1. Lesson 9: Choosing and Balancing a checking account
Banking 101
Modified from original presentation by Union Bank employees

2. Choosing a bank Big bank vs. small (community) bank
What is important to you?
Location
Interest
Loan (mortgages, car, etc.)
Savings
Certificate of Deposit (CD)
Freebies
Checking
Savings w/o minimum balance or low balance
Online banking
Customer service
Hours open
Drive up window
Other
Safe deposit box

3. Opening a Bank Account To open a bank account you must provide:
Valid photo ID (proof of age and identity) (interest can be reported to IRS)
Driver’s license
State issue or military ID
Alien registration number
Utility bill
Apartment Lease
Social Security Card (to report to FDIC)

4. Credit Unions Financial institution similar to bank Not open to public
Provides similar services as bank
Not open to public
Normally limit who can be customer for special groups
Educators
Military members
Etc.
Shareholder profit is normally not goal
Customers are called members and are actually part owners of credit union

5. Banks vs. Credit Unions Many locations Many customers
More convenient to find location nearby
Many customers
Higher interest rates on loans
Lower interest rates on deposits
Insured by FDIC for $250,000
Few locations
Less convenient to find location nearby
Fewer customers
Lower interest rates on loans
Higher interest rates on deposits
Insured by NCUA for $250,000

6. Services Available

7. ATM cards Allows you to access your money quickly
After hours can withdrawal or deposit funds
Must have a PIN number to use
Creating PINs
Easy for you to recall
Difficult for others to guess
Don’t use personal dates
Don’t use repetitive numbers
Choose a longer PIN
With tough times ahead and money getting harder to come by, it’s not only important that you manage your finances wisely, or find the best savings or investment deals for your money, it’s also essential to take the necessary precautions to keep your identity and finances safe.
These days, it doesn’t even take a computer genius to get away with stealing your financial information. A wily thief with the strength and the determination could just as well do it by mere brute force or cunning methods.
The Personal Identification Number or PIN is one of the easiest targets of fraudsters. This is because the PIN and of course, your ATM card hold the keys to instant cash. Once the card is stolen from you, it is very difficult to stop it from being used, particularly if you are not even aware of it being taken from you in the first place.
The PIN, however, is another matter altogether. If you take pains to safeguard it right from the start, even physical possession of the card would not do the holder any good. And then again, it’s also wise to choose a secure PIN so your bank account won’t be accessed by simple guesswork.
Basically, what makes a good PIN is one that is easy for you to recall but difficult for others, even those you know, to guess. Here are some do’s and don’ts of choosing the right PIN and keeping it safe.
Don’t use dates which are personally important to you. Birth dates, your wedding anniversary, or kids’ birth dates are out. Some studies reveal that family members or close friends are common perpetrators of PIN fraud; or anyone who is able to access your personal information can easily pick up these significant dates and use them as first options when trying out your card.
Don’t use a series of repeated numbers such as 5555 or 0000, or numbers in sequence such as 1234 or 6789 as they can be easily guessed too.
Do select a number that is memorable enough for you to recall but difficult for others to get. For instance, the day you got your favorite dog would hold significance for you but that wouldn’t show up in your records. Alternately, you can also choose a word familiar to you and substitute the letters with the numbers that correspond to it in your telephone. This method is usually used by fast-food delivery chains (e.g PIZZA) for easier recall.
Do choose a longer PIN if at all possible. PIN numbers and passwords with more than 4 digits are harder to crack. The longer, the better.
Do use the cellphone friend strategy – but only if you can memorize it or have a backup record in case your mobile phone gets stolen. The cellphone friend method is when an individual records his PIN number in his mobile phone under a fictitious friend’s name plus some extra numbers.
Do change your PIN number regularly. You can cycle through a series of PINs over a period of time.
Don’t let anyone else know of your PIN. If for some emergency reason, you ask somebody else to use your ATM on your behalf, be sure to change your PIN as soon as possible.
Don’t write down your PIN on documents that you often carry around, on a piece of paper in your wallet, and especially not on your ATM or credit card. That would be all the perpetrator needs to clean your bank account.
Do beware of shoulder surfers when using your card in ATMs, gas pumps, or groceries stores. As much as possible, shield the screen and the keypad with your body when you enter your PIN.

8. Debit Card
Card that can be used to make purchases at stores that accept debit cards
Money comes directly out of your account
Process as debit transaction
Must enter PIN number to make purchase
Relatively unsafe compared to credit transaction
Account number & PIN number transmitted together
Crook with right equipment can steal your account info and clean out your account
May be able to get cash store
Can avoid using ATMs if you get needed cash when you are making purchases anyway
Store must be willing to give you cash back on debit purchase

9. Debit Card (cont.) Electronic bank-to-bank transaction
Money taken from your bank account & put in bank account of store using the Electronic Funds Transfer (EFT) system provided by the Federal Reserve
Can also be used at ATMs

10. Check Card A special type of debit card
Normally associated with credit card company
VISA
MasterCard
American Express
Discover
Not credit
Money will come out of your account
Process as a “credit” transaction
Will have to sign for transaction, not put in PIN
Safer than debit transaction
Normally cannot get cash back when handling purchase as “credit” transaction

11. Check Card (cont.)
Credit card company handles the transaction (not the EFT system from the Federal Reserve)
Credit card company (Visa, MasterCard, etc.) pays store for amount of transaction
Normally deduct a fee from what they pay the store as service charge
This is how credit card companies make money on handling “debit” transactions
Credit card company then contacts your bank to get money for transaction from your account

12. Checking Regular checking account Interest bearing account
Monthly and per-check fees
Accounts with a minimum balance
Drop below minimum and you have to pay the full monthly fee
Free checking
Usually offered with direct deposit
Interest bearing account
Interest paid on balance at end of the day
Overdraft Protection (opt-in)
Kicks in when customer writes a check for more than they have in the account
Comes at a price – interest on the amount floated
Insufficient funds can be expensive – fee to the bank and the payee
Stop Payment – can cost anywhere from $18 - $32
Cashing checks
Banks and credit unions profit from the checking accounts they offer by either by re-investing your deposits (lending) to earn interest income and through fees like a monthly service fee. To avoid a monthly service fee, you must either keep enough money in the account or pay the service fee for each month-long statement cycle when you don't meet the minimum balance requirements. But institutions calculate these balance requirements different (of course). Find yours below:
Minimum balance - If an the fine print indicates only "minimum balance," with no other description, it's safe to assume the balance restrictions on this account are high. At no time during the statement cycle can your account balance drop below the specified amount. For example: John's account is listed as having a "$300 minimum balance." He will be charged the full monthly service fee if his balance goes under $300 at any point that month, even by a penny.
A line of credit that banks offer to their customers to cover their overdrafts. Overdraft protection kicks in when a customer writes a check for more than the amount in their account. Also referred to as "cash reserve checking."
Investopedia explains 'Overdraft Protection'
Overdraft protection comes at a price. Although it does allow its customers to escape paying overdraft fees, it does charge interest on the amount floated to them. Many banks allow their customers to link their bank accounts to a credit card in order to avoid overdraft charges.

13. Savings Statement (regular) – minimal withdrawals allowed
Savings Club – no withdrawals until the year end
Education Club/529 – withdrawals only for education expenses
CD (Certificate of Deposit) – no withdrawals until the end of the term
IRA (Individual Retirement Account) – penalty free withdrawals only at appropriate age

14. Compound interest fun fact
A savings account with $50 monthly deposits can earn, in 30 0% = $18,000 2% = $24, % = $34, ($16,868.15)
Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest. This addition of interest to the principal is called compounding. A bank account, for example, may have its interest compounded every year: in this case, an account with $1000 initial principal and 20% interest per year would have a balance of $1200 at the end of the first year, $1440 at the end of the second year, and so on.

15. Electronic Transfer Identify the advantages and disadvantages of:
Automatic transfer from checking to saving (forced savings)
Online bill payment and credit payment
Deposit of checks using a cell phone
Direct deposit of checks
Funds available quicker
Employee responsibility to verify funds deposited
Important to notify bank when or home address changes

16. Online Banking
Access to bank accounts to pay bills and monitor accounts

17. As Good as Cash Cashier/Bank checks (guaranteed by bank)
Drawn on bank’s own funds and signed by cashier
Treated as guaranteed funds
Used for real estate, brokerage transactions, etc.
Amount is taken out of customers account immediately
Bank assumes responsibility for covering check
Unlike personal checks (funds removed when check presented for payment)
A money order is a payment order for a pre-specified amount of money. As it is required that the funds be prepaid for the amount shown on it, it is a more trusted method of payment than a cheque.
Interesting fact: It is illegal in Germany for banks to certify checks. This is to prevent certified checks form becoming a universal substitute for cash, which is considered the only legal tender.

18. Certified checks (funds are set aside to pay)
Bank verifies that sufficient funds exist and funds set aside to cover check
Cannot “bounce”
Traveler’s check: many use for vacations funds, slowly being replaced by Credit Cards
Money Order: funds are pre-paid

19. Do You Lose Money if your Bank Fails?
FDIC has protected Banks since 1934
Savings deposits, checking deposits, and CD
Prior to FDIC banks where plagued with bank “runs”
Great Depression shattered peoples confidence in banks
2014 – FDIC insures accounts for up-to $250,000
Maximum $250,000 per each group (savings, checking , and CDs) at each different bank
The Federal Deposit Insurance Corporation (FDIC) has protected bank deposits since In all that time, no one has lost money that was FDIC-insured. Federal deposit insurance covers most types of deposits, including savings deposits, checking deposits, and certificates of deposit.
The basic insured amount is $250,000. In the days before federal deposit insurance, the U.S. banking system was plagued by bank “runs” or “panics.” At the slightest hint of trouble, depositors would run to the bank and line up to withdraw their money. All too often, only the first few people in line had any hope of ever seeing their money again; others lost everything. Even healthy banks sometimes failed after rumors caused depositors to panic and withdraw their money.
For many years, the public seemed willing to accept the losses. But then came the Great Depression of the 1930s, and financial pressures forced thousands of banks to close their doors forever. Losses ran into the hundreds of millions of dollars, and many people lost their life savings.
The wave of bank failures shattered public confidence in the banking system, and Americans looked to the federal government for help. Congress responded by establishing the FDIC, which provided deposit insurance coverage of up to $2,500 per depositor. Public confidence rebounded, and bank failures declined from approximately 4,000 in 1933 to 62 in 1934.
Over the years, the federal deposit insurance limit has increased, and federal deposit insurance has helped to maintain public confidence in the U.S. banking system. Bank failures have not been eliminated, but long lines of panic-stricken depositors have become an uncommon sight.

20. FDIC receives no federal funds – each member bank pays a premium
Establishes Reserve requirements (2014: 3% for first $13.3 million)
Federal Reserve backs the FDIC

21. CDs Sold by banks and credit unions
Similar to savings account, they are insured with FDIC or NCUA
Different from savings:
Fixed term
Difficult to get funds prior to maturity date (less liquid)
Fixed interest rate
CD is held until maturity at which time it can funds can be withdrawn
Given higher interest rates
Larger funds usually means higher interest rates
Recommend stair-step method (every 6 months one retires)
A certificate of deposit (CD) is a time deposit, a financial product commonly sold in the United States by banks, thrift institutions, and credit unions.
CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank". CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions. They are different from savings accounts in that the CD has a specific, fixed term (often monthly, three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
In exchange for keeping the money on deposit for the agreed-on term, institutions usually grant higher interest rates than they do on accounts from which money may be withdrawn on demand, although this may not be the case in an inverted yield curve situation. Fixed rates are common, but some institutions offer CDs with various forms of variable rates. For example, in mid-2004, interest rates were expected to rise, many banks and credit unions began to offer CDs with a "bump-up" feature. These allow for a single readjustment of the interest rate, at a time of the consumer's choosing, during the term of the CD. Sometimes, CDs that are indexed to the stock market, the bond market, or other indices are introduced.
A few general guidelines for interest rates are:
A larger principal should receive a higher interest rate, but may not.
A longer term will usually receive a higher interest rate, except in the case of an inverted yield curve (i.e. preceding a recession)
Smaller institutions tend to offer higher interest rates than larger ones.
Personal CD accounts generally receive higher interest rates than business CD accounts.
Banks and credit unions that are not insured by the FDIC or NCUA generally offer higher interest rates.

22. Money Market Account
Similar to savings account, but require higher balance
Interest rates vary
The more money in account the higher the interest
Limit the number of transactions you can do in a month
Money market account: Money market accounts are similar to savings accounts, but they require you to maintain a higher balance to avoid a monthly fee. Where savings accounts usually have a fixed interest rate, these accounts have rates that vary regularly based on money markets. Money market accounts can have tiered interest rates, providing more favorable rates based on higher balances. Some money market accounts also allow you to write checks against your funds, but on a more limited basis.

23. Individual Retirement Accounts (IRAs)
Useful when employers do not offer retirement accounts
Types:
Traditional IRA – contributions are tax deductible
Roth IRA – funds withdrawn tax-free many situations
Both accounts have contribution limits
Individual Retirement Accounts (IRAs): IRAs, or individual retirement accounts, allow you to save independently for your retirement. These plans are useful if your employer doesn’t offer retirement benefits or you want to save more than your employer-sponsored plan allows. These accounts come in two types: the traditional IRA and Roth IRA. The Roth IRA is popular because the funds can be withdrawn tax-free in many situations. Others prefer traditional IRAs because these contributions are tax-deductible. Both accounts have contribution limits and other requirements you may need to discuss with your tax advisor before choosing your account.

24. Loans What is a loan? What type of loans can you get?
Student loans
Personal loans
Car loans
Mortgages
Secured (collateralized)
Unsecured (uncollateralized)
Interest rates are based on credit scores
With credit card interest rates soaring as high as 30%, people continue to look for alternatives to credit cards, especially when an emergency comes up. Personal loans can be a good option, but only if you have a good credit score; otherwise, the rates can be even higher than credit cards. Just what can you use a personal loan for? Essentially any cash needed, including credit card payoff, debt consolidation, education, training, home improvement, car financing, business needs, vacation expenses, major purchases, wedding expenses, moving costs and medical expenses. But be careful out there: If you're not absolutely sure about what you're getting yourself into, personal loans can cost you big time. Interest rates, especially from places like the ones that offer payday loans, can be as high as 300%, so be certain you understand the terms before you sign on the dotted line. Loan basics There are essentially two types of personal loans: secured and unsecured. Secured loans generally offer lower interest rates than unsecured loans, but you must put up something for collateral, such as your house, your car or your boat. If you don't pay off the loan, you can lose that collateral, so tread carefully if you're asked to secure the loan. Unsecured loans are commonly known as "signature" loans. Essentially, the bank or other institution will loan you the money with just your signature. You can probably get more money and a lower interest rate with a secured loan, but do you really want to put an asset at risk? That's one of the key questions you need to ask yourself before applying for a personal loan. The next thing to determine is just where you're going to get a loan. Banks and credit unions offer loans, and those should be your first stop. You can start by calling your own bank and finding out their personal loan terms. That way you know what the ballpark is for personal loans. Also, if a you have good, long-term relationship with your bank, they know you as a customer and should be more willing to consider a "signature" loan. Just to be sure you're getting the best rate, call other banks and credit unions in your area. Since the market for personal loans is very broad, you definitely need to shop around to be sure you're getting the best offer. One word of advice: When you start checking on rates, don't put in an application until you've made your choice of lender. Although your lender will likely tell you it can't give you a rate until after you formally apply, you should try asking for a range of interest rates. You also should ask what credit score the bank or credit union requires to get the best rates. But why shouldn't you just apply to see what kind of rate you'd get? For a very good reason: When you apply to a bank, credit union or other lender, the lender will check your credit score. Every time your score gets checked, the inquiry could result in a lower FICO credit score, which means that every time you apply for a loan, the next bank will discover a lower credit score for you than the one before, and so on and so on and so on. And the lower your score, the worse the rates are that you'll be offered. After getting an idea of the type of rates you'd get from a bank or credit union, your next step should be to check out one of the peer-to-peer lending websites, such as Lending Club or Prosper. You may find you can get your best interest rate offer from one of these sites. Essentially, by going with one of these sites, you're cutting out the bank and borrowing from peers -- investors will put up the cash that you borrow. At both the Lending Club and Prosper, you can borrow up to $25,000 for personal loans, business loans or student loans -- pretty typical for the industry -- but you still need a pretty good credit score. With Lending Club, for instance, your credit score must be 660 or above, and with Prosper, you must have a credit score of 640 or above. As with banks and credit unions, the interest rate you'll be quoted will be based on your credit score; the better your score, the lower the interest rate. What kind of rate can you expect? At Lending Club, interest rates run between 7.93% and 25.07%. Prosper offers loans from 7.5% to 35%. Both websites require payback in full in three years. You'll also need to pay an origination fee. For the Lending Club, that's 2.25% to 4.5% of the total amount of the loan. Prosper charges between 0.5% and 3%. What is a loan? a thing that is borrowed, esp. a sum of money that is expected to be paid back with interest.
Not sure what your credit score is? You can get it for free at CreditKarma.com. If your score isn't at least 640 or above, you'll likely find it very difficult to get a personal loan at a decent rate. If you find your credit score is lower than that, take the time to order a free copy of your credit reports at annualcreditreport.com and see whether there are any errors on your credit report that could be affecting your score. If you find errors, correct them as soon as possible (my book, "The Complete Idiot's Guide to Improving Your Credit Score," offers extensive ideas on how to clean up your credit report and improve your score). Once you've corrected any errors on your credit report, check your credit score again. A higher score could just get you the loan you need to pay off your debts and get you back on track to financial fitness.

25. Safety Deposit Box
Your items are protected from fire, flood or other natural disasters at home. 
It’s a cost-effective way to keep valuables private and safe. 
Your items are protected from theft at home. 
Your items are protected from being lost or misplaced.
Your family members will know where to find your important papers. 
You rent the space from your bank
You put your food in a refrigerator. 
You put your clothes in a closet. 
Where do you put your jewelry, your rare stamps or coins, or your important papers? 
These items belong in a safe deposit box. 
A safe deposit box is a miniature safe-like box inside a bank.  These boxes are vaulted and sealed for the ultimate safety and protection of your items. 
Here are 5 pros and 5 cons to storing valuables in a safe deposit box…
Reasons To Use A Safe Deposit Box
#1  Your items are protected from fire, flood or other natural disasters at home.  Natural disasters can destroy much more than the house itself.  They destroy memories like photographs, jewelry, birth certificates, and other important records.  You can keep your most valued possessions, copies of your important papers, and even your photographs in digital form in a safe deposit box away from the house. 
#2  It’s a cost-effective way to keep valuables private and safe.  Only you know what’s inside your safe deposit box.  The cost for a safe deposit box varies depending on size.  Rental fees are charged annually.
The smallest box is 2"x5" and 12 inches long. Rent is typically between $15 and $25 a year.
A medium safe deposit box measures 4"x10" and is 12 inches long. The annual rental fee typically falls between $40 and $65. 
The largest safe deposit box offered is 15"x22" and 12 inches long.  Rent is usually between $185 and $500.
#3  Your items are protected from theft at home.  Your valuables can’t be stolen from your home if they are not there.  A safe deposit box is a great way to give you that extra peace of mind — just in case your home is ever burglarized. 
Opt for a bank safe over a home safe. While home safes can be had for as little as $99, they’re much easier for thieves to crack. Most home safes weight less than 100 lbs., so it’s not that difficult for thieves to walk off with your safe — and your valuables. That’s not going to happen with a bank safe, which is both heavily guarded and securely constructed.  Source
#4  Your items are protected from being lost or misplaced. If you are the type to misplace papers and other items, you might benefit from using a safe deposit box instead of trying to keep things organized at home.
#5  Your family members will know where to find your important papers.    If you have a copy of something important (like your will or insurance papers) in a safe deposit box, your family members will be able to retrieve those items if you, personally, cannot.

26. Abuse: remedies and prevention

27. Money Order Scams
You receive a fake money order and mail the merchandise
You receive a money order in excess of amount owed, overpayment to be mailed somewhere else
Red flags:
An offer that came from out of the blue
International money orders
Messages with numerous grammar and spelling mistakes
Refusal to pay you electronically
Buyer is not very interested in checking out the merchandise or product details
Buyer asks for sensitive information like your bank account number, etc.
It sounds too good to be true
Why Money Order Scams Work
Money orders can be a safe way to receive payments. Unfortunately, the sense of security you feel allows you to drop your guard. Money order scams work because you believe you’ve been paid and there’s nothing to worry about. In truth, you should always treat money orders with caution.
A Typical Money Order Scam
A typical money order scam involves an inquiry from somebody far away -- another state or country. They say they’ll buy your item, but when the money order arrives it’s for much more than it should be. Why? The buyer will ask you to send the excess money (above and beyond your sale price) somewhere. Perhaps you’re supposed to send the funds to an expensive shipper who handles overseas transactions. Perhaps the buyer will ask you to refund the excess because he couldn’t get a money order for the correct amount. In any case, you’ll lose that money for good if you send it.
Where Things Fall Apart
If you send money that you think you got from a money order, expect to hear from your bank. When you deposit a money order in your account, your bank will allow you to use some or all of the payment immediately. However, the bank has not yet collected the funds from the money order issuer -- that’ll take a few days or weeks.
When your bank tries to collect the funds (from Western Union, let’s say), they’ll find out that they’ve got a money order scam on their hands. They won’t get any money, and they’ll deduct the fake money from your account. If your account is empty, you’ll go into the negative and you’ll have to pay the bank back. Plus your checks will bounce and your debit/ATM card will become worthless if the money order scam wipes out your account.
Protecting Yourself
What can you do to protect yourself from money order scams? The best thing you can do is work with people you know and trust. You may have to expose yourself to the risk of money order scams if you want new customers though.
You’ll be able to spot most money order scams a mile away if you pay attention. But when life gets busy it’s easy to miss a detail and forget how these scams work. A major red flag -- and something you should never go along with -- is a request to send or wire money after you’ve been paid with a money order. Other red flags:
An offer that came from out of the blue (how did this generous trusting person find you?)
International money orders
Messages with numerous grammar and spelling mistakes
Refusal to pay you electronically (they can’t wire money or use an online service)
Buyer is not very interested in checking out the merchandise or product details
Buyer asks for sensitive information like your bank account number, etc.
It sounds too good to be true

28. Check Fraud Copy or duplicating actual financial documents
Stealing blank checks
Cancelled checks from garbage
Paid bills in your mail box, thieves take them
Chemical alteration
Victims
Financial institutions
Business who accept and issue checks
Consumer
Types of Fraud:
Forgery
Counterfeiting and Alteration
Paperhanging (where the float offers the opportunity to write fraudulent cheques but the account is never replenished.)
Check Kiting
Signs for bad checks
What is Check Fraud?
Check fraud is one of the largest challenges facing businesses and financial institutions today. With the advancement of computer technology it increasingly easy for criminals, either independently or in organized gangs, to manipulate checks in such a way as to deceive innocent victims expecting value in exchange for their money.
A significant amount of check fraud is due to counterfeiting through desktop publishing and copying to create or duplicate an actual financial document, as well as chemical alteration, which consists of removing some or all of the information and manipulating it to the benefit of the criminal. Victims include financial institutions, businesses who accept and issue checks, and the consumer. In most cases, these crimes begin with the theft of a financial document. It can be perpetrated as easily as someone stealing a blank check from your home or vehicle during a burglary, searching for a canceled or old check in the garbage, or removing a check you have mailed to pay a bill from the mailbox.
Types of Check Fraud:
Forgery
For a business, forgery typically takes place when an employee issues a check without proper authorization. Criminals will also steal a check, endorse it and present for payment at a retail location or at the bank teller window, probably using bogus personal identification.
Counterfeiting and Alteration
Counterfeiting can either mean wholly fabricating a check --using readily available desktop publishing equipment consisting of a personal computer, scanner, sophisticated software and high-grade laser printer -- or simply duplicating a check with advanced color photocopiers.
Alteration primarily refers to using chemicals and solvents such as acetone, brake fluid and bleach to remove or modify handwriting and information on the check. When performed on specific locations on the check such as the payee's name or amount, it is called-spot alteration; When an attempt to erase information from the entire check is made, it is called-check washing. For further information regarding this subject, visit HERE.
Paperhanging
This problem primarily has to do with people purposely writing checks on closed accounts (their own or others), as well as reordering checks on closed accounts (their own or others).
Check Kiting
Check Kiting is opening accounts at two or more institutions and using "the float time" of available funds to create fraudulent balances. This fraud has become easier in recent years due to new regulations requiring banks to make funds available sooner, combined with increasingly competitive banking practices.
It has been estimated that the annual losses due to check fraud are in the billions of dollars and continue to grow steadily as criminals continue to seek ways to earn a living by defrauding others. For the consumer, the amount of inconvenience and anxiety caused by resolving problems with the account, local merchants, as well as possible repercussions with credit bureaus can be considerable.
Signs for bad checks:
Below are several signs which may indicate a bad check. While one sign on its own does not guarantee a check to be counterfeit, the greater the number of signs, the greater the possibility that the check is bad.
The check lacks perforations.
The check number is either missing or does not change.
The check number is low (like 101 up to 400) on personal checks or (like 1001 up to 1500) on business checks. (90% of bad checks are written on accounts less than one year old.)
The type of font used to print the customer's name looks visibly different from the font used to print the address.
Additions to the check (i.e. phone numbers) have been written by hand.
The customer's address is missing.
The address of the bank is missing.
There are stains or discolorations on the check possibly caused by erasures or alterations.
The numbers printed along the bottoms of the check (called Magnetic Ink Character Recognition, or MICR, coding) is shiny. Real magnetic ink is dull and non glossy in appearance.
The MICR encoding at the bottom of the check does not match the check number.
The MICR numbers are missing.
The MICR coding does not match the bank district and the routing symbol in the upper right-hand corner of the check.
The name of the payee appears to have been printed by a typewriter. Most payroll, expenses, and dividend checks are printed via computer.
The word VOID appears across the check.
Notations appear in the memo section listing "load," "payroll," or "dividends." Most legitimate companies have separate accounts for these functions, eliminating a need for such notations.
The check lacks an authorized signature.

29. Loaning your ATM card
What problems can you see with loaning out your ATM card?

30. Check Cashing stores Pros Currency exchange Convenience (later hours)
Prepaid debit and credit cards
Public transportation passes and tokens
EBT services
Photocopying and faxing services
ATM machines
Motor vehicle renewal and registration
Convenience (later hours)
Payday loans and other types of loans
Money transfers
Bill payments
Money orders
P.O. boxes
Stamps, envelopes, and mailing services
Notary public
Most people have mixed emotions about using check cashing centers; however, there is good discussion as to why these financial service centers should, or should not, be used.
Approximately 28% of Americans don’t use traditional banking to handle personal finances. The majority of these people use check cashing centers for handling their financial needs. However, there is debate concerning whether these financial service centers provide a useful alternative to traditional banking, or exploit those who use them.
Check Cashing Center Pros
For some, the use of check cashing centers is almost necessary because they are unable to open checking accounts at banks, usually because of blemishes on their banking history. For others, check cashing centers are used because of the convenience they provide, like business hours that begin earlier and extend later than banks. While flexible hours may play a role in their use, others enjoy the variety of services offered in one place, such as:
Payday loans and other types of loans
Money transfers
Bill payments
Money orders
P.O. boxes
Stamps, envelopes, and mailing services
Notary public
Currency exchange
Prepaid debit and credit cards
Public transportation passes and tokens
EBT services
Photocopying and faxing services
ATM machines
Motor vehicle renewal and registration
Some consumers with checking accounts use the services of check cashing centers, in addition to banks, because of the immediacy of funds. When a check is cashed into a checking account, the whole amount usually cannot be immediately accessed; there may be a waiting period for the check to clear. With check cashing centers, consumers are immediately paid the full amount of their checks minus a service fee. However, with the Check 21 law (put into effect on October 28, 2004) banks are enabled to handle more checks electronically, making check processing faster.
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Check Cashing Center Cons
Although some may consider check cashing centers as providing a convenience to its consumers, it may come at a hefty price.
Critics of check cashing centers claim they exploit the consumers they serve, while providing a facade of convenience. The most common argument against the use of check cashing centers is the fees associated with them. Checks cashed at these centers can incur an average of 3-5% of the check amount in fees, regardless of the nature of the check. On average, the annual costs of using a financial service center for check cashing is greater than fees associated with using a checking account for similar needs.
With the online nature of most banks, and popularity of electronic payment, the convenience of check cashing centers gets lost when considering the ease of depositing paychecks electronically and paying bills online. Even for those individuals who are unable to open a checking account, there are alternatives, such as second chance bank accounts, which provide users the convenience of a checking account without having to pass a credit check or ChexSystems verification.
Aside from the convenience check cashing centers may present, there is an inherent danger associated with them. Since the majority of people use check cashing centers for cashing payroll and other types of checks, they are usually left having to leave the facility with a significant amount of cash in hand. This can be potentially dangerous when considering the proximity around most check cashing locations. Most check cashing centers are located in more urban neighborhoods, where crime may be more prominent.
Deciding on whether to use a check cashing center comes down to personal choice. There are good reasons for and against using such a service. Accessibility, convenience, cost, potential danger and preference all come into play when deciding which service works best for you.

31. Cons
Resort to check cashing stores because cannot get a bank account due to problems with credit history
High fees (3-5% of check)
Leave store with a great deal of cash on them (dangerous)
Stores usually located in higher crime areas

32. Payday Loan Small, short-term unsecured loan
Sometimes called cash advances
Must have previous payroll and employment records
Payment due borrowers next pay day
Borrower writes a postdated check
For $15 charge on a $ day payday loan, the annual percentage rate is %
They have a 10-20% default rate
A payday loan (also called a payday advance) is a small, short-term unsecured loan, "regardless of whether repayment of loans is linked to a borrower's payday".[1][2][3] The loans are also sometimes referred to as "cash advances", though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Payday advance loans rely on the consumer having previous payroll and employment records. Legislation regarding payday loans varies widely between different countries and, within the USA, between different states.

33. Title Loan Also called:
Auto title loan
Pink slip loan
Secured loan where borrow used their vehicle as collateral
Lender places a lien on the vehicle
Temporarily surrender the hard copy of vehicle title
Leander can repossess vehicle if loan not paid
Short-term high interest loans (36% to well over 100%)
In the United States, a car title loan, also called an auto title loan, pink slip loan or simply title loan, is a type of secured loan where the borrower can use their vehicle title as collateral.[1] Borrowers who get title loans must allow a lender to place a lien on their car title, and temporarily surrender the hard copy of their vehicle title, in exchange for a loan amount.[2] When the loan is repaid, the lien is removed and the car title is returned to its owner. If the borrower defaults on their payments then the lender is liable to repossess the vehicle and sell it to repay the borrowers’ outstanding debt.
These loans are typically short-term, and tend to carry higher interest rates than other sources of credit. Lenders typically do not check the credit history of borrowers for these loans and only consider the value and condition of the vehicle that is being used to secure it. Despite the secured nature of the loan, lenders argue that the comparatively high rates of interest that they charge are necessary. As evidence for this, they point to the increased risk of default on a type of loan that is used almost exclusively by borrowers who are already experiencing financial difficulties.
Most title loans can be acquired in 15 minutes or less on loan amounts as little as $100. Most other financial institutions will not loan under $1000 to someone without any credit as they deem these not profitable and too risky. In addition to verifying the borrower's collateral, many lenders verify that the borrower is employed or has some other source of regular income. The lenders do not generally consider the borrower's credit score.

34. What is Identify Theft?
It occurs when someone steals your personal information – e.g. credit card or Social Security number – and uses it fraudulently
It can cost you time and money
It can destroy your credit and ruin your good name

35. How Does Identity Theft Happen?
Identity thieves may:
Go through your trash or “dumpster dive”
Steal your wallet or purse
Steal your mail or submit a change of address form for your mail
Use “phishing” or take s to get you to provide personal information
Steal personnel records from their employers

36. What Can you do?
Deter
Deter identify thieves by safeguarding your information
Detect
Detect suspicious activity by routinely monitoring your financial accounts and billing statements
Defend
Defend against identity theft as soon as you suspect a problem

37. Deter Identify thieves by safeguarding your information.
Shred financial documents before discarding them
Protect your Social Security number
Don’t give out personal information unless you’re sure who you’re dealing with
Don’t use obvious passwords
Keep your information secure

38. Detect suspicious activity by routinely monitoring your financial accounts and billing statements
Be alert
Mail or bills that don’t arrive
Denials of credit for no reason
Inspect your credit report
Law entitles you to one free report a year from each nationwide credit reporting agencies if you ask for it.
Online: by phone: ; or by mail: Annual Credit Report Request Service, PO Box , Atlanta, VA
Inspect your financial statements
Look for charges you didn’t make

39. Defend against identify theft as soon as you suspect a problem
Place a “Fraud Alert” on your credit reports by calling any one of the three nationwide credit reporting companies:
Equifax:
Experian:
TransUnion:
Review reports carefully, looking for fraudulent activity
Close accounts that have been tampered with or opened fraudulently
File a police report
Contact the Federal Trade Commission

40. Where can you learn more?
Online:
By Phone: ID-THEFT
By Mail: Identity Theft Clearinghouse
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580

41. Exit Pass – Day 1 What does CD stand for?
What is the stair-step method?

42. Exit Pass – Day 2
List at least one pro and one con of Check Cashing stores.
Title loans are sometimes called?
Why are they called this?

43. Exit Pass – Day 3
After all your research on banks, which bank would be a good fit for you? Why?