According to the FTC these changes make it illegal for telemarketers to use three types of payment methods exploited by con artists and scammers. It is now against the law for telemarketers to ask customers to pay for goods or services using cash-to-cash money transfers like MoneyGram and Western Union. Its unlawful to require them to provide PIN numbers from cash reload cards such as MoneyPak, Vanilla Reload or Reloadit packs. Also, telemarketers cannot use unsigned checks called “remotely created payment orders” to withdraw money directly from consumers’ bank accounts.
The FTC made these changes to the TSR in November 2015, but this is a good reminder that a legitimate company or government agency will not ask a consumer to pay with money orders or gift cards. Better Business Bureau serving the Northwest often hears from victims who were misled into paying for a good or service using these methods only to realize they were scammed.
In May a Cheney, WA resident reported they lost $7,000 to an IRS scam when they were told to pay with iTunes gift cards. They reported the incident to local law enforcement officers and with the Internal Revenue Service. Unfortunately, they’ve yet to be refunded their money.
To learn more about this law, visit ftc.gov. If you’ve been asked to make a payment using any of the above methods and believe it to be a scam you can report the transaction to the FTC at 1-877-FTC-HELP or at BBB at www.bbb.org/scamtracker.
Creating and launching a business website that looks completely legitimate takes about 30 minutes. But it takes less than five minutes for a consumer to get scammed by one of these rogue, “fly-by-night” websites that are here today and gone tomorrow—with your money.
Double-dealing “brick-and-mortar” businesses continue to exist as well, simply because most consumers aren’t sure how to begin researching a business before interacting with them.
Although the Internet harbors millions of scam artists who prey every day on unsuspecting consumers, the Web also provides portals through which anyone can perform a background check on virtually any business in the world.
7 Ways to Research a Business
Search for a U.S. or Canadian business on Better Business Bureau’s website or call your local BBB. You’ll find a company’s rating (from A+ through F) along with a history of customer complaints. BBB also provides information about the services or products the business offers and whether government actions have ever been taken against the business. If the business is a BBB Accredited Business, that means the business has agreed to uphold BBB’s eight standards for trust.
Contact your home or auto insurance agent for advice about directing to you dependable and professional businesses. Because insurance companies deal with a wide variety of commercial businesses, your agent may be able to help you discover whether a business is exceptional or substandard.
Every U.S. business is regulated by the Federal Trade Commission, a government organization whose goal is to protect consumers from unfair trade practices and other unethical business activities. On the FTC website, you can search for news about a particular company relevant to your research. Likewise, the American Bar Association oversees law firms and attorneys, while the U.S. Securities & Exchange Commission standardizes financial entities.
Search local, county and state civil and criminal court records for litigation cases containing the company’s name. Businesses that own property or have filed bankruptcy in the past may be included in country or state tax records if there is a lien against their property. Federal district and bankruptcy courts may also shed further light on the reputation of the business. In addition to running the company’s name through a search portal, checking the names of owners, co-owners and employees may also turn up interesting information pertinent to your research.
Request a business credit/background report from Experian, Equifax, Dun & Bradstreet or LexisNexis. You will be charged a fee per report, but these are highly reputable services that are known to maintain accurate information on most businesses operating in the U.S.
Don’t forget to check social media sites for potentially compelling information. LinkedIn, Facebook and Twitter may offer insights from other customers who have used the company. However, beware of review sites such as Yelp—what reviewers say about a business may be fueled by reasons more personal than business-related, which offers nothing helpful to your research. Take what’s said on those review sites with a grain of salt.
If you don’t have the time or desire to do a comprehensive background search on a business, you can always hire a private detective or professional background check company that specializes in accessing lesser known databases and performing on-site investigations.
About Better Business Bureau
BBB is one of the best places to begin researching a business because of its easily navigable interface and the wealth of information provided by its database. In addition, businesses that are accredited by BBB and display BBB’s seal on their website or advertisements are favored by consumers over non-accredited businesses. In fact, 74% of consumers prefer to do business with BBB Accredited Businesses, as stated in a Roper survey.
A BBB Accredited Business maintains adherence to stringent BBB standards that include consistently applying ethical business practices to all facets of the company, protecting customer privacy, using honest advertising strategies and remaining as transparent as possible to customers.
Taking the time to research a business before hiring them may save you a lot of money, stress and time lost pursuing a potentially lost cause.
It’s that time of year — tax time. It’s also a great time to get up to speed on tax-related scams. Here are two ways tax scammers might target you:
1. Tax identity theft
This kind of identity theft happens when someone files a fake tax return using your personal information — like your Social Security number — to get a tax refund or a job. You find out about it when you get a letter from the IRS saying:
more than one tax return was filed in your name, or
IRS records show wages from an employer you don’t know.
2. IRS imposter scams
This time scammers aren’t pretending to be you — they’re posing as the IRS. They call you up saying you owe taxes, and threaten to arrest you if you don’t pay right away. They might know all or part of your Social Security number, and they can rig caller ID to make it look like the call is coming from Washington, DC – when it could be coming from anywhere. Leaving you no time to think, they tell you to put the money on a prepaid debit card and tell them the card number right away.
The real IRS won’t ask you to pay with prepaid debit cards or wire transfers, and won’t ask for a credit card number over the phone. When the IRS contacts people about unpaid taxes, they usually do it by mail.
If you have a question about your taxes, call the IRS at 800-829-1040 or go to irs.gov. You can report IRS imposter scams to the Treasury Inspector General for Tax Administration (TIGTA) online or at 800-366-4484, and to the FTC at ftc.gov/complaint.
In 1970, the Fair Credit Reporting Act was passed in the United States to protect and regulate the collection, dissemination and use of consumer credit information. Seven years later, the Fair Debt Collection Practices Act was implemented to help establish legal protection from abusive practices. Additionally, it promotes fair debt collection and provides an avenue for disputing errors and validating debt information.
While many legitimate companies adhere to the laws, I’ve heard many horror stories of improper—and downright illegal—debt collection practices in my time here at Better Business Bureau. Plus, as someone who has been on the incorrect receiving end of collection attempt calls, I personally understand how incessantly frustrating they can be: I waged an epic phone battle in the summer of 2011 with a company that was trying to track down a debt owed by someone else and had obtained my phone number somehow…
There will always be those who try to game the system for personal gain. As the cost of living surges, debt is becoming a common issue facing many consumers and the percentage of unlawful activity is likely to increase as well.
More than 160 million Americans have credit cards.
The average credit card holder has at least three cards.
On average, each household with a credit card carries more than $15,000 in credit card debt.
Total U.S. consumer debt is at $11.4 trillion, which includes mortgages, auto loans, credit cards and student loans.
As part of a cooperative agreement between the Federal Trade Commission and BBB, a comprehensive guide of Facts for Consumers was published in 2010—and I highly suggest that everyone reads it—to answer questions like:
What debts are covered?
Who is a debt collector?
How may a debt collector contact you?
Can you stop a debt collector from contacting you?
May a debt collector contact anyone else about your debt?
What must the debt collector tell you about the debt?
What types of debt collection practices are prohibited?
Know your rights and file complaints with the appropriate agencies if they are abused; these complaints are taken very seriously. If you don’t believe me, just ask the owner of this Texas-based debt collection company, who was permanently banned from business for using deception, insults and false threats to collect debts.
And remember, the best way to avoid sketchy debt collectors is to manage credit wisely and work hard to avoid debt in the first place.
I’ve always pictured my parents as invincible—two superheroes who not only gave me sound advice growing up, but were always there to pick me up when I fell. They also taught me to make smart decisions and be skeptical of too-good-to-be-true offers. So you can imagine my surprise when I received a call last week about their major life-changing event. Apparently, my Mom was the “lucky” recipient of a $500,000 sweepstakes prize! All she needed to do was pay $2,000 to cover the administrative fees.
Luckily, they called me first and never wired money or disclosed any personal information. But that one phone call really got me thinking: What if my parents had caved-in and wired money? What if they had given the caller personal information? What could have happened if the bad guys accessed my family’s bank accounts?
Unfortunately, this kind of thing happens every day to unsuspecting and trusting people. Sweepstakes and lottery scams are real. The scams prey on emotions and people are quick to buy into the idea of instant wealth. In fact, according to the Federal Trade Commission, Americans spend more than $100 million a year on foreign lottery sweepstakes.
At this point, it’s unclear how my parent’s contact information got into the hands of the con artists; they followed the proper procedures—always researching businesses with Better Business Bureau, reading the fine print, ignoring phishing emails and telemarketers, et cetera. The worst part is that we may never know how this caller obtained the phone number. But, learning the red flags of these types of scams can reduce the likelihood of falling victim.
I reminded my parents to exercise caution and anyone who receives similar phone calls or letters should listen closely as well:
Never pay for a prize. It is illegal for any company to require a purchase or fee to play a sweepstakes; just ask the Washington State Attorney General. Also, processing fees or taxes will be deducted from prizes and will never need to be paid out-of-pocket.
Do not wire money. Wire transfers are a great way to transfer money when you need to quickly get cash to your sister in Iowa or your nephew in Florida; they are a terrible way to get money to people you don’t know and have never met in person, especially if they are “out of the country.” Once funds are transferred, it is nearly impossible to reclaim them. In this case, the scammer specifically requested a wire transfer from my Mom, but she recognized the red flag and didn’t do it.
Spot the fakes. Bad guys will oftentimes hijack the names of government agencies and the logos of well-known organizations in attempts to confuse and fool victims. Reputable organizations will not call or email winners; notifications will be delivered by certified mail and never by bulk-rate mail. When in doubt, call BBB or visit bbb.org to see if companies and notifications are legitimate.
Never cash checks. Even if checks look real, don’t cash them! Scammers often blast out extremely convincing bogus checks in hopes that even just one person will make a deposit and wire some of the money back—this is called an overpayment scam.
As awesome as it would be to win a ton of money out of the blue, it’s a pretty unlikely event. Nationally, complaints about prizes, sweepstakes and lotteries ranked #6 in 2013 with the Federal Trade Commission. Victims of mail fraud should contact their local postmasters or the U.S. Postal Inspection Service by phone, toll-free at 1-800-372-8347, or online at postalinspectors.uspis.gov.
And while my blood is still boiling over the fact that someone targeted my parents, keeping a cool head is key. Whatever you do, avoid the gimmicks and hard sells and learn how to spot the red flags; this will turn you into the invincible superhero that helps others with sound advice.
From the City of Bellingham: On the shores of Bellingham Bay with Mount Baker as its backdrop, Bellingham is the last major city before the Washington coastline meets the Canadian border. The City of Bellingham is at the center of a uniquely picturesque area offering a rich variety of recreational, cultural, educational and economic activities.
But what lies beneath the surface?
Continuing Better Business Bureau’s analysis of the Federal Trade Commission‘s 2013 Consumer Sentinel Network Data Book, I am currently investigating an interesting statistic for 2013: Bellingham, Wash., is ranked #3 in the country for consumer complaints about fraud. Last week, BBB took a look at the total dollar amounts lost in Alaska, Oregon and Washington in the article What can Fraud Buy?, and this week I am particularly interested in how a relatively small city—population 82,310—beat out usual fraud hotspots like Miami, Fla.—ranked #17 in 2013—and Atlanta, Ga.—ranked #29.
Now, I’m not arguing that Bellingham isn’t a beautiful city with a rich culture and deep community roots, but what could cause such a high ratio of complaints in 2013? It’s important to note that this statistic is normalized, but the bottom line is that out of 100,000 people, 609 filed fraud complaints.
Typically, when I talk about the dangers of fraud it has to do with senior citizens. It’s an unfortunate fact, but seniors are the most-targeted demographic for scams and fraud because they have semi-disposable nest-eggs and are perceived as weak. However, Bellingham has a low population of seniors, with just 12% of the total population being over the age of 65. On the other hand, the population of 18-29 year-olds represents 32.5%—or about 1/3 of the total population of the city.
Initial conclusion: As more and more of the scams that BBB learns about evolve and become more advanced, younger demographics are falling victim.
So what can young adults do to protect themselves?
A $2 million yacht; a $14 million rare Ferrari; a $36 million private jet. What do all of these expensive luxury items have in common? They represent things that could be purchased with the money that consumers in Alaska, Oregon and Washington lost to fraud in 2013—according to the Federal Trade Commission‘s 2013 Consumer Sentinel Network Data Book.
1,951 Alaskans reported losing a total of $1,976,901 to fraud—about $1,359 per person. Alternatively, this amount could buy a very nice Mirage motor yacht.
10,271 Oregonians reported losing a total of $13,607,902 to fraud—about $1,945 per person. Alternatively, this amount could be used to cover the cost of a super rare classic Ferrari 250 LM.
19,927 Washingtonians reported losing a total of $36,282,700 to fraud—about $2,651 per person. Traveling the globe in a privately-owned Gulfstream G400 jet could be a much better way to spend this money.
In total, 32,149 people in Better Business Bureau‘s service area lost almost $42 million to fraud in 2013—and these are just the ones that filed complaints. It’s likely that there are hundreds, if not thousands more, that did not report losses because they were embarrassed or did not know where to turn for help. While the total dollar amounts lost in Alaska and Oregon are down significantly, Washington consumers actually lost $10 million more in 2013 than in 2012.
The total dollar value lost in the United States: $1,304,031,000—that’s $1.3 billion. It is obvious that there is still major work to be done in educating Americans about these crimes.
What can you do to protect yourself?
Research businesses at bbb.org before making purchases or signing contracts.
Visit the BBB News & Events page for the latest scam updates, consumer alerts and marketplace trends.
Attend the next BBB Secure Your ID Day event—hosted at locations across the Pacific Northwest and Alaska—to shred old bank statements, medical bills and other sensitive paperwork. Statistics indicate that a large portion of fraud still occurs by physical methods—dumpster diving, mail theft, et cetera—so properly destroying unneeded documents is as important as ever.
Personally, I would love to see the day where the Consumer Sentinel Network Data Book ceases to exist because no one needs to report any fraud, but until that day BBB will continue to provide free programs, services and events to help protect communities in Alaska, Oregon and Western Washington. For the people who choose to ignore these warnings or avoid educating themselves about fraud, you can just send your money directly to me; I promise to put my new Ferarri to good use.