On behalf of Maine’s Department of Professional and Financial Regulation, I want to thank the Bangor Daily News for drawing attention in a Sept. 30 editorial to something my agency focuses on virtually every day — financial literacy. As the editorial suggested, today’s economic challenges make an understanding of personal finances more important than ever.
The newspaper highlighted the lack of financial literacy among teens and college students. Those young people all too quickly grow into adults who fail to adequately comprehend the basics of saving, investing, contributing and spending wisely. Many of them turn to my department for assistance. Too often, they end up contacting us after experiencing a problem that could have been avoided through greater knowledge of interest rates, credit reports, investment risks and other financial considerations.
The Department of Professional and Financial Regulation has been helping consumers with a range of personal finance questions and problems for decades. During the past few years, however, we’ve sought to expand our educational outreach. We’ve done so, in part, because of an increase in the number, variety and sophistication of scams and other types of financial fraud.
Because the perpetrators of these schemes often target older people who may possess a lifetime of savings and a trusting attitude, the department has directed substantial outreach to seniors. Through an annual Wise and Safe Investing Conference, for example, our Office of Securities provides guidance to individuals who are retired or approaching that stage of life. Additionally, our Bureau of Consumer Credit Protection has developed a Downeaster Guide to Elder Financial Protection.
But make no mistake, regardless of age, we are all potential targets. Not long ago, FBI Director Robert Mueller revealed that he was nearly lured in by an e-mail that appeared in all respects to be from his bank. Unfortunately, it turned out to be a “phishing” attempt, in which a scam artist seeks personal information such as checking, savings or credit card numbers in order to steal from those accounts.
Needless to say, people of all ages and walks of life need to arm themselves with basic financial knowledge and a healthy skepticism about offers that seem too good to be true. That’s why the department is increasingly turning its attention to students and young adults. Our Bureau of Financial Institutions maintains a Teacher’s Page on its Web site; the Bureau of Consumer Credit Protection distributes a “Consumer Credit 101” guide; and the Bureau of Insurance provides a range of publications for young people and others who are new to the world of purchasing insurance products.
Our Office of Securities is leading a coalition of organizations in planning a Financial Literacy Summit for Educators. This first-of-its-kind event, to be held next May in Augusta, is expected to offer resources and best practices for incorporating personal finance lessons and materials into Maine school curriculums. We are excited about this collaborative effort and hope it will become an annual learning opportunity for Maine educators.
Financial literacy means more than avoiding scams. It also means knowing the true costs and obligations associated with certain transactions, and being aware that we are inundated with sales pitches that should be viewed with caution.
The truth of this was evident on the very Bangor Daily News Web page that featured the “Financial Literacy” editorial. Among the advertisements that rotated on and off the page were three from companies promising quick and easy access to cash. One promised a payday loan with no credit check and “$1,500 wired to you in 1 hour.” Another offered easy approval, again with no credit check, to a service that would “legally eliminate debt.”
Staff in the Bureau of Consumer Credit Protection checked into the companies associated with these ads. Not one is licensed to do business in Maine. And too often, consumers who pursue these unauthorized offers find themselves trapped in financial arrangements involving astronomical interest rates and terms that make it difficult or impossible to pay off the loan.
Although my department is doing what it can to enhance awareness about issues related to personal finance, there is an increasingly urgent need for parents, teachers, people in the media and others to educate themselves and to share that knowledge with children and young adults. It’s never too late to learn, but it’s time to get started. Contact the department (www.maine.gov/pfr), if we can help.
Anne L. Head is commissioner of the Maine Department of Professional and Financial Regulation.