FINANCIAL LITERACY: FACTS vs. FICTION

March 6, 2018

FEDERAL TRADE COMMISSION

NORTHWEST REGION

T i n a E . K o n d o , A s s i s t a n t R e g i o n a l D i r e c t o r

R i c h a r d M c K e w e n , S t a f f A t t o r n e y

N a d i n e S a m t e r , S t a f f A t t o r n e y

L a u r a M . S o l i s , S t a f f A t t o r n e y

What is the Federal Trade Commission?

An independent law enforcement agency with offices throughout the country

We are the nation’s consumer protection agency

We sue scammers and stop them.

We also partner with community members such as libraries so that we can:

Provide consumer and business education materials and information (English, Spanish and other languages).

Let people know how to file consumer complaints.

• Seattle Regional Office opened in 1925

Today’s Agenda

Speakers:

Tina Kondo—FTC overview and Facts about Financial Fraud in Washington state

Richard McKewen—Financial Literacy and FTC Resources

Nadine Samter—Credit and Debt issues

Laura Solis—Scams targeting vulnerable populations—what they are, how they work

National Consumer Protection Week | Consumer Information

FEDERAL TRADE COMMISSION

CONSUMER INFORMATION

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March 4 – 10, 2018

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National Consumer Protection Week (NCPW) is a time to help people understand their consumer rights and make well-

informed decisions about money.

Get Involved

You can be a part of NCPW! Check out these tips for spreading the

word, reaching local press and social media – plus tools like social media images

and a sample article to personalize and promote NCPW, or your own community

event.

Reach out to your community!

Plan an event - Host a forum, workshop or seminar in your community and

share the tools people need for today's economy. Partner with local

organizations such as a police department or library.

Write about it - Draft an article and send it to local organizations so they

can promote consumer education through their publications.

Blog about it - Add a comment about NCPW to blogs you regularly read.

Keep your comment brief and include a link to your NCPW event, your

website for consumer tips, or consumer.ftc.gov.

Spread the word - Encourage your audience to tell friends, family, colleagues

and neighbors about NCPW. Word of mouth is powerful!

Resources for local press and social media outreach Contact your local

television, radio or cable access station. Offer to talk about a consumer protection topic

you care about, or tell their audience about your NCPW events. Use the following

Fact: 2017 Fraud Reports in Washington

Fact: Financial Scammers Target Washington Consumers

According to Consumer Sentinel, these are the top financial scams in Washington

Imposters—IRS and other gov’t agencies

ID Theft

Debt Collection problems

Prizes, Sweepstakes and Lotteries

Credit Bureaus and information furnishers and users

Facts: Imposter Scams

WA’s #1 complaint in 2017

Nationwide there were 347,829 complaints

Common Red Flag: Pay by wire, debit card or iTunes cards

Urgency

Imposter Scam Fictions

Government (ex: IRS)—“you owe money”

Housing Lotteries—“Raise your odds of winning”

Utilities—Your power will be shut off

“Educational Grants”—for a fee

Social Security or FTC “help”

Juror scam– pay $$ for not showing up

FEMA scams—most recent

Bill for property taxes/mortgage

Mandatory posters required by “gov’t agency”

Facts: Identity Theft

Nationwide there were 371,061 complaints

WA’s #2 complaint in 2017—7360!!

Stolen SSNs, credit card theft

Value of your ID on the dark web now is less than $1

Identity Theft Complaints by Age

Free Identity Theft Resources

Go to IdentityTheft.gov for free resources and a recovery plan

Free resources at ftc.gov/bulkorder

Examples of letters to write and reports to make

Integrated with IRS reporting now if Tax ID Theft

Facts: Debt Collection and Debt Scams

Nationwide there were 608,535 complaints about Debt Collection scams

Washington’s #3 complaint in 2017

Unfair Debt Collection Practices

Collection on fake or expired debt

Could happen years after a purchase

Facts: Prizes, Sweepstakes and Lotteries

142,870 complaints nationwide in 2017

$95M in losses

“You’ve won a prize or sweepstakes”

“Just have to pay a processing or mailing fee”

Pay via instant cash method (iTunes, Greendot, wire transfer, debit card)

Credit, Information and Reports

2017 Nationwide saw 107,473 complaints

Includes problems with credit bureaus reporting incorrect information

Number might increase next year due to Equifax

Financial Literacy and FTC Resources

Tools to help you help others:

consumer.ftc.gov blogs, alerts, multimedia, action links

variety of topics

consumer.gov basic, key concepts

toolbox

ftc.gov/bulkorder

* OK, not really a millionaire, but it’s

a good reminder always to read the

fine print!

*

Sophia is trying to come up with a monthly budget for when she gets out. Which of the following would not be considered a fixed expense?

A. Grocery bill.

B. Car payment.

C. Car insurance.

D. Rent.

Marcella lands a job paying $400 per week. On her budget worksheet, she should put down $1600 as her monthly income.

A. True

B. False

Jessica’s bank offers her a credit card. Before she agrees, one of the most important questions she should ask is:

A. Can I get the Seahawks’ logo on it?

B. Does it come in a color that matches my handbag?

C. What are the fees?

D. Can I have the bill sent to my ex?

Jessica decides to celebrate her birthday in Vegas. She charges $500 airfare and $500 for a hotel on her credit card. If she pays only the minimum payment each month – and doesn’t use the card again – how long can she expect it to take to pay for her mini-vacation?

A. 18 months.

B. 3 years and 7 months.

C. 8 years.

D. 22 years.

DEBT COLLECTION

Q: Debt Collectors Keep Calling Me, What Should I Do?

Keep a notebook by the phone or nearby and ask for the collector’s name, company, address and phone number. Write it down with date and time you talked.

Say: “I will only talk when I get the written validation notice showing I what I owe, who I owe it to, and when I first owed the debt.”

If the collector threatens something they can’t legally do, or uses profanity, hang up – this is against the law.

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Q: How Do I Make Them Stop Calling Me?

To stop the debt collector calling you, write a Cease Notice Letter − a letter to telling the debt collectors to stop calling you immediately.

Send by certified mail with a return receipt.

The law requires the calls to stop, but the debt collector can still take other action to collect the debt, including suing or wage garnishment.

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Q: What Do I Do When I Get The Validation Notice ?

The notice should list the creditor – do you recognize the debt? You can call the creditor to get more information.

If you do not believe the debt is yours, follow the instructions on the notice – it should tell you what to do next to ask about the debt.

If the debt is yours, make a plan for payment or talk to a credit counselor.

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RESOURCES ONLINE OR FOR BULK ORDER

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RESOURCES ONLINE OR BULK ORDER38

BEWARE! Debt Negotiation and Credit Repair Scams!

Beware companies that offer to “fix” your credit or reduce your debt for a fee in advance − it’s illegal!

Beware companies that offer to enroll you in loan forgiveness or reduced payments on federally-backed student loans for a fee − only the Department of Education can provide relief for student loan borrowers! And, it’s free!

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RESOURCES40

Q: This Debt Is Years’ Old, Do I Still Have To Pay It?

Debt collectors have a limited number of years to sue you to collect a debt – the time varies by state law.

WA gives written contracts and accounts receivables 6 years before the unpaid debt becomes time-barred (RCW 4.16.040).

The clock starts when you fail to make a payment.

A debt collector cannot sue you for not paying a debt that is time-barred.

Collectors are permitted to call you for time-barred debts.

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Q: Should I Pay a Time-Barred Debt?

You can choose not to, but not paying it may lower your credit score.

You may make a partial payment, but in some states, paying any amount or even promising to pay a time-barred debt may “revive” it. The collector can then sue you.

You may decide to pay off the debt – make sure to get a signed form or letter releasing you from the debt before you pay it.

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Q: What If I Am Sued Anyways?

You should defend yourself in court – consider talking to an attorney. If you can show the debt is time-barred, the judge will dismiss the lawsuit.

Don’t ignore it! Otherwise the collector may get a judgment against you and may take money from your bank account, paycheck, or tax refund.

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RESOURCES ONLINE

https://www.consumer.ftc.gov/articles/0117-time-barred-debts

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Q: I Don’t Recognize The Debt! How Can I Tell If It’s Real?

A caller seeking to collect a debt may be a fake or “Phantom” collector if the caller:

Seeks payment on a debt you don’t recognize or are sure is not yours.

Refuses to give a mailing address or phone number.

Asks for personal information.

Threatens you with action that isn’t legal.

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Q: What Should I Do?

Ask for identification and validation of the debt.

Stop speaking with the caller.

Do not give out your personal information.

Contact your creditor if you think the debt is legitimate, but the caller is not.

Report the call to the FTC or the State AG.

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RESOURCES ONLINE

https://www.consumer.ftc.gov/articles/0258-fake-debt-collectors

https://www.consumer.ftc.gov/articles/0081-debts-and-deceased-relatives

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Q: A Landlord Won’t Rent To Me Because of A Background Check. Help!

Landlords have to tell you if they won’t rent or charge you more for rent because of something in a credit report. This is an Adverse Action Notice.

The Notice must state the name of who created the background or credit report and give a free copy of it to you if you ask for it within 60 days.

Can show the landlord pay stubs or bank statements, pay more money for a security deposit, or pay first and last months’ rent to overcome bad credit.

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RESOURCES AVAILABLE ONLINE AT www.consumer.gov or order for free, in bulk, in English & Spanish

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Q: An Employer Want To Do A Background Check, Can They?

Yes, but . . .

It must provide a stand-alone written notice before the background check and obtain your written consent.

It can’t ask about medical information before giving you a job offer.

It can’t treat you differently because of race, national origin, color, sex, religion, disability, genetic information, or age (if you are over 40).

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Q: An Employer Denied A Job Based On A Background Check! What Do I Do?

If an employer finds something negative, it has to give you an Pre-Adverse Action Notice, a copy of the report, and an FCRA Summary of Rights that tells you how to correct errors in the report.

If you see a mistake, ask the credit bureau to correct it and send a copy to the employer. Notify the employer of the mistake.

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Resources: Available for free, in bulk, in English & Spanish, at ftc.gov/bulk order; Joint pub of EEOC and FTC

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Q: How Do I Correct Errors On A Consumer Report?

If you find out you have an error, you can see the report and correct mistakes for free: go to the website www.annualcreditreport.com.

You can request another free report within 60 days to make sure the report has been corrected.

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RESOURCES: WWW.CONSUMER.FTC.GOV54

Other Resources on Credit55

Scams Targeting Vulnerable Populations

Scammers may target consumers who are:

Non-fluent English speakers

Unfamiliar with US systems/government

Looking for opportunity to get ahead

2016 FTC report: African-American and Latino consumers were more likely to become victims of fraud than counterparts, but less likely to report.

Debt and income-related fraud

In 2017, consumers aged 50+ reported $365 million in losses due to fraud

Grandparent scams, tech support scams, sweepstakes scams

Enforcement Actions

FTC v. Next-Gen, Inc. (Feb. 2018)

Sweepstakes scam

FTC v. Genius Technologies, LLC (Feb. 2018)

Tech support scam

FTC v. ABC Hispana, Inc. (Feb. 2017)

Imposter scam

FTC v. Centro Natural Corp. (Oct. 2014)

Phantom debt collection/unordered merchandise scheme

FTC v. Cream Group, Inc. (Dec. 2013)

Work-from-home scam

Top 10 Things You Can Do to Avoid Fraud

1. Spot imposters.

2. Do online searches.

3. Don’t believe your caller ID.

4. Don’t pay upfront for a promise.

5. Consider how you pay.

6. Talk to someone.

7. Hang up on robocalls.

8. Be skeptical about free trial offers.

9. Don’t deposit a check and wire money back.

10. Sign up for free scam alerts from the FTC at ftc.gov/scams.

Reporting Fraud to the FTC

www.ftc.gov/complaint877-FTC-HELP

FTC.gov/queja (Spanish)

FTC Free Resources for libraries

FTC.gov/libraries

Use the content designed for your programs

Free written materials—bookmarks and brochures

Free videos to embed in your websites!

Blog posts about scams

ftc.gov/bulkorder

Consumer.gov and Consumidor.gov

Donotcall.gov

Report Unwanted Calls

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