Oregon AG’s Office Puts Magazine Subscription Scam Out of Business

Ellen Rosenblum, Oregon State Attorney General
Ellen Rosenblum, Oregon State Attorney General

We received big news this week from the Oregon Attorney General’s Office when Ellen Rosenblum announced a $3 million settlement with Publisher’s Payment Processing.

According to the AG’s office, the White City company had operated a nationwide scam through a newspaper and magazine subscription ruse.

The numbers are staggering.

Better Business Bureau has received more than 800 complaints against the company within the last 3 years. These include sales and delivery issues as well as problems with service. The most common complaint was billing and collection issues. The volume of complaints, as well as the company’s failure to respond to many of them, have contributed to an F rating for the business.

Consumers told BBB they received bills from the company for magazines they already have subscriptions for, implying it was time for renewal. However, those consumers told us the subscriptions had not expired and they did not originally order from Publisher’s Payment Processing. What’s more, some consumers said the company claimed to have the lowest renewal fee, but they found they could get a better price if they ordered through their magazine’s publisher directly. Many told BBB that Publisher’s Payment Processing would charge a $20 processing fee just to cancel renewals.

The AG’s office says the settlement is not an admission of guilt, but Publisher’s Payment Processing will have to pay up to $500,000 in restitution to Oregon consumers who overpaid or did not receive their magazines. Service fees will also be refunded to Oregonians who have previously received refunds.

“This was a sophisticated operation that generated millions of dollars each year from consumers across the country who thought they were doing business with a reputable magazine or newspaper publisher, but were instead working with a company that made its money by scamming them,” Rosenblum said. “It’s a particular embarrassment to the legitimate Oregon business community when national companies based here don’t play by the rules. The only option was to shut them down—and we have.”

Read the complete Assurance of Voluntary Compliance here.

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Lottery Scams Target Seniors

junkmail
One day’s worth of mail for one victim.

Better Business Bureau sees scams reported to us by individuals in all age groups, but I have particularly noted that lottery scams appear to prey on seniors. Or maybe seniors are more susceptible to this type of scam because of their age.

Just in the past few months, I have had reports of three different individuals, ranging in age from late 60s to early 90s, who have fallen victim to lottery scams. We’re not talking a few hundred dollars, either. Two of these victims have sent more than $30,000, and the third has wired more than $100,000 to scammers. And they haven’t just been scammed once, but several times. Who knows if it was the same or different con artists that scammed these individuals multiple times?

It appears that once someone falls victim to a scam, their name ends up on a list. These lists of “easy targets” are often sold or traded between scammers.

I spoke to one woman who sent checks to alleged charities that requested money for sick children. She received phone calls as well as letters asking for her help. She told me it was difficult to turn down these requests because they involved children. Now she receives upwards of 40 pieces of mail a day from fake lotteries and charities. She wonders if the money she sent really went to any sick children. I don’t think so.

So why are seniors more vulnerable to these types of scams? There is evidence that as we age, we lose cognitive ability, and we may process information more slowly. These scammers are skilled at convincing the elderly that they must act now or they will lose out on their winnings. They are coerced into making instant decisions, leaving the individual no time to think, research or talk to family members. Additionally, seniors may be isolated and living alone. They react emotionally rather than rationally.

Seniors are prime targets for financial exploitation for other reasons, too. They may have a significant nest egg, although plenty of low-income victims are at risk. At an older age, this is especially devastating because there is no time to recoup financial losses. Once victims realize they have been scammed, they may be too embarrassed to tell family members or friends. They also may not remember details to help with investigation and prosecution. In two of the cases I mentioned, the victims were eventually threatened with bodily harm to themselves or their families if they did not continue to send money to the scammers.

Some important reminders:

  • You can’t win a contest you didn’t enter.
  • It is illegal for U.S. citizens to participate in foreign lotteries.
  • You do not have to pay money in order to receive a legitimate prize.
  • Never wire money or put money on a pre-paid debit card – both are the same as sending cash. There is no way to trace the money or to get it back once sent.

One helpful note I received while doing this research: Due to multistate settlements with Western Union and Moneygram, the Attorney General’s office can request that a fraud victim be blocked from wiring money. If you have a family member who has been a victim, call 206-464-6684 (WA), 503-229-5576 (OR) or 907-269-5200 (AK) for help. Also contact your local Better Business Bureau office at 206-431-2222 (WA), 503-212-3022 (OR) or 907-562-0704 (AK) to report the experience.

Ghosting: The Most Sinister Form of Identity Theft

Time to Let Her Go | © User: Fish Gravy / Wikimedia Commons / CC-BY-2.0
© User: Fish Gravy / Wikimedia Commons / CC-BY-2.0

Approximately 2.5 million identities are stolen each year from victims who are deceased. The practice of stealing identities from deceased persons is commonly referred to as “ghosting” and represents a significant threat to the surviving family members. This issue strikes particularly close to home at the moment; I have an elderly grandmother who, at 91 years young, has been struggling with chronic health issues for some time. When a loved one passes away it can be difficult to think about identity safety, but a few simple steps can prevent huge headaches down the road. It is my hope that others may benefit from this research.

The following guidelines are suggested for deaths at any age:

  1. Obtain at least 12 copies of the official death certificate as soon as it becomes available. It may be possible to photocopy the original, but remember that death records are public and some organizations may request additional proof.
  2. If there is a surviving spouse or another sort of joint account holder, make sure to immediately notify credit card companies, banks, stock brokers, loan/lien holders and mortgage companies of the death.
  3. The executor/surviving spouse will need to address any outstanding debts by either transferring or closing accounts; if accounts are closed, make sure they are listed as: “Closed. Account holder is deceased.”
  4. Contact all relevant financial institutions that may need to be informed of the death and make sure to follow the correct procedures. Generally, it is best to submit all pertinent information in the first letter to the agency—sent via certified mail with return receipt requested, as this will speed up processing:
    • Name and Social Security number of deceased
    • Last known address
    • Last five years of addresses
    • Date of birth
    • Date of death
  5. Request copies of the decedent’s credit reports, which will show any remaining active accounts that still need to be closed and request an alert be placed on the name to notify potential creditors to not issue any new credit.

A death in the family can be hard enough; don’t let a stolen identity make it worse.

Bellingham: Home of Scenery, WWU and… Fraud?

Bellingham, Wash. | © Josh Parish / Wikimedia Commons / CC-BY-2.0
Bellingham, Wash. | © Josh Parish / Wikimedia Commons / CC-BY-2.0

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?

Remember, the best defense is a proactive one. Take steps to educate yourself and others so that Bellingham doesn’t make the list next year. Oh, and go Vikings!