Massachusetts Bankers Association

FOR IMMEDIATE RELEASE

Contact:

Bruce Spitzer
617-523-7595

MONEY MANAGEMENT TIPS FOR COLLEGE STUDENTS
FROM THE MASSACHUSETTS BANKERS ASSOCIATION

--Beware of Internet Scams--

BOSTON, Aug. 18, 2005 - Most college-bound students are very familiar with computers and the Internet - that's the good news. The bad news is that there are an ever-increasing number of scammers and fraudsters, becoming more sophisticated with each passing day, intent on separating college students -- and all the rest of us -- from our money. College students may be particularly vulnerable because of their heavy use of the World Wide Web, combined with a certain naïveté about many things financial.

The Massachusetts Bankers Association has provided a few tips to help college students get off to a sound financial start. With a little parental assistance, students can dramatically improve their financial skills, including how to avoid financial scams.

Overall Money Management

• Protect Your Personal Information
  Dorms or off-campus housing can be a wonderful, shared experience. However, be concerned about "friends" of your roommate tramping through the place. Use a locked drawer or file holder to hold your personal documents - bank and credit card account numbers, social security number, etc. (Better yet, leave your social security card at home and, certainly, don't keep it in your wallet.) This information can be used to steal your identity, open up bogus accounts in your name and run up huge credit card bills. Protect your private information.
  
  
• Budgeting
  Students, establishing and managing a budget is always a good idea. A great way to start is to arrive at campus knowing all of your sources of income and the totals: money from a summer job or savings, financial aid, scholarship money and, of course, parental funds. Then track and record all of your spending very closely over the course of a few weeks. Project outward to the end of the semester and see how expenses compare to your available funds. After reviewing your expenses for a few weeks, chances are you will be surprised that the little things add up to so much. Think twice about stopping at the coffee shop or that late night pizza when you can eat on your meal plan instead. If you are careful, there may be more money left over for important things like books. Don't forget to budget carefully and realistically for entertainment. You may learn that not buying a CD or going on an expensive weekend trip will help you make it through the semester.
  
  
• Credit Cards, Debit Cards and Other Bills
  As a student just starting out on a financial life, it's important to learn about credit. Parents, teach your children about revolving credit and interest rates. They can be onerous if the student just charges away and overspends. Moreover, students should understand that you need to pay on time to avoid a poor credit rating that could hamper your ability to buy a car, rent an apartment, own a home -- or even to get a job. It's very important that you check your statements carefully and report any discrepancies to your card company to give you maximum protection against fraudulent activities. Using a credit card or a debit card (the credit function attached to an ATM card) can be a good way to establish a positive credit history that will be a benefit throughout life. In addition, you'll find that a credit card can be very valuable in case of emergency. Be sure to pay all of your bills on time and remember that cell phone bills and others can run up very fast. Save all receipts and review the statements thoroughly each month to be sure all charges are yours. Remember that you probably did not budget for paying credit card debt each month.
  
  

Internet Advice

• Avoid Phishing Scams
  Criminals have gone "phishing." This is the act of sending pretext emails to unsuspecting recipients who may think it is an email from their own bank or credit card company - or university -- referencing problems with an account or some situation requiring a fast response. The emails are random, but sending thousands increases the likelihood that the scammers will reach some consumers who, indeed, do business with that particular institution. The email or its links will use the institution's logo and other graphics to give the impression that it is actually the organization sending the email, or "spoofing" it. The communication will then include a request to "verify" social security, account numbers, or passwords. Don't do it. Your bank, credit card company or university knows this information and does not need to ask you for it. This is a fraudster. A newer variation of this practice attaches "spyware" to your computer which can record keystrokes and other activity.
  
  
• Avoid Suspicious Responses to Your Ad on the Internet
  This scheme often involves a legitimate ad that you place on the Internet, perhaps trying to sell a car, electronics or any pricey item. Someone responds and cites complications with currency exchange or shipping costs, and sends you a check for more than the selling price of your car or whatever you are selling. After depositing the cashier's check, you are then instructed to keep a portion of the extra money and wire or send a check for what's left of the overpayment to the buyer's agent/shipper. After you wire the money out of your account you may find that the check you received and deposited was counterfeit. An important rule: If you're selling something, funds should be moving only in one direction - to you. And make sure, after depositing a check and before you release the goods, that your bank has the funds. Don't simply ask if the check has cleared, verify that the funds are in your account by asking "Have the funds been 'finally collected?'" A better rule of thumb: If a deal sounds too good to be true, it probably is. Another warning: A similar fraud using a counterfeit cashier's check can also occur after an online auction.
  
  
• Avoid "African" emails
  There are many email messages circulating on the Internet that ask for your cooperation to move a large sum of money out of another country -- most often some place in Africa -- and all of them are scams. The scammers pose as bankers, chief auditors, chief security officers, remittance officials, directors of finance, directors of government or bank contract award divisions - all stating they have access to unclaimed funds, generally inactive or delinquent accounts, with millions waiting to be claimed. Others say they are kin to family members who died natural deaths but unexpectedly, or their relatives were killed in assassinations, military coups, or plane crashes. In all of these bogus scenes, the deceased was rich and the letter writer needs help getting the dead relative's vast fortune out of the county due to local snafus or bureaucracy. Individuals are asked to provide funds to cover various fees and for personal identifiers, such as social security numbers, bank account numbers and other similar data. Often they start out by just asking for your phone or FAX number and then in subsequent communication they ask for your bank account number to wire-in the alleged funds. Don't give them anything. Money will be wired out of your account. If it sounds too good to be true, it probably is.
  
  
• Be Wary of Prizes, Trips, Lottery Winnings
  This bogus communication can come to you via email, the U.S. Postal Service or over the telephone. There are numerous variations but, again, what they have in common is a request for you to advance funds to receive your prize. The scammers claim you have won the Canadian or some other lottery, you have won a trip or some other windfall and all you have to do is advance a "handling" fee to the sponsor or provide your bank account number. Don't do it. If it sounds too good to be true, it probably is.
  
  
• Avoid Computer Viruses
  Of all Internet frauds, this one is perhaps the most insidious. You receive an email with a tender header, perhaps with an attachment titled "I love you," or "call me," or just about anything that piques your curiosity. When you open the email, it attaches a small virus inside your computer that records keystrokes, log-in names and passwords. And it does so without you knowing it. After you have visited 20 or 30 online banking or financial Web sites, it emails that information back to the criminal sponsor. Best advice: Don't open strange emails. Check with your college and ask about how to protect your computer from viruses.
  
  
• Credit and Job Applications
  If you see a credit offer or a job posting online, you can fill out an application or send in a resume. However, don't respond if it asks you for your social security number or bank account information. These can be provided later after you have established contact by phone, or mail, or in-person with the companies and have verified that they are legitimate. Otherwise, you could be providing personal information that could result in the draining of your bank account or the stealing of your identity.
  
  

Important Banking Tools

• The Checking Account
  Open a checking account when arriving on campus, or see if your local bank has a branch near the college campus. Most colleges invite local banks to visit the college, or provide brochures at the beginning of the school year. Knowing how to write checks, balance a check book, and record ATM transactions can go a long way toward avoiding financial trouble down the road.
  
  
• Funds Transfer
  Inevitably, at some time during the school year you will need to transfer funds to your account from your parents (hopefully not because you did not budget well). Ask your local bank about setting up a savings account controlled by the parent, with the ability to transfer funds into a linked checking account with an attached ATM card controlled by the student. Moving funds in this way can be as easy as a phone call, a visit to the ATM, or going online. With a joint checking account both parties, with the same code, can go online to balance the account and review transactions, even if the statements are received in the mail by one person only. (Parents, you have both the benefit of seeing your child's financial transactions, as well as the ability to help the student manage the account, if needed.) If you cannot link accounts, good checkbook training is even more critical for the student.
  
  
• The ATM Card
  Nothing beats an ATM card for convenience. However, there can be a cost associated with the delivery of that convenience. Every student should be fully aware of his or her bank's fee policies. If you're a customer, most banks will not charge you for using their own ATMs, but you should know whether or not you will be charged for using another bank's ATM, and by your own bank for managing that transaction. Be aware, if you are being charged, and you're in the habit of visiting the ATM many times a week, the charges can add up quickly. Remember the option of using the cash-back feature of debit cards when making purchases to possibly avoid some fees associated with using another organization's ATM. Also, if your bank is a member of the SUM ATM Program, you can avoid ATM surcharges by using another bank's ATM if it is a member as well.
  
  
• Records
  Students should keep a record of all of financial service providers in a handy but secure place, separate from your wallet with cards in it, or your checkbook, in case they are ever lost or stolen. Call your bank or credit card company promptly to report lost or stolen cards to protect you from financial loss, and to order new materials.
  
  

Following all of this advice may seem daunting, but just going over it and using some common sense will go a long way toward making your college experience fun and rewarding.

The Massachusetts Bankers Association represents 215 commercial, savings and co-operative banks and savings and loan institutions in Massachusetts and elsewhere in New England.

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Massachusetts Bankers Association, Inc.
73 Tremont Street, Suite 306
Boston, MA 02108-3906
Tel: 617-523-7595 / Fax: 617-523-6373
http://www.massbankers.org