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Repeat after me: Never respond to an e-mail that asks for a bank account number, credit card number, Social Security number or any password.
If you have an e-mail address and don't know what I am talking about, just wait. Your turn is coming.
With four e-mail addresses, I get lots of correspondence aimed at separating me from my money. My favorites are the Nigerian scam letters, named for a scheme that originated in Nigeria, although the e-mails claim to be from a variety of countries. The details vary with the creativity of the scamster, but the underlying story line is similar: Somebody has come into possession of millions of dollars and needs my help getting it out of the country. If I simply supply my bank account number, I can share the wealth, or so they say. A newer variation claims that I have won a foreign lottery and can collect by supplying my bank account information.
My correspondents want to steal money from my account, but the letters are so ludicrous and so filled with grammatical errors, I find them funny rather than a serious threat to my wealth. However, not everyone reacts that way. I regularly hear from readers who have just received their first such missive and take it seriously. Here is the scoop: Do not reply. You don't need to report the e-mail to anyone unless you have lost money to this scam. Instead, you can dispose of the e-mail the same way you would any other junk that lands in your mailbox. If you are curious, you can learn more about this scam on the Internet (www.africanscam.co.uk)
Newer e-mail scams are much worse because they look so authentic, often appearing to be from legitimate businesses. Although I had read about this, I was still taken aback when one popped into my mailbox recently, purportedly from eBay. It looked quite genuine and started off "Dear Valued eBay Member." It said my eBay account was about to be suspended for misrepresenting my identity.
My first thought was that someone had hijacked my eBay account. Then I realized the e-mail was asking for information that eBay already knows, such as my name and address, user ID and password. When I saw it also wanted my credit card and bank account information, I knew it was a scam. I forwarded the e-mail to eBay, but I shudder to think about what could have happened had I entered my information and clicked the button to submit it.
Other scams involve fake company Web sites. To steer clear of them, I avoid clicking on any e-mails soliciting anything. If an offer appears to be from a legitimate company with which I would like to do business, I type in the company's basic Web address myself.
As thieves get more clever, we all have to become more vigilant to safeguard our personal information.
Q. What is a reverse stock split? I am very confused about this.
A reverse stock split is an act of desperation designed to prop up a company's low stock price. In a regular stock split, you end up with more shares than you previously owned. In a reverse stock split, you end up with fewer shares. For example, in a one-for-10 reverse split, you would have one share for every 10 shares you previously owned. If the shares previously traded for 50 cents each, the new shares theoretically would trade for $5 each. Unfortunately for shareholders, it does not always work out that way.
Companies that do reverse splits usually are trying to meet requirements for trading on the Nasdaq Stock Market. The general rule is that a company must have a share price of at least $5 to be listed initially and at least $1 to maintain a listing.
Q. I purchased a variable annuity for $95,000 in 1999. Now it is worth $55,000. I will never recoup my money, and I feel like taking my loss and cashing in. However, I am reluctant to do this because I would be shortchanging my daughter. The annuity has a death benefit based on the original investment and as I am now 82, it is possible I will go sooner rather than later. I am now on my third adviser and the only movement I see is his fee of $100 a month. Any advice?
A. Hang onto the annuity to keep the death benefit. That's the same as getting a safe return of 5.6 percent if you live another 10 years. Of course, the return is higher if you die "sooner rather than later."
You also can give yourself a chance at a higher return by investing the annuity in the stock market. Assuming that you have described the death benefit correctly, it seems to me that you can't lose.
What services is your adviser providing? Only you can decide whether they are worth $100 a month.
- Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.