Posts Tagged With: scams

Fake Payday Loan Debts

Posted on October 17, 2015 by Melissa Hart

In September 2015, the Federal Trade Commission banned Kirit Patel and his company, Broadway Global Masters, from the debt collection business. Patel and his company illegally collected more than $5.2 million in fake payday loan debts.  He also pleaded guilty to the Department of Justice on charges of criminal mail and wire fraud.  Specifically, Patel’s company:

  • Called people and pushed them to pay debts they didn’t really owed,
  • Posed as law enforcement and fake government agencies like the “Federal Crime Unit of the Department of Justice”,
  • Threatened to sue or arrest people—or tell their family and employers about a debt, and
  • Recited people’s Social Security and bank account numbers to seem legit.

So how can you tell if you’re being targeted by a fake debt collector?  A caller may be a fake debt collector if:

  • You don’t recognize the debt,
  • You can’t get a mailing address or phone number for the collector,
  • You’re asked for personal financial or sensitive information, and
  • You’re threatened with arrest or told you’ll be reported to a law enforcement agency.

For more information, click here.

Teaching Suggestions

  • Ask students to prepare a list of steps they should take if they receive a call from a debt collection agency.
  • Encourage students to visit a local office of the Consumer Credit Counseling Service. What assistance is available if the debt is legitimate, but the debt collector is not?

Discussion Questions

  1. What can governmental agencies do to stop scammers from bilking honest and innocent people?
  2. Why is it important to obtain and review your free credit reports at least once a year?
Categories: Chapter 5, Debt, Frauds and Scams, Uncategorized | Tags: , | Leave a comment

Tax Scams

Posted on March 4, 2015 by Melissa Hart

Phone calls from criminals impersonating an Internal Revenue Service agent are the most common and serious tax scams reported by the IRS. Taxpayers should be aware the IRS never calls demanding payment or to ask for a credit card; the agency will first make contact by mail.

Phishing involves a taxpayer receiving an unsolicited email trying to obtain financial or personal information.  These phony emails often look very official with an IRS logo.  Tax-related identity theft occurs when a stolen a Social Security number is used to file a tax return for a refund.  Fraudulent tax preparation services prey on innocent taxpayers with promises of large refunds.  Be sure to investigate the credentials of the tax preparer and make sure the preparer will be available after April 15.  Avoid tax preparers who base their fees on a percentage of the refund or promise a large refund.

Other common tax scams include inflated refund claims, fake charities, filing false documents to hide income, abusive tax shelters, falsifying income to claim tax credits, and excessive claims for fuel tax credits.

For additional information on tax scams, click here:

Teaching Suggestions

  • Have students talk with others to obtain information about actions taken to file their taxes.
  • Have students prepare a list of warning signs of tax scams.

Discussion Questions 

  1. What attitudes and behaviors can result in a person being a victim of a tax scam?
  2. What actions can taxpayers take to avoid being a victim of a tax scam?
Categories: Chapter 3, Chapter 6, Frauds and Scams, Taxes | Tags: , , | Leave a comment

The Perils of Penny Stocks

Posted on October 18, 2014 by Melissa Hart

“The best way to avoid penny stock scams is to do independent research.” 

This article underscores the importance of researching penny stocks before investing.  Too often, the lure of “big” profits encourages people to invest without researching penny stocks.  Simply put, they don’t do their homework.

According to this article, a good place to obtain research information about penny stocks is the Security and Exchange Commission website (www.sec.gov).  By examining a company’s 10-K annual report, 10-Q quarterly report, and Form 8-K filings, in which companies report material events.

The article also warns investors about email promotions about penny stocks that are more hype than reality.  For example, Paul Allen, a 65-year old retiree from Boston,  received a flood of emails about a company called Vapor Hub International suggesting that shares of the e-cigarette company were about to take off.  He invested and quickly lost 80 percent of his investment.  And there are many more examples where investors–especially investors with limited funds and little experience buying and selling stock–often lose all or a large portion of their investment.

For more information go to http://www.kiplinger.com/article/investing/T052-C008-S002-the-perils-of-penny-stocks.html

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Remind students that there is no substitute for research when picking any stock–especially penny stocks issued by small companies without a proven track record.
  • Tell students to remember the old adage “if it sounds too good to be true, it probably isn’t true.”

Discussion Questions

  1. Most investors know the risks involved when they invest in penny stocks. Still, they invest their money.  Why do you think they choose penny stocks?
  2. Assume that you are considering an investment in Vapor Hub International. What information could be used to evaluate this penny stock?  Where would you get this information?
Categories: Chapter_12, Frauds and Scams, Investments, Stocks | Tags: , , , | Leave a comment

Health Scams: Don’t Take Risks With Your Health and Your Money

Posted on August 6, 2014 by Melissa Hart

Lots of people are fooled with buying health products that sound great, but are really fakes.  These products may cause serious health problems, such as pain, suffering, or even death.

Watch out for the following fraudulent claims:

  • It’s Natural. Just because a product is “natural” does not mean it is safe.
  • It’s So Easy. Don’t believe the promises of “lose weight while you sleep.”  If it sounds too easy, it might be a scam.
  • Miracle Cure. Generally, one pill will not treat or cure many different illnesses such as cancer, diabetes, AIDS, or arthritis.
  • It Worked for Me. Personal success stories by “real people” or doctors are easy to make up.
  • They Don’t Want You to Know. Always ask your health care providers what is best for your health.

 

For additional information on health fraud and scams go to http://www.fda.gov/healthfraud, http://www.fda.gov/medwatch, and http://www.ftc.gov

Teaching Suggestions

  • Ask students if they have fallen prey to health care scammers.
  • Have students make a short presentation with a summary of actions that might be taken to avoid health scams.

Discussion Questions

  1. Why do health scammers continue to prey on unsuspecting consumers?
  2. What can consumers do to avoid being victimized by health scammers?
Categories: Chapter 9, Frauds and Scams | Tags: , , , | Leave a comment

Managing someone else’s money

Posted on July 5, 2014 by Melissa Hart

Millions of people serve as fiduciaries, someone who manages money or property for another person who is unable to do so. This responsibility provides caring assistance while also protecting the person from potential scams and fraud.  Many older Americans experience declining capacity to handle finances, which can make them vulnerable.  The main responsibilities of a fiduciary are to: (1) act in the person’s best interest, (2) manage money and property carefully, (3) keep money and property separate from own, and (4) maintain good records.

The Consumer Financial Protection Bureau (CFPB) recently published four guides to help financial caregivers, particularly those who handle the finances of older Americans.  These guides are designed for those who serve as agents with power of attorney, a court-appointed guardian, a trustee or as a government fiduciary, such as a Social Security payee.

The guides will assist financial caregivers as they: (1) plan and implement their duties, (2) attempt to avoid scams and financial exploitation, and what to do if the person is a victim, and (3) require additional information; the guides tell where to go for help.

For additional information on a managing someone else’s money, go to:

http://www.consumerfinance.gov/managing-someone-elses-money

Click to access 201306_cfpb_msoa-participant-guide.pdf

Teaching Suggestions

  • Have students talk to someone who manages money on behalf of someone else.  Obtain information about the activities and concerns they have encountered.
  • Prepare a list of actions that might be taken to avoid scams targeted at older consumers and other vulnerable audiences.

Discussion Questions   

  1. What are situations that might require a person to manage the money of another person?
  2. What are examples of frauds and scams aimed at older consumers?
  3. How might a person avoid frauds and scams?
Categories: Chapter 2, Chapter 6, Chapter_14, Financial Planning, Frauds and Scams, Trusts | Tags: , , , , | Leave a comment

Blog at WordPress.com.