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Could you cope with a shock to your bank balance? 5 ways to check you are financially resilient

<a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> Imagine the dentist has just said you urgently need a A$2,000 dental crown. A week later, a pipe in your bathroom bursts, causing $8,000 worth of damage. Suddenly, you’ve been hit with a $10,000 financial shock. As the cost-of-living crisis plunges more households into financial uncertainty and at least <a href="https://melbourneinstitute.unimelb.edu.au/data/taking-the-pulse-of-the-nation-2022/2023/australians-face-challenging-budgetary-constraints#:%7E:text=Over%20the%20past%20six%20months,has%20increased%20to%2060%20percent.">one-third</a> of Australians struggle to make ends meet, it’s more important than ever to ask yourself: how financially resilient am I? Being financially resilient means you aren’t left financially devastated when an expensive emergency creeps up on you. Here are five key signs of financial resilience. <h2>1. You have a plan for what you’d do if you suddenly lost your salary</h2> Financial resilience means having a plan to fall back on during tough times. This extends to how you’d make money if you lost your job. In practice, that means things like making sure your skills and contacts are kept up to date so you can more easily find a new job. You might also consider whether a “side hustle” job such as tutoring could work for you in the short term, and how you’d put that plan into practice if needed. Perhaps you have a spare room in your home you could rent out for a period of time if you lost your salary. Those examples won’t work for everyone, of course, but it’s still worth asking yourself the question: what would I do if I lost my salary tomorrow? <h2>2. You have enough liquid assets to meet an unexpected financial expense</h2> Liquid assets means money that can be accessed quickly and easily to overcome an unplanned financial expense. Savings are a good example. They provide a buffer so you can cope in the short term if a financial shock strikes. The federal government’s Moneysmart website suggests you aim to have enough in your emergency savings fund to cover <a href="https://moneysmart.gov.au/saving/save-for-an-emergency-fund">three months of expenses</a>. Having an <a href="https://moneysmart.gov.au/glossary/offset-account">offset account</a> as part of a mortgage is another option that provides a buffer. Putting money in an offset account helps you save while reducing the amount of interest on a home loan. You can still access the money in an offset account at any time. <h2>3. You have bought the right financial products, such as insurance</h2> Financial products, such as insurance, hedge against potential losses. Personal insurance is important because it provides income in the event of death, illness or injury. Examples include: <ul> <li> life insurance (which pays out to your beneficiaries, such as your partner or children, when you die) </li> <li> total and permanent disability insurance (which means you may get some money if you acquire a disability that prevents you from working) </li> <li> income protection (which provides you with an income if you can no longer work) </li> <li> trauma cover (which covers a life-changing illness or injury, such as cancer or a stroke). </li> </ul> Check if your superannuation has any of these insurances included in it. <a href="https://www.griffith.edu.au/__data/assets/pdf_file/0030/295770/FPRJ-V4-ISS1-pp-53-75-insurance-literacy-in-australia.pdf">Research</a> has found that many Australians are underinsured. <h2>4. You can still pay your debts when times are tough</h2> Being able to borrow money can help when you’re in a tight spot. But knowing where to borrow from, how much to borrow and how to manage debt repayments is crucial. Financially resilient people use debt responsibly. That means: <ul> <li> not using debt for frivolous expenses like after-work drinks </li> <li> staying away from private money lenders </li> <li> being cautious about buy-now-pay-later services </li> <li> watching out for debts with high interest rates, such as payday loans and credit card debt </li> <li> maintaining debt repayments consistently. </li> </ul> If you’re having debt problems, talk to your lender about renegotiating your repayment arrangements, or contact the <a href="https://ndh.org.au/">National Debt Helpline</a> on 1800 007 007. <h2>5. You are financially literate</h2> Being financially literate means you can assess the benefits and risks of using savings or taking out debt to meet an unplanned financial need. As I have <a href="https://theconversation.com/are-you-financially-literate-here-are-7-signs-youre-on-the-right-track-202331">written</a> before on The Conversation, key signs of financial literacy include tracking your cashflow, building a budget, as well as understanding what debts you have and which to pay first. It also means storing your money across different places (such as superannuation, savings accounts, property and the share market) and understanding how financial assets like cash, shares and bonds work. Being aware of your financial strengths and weaknesses, and having financial goals is also important. Nobody is born knowing how to make sound financial decisions; it’s a skill that must be learned. It’s good to think about the resources you would draw upon to help get yourself out of a difficult financial situation – well before disaster strikes.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/218126/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/could-you-cope-with-a-shock-to-your-bank-balance-5-ways-to-check-you-are-financially-resilient-218126">original article</a>.

Money & Banking

Bring a plate! What to take to Christmas lunch that looks impressive (but won’t break the bank)

<a href="https://theconversation.com/profiles/lauren-ball-14718">Lauren Ball</a>, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>; <a href="https://theconversation.com/profiles/amy-kirkegaard-1401256">Amy Kirkegaard</a>, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>; <a href="https://theconversation.com/profiles/breanna-lepre-1401257">Breanna Lepre</a>, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>, and <a href="https://theconversation.com/profiles/emily-burch-438717">Emily Burch</a>, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a> Christmas lunch is at your friend’s house this year, and they’ve asked you to bring a plate. Money is tight. So, you find yourself wondering, “What’s cheap, healthy but also looks impressive?” While a tray of mangoes would certainly be a cheap, healthy and colourful contribution, you want to look as if you’ve put in a bit of effort. If you’re struggling for inspiration, here are some tried and tested ideas. <h2>First, choose your ingredients</h2> Check your pantry for inspiration or ingredients. Crackers, dried fruit or nuts are great ideas for a charcuterie board. You can use herbs and spices to add flavour to dishes, or you could use up packets of dried pasta to make a <a href="https://nomoneynotime.com.au/healthy-easy-recipes/salmon-and-pasta-salad">pasta salad</a>. This is also a great way to clean out your pantry. Focus on fruit and vegetables that are in season, so are cheaper and more readily available. Keep an eye out at your local fruit and veggie shop or market as it will usually have in-season fruit and vegetables in bulk quantities at reduced prices. Check out <a href="http://seasonalfoodguide.com/australia-general-seasonal-fresh-produce-guide-fruits-vegetables-in-season-availability.html">this seasonal food guide</a> to help you plan your Christmas menu. Ask around for deals by chatting to your local butcher, fishmonger or grocer and let them know your budget. They may suggest cheaper cuts of meat (such as, <a href="https://www.australianbutchersguild.com.au/the-blog/the-abg-blog/underrated-cuts-of-beef/">oyster</a>, <a href="https://www.australianbeef.com.au/know-your-meat/beef-cuts/">blades, rump caps</a>). Try cooking <a href="https://www.bestrecipes.com.au/recipes/slow-cooker-corned-beef-mustard-sauce-recipe/z47lwrbv?r=entertaining/9clz7475&h=entertaining">corned beef</a> or <a href="https://www.bbcgoodfood.com/recipes/slow-cooker-roast-chicken">roast chicken</a> in a slow cooker with lots of vegetables. Slow-cooked meals can be frozen and can come in handy for left-overs. Lean into <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4608274/">legumes</a>. These are packed with fibre, protein, vitamins and minerals. They are also budget-friendly and a great way to add texture to salads. Tinned chickpeas, or cannellini, kidney, or butter beans are quick and easy additions that can make filling dishes go further. You could even turn tinned chickpeas into homemade hommus for a healthy and delicious side dish. Check out these healthy legume <a href="https://nomoneynotime.com.au/healthy-easy-recipes/filter/keywords--legumes">recipes</a>. <h2>7 ways to keep food costs down this Christmas</h2> 1. Plan ahead Plan your menu by asking how many people are coming and checking for any food preferences or dietary requirements. Check for items you already have at home, and make a shopping list for only what you <a href="https://www.emerald.com/insight/content/doi/10.1108/BFJ-12-2017-0726/full/html">need</a>. 2. Use free recipes Use free online recipe collections and e-books tailored for budget cooking that can help you design your Christmas menu to meet your budget. This <a href="https://nomoneynotime.com.au/uploads/Our-Guide-to-the-Perfect-Christmas-Feast.pdf">one</a> was created by a group of <a href="https://dietitiansaustralia.org.au/working-dietetics/standards-and-scope/role-accredited-practising-dietitian">accredited practising dietitians</a> and has healthy, budget friendly recipes and ideas. You could also try this budget friendly collection of Christmas recipes from <a href="https://www.taste.com.au/recipes/collections/budget-christmas-recipes">taste</a>. 3. Involve the family Get together with other family members and make it a challenge to see who can make the cheapest, most delicious dish. Get the kids involved in fun activities, such as making a DIY gingerbread house or putting together mixed skewers for the barbecue. 4. Pool your resources Larger quantities of a single dish will be cheaper than multiple different dishes (and easier to prepare). 5. Frozen is fine Use frozen fruits and vegetables if you need to. These can have just as <a href="https://pubmed.ncbi.nlm.nih.gov/25526594/">many vitamins and minerals</a> as fresh, are often cheaper than fresh produce and last longer. Try using frozen berries to decorate the pavlova or add them to your favourite cake, muffin or pie. 6. Make your own drinks You could make your own drinks, such as home-brewed iced tea. See if anyone in your family has a soda stream you can borrow to make sparkling mineral water. Add some freshly squeezed lemon or lime for extra flavour. 7. Reduce waste Use your own crockery and re-use leftovers to reduce waste. After all, washing up is cheaper than buying plastic or paper plates and better for the environment. Remember to save any leftovers and re-use them. Leftover fresh vegetables could be used to make a hearty soup or chutney. <h2>It doesn’t have to be perfect</h2> Christmas comes and goes quickly. If your cooking ideas don’t work out, it’s not the end of the world. Choosing healthy foods on a budget is important all year around, so you may like to think about trying these tips throughout the years to come. <img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/196565/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/lauren-ball-14718">Lauren Ball</a>, Professor of Community Health and Wellbeing, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>; <a href="https://theconversation.com/profiles/amy-kirkegaard-1401256">Amy Kirkegaard</a>, Postdoctoral Research Fellow, School of Human Movement and Nutrition Sciences, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>; <a href="https://theconversation.com/profiles/breanna-lepre-1401257">Breanna Lepre</a>, Research Fellow, Mater Research Institute, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>, and <a href="https://theconversation.com/profiles/emily-burch-438717">Emily Burch</a>, Dietitian and Researcher, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/bring-a-plate-what-to-take-to-christmas-lunch-that-looks-impressive-but-wont-break-the-bank-196565">original article</a>.

Food & Wine

How risky is it to give card details over the phone and how do I reduce the chance of fraud?

<a href="https://theconversation.com/profiles/paul-haskell-dowland-382903">Paul Haskell-Dowland</a>, <a href="https://theconversation.com/institutions/edith-cowan-university-720">Edith Cowan University</a> and <a href="https://theconversation.com/profiles/ismini-vasileiou-1031778">Ismini Vasileiou</a>, <a href="https://theconversation.com/institutions/de-montfort-university-1254">De Montfort University</a> Paying for things digitally is so common, most of us think nothing of swiping or tapping our card, or using mobile payments. While doing so is second nature, we may be more reluctant to provide card details over the phone. Merchants are allowed to ask us for credit card details over the phone – this is perfectly legal. But there are minimum standards they must comply with and safeguards to protect consumer data. So is giving your card details over the phone any more risky than other transactions and how can you minimise the risks? <h2>How is my card data protected?</h2> For a merchant to process card transactions, they are expected to comply with the <a href="https://docs-prv.pcisecuritystandards.org/PCI%20DSS/Standard/PCI-DSS-v4_0.pdf">Payment Card Industry Data Security Standard</a>. This is a set of security requirements designed to protect cardholder data and the trillions of dollars of transactions each year. Compliance involves various security measures (such as encryption and access controls) together with strong governance and regular security assessments. If the information stored by the merchant is accessed by an unauthorised party, encryption ensures it is not readable. That means stealing the data would not let the criminals use the card details. Meanwhile, access controls ensure only authorised individuals have access to cardholder data. Though all companies processing cards are expected to meet the compliance standards, only those processing large volumes are subject to mandatory regular audits. Should a subsequent data leak or misuse occur that can be attributed to a compliance failure, a <a href="https://www.csoonline.com/article/569591/pci-dss-explained-requirements-fines-and-steps-to-compliance.html">company can be penalised</a> at levels that can escalate into millions of dollars. These requirements apply to all card transactions, whether in person, online or over the phone. Phone transactions are likely to involve a human collecting the card details and either entering them into computer systems, or processing the payment through paper forms. The payment card Security Standards Council has <a href="https://docs-prv.pcisecuritystandards.org/Guidance%20Document/Telephone-Based%20Payments/Protecting_Telephone_Based_Payment_Card_Data_v3-0_nov_2018.pdf">detailed guides for best practice</a>: <blockquote> A policy should be in place to ensure that payment card data is protected against unauthorised viewing, copying, or scanning, in particular on desks. </blockquote> Although these measures can help to protect your card data, there are still risks in case the details are misplaced or the person on the phone aren’t who they say they are. <h2>Basic tips for safe credit card use over the phone</h2> If you provide card details over the phone, there are steps you can take to minimise the chance you’ll become the victim of fraud, or get your details leaked. 1. Verify the caller If you didn’t initiate the call, hang up and call the company directly using details you’ve verified yourself. Scammers will often masquerade as a well-known company (for example, an online retailer or a courier) and convince you a payment failed or payment is needed to release a delivery. Before you provide any information, confirm the caller is legitimate and the purpose of the call is genuine. 2. Be sceptical If you are being offered a deal that’s too good to be true, have concerns about the person you’re dealing with, or just feel something is not quite right, hang up. You can always call them back later if the caller turns out to be legitimate. 3. Use secure payment methods If you’ve previously paid the company with other (more secure) methods, ask to use that same method. 4. Keep records Make sure you record details of the company, the representative you are speaking to and the amount being charged. You should also ask for an order or transaction reference. Don’t forget to ask for the receipt to be sent to you. Check the transaction against your card matches the receipt – use your banking app, don’t wait for the statement to come through. <h2>Virtual credit cards</h2> In addition to the safeguards mentioned above, a <a href="https://www.forbes.com/advisor/credit-cards/virtual-credit-card-numbers-guide/">virtual credit card</a> can help reduce the risk of card fraud. You probably already have a form of virtual card if you’ve added a credit card to your phone for mobile payments. Depending on the financial institution, you can create a new credit card number linked to your physical card. Some banks extend this functionality to allow you to generate unique card numbers and/or CVV numbers (the three digits at the back of your card). With this approach you can easily separate transactions and cancel a virtual card/number if you have any concerns. <h2>What to do if you think your card details have been compromised or stolen?</h2> It’s important not to panic, but quick action is essential: <ul> <li> call your bank and get the card blocked so you won’t lose any more money. Depending on your situation, you can also block/cancel the card through your banking app or website </li> <li> report the issue to the police or other relevant body </li> <li> monitor your account(s) for any unusual transactions </li> <li> explore card settings in your banking app or website – many providers allow you to limit transactions based on value, restrict transaction types or enable alerts </li> <li> you may want to consider registering for <a href="https://theconversation.com/your-credit-report-is-a-key-part-of-your-privacy-heres-how-to-find-and-check-it-116999">credit monitoring services</a> and to enable fraud alerts. </li> </ul> <h2>So, should I give my card details over the phone?</h2> If you want to minimise risk, it’s best to avoid giving card details over the phone if you can. Providing your card details via a website still has risks, but at least it removes the human element. The best solution currently available is to use virtual cards – if anything goes wrong you can cancel just that unique card identity, rather than your entire card.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/216833/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/paul-haskell-dowland-382903">Paul Haskell-Dowland</a>, Professor of Cyber Security Practice, <a href="https://theconversation.com/institutions/edith-cowan-university-720">Edith Cowan University</a> and <a href="https://theconversation.com/profiles/ismini-vasileiou-1031778">Ismini Vasileiou</a>, Associate Professor, <a href="https://theconversation.com/institutions/de-montfort-university-1254">De Montfort University</a> Image credits: Getty Images This article is republished from <a style="font-style: italic;" href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a style="font-style: italic;" href="https://theconversation.com/how-risky-is-it-to-give-card-details-over-the-phone-and-how-do-i-reduce-the-chance-of-fraud-216833">original article</a>.

Money & Banking

1 in 6 older adults fall victim to impersonation scams

More older adults are likely to fall victim to scams than are currently recognised according to new US research. The problems are global. <div class="copy"> A research team from Rush University Medical Center in Chicago, US, says older Americans who aren’t cognitively impeded, are also at risk. In their study <a href="https://10.1001/jamanetworkopen.2023.35319" target="_blank" rel="noreferrer noopener">published</a> today in JAMA Network Open, the group reports on a behavioural experiment where they targeted 644 adults aged 64-104 in Rush’s Memory and Aging Project – a local scheme that draws on participants from metropolitan Chicago to participate in research – with a pitch mimicking a real-world impersonation scam. The study’s fictitious ‘US Retirement Protection Task Force’ pitched itself to participants as a government social security initiative. This USRPTF told participants via either post, email or a telephone call there’d been irregular activity on their Medicare or social security file and the inquiry was a routine account security check. As part of this, the fake agency asked participants to call a telephone hotline or login to a provided website to provide their details. Over two-thirds of the study failed to respond to any attempts to obtain information by the phoney scheme. The remainder were evenly split by either responding to requests for contact, but expressing scepticism at the authenticity of the USRPTF, or by responding and engaging with the request for information. Those who were engaged with the request for information, but expressed doubts, were also those with the highest cognitive performance, and lowest proportion of dementia. They were also the most financially literate participants, while those who provided their details had the lowest literacy. Those who provided details were also found to have the lowest scam awareness of all participants. Among this group, 1 in 10 willingly provided personal information and 1 in 5 provided details of their social security number. “If extrapolated to a population level, these numbers are astounding and suggest that a very large number of older adults are at risk of victimisation,” the authors say. They also note that, given the use of a fictitious US government organisation name, the number of people vulnerable to well-organised scams is likely much higher. Last year, the US National Council on Aging reported 92,371 older Americans were defrauded of a total of US$1.7 billion. Most were victims of government department impersonation, sweepstakes and robocall scams. Often such scams will simply demand payment while ‘spoofing’ the phone number of a government agency to add the veil of legitimacy. It’s a similar story around the world. This year, the Australian Competition and Consumer Commission found Australians lost a record $3.1 billion last year, mostly via phone scams. Australians over 65 years of age accounted for a quarter of losses and reports. The UK’s Action Fraud initiative found Britons lost about ₤2.35 billion in the 2020/21 financial year, with those aged 50-69 most susceptible to falling victim. <div> Image credits: Getty Images <a href="https://cosmosmagazine.com/people/society/1-in-6-older-adults-fall-victim-to-impersonation-scams/">This article</a> was originally published on <a href="https://cosmosmagazine.com">Cosmos Magazine</a> and was written by <a href="null">Cosmos</a>. </div> </div>

Legal

Hilarious reason dad couldn't be fooled by online scam

One savvy dad has outwitted a scammer who posed as his daughter, after the scammer made one hilarious error. Ian Whitworth, a dad from Sydney, took to his LinkedIn page to share the message a scammer texted him in a classic phishing scam that targets parents. He shared the photo of what he thought was the "funniest phishing text any parent has ever received". The text read, "Hey dad, dropped my phone in the sink while doing the dishes. Its unresponsive this is my new number for now just text me here x." Despite the terrible grammar and punctuation that would immediately alert anyone to the possibility of a scam, it was something else that caught the dad's attention. Instead, Whitworth said it was the fact his daughter would never do the chore mentioned by the scammers. Still, he thought it was worth sharing a photo of the text in a bid to warn others, which he uploaded along with the comment, "Cybersecurity update. I just got this." "Perhaps the funniest phishing txt any parent has ever received. 'Doing the dishes', yeah, for sure." In a reply to one of the people who commented on his post, Whitworth joked that his daughter "at age four emerged from my parents' kitchen with a shocked look on her face. 'What's pop doing?'. He was washing up in the sink." Another commenter wrote, "Haha! There is NO WAY this is from my son or daughter, that's for sure." Another commenter said the giveaway that it wasn't from his own child was that they didn't immediately ask for money, to which Whitworth replied, "Ha, yeah, the phishers are like the seven step ladder of confidence before the money issue gets raised. Actual kids: MONEY NOW." According to the federal government's Scamwatch website run by the Australian Competition and Consumer Commission (ACCC), the "Friends/Family Hi Mum" impersonation scam was common. "Scammers send messages pretending to be a family member or a friend desperate for money," it said. "They say they have a new phone and they need you to pay money to help them out of a crisis." Scamwatch warns: "Don't assume a person you are dealing with is who they say they are" and offers the following advice. "If someone you know sends a message to say they have a new phone number, try to call them on the existing number you have for them, or message them on the new number with a question only they would know the answer to," it said. "That way you will know if they are who they say they are." Image credits: Getty Images / LinkedIn

Legal

8 tips for keeping pets healthy that won’t break the bank

Australia is a nation of animal lovers. Collectively, we have more pets than people (<a href="https://kb.rspca.org.au/knowledge-base/how-many-pets-are-there-in-australia/#ftn1">28.7 million pets</a> vs <a href="https://www.abs.gov.au/statistics/people/population/population-clock-pyramid">26.7 million people</a>) and <a href="https://kb.rspca.org.au/knowledge-base/how-many-pets-are-there-in-australia/#:~:text=Overall%252C%2520Australian%2520households%2520are%2520estimated,spent%2520per%2520animal%2520each%2520year.">spent $33 billion on them</a> in 2022. Not only is a healthy pet a happy one, but healthy = wealthy with fewer vet bills and medications, plus less time off work to look after them. But how can you keep spending under control without sacrificing your pet’s health? Read on! 1. Choose the right pet Save yourself considerable drama – and money – by getting the right pet for your family from the outset. For instance: <ul> <li>Small dogs eat less, making them more suitable for tighter budgets.</li> <li>Energetic breeds won’t thrive if you can’t exercise them sufficiently. </li> <li>Low-allergy breeds (like Poodles and Burmese cats) can save allergy suffers on antihistamines and tissues.</li> </ul> 2. Secure your yard Prevention is always better than cure, so a secure yard/enclosure is a worthwhile investment. The cost of a new fence (especially if split with neighbours) often dwarfs the vet bills if your beloved is hit by a car. A secure pet is less likely to fight with other animals or eat things they shouldn’t. Plus, many areas impose fines for unrestrained pets. 3. Be organised An old phrase says: “For every minute spent organising, an hour is earned.” I’d suggest that hour earned also brings dollars saved. For pets, organisation includes: <ul> <li>Staying up-to-date with treatments and veterinary visits. Overdue parasite treatments, vaccinations, and check-ups often cause unnecessary and expensive complications.</li> <li>A tidy home, which saves replacing destroyed shoes etc and fees on overdue bills where the notice was chewed.</li> <li>Keeping household dangers – e.g., toxic plants, chemicals, foods (chocolate!) – out of your pets’ reach to avoid accidental poisoning.</li> </ul> 4. Weigh up insurance Many people say they’ll put money aside instead of buying pet insurance. But they don’t – the money winds up elsewhere. When considering insurance, weigh up each policy’s conditions, your pet’s health, and your ability to pay unexpected bills. Without insurance, small amounts may not be problematic. But unexpected surgeries or specialist tests and treatments could see you thousands of dollars out of pocket. The more claims you’re likely to make, the more valuable insurance may be. If you do get insurance, choose a reputable provider with positive reviews for paying claims promptly. 5. Master DIY Put your hands to work and make your pet’s essentials at a fraction of buying new. Consider making your own: <ul> <li>Toys – such as uncooked rice or pasta in a PET bottle. (Beware things like sticks, which can cause injuries and splinters.)</li> <li>Meals – cook in bulk and freeze portions for added savings and convenience. Homemade meals may be healthier too, since you know exactly what they’re eating.</li> <li>Bedding and towels – from your old clothing, linen etc.</li> </ul> Always use safe materials and ingredients that won’t be a choking hazard. Monitor items for wear and tear. 6. Involve your kids Getting kids/grandkids involved with animal care is good for everyone – including your wallet. Kids love animals. Pets love children’s playtime energy. And you’ll save paying someone else to do it when you’re short for time. Ask them to walk the dog, clean the litter tray, collect the eggs, top up food and water. You can make it form part of their pocket money – teaching them the value of earning – all while helping them develop important life skills like empathy and responsibility. 7. Consider legalities Custody and inheritance matters affect furbabies too, so it’s important to have a plan: <ul> <li>Wills – who will have guardianship if you die suddenly? Is that person willing and able? Have you left money to pay for their ongoing care?</li> <li>Separation/divorce – pets sadly are sometimes used as weapons in a separation. It could be emotional blackmail over custody, or one partner is given custody but cannot afford to keep them on a single income. The stress adversely affects everyone – including your pet. </li> </ul> 8. Spend time with them Companionship is important for your pet’s health – and yours. And it’s free! Research suggests <a href="https://www.health.harvard.edu/staying-healthy/having-a-dog-can-help-your-heart--literally">dog ownership improves heart health for humans</a> and <a href="https://www.psychologicalhealthcare.com.au/blog/mental-health-benefits-pets/">patting pets lowers blood pressure and stress hormones</a>. Plus, you’ll both benefit from being more active and making new friends (such as at the dog park). So, what are you waiting for? Hitch up the lead or pick up a toy and give your furbaby some love! Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au">www.onyourowntwofeet.com.au</a> Image credits: Shutterstock

Family & Pets

Facebook Messenger scams are on the rise – here’s how to protect yourself

Facebook Messenger scams prey on our vulnerabilities Scams through Facebook’s Messenger platform are being reported at higher rates than ever before, according to AARP, citing its own data as well as that of the government. Since Facebook’s early days, cybercriminals have been mining Facebook’s direct-messaging capabilities to scam unsuspecting victims out of money. One of the earliest Facebook Messenger scams involved a message, purportedly from a friend, claiming they were stuck in a foreign country and in desperate need of immediate financial assistance to get out. It wasn’t really the friend, however, but rather a scammer who had hacked into the friend’s account. Imposter scams such as “the friend in a foreign country” have evolved and proliferated over the years. The common thread is the scammer either creates an account impersonating an actual Facebook account or hacks into an existing Facebook account. In either case, the scammer then uses the fake/hacked account to send private messages to the account holder’s friends that elicit either money or personal information. The messages vary, but all are designed to prey on our human vulnerabilities, including: <ul> <li>the desire to be a “hero”</li> <li>the desire to appear “generous”</li> <li>the desire to win “free money”</li> <li>the desire to be loved and admired</li> <li>the desire to avoid shame or punishment</li> </ul> If a scammer tries to message you, report them, Facebook advises, but that begs the larger question of how does one recognise a Facebook Messenger scam? Current Messenger Facebook scams According to Facebook and our cybersecurity experts, here are the most common Facebook Messenger scams today: Romance scams. Preying on our desire to be loved and admired, romance scammers appear as attractive strangers with sad stories and a desire to love and be loved. The most effective romance scammers will friend a number of mutual friends before reaching out to any of them, in an attempt to make themselves seem less like strangers and more like people in the same social network. Many use photos they’ve stolen off the Internet and many pose as members of the military or as doctors, in an attempt to inspire trust, admiration, and even authority. What they all have in common is they can’t meet you just yet because they’re somewhere far away, and although it may take a bit of time, even as much as several weeks, they will eventually ask you to send money so that they can come to see you. Lottery scams. Preying on our desire for “free money,” lottery scammers appear as friends or organisations who are thrilled to tell you you’ve won money in some lottery or contest. The common thread? It’s a contest you have no recollection of having entered and to get the prize, you’ll have to either pay a fee or “refundable” advance or provide personal information. Inheritance scams. Also preying on our desire for free money, inheritance scammers claim to be lawyers or others who represent someone who has died and supposedly left you their estate or some portion of it – but first, you’ll have to fork over some money or personal information. Loan scams. Another variation on the “free money” theme is the loan scam, whereby the scammer promises low-interest loans with no money down – except for a “refundable” application fee. Facebook points out that loan scammers may send messages via Messenger and also leave posts and comments on Pages and in Groups to legitimise themselves. However, legitimate lenders wouldn’t offer loans via Facebook Messenger, nor would they ask you for money to proceed with a loan application. Donation scams. Facebook specifically warns users to watch out for “famous people” or people claiming to represent a charity hitting them up for a donation. Donation scams, which are easy money for a scammer because they are a direct request for payment, prey on our desire to be perceived, or to perceive ourselves, as generous. “Hey, is this you?” scams. Consumer Affairs warns of this “phishing scam” that uses the threat of shame to goad you into giving up personal information. The scammer hacks into one of your Facebook friend’s Messenger accounts and sends you a video, asking if it’s really you in the video, and implying there’s something in the video that could embarrass you. If you ever get a message like this, Consumer Affairs urges you to ignore and delete it to avoid giving away personal information or introducing a virus onto your computer. Red flags to watch out for Unfortunately, Facebook Messenger scams evolve rapidly (as soon as we suss them out, there are several more to replace them). So, it’s a good idea to be aware of these warning signs that we culled from our experts: Someone is asking you for money. While Facebook warns specifically against strangers asking for money, Rachel Wilson, investigative coordinator for The Smith Investigation Agency, points out to Reader’s Digest that any time anyone asks you for money over Messenger, it’s immediately suspect. “If friends or family ask you to help them in an emergency, always call to speak with them personally to confirm that the message originated with them.” Someone is getting a little too personal. When someone sends you a message requesting personal information, especially financial information, it should be considered suspicious, advises Sean Messier, credit industry analyst for Credit Card Insider. Messier suggests not revealing any such information until you’re certain the message-sender is who they claim to be, but it’s probably also a good idea to never reveal any such information over Messenger at all. Someone is offering something for free. You know how they say there’s no such thing as a free lunch? Well, there’s no such thing as free money on Facebook, points out Robert Siciliano, security expert. This is true for any kind of “free money” Messenger message, including those involving lotteries, loans, contest winnings, inheritances, lost bank accounts, and reimbursements of money owed. Someone who wants to take the conversation off Facebook (to text or email, etc). Facebook warns against taking conversations off Facebook unless you’re absolutely certain, beyond a shadow of a doubt, the message sender is who they say they are. Messages that seem out of character for the sender. If a message seems “out of the norm” for the sender, trust your instincts and ignore it. This is doubly true if the message includes an attachment. Be very wary of opening attachments in general, and particularly if something seems “off” about the message or the sender. Messages rife with spelling and grammatical errors. Facebook points out that when a message is filled with typos and grammatical errors, you should have your guard up. A single typo is one thing, but things like the misspelling of names and places are a big red flag. Messages from new accounts with few friends. Roger Thompson, CEO of Thompson Cybersecurity Labs, points out that new accounts with few friends should always be considered suspicious until confirmed otherwise. Friend requests from such accounts and from duplicate friend accounts should be considered suspect as well. To avoid getting hacked (and used by a cybercriminal in an imposter scam), Wilson recommends updating your social media passwords regularly and always use two-factor authentication. She also notes that with Facebook use increasing among seniors, it would be a good deed to speak to older family members about Messenger scams and how to avoid them. Image credits: Getty Images This article originally appeared on <a href="https://www.readersdigest.co.nz/true-stories-lifestyle/science-technology/facebook-messenger-scams-are-on-the-rise-heres-how-to-protect-yourself" target="_blank" rel="noopener">Reader's Digest</a>.

Technology

Don't get caught out: 6 holiday scams ripping off travellers

If you’re planning to take a trip across the world soon, then be warned, as there is an influx of new holiday scams affecting tourists as they travel to their dream break. Holiday-makers have money to spend and relaxation on their minds, which is why they are seen as easy targets for con artists. UK-based consumer group <a href="https://www.which.co.uk/" target="_blank" rel="noopener">Which?</a> has listed the six most common frauds travellers need to be aware of, along with tips on how to avoid getting scammed, <a href="https://www.thesun.co.uk/" target="_blank" rel="noopener">The Sun</a> reported. So, if you’re planning a trip abroad, here are the things you need to watch out for: 1. Accommodation booking scams While the introduction of the internet has been a blessing in terms of ease, it’s also made it easier for scammers to lure you into their traps. With the growth of online holiday bookings, fraudsters often need nothing more than a few fake pictures to lure their victims. A common scam is one that includes picturesque photographs of holiday rentals that don’t seem to exist, advertised at affordable price points. The deals were often advertised on mainstream websites but asked those who were interested in booking to contact them via email, rather than use the site’s own booking system. Bookers were then sent a link to a convincing payment page, which suggested the payment hadn’t cleared. They then ask for a bank transfer instead. How to protect yourself: Do your research. Google the property to see if it shows up on other reputable websites to check its authenticity. You could use Google Maps and Street View to see if the accommodation actually exists. Also, never pay by bank transfer. 2. Dodgy flight deals Con artists have created fake airline websites that advertise budget deals on long haul flights that leave their victims high and dry. The UK government’s fraud agency has reported a recent surge of scams targeting those who are travelling to Asia, Africa and the Middle East. In many instances, tickets were purchased with stolen credit cards and then sold to unsuspecting victims, complete with a reference number. But tickets were then cancelled after the credit card was reported as stolen, leaving the victims out of pocket and nothing to show for it. How to protect yourself: Book tickets through trusted agencies. 3. Wi-Fi hacks It’s become human instinct to try and find Wi-Fi wherever you go, and the same applies when travellers land at airports. While it’s important to stay connected in order to get in touch with friends and family, there is a risk involved. Fraudsters have set up their own free networks in airports and use them to gain free information about anyone that logs on. Many passengers have been tricked into entering their credit card details before logging on. How to protect yourself: Ask airport staff about the real Wi-Fi connection to make sure it’s the real deal and be on the lookout for connections that don’t ask for passwords straight away. Also, if you are asked for confidential information then provide fake details where possible. 4. “Free” holidays This decade-long scam has been one that con artists have perfected throughout the years. Back in the day, people would be pressured into buying timeshares after accepting a complimentary break. Now, the con is conducted through scratch cards and other fake competitions. In one example of the scam, around 500 British travellers in Spain’s Costa del Sol have been scammed of around $27.5 million in the last year alone. How to protect yourself: Refuse all offers of free holidays because if it’s too good to be true, then it probably is. Do you know of any other travel scams? Let us know in the comments below. 5. Document fraud Over the years, the internet has seen a growth in websites selling fake travel visas and other important documents needed to visit foreign countries. A few cases were found to not be conducting illegal activity but were responsible for reselling documents at a huge premium compared to official channels. Some common examples included websites selling the European Health Insurance Card and US visa (Electronic System for Travel Authorisation, or ESTA) documents. While the sites looked extremely convincing, they had nothing to do with the governments of the countries they claimed to represent. According to Which?, out of the top 20 search results for “ESTA visa” over half were unofficial. How to protect yourself: Follow links to official government websites through the Department of Foreign Affairs website. 6. Fake tickets It’s no secret that music concerts and major sporting events are on top of the list of potential scams, but travellers are now falling victim to fake packages to international events and are only finding out the true worth of their ticket once they arrive in the country. The FIFA World Cup in Russia was one example where countless websites offered travel packages including tickets when the only tickets that were considered valid and authentic were the ones purchased directly from FIFA themselves. Scammers love to lure desperate fans with fake tickets, as they know the demand is high and it’s easy to trap people who are willing to go the extra mile for a ticket to their chosen event. How to protect yourself: Make sure the tickets you are purchasing are from legitimate websites and web pages that start with “https” and have the padlock symbol in the URL bar. And if you’re on the hunt for second-hand tickets, then do a quick check if whether or not resale is allowed, as some tickets are only valid for the original buyer. “Criminals are finding ever more sophisticated ways to dupe holiday-makers, both in the booking process and when they’re on the holiday itself,” Which? Travel editor Rory Boland said. “If something seems too good to be true, it almost certainly is. Don’t hand your money over until you can be sure it’s the real deal.” Images: Getty

Travel Trouble

Get-rich-quick schemes, pyramids and ponzis: five signs you’re being scammed

<a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> and <a href="https://theconversation.com/profiles/abdul-latif-alhassan-1390159">Abdul Latif Alhassan</a>, <a href="https://theconversation.com/institutions/university-of-cape-town-691">University of Cape Town</a> Consumers are under a lot of financial strain. The <a href="https://www.weforum.org/agenda/2022/09/cost-of-living-crisis-global-impact/">World Economic Forum</a> reports that the cost-of-living crisis is affecting people across the globe. With food and fuel prices rising, it’s becoming increasingly difficult to keep financially afloat. On top of that, salaries <a href="https://www.wsj.com/articles/workers-pay-globally-hasnt-kept-up-with-inflation-e6df92d">aren’t keeping up with inflation</a>, making it more difficult to save and build wealth. It’s during such times of economic difficulty and uncertainty that fraudsters lure unsuspecting consumers into “<a href="https://www.sabric.co.za/">get-rich-quick</a>” schemes, offering <a href="https://www.sabric.co.za/stay-safe/ponzi-pyramid-schemes/">an avenue to make easy money</a> by investing in a “lucrative” financial opportunity. Nothing beats the prospect of making easy money, and every now and again there seems to be a “get-rich-quick” scheme circulating on WhatsApp or on social media that seems legitimate. But it’s not. Our research interests centre on financial systems in emerging economies, and we advocate for financial inclusion and empowering marginalised communities through financial literacy and financial planning. We use our academic platform to share our expertise on finance, including common financial traps people should steer clear of. “Get-rich-quick” schemes are one such trap. They’re also sometimes called ponzi or pyramid schemes. The schemes are a form of <a href="https://www.lawinsider.com/dictionary/financial-fraud">financial fraud</a>. The people running them take money through deception: the misrepresentation of information and identity. They promise financial benefits that don’t exist. You should avoid them because, more often than not, they are bogus and fraudulent business ventures. There have been some massive fraud schemes over the past 30 years. In the early 1990s, <a href="https://www.independent.co.uk/news/world/africa/mmm-global-russian-ponzi-scheme-from-1990s-reborn-and-now-spreading-like-wildfire-in-africa-a7333366.html">MMM Global</a> - one of the world’s largest and most notorious ponzi schemes - defrauded up to 40 million people, who lost an estimated $10 billion. Ponzi schemes have since resurfaced in different forms in <a href="https://www.iol.co.za/weekend-argus/news/ponzi-scheme-investigated-as-some-victims-lost-as-much-as-r200-000-c3c3633c-2abb-4dd4-b668-a5ea608deb41">South Africa</a>, <a href="https://guardian.ng/business-services/nigerians-lose-over-n911b-to-ponzi-schemes-related-fraud-in-23-years/">Nigeria</a>, <a href="https://www.voazimbabwe.com/a/zimbabwe-money-pyramids-ponzi-schemes/6305100.html">Zimbabwe</a>, <a href="https://allafrica.com/stories/202105170964.html">Kenya</a>, <a href="https://doi.org/10.1108/JFC-09-2020-0177">Ghana</a> and several other African countries. There are five tell-tale signs of a “get-rich-quick” scheme. Watch out for them. <h2>The five tell-tale signs</h2> Firstly, they offer exaggerated and above-market returns within a short period of time, with the promise of little to no risk. There are two golden rules when it comes to investing. The first is that it takes time to make money. Amassing a small fortune within a short space of time should raise questions about the scheme. The second rule is: the higher the risk, the higher the return. In other words, no investment is risk free or can guarantee significant returns. There is always some risk involved. An investment that promises substantial returns tends to be quite risky, which repels most people with a low appetite for risk. Secondly, new members are constantly recruited to join the scheme. Typically, such schemes are sustained by relying on the investments of new members to pay existing members. Once the number of existing members exceeds new members, the scheme goes “belly-up”. At best you lose out on the returns you were promised. At worst you lose all the money you’ve invested. When the scheme collapses, it is almost impossible to recover the money you’ve lost because you’ve technically given it to a stranger (remember, the definition of financial fraud encompasses the misrepresentation of identity). Thirdly, there is urgency to join the scheme and no clarity on how the scheme works. This is a classic characteristic of a “get-rich-quick” scheme. There is usually no clear answer about the nature of the scheme, what it invests in, how it generates its returns or the credentials of the organisation. Legitimate investments are transparent and can provide investors with all the information they need to help them decide whether to invest. Unsurprisingly, a proper check of “get-rich-quick” schemes will unmask their fraudulent nature. This is why there’s always the urgency and coercion to make an immediate financial commitment under the guise of missing a once-in-a-lifetime opportunity to get rich. Fourthly, the scheme is not registered with or regulated by any recognised authority. Regulatory authorities are important because they monitor the conduct of financial service providers and protect consumers by keeping their best interests in mind. The protection provided by financial regulators also instils confidence in financial systems. “Get-rich-quick” schemes are not registered and operate outside the framework of regulatory bodies. This makes investors more vulnerable to loss and makes it more difficult to seek legal recourse when the loss occurs. Legitimate investments in South Africa are offered by authorised financial service providers and regulated by the <a href="https://www.fsca.co.za/Pages/Default.aspx">Financial Sector Conduct Authority</a>. You can search for any authorised financial service provider on the authority’s <a href="https://www.fsca.co.za/Fais/Search_FSP.htm">website</a>. Fifthly, they use the testimonies from existing members who’ve earned big bucks to promote the scheme. At the initial stages, the scheme tends to pay out to those who have invested early, and these members are encouraged to share the news of their wealth (which travels fast and far) to promote the scheme. But this is a tactic used to create the impression that you too can earn returns in the double digits. These schemes are both unsustainable and unethical as one person gets wealthy through someone else being deceived. <h2>Too good to be true</h2> It’s worth repeating that if it sounds too good to be true, then it probably is. Wealth comes from a sound investment strategy and decisions made over time. Any promise to “get rich quick” should be treated with the cynicism it deserves. It will ultimately reveal its fraudulent nature. Recognising the signs of “get-rich-quick” schemes can save you from unnecessary financial distress. It’s always a good idea to do your own investigation before committing your finances into any investment. You can find more information on the various types of scams through the <a href="https://www.sabric.co.za/">South African Banking Risk Information Centre</a>’s website and report them to the <a href="https://www.safps.org.za/Home/Contact">South African Fraud Prevention Service</a>.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/205798/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a> and <a href="https://theconversation.com/profiles/abdul-latif-alhassan-1390159">Abdul Latif Alhassan</a>, Associate Professor in Development Finance & Insurance, <a href="https://theconversation.com/institutions/university-of-cape-town-691">University of Cape Town</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/get-rich-quick-schemes-pyramids-and-ponzis-five-signs-youre-being-scammed-205798">original article</a>.

Money & Banking

Tips for safe mobile banking

As we increasingly turn to our mobile devices for online transactions, it’s crucial to keep security in mind. We’ve all misplaced our mobile phone at some stage and the last thing you want is for some random stranger to get direct access to your bank accounts and other personal details. 1. Use a strong password – This goes without saying.While it might not be as critical with your library pass, someone who cracks or guesses your online banking password can drain your account dry. If you memorise just one strong password, make it your online banking password. 2. Never store passwords on your smartphone – Many people still try to hide passwords or PIN numbers within the body of text or phone numbers. However, despite how cleverly you may think you've concealed them, criminals know what to look for and where. It's always best to commit these security details to memory and not record them anywhere. This includes not ticking "save password" on website and applications that offer to remember your login details. Also make sure you limit other personal information. Criminals are interested in more than just your internet banking details. Any kind of personal information can be used to steal your identity, which criminals can then use to apply for credit cards, personal loans, even mortgages. 3. Use a password manager – Okay, in the real world you probably have more than one online financial account. Rather than strain your brain memorising hard-to-crack passwords for each of them, look at enlisting the help of a password manager. There are plenty of apps available and the best ones not only store your passwords securely but also help you work through your collection of passwords and replace weak ones and duplicates. 4. Activate smartphone security settings and password protection – All smartphones have built-in security features such as auto-locking and password protection. While it may seem like a bit of an inconvenience at times, these physical security measures are your first line of defense in keeping your smartphone and your personal details safe. You can also install smartphone security software as well as remote data wiping software if you lose your phone or it gets stolen. 5. Connect through your data plan – If you're banking online on a mobile device, you have a degree of in-built protection available when you turn off wi-fi tethering and bluetooth and connect using your mobile data plan. It's a lot harder for criminals to sniff your mobile data stream than to snag passwords from network traffic. If you’re on wi-fi only use reputable hot spots that are password protected. If you connect to a shared wi-fi hotspot you are completely dependent on the security of the host network. 6. Don't be tempted to jailbreak your smartphone – If you crack the manufacturer's security on your smartphone, you not only make your warranty invalid but you make it much more vulnerable to attacks by cybercriminals. 7. Clear your phone when you replace it – If you sell or discard your smartphone, it's crucial you delete all personal information first. This includes SMS messages, emails, photographs, contact details and internet links. Image credit: Shutterstock

Money & Banking

A piggy bank is the answer to saving for your next holiday

Not just for kids, the humble piggy bank is a great way to save up your hard earned cash for something special. How to: <ol> <li>Find a piggy bank for your savings. You can also use a glass jar or vase, which is great to be able to track your progress.</li> <li>At the end of each day come home and throw any coins that you have into your piggy bank</li> <li>Try paying for everything with notes instead of cards and keep all of your change each day for your savings jar.</li> </ol> So what are the benefits? Today we have four great reasons why you should start saving your coins in this way. Pain free You won’t even notice it missing from your wallet. As the money doesn’t feel like much you won’t feel as though you are actively ‘saving’ even though you are. Fast results Think about it, if you place just $5 worth of coins in your jar each day, it will only take one month to save up around $150. Out of sight Rather than keeping it in your savings account, it’s a much better idea to keep your holiday fund somewhere that you can’t accidentally spend it on everyday things like bills or petrol. You’re less likely to dip into it even for unexpected bills, as you know it is for your holiday. Satisfying You can literally see your savings building up, especially if you use a clear vase or jug. At the end of each day you will hear the satisfying sound of the coins being deposited. You’ll know then that you’re one step closer to that holiday that you thought you couldn’t afford. Images: Getty

Money & Banking

Senior bank robber’s unexpectedly polite note

A 78-year-old woman has caused some commotion with her bizarre Missouri bank heist. Bonnie Gooch, who already has two bank robbery convictions to her name, has collected a brand new charge - one count of stealing, or attempting to steal, from a financial institution - for her actions at the Goppert Financial Bank in Pleasant Hill. However, it’s the note that Bonnie had for the bank’s teller that has drawn the most attention around the world, with the senior bank robber allegedly stating that she “didn’t mean to scare” anyone. As The Kansas City Star reported, Bonnie supposedly entered the establishment just after 3pm, ‘disguised’ by her facemask and sunglasses. After approaching the counter, she is said to have handed over a note that demanded “13,000 small bills”, and another that read “thank you sorry I didn’t mean to scare you”. Prosecutors in Cass County said surveillance video from inside of the bank showed Bonnie banging on the counter and demanding that the teller hurry up. Bonnie made her getaway from there, but was ultimately caught by law enforcement officers, who reported that her car smelled of alcohol, and had money spread across its floor. Despite this, she is not facing any alcohol related charges. Pleasant Hill Police Chief Tommy Wright described the incident as “just sad’, and noted that Bonnie - as far as they were aware - had not been diagnosed with any notable ailments. “When officers first approached her, they were kind of confused ... it’s a little old lady who steps out,” he explained. “We weren’t sure initially that we had the right person.” He also noted that in his three decades as a police officer, he had never encountered a robbery suspect of a similar age to Bonnie. But it wasn’t Bonnie’s first rodeo, with Bonnie having been convicted for her actions in California in 1977, and again in another Kansas City suburb in 2020. Her probation for the latter only ended in November 2021. At the time of her 2020 theft, court documents cited by Fox 4 note that Bonnie’s son explained she had left the house “angry” and had declared that she was “going to rob a bank”. She is now being held on a $25,000 USD (~$37,500 AUD) bond at a Cass County detention centre for her 2023 crime. And as Police Chief Tommy Wright also revealed to Fox 4, he and his team were evaluating whether or not Bonnie would require further services as her case progressed through the criminal justice system. Images: Facebook

Legal

“Just heartbreaking”: Woman’s dream win turned nightmare

Amelia Conway has opened up about her heartbreak after her dream car was snatched away from her in the middle of the night. The 22-year-old from Victoria received the $100,000 4WD when she was named the winner of a Hello Lifestyle Australia online charity raffle. Amelia had purchased $120 worth of tickets in the draw, and was delighted when she was announced as the proud new owner of the modified Widebody Y62 Nissan Patrol. Supposedly, all associated on-road costs were also included in her prize. Amelia lives in Colac, Victoria, and had to be flown to Queensland by Hello Lifestyle Australia to claim her vehicle. Flights weren’t in order for the return trip, with the excited pair driving Amelia’s new car all the way back home to Victoria. However, Amelia’s good time was destined to come to an abrupt end. Upon trying to transfer the car into her name, and to register it in her home state as necessary, she discovered that the vehicle was still under finance. It had been one of Amelia’s friends who suggested that she look into the “too good to be true” win, and do a Personal Property Securities Register check. “I thought maybe they had paid it out,” Amelia said of learning the vehicle had money owing, “and it's taken a little while to clear, but that wasn't the case.” February 1 marked the beginning of Amelia’s nightmare, with someone showing up at her home to repossess the car. “Randomly, without me knowing anything, at 8pm last night a guy showed up to repossess the car,” Amelia said of the incident in a Facebook post. In the time to follow, Amelia attempted to get in touch with Hello Lifestyle Australia to find out more about what was going on with the vehicle’s transfer, and to get clarification on the payment of all on-road costs. But those attempts were met with silence for the unfortunate 22 year old. Victoria Police also confirmed that they are investigating Amelia’s case, but faced a difficult time ahead, with Hello Lifestyle Australia’s website and social media accounts having been shut down. “The patrol is gone and I am trying to gather information through other people that have won anything through Hello Lifestyle Australia to take it a lot further,” she said of her ordeal, adding, “it’s not fair on myself or anyone else that has won anything through this company. It’s just heartbreaking.” However, in a delightful twist to Amelia’s tale, Car Hub Australia took it upon themselves to get involved and to “right others’ wrong”. After searching the country high and low for a new Nissan Patrol - a vehicle in high demand with waiting lists measuring in months - before finally locating one on the New South Wales south coast. The team then made their way from Western Australia to Wollongong, before driving the car all the way to Amelia at home in Victoria. And all the company had to say of their good deed was that they “know there’s a lot of companies out there that don’t do the right thing. “We hold ourselves to a higher standard.” Despite the eventual happy ending to Amelia’s woes, it appears that she was not the first victim of Hello Lifestyle Australia’s “raffles”. Aaron Edmundson, a father from Perth, claims that he had to spend over $7,000 on a car that he also “won” from them. While the company apparently claimed that they would cover all related costs, this wasn’t the case, with Aaron eventually selling the car. Images: Seven News / Facebook

Legal

Salon owner loses $40,000 from one $60 deposit

When beautician Thuy Le received a call from a supposed customer’s ‘husband’ regarding an accidental payment, she could never have foreseen the devastating turn her life would take from that point on. The mother of two, whose husband is living with Parkinsons and unable to work, recounted how her harrowing ordeal started with that one phone call, and the man on the other end requesting she return the $60 his wife had ‘accidentally’ paid. Le checked her bank statements to verify his story, and after noting one deposit that matched, she transferred the funds into the account he provided. She did not provide any of her own personal information, her passwords, or any critical numbers for her accounts. And yet, in the time to follow, Le could only watch in horror as more withdrawals were made from her account, into the very same one owned by the customer’s ‘husband’. The withdrawals totalled a devastating $41,600 stolen from Le’s life savings. Le also recounted how she was refused access to her business account, and that she got in touch with her bank as soon as she realised what had happened, suspecting she had been scammed. Her quest for support in her time of need was cut short, with the financial institution placing the blame solely on Le and ruling that they were not liable for the losses she had endured - this was despite the suspicious withdrawals raising no alarm with the bank, and the lack of personal information involved in the scam. Of their questionable red flag system, the bank claimed that it is “nearly impossible for an unauthorised third party to guess”, referencing the way that the logins for the costly transaction all succeeded on the very first try. Furthermore, as stated in a letter to Le, they declared that “the only reasonable explanation for these logins would be that your online banking credentials were known to the unauthorised third party, which would be in breach of the passcode security requirements.” “I am in financial hardship,” Le admitted of her dire situation, and the need to have the funds returned for her family and her husband’s crucial medication. “I have two little kids, I have a husband with Parkinson’s disease, he cannot work,” she continued. “We are still in the process of applying for government help and I have carried the financial burden on my shoulders.” While Le’s bank offered $200 to resolve her complaint, she was offered no further assistance, and took matters to the Australian Financial Complaints Authority, hoping to have her money returned to her. “I can’t sleep,” she confessed. “I want to know why this happened to me and how it happened to me. “I’m not a liar, not a criminal, not a fraud.” Images: Supplied to 7News, Facebook

Money & Banking

Detective steals thousands from elderly woman

An elderly woman who was scammed out of $30,000 in an online scam has once again been stolen from, after the police officer helping her recover the money stole her bank details. In May 2021, 74-year-old Sonia was robbed by fraudsters pretending to be NBN workers after they convinced her to transfer the hefty five-figure sum. After discovering it was a scam, Sonia then reported the crime to NSW Police, who sent a detective to her home to investigate. The officer was supposed to be helping Sonia recover her stolen money, but instead tried to use her credit card and banking details and purchase almost $20,000 worth of goods. The police officer fronted Liverpool Local Court on Wednesday where his barrister tried to explain his client's behaviour saying he had gone "off the rails" and fallen into a depression due to the nature of his work. In June 2021, the detective, who cannot be named, attended Sonia's home several times to investigate what happened, often wearing his full police uniform. To gain her sympathy, he said he had a brain aneurysm and had not yet told his girlfriend or work. According to police documents tendered to the court, Sonia trusted him and he told her she "reminded him of his own grandmother", the <a href="https://www.dailytelegraph.com.au/truecrimeaustralia/police-courts-nsw/detective-investigating-30k-fraud-on-74yo-woman-steals-her-credit-card-for-16k-shopping-spree/news-story/1823067b8a55dc184f1278ce6a933b69" target="_blank" rel="nofollow noopener">Daily Telegraph</a> reported. When he asked to see her online banking details, credit cards and passwords, Sonia gave them to him willingly, assuming they were needed for his investigation. The detective tried to buy close to $20,000 worth of items from JB Hi Fi, Big W and Myer, including iPhones, GoPro cameras and Apple Watches. Thankfully for Sonia, none of the attempted purchases went through, as they were all rejected by Sonia's bank as suspicious activity. When Sonia was notified of the attempted transactions, she immediately suspected the detective who had been supposed to be helping her. In court this week, the now former detective pleaded guilty to stealing Sonia's bank details, and will will face Downing Centre District Court in Sydney on May 12th when he will be sentenced. More than 18 months after the events, Sonia is still very troubled by what happened and blames herself. "I can't switch off a feeling that I was stupid in the first place ... I trusted this guy and then he did that," she said. Image credits: Getty Images

Legal

Top 7 common travel rip-offs

<div id="yiv7422957477yui_3_16_0_1_1449006757770_9618" class="yiv7422957477"> Sometimes, when you’re travelling overseas it’s easy to feel like one big walking dollar sign. Avoid getting ripped-off with this guide to the seven most common tourist traps when travelling abroad. 1. Sim cards It’s convenient to have a working phone when travelling overseas but the data and call costs can quickly add up. Rather than using your current phone plan, contact your provider and ask to have your plan suspended while you’re away. When you arrive at your destination, buy a local sim card and opt to manually top up your funds. It will allow you to make cheap local calls without the international roaming fees. Don’t forget to use wi-fi networks as well- many restaurants and hotels offer free wi-fi so you don’t have to pay for data. 2. Airport transfers Big international airports often have a number of transport services that connect terminals to the city centre. The cost of these transfers can vary wildly. For example, the London Heathrow Express costs four times that of a standard train ticket to reach the city. Before you leave home, do a quick search about your options and where possible, book in advance to reap savings. 3. Inaccurate currency conversion rates Some overseas card terminals will let you choose whether you’d like to be charged in local or Australian currency. While the latter might seem like the most obvious choice, it’s often linked to an added layer of fees. Similarly, some countries such as Turkey and Cambodia often accept foreign cash. It’s rarely worthwhile paying for goods with foreign dollars, as market stall holders and local vendors set the exchange rate, which is usually far off the market rate. 4. Hire car GPS Hiring a car can be one of the best ways to escape the tourist path and see a country like a local. Be aware of added extras though, such as a GPS. Rather than pay the $10-or-so dollar-a-day fee, download an offline map app. alternatively, if you’ve got a GPS at home and know that you’ll need one on your trip, pack it! You can buy international maps on your GPS and it means you’ll own it for life, not just the duration of your car hire. 5. Mandatory tips While some high-end cruises have a no-tip policy, most companies add an extra daily fee to your final bill, without even asking. Fees can range from $12-$18 per day, which adds up! Be sure to check what your travel provider’s tip policy is before making a booking. 6. Shopping tours Taking a locally-guided tour is a wonderful way to see a city through the eyes of a local, but be wary of tour recommendations. The classic “my uncle runs a one-of-a-kind rug store” might seem innocent enough, but remember that many tour operators receive commission to take you to vendors, who’ll charge a higher price once they know you’re a tourist. Rather, jump online to sites like TripAdvisor to read up on real consumer reviews and take special note of the names of tour operators who receive glowing reviews. When you book the tour, ask for them to be sure you’re getting the same expert-led tour. 7. Rent full, return empty It’s become mandatory at many car rental outlets for drivers to receive the car with a full tank of petrol and return it empty. While it might sound like a great deal, the reality is that car companies usually win out, as drivers over-fill the tank to avoid that nervous return drive when the red light is flashing. If you’re planning to hire a car, make sure you use the rent full, return empty policy to your advantage. Image credits: Getty Images </div>

Travel Tips

Crypto scams will increase over the holidays – here’s what you need to know to not fall victim

Each year, as the festive season arrives, we must also keep an eye out for potential scammers trying to ruin the fun. This is because scammers become more active <a href="https://www.scamwatch.gov.au/scam-statistics?scamid=all&date=2021" target="_blank" rel="noopener">during the holidays</a>, targeting us while we have our guard down. So far in 2022, Australians have lost around <a href="https://www.scamwatch.gov.au/scam-statistics?scamid=all&date=2022" target="_blank" rel="noopener">half a billion dollars to scams</a>, which is already significantly more than had been lost by this time last year. The majority of these losses – <a href="https://www.scamwatch.gov.au/scam-statistics?scamid=26&date=2022" target="_blank" rel="noopener">around $300 million</a> – have involved investment or cryptocurrency scams. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=370&fit=crop&dpr=1 600w, https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=370&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=370&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=465&fit=crop&dpr=1 754w, https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=465&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/494108/original/file-20221108-14-vbvqlj.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=465&fit=crop&dpr=3 2262w" alt="A chart showing a steady rise of crypto scams, with a spike in April 2022" /></a><figcaption>Investment scams 2019-2022. scamwatch.gov.au</figcaption></figure> Researchers from <a href="https://cybercentre.org.au/" target="_blank" rel="noopener">Deakin University’s Centre for Cyber Security Research and Innovation</a> had a opportunity to interview recent victims of these scams. Here is what we found. Anyone can fall for a scam <blockquote> I was shocked and could not accept that this happened to me although I was very careful […] I was numb for a couple of minutes as it was a large amount of money. – (26-year-old female office manager from South Australia) </blockquote> These scams have become highly sophisticated and criminals have become less discriminating about whom they target. This is reflected in recent victim demographics, showing a wide variety of backgrounds, a more even distribution across several age groups, and an almost even split on gender. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=343&fit=crop&dpr=1 600w, https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=343&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=343&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=431&fit=crop&dpr=1 754w, https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=431&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/494408/original/file-20221109-21-4mauh4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=431&fit=crop&dpr=3 2262w" alt="A bar chart showing most age groups are almost equally targeted" /></a><figcaption>Age groups of scam victims. scamwatch.gov.au</figcaption></figure> <figure class="align-center "><img src="https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=461&fit=crop&dpr=1 754w, https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=461&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/494409/original/file-20221109-24-24ku3v.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=461&fit=crop&dpr=3 2262w" alt="A radial chart showing female scam victims comprise 49%, male 48% and gender X the rest" /><figcaption>Gender distribution for reported scams. scamwatch.gov.au</figcaption></figure> So, how can you spot these scams and where can you get help if you have fallen victim? If it sounds too good to be true, it might just be a scam <blockquote> I was dumbfounded, to say that ground shattered under my feet would be an understatement, it will take me a very long time to recover from it, financially and mentally. – (36-year-old female, legal practitioner from Victoria) </blockquote> Most crypto scams involve getting the victim to buy and send cryptocurrency to the perpetrator’s account for what appears to be a legitimate investment opportunity. Cryptocurrency is the currency of choice for this type of crime, because it’s unregulated, untraceable and transactions cannot be reversed. Victims of such scams are targeted using a number of different methods, which include: Investment scams: scammers pretend to be investment managers claiming high returns on crypto investments. They get the victim to transfer over funds and escape with them. “Pump and dump”: scammers usually hype up a new cryptocurrency or an <a href="https://www.kaspersky.com/resource-center/preemptive-safety/how-to-avoid-nft-scams" target="_blank" rel="noopener">NFT project</a> and artificially increase its value. Once enough victims invest, the scammers sell their stake, leaving the victims with worthless cryptocurrency or NFT. Romance scams: involves scammers using dating platforms, social media or direct messaging to engage with you, gain your trust and pitch an amazing investment opportunity promising high returns, or ask for cryptocurrency to cover medical or travel expenses. Phishing scams: an old but still effective scam involving malicious emails or messages with links to fake websites promising huge returns on investment or just outright stealing credentials to access users’ digital currency wallets. Ponzi schemes: a type of investment scam where the scammers use cryptocurrency gathered from multiple victims to repay high interest to some of them; when victims invest more funds, the scammers escape with all the investments. Mining scams: scammers try and convince victims to buy cryptocurrency to use in mining more of it, while in reality there is no mining happening – the scammers just make transfers that look like returns on the investment. Over time, the victim invests more, and the scammers keep taking it all. Although methods evolve and change, the telltale signs of a potential scam remain relatively similar: <ul> <li>very high returns with promises of little or no risk</li> <li>proprietary or secretive strategies to gain an advantage</li> <li>lack of liquidity, requiring a minimum accumulation amount before funds are released.</li> </ul> Where to seek help if you’ve been scammed <blockquote> I felt helpless, I didn’t know what to do, who to reach out to, I was too embarrassed and just kept blaming myself. – (72-year-old male, accountant from Victoria) </blockquote> If you think you have fallen victim to one of these scams, here is what you need to do next: <ul> <li> inform the Australian Competition and Consumer Commission (ACCC) <a href="https://www.scamwatch.gov.au/report-a-scam" target="_blank" rel="noopener">here</a> or reach out to relevant authorities <a href="https://www.scamwatch.gov.au/get-help/where-to-get-help" target="_blank" rel="noopener">as per advice on the ScamWatch website</a> </li> <li> reach out to your friends and family members and inform them of the scam; they can also be a source of help and support during such times </li> <li> as these events can have a psychological impact, it’s recommended you talk to your GP, a health professional, or someone you trust </li> <li> you can also reach out to counselling services such as <a href="http://www.lifeline.org.au/" target="_blank" rel="noopener">LifeLine</a>, <a href="https://www.beyondblue.org.au/" target="_blank" rel="noopener">beyond blue</a>, <a href="http://www.suicidecallbackservice.org.au/" target="_blank" rel="noopener">Sucide Call Back Service</a>, <a href="http://www.mensline.org.au/" target="_blank" rel="noopener">Mens Line</a>, and <a href="https://www.scamwatch.gov.au/get-help/where-to-get-help" target="_blank" rel="noopener">more</a> for help and support. </li> </ul> If you ever find yourself in a difficult situation, please remember help and support is available. Finally, to prevent yourself becoming the next statistic over the holiday period, keep in mind the following advice:<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/194064/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <ul> <li>don’t share your personal details with people online or over a call</li> <li>don’t invest in something you don’t understand</li> <li>if in doubt, talk to an expert or search online for resources yourself (don’t believe any links the scammers send you).</li> </ul> Writen by Ashish Nanda, Jeb Webb, Jongkil Jay Jeong, Mohammed Reza Nosouhi, and Syed Wajid Ali Shah. Republished with permission from <a href="https://theconversation.com/crypto-scams-will-increase-over-the-holidays-heres-what-you-need-to-know-to-not-fall-victim-194064" target="_blank" rel="noopener">The Conversation</a>. <p style="font-size: 16px; box-sizing: border-box; margin-top: 0px; margin-bottom: 0px; color: #212529; font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, 'Helvetica Neue', Arial, sans-serif, 'Apple Color Emoji', 'Segoe UI Emoji', 'Segoe UI Symbol', 'Noto Color Emoji'; background-color: #ffffff;">Image: Getty Images

Money & Banking

Nobel economics prize: insights into financial contagion changed how central banks react during a crisis

This year’s <a href="https://www.nobelprize.org/prizes/economic-sciences/2022/prize-announcement/" target="_blank" rel="noopener">Nobel prize in economics</a>, known as the Sveriges Riksbank Prize in Economic Sciences, has gone to Douglas Diamond, Philip Dybvig and former Federal Reserve Chair Ben Bernanke for their work on banks and how they relate to financial crises. To explain the work and why it matters, we talked to Elena Carletti, a Professor of Finance at Bocconi University in Milan. Why have Diamond, Bernanke and Dybvig been awarded the prize? The works by <a href="https://www.nobelprize.org/uploads/2022/10/popular-economicsciencesprize2022.pdf" target="_blank" rel="noopener">Diamond and Dybvig</a> essentially explained why banks exist and the role they play in the economy by channelling savings from individuals into productive investments. Essentially, banks play two roles. On the one hand, they monitor borrowers within the economy. On the other, they provide liquidity to individuals, who don’t know what they will need to buy in future, and this can make them averse to depositing money in case it’s not available when they need it. Banks smooth out this aversion by providing us with the assurance that we will be able to take out our money when it’s required. The problem is that by providing this assurance, banks are also vulnerable to crises even at times when their finances are healthy. This occurs when individual depositors worry that many other depositors are removing their money from the bank. This then gives them an incentive to remove money themselves, which can lead to a panic that causes a bank run. Ben Bernanke fed into this by looking at bank behaviour during the great depression of the 1930s, and showed that bank runs during the depression was the decisive factor in making the crisis longer and deeper than it otherwise would have been. The observations behind the Nobel win seem fairly straightforward compared to previous years. Why are they so important? It’s the idea that banks that are otherwise financially sound can nevertheless be vulnerable because of panicking depositors. Or, in cases such as during the global financial crisis of 2007-09, it can be a combination of the two, where there is a problem with a bank’s fundamentals but it is exacerbated by panic. Having recognised the intrinsic vulnerability of healthy banks, it was then possible to start thinking about policies to alleviate that risk, such as depositor insurance and reassuring everyone that the central bank will step in as the lender of last resort. In a bank run caused by liquidity (panic) rather than insolvency, an announcement from the government or central bank is likely to be enough to solve the problem on its own – often without the need for any deposit insurance even being paid out. On the other hand, in a banking crisis caused by insolvency, that’s when you need to pump in money to rescue the institution. What was the consensus about bank runs before Diamond and Dybvig began publishing their work? There had been a lot of bank runs in the past and it was understood that financial crises were linked to them – particularly before the US Federal Reserve was founded in 1913. It was understood that bank runs made financial crises longer by exacerbating them. But the mechanism causing the bank runs wasn’t well understood. <figure class="align-center zoomable"><a href="https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/489027/original/file-20221010-11-on0vn4.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" alt="Police controlling an angry crowd during a Paris bank in 1904" /></a><figcaption>A bank run in Paris in 1904. <a class="source" href="https://www.shutterstock.com/image-illustration/paris-police-hold-back-crowd-making-242294071" target="_blank" rel="noopener">Everett Collection</a></figcaption></figure> How easy is it to tell what kind of bank run you are dealing with? It’s not always easy. For example, in 2008 in Ireland it was thought to be a classic example of bank runs caused by liquidity fears. The state stepped up to give a blanket guarantee to creditors, but it then became apparent that the banks were really insolvent and the government had to inject enormous amounts of money into them, which led to a sovereign debt crisis. Speaking of sovereign debt crises, the work by Diamond and Dybvig also underpins the literature on financial contagion, which is based on a <a href="https://www.jstor.org/stable/10.1086/262109" target="_blank" rel="noopener">2000 paper</a> by Franklin Allen and Douglas Gale. I worked with Allen and Gale for many years, and all our papers have been based on the work of Diamond, and Diamond and Dybvig. In a similar way to how state reassurances can defuse a bank run caused by liquidity problems, we saw how the then European Central Bank President Mario Draghi was able to defuse the run on government bonds in the eurozone crisis in 2011 by saying that the bank would do “<a href="https://qz.com/1038954/whatever-it-takes-five-years-ago-today-mario-draghi-saved-the-euro-with-a-momentous-speech/" target="_blank" rel="noopener">whatever it takes</a>” to preserve the euro. <figure><iframe src="https://www.youtube.com/embed/tB2CM2ngpQg?wmode=transparent&start=0" width="440" height="260" frameborder="0" allowfullscreen="allowfullscreen"></iframe></figure> The prize announcement has attracted plenty of people on social media saying we shouldn’t be celebrating Bernanke when he was so involved in the quantitative easing (QE) that has helped to cause today’s global financial problems – what’s your view? I would say that without QE our problems would today be much worse, but also that the prize recognises his achievements as an academic and not as chair of the Fed. Also, Bernanke was only one of the numerous central bankers who resorted to QE after 2008. And it is not only the central bank actions that make banks stable. It’s also worth pointing out that the changes to the rules around the amount of capital that banks have to hold after 2008 have made the financial system much better protected against bank runs than it was beforehand. Should such rules have been introduced when the academics first explained the risks around bank runs and contagion? The literature had certainly hinted at these risks, but regulation-wise, we had to wait until after the global financial crisis to see <a href="https://www.ecb.europa.eu/pub/pdf/fsr/art/ecb.fsrart201405_03.en.pdf" target="_blank" rel="noopener">reforms such as</a> macro-prudential regulation and more stringent micro-prudential regulation. This shows that regulators were underestimating the risk of financial crises, perhaps also pushed by the banking lobbies that had been traditionally very powerful and managed to convince regulators that risks were well managed. If retail banks become less important in future because of blockchain technology or central bank digital currencies, do you think the threat of financial panic will reduce? If we are heading for a situation where depositors put their money into central banks rather than retail banks, that would diminish the role of retail banking, but I think we are far from that. Central bank digital currencies can be designed in such a way that retail banks are still necessary. But either way, the insights from Diamond and Dybvig about liquidity panics are still relevant because they apply to any context where coordination failures among investors are important, such as sovereign debt crises, currency attacks and so on.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/192208/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Written by Elena Carletti. Republished with permission of <a href="https://theconversation.com/nobel-economics-prize-insights-into-financial-contagion-changed-how-central-banks-react-during-a-crisis-192208" target="_blank" rel="noopener">The Conversation</a>. Image: The Nobel Foundation

Money & Banking

Right royal nonsense: online scam roasted for being most pathetic ever

It hasn’t taken long for scammers to swoop in and take advantage of the Queen’s death, only two short weeks after her funeral was watched by literally billions of people. Pretty audacious then for this particular scammer to think that pretending the Queen is actually still alive would fool anyone for even a moment. Twitter account UberFacts shared a screenshot of just such an attempt that has been circulating on Instagram. An account pretending to be the Queen herself is behind these ludicrous messages, with the handle @queenelizabet._3 ... and the messages claim the Queen isn't dead, that she's simply been shipped off to a desert island by King Charles so that he could ascend to the throne. <blockquote class="twitter-tweet"> I have some news <a href="https://t.co/f1QbInTJNl">pic.twitter.com/f1QbInTJNl</a> — UberFacts (@UberFacts) <a href="https://twitter.com/UberFacts/status/1572279949201117186?ref_src=twsrc%5Etfw">September 20, 2022</a></blockquote> According to the message, "the Queen" "can't get hold of her royal money" - and needs people to send her some cash so she can return to the UK. The absurd message concludes with "Tea and biscuits" and a Union Jack flag emoji. As expected, the scam was thoroughly mocked online for its outrageous attempt at conning people out of money. Scammers come up with new ways to target social media users every day, but there are a few ways to help protect yourself and your information including: treating contact from unfamiliar accounts with caution - particularly if it claims to be an official account. Even if it is familiar, legitimate users often get hacked, so it still pays to watch out. Don't click on suspicious links or attachments - these are often the most dangerous parts of a scam message. As always, if you're unsure, better to be safe than sorry and avoid the links and messages altogether. Image: Twitter

Money & Banking

Dream home turns into nightmare for scam victims

A Queensland couple who thought they had snapped up the home of their dreams have been left devastated after they lost almost $40,000 to a “cunning” email scammer instead. When Mitch Wilson and Penny Davies received an email from what appeared to be their real estate agent’s email address, they believed they were following their agent’s advice to then transfer the deposit for their house into a bank account. “It plays over and over in my head all of the time,” Ms Davies said. “We got an email from the real estate agent we had been dealing with, from their email account, saying in light of the contract please pay money to this account,” Mr Wilson told 9News. <img src="https://oversixtydev.blob.core.windows.net/media/2022/08/receipts.jpg" alt="" width="1280" height="720" /> The couple lost nearly $40,000 after receiving the fraudulent email (left), realising their costly mistake while messaging the actual real estate agent (right). Images: 9News After transferring the $39,000 sum, they thought nothing of it until the agent contacted them several days later asking where the funds were. “We went back and forth, we exchanged screenshots and emails from their side and ours, and what was obvious is the money didn’t go where it was supposed to go which was their account,” Mr Wilson said. “(It) ended up in some fraudster‘s account and then offshore to a crypto account.” But, the couple aren’t the only victims of this kind of scam, which police refer to as an email compromise scam. The scammers infiltrate an email account and use it to send emails to victims - making it difficult to identify that they are being scammed. Constance Hall, a mummy blogger, told news.com.au she felt “stupid” after losing thousands of dollars to the scam after she transferred money via a link sent from the real estate agency that managed the rental property she believed she was paying a deposit for. When she contacted the bank, she was told that the chance of recovering the funds was minimal as she had authorised the transaction, and that she should report it to the police. In the end, only $7.57 was recovered. “To have it all stolen in an instant … felt unbelievably unfair,” she said. Ian Wells, of Queensland Police’s Cyber Crime Group, told 9News: “These people with these skills, they‘re very cunning, they’re very calculated.” Police are advising home buyers to contact the business before paying invoices online to confirm bank account numbers, as the hackers change the bank accounts in invoices sent by business owners before forwarding the altered invoices to unsuspecting customers. Victims are also urged to contact their bank as soon as possible to report the fraudulent transaction. As for businesses impacted by the scams, the Australian Cyber Security Centre advises that they report the incident at <a href="https://www.cyber.gov.au/acsc/report" target="_blank" rel="noopener">https://www.cyber.gov.au/acsc/report</a>, alert other employees and clients, and report the breach to their email service provider. Image: 9News

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Could you cope with a shock to your bank balance? 5 ways to check you are financially resilient

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How risky is it to give card details over the phone and how do I reduce the chance of fraud?

1 in 6 older adults fall victim to impersonation scams

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8 tips for keeping pets healthy that won’t break the bank

Facebook Messenger scams are on the rise – here’s how to protect yourself

Don't get caught out: 6 holiday scams ripping off travellers

Get-rich-quick schemes, pyramids and ponzis: five signs you’re being scammed

Tips for safe mobile banking

A piggy bank is the answer to saving for your next holiday

Senior bank robber’s unexpectedly polite note

“Just heartbreaking”: Woman’s dream win turned nightmare

Salon owner loses $40,000 from one $60 deposit

Detective steals thousands from elderly woman

Top 7 common travel rip-offs

Crypto scams will increase over the holidays – here’s what you need to know to not fall victim

Nobel economics prize: insights into financial contagion changed how central banks react during a crisis

Right royal nonsense: online scam roasted for being most pathetic ever

Dream home turns into nightmare for scam victims

News

Shop

Catalogues

Travel

Health

Lifestyle

Finance

Entertainment

Property

Information

Keep up to date

Search

Could you cope with a shock to your bank balance? 5 ways to check you are financially resilient

Bring a plate! What to take to Christmas lunch that looks impressive (but won’t break the bank)

How risky is it to give card details over the phone and how do I reduce the chance of fraud?

1 in 6 older adults fall victim to impersonation scams

Hilarious reason dad couldn't be fooled by online scam

8 tips for keeping pets healthy that won’t break the bank

Facebook Messenger scams are on the rise – here’s how to protect yourself

Don't get caught out: 6 holiday scams ripping off travellers

Get-rich-quick schemes, pyramids and ponzis: five signs you’re being scammed

Tips for safe mobile banking

A piggy bank is the answer to saving for your next holiday

Senior bank robber’s unexpectedly polite note

“Just heartbreaking”: Woman’s dream win turned nightmare

Salon owner loses $40,000 from one $60 deposit

Detective steals thousands from elderly woman

Top 7 common travel rip-offs

Crypto scams will increase over the holidays – here’s what you need to know to not fall victim

Nobel economics prize: insights into financial contagion changed how central banks react during a crisis

Right royal nonsense: online scam roasted for being most pathetic ever

Dream home turns into nightmare for scam victims

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