Various 2005 Tips for Consumers
Don't Fall for Tax Scams!
Tax season is here. There are some recent tax law changes for the 2004 tax year. If you are concerned about whether these changes will affect you, be sure to get the details before you prepare your tax return.
For a list of tax law changes, visit www.irs.gov/newsroom/article/0,,id=130215,00.html.
Most consumers are always looking for ways to cut their tax bill. Unfortunately, con artists are always looking for filers who are eager to find tax breaks. The Better Business Bureau of Central/Northern Arizona, along with the Internal Revenue Service (IRS), reminds taxpayers not to fall victim to a variety of tax scams. Here are a few:
·African-Americans Get a Special Tax Refund: Thousands of African Americans have been misled by people offering to file for tax credits or refunds related to reparations for slavery. There is no such provision in the tax law. Some unscrupulous promoters have encouraged clients to pay them to prepare a claim for this refund. But the claims are a waste of money. Promoters of reparations tax schemes have been convicted and imprisoned. And taxpayers could face a $500 penalty for filing such claims if they do not withdraw the claim. Related scams include claiming an illegal tax credit by misusing Form 2439, "Notice to Shareholder of Undistributed Long-Term Capital Gains." The slavery reparations scam was at the top of the IRS 2002 "Dirty Dozen" list and, although claims have fallen considerably, the IRS continues to see activity in this area.
·No Taxes Withheld From your Wages: Illegal schemes are being promoted that instruct employers not to withhold federal income tax or employment taxes from wages paid to their employees. These schemes are based on an incorrect interpretation of tax laws. Employers are required by law to withhold employment taxes from their employees. Employers who do not comply with the employment tax laws may be subject to criminal and civil sanctions for willfully failing to pay employment taxes.
·Big Refunds…for a Fee: These scam artists approach you wanting to "borrow" your Social Security number or give you a phony W-2 so it appears that you qualify for a big refund. They may offer to split the refund with you. Keep in mind that anyone who promises you a bigger refund, without knowing your tax situation, is most likely misleading you. Never sign a tax return without looking it over to make sure it is honest and correct.
·Pay the Tax and Get a Prize: If you have won a prize and the promoter claims that you have to pay the income tax due in order to receive it, don't believe it! If you have really won a prize, you may need to make an estimated tax payment to cover the taxes that will be due at the end of the year. But the payment would go to the IRS, not the prize promoter. Whether you have won cash, a car or a trip, the prize giver generally sends you and the IRS a Form 1099 showing the total prize value that should be reported on your tax return.
·Improper Home-Based Business: This scheme purports to offer tax "relief" but in reality is illegal tax avoidance. The promoters of this scheme claim that individual taxpayers can deduct most, or all, of their personal expenses as business expenses by setting up a bogus home-based business. But the tax code firmly establishes that a clear business purpose and profit motive must exist in order to generate and claim allowable business expenses. This scam has been around for years, and the IRS continues to see activity in this area.
·Identity Theft: Identity thieves use someone's personal data to steal his or her financial accounts, run up charges on the victim's existing credit cards, apply for new loans, credit cards, services or benefits in the victim's name and even file fraudulent tax returns. The IRS is aware of several identity theft scams involving taxes or the IRS. In one example, fraudsters sent bank customers fictitious bank correspondence and IRS forms in an attempt to trick them into disclosing their personal and banking data. In another, abusive tax preparers have used clients' Social Security numbers and other information to file false tax returns without the clients' knowledge. For taxpayers, it pays to be choosy about disclosing personal and financial information. And the BBB encourages taxpayers to carefully select a reputable tax professional.
Before you do business with a company, check it out with the Better Business Bureau of Central/Northern Arizona. To report suspected tax fraud activity, contact the IRS at 1.800.829.0433. Additional information on tax fraud is available at www.treas.gov/irs/ci/index.htm.
The Power of an Urban Myth E-mail
Recently several e-mails concerning the proposed Wireless 411 service received wide distribution. One e-mail claimed that beginning January 2005 all cell phone numbers will be made public to telemarketing firms. It also stated that consumers' cell phones would be inundated with calls from telemarketers. And, that these telemarketers will eat up your free minutes and could end up costing you money. The e-mail goes on to say that you had until December 15, 2004 to get your cell phone number on the National Do-Not-Call list. A person could call either 1.888.382.1222 from the cell phone they wish to have put on the list or that person can do it online at www.donotcall.gov.
Unlike many so called "urban myths," this e-mail actually contains several elements of truth woven through it; and perhaps because it does, it has gotten passed around with a speed that would have made the perpetrators of old-fashioned chain letters positively green with envy.
It is true that a consortium of wireless providers is planning to create a 411 (directory assistance) service for cell phone numbers. However, it is not true that you must register your cell phone with the national "Do Not Call" Registry before January 1, 2005 to prevent your number from being provided to telemarketers.
Certain of the major wireless companies -- AllTel, Cingular (AT&T Wireless), Nextel, Sprint PCS, and T-Mobile -- have banded together to produce a Wireless 411 service. Their goal is to pool their listings to create a comprehensive directory of cell phone customer names and phone numbers that would be made available to directory assistance providers.
While many cell phone customers are opposed to the proposed Wireless 411 service, the wireless companies behind the proposed Wireless 411 service contend that their service will be beneficial to cellular customers and that they have addressed those customers' major concerns, the most important of which is that the Wireless 411 service would be strictly "opt-in" - that is, wireless customers will be included in the directory only if they specifically request to be added. The phone numbers of wireless customers who do nothing will not be included; those who choose to be listed can have their numbers removed from the directory if they change their minds; and, there is no charge for requesting to be included or choosing not to be included.
The industry will not publish numbers in a directory or sell the numbers to a third party. The Wireless 411 directory information is not supposed to be supplied to telemarketers. It is currently against federal law for telemarketers to use their "automated dialing system" to call wireless numbers without the customer's permission. The best and most efficient way to eliminate telemarketers is to list a wireless number with the FTC's Do-Not-Call registry. All wireless phones are eligible.
There is currently no timetable for the Wireless 411 service introduction and determining when it will be operational is a decision to be made by each carrier.
For more information on this particular "urban myth," go to www.snopes.com/politics/business/cell411.asp. You can check out other "urban myths" as they hit your e-mail box at www.snopes.com.
Free or Low-Cost Prescription Drug Offers Are Not So Free
Perhaps you have seen the infomercials or received offers like these in your e-mail in box. "You can receive the medicines you need without the hassle and expense!" "No Insurance?" No Money to pay for expensive medications?" "Let us help you find free medicines!"
Ads like these could be operated by fraudulent companies. Some marketers are using spam and the Web to offer information on free or low-cost prescription drug programs for a fee. According to federal officials, consumers have been asked to pay as much as $195 for assistance in finding free drug programs. Consumers are urged to think twice before paying for information on how to find these types of programs.
While there are prescription drug companies out there that offer free or low-cost drugs for people who do not have prescription drug coverage, cannot afford to pay for medication out of pocket, or have exhausted their insurance's annual allowance, the programs have strict qualification standards. There are some factors that determine whether a person would qualify for a program, such as, income and cost of the drugs needed.
Information on free and low-cost prescription drug programs are out there, at no charge - consumers just need to know where to look. Ask your pharmacist or physician for information or check out Web sites like helpingpatients.org or benefitscheckup.org. These Web site programs use computer programs to determine whether there might be a match for you among the various programs. Health care providers must approve most applications for these assistance programs.
Always check out any unknown business or suspect advertisement with the Better Business Bureau of Central/Northern Arizona at www.arizonabbb.org, 602-264-1721 or 928-772-3410 in Yavapai County.
Tsunami Charity Appeals: What Donors Should Be Aware Of
PHOENIX, AZ-December 29, 2004--As the Tsunami death toll continues to rise, the Better Business Bureau of Central/Northern Arizona advises the public to ensure charitable donations for Tsunami victims get into the right hands.
"Too often after a disaster of this magnitude, there will be those who take advantage of the situation and solicit for victim donations through phony websites and other fake charities, when in the end; the victims never see a dime," BBB President/CEO Elaine Hugunin said.
To ensure donations will be used properly, donors can check with the Better Business Bureau to see if the charity meets its Wise Giving Alliance guidelines. Donors should also make certain the charity is properly registered with the appropriate state government agency.
When giving in the wake of a tragedy, donors must also consider the following:
·Be wary of appeals that are long on emotion, but short on describing what the charity will do to address the needs of victims and their families.
Tsunami Charity Appeals 2-2-2-2
·If you contribute, do not give cash. Make a check or money order out to the name of the charitable organization, not to the individual collecting the donation.
·If you decide to contribute online, find out more about the charity before making a contribution and be aware of red flags. For example, some charities imitate the name and style of a well-known organization in order to confuse people. Also, when clicking on the link to "donate", look at the organization's URL in the browser window. Exercise caution if the domain name is hidden, is not familiar to you, or is not the same as the one stated in the text of the link.
·Watch out for excessive pressure for on-the-spot donations. Be wary of any requests to send a "runner" to pick up your donation.
·Do not give your credit card number or other personal information to a telephone solicitor or in response to an email solicitation. Ask the caller or sender to provide you with written information on the charity's programs and finances.
For more advice on donating to victims of a natural disaster or to gain access to the report of a national charity, visit www.give.org. Reports on local charities are available at www.arizonabbb.org or by calling 602-264-1721 and 928-772-3410.
About the BBB
The Better Business Bureau of Central/Northern Arizona is a membership-based, nonprofit organization funded by BBB member companies. The BBB is dedicated to promoting and fostering the highest ethical marketplace relationship through voluntary self-regulation, consumer and business education, and service excellence. The BBB receives approximately 2,400 inquires a day through our website www.arizonabbb.org and phone lines 602-264-1721 and 928-772-3410 in Yavapai County.
(12/04)
Writing a Check? Understand the Impact of "Check 21"
With the holiday shopping season here, The Better Business Bureau of Central/Northern Arizona cautions consumers who plan to write checks to pay for purchases to be aware of a new law. The law, which went into effect October 2004, shortens the "float time" on the checks you write. The Check Clearing for the 21st Century Act, also known as Check 21, shortens the grace period between the time your check is written and when the money is taken from your account. This means if you write a check at a retail establishment today, chances are the check will be processed electronically and the money could be debited from your bank account on the same day. No more two to three day float time! Under this new law consumer advocates predict that consumers will lose millions of dollars in bounced check fees.
The Check 21 law was designed to enable banks to replace the paper checks they receive with electronic images. Banks can now use electronic-check processing to reduce, by an estimated $2 billion a year, the cost of moving, clearing and returning paper checks.
What does this mean for consumers? The BBB urges consumers to be aware of the following:
· Before you write a check, make sure that your checking account has enough money in it to cover the check. Checks you write now will clear sooner - which means money may be deducted from your checking account faster than you may anticipate.
· You may not gain access to the funds from checks you deposit any sooner than before. While the new law speeds up how quickly funds can be taken out of your checking account, it does not speed up the length of time in which your bank must make funds available from the checks that you deposit. The new law does not shorten check hold times.
· You may also start to see fewer and fewer of your original checks in your bank statements and more paper substitutes. Many consumers already receive digital images of their checks, a list of their paid checks, or a combination of these items. According to the Federal Reserve Board, Check 21 will have little to no effect on these practices. However, if you do get your canceled checks back in your regular bank account statements, you may notice some changes under Check 21. For example, your bank may start sending you a combination of original checks and "substitute checks" in your account statements. A substitute check is a special paper copy of the front and back of an original check. The substitute check is a legal copy of your check. You can use it the same way you would use the original check.
· Before Check 21, your own bank decided how long to keep your original checks, if they were not returned with your statement. Under Check 21, the bank of the person you wrote the check to may decide when to destroy your check. Neither Check 21 nor any other law requires a bank to keep your original check for any specific period of time. For additional information on Check 21, visit the Federal Reserve Board's website at www.federalreserve.gov.
Members of The Better Business Bureau of Central/Northern Arizona include 6,000+ local businesses that have a strong belief in self-regulated ethical behavior and customer service. As a non-profit organization, your local BBB provides information reports on more than 32,000 member and non-member businesses and charities throughout its service area. Additionally, the BBB provides information to help consumers to make smarter buying and giving decisions, learn about scams and how to avoid expensive mistakes, and a complaint process to help purchase problems become resolved. For more information, or a report on a specific company or charity, please call 602-264-1721 or visit www.arizonabbb.org. In Yavapai County, call 928-772-3410 or toll-free at 877-291-6222.
11/04
That Check in the Mail Could Be a Scam!
Individuals in Yavapai County are contacting the Better Business Bureau of Central/Northern Arizona about notices they received in the mail claiming they have won a substantial amount of money from a foreign lottery. Some people throughout the nation are stating that, in some instances, there may be a check enclosed to "help pay" fees involved with claiming the money The lucky lottery "winner" is instructed to contact their "agent" before cashing the check, to activate their account. Then they are asked to deposit the check and send the money by wire transfer immediately to the so-called lottery company in order to receive the remainder of their winnings, which they are told range anywhere from $405,501 to $675,000.
Everything goes smoothly at first. The banking institution listed on the check is a real bank, and the account number and routing number on the check are real. The "winner" is able to deposit the check in their bank account without a glitch. However, a serious problem arises weeks later when the lottery "winner" is notified by their bank that the check is counterfeit, and the victim is told they must repay the bank the thousands of dollars they withdrew against the bad check.
While there are numerous variations to this scam, they all have one common goal - to get the targeted victim to provide personal information, to send money for a "processing fee," or to cash a check and wire the money to the scam artist.
According to the U.S. Postal Inspection Service, thousands of U.S. citizens have been bilked out of millions of dollars for fraudulent foreign lottery purchases. To protect yourself, the Better Business Bureau recommends that you know the facts.
United States federal law prohibits mailing payments to purchase any ticket, share, or chance in a foreign lottery. Most foreign lottery solicitations sent to addressees in the United States do not come from foreign government agencies or licensees. Instead, they come from fraudulent companies that seek exorbitant fees from those wishing to play. The activities of these companies are neither controlled nor monitored by the government of the country in which they are located.
The BBB suggests that consumers keep the following in mind:
· If you play a foreign lottery-through the mail or over the telephone-you're violating federal law.
· There are no secret systems for winning foreign lotteries.
· If you purchase one foreign lottery ticket, expect many more bogus offers for lottery or investment "opportunities."
· Keep your credit card and bank account numbers to yourself. Scam artists often ask for them.
· Just because you can withdraw the money from the bank does not mean the check is good, even if it is a cashier's check.
·Ignore mail and phone solicitations for foreign lottery promotions. If you receive what looks like lottery material from a foreign country, give it to your local postmaster.
·There is no reason for someone who is giving you money to ask you to wire money back.
The BBB provides information to help consumers to make smarter buying and giving decisions, learn about scams and how to avoid expensive mistakes, and a complaint process to help purchase problems become resolved. For more information, or a report on a specific company or charity, please call 602-264-1721 or visit www.arizonabbb.org. In Yavapai County, call 928-772-3410 or toll-free at 877-291-6222.
(10/4)
Looking for a New Job? Beware of "Reshipping" and "Forwarding" Scams
Job seekers beware! The Better Business Bureau of Central/Northern Arizona cautions job seekers that bogus foreign companies are advertising in help wanted ads on Internet job sites like Monster.com, CareerBuilders.com or Yahoo HotJobs. The ads claim to be looking for an "import/export specialist," "marketing manager," or "financial manager." Job seekers are asked to forward money from one account to another or to reship stolen merchandise to overseas companies as part of their employment duties. Consumers who respond to the ads are told that the employer is in a foreign country and needs an American contact to handle its business in the U.S.
In one scenario a job applicant was hired to repackage and reship merchandise to a foreign company. What the applicant did not know is that the merchandise was ordered from mail order companies or Internet auction sites, but had never been paid for.
In another scenario, a job seeker was hired to collect payments from clients in the U.S. and, in turn, wire the money to a company located overseas. The employee was instructed to keep a percentage of the money as his or her pay. The employee later found out that the collected payments were for non-existent merchandise sold through online auction sites. Auction bidders, would bid on an item and send in their payment to the seller, only to find out later that the merchandise never existed.
The Better Business Bureau offers the following tips to help job seekers avoid these types of scams:
· Avoid job listings that use these descriptions: "package forwarding," "reshipping," "money transfers," "wiring funds" and "foreign agent agreements." These and similar phrases should raise a red flag.
· Do not be fooled by official-sounding corporate names. Some scam artists operate under names that sound like those of long-standing, reputable firms.
· Never forward or transfer money from any of your personal accounts on behalf of your employer. Also, be suspicious if you are asked to "wire" money to an employer. If a legitimate job requires you to make money transfers, the money should be withdrawn from the employer's business account, not yours.
· Do not give out your personal financial information. A potential legitimate employer will not request your bank account, credit card or Paypal account number. Only provide your banking information if you are hired by a legitimate company and you choose to have your paycheck direct deposited.
· Do not fax copies of your ID or Social Security number to someone you have never met. Credit checks and fake IDs can be obtained with this information. Only give these documents to your employer when you are physically at the place of employment.
If you have questions about the legitimacy of a job listing, contact your Better Business Bureau of Central/Northern Arizona or the Federal Trade Commission at 1-877-382-4357 (www.ftc.gov)
The BBB provides information to help consumers to make smarter buying and giving decisions, learn about scams and how to avoid expensive mistakes, and a complaint process to help purchase problems become resolved.
(8/04)
Is That Free Credit Report Really Free, Or Is It A Scam?
We have all seen the ads on the Internet, or perhaps received an e-mail touting "free" credit reports. The Better Business Bureau warns consumers to be careful when responding to such offers. Some of these online operators do not actually provide credit reports, but may be using their sites as a way to capture a consumer's personal information. You may never receive the free credit report that was offered. Once your information has been obtained, they may sell your information to others who may use it to commit fraud, including identity thief. Or by requesting a "free" credit report, you may be agreeing to a monthly service-for a fee.
The BBB, along with the Federal Trade Commission, urge consumers to take the following precautions when visiting sites, or responding to e-mails that offer credit reports:
• If you receive an e-mail offering a credit report, do not reply or click on the link in the e-mail. Instead, contact the company cited in the e-mail using a telephone number or a Web site address you know to be genuine.
• Be skeptical of unsolicited e-mail offering credit reports. Be cautious of e-mail from an atypical address, like ABC123@website.net, or an e-mail address ending in a top level domain other than .com, like .ru or .de.
• Check for grammatical and spelling errors. Silly mistakes and sloppy copy - for example, an area code that does not match an address - often are red flags that the site may be a scam.
• Check to see if the e-mail address matches the Web address. When you enter the company's Web address in the browser, does it go to the sender's site or re-direct you to a different Web address? If it re-directs you, cease the transaction.
• Exit from a Web site that asks for unnecessary personal information, like a Personal Identification Number (PIN) for your bank account, the three-digit code on the back of your credit card, or your passport number and issuing country. Legitimate sites do not ask for this information.
• Use only secure Web sites. Look for the "lock" icon on the browser's status bar, and phrase "https" in the URL address on a Web site, to be sure your information is secure during transmission.
• Watch your credit card statements for unauthorized charges. Contact your credit card issuer immediately in this case.
To obtain a copy of your credit report from the three major credit bureaus, contact:
• Equifax at www.equifax.com or call 1.800.685.1111;
• Experian at www.experian.com or call 1.888.397.3742; or
• TransUnion at www.transunion.com or call 1.800.888.4213.
According to the Federal Trade Commission, beginning December 2004, consumers in Arizona will be able to request a free credit report according to the Fair and Accurate Credit Transaction Act. For more information on this rule, visit www.ftc.gov/opa/2004/06/freeannual.htm
Information provided by Better Business Bureau, (BBB). For more information about the BBB, please call 602-264-1721 or visit www.arizonabbb.org on the web. In Yavapai County, call 928-772-3410 or toll-free at 877-291-6222.
April Consumer Tip Article: Is Your Teen’s Identity Protected?
The parents of teenagers spend many hours teaching them how to drive safely, discussing the importance of an education and warning about the dangers of illegal drugs. Now they can add identity theft to the list of items meriting special attention.
Identity theft is an ever-increasing threat for all consumers, but children and teenagers make particularly good targets. That is because they have “unblemished” credit records (indeed, they have no credit records at all!); once their identity is stolen it can go undetected for months, if not years, and teenagers and children are likely to be ignorant to any signs that their identity has been compromised.
What can parents to do protect their teens and pre-teens? The Better Business Bureau of Central/Northern Arizona suggests the key to shielding your kids from identity theft is to protect their personal information and teach them to question anyone who requests their Social Security number, bank account number, credit card number or other personal financial information.
• Schools, athletic teams and pediatric offices routinely request children's Social Security numbers for registration purposes. Before giving that information, always ask: Is this required? By whom? If you do not like the answer, then decline to provide the data.
• Don’t carry your child’s Social Security card in your wallet or purse and do not permit your teen to do so.
• When your teen applies for his or her driver’s license, make certain that they do not permit their Social Security number to be used as the driver license identification number.
• When your teen opens their first checking account, discuss how important it is to safeguard their checks and their banking account number and advise them to carefully monitor their accounts for suspicious activities. Do the same when they apply for their first credit card.
• Limit the copies of your child’s birth certificate that you give out. If copies are requested in order to allow your children to participate in sports or other extracurricular activities, ask who will have access to the information and where it will be stored.
• Talk to your teen about why he or she should not give out personal financial information in response to phone calls from telemarketers or e-mails from unknown individuals or businesses. Be sure to stress the importance of safeguarding information on the Internet.
• Advise your teen to protect their credit cards and checkbook at all times. Only carry what is necessary in their wallets or purses. They should not take their credit cards or checkbooks with them when they go out partying, for instance.
• If your teen is headed off to college, discuss the importance of safeguarding financial documents, bank account statements, credit cards, and other personal records in their dorm room or apartment. Roommates, friends and casual visitors can have “prying eyes.”
• Check your child’s credit report annually for any unauthorized accounts and requests for credit
Some warning signs of identity theft include pre-approved credit card offers arriving in your child’s name; unfamiliar bank, credit card or other financial statements that are in your child’s name; and/or collection agency notifications or calls in your child’s name.
If you believe your child’s identity may have been stolen, contact one of the three major credit bureaus; immediately dispute any bills with fraudulent charges; and, visit the ID Theft Resource Center on the Federal Trade Commission Web site at www.ftc.gov .
BBB WARNS HOMEOWNERS ON HOME REPAIR CON ARTISTS
Prescott, AZ-March 16, 2005-Last spring, the tri-city area was hit hard by traveling home repair con artists. The Better Business Bureau of Central/Northern Arizona warns residents to be cautious this time of year for con artists who prey on homeowners.
"We wanted to ensure the community was aware of this situation should homeowners be approached by door-to-door home repair companies in the coming months," said Mary Hawkes, BBB Community Relations Manager for the Yavapai County Office.
Con artists show up at your door offering home repairs ranging from painting to repairing your roof to asphalting your driveway. They may offer a "once in a lifetime" deal or a price so low that it seems too good to pass up. After the "repair" the homeowner finds that the workmanship is poor, the materials shoddy or that the repair was not completed. Or the con artist may ask for payment up front "to buy the supplies" and never return to do the work.
Oftentimes, these fly-by-night operators may drive vehicles with out-of-state license plates, or set up temporary offices from which they can move quickly once authorities start looking for them.
Most licensed contractors do not routinely go door to door for business. Any legitimate company that wants your business will be more than willing to allow you the time to "check them out." Don't fall prey to high-pressure tactics such as "this is the only chance you have" or "by tomorrow the extra materials will be gone." If you have an expensive repair, be especially cautious of these offers.
Before you pay money to anyone who uses this type of approach, and especially before you allow any unknown individual into your home, the Better Business Bureau suggests that you do the following: obtain the name and address of the company that the person allegedly represents; get all details of the offer in writing and carefully review it; verify that the contractor is properly licensed, bonded and insured; obtain bids from several companies; and obtain references.
Before doing business with a company, contact The Better Business Bureau in Yavapai County at 928-772-3410 for a Reliability Report on the company. Also contact the Arizona Registrar of Contractors to verify that a contractor is properly licensed; the Registrar of Contractors can be reached by calling 888-271-9286 or in Yavapai County 928-445-5710.
6/05
Counterfeit Postal Money Orders Can Scam Consumers and Businesses
You cannot believe your luck! Someone has just offered to pay you more than the purchase price for merchandise you are selling on the Internet. All you have to do is accept a postal money order as payment; keep the price of the item and a bit extra as a “gift” for your help; and, wire the remainder of the funds to your customer. Is this deal “too good to be true?”
Yes, advises the Better Business Bureau of Central/Northern Arizona who warns consumers and businesses to exercise care when approached by eager buyers requesting, “help” cashing domestic or international postal money orders. The “buyer” often claims to be living in a foreign country. These scam artists target private citizens, as well as small Internet retailers and classified advertisers located in the U.S. Sometimes the scam artists use e-mail and online auctions to perpetrate this fraud; other times, the telephone.
In any case, the scammer expresses an interest in purchasing the merchandise and offers to send a money order through the mail. Sometimes the victim is told up front that the money order will be for more than the purchase price and that he or she should keep the extra funds as payment for their assistance. Other times, the “purchaser” claims to have made a mistake and asks the seller to refund the difference. Either way, the victim is told to ship the requested merchandise immediately and, to return the “excess funds” – either by wiring them to a bank or person located outside the U.S. or by enclosing them with shipment of the merchandise.
The victim then cashes or deposits the postal money order, assuming the financial document to be legitimate. That is when they learn that the money order is a fake. If the money was deposited, the victim’s account is debited for the full amount once the bank discovers the money order to be counterfeit. At the very least, the victim loses the merchandise already shipped to the “buyer.” In addition, the victim will likely be questioned by bank personnel and other officials about their involvement in the fraud.
Postal money orders have many security features to help verify their legitimacy, according to the U.S. Postal Inspection Service. To check that a money order is authentic, hold it up to the light and look for Ben Franklin images repeated on the left side (top to bottom) and a dark security threat running (top to bottom) to the right of the Franklin watermarks, with the tiny letters “USPS” facing backward and forward. If either of these security features is not present, the postal money order is a fake. Also, be aware that denominations appear in two locations. If denomination amounts are discolored, that indicates they have been erased. U.S. Postal money orders are printed on crisp textured paper stock with a maximum value of $1,000; the maximum value for international postal money orders is $700.
If you have questions about accepting postal money orders, contact your local Post Office, call the fraud hotline at 1.800.472.8347 or visit www.usps.com/postalinspectors.
Information provided by the BBB. For more information about the BBB or to check on a business, contact The Better Business Bureau in Yavapai County at 928-772-3410 for a Reliability Report on that company.
8/05
Foreclosure "Rescue" Scams on the Rise
Are you facing the threat of losing your home? The BBB of Central/Northern Arizona advises consumers to be wary of individuals and companies offering to "help" them out of a difficult financial situation.
Consumer advocates report an increase in complaints about foreclosure "rescue" scams. These scams specifically target homeowners who are in financial distress. Scam operators advertise over the Internet and in local publications, plaster posters on telephone poles, stick flyers in people's front doors or contact people whose homes are listed in public foreclosure notices. Sometimes they direct their appeals to specific religious or ethnic groups.
In one scenario the scam operator offers to "buy" the homeowner's property by paying off the amount that is overdue on the loan. He convinces the homeowner to move out and deed the property over to a third party. The homeowner is given the option of renting the property with the option to buy it back later. The rent payment on the home is often higher than the homeowner can afford. Often times, the original homeowner cannot make the rent payment and is evicted from their home. Or, if the homeowner expresses a desire to buy back the property, the scam operator usually sets the price of the home higher than the homeowner can afford.
The hapless homeowner can lose his/her equity and home. Sometimes, the homeowner's troubles go even deeper. In many cases the initial mortgage has not been paid off and the deed was never transferred, as promised. Not only is the homeowner faced with eviction from the home, but they still owe for the original loan amount.
The Better Business Bureau advises consumers who are tempted by such offers to recognize that they are at real risk of losing money, equity, their home or all three. Carefully consider the following if your mortgage is in arrears or you are facing foreclosure:
· Talk to your lender. Ask about how to restructure your loan payment or refinance. Some foreclosure "rescuers" will offer to "negotiate" with your lender or lawyer. Know that such an offer is likely to involve a significant fee. If you are hesitant to talk to your lender yourself, engage the assistance of a trusted family member.
· If that proves to be unfeasible, try selling the house on your own to pay off the lender. Signing over a deed in no way releases you from your mortgage responsibilities!
· Some schemers will offer to complete paperwork for you, or ask you to sign a stack of documents, supposedly to secure a new mortgage. Victims have later learned that they signed a quit-claim deed to their home.
· Beware the personal approach. Some less-than-ethical businesses will stuff a handwritten note in your front door or mailbox that implies that "help" is available from someone you know or who has your interests in mind.
· If a foreclosure "rescuer" instructs you not to contact your mortgage company or your attorney, beware. Your mortgage company is the very business that you should be in touch with! Furthermore, why would you agree to cease contact with your attorney when dealing with complicated financial matters that involve perhaps your biggest investment, your home?
· You should never sign a contract under pressure and never sign away ownership of your property. Ask a trusted family member, your attorney or a financial professional to review any paperwork you may be asked to sign.
Before signing any deals with a potential buyer, contact the Better Business Bureau online at www.arizonabbb.org, by phone, 602-264-1721 or 928-772-3410 in Yavapai County to request a report on the company and check with the Arizona Attorney General and Arizona Department of Real Estate.
Information provided by the BBB. For more information about the BBB or to check on a business, contact The Better Business Bureau in Yavapai County at 928-772-3410 for a Reliability Report on that company.
About the BBB-The Better Business Bureau of Central/Northern Arizona is a membership-based, nonprofit organization funded by BBB member companies. The BBB is dedicated to promoting and fostering the highest ethical marketplace relationship through voluntary self-regulation, consumer and business education, and arbitration. The BBB receives approximately 2,400 inquires a day through our website www.arizonabbb.org and phone lines 602-264-1721 and 928-772-3410 in Yavapai County.
7/05
Congratulations, You are a Winner (Not!)
The e-mail sure looks official. It is from the UK Grand National Lottery (UKGNL) Headquarters, includes a detailed Ref. No. and a Batch No., and states that it is the FINAL NOTIFICATION TO CLAIM YOUR PRIZE MONEY OF ONE MILLION DOLLARS! Even more exciting, it notifies you that your prize money is available for collection and has been deposited with a financial security firm. All you need do is (1) "keep this award from the public until your claim have (sic) been processed and your money remitted to you" and (2) e-mail your claims agent, MR. LEE JONES at UKGNL for processing and remittance of your prize money.
So far, so good, right? Wrong! Those consumers who do e-mail their claims agent receive a request to forward $530 to open up an online bank account with the financial security firm to use to "transfer their winnings." Eventually, the claims agent also requests private information, including the winner's social security number, bank account and credit card information to "use for credit checks" and other personal financial details.
This is just the latest among scams that target people who permit themselves to be swept away by dreams of free money. Some offers arrive via computer; others enter the home through direct mail or the telephone. In addition to phony sweepstakes announcements, Better Business Bureau of Central/Northern Arizona reports that consumers are receiving:
· suspicious foreign lottery solicitations (from Australia, Canada, Spain and other countries) advising winners to send money orders for hundreds of dollars;
· notifications of cash awards from international security firms or disbursement offices that demand payment up-front to cover entry, judging or postage fees; and
· phone calls from people claiming to be representatives of reputable retailers, who want to "reward" loyal customers with special gift certifications or cash cards, after payment of a delivery fee.
Everyone loves to be a winner, but the BBB cautions consumers not to allow enticing dollar signs to obstruct common sense. If you receive a phone call, letter, or e-mail announcing that you have won a sweepstakes, a lottery or prize award, remember these tips:
· Are you being directed to wire money, provide access to your bank account or credit card numbers, or forward any personal financial information in order to claim your sweepstakes or lottery winnings? This is an attempt to steal your money or identity, by a person masquerading as a sweepstakes or lottery official!
· Legitimate sweepstakes companies do not require you to pay taxes, customs fees, shipping or handling, or any other fee before awarding your winnings. And, they are prohibited by U.S. law from requiring that you buy something to enter a sweepstakes contest or to receive sweepstakes mailings.
· Did you ever actually enter the company's sweepstakes? Chances are, you did not!
· Read the fine print on any sweepstakes offer or entry form that you receive in the mail. Usually is says something to the effect that you win, IF your number is selected or IF your number is one of the winning numbers. You have not yet won anything!
· Do not be deceived by seals, official-sounding names, or terms that imply affiliation with or endorsement by a government entity, here or abroad. It is illegal for a promoter to misrepresent an affiliation with a government organization or other well-known organization.
· If you have truly won a prize, whether it is a cash card, gift certificate or product, there should be no redemption fees, postage fees, delivery fees, or other conditional rules to comply with in order to receive your prize.
· Responding to just one foreign lottery ticket or one fraudulent sweepstakes notice or one prize award solicitation can open the door to many more bogus offers. Ignore all such offers!
Information provided by the BBB. For more information about the BBB or to check on a business, contact The Better Business Bureau in Yavapai County at 928-772-3410 for a Reliability Report on that company.
7/05
Extortionists Are Using BBB Name to Scam Online Buyers
Prescott, AZ, June 27, 2005 - Better Business Bureaus have issued an international alert to warn about individuals who are fraudulently using the BBB name to extort money from online shoppers seeking to purchase "big-ticket" items advertised at "low ball" prices. In fact, one individual, selling a motorcycle using bogus BBB services, provides a contact telephone number in Northern Arizona with a 928 area code.
BBBs in Arizona, California, Florida, Georgia, Ohio, South Carolina, Tennessee and Texas have received queries from online shoppers who were directed to use bogus Better Business Bureau services or received bogus BBB invoices when pursuing jet skis, cars, motorcycles and similar items that were advertised on auction, classifieds and other Web sites. Sites where such items were allegedly listed include eBay, Craigslist, Carbuyer.com and Motorcycletrader.com.
Complainants reported that the merchandise was briefly posted on the online shopping site, and that when they attempted to buy the item by communicating directly with the seller, they were advised that their financial payment would be "handled securely through the Better Business Bureau Company's insurance service." Buyers were told to e-mail the seller, whom, they were advised, would send their e-mail to "the BBB." “The BBB" would let them know if they were preferred customers and could start the transaction.
Next, the approved buyers received electronic invoices instructing them to wire thousands of dollars to a Western Union in another country to one of "the BBB's" agents. Signed "Better Business Bureau Customer Support," the e-mail states that "the Better Business Bureau will hold the transferred money until the merchandise is inspected and received by the buyer." To date, consumers have been instructed to wire money to Greece, Ireland or England.
“These thieves are falsely using the BBB name to inspire trust and confidence on the part of the buyer," said Ken Hunter, president and CEO of the Council of Better Business Bureaus, Inc. "The CBBB has reported the fraudulent activity to several law enforcement authorities and has taken steps to prevent others from being victimized by demanding that the individuals involved cease and desist from using the BBB name to pursue their extortion schemes."
The BBB advises consumers to take note of the following:
·The BBB does not operate a "Better Business Bureau Insurance Service", and it does not offer a "BBB Auto Buyers Protection Program";
·The BBB is not a 'preferred insurance provider' for eBay or any other entity;
·The BBB does not manage financial transactions for online merchants; and
·The BBB does not issue profiles or reports on individuals; BBBs report on businesses.
The fraudulent e-mails attempt to encourage buyers to proceed with the "Better Business Bureau Managed Transaction" by emphasizing that the BBB is an objective third party; protects online buyers and sellers; is highly effective in completing a successful transaction; resolves thousands of cases each month from eBay and other marketplaces; treats your personal information with the utmost care; and, has a Privacy Policy designed to protect you and your information.
One such e-mail assured the buyer that "once your payment has been verified by our specialized department, you will be liable for 100% refund." Another e-mail promised that the seller would not be paid until the buyer accepted the merchandise, or the three-day inspection period had expired.
When advised of the false BBB representations and the nature of the transactions that were occurring on eBay, the company told CBBB: "On our Web site and in e-mails to users, eBay consistently warns against being lured off the eBay marketplace to complete a transaction, as well as against ever using a wire transfer service, such as Western Union, to pay for products. The perpetrators in this scam appear to be encouraging victims to engage in both of these unsafe trading activities."
E-mail addresses affiliated with the scam include support@bbb-paysafe.com, support@ bbbsafe.com and support@inc-bbb.com. One consumer said the e-mail she received from "Better Business Bureau Customer Support" had a BBB Torch logo that, when clicked on, transferred her to the bbb.org Web site. In some of the e-mails, “Square Trade Better Business Bureau” or “Better Business Bureau Financial Department” appears as the name of the sender.
The BBB advises consumers to:
· always contact the BBB when there are questions concerning the legitimacy of an offer,
· always check with the BBB when its name is being used in an unusual or questionable fashion;
· “click to check” BBBOnLine Reliability or BBBOnLine Privacy program seals displayed on merchant Web sites or go to www.bbbonline.org for a list of merchants meeting BBBOnLine standards.
About the BBB
The Better Business Bureau of Central/ Northern Arizona is a membership-based, nonprofit organization funded by BBB member companies. The BBB is dedicated to promoting and fostering the highest ethical marketplace relationship through voluntary self-regulation, consumer and business education, and arbitration. The BBB receives approximately 2,400 inquires a day through our website www.arizonabbb.org and phone lines 602-264-1721 and 928-772-3410 in Yavapai County.
9/05
Know the Facts: Identity Theft Insurance
As news stories regularly profile victims struggling to recover from the devastating impact of identity theft, some consumers are left wondering whether they should purchase protection in case they too fall victim.
Consumers are asking the Better Business Bureau of Central/Northern Arizona about advertisements by organizations and businesses that offer identity theft insurance, forms, services or other protection for a fee. They want to know how to evaluate the various services and what factors to consider when making a purchasing decision.
Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. This would include expenses such as phone bills, lost wages for time taken from work to deal with the fraud, notary expenses, loan re-application fees, certified mailing costs and sometimes attorney fees, with the prior consent of the insurer.
Some insurance companies now include identity theft insurance as part of their homeowners' insurance policy. Others sell it as either a stand alone policy or as an endorsement or rider to a homeowners or renters insurance policy. According to the Insurance Information Institute, these policies cost, on average, between $25 and $50 for $15,000 to $25,000 worth of coverage.
Whether to purchase identity theft insurance is a personal decision. Keep in mind that whether insured or not, victims are usually not held responsible for fraudulent charges incurred by identity thieves. It is out-of-pocket losses that can be a consideration.
A new survey conducted for Nationwide Mutual Insurance, which focused on 10 metropolitan areas, found that ID theft victims paid an average of $587 in out-of-pocket charges for legal fees, copying charges, telephone calls and lost wages. The 2005 Identity Fraud Survey Report released by Javelin Strategy & Research and the Better Business Bureau found that while the median worth of identity fraud crimes is $750, most identity fraud victims incurred no out-of-pocket costs. The average victim spent 28 hours trying to "restore" his or her credit record.
If you decide in favor of purchasing insurance against identity theft, the BBB suggests the following:
- Check first with your insurance agent or your homeowners' insurance company to find out if they offer identity theft insurance. Ask what they would recommend for your situation.
- Be cautious before investing money in a new product being offered by an unknown company. Make sure you are dealing with a reputable organization. Contact the BBB for a reliability report or visit www.bbb.org.
- Ask about the deductible; coverage limits (some policies place a dollar limit on retaining legal assistance or on the amount of lost wages that will be covered); and, any restrictions on how the money for expenses is to be spent.
- Have a clear understanding of the services and assistance you would receive in the event of an identity theft when comparing product costs. For instance, some third party insurers reimburse out-of-pocket costs, as well as offer investigators to help victims wend their way through the process of working with creditors, law enforcement, credit bureaus and the like.
If you do decide to purchase identity theft insurance, do not let this be you only source of protection. The BBB offers suggestions on how you can safeguard your personal information at www.bbb.org. For further details, contact the BBB of Central/Northern Arizona main office at 602-264-1721 or the Yavapai County Office at 928-772-3410.
Click on advertisers in blue to be redirected to their website or email account, right from here. Use these links at your own risk.
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© 2004 Lonesome Valley Newsletter, LLC. All Rights Reserved.
DEC 2005
Last update - Dec. 22, 2005. Newsletter comes up around the middle of each month. Please check back for December’s website updates within the next few days. To view things submitted after the current month’s printed version, go to the Updates tab on left. If this page doesn’t display properly, click here as to why.
