Scam of the Day
Scam of the day – May 29, 2023 – Federal Court Shuts Down Pyramid Schemer
In the Scam of the day for January 19, 2020 I first told you that the Federal Trade Commission (FTC) had sued multi-level marketer “Success By Health” and its executives alleging that the company operated an illegal pyramid scheme. At that time the United States Federal Court for Arizona granted a temporary restraining order shutting down the operation of “Success by Health” while the litigation progressed. According to the FTC, “Success By Health” cheated their victims out of more than seven million dollars. The flagship product of “Success By Health” is an instant coffee product called “MyocoCafe” that contains a mushroom that “Success By Health” represented as providing significant health benefits although there is no evidence to that effect.
“Success By Health” operated as a multi-level marketing company, however, rather than a legitimate multi-level marketing company such as Amway, the FTC alleges that “Success By Health” operated as an illegal pyramid scheme through which its distributors made money by recruiting new distributors rather than through selling products which is the hallmark of an illegal pyramid scheme. As Andrew Smith the FTC’s Director of Consumer Protection has said, “Participants in legitimate multi-level marketing companies earn money based on actual sales to real customers rather than recruitment. But pyramid schemes depend on recruitment of new participants to pay out to existing participants, meaning that the vast majority of participants will ultimately lose money.” “Success By Health” executives told prospective distributors that they could earn more than a million dollars per month, however, in order to do so they would have to recruit more than 100,000 affiliates working under them to achieve that level of profit.
Sometimes a legitimate multilevel marketing business may look quite similar to an illegitimate pyramid scheme, which is one of the reasons that so many people fall prey to these scams. For every legitimate multilevel marketing company, such as Mary Kay and Amway, there are many that are just scams. In a legitimate multilevel marketing company, investors make money by selling products to the public and by recruiting new salespeople. In a pyramid scheme the source of profits is based primarily on the recruiting of new members or salespeople.
Now the Federal Court for Arizona has ruled that Success by Health and its principal, Jay Noland and others violated a range of federal laws and have banned them from ever participating in multi level marketing operations and also imposed a 7.3 million dollar judgment against them. This money will be used to pay back the victims of the scam. As more information becomes available about the refunds, I will inform you.
TIPS
Anyone who is considering investing in what is represented to be a multilevel marketing business should always investigate the company and the terms of investment carefully before investing any money. In addition, you should also check out the company with the FTC and your state’s attorney general to make sure that the company is legitimate before investing any money. Here is a link to information from the FTC that you should consider before investing in a multilevel marketing business. http://www.consumer.ftc.gov/articles/0065-multilevel-marketing
As for supplements that purport to provide health benefits, you should never buy them or sell them unless you have thoroughly investigated the legitimacy of the claims.
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Scam of the day – May 28, 2023 – Memorial Day Scams
As we honor our veterans on Memorial Day, May 29th it is important to remember that scammers take Memorial Day as just another opportunity to scam veterans and others. In the case of Memorial Day, you can expect to be solicited by scammers by phone (remember legitimate charities can call you by phone even if you have enrolled in the Do Not Call List because charities are exempt from the Do Not Call List), email or letters asking for your money for various veterans causes or charitable ventures tied to Memorial Day.
Another common scam targets veterans and starts with a telephone call in which the veteran is told that in order to continue to receive various benefits, it is necessary to verify personal information such as the veteran’s birth date, Social Security number or bank account information. Of course, the call is not from the Veterans Administration and the call is not to verify information, but rather to gain information to be used to make the veteran a victim of identity theft.
TIPS
You never know who is on the other line of a telemarketing call, so never trust them. Remember my motto, “trust me, you can’t trust anyone.” If you are at all interested in what the caller appears to be selling or soliciting, ask them to send you written materials that you can then check out to see if it is legitimate. When it comes to charities, a good place to go is www.charitynavigator.org where you can see if a charity is legitimate or a scam as well as actually how much of the money they collect goes toward their charitable purposes and how much towards salaries and administrative costs.
As for calls purporting to be from the Veterans Administration, they do not call you on the phone to verify information. If you receive such a call, you can never be sure who is really calling because clever identity thieves are able to use a technique called “spoofing” to make it appear on your Caller ID as if the call from the identity thief is coming from the VA.
Since you cannot be sure who is calling you when you receive a call asking for personal information, you should never give that information out in response to a phone call, text message or email. Instead if you have the slightest thought that the communication may be legitimate, you should contact the real entity, in this case, the VA at a phone number that you know is accurate to inquire where you will learn that the initial contact was a scam.
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Scam of the day – May 27, 2023 – FTC Refunding Money to Victims of Credit Card Interest Rate Reduction Scam
In 2020 I first told you about the FTC and the State of Florida suing GDP Network and its owners over allegations that they operated a credit card interest rate reduction scam. GDP contacted consumers through telemarketing cold calls promising to permanently and substantially reduce their credit card interest rates. After tricking consumers into believing they were affiliated with the consumer’s existing credit card companies or well-known credit card networks such as MasterCard or Visa, the defendants promised to save them thousands of dollars in credit card interest and enable them to pay off their credit card debt three to five times faster. The defendants charged upfront fees of as much as $3,995 for their bogus services, the agencies allege.
Many consumers who paid the defendants’ significant upfront fees received no permanent debt reduction and were left with more debt and worse credit. Instead of contacting the consumer’s credit card companies to negotiate permanently and substantially lower interest rates, the defendants applied for new credit cards in their names with temporarily lower “teaser” interest rates. They then executed balance transfers from the consumer’s existing cards to the new cards. These tactics not only failed to provide many consumers the savings they were promised, but also often left them saddled with substantial balance transfer fees, on top of the upfront fees they paid.
Now three years later the case has been settled with GDP Network being permanently banned from the debt relief industry and required to pay funds that are now being refunded to victims of the scam. The FTC has started sending refund checks to victims of the scam. For more information about the refunds, go to the middle of the opening page of Scamicide to the section entitled “FTC Scam Refunds.”
TIPS
It is important to remember that the FTC’s Telemarketing Sales Rules specifically prohibit charging advance fees before providing any debt relief services. Any company that requires an advance fee before they have completed their successful debt reduction services is breaking the law. You also may want to consider avoiding scams like this by enrolling in the federal Do Not Call List so that if you are contacted by a telemarketer, you already know it would be someone who is knowingly breaking the law and cannot be trusted. Registering for the Do Not Call List is easy and free. Merely go to http://www.donotcall.gov to register your phone number.
If you need real credit counseling you can go to this section of the Department of Justice’s website where it lists agencies approved to assist consumers with debt problems. https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111 You also may consider contacting companies that are affiliated with the National Foundation for Credit Counseling at this link https://www.nfcc.org/
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Scam of the day – May 26, 2023 – Postal Workers Scammed Out of a Million Dollars
The American Postal Workers Union has disclosed that at least 460 of its members lost a million dollars in paychecks through a scam in which the scammers set up fake USPS HR websites that were used by the scammers to trick the postal workers who went to the phony websites to provide their usernames and passwords which the scammers then used to access the postal workers’ real accounts and have the paychecks sent to accounts controlled by the scammers.
Payroll diversion scams such as this are becoming a major problem, but can be avoided by taking a few precautions.
TIPS
Whenever you are going to a website you should never go by clicking on a link in an email or text message. Nor should you trust a search engine search to provide you with the real website. Algorithms used by search engine such as Google can be manipulated by sophisticated scammers to have their phony websites appear at the top of a search. Instead you should confirm the URL of the site you are looking for and enter it manually.
Additionally, because the risk of your user name and password being compromised is great, whenever possible you should use dual factor authentication so that even if someone manages to obtain your user name and password, they will not be able to access your account.
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Scam of the day – May 25, 2023 – Two Million People Affected by Medical Equipment Company Data Breach
Once again I need to tell you about another major data breach. This time it is Apria Healthcare LLC a home medical equipment company who, we are just now learning was hacked in 2019 and 2021 by the same hackers. As a result of the data breach sensitive information including credit card and debit card numbers of two million of Apria Healthcare’s customers were stolen.
As I have reminded you many times, we are only as safe and secure as the security of the companies, government agencies and websites that have our personal information. Even if you are extremely diligent in protecting your personal information, you can be in danger of identity theft and scams if your personal information falls into the hands of hackers.
So what can you do to protect yourself from these data breaches that will be occurring?
TIPS
One important lesson is to limit the amount of personal information that you provide to companies and websites whenever possible. For example, your doctor or hospital doesn’t need your Social Security number for its records. This is particularly significant because health care providers are the biggest targets for data breaches.
You should make sure that you have a unique password for each of your online accounts so that if one of your passwords is compromised in a data breach, all of your accounts will not be in danger. If your information is compromised in a data breach, you should immediately change the password for that account.
If you have not already done so, set up dual factor authentication for each of you accounts where it is available. This will protect you from having those accounts stolen by someone who may have access to your password.
You also should limit your debit card use to using it at ATMs because the law regarding liability for fraudulent debit card charges is not as protective as the law regarding credit cards.
https://www.transunion.com/credit-freeze
https://www.experian.com/freeze/center.html
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Scam of the day – May 24, 2023 – Ransomware Attack Cripples Dallas
I have been warning you about the dangers of ransomware for eight years. Ransomware is a type of malware that when downloaded encrypts and make unavailable all of the data on your computer. Once this occurs the criminals then threaten to destroy the data if a ransom is not paid. Ransomware attacks have been made against government agencies, companies and individuals. Like all forms of malware, ransomware must be downloaded on to your computer in order to cause problems. This is generally done by luring people to click on links or download infected attachments contained in spear phishing emails. One of the most recent ransomware attacks started on May 3rd against the City of Dallas As a result of the attack, the Dallas government has had many of its services unavailable as well as sensitive data stolen.
For the last eight years protection from ransomware has focused on backing up your data daily so that if you do become a ransomware victim, you do not feel compelled to pay the ransom because your data has been protected. Some cybercriminals have changed their tactics in regard to ransomware. In 2020 the University of Utah announced that it had paid $457,059 to cybercriminals who used ransomware to attack the University’s computers and encrypt its data. What was unusual about this was the fact that the University of Utah had backed up all of its data and was in no danger of losing the data if it did not pay the ransom. However, in a relatively new tactic that has been employed against law firms and others recently, the cybercriminals threatened to make public the sensitive information they stole if a ransom was not paid. We are now seeing about 10% of ransomware attacks involve the making public of data accessed by the cybercriminals.
It is important to note that although major ransomware attacks against companies and governmental agencies have been newsworthy, a ransomware attack is also a very real threat to ordinary people.
TIPS
Because ransomware attacks as well as most other types of malware attacks are spread through phishing emails that lure unsuspecting people into clicking on malware infected links or downloading attachments tainted with malware, you should never click on links in emails or download attachments unless you have absolutely confirmed that the email is legitimate.
You also should update all of your electronic devices with the latest security updates and patches as soon as they become available, preferably automatically. Many past ransomware attacks exploited vulnerabilities for which patches had already been issued. The No More Ransom Project has a website that provides decryption tools for some of the older versions of ransomware that are still being used. Here is a link to their website https://www.nomoreransom.org/en/decryption-tools.html It is important, however, to remove the ransomware before downloading and using the decryption tools. This can be done using readily available antivirus software. It is also important to remember that even if you have the most up to date security software on your computer and phone, it will not protect you from the latest zero day defect malware which is malware that exploits previously undiscovered vulnerabilities.
Another precaution you should follow is to regularly back up all of your data on at least two different platforms, such as in the Cloud and on a portable hard drive. However, this will not protect you from a ransomware attack that threatens to make public your data, so everyone should truly focus on not just protecting data in the event of a ransomware attack, but on preventing such attacks through security software and training to recognize phishing and spear phishing emails.
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Scam of the day – May 23, 2023 – FTC Sues Student Loan Debt Relief Scammers
More than forty-two million Americans have student loans with an outstanding balance of more than 1.4 trillion dollars so it is no surprise that scammers are focusing their attention on these students and former students through scams that falsely promise to provide debt relief.
Recently the Federal Trade Commission (FTC) filed a lawsuit against SL Finance LLC and its owners Michael Castillo and Chirstian Castillo as well as against BCO Consulting Services Inc. and SLA Consulting Services Inc. and their owners Gianni Oilang, Brandon Clores, Kishan Bhakta and Allan Radam alleging that they lured unsuspecting victims into paying approximately 12 million dollars in illegal upfront fees by lying about repayment programs and loan forgiveness programs that never existed. The companies also lied about being affiliated with the Department of Education as well as telling their victims that the money paid to them would be used to reduce their loans.
The FTC has obtained a temporary injunction shutting down the scammers while the cases against them proceed in court.
TIPS
The old adage still is true. If it sounds too good to be true, it probably isn’t true. Many of these student loan debt relief scammers promise quick loan forgiveness, which is unrealistic. In addition, you should never pay any upfront fees for student loan debt relief assistance. Those fees are illegal and are a sure indication that you are being scammed. Also, remember my motto, “trust me, you can’t trust anyone.” Don’t trust scammers merely because they use names that sound like they are affiliated with the government.
For information you can trust about federal student loan repayment option, go to https://studentaid.ed.gov/sa/repay-loans . There you can learn about loan deferments, forbearance, repayment and loan forgiveness programs and there is never an application fee. If you owe private student loans, contact your loan servicer directly.
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Scam of the day – May 22, 2023 – Taylor Swift Concert Ticket Scams
It is not an overstatement to say that Taylor Swift is one of the most popular singers of all time. Tickets to her concert tour are in great demand with many of her fans (called Swifties) desperate to buy tickets to her concerts. This desperation is not missed by scammers who have been selling phony tickets to her fans who end up going to the concert only to be doubly disappointed as they are turned away at the door and lose the money they used to pay for the tickets.
Scammers are selling their phony tickets on Craigslist, social media such as Facebook marketplace, through unsolicited emails and text messages as well as through pop-up ads.
TIPS
Always buy your tickets from legitimate sources that you have confirmed are legitimate with your local state’s attorney general. Buying tickets directly from the venue box office or reputable ticket sale or exchange sites is the safest way to buy tickets. Even then, check with the Federal Trade Commission for any complaints against these companies offering ticket sales. Never wire money for tickets because once money is wired, it is gone forever, leaving you with no recourse if the tickets are phony. Only pay through a credit card where you would be in a good position to get your money back if the sale is a scam. Never pay with a debit card where you have far less legal protection in the event of fraud. Nor should you pay by a gift card or services like Venmo. When buying tickets on-line using your credit card, make sure that the connection is secure. Always look for the prefix https rather than http in order to confirm that the data is encrypted as it is being transferred.
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Scam of the day – May 21, 2023 – Federal Prosecutors Against Alleged Crypto and Metaverse Scammers
Two days ago, federal prosecutors unsealed charges against Bryan Lee in regard to an investment scam where Lee and the previously indicted Neil Chandran operated companies that purported to be developing metaverse technologies and cryptocurrencies. They promised investors huge returns which they said would occur when their companies would be bought by Jeff Bezos of and Elon Musk. Lee and Chandran managed to convince 10,000 people to invest more than 45 million dollars in these fraudulent companies.
Convicted Ponzi schemer Bernie Madoff who stole 50 billion dollars from unsuspecting victims may be the last person from whom you would accept investing advice, but in fact, his advice, as contained in a 2014 jailhouse interview Madoff gave to the Wall Street Journal is helpful to people hoping to avoid the fate of Madoff’s many victims. With great “chutzpah,” Madoff blamed his victims for their losses. He said that his investors were “sophisticated people” who should have known better. “People asked me all the time, how did I do it. And I refused to tell them, and they still invested. Things have to make sense to you. You should ask good questions.” About this he is correct. No one should ever invest in anything that they do not totally understand.
TIPS
The bottom line is that Bernie Madoff was right about one thing. No one should ever invest in anything without totally understanding the investment and the inherent risks. Cryptocurrencies and virtual reality products for the metaverse are extremely complicated. No one should invest in companies involved in these activities unless you firmly understand what you are investing in. You may want to check out the SEC’s investor education website at www.investor.gov. as well as the SEC’s website for information about cryptocurrencies. https://www.sec.gov/oiea/investor-alerts-and-bulletins/exercise-caution-crypto-asset-securities-investor-alert
Before investing with anyone, you should also investigate the person offering to sell you the investment with FINRA’s Central Registration Depository. http://www.finra.org/industry/crd This will tell you if the broker is licensed and if there have been disciplinary procedures against him or her. You can also check with your own state’s securities regulation office for similar information. Many investment advisers will not be required to register with the SEC, but are required to register with your individual state securities regulators. You can find your state’s agency by going to the website of the North American Securities Administrators Association.http://www.nasaa.org/2709/how-to-check-out-your-broker-or-investment-adviser/
Anyone investigating Neil Chandran would have been able to find that he was a convicted felon and securities law violator.
Scam of the day – May 20, 2023 – Debt Collection Agency Data Breach
If it seems like I was just telling you about another major data breach a few days ago, you are correct. It was only three days ago that I wrote about another data breach. https://scamicide.com/2023/05/16/scam-of-the-day-may-17-2023-another-major-health-care-data-breach/
Today’s data breach involves Credit Control Corporation which is a debt collection agency specializing in debt collection on behalf of a number of hospitals and physicians. They have just announced that they suffered a data breach in March in which sensitive personal information of 286,699 people was stolen. This information included names, addresses and, most importantly, Social Security numbers. This information can be readily used to make the victims of the data breach also victims of identity theft.
As I have reminded you many times, we are only as safe and secure as the security of the companies, government agencies and websites that have our personal information. Even if you are extremely diligent in protecting your personal information, you can be in danger of identity theft and scams if your personal information falls into the hands of hackers.
So what can you do to protect yourself from these data breaches that will be occurring?
TIPS
One important lesson is to limit the amount of personal information that you provide to companies and websites whenever possible. For example, your doctor or hospital doesn’t need your Social Security number for its records. This is particularly significant because health care providers are the biggest targets for data breaches.
You should make sure that you have a unique password for each of your online accounts so that if one of your passwords is compromised in a data breach, all of your accounts will not be in danger. If your information is compromised in a data breach, you should immediately change the password for that account.
If you have not already done so, set up dual factor authentication for each of you accounts where it is available. This will protect you from having those accounts stolen by someone who may have access to your password.
https://www.transunion.com/credit-freeze
https://www.experian.com/freeze/center.html
If you are not a subscriber to Scamicide.com and would like to receive daily emails with the Scam of the day, all you need to do is sign up for free using this link. https://scamicide.com/scam-of-the-day/