Phony Collectors Want Your Credit/Debit Card Information

About a week ago, I was made aware of a fraud group operating from a Tampa, Florida number, who were calling people and using some pretty heavy-handed tactics to collect (steal) money. Interestingly enough, the person that let me know about this had never done business with the company being impersonated.

Please note, there might be a reason for alarm even if you don't think you owe a debt and a collector calls. With more and more people becoming identity theft victims, a call from a collector could be the first notification a person gets that someone else is using their information. Of course, in this instance, since the calls were bogus, it was not the case. In fact, if you give these scammers any information they can use, you will likely become an identity theft victim yourself.

The person who provided me with this information also provided me with the number she was called from. I called the number and, after a slight delay, I got a person with a Indian accent, who identified himself as "William Scott" from ACS, Inc. Leading him on, I told him my wife was always getting us into trouble by borrowing money — and that we had received a message to call them. He asked me for my wife's name and I made one up. He then told me to wait a minute, while he looked up the file. After about a minute, he said he had located the file and that she owed $500.00, and said this was a "serious legal issue we needed to get cleared up right away." He even offered to settle for $300.00, if I paid that day with a debit/credit card.

During my conversation with William, I could hear the chatter of other calls being made. Listening carefully, I noted that all the people, "chattering" in the background seemed to have Southern Asian (probably Indian) accents. This leads me to believe that the call was being forwarded, possibly overseas. This is not hard to do and there are a lot of legitimate call centers where callers are forwarded from a local number, all over the world.

I gave him an e-mail address so he could send me a payment authorization form and he told me to fill it out, sign it and e-mail it back to him. About an hour later. I got the form coming from an e-mail address, acscorpusa@gmail.com. It asked for personal identifiers, the card number, billing address, zip code, expiration date and CVC number. There is very little doubt in my mind if I had sent the form back to him the account I gave them would have been promptly cleaned out.

I ran the number (813-434-4611) on a site called PhoneValidator.com, which tells you what company a number belongs to and if it is a cell phone or a landline. This number belongs to a PaeTec Communications in Tampa, Florida. PhoneValidator.com offers two additional tools after you run the number. One is primarily a paid search (how they make money), but they offer Google results, also. When I ran the Google results, it identified the same scam, I had run into. One site, 800notes.com, had quite a few comments about it.

The payment authorization letter listed a fax number of 646-786-4401. I ran that number and it went to a landline in New York. Again, I ran the Google results, which revealed more people getting faux collection calls. Besides the fax number on the authorization letter — designed to clean out a payment card — was another number (813-435-1963) to call them back. Although, it was another Tampa number, it went to different telecom outfit. By running the Google results, lo and behold, more complaints about phony collection calls were found, some of which stated that some pretty crude and disgusting comments were made by some of these fake collectors.

Based on the comments I found, it appeared that this activity had been going for a long time, and the Indian accents seems to be a common theme. I did report this to the authorities — but besides getting an initial call back — I haven't heard anything from them since then.

It is not uncommon for scammers to set up legitimate sounding numbers, either. As long as the bill gets paid, very little due diligence is conducted by telecom types to ensure a number actually belongs to what it says it does. Sometimes the numbers are paid for with stolen financial instruments, and it is not uncommon to call one back a week later and find it has been disconnected.

I did more research on this activity and discovered that the BBB had an interesting write-up about similar (if not the same) fraudulent collection activity. The report lists 67 complaints they had received. Another write-up in August of 2009 from the BBB suggested that the scammers had so much personal information about the victims — a data breach was suspected. In this case, it was reported that the people behind this had social security numbers, addresses and knew how to contact their victim's relatives. It also stated that people were being threatened with criminal prosecution, if they did not pay.

If you are called by a collector and you do not know anything about the debt they are talking about, you should always ask them to send you documentation proving that you owe the debt. The Federal Trade Commission (FTC) has information on their site on what your rights are and the specific laws that legitimate collection agencies have to follow. You can also file an online complaint (highly recommended if you suspect abuse) and even watch a video on how to do it properly. They also provide a number (1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261) if you want to speak with a live human being.

The phenomenon of fraud by telephone is becoming more and more common. Officially dubbed "vishing," which is phishing by telephone, the people behind it spoof financial institutions to gather personal and financial details to commit identity theft and financial crimes. Cheap long distance — enabled by VoIP (Voice over Internet Protocol) — and caller ID spoofing (which is legal) have made vishing pretty easy to accomplish.

If you get a phone call that doesn't make sense, take a deep breath and then make sure the person calling you is legitimate before proceeding!

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Are Anti-Aging Products Containing Resveratrol Scamming Innocent People?

Getting old happens to the best of us – and ever since Juan Ponce de Leon went to Florida in 1512 on a quest to find the fountain of youth – many have searched for a miracle that would stop, slow or reverse the aging process.

The marketing of Resveratrol is the latest chapter in this saga and has inspired some greedy and not very honest entities to hawk Resveratrol products over the Internet they claim are "guaranteed." The only guarantee with some of these products is that the person buying them might end up spending a lot of money for nothing.

The sad truth is that there are companies selling Resveratrol supplements that appear to be using deceptive marketing practices. If you see a come-on for Resveratrol, I would carefully consider, whether or not, it appears a little too be too good to be true and follow the principle of "caveat emptor" (buyer beware). Of course, it always pays to read the “fine print” (as you will see below), also.

Please note, I'm not here to dispute the possible health benefits of Resvervatrol or recommend if people should use it. The research on it is pretty exciting and I truly hope the results are positive.

There is research showing that Resveratrol has the ability to cure diseases caused by aging and increase life spans. 60 Minutes, Oprah and many other media sources have done stories on it – but although it is being studied seriously – it still hasn’t been approved by the FDA.

Unfortunately, seeming credible evidence is often twisted by greedy people with the intent of making a quick buck, who make it appear they are legitimate when they are not.

Horror stories are starting to pop in Internet forums from ordinary people – who buy Resveratrol and end up paying a lot more than they should have. Even worse, they might end up buying something that isn’t really Resveratrol. A lot of supplements are hawked via spam advertising, where the source might be slightly questionable. The latest estimates are that over 90 percent of all e-mail is spam. Spam is known to contain a lot of deceptive and outright criminal come-ons.

Of course, spam advertising isn't the only venue where Resveratrol is being marketed. Dr. Oz has talked about Resveratrol on Oprah and the article on this from Oprah.com has put in a disclaimer that Harpo productions is pursuing companies that are claiming an affiliation with Dr. Oz or Oprah. I even found an ad page from a "Dr. Os" (note the spelling difference), which is hawking Resveratrol. The page has a YouTube video with the real Dr. Oz talking about Resveratrol. Didn't go so far as to confirm it, but I would be careful about buying anything on this site, which offers up to two free bottles of Resveratrol.

Sadly enough the Oprah.com article – with the disclaimer – is buried by all the other sites using Dr. Oz and other assorted mainstream media stories about Resveratrol. If you want to see what I am talking about, a simple search for "Resveratrol" pulls up an amazing amount of Internet marketing selling Resveratrol. Some of the advertising has "warnings" that Resveratrol products might be harmful to someone's health or a scam. Most of these ads lead to the product the advertiser putting out the warning is selling.

The sheer volume of advertising on Resveratrol makes it hard for the average person to determine what is legitimate and what is not.

Besides the disclaimer being made by Oprah, there is some interesting buzz on her forums about a product called "Resveratrol Ultra.". Many of the people leaving comments on these forums have had their credit cards repetitively charged after signing up for a free trial of this particular product. The true cost is $87.13 for the free trial (if you don’t immediately return it) and they keep shipping you their product and charging you this amount, monthly.

I went to the Resveratrol Ultra site and it has a YouTube clip of the 60 minutes story. One thing I noticed is there is a disclaimer on the site, which states:

The 15 day Free Trial offer is designed to display the quality and effectiveness of Resveratrol Ultra. This gives you the opportunity to try this remarkable program for FREE (just pay shipping and handling) so you can come to a decision for yourself if this is the right product for you.

We want you to be pleased with our products. If it is not all you expected it to be, or you're unsatisfied in any way just return the unused portion 15 days from the date that the product was originally shipped to you for a refund. We are committed to providing superior products and service to our customers. If you are not completely satisfied, contact us and we will make it right for you. Guaranteed!

If you read the complaints this seems to allow them to start charging you $87.13 a month starting with the free offer unless you return the product in 15 days. Based on the comments in Oprah's forum and on a personal conversation I had with a victim -- good luck getting any cooperation from Resveratrol Ultra in getting a refund once this happens. Other complaints state it is even hard to get them to stop billing you $87.13 a month.

Of course, Oprah.com isn't the only place where the public is crying foul about a company selling a Resveratrol product. Complaintboard.com is warning people about Resveratrol complaints and there are also YouTube videos about the subject.

I did a search on mainstream drug store sites and found Resveratrol for about $7 to $12 a bottle. This seems to be a more sensible way to go than paying almost $100 a bottle if you choose to try Resveratrol before the FDA approves it. These places won’t keep charging your credit card, over and over again, either.

If anyone reading this has a complaint, the best place to report it would be the Federal Trade Commission. You can do so right on their site. I ran a search on the FTC site and so far there is nothing about Resveratrol companies, but if enough people complain to them, perhaps there will be.

Posting complaints in Internet forums is an honorable thing to do – but my guess is that if the FTC gets enough complaints they will look into it and go after the people doing it – a lot more, effectively!

To close this post, I would like to reach out to all the mainstream sources which have covered Resveratrol. Their stories are being used to market these products. It sure would be nice if they took the time to cover this aspect of the story more effectively. The few warnings out there about this are easily buried by all the people selling Resveratrol!

My inspiration to write this post came from a Nurse Carol, who spent a career working in Public Health and holds a Master's Degree. She fell for the free trial part of this and has gone through hours of pain and suffering trying to get her money back. Despite cancelling the product after realizing what it was all about, her credit card is still be billed by Resveratrol Ultra as I write this. Although Nurse Carol isn’t a celebrity like Doctor Oz, I can guarantee she recommends that anyone considering using Resveratrol exercise caution before handing over a method of payment.

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Trust Caller ID, Become a Crime Victim!

Fraud using the telephone is nothing new; it's probably been around as long as there have been telephones. After all, a telephone is merely a communication device and can be used to dupe someone into doing something they shouldn't have.

Saying that, telephone technology, which has grown rapidly in recent years, has given fraudsters a wide array of new tools to use to depart common people and even large businesses from their hard-earned money.

Take caller ID for instance, which is marketed as a means of protecting our privacy. When I say marketed, it's normally sold for a fee so we can see who is calling us. The irony of the situation is that for a fee, just about anyone can make the caller ID appear to whatever number they desire.

The ability to spoof (fake/impersonate) caller ID has been around for a few years. Collection agencies, private investigators and even law enforcement agencies use it to get people to answer their telephone. In these instances, they are normally paying the telecom company for the service. I guess this means the people selling caller ID and the ability to spoof it are making money on both sides of the fence.

While some might argue the semi-legitimate (?) uses are deceptive in themselves, I'm far more concerned when criminals or malicious beings use it to further one of their schemes.

For instance, caller ID spoofing has been used to dispatch a SWAT team to an unsuspecting person's house, and a Pennsylvania man made obscene phone calls to women and made the caller ID appear as if they were coming from within the house. It has also subjected a lot of people to abusive return phone calls when their number was spoofed and angry consumers wanted to complain.

Of even greater concern is when caller ID spoofing is used by "stalkers." In January, Alexis A. Moore did a very well researched post on her blog about this subject. Moore is a "crime victim advocate and expert in cyber stalking, identity theft, traditional stalking, domestic violence and privacy protection," according to her profile on Blogspot.

Before I move forward, please note that it seems to have worked on a 911 dispatch system. In this case, law enforcement – who is known to spoof their numbers – is being victimized by the same technology they use to cloak calls themselves. Please note that if anyone should be able to legally spoof calls, it’s probably law enforcement. Nonetheless, it is ironic.

More and more frequently, caller ID is being used by organized (and maybe some not so organized) criminals to commit fraud.

Last month, spoofing caller ID was reported to be used as a tool by an international credit card fraud ring that was broken up by the NYPD and the Queens District Attorney's office. The ring was using an easily purchased portable spoofing tool, known as a Spoof Card. Spoof Cards can be bought by anyone who has the money to buy them, right over the Internet! Besides spoofing a number, the cards can be used to disguise a person's voice and gender.

The ring, which was described as stretching from New York to Nigeria, obtained cards and activated them using a number they spoofed as legitimately belonging to the intended recipient of the card. Please note, most banks require you to activate a card from a known number when you receive it in the mail. I wonder how many of these same banks are using caller ID spoofing technology in their collections departments.

While the methods used by this group included counterfeiting, mail theft, taking over accounts and fraud applications to get the cards, using a Spoof Card was obviously a pretty successful tool used in furthering the fraud scheme. The victims were from all over North America and the cards were used worldwide. According to the authorities, the financial impact of this activity was estimated at $12 million in the past year alone.

While devices like Spoof Card are an issue, the problem doesn't stop there. Semi-legitimate (?) marketing firms, such as Voice Touch, Inc. and Network Foundations LLC – ones that the FTC shut down last month – were using robocalls with spoofed caller IDs. Of course, there were a lot of complaints that these warranties they were selling (provided by Transcontinental Warranty, Inc.) were virtually useless if you tried to use them, too.

Spoofing caller ID has led to a rash of vishing (phishing by telephone scams), also. Last year in November, I wrote about a call I was getting offering to lower my interest rate. The calls in question were robo-generated and the intent was to get you give up your credit card numbers to a scammer. As of this month, I received another one of these calls. Besides this particular scam, there have been numerous reports of financial institutions having their telephone numbers spoofed in vishing schemes.

Of course, Spoof Card isn't the only spoofing service out there. Some services offer software programs that can be used to spoof calls over a Web interface. One even calls itself PhoneGangster.com.

The services that allow it to be done over a Web interface enable the activity to be performed on a much larger scale. A simple Google search for "caller ID spoofing" brings up all kinds of Adsense ads selling a wide range of caller ID spoofing services. Of course, I shouldn't single out Google or Adsense; my guess is that any search on most commercial browsers will net the same type of advertising.

With VoIP technology in full vogue and services like Skype, the fraudulent use of caller id spoofing services now can feasibly be done across borders. This will make it much more difficult for law enforcement agencies to investigate and prosecute these cases.

In 2007, two bills were sent to the Senate to address caller ID spoofing. Neither was voted on and as a result no effective law has been put into place to address this issue. This year, Senator Bill Nelson (FL) and three co-sponsors introduced another bill (S.30) dubbed "The Truth in Caller ID Act."

In my humble opinion, the need for this legislation is pretty apparent. Laws are designed to protect people and it there are too many good reasons people need to be protected from caller ID spoofing!

The right place to file a complaint about something like this is the Federal Trade Commission. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). There is also a link on the page to file a complaint on an overseas entity.

You can also write your representatives (elected officials) and encourage them to make 2009 the year that they finally pass some legislation on this issue.

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Charity Scams Busted Nationwide

Most Americans embrace the philosophy of helping others in their time of need. In every disaster -- whether it is in this country or anywhere in the world -- Americans are there to help those who need a helping hand. Unfortunately, there are those who take advantage of this, which has led to an ever-growing problem with charity fraud.

One of the more popular charity causes is to support the public service organizations, which are on the front lines of protecting the rest of us. Sadly enough, charity fraudsters are impersonating organizations that raise money to support fire fighters, policemen, and members of the armed forces.

Often, the line between an outright scam and the deceptive marketing of charitable causes is a little blurry. There are a lot of services-for-profit that market charitable causes for a cut of the proceeds. Unfortunately, some of them get too greedy when taking their cut.

To combat this growing problem, the Federal Trade Commission, along with dozens of state law enforcement officials, announced Operation False Charity on May 20th. Operation False Charity is a crackdown on fraudulent telemarketers, who claim to be gathering money on behalf of police, firefighters and veteran’s charities.

In keeping with the FTC tradition of educating the public, they are also releasing a lot of educational materials about charity fraud. They even provide a lot of these materials in Spanish.
Warning signs of scams, and what you should do about them:

• High pressure pitches. Reject them: It’s okay to hang up.

• A “thank you” for a pledge you don't remember making. Be skeptical. Scam artists will lie to get your money.

• Requests for cash. Avoid giving cash donations.

• Charities that offer to send a courier or overnight delivery service to collect your money.

• Charities that guarantee sweepstakes winnings in exchange for a contribution.

• Charities that spring up overnight, especially those that involve current events like natural disasters, or those that claim to be for police officers, veterans, or firefighters. They probably don't have the infrastructure to get your donations to the affected area or people.

To assist the public in learning how to avoid being taken when giving money to a charitable cause, the FTC has a lot of tips to identify a potential scam. Here again, these tips are provided in Spanish, too.

Individuals are not the only ones targeted by charity fraudsters. Frequently businesses are targeted, also. One way businesses are targeted is by being solicited to buy advertising in publications that look like they're sponsored by nonprofit groups. Just because the publication may use words like "firefighter," "police," or "veteran" doesn't necessarily mean they are affiliated with these groups. The prudent thing is to check out any unknown charity with a site like NASCO (National Association of State Charity Officials), which provides resources to identify legitimate charities throughout the country.

The results are starting to come in from the efforts put forth in Operation False Charity. On Friday, Jerry Brown, the California AG, announced they have filed eight law suits on 53 people, 17 telemarketers, and 12 charities accused of squandering millions of dollars of charity money intended to support policemen, fire fighters, and veterans. According to the announcement, the so-called agencies involved had bloated overheads and even purchased a 30-foot sail boat with the money they collected.

Thus far, 76 law enforcement actions against 32 fundraising companies, 22 non-profits or purported non-profits on whose behalf funds were solicited, and 31 individuals throughout the United States have been initiated as a result of Operation False Charity. Also included in this total are two FTC actions against alleged fake non-profits and the telemarketers making the calls.

If you want to learn more about how to make your donations count, you can visit the special site the FTC has put up on this subject. Furthermore if you spot what you suspect is charity fraud, contact your State Attorney General or local consumer protection agency.

Other recognized places to ensure a charity is legitimate are the American Institute of Philanthropy, Better Business Bureau Wise Giving Alliance and CharityNavigator.

You also may file a complaint with the Federal Trade Commission by visiting the page on their site, or calling toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

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FTC Warns FreeCreditReport.com is NOT FREE

Identity theft is a serious subject, and according to recent reports, it's a growing problem. Because identity theft is out of control (personal opinion) and has victimized a lot of people, it's spawned a cottage industry that sells protection at a price. Critics, including the FTC, believe a lot of these identity theft companies are selling services that are supposed to be free.

If you've watched TV in the past year, you've probably seen the ads for FreeCreditReport.com. These ads have urban minstrels (guitar dudes) singing about the woes of people who have had their identities stolen or made poor credit choices. The idea is to get you to go to FreeCreditReport.com, which isn't exactly free. If you read the fine print when you sign up at this site for your free credit report, you are actually authorizing them to bill your credit/debit card $14.95 a month for eternity. This ads up to $179.40 a year.

That doesn't exactly sound like it's free, does it? You can cancel within the first seven days, but given their immense advertising budget, it appears not very many people do or seem to have a problem cancelling the service. Even worse, a lot of people who signed up for their service probably aren't even aware that they could have actually gotten their credit report for free elsewhere.

Under federal law, anyone is entitled to get their credit report for free. To bring attention to this, the FTC (Federal Trade Commission) has launched an awareness campaign entitled "FTC Releases Humorous Videos with a Serious Message About AnnualCreditReport.com."

AnnualCreditReport.com is the only source authorized to give out free credit reports under federal law. The law, which is part of the Fair Credit Reporting Act, guarantees anyone access to a free credit report from each of the big three credit reporting agencies — Experian, Equifax, and TransUnion — every twelve months.

The reason for this campaign was the large volume of complaints from consumers, who thought they were getting something for free, but were not. The FTC is warning the public not to be fooled by TV ads, e-mail offers, or ads on the Internet.

Please note that little to nothing is done to make sure these ads and or spam messages offering protection are legitimate. These ads and spam e-mails might actually come from fraudsters. Answering one of them might lead to a person having their identity stolen.

There are other reasons not to hand over your personal information to the wrong organization. We live in a world where hackers and identity thieves breach databases with an alarming frequency. If you are handing over personal information to one of these companies, they might be maintaining it in a database where it could be stolen. Also, there is no guarantee that your personal information isn't going to be stolen by a dishonest insider. Because information is often outsourced and electronically transmitted all over the world, a lot of people can end up having access to it. All it takes is one dishonest person to decide to steal it and sell it to someone else.

Information is worth a lot of money, and besides dishonest insiders, data brokers and the credit bureaus sell it all the time for marketing purposes. Having information in too many places is a common denominator in a lot of people who become an identity theft victim.

AnnualCreditReport.com is the only place to get a free credit report authorized by the government. I would trust my information with them a lot more than some of the places I see advertising identity theft protection.

Free reports can be requested online, by phone or by mail. To get your free credit report online go to AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You have the option of requesting all three reports at once or you can order one report at a time. A lot of users of this service order one every few months to monitor their credit on a more frequent basis without having to pay for it.

If you see items on your report that are inaccurate, the FTC provides a tutorial on their site on how to dispute credit errors. If you think you have become an identity theft statistic, you may need to place a fraud alert on your credit report, close compromised accounts, file a complaint with the FTC, or file a police report. A tutorial is also provided to help consumers do this on FTC’s identity theft Web site.

Besides the FTC site on identity theft, I recommend the Identity Theft Resource Center and the Privacy Rights Clearinghouse as excellent free resources to learn how to prevent identity theft and recover from it.

If you think you've been tricked to paying for a credit report, the FTC is asking that you let them know about it by filing a complaint. Additionally, if you receive any spam e-mails offering free credit reports, the FTC asks that you send them to spam@uce.gov.

Spam e-mails offering free credit reports can be phishing attempts, which are designed to trick you into giving up your personal information. They can also contain malicious software, which will steal all the information off your computer, automatically. Either way, answering one or even clicking on a link in one can make you an identity theft victim.

Credit reports don't necessarily catch all forms of identity theft. Sometimes different parts of people's identities are used to forge a synthetic one. This phenomenon has been dubbed synthetic identity theft. Quite often, because a lot of the information doesn't match, the credit bureaus don't pick it up.

Other examples where a credit bureau might not reveal identity theft are medical benefit fraud, employment fraud, government benefit fraud, some forms of check fraud and when it is used to commit crimes of other than a financial nature.

In the recent past, this has been discovered by many during tax season, when they get a bill for taxes that an identity thief never paid to the government. A lot of experts recommend that you watch your yearly Social Security statement carefully because of this. Identities are stolen to file fraudulent tax returns or used to obtain employment.

As a bonus, I am going to include what I consider an interesting post from Kelly Sonora over on the e-Justice blog. In this post, Kelly provides 25 tools that can be used to monitor information about yourself, see what is being said about your business, search for information about yourself and find public records that relate to your personal information. A prudent person can even set up alerts on some of these tools so they are automatically notified of any new information.

Please note, Kelly's blog post is not sanctioned by the FTC, but nonetheless, I think it's a neat set of tools that a lot of people might find useful.

As a final bonus — here is a parody (courtesy of the FTC) warning us all the the guitar dude's free credit report isn't free:

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Don't Bail Out a Scam Artist

Recently, I've noticed all kinds of ads and spam e-mails promising to deliver a bail out of one kind or another. While we're finally going to see a few average people bailed out, most of these ads and spam e-mails have one purpose and one purpose only — to provide a revenue stream to a scam artist.

On March 4th, the FTC issued a warning that consumers might get stung by one of these bail out schemes and that these scams are showing up in many different forms.

A lot of these scams claim they can assist someone in qualifying for a bail out and all you need to do is to provide them with a little information or a small payment (preferably using a plastic instrument) to reap a too-good-to-be return on your investment. Plastic is quickly becoming the preferred payment option of criminals and semi-legitimate marketing gurus, alike.

Common spam e-mail messages ask for your banking information so the money can be direct deposited into a bank account. In most of these scams, the exact opposite occurs, or the money in the account is stolen. There are also a lot of spoofed spam e-mails that appear to come directly from a government agency, which ask you to verify that you qualify for a payment by providing them with personal/financial information. If responded to, they either clean out your financial resources or use your good name to steal from a financial institution.

The FBI, IRS and Federal Reserve have recently reported their names being spoofed (impersonated) in a variety of spam e-mails designed to scam people of their hard-earned resources. Of course, a lot of the e-mails and e-ads use the names of Barack Obama and Joe Biden to make their come-on appear more legitimate, too.

Some of these e-mails contain links, which lead to websites that download all kinds of malicious software and spyware on a machine. Normally, the intent in these instances is to steal personal information or take command and control over a machine.

Not all these come-ons come in spam e-mails, either. Much to my dismay, I did a search on the word "Stimulus" and found several ads offering a questionable bail out. After doing this, I went to my local coffee house and picked up some of available free magazines and found questionable bail-out offers in them, also.

When it comes to advertising dollars, those accepting the money aren't required to perform any due diligence on what is being advertised.

In some of the so-called semi-legitimate come-ons (my personal opinion), there might be a clause in small-print that allows them to charge your card a small fee over a long period of time.

While these so-called legitimate marketing ploys are nothing new, they are being seen used in some of the pay for bail out products being hawked all over the place.

If you've signed up for any of these deals, it might pay to review your statements, carefully. Of course, in today's world, it pays to do this on a regular basis, anyway.

If you see any of these scams and want to complain about them, the FTC provides an electronic means of doing so. I've provided a link for anyone, who might be interested in doing this. You can also complain by calling 1-877-FTC-HELP (1-877-382-4357).

Last, but not least, I'll point to a site called the Bank of Obama (Because Everybody Deserves a Bail Out). On this site — which appears to be somewhat of a parody — you can send your friends an imaginary check. At least this site delivers what it claims to — an imaginary check.

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FTC Site Teaches Public How to Avoid Bad Deals

March 1st through the 7th is Consumer Awareness Week. This year, the Federal Trade Commission (along with an army of partners) are providing a user-friendly set of free e-tools designed to help the average "Joe or Jolene" safely navigate the murky waters they face in the current economic environment.

Besides teaching us how to make the most of our financial resources, the tools also teach how to avoid the underground army of not very honest people who are spreading more economic doom and gloom with too-good-to-be-true schemes designed to take advantage of the grim economic situation.

The Web site for the 11th annual National Consumer Protection Week is now up and running. Launched by the Federal Trade Commission and its NCPW (National Consumer Protection Week) Steering Committee partners, the site gives people free tools to make smart business decisions in today’s economy. The information on the site is designed to help the average person get the most value for their money, whether they are trying to improve their credit history, tell the difference between a real deal and a rip-off, or protect their mortgage from foreclosure or foreclosure rescue scams. It explains their rights under various laws and tells how to file a complaint or seek assistance from the appropriate government agency.

According to the Federal Trade Commission, scam artists, fraudsters, hackers and flim flam artists follow the headlines and use the current economic downturn to part people from their hard-earned (and ever-dwindling) financial resources. The NCPW Web site has tools (educational resources) to teach people how to recognize a ripoff, sniff out a scam and ensure they are getting value for their dollar in today's marketplace.

The site has tips on a wide range of topics from partner organizations. These tips include from how to get a free credit report to how to spot a telemarketing scam and how to deal with debt to how to deter and detect identity theft and from how to avoid home and auto repair scams. Also included is detailed information on how to file a complaint with the appropriate agency if you do run into an issue.

Of course, on a personal level, I always recommend reporting them if you spot a problem and are able to avoid becoming a statistic, also. This can prevent a less educated person from becoming a victim and is a good deed.




The FTC partners involved in providing this information include the AARP, the Comptroller of the Currency, the Consumer Federation of America, the Council of Better Business Bureaus, the Federal Citizen’s Information Center, the Federal Communications Commission, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Association of Attorneys General, the National Association of Consumer Agency Administrators, the National Consumers League, the U.S. Department of the Treasury, the U.S. Postal Inspection Service, and the U.S. Postal Service.

The FTC also just released the top complaints they received in 2008. For the ninth year in a row, identity theft came in at number one. 1,223,370 complaints were received in 2008. 313,982 (26%) were related to identity theft.

Not surprisingly, with all the data breaches seen recently, credit card fraud was the most common form reported. This was followed by government documents/benefits fraud at 15%, employment fraud at 15%, phone or utilities fraud at 13%, bank fraud at 11% and loan fraud at 4%.

Other complaint categories included Third Party and Creditor Debt Collection, Shop-at-Home and Catalog Sales, Internet Services, Foreign Money Offers and Counterfeit Check Scams, Credit Bureaus, Information Furnishers and Report Users, Prizes, Sweepstakes and Lotteries, Television and Electronic Media, Banks and Lenders, Telecom Equipment and Mobile Services, Computer Equipment and Software, Business Opportunities, Employment Agencies and Work-at-Home, Internet Auction, Advance-Fee Loans and Credit Protection/Repair, Health Care, Auto Related Complaints, Travel, Vacations and Timeshare Plans, Credit Cards, Magazines and Buyers Clubs and Telephone Services.

Please note these are statistics where people were victimized. The information on the NCPW site is designed to keep people from becoming one (a statistic).

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Improved OnGuardOnLine Site Teaches Cyber Safety to the Average Person

One of the better places for the average person to learn about the sometimes murky waters of the Internet is free and sponsored by the Federal Trade Commission. Although OnGuardOnline.gov and AlertaEnLinea.gov, its Spanish-language counterpart have been around for awhile -- some new and exciting improvements have been made to the site with a just released Web 2.0 redesign.

The new and improved site allows users to grab and embed games and videos, search for topics on the site, take a “show of hands” poll, and have a more interactive experience while learning how to avoid becoming an Internet crime statistic.

Articles and games covering sixteen topics -- including social networking, phishing, email scams and laptop security; plenty of buttons and banners you can post on your blog or website; free publications consumers and organizations can order; and links to the OnGuard Online partners from the public and private sector.

I should add that a lot of good people from both the government and private sectors have given resources and their valuable time to assist the Federal Trade Commission with this site. Industry and government partners -- include the U.S. Department of Justice, Office of Justice Programs, Department of Homeland Security, Internal Revenue Service, United States Postal Inspection Service, Department of Commerce, Technology Administration, Securities and Exchange Commission, National Cyber Security Alliance, Anti-Phishing Working Group, i-SAFE, AARP, National Consumers League, Direct Marketing Association, WiredSafety.org, The SANS Institute, The National Association of Attorneys General, Better Business Bureau, NetFamilyNews, CompTIA, National Crime Prevention Council, Association of College Unions International, and the Latinos in Information Sciences and Technology Association.

In my opinion, this represents a valuable partnership in dealing with the ever growing problem of crime on the Internet. This also represents a very credible collaboration of resources and industry experts (my humble opinion).

There is also a lot of material that businesses and organizations can use to educate their people with. Frequently, I get approached on this subject and I will continue to recommend this site as a valuable resource. Of course, the benefits for the individual person wanting to protect themselves, or become more knowledgeable are there (free for the taking), also.

If you are one of those businesses or organizations wanting additional matertials, you can get free OnGuard Online publications. For 50 or more copies, visit ftc.gov/bulkorder. If you need less than 50 copies, call 1-877-FTC-HELP.

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Report Reveals That Internet Fraud Threatens E-Commerce

The Center for American Progress just released a report indicating that not enough is being done to protect the public from fraud on the Internet. It's also warning that the convenience, choices and lower prices enjoyed by Internet users are at risk because of this.

They report reveals that high levels of fraud and abuse may cause more and more consumers to lose trust, a key-component of any successful business. Malicious software, phishing and spam were cited as primary causes for the high levels of fraud and abuse on the Internet.

Studies indicate that over 80 percent of all e-mail is spam. It should be noted that spam is the preferred delivery vehicle of fraud and abuse on the Internet. Malware and phishing normally start with a spam e-mail. In Phishing schemes -- which are designed to steal personal and financial information -- the use of malicious software to automatically steal information is on the rise. In the past, phishing normally relied on a social engineering scheme to accomplish this goal.

The Anti Phishing Working Group, an organization that tracks phishing activity, has noted an increase in the use of malicious software to phish information. They speculate that ability of e-criminals to use automated tools to spread crimeware (a.k.a. malware) could be the reason for the increase.

The report states that although the Federal Trade Commission is stepping up enforcement activity, it's resources are limited and more action by the State attorney generals is desperately needed. It cites as an example that over the past three years, only 11 cases against spyware distributors have been brought forward by the States, which is the same number taken for action by the FTC.

The Center for American Progress and the Center for Democracy and Technology asked States to provide data on the complaints they received 2006 and 2007. Thirty six States responded and most of them had a Internet related category listed in their top-ten complaints. It was also noted that overall Internet related complaints increased from 2006 to 2007. Eight of the States listed Internet related complaints in their top-three and four States listed them as being the number-one complaint.

The FTC, who gathers data on a much wider scale noted an increase of 16,000 Internet related complaints in 2007 versus the number received in 2006. When comparing the numbers to 2005, a 24,000 increase in complaints was noted.

The report points out that many experts speculate that not all cybercrime is reported or even discovered. Additionally, the standard for classifying it varies from State to State, which makes it hard to evaluate current statistical data. Given these factors, many believe the problem is understated.

In looking at the enforcement level by the States, the Center for American Progress and the Center for Democracy and Technology gathered information from annual and biennial reports, websites, news articles, and the bimonthly Cybercrime Newsletter released by the National Association of Attorneys General.

Data from the Cybercrime Newsletter revealed that 60 percent of the cases prosecuted were for the sexual enticement of minors or pornography. Crimes involving the theft of information or identity theft represented 8.9 percent of the total and 15.5 percent involved online sales and services. The majority of the cases involving online sales and services were for false advertising or the quality of a product or service.

The conclusion given by the researchers is that not very many crimes involving phishing, spyware, spam, adware and hacking were being effectively investigated or prosecuted. "Internet crime requires almost no expense to execute, carries potentially high financial rewards, and involves relatively little risk of being caught and punished," according to the report.

The monetary cost of all this activity isn't cheap, either. In 2007, an estimated $7.1 billion was lost due to phishing, viruses and malware in the United States, alone. Given that the estimated losses in 2006 was a mere $2 billion, this would lead a reasonable person to speculate that the problem is a growing one. Worldwide estimates put the losses at about $100 billion.

The report gives a possible reason for the increase in activity. With few overhead or start-up costs a phishing group can net about $250,000 a month and operate anonymously from just about anywhere in the world.

Do it yourself (DIY) phishing kits for sale on the Internet have been cited as a primary cause of more and more activity, also. Some of these DIY kits even come with technical support. The bottom line is that it no longer takes much technical knowledge to become a phisherman.

The report speculates that we shouldn't be surprised that online fraud and abuse are at high levels and calls for stronger deterrents. They believe that stronger action by the state attorneys general is key to this effort.

While more support at the State level is needed, I'm not sure if the States can control Internet crime all by themselves. Internet crime moves across borders with a click of a mouse and it's going to be difficult for Alabama to prosecute a spammer or phisherman living in Moscow, Shanghai, Montreal or London.

Two so-called spam kings were recently prosecuted by the federal government. One later escaped and killed himself and family members in the process. These arrests didn't seem to make much of a dent in the amount of spam being sent. Both of the government press releases on these stories mentioned they were catering to commercial clients. Any solution to crime on the Internet will have to take a long and hard look at what enables the activity to be too easy to facilitate in the first place.

Some blame the Internet Service Providers (which seem to be a dime a dozen) for looking the other way because spam brings in revenue for them. Of course, auction sites like eBay have long been criticized for looking the other way at the the criminal activity on their sites. Since Internet Service Providers and Auction sites operate worldwide with a click of the mouse, it's difficult to prosecute or investigate anything on the Internet.

This list of Internet crime enablers is long and the one's referenced regarding service providers and auction sites are merely two examples of them. But if you were to take a look at all them, they have one thing in common: which is maintaining an environment conducive to making money easily. The question is how long will it take for the financial and social costs of Internet fraud and abuse to inspire a more responsible and practical approach to the problem?

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Send Dad a "Phishy" E-Card for Father's Day

In case you forgot to send a Father's Day card, here are some free ones courtesy of the fine folks at the Federal Trade Commission designed to educate him about phishing, which is a leading cause of identity theft on the Internet.

These were sent to me courtesy of Alvaro Puig from the Federal Trade Commission’s Division of Consumer and Business Education in Washington , D.C.

Please note that most of the consumer awareness materials from the FTC are available in both English and Espanol.

Avaro wrote:

With Father’s Day right around the corner, I wanted to let you know about our Father’s Day phishing e-card. This e-card, which is available at www.ftc.gov/dad (and www.ftc.gov/padre in Spanish) gives “Dear Old Dad” some useful tips on how to recognize and avoid phishing emails and protect his personal information. The e-card also links to our newly released “Phishy” videos that are designed to create awareness of phishing in a humorous way.

The FTC and their government agency partners provide a lot of free educational resources about fraud, phishing and financial misdeeds on the Internet at OnGuardOnline.gov. A lot of these presentations are visual and great tools to learn, or spread the word!

In the war against fraud, there is no more powerful tool than communication. The reason for this is that no matter how good a scam is -- human beings are less likely to fall for it if they are aware of the consequences.

More consumer awareness information can be obtained on the FTC's website and it is available in both English and Espanol.

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Phishermen stealing food from the mouths of Children

It never ceases to amaze me how cyber criminals seem to have NO conscience, whatsoever.

The FBI and IC3 are reporting that EPPICards, which are set up as debit cards to disburse child support payments are the latest target of the phishermen.

In this instance, they are literally stealing food from the mouths of children.

From the FBI press release:

The FBI and its partner, the Internet Crime Complaint Center (IC3), have received reports of phishing attacks targeting users of EPPICards. The EPPICard is similar to a debit card. EPPICards are issued by a state agency for the purpose of receiving child-support payments. The cards are currently used in 15 states.

Individuals have reported receiving e-mail or text messages indicating a problem with their account. They are directed to follow the link provided in the message to update their account or correct the problem. The link actually directs the individuals to a fraudulent web site where their personal information, such as account number and PIN, is compromised.

My humble guess is that if a parent is being forced to support their children by loading funds on a EPPIcard, the kids in question could really use the money.

If you happen to spot one of these phishing or vishing attempts, please take the time to report it to IC3.

If you want to learn more about phishing and other related Internet scams, the Federal Trade Commission (FTC) recently posted a series of videos on YouTube that can be viewed, here.

Full press release, here.

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Fine Wine and Identity Theft?

What do fine wine and identity theft have in common? According to the FTC's top cities for identity theft, the answer is Napa, California.

Christopher Null blogged about this on Yahoo:

While you're sipping Chardonnay and enjoying the beauty of the wine country, crooks may be busy swiping your identity. According to a Federal Trade Commission study, Napa, California, earned the title of worst town for identity theft, with over 300 consumer complaints per 100,000 residents in 2007.

Madera, California, (280 complaints per 100,000 residents) and Greeley, Colorado, (228 complaints) followed Napa on the list. On a state level, California (120 complaints) was surpassed by only Arizona, which had the worst per-capita trouble with identity theft (137 complaints).

I decided to go to a more local Northern California source and found that Channel 10 News out of Sacramento/Stockton/Modesto covered the story, also.

Cornell Barnard (News 10) reports:

Stockton ranks number 21 out of 50 on the Federal Trade Commission's list of the worst cities for identity theft complaints.

Stockton Police can't pinpoint why their city ranks so high, but the valley's trade take part of the blame, a constant hunger for cash.

"It's all connected. It's a brutal crime for those victimized," said Stockton Police spokesman Pete Smith.In addition to Stockton, Northern California is well-represented on the FTC list. Napa tops the list of U.S. metropolitan areas for identity theft consumer complaints, logging over 302 complaints for every 100,000 residents during 2007. Nearbly Vallejo and Fairfield rank sixth while the Yuba City area comes in 11th.

Interestingly enough, Vallejo and Fairfield are just over the hill from Napa and one of the entry points for the San Francisco Bay area. Yuba City is roughly just North of the Napa Valley. These cities aren't very far from Stockton, either.

Maybe this means, there is a higher incidence of Identity Theft in Northern California? Napa might be the worst because it is an affluent area and the better a person's credit is -- the more lucrative their identity is to a criminal.

Being a fifth generation, or so Northern California type (a lot of this blog is written from there), I'd like to point out that Northern California also hosts a lot of information to combat the identity theft problem. In fact, some of the best resources to protect and educate people originate from the area.

Sacramento, which didn't make the list is the State Capital. The Office of Privacy Protection is one of the better written information sources to educate people about the problem of identity theft. Please note the information on this site is available in English, Espanol and Chinese.

For the more frugal, this page contains all the information needed to protect a person without paying for one of those services with an alleged $1 million guarantee.

Interestingly enough, the State of California is also known as being pretty proactive when it comes to protecting the rights of victims. Many of the privacy laws enacted in California have had a worldwide impact.

A great place to read more about the problem is a document outlining Governor Schwarzenegger's 2005 Identity Theft Summit. This document includes a lot of perspective from privacy groups, law enforcement and business groups on the problem.

Last, but not least, a University of Berkeley professor, Chris Hoofnagle just issued an interesting paper based off information culled from the FTC about which financial institutions are most prone to making their customers a victim of identity theft. Professor Hoofnagle openly admits that the results might be jaded because they are only from a consumer complaint point of view and that most financial institutions seem to prefer not to release these statistics.

If your a more "visual type," Cornell Barnard's newscast on this story can be seen, here.

If you are one of those more "scholarly types," the full FTC report on this can be viewed, here.

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Is identity theft on the rise, or declining?

(Sign above DMV trash can in LA courtesy of willnorris at Flickr)

Identity theft is making the news again with the FTC's release of their statistics for 2007.

From the press release:

The FTC today released the list of top consumer fraud complaints received by the agency in 2007. The list, contained in the publication “Consumer Fraud and Identity Theft Complaint Data January-December 2007,” showed that for the seventh year in a row, identity theft is the number one consumer complaint category. Of 813,899 total complaints received in 2007, 258,427, or 32 percent, were related to identity theft.

Broken down a little further, the report stated that credit card fraud was the most prevalent form of identity theft (23 percent). Utilities and employment fraud followed at 18 percent and 14 percent respectively. Bank fraud was at the bottom of the big 4 at 13 percent.

I found it interesting that utilities fraud and employment fraud ranked in the top four identity theft complaints. Maybe starting to hold employers accountable to match a social security number to an actual name is starting to take a toll on the statistics? In the past -- anyone has been able to use any SSN for employment purposes -- even if the number was made up out of thin air.

Enforcement of no match social security numbers is currently being held up in federal court, but a few States are already taking matters into their own hands.

It’s going to be interesting to see how much of an effect this has on identity theft if full enforcement is implemented. There are a lot of people, who believe the problem of illegal immigration is primarily caused by the people hiring them to hold down their labor costs.

In the current FTC report, Arizona came out #1 in identity theft (again) and is one of the States taking matters into their own hands.

So far as utilities fraud, I remembered a series of conversations I had with Suad Leija and her husband. In case you've never heard of Suad -- she is the stepdaughter of one of the main players of a counterfeit documents cartel -- who has been assisting the government in identifying and going after members of the cartel. Saud told me that in the world of counterfeit documents, utility bills are considered feeder documents. Feeder documents are used by people to establish more legitimate identities, which is normally the goal of people, who need to establish an identity other than their own.

I tried to find something in the current report about this, but I couldn't find anything that suggested why one category was higher than another.

In all fairness -- with all the financial crimes stemming from identity theft and all the crime that hides itself in illegal immigration -- it's extremely difficult to track any of the categories to a particular reason. With all the variables, identity theft isn't a very transparent subject.

There are a lot of people writing about the report. Martin Bosworth (Consumer Affairs) added some telling commentary that supports the contention I made in the above paragraph that the reasons behind identity theft aren't always very transparent.

The agency offered a caveat in its report that the data was not from a survey, but from unverified self-reported complaints.

Martin also commented on something, I also noted that was inconsistent for those of us, who follow the identity theft phenomenon:

The FTC's surveys and complaint reports have acted as a counterpoint to claims from the financial industry that identity theft and related fraud are on the decline. A new survey released by Javelin Research & Strategy, and funded in part by Visa, claimed that identity theft dropped by 12 percent from previous years, even as costs of individual cases rose to $691 per affected victim.

The dollar amount seems inconsistent between the two reports, either. Javelin says it is $691 per incident and the FTC states the cost is $349.

Whatever report you want to believe, the fact remains that identity theft continues to be a problem and I strongly suspect we have a long way to go before it no longer is an issue.

FTC press release, here.

Full report, here.

The FTC also has some great free resources for people, who want to learn more, or recover from identity theft:

FTC's Identity Theft

OnGuard Online

Fraud: Recognize It. Report It. Stop It.

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FTC tutorial on how to protect sensitive business information

The FTC has released a training tool designed to help businesses protect sensitive information, which might be stolen to commit identity theft or fraud.

After taking a look at it, I found it to be simple, straight forward and effective way for a business to evaluate how well they are protecting information.

From the FTC release on this new tool:

Protecting the personal information of customers, clients, and employees is good business. The Federal Trade Commission has a new online tutorial to alert businesses and other organizations to practical and low- or no-cost ways to keep data secure.

The tutorial, “Protecting Personal Information: A Guide for Business,” at www.ftc.gov/infosecurity, takes a plain-language, interactive approach to the security of sensitive information. Although the specifics depend on the type of company and the kind of information it keeps, the basic principles are the same: any business or office that keeps personal information needs to take stock, scale down, lock it, pitch it, and plan ahead. The tutorial explains each of these principles, and includes checklists of steps to take to improve data security.

The tutorial supplements brochures, slide presentations, and articles on information security already on the Web site and available from the FTC for free. The agency is encouraging businesses and other organizations to share this important information with employees who handle personal information such as Social Security numbers, credit card numbers, financial account numbers, and other sensitive personal information.

Interestingly enough, I just did a post on a new report released by the IT Compliance Policy Group. Their findings were the organizations that suffer the fewest incidents of information theft have a few things in common, which is they keep their programs simple, and pick out the most critical items with a focus on risk. The organizations with the fewest incidents of data theft inspect these critical items more frequently, also.

The FTC tutorial gives some great guidance on how to identify the most critical items that are risk focused in an organization.

Common sense often is the best way to approach ensuring competent security.

Materials can be ordered for presentation purposes by following the link listed in the press release.

FTC press release, here.

A video presentation of this infomation can be seen, here.

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The FTC Fraud Department didn't really send you that phishmail

Phishing attempts spoofing (impersonating) government agencies aren't anything new. Here again, the FTC (Federal Trade Commission) is being used as a badge of authority to trick people into downloading something that is likely to steal their personal and financial details.

From the FTC press release about this most recent occurrence:

A bogus email is circulating that says it is from the Federal Trade Commission, referencing a “complaint” filed with the FTC against the email’s recipient. The email includes links and an attachment that download a virus. As with any suspicious email, the FTC warns recipients not to click on links within the email and not to open any attachments.

The spoof email includes a phony sender’s address, making it appear the email is from “frauddep@ftc.gov” and also spoofs the return-path and reply-to fields to hide the email’s true origin. While the email includes the FTC seal, it has grammatical errors, misspellings, and incorrect syntax. Recipients should forward the email to spam@uce.gov and then delete it. Emails sent to that address are kept in the FTC’s spam database to assist with investigations.

The virus contains a keylogger, which logs information keyed into a computer and sends it back (electronically) to the phishermen (bad guys). This is a common method of stealing people's financial and personal information, which then is used to steal money.

The technical terminology used in the press release refers to a virus. Two other terms used to describe how a keylogger is planted on a system are malware and crimeware.

Keylogging software seems to be legally purchased, often touted as a way to spy on your family, or employees. Law enforcement and people committing more sophisticated forms of espionage have been known to use them, also.

If you are interested in seeing how many people are marketing keyloggers, click here.

Phishing might sound technical, but it almost always uses a psychological technique known as social engineering (trickery) to accomplish it's purpose. In this case, the trick (lure) to click on the attachment is fear, but in a lot of cases, it's something that's too good to be true.

The FTC refers people, who want to learn more about phishing to http://www.onguardonline.gov/.

Another place that has a lot of information about phishing is the Anti-Phishing Working Group.

Traditionally, the Phishermen relied on tricking people to give up the information they were seeking. More and more, keyloggers are being used that steal the information automatically.

Other posts, where I've written about keyloggers can be seen, here.

I've been getting a lot of queries on this site about another government agency (the IRS), who has also been spoofed frequently by the Phishermen. The last update on this was on September 19th, but my guess is that these are still circulating out there, also.

Full FTC press release on this matter, here.

Here is an interesting CNet blog post about FTC Chairman, Deborah Platt Majoras, stating publically that phishing is driving her insane. This was taken from a comment she made about a month ago to the first National Cybersecurity Awareness Summit.

(Deborah Platt Majoras courtesy of the FTC site)

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13 percent of the U.S. population were fraud victims, according to the FTC

More than one out of ten people fell victim to a fraud scheme last year, according to the Federal Trade Commission. Of even greater interest was the fact that weight-loss scams came out number one, over lottery and buyers-club scams.

From the FTC press release on this:

The Federal Trade Commission today released a statistical survey of fraud in the United States that shows that 30.2 million adults – 13.5 percent of the adult population – were victims of fraud during the year studied. More people – an estimated 4.8 million U.S. consumers – were victims of fraudulent weight-loss products than any of the other frauds covered by the survey.

Fraudulent foreign lottery offers and buyers club memberships tied for second place in the survey. Lottery scams occur when consumers are told they have won a foreign lottery that they had not entered. Victims supplied either personal information such as their bank account numbers or paid money to receive their “winnings.” In the case of buyers clubs, victims are billed for a “membership” they had not agreed to buy. An estimated 3.2 million people were victims of these frauds during the period studied.

Here is another set of statistics worth evaluating:

Print advertising – direct mail, including catalogs, newspaper and magazine advertising, and posters and flyers – was used to pitch fraudulent offers in 27 percent of reported incidents. The Internet, including Web sites, auction sites, and e-mail, was used to make 22 percent of the fraudulent pitches. Television or radio accounted for 21 percent of the pitches, and telemarketing accounted for nine percent.

Interestingly enough, at least according to this survey, the Internet is only one venue used to pitch fraudulent schemes. Almost half (48 percent) were pitched by more traditional marketing venues, such as direct mail, newspaper and magazine advertising, television advertising and telemarketing.

Schemes pitched via the Internet only accounted for 21 percent of the reported incidents.

The full release by the FTC, along with consumer tips can be read, here.

The FTC has another page worth reading (I like the fact that it points out certain behaviors that most fraudsters exhibit), here.

Both of these links contain information on where to report fraud, which is highly recommended. The sad truth is that a lot of fraud victims never report being taken advantage of. Admitting that you were taken in by one of these schemes is embarrassing to a lot of people.

Trust me, there are a lot of people out there that fall for something that's too good to be true. Not reporting a scam probably means another person is probably going to end up being victimized by it.

With all the publications, television and radio shows, and direct mail come-ons out there, the FTC needs help identifying all the fraud that is out there.

I wonder what would happen if laws were passed that required advertising (marketing) mediums to exercise a little due diligence (act with a certain standard of care) before accepting money to plaster some of these fraudulent schemes all over the place?

One thing is for certain, most fraudsters aren't going to be able to get their customers to promote their goods, or services without paying them to do so!

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Is Myexcusedabsence.com a counterfeiting mill for dishonest employees?

Just about when you think you've seen everything on the Internet, someone comes up with something so outlandish that a reasonable person has to question it's legality.

Jessica K. Brown (AP) is reporting on a website that allows anyone to counterfeit (my term) excuses to provide to an employer.

From the AP article (courtesy of the Washington Post):

For about $25, students and employees can buy excuse notes that appear to come from doctors or hospitals. Other options include a fake jury summons or an authentic-looking funeral service program complete with comforting poems and a list of pallbearers.

Apparently, they are getting away with it because they have a disclaimer on the site stating that the templates are for "entertainment purposes only."

Oddly enough, the AP article directly quotes one of the owners as saying:

"Millions of Americans work dead-end jobs, and sometimes they just need a day off," said John Liddell, co-founder of the Internet-based company Vision Matters, which sells the notes as part of its Excused Absence Network. "People are going to lie anyway. How many people go visit their doctors every day when they're not sick because they just need a note?"

To me, this is a direct admission that they know fully well that their templates are being used to defraud employers.

And please remember that it wouldn't be too far fetched to guess that some of these excuses could be used by people committing workmen's comp fraud.

Will the owners of this enterprise be held liable when someone loses their job after providing one of these counterfeit excuses to their employer?

According to the article at least one person has been already been arrested after using one of these counterfeit excuses. A New Jersey woman was arrested after using one of these notes to try to get out of appearing in court. I guess this means people can and will use these counterfeit documents for other purposes besides getting a day off.

Since, a lot of these people are collecting pay using these documents, there is a financial loss being incurred by employers from this activity, also.

There are a lot of reasons for employee absenteeism and many consider it a factor in how productive (profitable) any organization is.

In 2003, a study was published by Braun Consulting News that attempts to quantify the reasons it occurs and what can be done about it. Interestingly enough, the study showed that employee absenteeism was decreasing. The study recommends proactive ways of increasing employee morale, which was found to be big factor in what causes employees to call in sick.

The study is worth a read and it certainly points how organizations need to take a proactive approach in an ever-changing world to address employee absenteeism.

Saying this, most employers are going to take a dim view of forged documents and any employee, who uses them and gets caught, is going to be extremely lucky if they are not terminated for their actions. Most employee handbooks I've ever seen have a clause in them warning against falsifying documents, and most of them call for immediate termination for doing so.

This is a pretty hefty price to pay to get a day off!

Most reasonable bosses are more than happy to take care of a hard working and productive employee if they have a need. My guess is that these documents will be used by employees -- who aren't very hard working, and have already abused the system so much -- they need a written excuse.

The amount of payroll a company spends it directly attributable to how much money they are making. The more of it that gets stolen, the less a company will have to spend on wages and benefits. Given this, the people at myexcusedabsence.com are costing the honest worker wages and benefits should their materials be used for anything other than entertainment purposes.

The Internet offers a lot of questionable services, and too many of them operate under the "entertainment purposes" guise.

Maybe if enough people complained to the Federal Trade Commission (FTC) about them and they were investigated throughly a few of them might be held accountable.

After all, in this instance, one of the site owners seems to have openly admitted to the associated press that he is fully aware of what people are using them for!

AP article (courtesy of the Washington Post), here.

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P2P under Congressional scrutiny - FTC to investigate

Although there are legitimate uses for P2P (peer to peer) software, there is no doubt that there are a lot of dangers to using it, also.

Officially, the concerns are how this exposes people to identity theft -- but this costs the entertainment industry (who probably have a few lobbyists dedicated to this matter) a lot of money when they don't get their royalties (money) on music and videos -- which people download for free using P2P.

Now Congress is asking the Federal Trade Commission to take a deeper look into the matter.

Still worried that peer-to-peer filesharing networks like Lime Wire are causing users to "inadvertently" expose sensitive documents, posing potential security risks, members of Congress are now asking for a formal investigation into the phenomenon.

The latest concern from the House of Representatives Committee on Oversight and Government Reform, judging by a 7-page letter (click for PDF) dated Wednesday to Federal Trade Commission chairwoman Deborah Majoras, appears to be this: Peer-to-peer networks may make unsuspecting consumers vulnerable to identity theft.

The same group of politicians, led by Reps. Henry Waxman (D-Calif.) and Tom Davis (R-Va.), suggested earlier this summer that peer-to-peer networks can pose a "national security" threat by allowing users to expose sensitive information unwittingly. (Some politicians, particularly those with entertainment industries in their districts, also took the opportunity once again to condemn unlawful transfer of copyrighted content via the networks.)

I've written a little about why it isn't a good idea to use some of the P2P networks out there:

Japanese cop exposes confidential information on 6,000 people using P2P (file-sharing) software

How P2P Software like Limewire Compromises Personal and Financial Information

Besides being a potential national security threat and an identity theft venue, most of this software is liable to do a lot of damage to your system. And unless you are pretty technically inclined, you will probably have to spend a little of your hard-earned money to fix the damage it will cause!

CNet news blog story, here.

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Immigrants targeted in learn English (with Rhythm) scam

Immigrants are often targeted in scams because they are less likely to report them. Here is an example -- where the Oregon AG with some assistance from the Willamette University College of Law Clinical Law Program is going after four California corporations for scamming immigrants -- who want to learn English.

Ironically, I seem to hear a lot of criticism about immigrants, who don't want to learn English. In this instance, people trying to exactly this (learn English), were being scammed!

From the Oregon AG (Attorney General) press release:

The lawsuit alleges that from 2002 to 2005 the defendants targeted members of Oregon's Hispanic community by advertising "free" English-language instruction courses entitled "Ingles con Ritmo" (English with Rhythm) and later charged exorbitant shipping and handling fees. The defendants repeatedly demanded additional payments for products that consumers never ordered or received. Thereafter, the defendants falsely represented themselves as third-party debt collectors and lawyers and threatened legal action in an effort to extract more money from the victims. In all cases, the victims owed the defendants nothing.

I decided to Google "Ingles con Ritmo" (English with Rhythm) and found an article by Consumer Affairs, where the FTC filed a similar action in June.

From the FTC press release:

According to the FTC’s complaint, from 2003 to 2005 the defendants sold an English-language instruction course, “Inglés con Ritmo,” advertised on Spanish-language television and the defendants’ Web sites, http://www.tonorecords.com/ and http://www.tonomusic.com/, stating that it was free due to government or non-profit subsidies. Inquiring consumers were told that a shipping and handling fee of $100 to $169 applied. Since 2006, the complaint states, the defendants, posing as third-party debt collectors, told consumers they owed money, typically $900, and repeatedly called them, even though the evidence shows that they owe no money.

The defendants are charged with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA) by falsely claiming that a debt is owed; by falsely claiming to be, or to represent, an attorney; and by falsely threatening legal action, arrest, imprisonment, property seizure, or garnishment of wages. Other FDCPA violations alleged are attempting to collect an amount of debt not authorized by contract or permitted by law; harassing consumers; and failing to inform consumers, within five days of their initial communication with them, of their right to dispute and obtain verification of their debt and the name of the original creditor.

The corporations and individuals listed in the suit are:

Tono Records, dba Tono Music and Professional Legal Services, Tono Publishing, Promo Music, Millennium Three Corp., Dulce Ugalde, Luis Roberto Ruiz, and Maria Oceguera, all based in Los Angeles County, California.

As of this writing, both the sites linked to in the FTC press release are no longer active.

Although, I'm glad to see a civil action undertaken in this instance, I have to wonder why criminal charges aren't being filed. Some of the collection practices allegedly being used, might be defined as "extortion," which is a criminal offense.

Consumer Action, a non profit organization that has been around since 1971 has a page on their site detailing the most common scams, where immigrants are targeted.

They list the most common scams against immigrants, which were put together by the FTC in 2006:

• Predatory lending practices. Lower income levels and other factors can make obtaining access to credit difficult. Moreover, Hispanics unfairly may be charged higher interest rates.

• Immigration fraud. Perpetrated by so-called “immigration consultants,” such schemes tend to increase when immigration legislation (for example, for an “amnesty”) is being proposed or considered. The “consultants” take advantage of general awareness of possible new programs and their victims’ lack of sophistication about the legislative process.

• Used cars. Some sellers fail to comply with applicable state and federal laws, such as the FTC’s Used Car Rule (if a transaction is conducted in Spanish, the mandated “Buyers Guide,” disclosing whether the vehicle comes with a warranty or “as is,” must be provided in Spanish) or California’s law that if negotiations are conducted in Spanish, the written contract also must be in Spanish.

• Health insurance fraud. Because minimum wage earners often do not obtain health insurance from their employers, they are attracted to offers for low-cost health insurance, which may not provide the advertised benefits, if any.

• Buying clubs (offering discounts on products and services). For Hispanics who seek discounts and best prices, offers for buying clubs are extremely attractive. Panelists at an FTC Hispanic/Latino Outreach Forum described a Hispanic cultural affinity for “free” or discounted goods and services, and an economic need for them driven by lower income levels as a group. Buying clubs often are offered for free for thirty days, requiring the consumer to cancel before the end of thirty days to avoid being charged for the club.

• Work-at-home schemes. The panelists considered this a growing problem area that particularly takes advantage of undocumented immigrants seeking an income without having a traditional employer. Tackling this fraud also poses challenges because these schemes are advertised not just in classified ads and other media, but often by signs tacked onto telephone poles.

• Notario fraud. In most Latin American countries, the term “notario” implies that the person described is a licensed attorney. Panelists reported a common scam involving individuals who represent themselves as “notario” and offer help with the immigration process; in fact, these individuals are not attorneys.

• Remittances. The panelists noted that many Hispanics wire money to relatives in their home countries and that there are many problems with undisclosed fees or fees that vary from what was disclosed.

• Prepaid phone cards. Panelists agreed that problems with undisclosed fees are commonplace with these cards.

• Employment agency fraud. This fraud preys upon undocumented immigrants looking for work and tends to increase when the economy is in a downturn.

• Panelists observed that purported cures for many ailments appear in numerous Spanish newspapers and other Spanish-language media.

Oregon AG press release, here

FTC press release, here.

The FTC now has information in Spanish on their site, here.

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