Posts Tagged With: consumer fraud

Beware of Credit-Repair Scams

Posted on September 24, 2022 by Melissa Hart

According to the Federal Trade Commission (FTC), Financial Education Services (FES) has bilked people out of more than $213 million with a scheme that combines charging people for worthless credit repair services and recruiting them to sell the same bogus services to others.  FES also does business as United Wealth Services.

FES claims it can boost people’s credit scores by hundreds of points quickly by permanently removing negative information from their credit reports and adding positive information. But the FTC says FES’s services accomplish little or nothing. For example, FES sends clients form letters to send to credit bureaus to dispute negative items, but the letters don’t include supporting documents so they rarely result in removal of the items.

The complaint says FES charges people $99 up front for its services, plus up to $89 each month. It’s illegal for a credit repair company to charge people before fully performing the services it promises. Also, the complaint alleges, FES doesn’t give people important information they’re entitled to by law, including written information about the total cost of its services and its refund and cancellation policies.

According to the complaint, FES also pressures people to become FES “agents,” telling them they can make tens of thousands of dollars a month selling FES services to other consumers and recruiting them to become FES agents themselves. But, the FTC says, FES’s purported business opportunity requires its agents to pay hundreds of dollars to join and advance in the business. And, the FTC alleges, in classic pyramid scheme style, FES incentivizes recruiting new agents over selling credit repair services. The complaint charges that few people, if any, make the income promised, and many lose money as FES agents.

If you want to repair your credit, Fixing Your Credit FAQs has information about building your credit and spotting scams. And, if you’re thinking about investing in a business that requires you to recruit other investors, read this information about spotting a pyramid scheme.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of the legal steps to take to improve their credit scores.
  • What are the legitimate resources for low-cost or no cost help to repair your credit?

Discussion Questions

  1. Is it possible for you to boost your credit score by hundreds of points quickly by permanently removing negative information from your credit reports and adding positive information?  Explain your answer.
  2. Discuss the statement: “Sometimes doing it yourself is the best way to repair your credit.”
  3. What is one of the most important step you can take to improve your credit score?
Categories: Chapter 5, Credit Scores, Frauds and Scams | Tags: , | Leave a comment

Top Frauds

Posted on November 2, 2019 by Melissa Hart

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

Posted on October 19, 2019 by Melissa Hart

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?

Posted on July 20, 2019 by Melissa Hart

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

Equifax isn’t calling

Posted on November 18, 2017 by Melissa Hart

Ring, ring. “This is Equifax calling to verify your account information.” Stop. Don’t tell them anything. They’re not from Equifax. It’s a scam. Equifax will not call you out of the blue.

That’s just one scam you might see after Equifax’s recent data breach. Other calls might try to trick you into giving your personal information. Here are some tips for recognizing and preventing phone scams and imposter scams:

  • Don’t give personal information. Don’t provide any personal or financial information unless you’ve initiated the call and it’s to a phone number you know is correct.
  • Don’t trust caller ID. Scammers can spoof their numbers so it looks like they are calling from a particular company, even when they’re not.
  • If you get a robocall, hang up. Don’t press 1 to speak to a live operator or any other key to take your number off the list. If you respond by pressing any number, it will probably just lead to more robocalls.

For more information about the Equifax breach, go to Equifax’s website.

 Teaching Suggestions

  • Ask students if they know someone who has received such a call. If so, how the victim responded to the imposter?
  • What advice can you provide to a victim of a scam?

Discussion Questions

  1. What should you do, if you have already received a call that you think is fake?
  2. What must you do if you gave personal information to an imposter?
  3. What can you do to protect yourself from such scams?
Categories: Chapter 5, Consumer Complaints, Credit Scores, Frauds and Scams | Tags: , , | Leave a comment

BAM banned from debt collection

Posted on September 17, 2016 by Melissa Hart

In late July 2016, filed as part of Operation Collection Protection, the Federal Trade Commission (FTC) charged that BAM Financial used lies, threats, intimidation, and other illegal practices to extract payments from consumers.  When obscene language, incessant calls, and harassment of family members didn’t get the results they wanted, the defendants got personal.  For instance, the defendants told the parent of one purported debtor “No wonder your daughter is in such predicament with a mother like you.”  The FTC alleges that they falsely stated to another consumer’s 84-year-old mother that they had a warrant for her daughter’s arrest and later told the consumer they were bounty hunters.

The FTC says BAM’s letters and phone calls were riddled with false threats of litigation.  The complaint also charged that in numerous instances, the defendants didn’t follow up within five days of their initial communications with proper validation notices as the law requires.

The settlement with BAM Financial, Everton Financial, Legal Financial Consulting, Luis O. Carrera, and Robert Llaury bans them for life from debt collection agency industry.

For more information, click here.

Teaching Suggestions

  • Ask students what consumer rights they have when dealing with debt collection agencies.
  • Ask students to list important provisions of the Fair Debt Collection Practices Act.

Discussion Questions

  1. Nearly 30 million Americans have their accounts in collection, and debt collectors make as many as one billion contacts with people every year. Are these contacts legal?
  2. What types of debts are covered under the Fair Debt Collection Practices Act?
  3. How can you stop a debt collector from contacting you?
Categories: Chapter 5, Consumer Complaints, Debt, Frauds and Scams | Tags: , | Leave a comment

Internet Fraud

Posted on October 24, 2015 by Melissa Hart

How many people are scammed into sending money or giving personal information each year?
Answer: Millions!!

Types of Internet Fraud

  • Internet auction fraud—involves the misrepresentation of a product advertised for sale on an Internet auction site, or non-delivery of merchandise.
  • Credit card fraud—the unauthorized use of credit/debit card, or card number, scammers fraudulently obtain money or property.
  • Investment fraud—an offer using false claims to solicit investments or loans, or providing purchase, use, or trade of forged or counterfeit securities.
  • Nigerian letter or “419” fraud—named for the violation of Section 419 of the Nigerian Criminal Code, it combines the threat of impersonation fraud with a variation of an advance fee scheme in which a letter, e-mail, or fax is received by a victim.

Tips for Avoiding Internet Fraud

  • Know your seller – If you don’t know who you are buying from online, do some research.
  • Protect your personal information – Don’t provide it in response to an e-mail, a pop-up, or website you’ve linked to from an e-mail or web page.

For more information, click here.

Teaching Suggestions

  • Bring to class Internet-related problems and examples of individuals or families. Suggest ways in which these problems might be solved.
  • Compile a list of places and organizations where a person can call to report Internet fraud.

Discussion Questions

  1. While the Internet makes everyday tasks faster and more convenient, like stopping, banking, and communicating, why it’s important to be safe, secure, and responsible online.
  2. What are some basic precautions we can take to protect our computer and personal data from theft, misuse, and destruction?
Categories: Chapter 6, Credit Cards, Frauds and Scams, Identity Theft | Tags: , , , | Leave a comment

Text Message Spam

Posted on July 16, 2014 by Melissa Hart

Spam text messages are not only annoying but also illegal. Many con artists use text messages to obtain your personal information by offering a free gift card or vacation. As a result, you become very vulnerable to identity theft.

To avoid becoming a victim of text message spam, register your number on the Do Not Call List.  Also, never click on links in spam messages, which often carry malware or send you to fake websites.

Never reply to these text messages or give out your personal information.  Report the text spam to your cell phone carrier by forwarding the message to 7726 (SPAM).

You can report unwanted commercial text messages and other complaints related to consumer fraud to the Federal Trade Commission at https://www.ftccomplaintassistant.gov/#crnt&panel1-1

For additional information on text message spam, go to:

http://blog.usa.gov/post/89152807112/protect-yourself-from-text-message-spam

http://www.consumer.ftc.gov/articles/0350-text-message-spam

Teaching Suggestions

  • Have students conduct research to obtain information on various types of scam and frauds.
  • Have students create an in-class presentation or a video communicating actions to take to avoid becoming a victim of consumer fraud.

Discussion Questions 

  1. Why do some people easily become victims of text message spam and other consumer frauds?
  2. Describe various types of frauds and scams.
  3. What actions can be taken to avoid becoming a victim of consumer fraud?

 

Categories: Chapter 4, Chapter 5, Chapter 6, Identity Theft | Tags: , , | Leave a comment

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