Tag Archives: FTC

Avoiding Fraudulent Debt Collectors

Debt collection generally works like this: a creditor who can’t devote the necessary time and resources needed to recover funds from old delinquent loans sells those debts to a collection agency, often for pennies on the dollar, to cut their losses a little. That agency, which now owns the debt, contacts consumers and tries to negotiate at least partial repayment.

Naturally, there are also con artists posing as debt collectors, attempting to obtain money, personal information, or both from victims. There are also collection agencies who stray from established, legal methods in order to collect legitimate debts. Here are six warning signs to watch for.

They’re trying to collect on a debt you don’t owe

Unscrupulous collectors will sometimes contact people with the same name as the actual debtor, or even settle for someone with a similar name. An outright scam artist might simply invent a debt out of thin air, or threaten random people in hopes that someone will pay out of sheer terror. In any case, never agree to pay a debt you don’t owe. Ask for a written validation notice. If they refuse, that’s a sign of trouble. Get as much information as you can about the agency, and report them to the FTC.

Important Note: collection calls for debts you didn’t incur can also be a signal that you have been a victim of identity theft. If you’ve received such a call, it may be time to check your credit report if you have not done so recently, to look for anything that shouldn’t be there.

They’re threatening you with arrest, lawsuits, or violence

For the most part, debt collectors are allowed to inform you that you owe a debt, provide proof that you owe it, state to whom the debt is owed, and present options for payment. They are not allowed to threaten you with arrest or legal action, and they’re especially not allowed to threaten physical harm to you or those around you.

They’re demanding personal information

Even if you actually owe money, there is no reason for them to ask for personal identifying information or account numbers over the phone. It’s one of the core rules of fraud and identity theft prevention: never reveal personal information to a stranger who contacted you out of the blue.

They won’t give you any information

If the caller won’t tell you the name of the agency, to whom the debt is owed, or anything else about whom he or she represents, be very suspicious. A legitimate collector will be transparent about these things, presumably because they want to actually collect on delinquent debts and stay in business, instead of being shut down by the FTC.

They’re calling in the middle of the night

This applies to a lot of other types of calls, but if they’re calling you before 8:00 a.m. or after 9:00 p.m., you have every reason to suspect either a scam or a rogue debt collector. There are rules about when they can contact you by phone. It’s kind of like putting yourself on the Do Not Call registry; if they’re already violating one rule, what else are they up to?

They keep calling after you’ve told them not to

Even if you’ve got a legitimate debt, you can still tell a collector to stop contacting you about it. Usually you will have to provide this request in writing, but once you do, they’re supposed to knock it off. Of course, if they won’t even provide an address to send said request to in the first place, you already know something is fishy.

Resources

Learn more about debt collection scams:

Report a debt collector to the FTC:

File a complaint with the Indiana Attorney General’s Office:

Don’t Fall for the Inevitable Western Union Settlement Scams (OR: Distant Early Warning)

In January of this year, Western Union reached a $586 million settlement with the FTC to refund some of the money people lost to scams between January 2004 and January 2017, and to create a functional fraud prevention program.

Consumers who can prove they were a victim of a scam that involved wiring money through Western Union between those dates, and who can back up their claims with documentation, may be able to get some money back. Not all of it, but some, which is better than none. The refunds will be handled through the Department of Justice, once they have the money from Western Union. It may take a year or so to verify and pay out claims after that.

So here’s your preemptive scam warning: don’t fall for the inevitable scams based on this settlement. At some point, somebody is going to start attempting to trick people into sending money in advance to claim their share of the settlement.

There will be a claims process through the DOJ. There will not be any prepayments made on your part, you will not be able to “speed up the process” by sending money, and the DOJ or FTC won’t ask you to purchase any gift cards (the preferred method of fraudulent payment these days, now that Western Union has taken enough of a hit to actually start paying attention to the problem). Nobody will contact you out of the blue by phone, email, or any other channel (I predict well-organized scammers who kept their victims’ contact information going after the people they already tricked once). You will submit a claim through the DOJ, wait a long time, and hope for the best.

In the meantime, if you were a victim of a scam that involved Western Union, keep any documentation you have from the incident. How much you can get back will depend on how much you lost and how many people file a claim, but getting something back is better than the nothing you were left with before.

Sources:

File Under “Things That Were Just a Matter of Time.” New scams using Affordable Care Act to harvest personal information.

Okay, so if you live in these United States, you may have heard of a controversial little thing called the Affordable Care Act.

Yeah, okay, before you head to the bottom of the page to sound off, I’ve already turned comments off for this post. I’m not here to express my opinion of the legislation, and I’m not fielding others’, either. Our opinions are irrelevant for the moment. Besides, certain post topics generate TONS of bot-generated spam comments, and I have a hunch this might be one of them (you should’ve seen how many came in when I wrote about Açaí berry scams a few years ago…it was seriously ridiculous).

Here’s all we need to know, and it’s pretty easy to agree upon: The Affordable Care Act is a Thing That Exists. (That’s only a matter of opinion if you’re into really fabric-of-universe-level philosophical discussions.)

And, as a Thing That Exists, it was only a matter of time before someone started up a scam based upon it.

Lo and behold, the FTC is reporting exactly that. Scammers are calling potential victims to “verify” information. For example, “So I see here that your routing number is __________, is that correct? Okay, good, so now we just need your account number…”

Here’s the deal with the Affordable Care Act: if you’re one of the people who is going to need to use the exchanges to obtain insurance, you’re going to be the one contacting them. According to the FTC report, “If someone who claims to be from the government calls and asks for your personal information, hang up. It’s a scam. The government and legitimate organizations you do business with already have the information they need and will not ask you for it.”

That sums it up pretty nicely, both in this specific instance and as a general rule.

FTC lawsuit reveals what actually happens if you fall for one of those “Free Gift Card” spam text messages

Back in April 2012, The Consumerist reported that around 4.5 billion spam texts were sent to U.S. cell phones in 2011 (“Yeah, and I got about 2 billion of those myself,” I remember thinking).

Yesterday, The Consumerist released an article that gives a little insight into how those soul-crushingly irritating “Free $1,000 Gift Card” spam texts actually work. The good news is: the FTC has 29 people in their legal crosshairs, whom they believe to be responsible for 180 million of those texts. The “meh” news is: what about the other six quadrillion spam texts?

Anyway, for those unlucky enough to fall for the free gift card text scam, here’s a brief rundown of what actually happens:

  1. You’re directed to a website that collects an awful lot of personal information, including medical data in some cases, before you’re allowed to proceed
  2. You are taken to another site that requires participation in a bunch of “offers” before you can get the gift card
  3. This required more personal data, including credit card numbers for “subscriptions” or to actually apply for credit
  4. You’re told you have to get (i.e. trick) three more people into signing up before you can claim your gift card
  5. You never, ever, EVER actually get a free $1,000 gift card, because if spammers actually delivered on their promises, they wouldn’t be spammers.

For the FTC to go after 29 people is a good start, but you know as well as I do there are probably a thousand more involved in these schemes. So if the “Free $1,000 Best Buy Gift Card” texts continue to arrive, just continue to ignore ’em, like always.

Score one for the good guys: “Rachel From Cardholder Services” has left the building

Have you ever gotten one (or a couple thousand) of those robocalls where “Rachel From Cardholder Services” tells you to press “1” to lower the interest rate on all your credit cards?

If you pressed “1” instead of hanging up the phone in disgust, you were connected to a telemarketer who would attempt to scam you out of a couple thousand dollars in up-front fees. If you pressed “2,” you were supposedly removed from the call list. Of course, Rachel would still call back a few weeks later because pressing “2” did absolutely nothing.

It turns out there were five companies running this scam, and the FTC has now officially brought charges against them. These companies have violated a whole slumgullion of federal regulations. In other words, Rachel From Cardholder Services won’t be calling anymore.

I never liked her anyway.

Anyway, there’s an article over at the Consumerist that goes into more detail.

Things the FTC doesn’t do: hold sweepstakes and give away cash prizes

Scammers are really getting meta- these days; it seems people have received phone calls, allegedly from the Federal Trade Commission (FTC), informing them that they have won a large cash prize in a sweepstakes.

Among other duties, the FTC normally tries to protect consumers from scams. I guess the victims are supposed to think, “Well, surely if this call’s from the FTC, it’s legitimate.” Never mind the years of warnings that all begin with, “No matter who a caller claims to be…”

Naturally, the victim is told they have to pay taxes and fees up front by wiring between $1,000 and $10,000 to someone. So it’s a standard-issue sweepstakes scheme.

Folks, you can argue about whether different government agencies waste money or not until you’re blue in the face, but I can assure you of a couple things:

  1. The FTC isn’t running a sweepstakes and does not give away cash prizes.
  2. The FTC has never given away cash prizes (unless “giving away cash prizes” actually means “nailing rogue debt collection agencies to the wall” in some obscure regional dialect, which it doesn’t).
  3. The FTC is never going to run a sweepstakes. Or give away (say it with me) cash prizes.
  4. Whenever you do hear about a government agency giving a person or organization money for something, those aren’t sweepstakes prizes, and it’s not a random selection process. Those are grants, and the recipients had to apply for them. It’s a vastly different thing.

Also, you’d do well to remember this little nugget: it doesn’t matter if a caller claims to be from the FTC, the FBI, the ATF, Microsoft, Canada, or your Aunt Tilly, if they’re saying you won a sweepstakes you never entered and asking you to pay money up front before receiving the prize, they’re running a scam.

I haven’t run into an exception to that rule yet.

FTC sues three companies for violations of new robocall rules.

The FTC is taking three companies to task for violations of the new rules regarding automated “robocalls,” which were passed last September.

All three companies used caller ID spoofing (for example, the caller would appear as “Card Services”) to lure victims into paying fees as high as $1,495 for a credit card interest rate renegotiation. Calls would begin with a prerecorded message. Recipients who pressed “1” would be transferred to a telemarketer who would attempt to sell the service.

Those interest rate negotiations never happened, by the way. Victims simply lost several hundred dollars. One company was also selling worthless auto “warranty extensions” on the side.

The FTC has a real laundry list of complaints against all three entities, including:

  1. Calling consumers whose phone numbers are on the National Do Not Call Registry
  2. Calling consumers who had previously asked not to be called
  3. Failing to transmit their caller ID information, as required
  4. Masking their caller ID information
  5. Failing to promptly identify themselves, the purpose of their call, and/or the nature of the goods or services they were selling
  6. Improperly abandoning calls
  7. Failing to make required disclosures in their robocalls.

It’s a real violation gumbo. The three companies named in the suit are:

  • Economic Relief Technologies, LLC
  • Dynamic Financial Group (U.S.A.) Inc.
  • JPM Accelerated Services (JPM)

Punks. I hope the FTC shuts them down completely, and I hope the people behind these operations aren’t able to hide behind their “LLC” and “Inc.” designations. Doesn’t criminal law apply to these swindlers, too?

Once again, though, this all just goes to show something: namely, that you should never pay anyone a fee for help with your credit card debt, and always check out who you’re dealing with beforehand.

Of course, when they’re blatantly lying about who they are, it might be more difficult. I guess the first question to ask yourself is, “Did I contact them, or did they contact me first?”

If you contacted them, and did your homework, you’re probably OK.

If they contaced you, you’re looking at a scam.

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.

More information about fake virus scan pop-ups: what the FTC has to say

Today I was checking out some articles at FTC.gov, and I came across a good one called “Free Security Scan Could Cost Time and Money.”

The article dates back to December 2008, but it’s still relevant. It covers the same basic topic as my post “Fake Virus Scan Pop-Ups” from a couple weeks ago, with some additional information I thought it would be wise to share.

For example, this article also says that when a window pops up offering a “free security scan” or telling you that “malicious software” or (for maximum scare value) “illegal pornography” has been found on your computer, not to trust the “Cancel” or “No” buttons on that pop-up window, since it usually does the same thing as the “Scan” or “Yes” buttons. However, they also give you specific directions, which I did not do in the previous article:

If you use Windows, press Ctrl + Alt + Delete to open your Task Manager, and click “End Task.” If you use a Mac, press Command + Option + Q + Esc to “Force Quit.”

The article further warns you, “Make it a practice not to click on any links within pop-ups” (my emphasis), which I think is pretty good advice.

There is one paragraph I disagree with (or, more accurately, only-sort-of agree with) in the FTC article:

If you get an offer, check out the program by entering the name in a search engine. The results can help you determine if the program is on the up-and-up.

I only take issue with this advice because, in general, I feel that if you’re getting an offer at all, it’s probably not legitimate, so don’t bother wasting too much time on a search.

Norton, McAfee and Kaspersky are going to advertise on the Internet, obviously. However, they’re never going to do it by running one of these pop-up traps. If you’ve got a “free scan” or “clean your registry” window, you’re looking at a scam. I’d consider that a zero-tolerance policy if I were you.

If you truly feel like an offer might be legit, go ahead and do a quick search on it. However, my first reaction is to not trust any offers that I wasn’t looking for in the first place. If you were looking for security software to begin with, it’s a different story; obviously, Symantec’s website might have special offers on it from time to time, since they’re the actual company that produces the Norton line. It’s when you’re looking for the latest Hollywood scandal photos that you’re going to run into trouble.

Score one for us: federal robocall ban takes effect September 1st

They were already supposed to be illegal in Indiana, but telemarketing robocalls are banned on the federal level starting Tuesday.

Basically, a robocall involves an automatic phone dialer and an automated message. You’d get a robotic-sounding voice (hence the name) telling you, for example, that the warranty on your car was about to run out, and to press “1” to extend it. The implication was that the call came from the automaker itself, only it didn’t. Quite a few people have been suckered out of a few thousand dollars each because of these things.

There are some exceptions to this new rule, of course. You should still sign up for the national Do Not Call Registry, as well.