Scam of the Day

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Scam of the day – October 4, 2019 – FTC Sending Refunds to Victims of Pyramid Scheme

All good things come to those who wait.  In my Scam of the Day for September 4, 2015 I told you about the Federal Trade Commission’s legal action against Vemma Nutrition Company, which the FTC described in its court complaint as an illegal pyramid scheme that preyed primarily upon college students and other young people.   Young people were lured to sign up as affiliates of the company which marketed health and wellness drinks with promises of earnings of as much as $50,000 a week while the truth was that 90% of the company’s affiliates earned less that $3,674 annually while the company reaped profits of 200 million dollars in 2014.  According to the FTC, Vemma was an illegal pyramid scheme where affiliates’ earnings were tied primarily to signing up more affiliates than to selling products.   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, four years after the initial court actions against Vemma, the FTC is sending checks totaling more than 2.2 million dollars to the victims of the scam.

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

For more information about this particular refund program check out the “FTC Scam Refunds” tab in the middle of the first page of www.scamicide.com. You also can find information there about the mailing of the refund checks.  There is no cost or fee to file a claim or get a refund.  Anyone who tells you differently is trying to scam you.

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Scam of the day – October 3, 2019 – Utility Phone Scam

Scams involving utility bills for electric, water or gas services have long been popular with scammers.   Often scammers make robocalls posing as their targeted victims’ electric utility company threatening to turn off the customer’s power if payment is not paid immediately.  While this scam occurs everywhere, Colorado Springs Utilities has just issued a warning to its customers to be aware of this scam.  In the Colorado version of this scam, people are receiving calls in which an immediate payment is demanded by credit card or gift card over the phone or their electricity will be turned off.  The scammers tell their victims that the payment is required to pay for a new digital meter and that customers will be reimbursed by the company for the cost in a few months.  In another version of this scam, potential victims are called on the phone by scammers who tell them that their utility service will be terminated for non-payment unless they pay by credit card or prepaid cards such as iTunes cards over the phone.  In a third version of this scam, potential victims receive an email that has a link to take them to their bill.

All of these are scams.  In the first, utilities will not use robocalls to demand immediate payment under the threat of termination of service. In the second, the victim is coerced into giving their credit card or prepaid card information  to a scammer and in the third, merely by clicking on the link to go to the phony bill, the victim ends up downloading keystroke logging malware or ransomware that can lead to identity theft or worse.

TIPS

You can never be sure when you get an email or a telephone call if it is really from a legitimate source.  Even if you have Caller ID, a scammer can use a technique called “spoofing” to make it appear that the call is from a legitimate caller.  Emails and text messages may also appear legitimate, but can be merely made to appear as if they are coming from your utility company when, in fact, they are coming from a scammer.
Trust me, you can’t trust anyone.  Never provide personal or financial information to anyone in response to a telephone call, text message or email until you have independently confirmed that the communication was legitimate.  In the case of a utility bill, merely call the number on the back of your bill and you will be able to confirm whether or not the communication was legitimate.  Also, never click on links unless you have confirmed that they are legitimate.  The risk is too great.  It is also important to remember that no legitimate utility company will require you to immediately pay your bill over the phone with a prepaid card such as an iTunes card.

A hundred American and Canadian utility companies have formed an organization called Utilities United Against Scams and they have created a Consumer’s Guide to Impostor Utility Scams which provides much information to help you avoid these types of scams.  Here is a link to the guide.  http://www.utilitiesunited.org/Documents/Guide_UUAS_Guide_Utility_Scams.pdf

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Scam of the day – October 2, 2019 – Refunds Being Sent to Student Loan Debt Relief Scam Victims

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. I have written numerous times in the past about various student loan debt relief scams. The Federal Trade Commission recently announced that it is sending 5.4 million dollars worth of refunds to close to 40,000 people who were scammed by a student debt relief scammer who turned over the money to pay for the refunds to the FTC pursuant to a 2018 settlement related to the scams.

The scammers operated under the names Alliance Document Preparation, LLC; EZ Doc Preps; Grads Aid; First Dcoument Aid; SBS Capital Group, LLC, Grads United Discharge; SBB Holdings, LLC; Allied Doc Prep; Post Grad Services; United Legal Center, LLC; Post Grad Aid; Alumni Aid Assistance; United Legal Discharge; United Legal Center, Inc.; Grads Doc Prep, LLC, Academic Aid Center; Academic Protection; Academy Doc Prep and Academic Discharge.  The defendants falsely misrepresented that they were affiliated with the U.S. Department of Education and charged upfront fees for debt relief that never happened.

In October of 2017 the Federal Trade Commission, working with the Attorneys General of eleven states, launched what it cleverly calls, Operation Game of Loans to jointly target these various student loan scams.   Some scammers promise dramatic reductions of debt of 50% or more in return for upfront fees of between $500 and $2,500.  Often these scam companies have names that make it appear that they are endorsed by the federal government in order to trick people into trusting them.  Another student loan scam involves promises related to consolidating student loans.  Often the scammers represent that they are associated with the U.S. Department of Education although the Department of Education does not associate with private lenders in regard to student loan consolidation.  These scammers also charge significant fees for their student loan consolidation services when the truth is that there is no fee for legitimate student loan consolidation.  It is also important to remember that consolidating your student loans does not lower your interest or monthly payment.  Instead, after loan consolidation the student’s monthly payment is equal to a weighted average of the interest rates on the student’s current loans.

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.  You also should never share your FSA ID with anyone.

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.  You can also look into student loan refinancing rather than consolidating the loans.  Refinancing student loans can result in a lower interest rate.  For more information about student loans go to https://www.consumer.ftc.gov/articles/1028-student-loans  Here is a link to a calculator that can help you determine whether you will save more by consolidating or refinancing student loans.https://www.makelemonade.co/calculators/student-loan-consolidation-refinancing-calculator/

For more information about this particular refund program check out the “FTC Scam Refunds” tab in the middle of the first page of www.scamicide.com. You also can find information there about the mailing of the refund checks.  There is no cost or fee to file a claim or get a refund.  Anyone who tells you differently is trying to scam you.

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 to go to the bottom of the initial page of www.scamicide.com and click on the tab that states “Sign up for this blog.”

 

Scam of the day – October 1, 2019 – Medicare Gene Testing Scammers Arrested

DNA testing has become very popular for helping to determine your ancestry.  They also can be used to identify your genetic risk of certain diseases.  Scammers, however are taking advantage of people’s interest in these tests that are done for medical purposes to attempt to scam Medicare.  In my Scam of the day for June 27, 2019 I told you about the Area Agency on Aging for Southwest Florida issuing a warning about these DNA genetic tests.  Senior citizens have been approached at health fairs and asked if they were willing to participate in a free health screening.  A cheek swab was done to collect DNA and the scam victims were  told that the DNA would be sent to a lab for genetic testing.  They were  also told that there would be no cost to them and that Medicare would pay for the test.  In some instances being reported, people aren’t getting the results of the tests, if they were even done, however Medicare was billed as much as $30,000 for the tests.  This is a scam because Medicare does not pay for medical tests or equipment unless it is medically necessary and a doctor orders the test.  Cologuard a colorectal cancer screening test available only with a doctor’s prescription is the only genetic test covered by Medicare.

Now, through the joint efforts of the FBI, department of Justice and the Inspector General of the Department of Health and Human Services more than thirty people were arrested for involvement in this scam.  The joint operation has been named Operation Double Helix and it is targeting a wide variety of scammers perpetrating this scam.

TIPS

Never provide your Medicare number to anyone asking for your number in return for “free”  equipment or services.  It is always a scam.  Also, if you are a Medicare recipient, switch immediately to your new randomly selected Medicare ID number rather than use your old card which has your Social Security number as your identification number.  Always check your Medicare and private insurance bills, sometimes called Explanation of Benefits to make sure that you are not being charged for services that you did not receive.

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Scam of the day – September 30, 2019 – FTC Warning the Public About Social Security Scam

The Federal Trade Commission (FTC) has issued another warning about phony robocalls that are made to appear as if they are coming from the Social Security Administration.  In the call, you are told that your Social Security benefits are being suspended and then prompts you to press 1 on your keypad if you believe this is a mistake.  If you do press 1, you will be transferred to a scammer who will either ask you to send money or provide personal information that would lead to your identity being stolen.    Below is a recording of one of these fraudulent phone calls.  According to the FTC these Social Security fake phone calls are the number one scam of 2019 to date with more than 70,000 reports of this scam.

First and foremost, it is important to know that Social Security numbers are never suspended so right away you can be sure that a call informing you that your Social Security number has been suspended is a scam. The calls, however, can be very convincing and by using a technique called “spoofing” the call can manipulate your Caller ID into making it appear as if the call is coming from the Social Security Administration. Additionally, the Social Security Administration will not call you by phone if there is a problem with your Social Security. they will initiate contact with you by old fashioned snail mail.  Also, the Social Security Administration will never ask you to wire money, send cash or make a payment to them through a gift card.

TIPS

As I often have cautioned you, you can never be sure who is calling you when you receive a phone call and therefore should never give out personal information when you are asked in a phone call. If you believe the call is legitimate, you should hang up and call back the company or agency at a number that you know is accurate in order to ascertain whether or not (usually not) the call was legitimate.

In addition, the Social Security Administration (SSA) has a helpful online service called My Social Security Account which allows you to set up a personal online account with the SSA that enables you to view your earnings history and estimates of benefits as well as manage your benefits online including changing your address or starting or changing direct electronic deposits of your check into a bank account you may designate.  This is a tremendously convenient service, but it also provides a great opportunity for scammers who have been setting up My Social Security Accounts on behalf of seniors who have not already set up such accounts for themselves.  The scammers then make changes to the victim’s account by directing their benefits checks to be sent to bank accounts controlled by the scammers.  Even though  the Social Security Administration requires verification of personal information by asking questions that only the Social Security recipient should know as part of the process for opening a My Social Security Account, too often this information is available to a determined identity thief who is thereby able to fraudulently open an account in the name of their intended victim.

In order to improve the security of the accounts, the SSA is now requiring people to use dual factor authentication to access their accounts once they have been set up.   At the user’s option, the dual factor authentication is done by the SSA sending a one time code either to the user’s email or cell phone. Using an email address for dual factor authentication may prove to be problematic because it is not particularly difficult for a sophisticated hacker to gain access to someone’s email account.

Just as the best defense against income tax identity theft is to file your income tax return before an identity thief attempts does so in your name, so the best defense against the fraudulent setting up of a My Social Security Account in your name is for you to set one up first and protect its safety with a strong username and password. For information about signing up for a My Social Security Account go to https://ssa.gov/myaccount/

You can also require that any changes to the bank account into which your check is electronically deposited only be done at a Social Security branch office and not on your online account.

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Scam of the day – September 29, 2019 – DoorDash Becomes Victim of Massive Data Breach

In Shakespeare’s play Henry V, the king utters the phrase, “once more unto the breach, dear friends,” and so it is, because once more we have learned of a massive data breach.  This time it is DoorDash, the food delivery service.  While the data breach was only revealed earlier this week by DoorDash, the actual data breach occurred on May 4th.  Information stolen in the data breach included names, delivery addresses and the last four numbers on credit cards and debit cards as well as other personal information of 4.9 million DoorDash customers.  Fortunately, the credit card and debit card information would not be sufficient to enable a criminal to use those cards.  Here is a link to the official announcement of DoorDash.  https://blog.doordash.com/important-security-notice-about-your-doordash-account-ddd90ddf5996#46h35gr24e

TIPS

If you have been a customer of DoorDash, you should check your credit card or debit card statements carefully for any indication of fraudulent use of your card.  Under federal law, the holder of a credit card used for fraudulent purposes cannot be assessed more than $50 for such use and most credit card companies charge nothing, but it is important to report any improper use of your card to your credit card issuer promptly. However, the potential liability of a person whose debit card has been compromised can reach the entire bank account tied to the card if the card owner does not report the crime promptly and even if the card owner does report the theft promptly, the debit card owner’s access to his or her own bank account is frozen while the bank investigates the crime.  It is for this reason that consumers should refrain from using their debit cards for anything other than an ATM card. Use a credit card for all of your card purchases to achieve greater consumer protection.  In addition, you should regularly monitor the bank account tied to your debit card in order to discover as soon as possible if fraudulent use of your debit card has occurred so that you can report it to the bank and limit your liability.

Even if you were not affected by this data breach, you should consider this data breach as an opportunity to consider how protected you are from future data breaches.  Regular monitoring of your credit card and debit card usage is very important for everyone.

If you have not yet frozen your credit with each of the three major credit reporting agencies, Equifax, Experian and TransUnion, you should do so now to protect yourself from possible identity theft. It is free and easy to do.

To get the maximum protection from identity theft, it is important to freeze your credit at each of the three major credit reporting agencies. Here are links to each of them with instructions about how to get a credit freeze:
https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp
https://www.transunion.com/credit-freeze/place-credit-freeze
https://www.experian.com/freeze/center.html

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Scam of the day – September 28, 2019 – Match.com Sued by FTC

The Federal Trade Commission (FTC) has sued online dating service Match Group, Inc. which owns and operates not just Match.com, but also Tinder, OK Cupid, PlentyOfFish and other dating sites.  While the FTC alleges a wide variety of improper actions by Match, the one that caught my attention was the allegation that Match.com allows users to create a free Match.com profile, but prohibits users from responding to messages without upgrading their membership to a paid subscription.  According to the FTC when nonsubscribers with free accounts at Match.com received likes, emails or instant messages, they would then receive emailed ads from Match urging them to purchase a paid subscription to Match.com in order to see the message and who sent it.  The big problem with this, however, is that according to the FTC, millions of the contacts that generate Match.com’s “You caught his eye” notices came from accounts that Match had already determined were likely to be fraudulent accounts of scammers seeking to perpetrate romance scams, phishing scams and extortion scams.  Between 2013 and 2016, more than half of the instant messages and favorites that Match customers received came from accounts that Match already had identified as being fraudulent.

Romance scams where a scammer quickly pretends to be in love with the intended victim of the scam and then asks for money under the pretense of a wide variety of emergencies  have become the FTC’s most reported scam with Americans losing 143 million dollars to these scams last year according to the FTC and this figure is probably lower than the true figure.  Often these scams are done through online dating sites such as Match.com

TIPS

There are various red flags to help you identify romance scams.  I describe many of them in detail in my book “The Truth About Avoiding Scams.” The most important thing to remember is to always be skeptical of anyone who falls in love with you quickly online without ever meeting you and early into the relationship who then asks you to wire money to assist them with a wide range of phony emergencies.

Here are a few other things to look for to help identify an online romance scam.  Often their profile picture is stolen from a modeling website on the Internet.  If the picture looks too professional and the person looks too much like a model, you should be wary. You also can check on the legitimacy of photographs by seeing if they have been used elsewhere by doing a reverse image search using Google or websites such as tineye.com.  Particular phrases, such as “Remember the distance or color does not matter, but love matters a lot in life” is a phrase that turns up in many romance scam emails.  Also be on the lookout for bad spelling and grammar as many of the romance scammers claim to be Americans, but are actually foreigners lying about where they are and who they are.  Of course you should be particularly concerned if someone falls in love with you almost immediately.  Often they will ask you to use a webcam, but will not use one themselves.  This is another red flag.  One thing you may want to do is ask them to take a picture of themselves holding up a sign with their name on it.  In addition, ask for a number of pictures because generally when the scammers are stealing pictures of models from websites, they do not have many photographs. Ask for the picture to be at a particular place that you designate to further test them.  If you meet someone through a dating website, be particularly wary if they ask you to leave the dating service and go “offline.”

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Scam of the day – September 27, 2019 – Mail Stealing Identity Thieves Arrested

Identity theft can be high tech, low tech or no tech.  Stealing mail from mailboxes for purposes of identity theft has been done by identity thieves for years.  Numerous times over the last few years I have warned you about the danger of having your mail, such as credit card bills or bank statements stolen from your personal mailbox.  In addition, many people put themselves in great danger of identity theft by putting their outgoing mail in their mailbox and put up the red flag to alert the mail carrier that there is mail to be picked up.  Unfortunately, that is also an alert to identity thieves cruising the neighborhood of mail to be easily stolen. Recently Jeanetta Roland and Aubrey Marshall were arrested and charged with identity theft related to their alleged theft of mail from mailboxes in the Chicago suburb of Orland Park. When they were arrested they had a United States Postal Service arrow key which enables access to secure mail boxes.

TIPS

In order to avoid becoming a victim of identity theft through your mailbox, you should make sure that it is securely locked so that it is not easily accessed by your friendly neighborhood identity thief and when it comes to outgoing mail, don’t put it in your mailbox for your mail carrier to pick up regardless of how convenient it may be to do so.  In fact, identity thieves have been known to steal mail from the U.S. Postal Service mailboxes found on the corners of major streets so, in order to be safe, you should mail your outgoing mail at the post office.   It may seem like this is being a bit excessive when it comes to protecting your mail, but remember, even paranoids have enemies.

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Scam of the day – September 26, 2019 – Russian Pleads Guilty to Massive Data Breach

Earlier this week, Andrei Tyurin, a Russian hacker pleaded guilty in federal court to wire fraud, bank fraud and conspiracy to commit computer hacking.  The charges stemmed from a number of large data breaches done by Tyurin including, most notably the 2014 data breach of JP Morgan Chase customers in which Tyurin obtained the names, phone numbers and email addresses of 83 million of JP Morgan Chase’s customers.  Turin’s cohorts then used this information to contact these people to tout penny stocks in a classic pump and dump scam.  Penny stocks are low-priced, thinly traded stocks that are often used as the tool for scammers to take advantage of unwary investors.  Because they are so thinly traded, scammers are able to manipulate the prices so that they temporarily are able to artificially inflate the price of the stock and then sell shares they purchased at low values thereby achieving a huge profit.  Scammers manipulate the stock market through telephone calls, emails, chat rooms, social media and news releases touting the stock as a great investment.  Often they purport to have inside information about a huge increase in the value of the stock that is about to occur.  Sometimes, the victims of this communications barrage receive emails that appear to have inside information indicating the stock is about to sharply rise.  These communications lure unsuspecting investors into buying the stock and thereby for a short period raise the value of the stock.  The scammers then sell their stock at the manipulated high price.   When the truth becomes known, the value of the stock shares plummet and the investors are left with tremendous losses.  This scam is called “pump and dump.”

TIPS

Investing is always risky and investing in penny stocks is particularly risky.  Any investment is only as good as the information upon which the investment is made.  Never make an investment without reliable information gleaned from legitimate, reliable sources.   Always be skeptical of purported insider information which is not only unreliable, but also can be illegal to trade upon.

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Scam of the day – September 25, 2019 – Amish Affinity Fraud

Affinity fraud is the name for the type of fraud where people put undeserved trust in someone offering an investment opportunity because that person is “someone like me.”  Affinity fraud works because people trust other people who may share a common bond, such as family, religion or some other group affiliation.   The list goes on and on.  Over the years I have reported on many instances of affinity fraud perpetrated against a wide variety of people.  Scammers take advantage of every connection they can make with their victims to gain their trust and then steal their money.  Recently, the Securities and Exchange Commission (SEC) successfully sued Earl Miller whose affinity fraud focused on people who shared his Amish heritage.  Miller advertised in Amish newspapers and arranged community meetings in Indiana and Michigan among the Amish communities proclaiming his Amish heritage to lure investors into his scam.  Miller lied to his clients about the nature of the investments and purported safeguards which he never implemented.  Ultimately, his investments failed costing 72 investors the entire 4.1 million dollars they invested with him.  While the federal court ordered Miller to repay his investors the money they lost plus interest and a civil penalty, it is not clear whether Miller will be able to comply with those orders.

TIPS

Before investing with anyone, you should investigate the person offering to sell you the investment with the Securities and Exchange Commission’s Central Registration Depository.  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’s securities regulators.   You can find your state’s agency by going to the website of the North American Securities Administrators Association. 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.   You should also check with the Financial Industry Regulatory Authority (FINRA) for information about the particular  investment adviser.

It is also important to remember that you should never  invest in something that you do not completely understand.  This was a mistake that many of Bernie Madoff’s victims made.  You also may want to check out the SEC’s investor education website at www.investor.gov.  Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours. Additionally, investing with someone merely because you share the same heritage, nationality, religion or any other affinity is something you should avoid.

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