering a classified ad and offering to pay for the advertised item with a personal check, cashier’s check, or corporate check.

Before the check is sent, however, the scammer devises a way to “accidentally” write the check for more than the item’s price. They then request that the recipient deposit this check and then wire them back an amount equal to the difference between the “erroneous” check and the advertised item price. Unbeknownst to the victim, they have deposited a check from an intentionally under funded account, which then bounces. The victim is then liable for the full amount of the fraudulent check.

Besides the fake check scheme, many other methods are used by ID thieves. These include “dumpster diving” for account numbers in garbage, phishing, changing the victim’s address, and stealing their wallets or financial statements. They can then use this information to gain access to existing accounts or create new ones, rent items, or claim government transfer payments in the victim’s name. Due to the multitude of schemes employed by such criminals, it is essential that you safeguard your account numbers and Personal Identification Numbers (PINs).

If you suspect that your identity has been stolen or is about to be stolen (e.g. your wallet has been stolen), you can freeze your credit report to prevent unconfirmed access, close accounts you suspect to be affected, or file a fraud alert.

This can be negotiated by contacting one of the credit reporting agencies (Equifax, Experian, or TransUnion) and posting either an initial alert, which will remain valid for at least 90 days, or an extended alert, remaining on your report for seven years.

You may also want to file a police report on the incident and the suspected perpetrator. Unfortunately, some police departments remain hesitant to file such reports. In such cases, filing an ID theft report with the Federal Trade Commission (FTC) will help them identify threats and catch the perpetrators. You may also want to contact other police departments for assistance.

Although we have discussed several methods of recovering from identity theft, the most effective method is to remain vigilant to potential theft schemes and avoid them in the first place. Remember that while identity theft may seem ubiquitous in today’s electronic society, there are ways to safeguard oneself.

Written by Elizabethtown College Students In Free Enterprise, a nonprofit organization that teaches others the principles of free market economics. Students, faculty and staff are strongly encouraged to visit the SIFE blog at http://etownsife.blogspot.com/. Contact sife@etown.edu with any questions.

This article was originally published in the Etownian on Thursday, January 31st.

Ways to Invest in the Stock Market

Like most transactions, there can be more than one way to purchase stock in a company. Most people hire stockbrokers to do this for them. Web sites such as Scottrade, E*trade and Ameritrade provide online investment services. To keep track of increases and decreases in the price of stocks, you can go to Web sites like Yahoo Finance or simply look in the newspaper, such as the Wall Street Journal.

There are quite a few options to use when trying to pick the best stock to invest in. First, you can select a few stocks on your own and then look over their progress from the last few years.

Have their stock prices gone up? How much do they earn per stock? Are the companies declaring any dividends to the investors? What do the future dividends and returns look like for the stock?

Having some knowledge in accounting might help this process, but it is not necessary. If, though, you do not want to risk your success on your own opinion and research, then you may want to talk with a financial consultant, who can help you.

Do you want to play the market or pick a stock and stick with it? Some risk takers will attempt to predict the market. If the prices continue to rise, they might choose to sell the stocks and invest in other securities with the earnings instead of staying put.

Also, if a price significantly drops, they may pick that time to invest in hopes that the prices will climb back to their past heights, if not higher.

Generally, the more you risk, the more you can gain. Those who make the most on average in the stock market are those who attempt to predict and make money by buying and selling at key points.

Money can also be made through dividends and just by waiting it out and having faith in your investments.

The simplest way to get into the stockmarket might be to hire a stockbroker, and let him or her handle the accounts and make the money for you.

You will be charged a set fee, but he or she will be required to earn you a return on your money. Stockbrokers have more and more money to work with to earn returns as well.

These are a few of the investing basics — where to go, how to buy, who to talk to and what can be gained from this. The stock market is a crucial part of our economy and a somewhat risky way to make money if you don’t understand how it works.

This article was originally published in the Etownian on Thursday, November 15th, 2007.

Stock Market Investing

The stock market can either be the most lucrative investment of your lifetime or drain your worth, depending on how you “play the game.” While numerous multimillionaires or multibillionaires have earned their fortunes investing in small firms that eventually blossomed into hugely successful corporations, placing “all of your eggs in one basket,” or investing your entire worth into one venture, is very risky. Only a very minute percentage of startup firms ever reach the financial success of the Microsofts or the Yahoos. The safest game plan for the investment market is to choose a select group of attractive and feasible investments. However, if it is a windfall of fortune you desire, you will need to remember that greater reward generally corresponds with greater risk.

All corporations offer stock, although some prefer to keep their interests closely held or private, meaning that stock can only be purchased by the managers of the organization. However, many corporations are publicly-held, which means that outside interests can purchase shares and thus purchase a stake in ownership. Public corporations sell two distinct classes of stock shares: common and preferred. Common shares are attached to the privilege to vote for the company’s board of directors; however, companies may experience times of financial difficulty in which they find it impossible to pay their common shareholders dividends, or portions of the company’s earnings disbursed to shareholders. The purchase of preferred stock guarantees that you will be paid your declared dividend before common shareholders.

Individual stocks are traded on stock exchanges, whose price listings can be found in special sections of most major newspapers or online at investment Web sites. Examples of renowned American stock exchanges include NASDAQ (marketing & major tech. firm’s stocks) the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX). Transactions on the stock exchange are conducted through brokers, the most prominent of whom actually conduct business on the floor of the stock exchange houses. Investors interact with the brokers directly via telephone or indirectly via Internet investment sites such as Charles Schwab, Scottrade and E*TRADE.

Regardless of your method of investing, the stock market still offers the greatest potential for financial gain of all investment opportunities. However, it is crucial to bear in mind that great financial rewards rarely come without great financial risks.

This article was originally published in the Etownian on Thursday, November 1st, 2007.