consumer fraud

The University of Wyoming is an equal opportunity/affirmative

action institution.

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CONSUMER FRAUD:Protect Yourself!

Bill TaylorUniversity of Wyoming

Community Development Area Educator

UW Community Development Education

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Fraud in Wyoming

Cheyenne residents targeted Scammer claimed to have known

Ferdinand Marcos and had gold certificates worth billions

Would receive $1 million for an application fee of $10,000 as part of a ‘self liquidating loan’

50 investors lost $1 million


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Warning signs of fraud Be suspicious if you hear

You’ve won a prize or free gift You’ve been selected to receive a special

offer You must act immediately or lose out You must pay for shipping your prize or free

gift Give us your credit card number and

expiration date to verify that you are a credit cardholder


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More warning signs of fraud You’re asked for personal information

You’re asked to donate to an agency whose name sounds like a well known charity

You’re one of only a chosen few to receive this offer

A courier will come to your home to get your payment

Little risk and large, short term profits


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Sucker lists If you often respond to sweepstakes or

contests, your name might be added to lists sold to con artists

A sucker list contains the names of people who have been, or are good candidates to be, victims of fraud

People on the lists may hear from crooks who claim they can help recover, for a fee, money lost to a con artist


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Types of scams

Following are various types of scams This list is not exhaustive

www.scambusters.org list 227 present scams, with more added as they appear


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Phishing A term used for emails that claim to be

from your bank, a reputable business or a government agency

Criminals ask for personal information such as Social Security numbers or account numbers to steal funds and/or steal identities


action institution.

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A phishing email. . .– preys on fears – nothing is safe

Grammar

Spelling


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Nigerian letters E-mails that ask recipients to provide

their bank account number to help them share in a big pot of money

If you respond to these letters you will lose your money


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Sweepstakes and lotteries You’re told that you’ve won a

sweepstakes or the Canadian lottery

You’re asked to pay for processing, taxes or delivery, or provide a bank account number to verify your identity

No one ever receives a penny except for the thieves


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Travel scams Before buying travel packages

Get the offer in writing Check to see if the company is

legitimate: the Better Business Bureau state attorney general’s office your local consumer protection agency the U.S. Dept. of Transportation (DOT) at

202-366-2396 Always use a credit card to purchase

travel


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Charities ‘Sound-alike’ names can be tricky

Nonprofit and charitable groups must file IRS Form 990 Check 990s at GuideStar

www.guidestar.org

Before you donate, check to see if the charity is legitimate www.charitywatch.org: 773-529-

2300


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Work-at-home scams

Do not respond—these offers are scams

If you respond, you’ll be asked to pay for supplies upfront

Might ask you for your credit card, bank account or Social Security numbers for fraudulent uses


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Credit card fraud Keep an eye on your credit

cards at all times

Unscrupulous employees might steal the information from your credit card and use it to make counterfeit cards

Shred all credit card statements, receipts and solicitations before throwing them away


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Dumpster diving Crooks look in garbage cans and

elsewhere for discarded credit card statements and receipts to obtain the card numbers

These papers can be used to steal your identity and set up credit in your name

Shred sensitive papers


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Real estate fraud Before purchasing property out of state,

contact a national real estate firm with licensed brokers

Before you purchase land contact: The state department of real estate

where the land is located

The U.S. Department of Housing and Urban Development at 202-708-0502


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Contractor fraud Traveling contractors are rarely licensed

or insured and often take a large cash payment up front

They will probably never return to complete the work

When you need a contractor for a home improvement job, get at least 3 estimates from reputable local contractors


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Home equity loan fraud Often working with unscrupulous lenders,

door-to-door salespeople offer “easy financing” for improvements and home repairs that may not be needed at all

Often the work they do is shoddy or incomplete

The loans they arrange are secured by your home and often carry very high interest rates and other costs


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Refinancing scams Brokers solicit homeowners to

refinance their existing mortgages and replace them with bad loans

Bad loans have inflated fees and interest and high monthly payments that homeowners cannot afford to pay

The homeowner falls into default and the home is foreclosed on

The crooks buy up the real estate at deflated prices


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Deed forgeries Scam artists forge the

homeowner’s signature on a blank deed in order to transfer ownership of their property

Never sign blank contract documents


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Fly-by-night lenders

Phony lenders Set up offices in low income and minority

neighborhoods

Get homeowners’ signatures on loan documents

Disappear with the loan money

Loans may be resold to another lender who then forecloses on the homes


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Investment fraud

Everyone would like to see his or her money grow faster

Crooks try to convince people to buy phony investments with promises of unusually high returns


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Analysis of Audio TapesInvestment fraud criminals use a wide array of influence

tactics. The research found 1,100 separate uses of the influence tactics in 128 transcripts. The most frequently-used tactics were: Phantom Fixation – “These gas wells are

guaranteed to produce $6,800 a month in income.” Commitment – “You can vote to stop drilling, but if

you do, all the rest of what you have invested will be lost.”

Authority – “I have been in the oil business for over 30 years and I have seen it all.”

Social Consensus – “I know it’s a lot of additional money to spend, but I am in this thing just as deep as you are and I say its worth every dime.”

Scarcity – “There are only two units left in this well.”


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Avoid investment fraud Do your homework about investments

If you are targeted with questionable investment offers, notify the U.S. Securities and Exchange Commission (SEC)

Call your state attorney general’s office to file a complaint


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Checking investments Check with the SEC before

investing Has the offering been cleared for

sale in your state? Call your state securities department

Check disciplinary actions against brokers with the Central Registration Depository (CRD)

The National Association of Securities Dealers (NASD) may provide a disciplinary history on a broker or firm. 800-289-9999 or www.nasd.com


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Pyramid schemes Promoters recruit investors and use them to

recruit more investors

Investors are promised a fabulous return, such as 20% a year

Some investors might receive money but eventually, the organizers run off with everything

Pyramid schemes are often called “investment clubs” or “gifting circles,” and can involve the sale of products or distributorships


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ID theft

ID theft criminals use your personal information to apply for credit or government benefits Your name Your birth date Your Social Security number Your address Your bank account or credit card

numbers


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Fake cashier’s checks Crooks scan want ads looking for victims Answer ads and offer to pay by “cashier’s

check” for more than the sales price Ask you to wire the remainder of the

money back to them or to give the extra money and the merchandise to a “shipper”

Check turns out to be a fake and you lose the merchandise and the money


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Credit card loss protection Don’t buy the worthless credit

card loss protection and insurance programs sold by telemarketers

Your liability for unauthorized credit card charges is limited to $50


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Protect your property and assets

Financial exploitation is often committed by a person that is trusted by the victim

Keep all important financial documents under lock and key in your home

Store valuables in a bank safe deposit box


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Medicare fraud Medicare prohibits companies offering its

approved drug cards from calling you, sending emails or coming to your home unless you ask them

If you are interested in the benefits available to you as a Medicare beneficiary, visit the federal government’s Medicare web site (www.medicare.gov) or call 800-MEDICARE (800-633-4227)


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Health fraud Signs of health fraud include:

Promoters of cures who claim that the medical establishment is keeping information away from consumers

Testimonials from people who supposedly have been cured

“Secret formulas” that no one else has The use of infomercials—programs that

look like news, but are just lengthy ads paid for by the promoter


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Living trusts Living trusts are a legitimate estate-

planning tool

Typically, consumers with low income and small estates do not need them Consider a living trust only if your

estate’s value is higher than the state’s minimum limit for probate, which is $100,000 in Wyoming


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Funerals and burial scams While it makes sense to plan your

funeral and burial in advance, it is not a good idea to pay for these services in advance

Draw up your plans with a reputable funeral business and save a copy for your survivors

If you want cover the cost of your funeral include funds to do so in your will


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Warning signs of fraud Be suspicious if you hear

You’ve won a prize or free gift

You’ve been selected to receive a special offer

You must act immediately or lose out

You must pay for shipping your prize or free gift

Give us your credit card number and expiration date to verify that you are a credit cardholder


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More warning signs of fraud You’re asked for personal information

You’re asked to donate to an agency whose name sounds like a well known charity

You’re one of only a chosen few to receive this offer

A courier will come to your home to get your payment


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Protect your assetsNever

reveal your financial information to someone who calls you on the phone

allow strangers to come into your home

believe that a stranger will use your money for a good purpose

assign power of attorney to people you don’t know very well

sign contracts that have any blank lines in them


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What is ID theft?

Criminals use your personal information to apply for credit or government benefits Your name Your birth date Your Social Security number Your address Your bank account or credit card

numbers


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What can be done with a false ID? Open credit cards, buy goods Take out loans Get cell phones Open bank accounts Seek employment Open credit accounts Pay bills


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What is account fraud?

Unauthorized charges, withdrawals or new accounts

Crooks use: Identification Credit card numbers Social security numbers Bank account information


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It pays to prevent ID theft

Victims spend an average of 600 hours recovering from ID theft often over a period of years.

It is estimated that every victim of ID theft spends $1,400 in out-of-pocket expenses to clear their names


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Are you already a victim?

Check your credit report Look for

Accounts you don’t recognize Inaccurate information


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Credit reports Check your credit reports regularly. Free credit reports can be obtained

once a year from each of the 3 credit reporting agencies Equifax Experian TransUnion


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Credit reporting agencies

Equifax, 800-525-6285, www.equifax.com

Experian, 888-397-3742, www.experian.com

TransUnion, 800-680-7289, www.transunion.com


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Free credit reports

Annual Credit Report www.annualcreditreport.com (877) 322-8228 Annual Credit Report, Request Service,

PO Box 105281, Atlanta, GA 30348-5281


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Victims - be watchful Dispute fraudulent accounts immediately

Close all affected accounts Follow up your phone call with a written request

Get letters stating disputed accounts have been closed

Create new passwords for all of your accounts Avoid easy-to-guess passwords


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Social Security number (SSN) Memorize your Social Security number

(SSN) Don’t carry your Social Security card Don’t print your SSN on your driver’s

license or bank checks Keep all papers listing your SSN hidden or

locked away Shred all documents with SSNs before you

throw them away


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Financial information Check bills, bank and credit card

statements Report any unauthorized transactions

immediately Track statements, new credit cards or

check orders in the mail Call the companies immediately if you

notice Unauthorized transactions Missing credit cards or checks


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Cards and account numbers Shield ATM keypads when entering

passwords Memorize your PINs Watch your cards while they are with

sales clerks or waiters Lock your own mailbox

Use US post boxes for outgoing mail that contains account numbers


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Phone and Internet

Don’t answer callers or e-mails asking for personal information Remember, you may be overheard on a

cell phone Always make sure you are dealing

with reputable companies


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Marketing

Read your bank’s privacy notice Stop or ‘opt out’ of pre-screened

credit offers (888) 5OPT-OUT


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Monitor your mail

Missed bills, credit card statements, etc. may signal trouble


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Always question … Charges, bills or collection calls that

are not yours Complain immediately

Denials of credit when you have good credit Get a free copy of the credit report used

to make the decision Check for mistakes or fraud


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ID theft clean up Document the crime File a police report with your local police

department Get a copy of the police report

Contact appropriate state and federal law enforcement agencies

Complete a free ID Theft Affidavit from the FTC www.ftc.gov/idtheft


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Password accounts

Place passwords on your credit card, bank and phone accounts

Don’t use easy-to-guess names and numbers

Ask businesses not to use SSN or mother’s maiden name


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What can you do: General

1. Do not give your telephone calling card, credit card, or bank account numbers to strangers by telephone or mail unless you initiated the order for goods or services.

2. Do not be pressured by salespeople into buying NOW.

3. Do not pay to receive a free gift.4. Shut the door. Hang up the phone.


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What can you do: Telemarketers

1. Register with the FTC’s Do-Not-Call Registry (to cut down on telemarketers) donotcall.gov or (888) 382-1222.

2. Be very careful about sharing personal financial information.

3. Be skeptical about unsolicited phone calls, especially about investments.

Say: "Sorry, I do not do business over the phone."


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What you can do: Investments

1. Ask for information about the company, price information, and written estimates from door-to-door salespeople before doing business with them.

2. Examine investments carefully.3. Exercise caution about can’t miss

deals.


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What you can do: Contractors1. Ask the contractor for local references. Find out

if other customers were satisfied with the work.2. Check with the Better Business Bureau for

complaints against the contractor. 3. Demand to review the contractor's business

license and insurance certificate. Refuse to deal with anyone who will not provide this information.

4. Do not pay up-front for home repairs. Divide payments up to ensure you are not left with an empty bank account by an unethical contractor.


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Elder Abuse: Background

Often traced to family members, caregivers and trusted friends

Adult Protective Services (APS) agencies report more cases of financial abuse than physical abuse each year

Only 1 of 14 cases of domestic vulnerable adult abuse incidences is reported


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Elder Abuse Perpetrator Profiles

1. Adult children, grandchildren, or other relatives

2. Professional or hired caretakers3. Friends or others in a position of trust4. Professional crime groups that target

elders and dependent adults


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Caretaker crimes Be alert for caregivers

who try to isolate you from your friends and family

who ask about your will and investments

who ask to be given power of attorney

who try to dominate or influence you Tell family members or call adult protective

services


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Relative and Caregiver Offenders

Methods of financial exploitation include: Simply taking the victim’s money Signing or cashing the person’s pension or social

security checks without permission Forging a signature to cash checks Deceiving or coercing the victim into signing

checks, documents (will, contract) Transferring title on, or re-encumbering, real

property Improper use of conservatorship, guardianship, or

power of attorney.


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Spot the Warning Signs: Behavior

1. Change in the elder's spending patterns, such as buying items he or she doesn't need and can't use.

2. Lack of personal amenities, such as appropriate clothing and grooming items.

3. The appearance of a stranger who begins a new close relationship and offers to manage the elder's finances and assets.

4. Parents suddenly become secretive or defensive about their finances.


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Spot the Warning Signs: Banking1. Numerous unpaid bills when someone else has been

designated to pay the bills.2. Abrupt or unexplained change in durable power of

attorney 3. Allegations of missing funds from a senior's account 4. Sudden increase in credit card activity or a flurry of

bounced checks5. Checks written out of their numerical order 6. Financial statements sent to an unauthorized address7. Signature that seems unusual or suspicious 8. Checks or other documents signed when the elder

cannot write or understand what he or she is signing.


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Spot the Warning Signs: Other Junk mail for

contests, free trips, and sweepstakes

Calls from strangers offering awards or moneymaking deals

Cheap items like costume jewelry or mini-flashlights


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Tips to Identifying Family Fraud

1. Monitor your credit card and bank account activity.

2. Be wary if a distant relative offers to help you with your finances.

3. If you suspect something, find another family member you trust to talk to.

Look for . . . A change in a caregiver’s lifestyle – a grander

lifestyle? Isolation of an elder by the caregiver.


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What can you do: Family/Caregivers

1. Arrange for direct deposit of Social Security checks and other retirement benefits.

2. Carefully choose someone to appoint as power of attorney and in completing or revising a will.

3. Be careful about permitting family, friends or tenants to live in your house. Have a written agreement about expectations of services to be performed or rent paid.

4. Treat home attendants like employees, not friends.5. Keep valuables hidden if someone comes into the

house on a regular basis.6. Maintain contact with family, friends, neighbors and/or

your community center. The more active you are, the less likely you are to be exploited.


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What can a relative do? Stay involved, even if it’s over the phone. Observe what they receive in the mail. Know who is in their social circle. Look at financial statements for unusual

activity. Take a visual inventory of the home and note

changes. Encourage seniors to complain to the police.


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What can a relative do? (2)

Talk about common scams.

Perform background checks on caregivers.

Take charge. Create a trust.

Remember: Everyone does stupid things.


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What to do if your fears are warranted

Don’t lecture them. Call the police

You may need a police report to help you prove that you were a victim

Contact your state and local law enforcement agencies such as your district attorney’s office or the Wyoming Attorney General


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National Association of Securities Dealers FindingsInvestment fraud victims are more financially literate than non-

victims

Fraud pitches are tailored to match the psychological needs of the victims

Investment fraud criminals use a variety of tactics, from friendship to fear and intimidation, to defraud victims

Investment fraud and lottery fraud victims are more likely to listen to sales pitches than non-victims

Fraud victims often have experienced more difficulties from negative life events than non-victims


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Vulnerable Consumers

Assume They Are Experts. Vulnerable consumers do not seek information about a subject or "opportunity". They may not admit their lack of necessary knowledge or skills.

Do Not Use Common Sense. Vulnerable consumers let "getting something for nothing" overtake sound reasoning. They do not question what sounds too good to be true. They accept the deal rapidly for fear they might miss the opportunity.


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Search for Good Health. Vulnerable consumers let universal desire to be healthy overtake good judgment. They believe in false cures for an illness or chronic condition.

Believe Misleading Ads. Vulnerable consumers assume publications accept advertisements from reputable sources only. They assume information in advertisements has been verified as true.


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Feel Intimidated. Vulnerable consumers buy a product or service out of assumed obligation to the seller. They feel threatened when they question price or quality of goods or services.

Do Not Know or Use Their Legal Rights. Vulnerable consumers do not seek legal counsel when needed. They often fail to report being swindled to law enforcement agencies.


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If you become a victim...

Call the police You may need a police report to help you

prove that you were a victim

Contact your state and local law enforcement agencies such as your district attorney’s office or the Wyoming Attorney General


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Resources Wyoming Attorney General AARP Wyoming Adult Protective Services Consumer Action North American Securities Association National Fraud Information Center National Association of Attorneys

General National Consumers League


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Additional resources FTC ID Theft Clearinghouse / ID Theft Hotline US Department of Justice Federal Bureau of Investigation Federal Deposit Insurance Corporation United States Postal Inspection Service United States Secret Service


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Non-profit organizations Consumer Action

www.consumer-action.org Identity Theft Resource Center

www.idtheftcenter.org National Fraud Information Center

www.fraud.org Privacy Rights Clearinghouse

www.privacyrights.org


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