Help your Student Become Financially Fit for College

Identity Theft and Teen 17Teaching a teen or young adult to be financially responsible is an important part of college.

Consider these financial tips to help students become financially responsible adults.

Create a Budget

College might be the first time your child is responsible for managing his or her own expenses, or the first time on a larger scale. Sit down with your student and help them develop a budget that estimates potential expenses for the year.

Set a Reasonable Allowance

Develop a specific strategy for how much money you will provide and how often. Teach your child how to live within a budget. Setting a monthly or once every two week payment will allow the student to get used to how they will likely get paid at a job after college.

Set Expectations

Discuss your money boundaries. Write down what you will pay for and what your child will pay for when they are at college. Be clear about your expectations. This is a learning process, so your child may make a few mistakes. However, money mistakes can have consequences, so it may be a good lesson for students to go a few days without spending money before their next “payday.”

Track Spending

Creating a budget can be very different from sticking to one. Children do not always realize how much little purchases can add up. Have your student track their purchases, so they can get a feel for the outflow of money.

It is important to keep an eye on your child’s finances. A checking account with online and mobile access will allow you to check your child’s balance and see what purchases have been made, as well as deposit checks remotely.

Another option is a prepaid debit card. Your student can spend only the amount that is loaded onto the card.

Working While in College

Is your child going to work while they are at school? During school breaks? Over the summer? What do you expect, and what expenses are they expected to cover with the money they earn? If possible, it might be easiest for your student to spend the first semester concentrating solely on school and then determine whether your child can handle a part-time job along with their course load. If a job is added to the mix, encourage your child to look for something manageable. Working too many hours can cause school performance to suffer.

Enroll in a Personal Finance Class

If your child’s school offers a personal finance course, encourage your child to enroll. Understanding the basics of finance, such as interest rates on credit cards and loans and fees on checking and other deposit accounts, will help the child function as an adult.

Help your Student Understand Credit 

Help your child ease into the credit card world by giving them a debit card and teaching them how to use it. Consider having them opt out of overdraft protection so they cannot use the card if there is no money in the account. However, exceeding an account balance can result in fees. A debit card should be presented as a convenient way to access available funds in an account and should be used in accordance with a spending budget.

After a few years, the student may be ready to graduate to a college rewards credit card. Use of a credit card can be tracked and overseen, and spending limits can be placed on cards. You may have to co-sign for a card, depending on your child’s age. Having a credit card can be a good step when it comes to a student learning how to be responsible for debt and establishing a credit history. It also teaches that carrying a balance forward beyond the balance due date is a bad idea because of the interest the student will pay. Do not give a student a credit card without very specific guidelines.

Prepare your child now for money independence. It is an important, life-long lesson. It is never too late to help your student become financially fit.

Watch Out for Imposter Scams and Money Mule Schemes Related to COVID-19

The Financial Crimes Enforcement Network (FinCEN) is alerting consumers to potential imposter scams and money mule schemes observed during the COVID-19 pandemic.

Illicit actors are engaged in fraudulent schemes that exploit vulnerabilities created by the Coronavirus pandemic.

Consumer frauds include imposter scams and money mule schemes where fraudulent actors deceive victims by impersonating federal government agencies, international organizations or charities.

Imposter Scams

In imposter scams, criminals impersonate organizations such as government agencies, non-profit groups, universities or charities to offer fraudulent services or otherwise defraud victims.

While imposter scams can take multiple forms, the basic methodology involves an illicit actor contacting a target under the false pretense of representing an official organization and coercing or convincing the target to provide funds or valuable information, engage in behavior that causes the target’s computer to be infected with malware or spread disinformation.

In the case of schemes connected to COVID-19, imposters may pose as officials or representatives from the Internal Revenue Service (IRS), the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO), other healthcare or non-profit groups, and academic institutions.

Illicit actors can use imposter scams to defraud and deceive the vulnerable, including the elderly and unemployed, through the solicitation of payments (such as digital payments and virtual currency), donations or personal information via email, robocalls or text messages. The Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) have sent warning letters to multiple Voice over Internet Protocol (VoIP) service providers for allegedly routing illegal pandemic-related scam telemarketing, robocalls or other communication methods.

For example, an imposter may contact potential victims by phone, email or text to imply that the victim must verify personal information or send payments to scammers in return for COVID-19-related stimulus payments or benefits.

Another instance includes imposters contacting victims and posing as government or health care representatives engaged in COVID-19 contact tracing activities, implying that a victim must share personal or financial information as part of contact tracing efforts.

Multiple examples include phishing schemes, where imposters send communications appearing to come from legitimate sources, to collect victims’ personal and financial data and potentially infect their devices by convincing the target to download a malicious attachment or click malicious links.

Scammers may also impersonate legitimate charities or create sham charities, taking advantage of the generosity of the public and embezzling donations intended for COVID-19 response efforts.

Criminals often use social media accounts, door-to-door collections, flyers, mailings, telephone and robocalls, text messages, websites and emails mimicking legitimate charities and non-profits to defraud the public. These operations may include words like “relief,” “fund,” “donation” and “foundation” in their titles to give the illusion that they are a legitimate organization.

Money Mule Schemes

A money mule is a person who transfers illegally acquired money on behalf of or at the direction of another.

Money mule schemes, including those related to the COVID-19 pandemic, span the spectrum of using unwitting, witting or complicit money mules.

An unwitting or unknowing money mule is an individual who is unaware that he or she is part of a larger criminal scheme. The individual is motivated by his/her trust in the actual romance, job position or proposition.

A witting money mule is an individual who chooses to ignore obvious red flags or acts willfully blind to his/ her money movement activity. The individual is motivated by financial gain or an unwillingness to acknowledge his/her role.

A complicit money mule is an individual who is aware of his/her role as a money mule and is complicit in the larger criminal scheme. The individual is motivated by financial gain or loyalty to a criminal group.

During the COVID-19 pandemic, U.S. authorities have detected recruiters using money mule schemes, such as good-Samaritan, romance and work-from-home schemes.

In work-from-home schemes, for example, COVID-19 money mule recruiters, under a false charity or company label, may approach targets with a seemingly legitimate offer of employment under the pretense of work-from-home jobs, often through internet or social media advertisements, emails or text messages. Once the target accepts the “employment,” he or she receives instructions to move funds through accounts or to set up a new account in the target’s name for the “business.” The target (i.e., the money mule) earns money by taking a percentage of the funds that he or she helps to transfer per the instructions of the “employer.”

U.S. authorities also have identified criminals using money mules to exploit unemployment insurance programs during the COVID-19 pandemic.

Stay in the Know

Detecting, preventing and reporting consumer fraud and other illicit activity related to COVID-19 is critical for national security, safeguarding legitimate relief efforts and protecting innocent consumers from harm.

Overall, the message from the Federal Bureau of Investigation (FBI) and the FTC during this time is to be extra vigilant and cyber-smart. Hackers know how vulnerable the world is to Coronavirus fears, and everything involved with the pandemic can be exploited.

The FBI’s ic3.gov has helpful information, including where to report scammers so others can avoid them. They welcome all concerned to visit the site frequently as it is continually being updated with legitimate Coronavirus-related information and resources.

Go to ftc.gov/coronavirus for the latest information on COVID-19 scams. Sign up to get FTC’s alerts at ftc.gov/subscribe.

American Federal Bank Welcomes New Officers

Four American Federal Bank employees have been invited to join the American Federal Professional Partnership. Approved for the designation of Officer are:

– Adam Braunberger, Business Banker, Fargo Downtown

– Mary Jones, Accounting Associate, Home Office Finance and Accounting Department, Fargo

– Paige Kjesbo, Ag and Business Banker, Wahpeton

– Ryan Paulson, Ag and Business Banker, Fosston

The American Federal Professional Partnership affords Officers the opportunity to become employee owners of the organization.  American Federal employees also are owners of the bank through the Employee Stock Ownership Plan.

American Federal is an employee-owned community bank with full-service Sales Offices in the Red River Valley of North Dakota and Minnesota and the Lakes Country of northwestern Minnesota. Home Office is in Fargo, North Dakota.

American Federal Ag, Business and Personal Bankers provide trusted advice and solutions to help their clients achieve their goals. They forge long-term, personal relationship with their ag, business and consumer clients and offer banking, insurance, investments and mortgages.