For financial fraud victims, the loss can be more than monetary.

Nearly two-thirds of 600 self-reported fraud victims said in a survey funded by the FINRA Investor Education Foundation that they experienced, to a serious degree, at least one non-financial issue -- for example, severe stress, anxiety, difficulty sleeping and depression (tinyurl.com/muv53hf5).

While the return of lost funds is a goal of someone who has been taken, "your recovery is also about finding ways to recover emotionally from the crime and protecting yourself from future scam attempts," states a recently released FINRA Investor Insight article, "Recovering from Investment Fraud: Start with These 6 Steps" (tinyurl.com/3at4t95c). FINRA regulates member brokerage firms doing business in the U.S.

To "help you reclaim power from the fraudsters and begin to move forward," FINRA offers a fraud recovery checklist. If you have been the victim of fraud, the following can assist you in charting a path for handling the situation.

Create a fraud file: Put together a resource that contains all the information you have related to the fraud. The file should include a timeline of events, along with screenshots of any communications with the perpetrator. Also important: copies of the affected financial accounts. Your fraud file should be kept in a secure location.

Report the fraud to regulators: "You might benefit from reporting the investment fraud to as many as apply," says FINRA. Among the agencies are the U.S. Securities and Exchange Commission (tinyurl.com/ycxwsnp4) and the North American Securities Administrators Association (tinyurl.com/3snez5u3).

Report the fraud to law enforcement: Consider contacting federal (the FBI's Internet Crime Complaint Center at ic3.gov), state (attorney general's office) and local law enforcement (file a police report and contact your local district attorney's office). It can be helpful to file a report with the Federal Trade Commission (reportfraud.ftc.gov) -- even though doing so "won't initiate a criminal investigation of your case," says FINRA. Law enforcement uses the FTC's Consumer Sentinel Network database to "stop ongoing fraud and track these crimes." Also, be sure that copies of all law enforcement reports are a part of your personal fraud file.

Keep in mind that the three major credit reporting agencies -- Experian, Equifax and TransUnion -- offer details on how to place a fraud alert on your account and how to freeze your credit, which can make it harder for scammers to open a new account in your name.

Know your rights: The NASAA publishes an Investor Bill of Rights (tinyurl.com/2v24knm9), and the VictimConnect Resource Center (victimconnect.org/), part of the National Center for Victims of Crime, has a referral helpline to assist crime victims. Also, reach out to your local U.S. attorney's office (tinyurl.com/2s4kezuv) and state attorney general's office (tinyurl.com/ye25e867) to find more details about your rights as a crime victim.

Consider your options: FINRA provides an overview of legitimate avenues for recovery of investment losses (tinyurl.com/b4d9b4c). If you choose to pursue legal action, "[a]ttorneys with experience working on financial fraud cases might be able to counsel you on which remedies are available."

Seek support: This might be the most important part of your recovery. "Consider whether you need professional assistance with your post-fraud financial picture," FINRA states. "If you're experiencing guilt, embarrassment, shame or similar painful emotions as a result of the fraud, seek additional support." Among the possibilities are AARP's Fraud Victim Support Group (tinyurl.com/3ddp5xeb) and FightCybercrime.org's Romance Scam Recovery Group at fightcybercrime.org/support/financial-loss/.

Unfortunately, fraud impacts far too many families (estimated at 42% of adults by a 2024 AARP survey at tinyurl.com/8nf5f6he) and creates losses. The Federal Trade Commission reported that consumers reported losing more than $12.5 billion to fraud in 2024 (tinyurl.com/4na2zyy2). And, even more devasting is the emotional impact of fraud: FINRA's survey found that many victims blamed themselves for being taken, with 61% believing they were "too trusting."

That is something that can be addressed. As my regular readers know, I'm a skeptic, and I encourage you to be one as well. It starts with learning the ropes.

If you would like to experience how this skeptic approaches retirement portfolios, attend a virtual presentation sponsored by the Greenwich Library on May 14. Register at Juliejason.com/events.

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If you receive a letter from the IRS or are the subject of an examination or an audit, it helps to know the rules of the road. You'll find them in the Taxpayer Bill of Rights, published in IRS Publication 1, Your Rights as a Taxpayer, available on the IRS website at tinyurl.com/3v9y9fy9.

Here is a summary:

The Right to Be Informed: "Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence."

The Right to Pay No More than the Correct Amount of Tax: "Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly."

The Right to Challenge the IRS's Position and Be Heard: "Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position."

The Right to Appeal an IRS Decision in an Independent Forum: "Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Off�ice of Appeals' decision. Taxpayers generally have the right to take their cases to court."

The Right to Finality: "Taxpayers have the right to know the maximum amount of time they have to challenge the IRS's position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt."

That's all well and good, but realistically, what does this mean to an everyday taxpayer who receives correspondence from the IRS?

It's important to understand that a "conversation" starts with a letter, which can lead to a quick and easy resolution or just the opposite, an examination or an audit.

If you receive a letter, call your accountant, or if you do your own taxes, follow the instructions provided on the IRS website. See "What taxpayers should do if they receive mail from the IRS" (tinyurl.com/2p9kxtp9).

The IRS suggests you start by reading the letter carefully: "Each notice deals with a specific issue and includes any steps the taxpayer needs to take."

Review the information: "Typically ... taxpayer[s] will need to act only if they don't agree with the information, if the IRS asked for more information or if they have a balance due."

A balance is easy to handle, unless you disagree with the amount. Providing more information is also easy, unless there is an underlying interpretive question, or you simply don't agree with the information. In that case, you'll need to "follow the instructions in the [letter/notice] to dispute what the notice says. The taxpayer should include information and documents for the IRS to review when considering the dispute."

When must you call your CPA? Russell Abrahms, a CPA located in Fairfield, Connecticut, said that if the letter includes the threat of a tax levy or a summons, drop everything and call your tax adviser right away. Time is of the essence, added Abrahms. To get your bearings, look at the year and the type of tax.

But here is a cautionary note: Beware of scammers. Before responding to IRS correspondence, read "Recognize tax scams and fraud" (tinyurl.com/yvfyjuxb).

Before we leave this subject, don't forget that the Taxpayer Advocate Service (taxpayeradvocate.irs.gov) can be helpful as well. TAS is an independent organization within the IRS that seeks to "ensure that every taxpayer is treated fairly and that you know and understand your rights."

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Let me ask you a question: Suppose you have $100 in a savings account earning 2% interest a year. After five years, how much would you have?

That's the first question on FINRA's Financial Knowledge Quiz (tinyurl.com/2wyr882b), which is part of the FINRA Investor Education Foundation's 2024 National Financial Capability Study, set to be published in July.

Which answer would you choose if these were your multiple-choice options? 1) More than $102; 2) Exactly $102; 3) Less than $102; 4) Don't know.

Only 27% of test-takers nationwide correctly answered at least five of the seven quiz questions. FINRA's previous quiz in 2021 showed similar results.

I recommend spending a few minutes today taking the quiz to assess your own financial knowledge. Why? Because I believe you will do better than most test-takers. Explanations for the correct answers are provided after you take the quiz.

One area of greater public knowledge turned out to be inflation. Here is the question:

"Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, how much would you be able to buy with the money in this account?"

The possible answers were "More than today," "Exactly the same," "Less than today" and "Don't know."

Fifty-eight percent of test-takers chose the correct answer of "Less than today," an increase from 53% in 2021. As explained on the answer page, "If the annual inflation rate is 2 percent but the savings account only earns 1 percent, the cost of goods and services has outpaced the buying power of the money in the savings account that year."

Wyoming test-takers beat others, with 68.21% answering the inflation question correctly. Minnesota, Utah, Washington and Wisconsin were each over 65%. Connecticut was at 61.56%.

Still, any score under 100% is hardly anything to cheer about. (Shouldn't every adult know the answer?)

As Gerri Walsh, president of the FINRA Foundation, said in a recent press release, "Overall, the findings show that knowledge of everyday financial concepts remains a challenge for many Americans" (tinyurl.com/3j9x84xd). Indeed.

Walsh added: "[C]ontinued efforts are needed to ensure all Americans fully understand the effects of economic factors on their personal finances." Absolutely.

I am a strong supporter of financial literacy education starting at age 5 and continuing through grade school, high school and college, and delivered both at school and at home.

What about you? In your societal circles of friends, colleagues and family, surely there are ways you can play a part to help share your own knowledge and to model sound decision-making.

If you need resources, there are plenty. Take a look at the FINRA Investor Education Foundation website (finrafoundation.org). You can view previous National Financial Capability studies at FINRA's Data and Downloads page (tinyurl.com/5n7uc7xw).

A resource for younger members of the family is the American Bankers Association website, which provides material for Grades K-8, High School/Young Adult and All Ages (tinyurl.com/2pwd33rs).

The goal when it comes to financial literacy is to start early and continue to seek knowledge throughout life. It's an investment of time that creates a pathway to financial security and goes far beyond celebrating one month a year (National Financial Literacy Month in April).

On a related note: I invite couples to a virtual presentation that I'm giving on Wednesday, April 30, hosted by Greenwich Library. This complimentary one-hour talk will help you, as a couple, create an action plan with the goal of achieving retirement security. Reserve your spot at juliejason.com/events/upcoming-events. This is one of my personal efforts to promote financial literacy education, as is my writing, and my pro bono efforts with local schools and nonprofits.

In the meantime, don't hesitate to write to me at readers@juliejason.com with questions and comments.

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