Stimulus Scams: Information from the FTC

I could have told you the minute the U.S. Government announced those $600/person stimulus checks back in 2007: somebody is going to find a way to turn this into a scam.

Boy, was I ever right.

Almost immediately, there was a spate of people using phone calls and email to trick people into revealing personal information. “You have to verify this information to get your check,” the messages said. Of course, if you were eligible for the rebate (i.e., if you had done your taxes for the previous year), the IRS already had this information. Identities were stolen and money was lost.

Then, in 2008, you started hearing about the Economic Stimulus Package. Again, I could have told you what was going to happen. I don’t want to come off as a curmudgeon with statements like, “People never pay any dang attention!” here, but the fact is that an awful lot of people don’t pay enough attention to certain things. They heard the word “stimulus” and immediately assumed that it meant, “I’m’onna get me another check in the mail.”

Once again, the phishing emails and phone calls appeared and a new group of people learned something the hard way. Never mind that, in this context, “Economic Stimulus Package” had nothing to do with rebate checks for individuals.

Well, it’s still happening. Now people are getting letters instructing people to submit personal information in order to access federal stimulus dollars. I hate to be redundant, but everyone needs to understand this: they’re not handing out pocket money to individuals, and there are no “programs” that can be loopholed into doing so. Anybody who contacts you about federal stimulus dollars, whether by mail, email, telephone, fax or two-cans-on-a-string, asking you to fill out forms or submit information of any kind, is attempting to commit fraud.

The FTC has a good article called “Seeing Through Stimulus Scams” that dates back to February 2009, but it’s still relevant reading. There’s also a short video at CNN featuring Clark Howard from just a couple days ago. Check them both out, and please don’t assume that every time the government says “stimulus” it means you’re getting a direct payment.

Fraud Alert: The Internet Crime Complaint Center (IC3) warns of new fraudulent email

United States Attorney General Eric Holder’s name is being used in a new fraudulent email currently making the rounds. Below is an excerpt from the IC3 Intelligence Note:

The current spam alleges that the Department of Homeland Security and the Federal Bureau of Investigation were informed the e-mail recipient is allegedly involved in money laundering and terrorist-related activities. To avoid legal prosecution, the recipient must obtain a certificate from the Economic Financial Crimes Commission (EFCC) Chairman at a cost of $370. The spam provides the name of the EFCC Chairman and an e-mail address from which the recipient can obtain the required certificate.

The full text of the Note further explains that the government does not use email to contact people in this way. I would also add that the FBI and the DHS are not going to let people suspected of terrorism or money laundering buy their way out of trouble for $370.

Is “Winning in the Cash Flow Business” a scam?

I saw a classic infomercial the other day. They seem to run it mostly during daytime television and late at night. Advertising costs less at those times, and I think they assume that anyone watching TV during the day or night is jobless and desperate.

Oddly, I am neither, but there I was. It was my lunch break.

Anyway, this program was hawking something called “Winning in the Cash Flow Business” by Russ Dalbey.

Man, you should have seen the luxury these paid actors were standing in front of. They had paid actors standing in front of huge mansions, Italian sports cars and swimming pools at luxury resorts, and every single one was reciting memorized lines about how easy it was to earn over $100,000 per month.

At this point, you might be detecting a little sarcasm in the tone of this article. In fact, I don’t believe a single word of this advertisement.

First and foremost, if it was that easy to make over a million dollars a year, don’t you think a lot more people would be doing it?

Here’s how the system is supposed to work, according to what I saw on the infomercial and gathered from some Internet research: you (allegedly) make money by brokering “cash flow notes” through Dalbey’s America’s Note Network. Cash flow notes are used for things like lotteries and legal settlements that are paid out in small amounts over the course of several years. What you’re essentially doing is buying someone’s regular payouts for one (smaller) lump sum, and then selling the promissory note to someone else. According to the infomercial, it’s as easy as “Find ‘Em, List ‘Em, Sell ‘Em.”

Now, here’s what actually happens, according to my research: you pay an upfront fee for materials that are supposed to teach you how to get started in this business, which opens you up to nearly instant, aggressive telemarketing calls from the Dalbey Education Institute. When you have trouble getting started due to limitations by state and local laws, or just the difficulty in finding people with cash flow notes in the first place (how do you find out who has these things?), you purchase more materials and coaching sessions and other assorted garbage. By the time you’re a good $800 in the hole (or more), you start to realize that you’ve bought into a scheme that doesn’t really work.

So, is it really a scam, in the usual sense of the word?

On a legal level, I’d have to say no. If you were already a talented salesperson, and if you had a way to get around the obstacles that would keep most of us from finding out who has the cash flow notes in the first place, and if you got really incredibly lucky, there is a tiny, tiny possibility that you might see a profit. They weasel around those million-to-one odds with a variation on the old “results not typical” disclaimer that’s served the weight loss industry so well.

On a practical level, I’d have to say yes. It just feels like a scam, and for a vast majority of people, it ends up functioning the exact same way: you lose money, you get nothing to show for it.

For me, I’m ignoring this infomercial. I strongly suggest you do the same. Even if you are a talented salesperson with a knack for making things happen, you’re better off focusing your strengths elsewhere. This is just too big of a long shot.

Now, I personally believe in abundance, even in a bad economy. There is an awful lot of money out there, and most of us have something that we could leverage into a piece of that pie. I also believe that it’s possible to do what you love while earning an abundant income and not having a traditional job. However, you have to work with the tools you have as an individual, and use them to deliver something of value to others. In other words, you’ve got to create your own system.

You also have to have a passion for whatever it is you’re doing, and more than the average level of courage. You can’t just buy into some prefabricated system and hope to get lucky. You create your own luck when you leverage your talents and passions into income.

In the meantime, steer clear of this mess.

Fraud Alert: FDIC warns of fraudulent emails

The following is the full text of an alert from the Federal Deposit Insurance Corporation (FDIC):

E-mail Claiming to Be From the FDIC – October 26, 2009

The Federal Deposit Insurance Corporation (FDIC) has received numerous reports of a fraudulent e-mail that has the appearance of being sent from the FDIC.

The subject line of the e-mail states: “check your Bank Deposit Insurance Coverage.” The e-mail tells recipients that, “You have received this message because you are a holder of a FDIC-insured bank account. Recently FDIC has officially named the bank you have opened your account with as a failed bank, thus, taking control of its assets.”

The e-mail then asks recipients to “visit the official FDIC website and perform the following steps to check your Deposit Insurance Coverage” (a fraudulent link is provided). It then instructs recipients to “download and open your personal FDIC Insurance File to check your Deposit Insurance Coverage.”

This e-mail and associated Web site are fraudulent. Recipients should consider the intent of this e-mail as an attempt to collect personal or confidential information, some of which may be used to gain unauthorized access to on-line banking services or to conduct identity theft.

The FDIC does not issue unsolicited e-mails to consumers. Financial institutions and consumers should NOT follow the link in the fraudulent e-mail.

Yet another reminder that you should never follow links in unsolicited email messages, especially those telling you to log in to something. Even if you had an account at a failed bank, the FDIC would have no way of knowing your email address.

FDA warns of H1N1 (Swine Flu) scams

I’m going to guess it comes as no surprise that some people are using the widespread fear over the H1N1 (Swine Flu) virus to sell products that may do everything from nothing at all to making you even sicker.

In other words, folks, there’s a lot of fake Tamiflu being offered on the Internet. If you’re ordering prescription drugs online, without a prescription, you are headed for trouble. You have no way to verify what is in the substance you’re about to put into your body.

Then again, if you’ve been reading this site for any amount of time at all, you’re not even going to respond to those emails advertising discount prescription drugs, are you?

That’s what I thought.

Federal officials are also targeting online retailers who sell “alternative medicine” products that claim to help you fight H1N1. They even sent a letter to Dr. Weil, over his “Immune Support Formula!”

That one made me do a double-take. Apparently, the site “offers a product for sale that is intended to diagnose, mitigate, prevent, treat or cure the H1N1 Flu Virus in people,” which is kind of a rookie mistake. Dr. Weil’s people probably should have known better than to put that out there.

Now, I believe 100% that there are many non-drug substances that can make your body (including your immune system) function better. Human beings didn’t just suddenly create medicine the moment the FDA appeared. Something was helping people get over illnesses for the thousands of years before the advent of modern chemistry and government regulation. More to the point, I’ve experienced firsthand that the “garbage in/garbage out” principle applies to the human body. Fill your body with trash, it will perform poorly in all areas (mental health, immune system, strength, weight, etc.).

However, you have got to be so careful about what kind of supplements you take. Personally, I like Dr. Weil. I think he’s done his homework when it comes to treatments that people have been using for thousands of years (and he acknowledges that modern medicine is also valid). But there are some people out there, especially on the Internet, who are just selling any old thing and making wild claims. Even if they’re hawking something that should be safe and effective, you don’t know for sure what you’re getting in those capsules. Some herbs can really put the hurt on you.

And then you’ve got people selling Air Sanitizers and Photon Machines. This stuff is just utter garbage. Even if you actually get the item you paid for, you’re not getting anything that actually works. Proving a negative isn’t valid—”I bought the Photon Machine and didn’t get Swine Flu” is a flawed statement. It doesn’t prove that the machine worked at all.

I hate to break this to you, but you’re not going to sanitize the air. I mean, there’s an awful lot of it, isn’t there? You’re really fighting an uphill battle trying to sanitize the stuff.

When do you have to give your Social Security Number?

You hear a lot of information about when not to give out your Social Security number, but when are you required to reveal it?

The short (and incomplete) answer is: any time you’re doing something that involves taxable income.

A little more specifically, you’re probably going to be required to provide your SSN in the following situations:

  • Opening a new account at a financial institution
  • Taxes
  • When you get a new job
  • When obtaining or renewing your driver’s license or other state-issued identification
  • Conducting business involving government welfare or healthcare (Medicare, for example)

Aside from those situations, be very cautious about sharing your number. Actually, be very cautious anyway, but in other situations you would be wise to ask:

  • Why your number is needed
  • How your number will be used
  • What happens if you refuse
  • What law requires you to give your number

Finally, be extremely cautious (read: don’t do it at all) when it comes to people asking for your Social over the telephone or Internet, especially if they initiated the contact with you. If you can’t verify who the requesting entity is (as well as the answers to the four questions above), refuse to share your number.

Entry-Level Job Scams

I suppose this post technically isn’t about scams, per se. A scam, in its simplest form, is when someone takes your money without giving you anything in return.

But what would you call a job listing that misleads you as to the nature of the job, promises a fat paycheck that will never materialize, and comes from a company that dodges basic questions about salary, benefits and basic descriptions of the job?

What would you call a job that promises entry-level employment in the sports or entertainment industry, but really entails going door-to-door for 12 hours a day, selling coupons (that may have something to do with a sports or entertainment venue)?

I know what I’d call it: a scam. Plain and simple.

These advertisements are often found in the Classifieds section of the newspaper, but I’m told they’re just everywhere on CareerBuilder and Monster (as well as every other job search website in the universe). They’re aimed at recent college graduates, but people from all walks of life fall for them. In the current economy, with unemployment running wild, I’m sure more people than ever are applying for these jobs.

So, how do you avoid these less-than-honest job offers?

  1. Warning Sign #1: The advertisement promises entry-level work in the professional sports or entertainment industries. Sometimes they will list sports teams that are “clients.” Here’s a trade secret about real entry-level jobs in sports and entertainment: they’re all taken. It doesn’t matter when you’re reading this. They’re taken.
  2. Warning Sign #2: When you call the phone number, they won’t say the name of the company. That’s because they often work under many different names.
  3. Warning Sign #3: Your first interview is over the telephone. During this interview, you’re told that you’ll “just have to see for yourself.” You will always be granted a second interview. You can tell them you’re an escaped serial murderer, and they’ll still grant that second interview.
  4. Warning Sign #4: Your second interview consists of being picked up in a junk car and driven to the worst neighborhood in the universe by another employee. You’re handed a stack of coupons and told to take one side of the street. Essentially, you’re working for free that first day. You could also end up stranded in The Worst Neighborhood In The Universe if you protest. And, since you showed up in a suit because you thought it would be a real interview, everybody in TWNITU thinks you’re a banker trying to take their house.

The best defense is just to not answer these ads in the first place. Nobody is handing out jobs in the music business in this (or any other) economy.

Your other best defense is to be informed. Do the following Google search: “[name of company]” scam. You might find out everything you need to know with that one step. Trust your instincts, too—if something about a job offer or interview doesn’t seem quite right, it probably isn’t.

I found a couple excellent articles on this topic, both written by Willy Franzen at One Day, One Job, a site for post-college job hunters:

As far as I’m concerned, both articles are required reading for yourself and for any people between the ages of 16 and 30 you might know. The Landers Group is a company that operates under about a thousand different names, and runs a lot of these schemes.

Is it a true scam? No. Ultimately, it is a job, and I suppose if you sell a lot of coupons in The Worst Neighborhood In The Universe (or elsewhere—they don’t only stick to TWNITU), you might be able to make a few dollars.

Should you avoid it anyway? Yes, yes, and yes.

One more thing you should do: when young people come to your door selling coupons or magazines (“Mag Crews” are a whole other topic, not really fraud-related), be nice to them. They’re very probably stuck in a terrible job very far from home, with no money or way to get back.

Your biggest security vulnerability, according to the World’s Greatest Hacker

Kevin Mitnick was a hacker before hacking was even illegal. He was famous for having broken into the computer networks of some really large companies. He didn’t make a single dime from his activities; he just wanted to prove it could be done. He was eventually arrested, convicted and given a harsh five-year sentence, served in solitary confinement because the judge was convinced Mitnick could “start a nuclear war by whistling into a pay phone” (source: Wikipedia).

Later, he was released from prison and started a security consulting business (Mitnick Security Consulting, LLC), and now gets paid by companies to break into their computer systems and tell them what they need to fix.

Since he’s no longer dangerous (many argue that he was never all that dangerous, in the “this guy wants to destroy the world” way the prosecution claimed), Mitnick has also become a popular conference speaker. He knows the single biggest security flaw in every single commercial or private computer system, including yours:

It’s the people.

Time and again, Mitnick bypassed high-tech means of hacking (using software to force his way into a system) in favor of low-tech hacks: calling people on the telephone and asking for information.

It’s called social engineering, and it amounts to tricking people into giving away information simply by talking to them.

Mitnick concentrates on corporate network security, teaching businesses how to keep their data safe. However, the same goes for your own personal online safety: you are the weak point. How public have you made the names of your pets, your birthdate, your children’s names and birthdates, or the school(s) you attended? (I’m looking at you, MySpace and Facebook users.) All of this information can be used to steal your identity, by providing a would-be thief with enough information to talk you into accidentally revealing too much information.

Mitnick’s business card, a miniature lock-picking set, has become quite famous these last few years. Look at his website again, under the “Get Kevin’s Business Card” section. It says “Send your IP address and password to:” and his address. It’s obviously meant as a sly inside joke, but I wonder how many people actually mail this information to him.

Suspicious Email: credit reporting agencies are NOT going to remove accurate negative information

I recieved the following suspicious email message this morning. I have removed all the links; other than that, this is the full text:

Credit News: “All Three Credit Bureaus Forced to Remove All Negative Credit” 

Hi, it’s Glenn Garvin with updated news about your credit…

*** Find Out How Your Negative Credit Can Be Removed By The Bureaus***

All negative credit can now be removed from any credit report……and not just by Experian…TransUnion and Equifax will also remove all negative credit because…

….of a simple and proven legal strategy that forces them to comply with the “Law” based on Section 609 of the Fair Credit Reporting Act.

The Section 609 Credit System is patented and copyrighted and has been used on behalf of 125,000+ clients since 1999 to remove or turn to positive over 5 million negative items….

But the amazing thing is that…

It has never lost a single case. – Not one case…Ever!

The Section 609 Credit System is used for the clients of over 3,500 Law Firms and Attorneys and well over 22,000 Lenders and Loan Officers…because it works!

To Be Clear: The Section 609 Credit System can remove ALL negative credit from ANY credit report from all three Bureaus…

Think of what this can mean for you or someone you know who is currently living with damaged credit…..A huge boost in scores and no more negative credit showing up on credit reports….within a few short weeks!

There’s a lot more to know about the Section 609 Credit System….

So a Free Section 609 Guide has been prepared to explain everything.

Don’t hesitate… ***** Get Your FREE REPORT Right Here ******

I’ll check back again with more information,


PS. This is NOT credit “repair”. You’ll learn why in the free report.

If you already have great credit, please pass this information on to some who is not as fortunate. The fastest growing segment of the entire country are people with lower credit scores.

The Section 609 System is the only successful method that legally forces the credit agencies to remove all negative credit.

(mailing address removed)


A while back, I did a “play along at home” post with a suspicious email. I posted the full text, with very little comment, and then posted my list of things that should tip you off that it was a scam the next day.

This time, I’m just going to pass judgment: this email is extremely suspicious. I would not click on a single link, trust a single word, or give it a second thought. There was a mailing address at the bottom, and I can say this much about it: Glenn Garvin doesn’t live there.

What I think they’re doing is selling you some “secret” method of clearing your credit report of any negative information.

It won’t work, by the way; the three major credit reporting agencies (Experian, TransUnion and Equifax) will not remove accurate records from your credit report. The law, believe it or not, is on their side. Imagine—the financial industry having been set up over many decades by lawyers, bankers and legislators who knew exactly what they were doing and covered every base.

It reminds me of those Mortage Elimination scams you see sometimes—the ones where you pay for some “secret” information. When (and if) you get the information, it’s some crackpot theory about how your mortgage wasn’t actually money, and therefore you don’t have to pay it back, and your case will win every time in court. What actually happens is that you end up losing your house (at best) and serving time in prison for fraud (at worst).

That’s probably exactly what this “Section 609 System” is: a way for you to make your credit problems seem trivial, once you’ve been convicted on federal charges.

By the way, here is the full text of the Fair Credit Reporting Act. Section 609 says you have the right to dispute information on your credit report. It does not say the agencies have to remove it just because you said so. It’s in Section 609 (c), which is actually readable; the heavy legal-ese starts later in the Section.

Also: Glenn Garvin is apparently a journalist (Miami Herald) and libertarian activist. I’m pretty sure he isn’t selling credit repair secrets. Plus, no veteran journalist would ever use that many ellipses. It’s very poor writing.

National Protect Your Identity Week is October 17-24, 2009

Actually, shouldn’t every week be Protect Your Identity Week?

Snide remarks aside, PYIW is apparently an awareness initiative by the National Foundation for Credit Counseling. I’ll let them describe their organization (from their website):

Founded in 1951, the National Foundation for Credit Counseling (NFCC), Inc., promotes the national agenda for financially responsible behavior and builds capacity for its Members to deliver the highest quality financial education and counseling services. The NFCC is the nations largest and longest serving national nonprofit credit counseling network, with more than 100 Member agencies and nearly 850 offices in communities throughout the country. Each year, NFCC Members assist more than 3.2 million consumers, helping many to drive down their debt and take control of their finances.

Consumer Credit Counseling Service of Northwest Indiana is a member of this organization. They are one of the good ones—no misleading claims, true nonprofit structure, no insane promises, and an A+ rating from the BBB.

So, how to celebrate Protect Your Identity Week? Had I found out about this sooner, I would have set up some live presentations or something. But hey, if you hear about any bangin’ PYIW parties, be sure to keep me in the loop, ‘kay?