Frauds and Scams

What to Do When Information Is Lost or Exposed

What to Do When Information Is Lost or Exposed

Did you recently get a notice informing you that your personal information was exposed in a data breach? Did you lose your wallet? Or learn that an online account was hacked? Depending on what information was lost, there are steps you can take to help protect yourself from identity theft

What information was lost or exposed?

  1. Social Security number
  • If a company responsible for exposing your information offers you free credit monitoring, take advantage of it.
  • Get your free credit reports from annualcreditreport.com. Check for any accounts or charges you don’t recognize.
  • Consider placing a free credit freeze. A credit freeze makes it harder for someone to open a new account in your name.
  • Try to file your taxes early — before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.
  • Respond right away to letters from the IRS.  Don’t believe anyone who calls and says you’ll be arrested unless you pay for taxes or debt.
  • Continue to check your credit reports at annualcreditreport.com.  You can order a free report from each of the three credit reporting companies once a year.
  1. Online login or password
  • Log in to that account and change your password. If possible, also change your user name. If you can’t log in, contact the company. Ask them how you can recover or shut down the account.

3. Debit or credit card number

  • Contact your bank or credit card company to cancel your card and request a new one.
  • Review your transactions regularly. Make sure no one misused your card. If you find fraudulent charges, call the fraud department and get them removed.
  • If you have automatic payments set up, update them with your new card number.
  • Check your credit report at annualcreditreport.com.

4. Bank account information

  • Contact your bank to close the account and open a new one.
  • Review your transactions regularly to make sure no one misused your account. If you find fraudulent charges or withdrawals, call the fraud department and get them removed.
  • If you have automatic payments set up, update them with your new bank account information.
  1. Driver’s license information
  • Contact your nearest motor vehicles branch to report a lost or stolen driver’s license. The state might flag your license number in case someone else tries to use it, or they might suggest that you apply for a duplicate.
  • Check your credit report at annualcreditreport.com.

 

For More Information, click here.

Teaching Suggestions:

  • Ask how many students check their credit report at least once a year. What is the importance of checking your credit report regularly?
  • Ask if any student has placed a credit freeze. If so, what was their experience?

Discussion Questions:

  1. What is the difference between a credit freeze and a fraud alert?
  2. What must you do if someone uses your Social Security number to get a tax refund?
Categories: Chapter 4, Chapter 5, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Warning Signs of Identity Theft

What Do Thieves Do With Your Information?

 Once identity thieves have your personal information, they can drain your bank account, run up charges on your credit cards, open new utility accounts, or get medical treatment on your health insurance. An identity thief can file a tax refund in your name and get your refund. In some extreme cases, a thief might even give your name to the police during an arrest.

Here are clues that someone has stolen your information:

  • You see withdrawals from your bank account that you can’t explain.
  • You don’t get your bills or other mail.
  • Merchants refuse your checks.
  • Debt collectors call you about debts that aren’t yours.
  • You find unfamiliar accounts or charges on your credit report.
  • Medical providers bill you for services you didn’t use.
  • Your health plan rejects your legitimate medical claim because the records show you’ve reached your benefits limit.
  • A health plan won’t cover you because your medical records show a condition you don’t have.
  • The IRS notifies you that more than one tax return was filed in your name, or that you have income from an employer you don’t work for.
  • You get notice that your information was compromised by a data breach at a company where you do business or have an account.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their family members or friends have been victims of an identity theft. What was their experience and how did they resolve the problem?
  • Ask students if they mail bills from their home mail box, especially if it is out by the street. What might be some dangers of this method of mailing bills?

Discussion Questions

  1. Should you put your Social Security and driver’s license numbers on your checks?   Why or why not?
  2. Why is it important to check your credit report each year? Should you consider credit monitoring, identity monitoring service, or identity theft insurance?  Why or why not?
Categories: Chapter 4, Chapter 5, Chapter 8, Credit Scores, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

Beware of scams related to the coronavirus

Scammers are taking advantage of the corona virus (COVID-19) pandemic to con people into giving up their money. Though the reason behind their fraud is new, their tactics are familiar. It can be even harder to prevent scams right now because people aren’t interacting with as many friends, neighbors, and senior service providers due to efforts to slow the spread of disease.

Those who are ill or don’t feel comfortable potentially exposing themselves may need someone to help with errands. Be cautious when accepting offers of help and use trusted delivery services for supplies and food. During this time of uncertainty, knowing about possible scams is a good first step toward preventing them.

  1. Scams offering COVID-19 vaccine, cure, air filters, testing

There is an increasing number of scams related to vaccines, test kits, cures or treatments, and air filter systems designed to remove COVID-19 from the air in your home. At the time of this writing, there is neither a vaccine nor a cure for this virus. If you receive a phone call, email, text message, or letter with claims to sell you any of these items–it’s a scam.

  1. Fake corona virus-related charity scams

A thief poses as a real charity or makes up the name of a charity that sounds real to get money from you. Be careful about any charity calling you asking for donations. If you are able to help financially, visit the website of the organization of your choice to make sure your money is going to the right place. And be wary if you get a call following up on a donation pledge that you don’t remember making–it could be a scam.

  1. “Person in need” scams

Scammers use the circumstances of the corona virus to pose as a grandchild, relative or friend who claims to be ill, stranded in another state or foreign country, or otherwise in trouble, and asks you to send money. The scammer may ask you to send cash by mail or buy gift cards. These scammers often beg you to keep it a secret and act fast before you ask questions. Don’t panic!  Don’t send money unless you’re sure it’s the real person who contacted you. Hang up and call your grandchild or friend’s phone number to see if the story checks out. You could also call a different friend or relative to check the caller’s story.

  1. Scams targeting your Social Security benefits

Local Social Security Administration (SSA) offices are closed to the public due to COVID-19 concerns, SSA will not suspend or decrease  Social Security benefit payments or Supplemental Security Income payments due to the current COVID-19 pandemic. Scammers may mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments during this period. Any communication that says SSA will suspend or decrease your benefits due to COVID-19 is a scam, whether you receive it by letter, text, email, or phone call. Report Social Security scams to the SSA Inspector General online at oig.ssa.gov .

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends, or relatives have been victims of coronavirus- related scams? If so, what was their experience?
  • Someone you don’t know contacts you asking for any personally identifiable information by phone, in person, by text message, or email. What will be your response?

Discussion Questions

  1. Someone you don’t know sends you a check, maybe prize-winnings or the sale of goods and asks you to send a portion of the money back. What will you do and why?
  2. Discuss the statement: “The federal. State, and local consumer protection agencies are doing everything possible to protect consumers from fraudsters”.
Categories: Chapter 4, Chapter 5, Chapter 8, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

IRS Dirty Dozen Tax Schemes

Each year, the IRS warns taxpayers about the “Dirty Dozen” tax scams.  Some of these cons show up on the list each year, while others are new. Tax scams are most common during tax season or times of crisis. The COVID pandemic created opportunities to try steal money and information from taxpayers.

Taxpayers are reminded to beware of these ongoing swindles that include:

  • Phishing involves fake emails or websites to obtain personal information. The IRS never initiates contact by email. Do not click on links claiming to be from the IRS. Also be wary of keywords, such as “coronavirus,” “COVID-19,” and “Stimulus.”
  • Fake charities are a reoccurring concern. Criminals often take advantage of natural disasters and other situations, such as the COVID-19 pandemic, to set up a phony charity, and may even claim to be working with the IRS to help victims.
  • Threatening impersonator phone calls claim to be collecting money for the IRS. The scammer uses fear and urgency to demand immediate payment. Senior citizens and their caregivers should be especially alert for this type of fraud.
  • Unscrupulous return preparers, called “ghost” preparers, expose their clients to serious filing mistakes and tax fraud. Ghost preparers do not sign the tax returns they prepare, as required by law. While most tax professionals provide honest service, others should be avoided.
  • Fake payments with repayment demands involve scammers tricking taxpayers into sending them their refund. The criminal steals or obtains personal data to file a bogus tax return. Once the money is in the bank account, the criminal poses as an IRS employee to request that the money be returned immediately, perhaps in the form of gift cards.

Some recent tax scams that have surfaced include

  • Offer-in-compromise mills involves misleading tax debt resolution companies exaggerating their ability to settle tax debts for “pennies on the dollar.” The offer requires that taxpayers meet certain legal requirements. Dishonest businesses enroll unqualified candidates to collect hefty fees from taxpayers already deep in debt.
  • Economic impact payment or refund theft, in which criminals filed false tax returns or bogus information with the IRS to redirect refunds to a wrong address or bank account.
  • Social media scams may use COVID-19 to trick people. The scammer uses information on social media to send emails pretending to be a family member, friend, or co-worker, which can result in tax-related identity theft.
  • Ransomware takes advantage of human and technical weaknesses to infect a computer, network, or server. Invasive software (malware) can track keystrokes and other computer activity. An infected computer can allow access to personal and financial data. Or, a ransom request appears in a pop-up window.

To avoid these scams: (1) be aware of potential cons; (2) check with the IRS or your bank if something is suspicious; (3) keep your computer system and passwords secure, and (4) avoid deals that are “too good to be true.”

For additional information on tax scams, click here.

Teaching Suggestions

  • Have students describe these situations to other people, and ask them what actions they might take to avoid these scams.
  • Have students create a video or visual presentation to warn others of these potential scams.

Discussion Questions 

  1. Why do some people get taken by tax scams and other frauds?
  2. Describe actions that might be taken to avoid various tax scams.
Categories: Chapter 3, Chapter 6, Frauds and Scams, Taxes | Tags: , , | Leave a comment

Resources to help you avoid scams during the COVID-19 Pandemic

Scammers are taking advantage of the coronavirus pandemic to con people into giving up their money. During this time of uncertainty, knowing about possible scams is a good first step toward preventing them.

Beware of these corona-related scams:

Vaccine, cure, air filters, and testing scams

The FTC warned  about an increasing number of scams related to vaccines, test kits, cures or treatments, and air filter systems designed to remove COVID-19 from the air in your home. There is no vaccine for this virus, and there is no cure. If you receive a phone call, email, text message, or letter with claims to sell you any of these items–it’s a scam.

What to do instead: Testing is available  through your local and state governments, but these tests are not delivered to your house.

Fake coronavirus-related charity scams

charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real to get money from you. Be careful about any charity calling you and asking for donations. Also be wary if you get a call following up on a donation pledge that you don’t remember making–it could be a scam.

What to do instead: If you are able to help financially, visit the website of the organization of your choice to make sure your money is going to the right place.

“Person in need” scams

Scammers could use the circumstances of the coronavirus to pose as a grandchild, relative or friend who claims to be ill, stranded in another state or foreign country, or otherwise in trouble, and ask you to send money. They may ask you to send cash by mail or buy gift cards. These scammers often beg you to keep it a secret and act fast before you ask questions.

What to do instead: Don’t panic! Take a deep breath and get the facts. Hang up and call your grandchild or friend’s phone number to see if the story checks out. You could also call a different friend or relative. Don’t send money unless you’re sure it’s the real person who contacted you.

Scams targeting Social Security benefits

While local Social Security Administration (SSA) offices are closed to the public due to COVID-19 concerns, SSA will not suspend or decrease  Social Security benefit payments or Supplemental Security Income payments due to the current COVID-19 pandemic. Scammers may mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments during this period. Any communication that says SSA will suspend or decrease your benefits due to COVID-19 is a scam, whether you receive it by letter, text, email, or phone call.

What to do instead: Report Social Security scams to the SSA Inspector General online at oig.ssa.gov .

For more information, go to: click here.

Teaching Suggestions

  • Ask students if they or their families have received calls from scammers. If so, what was their response?
  • Ask students to prepare a list of actions to take if they receive calls from scammers. Share the list with others.

Discussion Questions

  1. Why is it important to do your homework when you donate to a charity? should you donate in cash, by gift card, or by wiring money?  Why or why not?
  2. What should you do if you receive a call, an email, text message, or a letter claiming that an air filter system will remove COVID-19 from the air in your home?
  3. How would you handle any communication which claims that Social Security will suspend or decrease your benefits due to COVID-19 pandemic?
Categories: Chapter 9, Chapter_14, Frauds and Scams | Tags: , | Leave a comment

Social Security Benefit Suspension Scam

The Inspector General of Social Security,  is warning the Americans about fraudulent letters threatening suspension of Social Security benefits due to COVID-19 or coronavirus-related office closures. The Social Security Administration (SSA) will not suspend or discontinue benefits because their offices are closed.

The Inspector General reports that Social Security beneficiaries have received letters through the U.S. Mail stating their payments will be suspended or discontinued unless they call a phone number referenced in the letter. Scammers may then mislead beneficiaries into providing personal information or payment via retail gift cards, wire transfers, internet currency, or by mailing cash, to maintain regular benefit payments during this period of COVID-19 office closures.

Even though local SSA offices are closed to the public due to COVID-19 concerns, Social Security employees continue to work. Social Security will not suspend or decrease Social Security benefit payments or Supplemental Security Income payments due to the current COVID19 pandemic.

Remember Social Security will never:

  • threaten you with benefit suspension, arrest, or other legal action unless you pay a fine or fee;
  • promise a benefit increase or other assistance in exchange for payment;
  • require payment by retail gift card, cash, wire transfer, internet currency, or prepaid debit card;
  • demand secrecy from you in handling a Social Security-related problem; or
  • send official letters or reports containing personally identifiable information via email.

If you receive a letter, text, call or email that you believe to be suspicious, about an alleged problem with your Social Security number, account, or payments, hang up or do not respond. The Social Security Administration  encourages you to report Social Security scams using their dedicated online form, at https://oig.ssa.gov. For more information, please visit https://oig.ssa.gov/scam. Members of the press may make inquiries to Social Security OIG at oig.dcom@ssa.gov.

For information, click here.

Teaching Suggestions:

  • Ask students if they or their family members have received calls from government imposter scammers. If so, how did you or your family respond to such calls?
  • Ask students to make a list of possible actions that individuals can take to combat Social Security imposters.

Discussion Questions

  1. If you believe you have been a victim of Social Security or an IRS impersonator scam, what actions should you take to prevent such calls in the future?
  2. How do scammers play on emotions like fear or greed to convince people to provide personal information or money in cash, wire transfers, or gift cards?
  3. Why do fraudsters often demand payment via retail gift card, cash, wire transfer, internet currency, such as Bitcoin, or prepaid debit card?
Categories: Chapter_14, Frauds and Scams | Tags: , | Leave a comment

Top Frauds

Are you at risk for fraud?  What are some of the more common frauds and how much could it cost you?

  • In 2018, the Federal Trade Commission (FTC) collected more than 1.4 million fraud reports, and Americans said they lost money to the fraud in 25 percent of those reports. Americans reported losing $1.48 billion to fraud – an increase of 38 percent over 2017.
  • The top reports in 2018 were: imposter scams, debt collection, and identity theft.
  • Younger people reported losing money to fraud more often than older people. Of those people who reported fraud and their age, 43 percent of people in their 20s reported a loss to that fraud, while only 15 percent of people in their 70s did.
  • When people in their 70s lost money, the amount tended to be higher: their median loss was $751, compared to $400 for people in their 20s.
  • Scammers like to get money by wire transfer – for a total of $423 million in 2018. That was the most of any payment method reported, but there was a surge of payments with gift and reload cards – a 95 percent increase in dollars paid to scammers last year.
  • Tax-related identity theft was down last year (by 38 percent), but credit card fraud on new accounts was up 24 percent. In fact, misusing someone’s information to open a new credit card account was reported more often than other forms of identity theft in 2018.
  • The top 3 states for fraud and other reports (per 100,000 population) are Florida, Georgia and Nevada. The top 3 states for identity theft reports (also per 100,000) are Georgia, Nevada and California.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their relatives or friends have ever been victims of fraud. If so, what was the outcome?
  • Ask students to prepare a list of local, state, and federal agencies where fraud can be reported.

Discussion Questions

  1. Is it possible that the reason more young people reported fraud is because older persons are less likely to report?
  2. Are older people not reporting fraud because they are not tech savvy, or embarrassed by their inability to know they were scammed?
Categories: Chapter 5, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Fake Credit Repair: Good Teton Professionals, LLC

In June 2019, the Federal Trade Commission (FTC) charged that two defendants, Douglas Filter and Marcio G. Andrade, using such trade names as Deletion Experts, Inquiry Busters, and Top Tradelines, used deceptive websites, unsolicited emails, and text messages to target consumers with false promises of substantially improving consumers’ credit scores by claiming to remove all negative items and hard inquiries from consumers’ credit reports.

The defendants also falsely claimed to substantially improve consumers’ credit scores by promising to add consumers as “authorized users” to other individuals’ credit accounts.  In most instances, however, the defendants were not able to substantially improve consumers’ credit scores.  The complaint also alleges that the defendants charged illegal upfront fees and failed to provide consumers with required disclosures about their credit repair services.

The defendants often used illegal remotely created checks to pay for the credit repair services they offered through telemarketing, according the FTC’s complaint.

For more information, click here.

Teaching Suggestions

  • Ask students to prepare a list of federal laws that protect consumers from operators of fake credit repair schemes.
  • What is the best advice before you sign with such companies as, Grand Teton Professionals, LLC; to repair your poor credit?

Discussion Questions

  1. What is a household to do if it is experiencing problems in paying bills, thus resulting in poor credit scores?
  2. What are your options, if you are having problems paying your bills and need help?
  3. Discuss the statement, “Only time and a conscientious effort to pay your debt in a timely manner will lead to the success of improving your credit report.”
Categories: Chapter 5, Consumer Complaints, Credit Scores, Frauds and Scams | Tags: , | Leave a comment

Do You Really Need Dietary Supplements?

Ads abound for products that claim to treat or prevent serious health conditions. Unfortunately, these products often are unproven and useless. Sometimes the ads even make false promises for Alzheimer’s disease and dementia – diseases for which science has no cure.

In March 2019, the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) issued warning letters to certain companies making unproven claims that their products can treat or cure Alzheimer’s or other diseases .Many of these products are sold on websites and social media platforms – and called “dietary supplements” or natural remedies. But that doesn’t mean they are necessarily safe.  Products that claim to do it all often do nothing.

The reality is that phony miracle products can be dangerous, and not just because of interactions with medicines you’re already taking. They also might cause you to delay or stop proven medical treatment ordered by – or available from – your physician. They might also delay you from making important dietary and lifestyle changes to help your condition. And some may contain unlabeled and unapproved drugs, which can cause serious injury or death.

For more information, click here.

Teaching Suggestions

  1. Ask students to make a list of credible sources of health information.
  2. Ask students if they, their relatives or friends ever bought a dietary supplement or health-related product that did not work as promised. What action(s) did they take?

Discussion Questions

  1. Why is it important to talk to your healthcare professional before you take any dietary supplements?
  2. What are some of the most effective ways to stay healthy, instead of wasting your money on unproven dietary supplements?
Categories: Chapter 9, Frauds and Scams | Tags: , | Leave a comment

Avoid Tax Refund Advances

Each year, more than 1.5 million taxpayers obtain refund anticipation loans (RALs).  This year, the number may be higher as a result of the government shutdown.  While, RALs provide faster access to your money, they come with high fees and should only be used as a last resort.  These “cash advances” are a potential for scams; before using these loans, take these actions:

  • Assess the cost. While some national tax chains promote this service as a “free” cash advance, fees may apply for applying for the advance, checking your credit, and transferring the money to you. Costs for your refund advance check range from $29 to $65.  If your refund is on a prepaid debit card, there will likely be additional fees.
  • Beware of loan terms based on timing. Additional charges may occur if your refund is delayed.
  • Compare other options. Seek less expensive, small-dollar, short-term loans from a community bank or credit union, or a zero-percent credit card. A $35 charge to defer a $350 tax preparation fee for two weeks has an APR of 174 percent.
  • To avoid late fees for bills, contact your creditors. Utility companies and medical providers may offer no-cost extensions or no-cost payment plans.

Always be sure you are doing business with a reputable tax preparer. Check credentials and references. Avoid tax preparers who charge fees based your refund amount, or who deposit your refund in their bank account. Another fraudulent activity is filing false information to increase the amount of the refund.

For additional information on tax refund advances, click here.

Teaching Suggestions

  • Have students search online for costs for refund anticipation loans.
  • Have students prepare a video presentation on avoiding refund anticipation loans.

Discussion Questions 

  1. What advice would you give a person planning to obtain a refund anticipation loan?
  2. How might community organizations and government agencies assist people who are considering a refund anticipation loan?
Categories: Chapter 3, Chapter 4, Chapter 6, Financial Services, Frauds and Scams, Taxes | Tags: , , | Leave a comment

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