Almost every scam manufactures urgency. A real institution does not demand a decision in the next ten minutes.
Step 1: Let's Learn
Read it, or press Listen and follow the words.
The payment method gives it away
Demands for gift cards, wire transfers or cryptocurrency are near-certain fraud. Those payments cannot be reversed.
Guaranteed returns
No legitimate investment guarantees a high return. Risk and return move together, always.
Payday loans
A $15 fee on a $100 two-week loan sounds small. Annualised it is roughly 390%, which the arithmetic exposes instantly.
Annualise every rate
Two weeks is 26 periods a year. Multiplying the period rate by 26 turns a small fee into its real cost.
Protecting information
Never give account numbers or passwords to an incoming caller. Hang up and call the institution on its published number.
The common signals
Urgency, a threat, a demand for an unusual payment method, and pressure not to consult anyone. Legitimate organisations do not require an immediate decision or payment in gift cards.
Verify independently
Contact the organisation using a number you already have, not one supplied in the message. Every impersonation scam depends on the target using the contact details the scammer provided.
Protect the identifying details
Government identity numbers, account numbers and passwords are what allow accounts to be opened in someone else's name. Legitimate callers do not ask for them unprompted.
If it happens
Contact the bank, place a freeze or alert on credit files, report to the relevant authority and keep records. Speed limits the damage, and the reporting steps are worth knowing before they are needed.
Step 2: Try It Yourself
Tap and try it out.
Mortgage
Credit card
Payday loan
Payday loan has the most. It has 384 more than Mortgage.
Step 3: Watch an Example
One step at a time.
Watch Kofi Annualise a Payday Loan
A lender charges $15 to borrow $100 for two weeks.
- Step 1
The fee is 15 ÷ 100 = 15% for the two-week period.
Step 4: Your Turn
Practice makes it stick.
The Fee
Problem 1 of 2
A $15 fee to borrow $100. What percentage is that for the period?
%
The Annual Rate
Problem 2 of 2
15% per two weeks. Annualised rate in percent, using 26 periods?
%
Spot the Trap
1 of 8
A $20 fee to borrow $100. Period rate in percent?
2 of 8
20% per two weeks, 26 periods. Annualised rate in percent?
3 of 8
10% per month, 12 periods. Annualised rate in percent?
4 of 8
Does a legitimate investment guarantee a high return? 1 yes, 0 no.
5 of 8
A caller demands payment in gift cards. Scam? 1 yes, 0 no.
6 of 8
How many two-week periods are in a year?
7 of 8
Which are warning signs of a scam?
8 of 8
5% per week, 52 periods. Annualised rate in percent?
Step 5: Quick Check
Show what you know.
Question 1 of 2
15% per two weeks over 26 periods. Annualised rate in percent?
Question 2 of 2
What should you do when an incoming caller asks for account details?
What You Learned
- Scams manufacture urgency and demand irreversible payment methods.
- No legitimate investment guarantees a high return.
- Annualise every quoted rate; a small fee can be a 390% loan.