Congressional hearings last week highlighted the problem of scam artists fraudulently selling gold and other precious metals to people, many of them elderly. Often these scams start with a telemarketing call to the victim in which he or she is told “inside” information about an upcoming rise in the prices for gold, silver or other precious metals. The victims are then goaded into buying the metals at an inflated price and then must often pay additional commission and storage fees that result in the victims losing thousands of dollars. Since 2001, it is estimated that precious metals fraud has cost consumers 300 million dollars. Although the Commodity Futures Trading Commission and the Federal Trade Commission both have jurisdiction in the advertising and sale of precious metals and have shut down some scammers, their record in protecting consumers from precious metal scams is lacking.
No one should ever purchase an investment unless they fully understand the investment and no one should ever make an investment decision based solely on a telemarketing call. Precious metals can be a part of a legitimate investment portfolio, however, this is a sophisticated investment that should only be done by people who are fully educated and informed not just about the investment itself, but also the brokers and others selling the particular investment.
Every day is Scam Day and Mother’s Day is no exception. Although for many of us, Mother’s Day is an opportunity to show our mothers how much we love and appreciate them, for scam artists, the only criminals we refer to as artists, it is yet another opportunity to scam people. One common Mother’s Day scam involves an email that you get offering Mother’s Day gifts such as flowers, jewelry, shoes or clothing at tremendously discounted prices. All you need to do is to click on a link to order online. The problem is that many of these offers are indeed scams. If you click on the link, one of two things can happen and both are bad. Sometimes the link will take you to an order form where you provide your credit card information, but never get anything in return. Instead your credit card information is used to make you a victim of identity theft. Even worse is the other possibility which is by clicking on the link, you will unwittingly download a keystroke logging malware program that will steal all of the personal information stored on your computer and use that information to make you a victim of identity theft. Another Mother’s Day involves e-cards which are great, particularly for those of us who forget to get a Mother’s Day card until the last minute. Again, however, identity thieves will send emails purporting to contain a link to an electronic Mother’s Day card, but instead download that dangerous keystroke logging malware that I just described.
It is always dangerous to buy anything online from any store or company with which you are not familiar. Check out the company with the Better Business Bureau, your state’s Attorney General, the Federal Trade Commission or just on Google to see if the company is legitimate. Even then you are better going directly to the company rather than dealing with a company through an email that may just be a forgery of an email from a legitimate company. As always, if the offer you receive sounds too good to be true, it usually is. As for e-cards, never open an e card unless it specifically indicates who sent the card. Phony e cards will not indicate the name of the sender.
According to the Federal Trade Commission’s most recent survey, more than thirty million Americans were the victims of scams last year. However, the number of scams was indicated as close to 49 million scams, which means that many scam victims were victimized more than once. This is not a coincidence or mere bad luck. Scammers often compile lists of their victims with information including their names, addresses and contact information. They sell this information to other scammers who often contact the victims and tell them that they are with a consumer group or government agency and that they are available to help the victim regain the money lost to the previous scam. The new scammer then asks for processing fees or other personal information, such as a Social Security number in order to proceed with the recovery effort. Of course, the recovery effort never occurs. In fact, the victim is merely victimized again, either by paying for services the victim never receives or by giving away personal information that leads to identity theft.
No government agency or consumer agency will contact you about recovering money you have lost to a scam. It is up to you to contact them. Only the scammers know you have been scammed so if you receive contact from someone seeking to help you, just say no. Never give your personal information to anyone whom you have not contacted and are sure that they are legitimate and need the information.
The Federal Trade Commission has just won a major lawsuit against infomercial marketers of real estate investment scams that stole money from a million victims who fell for the informercials misleading misinformation as to how they could become rich through real estate deals and through the Internet. The infomercials were for “John Beck’s Free & Clear Real Estate System”, “John Alexander’s Real Estate Riches in 14 days” and “Jeff Paul’s Shortcuts to Internet Millions.” In addition to the misleading and false claims that were made in the infomercials, the scammers did not adequatley disclose that once you paid for the system, you also were automatically enrolled in a program that charged you anew every month.
Perhaps the most important thing to take away from this type of scam is that just because you see an advertisement on a legitimate television, cable or satellite station, hear about it on a legitimate radio station or read about it on a website or publication that is honest, you can’t automatically trust that the advertisment is legitimate. Media outlets do little if any screening for legitimacy and accuracy when it comes to their advertisers. As always, if it sound too good to be true, it usually is. It is always a good idea to check out the program and the history of the company behind the program independently before investing in anything. Checking with the Better Business Bureau, the FTC and your local attorney general are good places to start your research. And finally, always read the fine print. Rarely is there anything fine in fine print.
Recently the operators of the online children’s game site RockYou settled a claim of the Federal Trade Commission that it did not properly protect the privacy of its users and failed to use proper security resulting in the site being hacked and the information on 32 million users being compromised. This particular website by being aimed at children also violated the Children’s Online Privacy Protect Act Rule or COPPA which requires website operators to notify parents and get their consent before collecting, using or disclosing personal information from people under the age of 13.
You are only as safe from identity theft as the places that hold your information. Try to limit the places that have your personal information and find out what security measures they take, such as encryption of the data. You should also educate your children about the dangers of downloading free music or games because that is a common way that scammers install keystroke logging malware on your computer that can steal all of the information from your computer.
Recently the Federal Trade Commission announced a new effort to combat botnets. Botnets occur when a scammer is able to install malware on your computer turning it into a robot that can steal your information or use your computer to send out spam emails or spread viruses and other malware. The malware that turns your computer into a botnet is installed on your computer when you unwittingly download the malware.
Never click on links for “free” music or games from a source that you are not absolutely sure is secure. This is a common source of the malware that turns your computer into a botnet. Keep your security software up to date, use strong passwords, never turn off your firewall and be very cautious when using thumbdrives. This is another area where infections occur.
Recently the Federal Trade Commission settled complaints against five automobile dealers for a misleading and deceptive advertising practice pertaining to paying off a car loan on a consumer’s trade-in when buying a new vehicle. Some car dealers promise in their ads to pay off any outstanding car loan on the car that is being traded when purchasing a new car, however, rather than paying off the loan with their own money as implied by their advertising, some dealers are merely adding the cost of the payoff into the cost of the new car, building the cost into the new car loan. Other times the consumers have even been forced to pay off the old loan in cash before they can take their new car.
When buying a new car make sure you negotiate the total price of the car and not the monthly payments on a car loan. The loan payments can be extended to make it appear that you are paying less when you are paying more over the time of the loan. Also read the fine print to make sure that you know exactly what you are paying.
This scam keeps reappearing. It involves the scammer telling the victim that they can get huge returns on their investments by being let in on the “secret” investment portfolios of the world’s largest and most elite banks. You may be told that these investments are a secret and that only select banks and privileged investors are permitted access to these investment programs. In fact, it is so secret that federal regulatory agencies don’t even know about it. You may even be required to sing a nondisclosure agreement by which you promise not to divulge to anyone that you are one of the lucky few involved in this investment.
There is no such prime bank investment program. It is a scam. The fact that you are told that even federal regulatory agencies don’t know about this secret program is a good indication that it is nothing more than a scam. A good question to ask yourself is, “Why am I so lucky to be offered to participate in this investment program?” The answer is that you are lucky enough because you are targeted as a victim.
These scams lure victims by telling them that they will be paid to shop at various stores and then report on their shopping experience to market research firms that work for the retailers to help them evaluate and improve their customer relations.
How the scam works is that once the victim signs up for the program, he or she receives a certified bank check to cover the cost of the purchases (which the mystery shopper is allowed to keep) as well as the payment to the mystery shopper for his or her services. The scam artist further instructs the victim to wire back to the scam artist the balance remaining of the funds sent by the certified check. Many victims have thought they were being careful by waiting for the check to clear before making their purchases and sending back the remainder only to find that banks routinely give provisional credit for checks of less than $5,000 within five days. Once the certified bank check is discovered to be a forgery, the bank deducts the amount of the check from the victim’s account. Unfortunately, also deducted from the victim’s account are the funds that the victim wired to the scam artist under the mistaken impression that the certified bank check indeed was an actual certified bank check.
Whenever you are provided payment by check, always wait for the check to truly clear before trusting that the funds are legitimate. One reason that mystery shopping scams work is that there are legitimate mystery shopping jobs although they are relatively few. A good place to check out if a mystery shopping company is legitimate is with the Mystery Shopping Providers Association, a trade organization of legitimate mystery shopping companies. Their website can be found at http://www.mysteryshop.org/
As always, you should also check into the particular mystery shopping company you are interested in with the FTC, the Better Business Bureau and your local state attorney general.
Skimmers are small devices that can read a credit or debit card and capture the information on the card for scam artists. They may be installed on an ATM or a gas pump or any other device into which you directly swipe your credit card or debit card. They may also be used as a portable device by a criminal clerk or waiter who takes your card and not only runs it for the legitimate charge for whatever you are purchasing, but also runs it through the skimmer to capture the information to steal access to your credit card or debit card.
As much as possible, when giving your credit or debit card to a clerk or waiter, watch the card to make sure that it is not swiped through a skimmer as well as through the legitimate credit card processing machine. Many restaurants now bring the card processing apparatus to you at your table to avoid this type of criminal activity.
And while you are at it, you should consider using your debit card less because unlike a credit card, the laws that protect you in the event of fraudulent use of the card are greatly limited. While your liability for fraudulent use of your credit card is limited by law to no more than fifty dollars, your potential liability for fraudulent use of your debit card that you do not catch in a timely fashion could be the emptying of the checking account to which your debit card is attached.