Scams and Frauds and how to avoid them

Presented by the Central VA BBB

The BBB offers consumers:

• Unbiased reports on area business• A way to check a company’s reliability• Somebody to contact the company for you• Low cost mediation• Advice on current scams in the area• A place to report wrongdoing and get

advice to avoid a problem

This presentation will cover

• ID theft prevention• Lottery scams• Home repair

do’s/don’ts• Work at home

schemes• Guaranteed

loans/credit cards

• Charities• Bogus certified checks• Email phishing• Discount Medicare

Cards• Places to contact for

help• Laws• Online Scams

ID THEFT• What is it?

• Identity theft is when someone uses your personal information such as Social Security #, name, address, and credit card to commit financial crimes against you and/or a business.

• Federal and local police agencies report that it has become the fastest growing crime in America and will continue to be so for the near future.

ID Theft (cont.)• How can it happen? How to avoid !• Q: Do you put your bill payments out in the mailbox?• A: Taking them to the Post Office or a collection box offers

you greater protection against someone getting your account info.

• Q: Do you shred or tear up old bills, statements and personal info before putting in the trash?

• A: Doing so could save a lot of problems with “dumpster divers”.

• Q: Do you carry your Social Security Number or extra credit cards except when needed?

• A: Doing so leaves you open to theft and misuse.• Q: Do you review your credit report annually? • A: It can give you a heads up on unauthorized persons using

or looking into your information.

ID TheftWho to call/What to do:

Contact your local police agency as soon as possible.Contact your banks and credit card companies.

Contact the Federal Trade Commission (877-438-4338)U. S. Postal Inspectors (804-418-6100)FBI (804-261-1044)Credit reporting agencies: Equifax (800-525-6285)

(place an alert) Experian (800-301-7195)Trans Union (800-680-7289)

Free credit report: (877-322-8228)Free Credit Report Annually: https://www.annualcreditreport.com/cra/index.jsp

Other Online helpwww.centralvirginia.bbb.org/ www.ftc.gov/ www.mastercard.com

/education/fraud www.visa.com/personalwww.fraud.org/ www.equifax.com/

Other Help• Eastern District of VA: www.usdoj.gov/usao/vae/• Chesterfield County:

www.co.chesterfield.va.us/PublicSafety/Police/• Henrico Count Police: www.co.henrico.va.us/police/• United States Secret Service: www.secretservice.gov/

• Virginia State Police: www.vsp.state.va.us/Depending on the ID stolen you may need to change your checking

and credit card account numbers immediately by contacting your bank(s).

Make sure you file a complaint with your local police.It is a good idea to obtain a copy of your credit report from a credit

reporting agency.

Chesterfield County, Virginia Police.url

Lotteries• All foreign lotteries are frauds. Only

domestic lotteries approved by the State are legal.

• If you are contacted by anyone other than State Lottery officials (they will never ask for money) it is likely a scam.

• Hang up the phone, rip up the Mail.

Home Repair Fraud

• Always get a written contract - read it carefully-you have three days to cancel.

• Try to get two or more estimates.• Always check out a company history - call

BBB and/or State DPOR.• Be wary of persons knocking at the door –

they may not be around later.• Never pay large amount upfront before

work is completed.

Home Repair• VA DPOR, who overseas contractors, advises the

following:

• Hire only licensed contractors.• Check for valid license @ www.dpor.virginia.gov or 804-367-

8511.• Get at least three references and review past work.• Get at least three bids.• Insist on a written contract and do not sign until you understand

the terms.• Pay 10% down or $1000, whichever is less.• Do not let payments get ahead of the work, keep records of all

payments.• Do not make final payment until you are satisfied with the job.• Do not pay cash.• Keep a file of all papers relating to your project (change orders,

warranties, etc.

Work at Home Schemes

• Mostly make money for the person selling start up kits or how to kits

• No one makes $ stuffing envelopes. (except bad guys)

• If it’s a home-based business check out others who “succeeded” with deal.

• Beware of pyramids – you will lose friends, possibly be sued, or go to jail!!

Guaranteed Credit• If it’s a loan - any fees? Real banks do not

have upfront fees for approving loans.• Do not deal with strangers over the

phone.• Ads in magazines are usually scams.• Real banks do not have upfront fees for

credit cards.

Charities• BBB maintains a data base on charities. • To be an approved charity it must meet our

guidelines and give updated info re. its spending.

• Before donating get their literature sent to you - be sure who they are, not some sound-alike scam artist.

• Contact the BBB @ 804-648-0036• Online @ www.centralvirginia.bbb.org

Bogus Certified Checks• A new wrinkle on the old phony lottery scam,

operators are now calling, telling you have won (nothing new there). If you hesitate at sending them “admin fees” they offer to send a certified check. You are supposed to then deposit the check in your account and send along a certified check from your account to them by FEDEX. The only problem is you find out the next day from your bank the original check was a phony - but your account was debited and you can’t get the money back. Remember all these lotteries are scams.

Email Phishing

• This is when someone pretending to be a legit business (such as a bank) sends you an email asking you to fill out info about your accounts. The usual excuse is it’s an update or account info was compromised so you need to confirm your ID – always a scam. A bank or cable company will never contact you this way . If in doubt call customer service # on your bill.

Discount Medicare Cards

Con artists are already taking advantage of the program. The Better Business Bureau urges older consumers to be wary of scams masquerading as solicitations for the new Medicare discount drug program. According to the Centers for Medicare and Medicaid Services (CMS), illegal door-to-door or telephone solicitation scams selling “Medicare-approved” discount drug cards have been reported across the country. Consumers are advised to be suspicious of any solicitation that asks for their banking, Social Security, Medicare or credit card information.

Drug discount cards that have been approved by Medicare will carry

a “Medicare-Approved” seal. You will be able to confirm that the cards are legitimate by checking the government’s Web site at http://www.medicare.gov or by calling 1-800-MEDICARE. The CMS fact sheet about Medicare-approved drug discount card scams offers additional information. To read, go www.cms.hhs.gov/media/press/release.asp

Places to Contact Better Business Bureau 701 E. Franklin St., Suite 712Richmond, VA 23219(804) 780-2222FAX (804) 648-3115www.centralvirginia.bbb.orginfo@richmond.bbb.org

BBB CHARITY LIST 804-648-0036 The BBB rates charities as acceptable only after checking them out and

asking for info.BBB SENIOR FRAUD 804-780-2222The dedicated unit of the BBB will either help or point you to the right place

to get help.BBB RICHMOND 804-648-0016Call this # to check out the reputation of a business prior to signing a

contract.CENTER for ELDER RIGHTS 804-662-9333Stop Junk Mail/TelemarketingDIRECT MKTING ASSN. 202-861-2475CREDIT CARD OFFERS 888-567-8688DO NOT CALL REGISTRY 888-382-1222 or 866-290-4236

Places to Call (cont.)Credit Reporting Agencies For Report

EQUIFAX 800-525-6285 800-685-1111EXPERIAN 800-301-7195 TRANS UNION 800-680-7289 800-916-8800

To get copies of credit report and report ID theft (and call local Police)Fraud FBI RICHMOND 804-261-1044

The FBI handles fraud by telephone (wire fraud) and other Federal crimesFED TRADE COMM 877-382-4357

Acts as clearing house for complaints against telemarketing and othersPHONE BUSTERS 888-495-8501

For complaints against Canadian lottery, etc.POSTAL INSPECTORS 804-418-6100

Crimes committed by use of the Mails.http://www.usps.com/websites/depart/inspect/welcome.htm

SOCIAL SECURITY 800-269-0271VA BUREAU OF INSURANCE 877-310-6560

http://www.state.va.us/scc/division/boi/webpages/seniorphone.htm

Places to Call (cont.)Report AbuseVA CHILD PROTCT SVCS 800-552-7096VA FAMILY VIOLENCE 800-838-VADVVA ADULT PROTEC SVCS 888-83ADULTVA. ATTY GENERAL 800-451-1525

Problems/Questions on BuildersVA. CONSUMER AFFAIRS 800-552-9963VA. PROF & OCCUPATIONAL 804-367- 8500

http://www.state.va.us/dpor/indexie.htmlEnforces laws and regulations for health and safety, and licensing.

VA Bureau of Financial Institutions. (800) 552-7945 VA Dept. for the Aging 804-662-7650

Gives advice on medical bills, etcVA Lawyer Referral 804-775-0808VA ASSOC. of AREA AGENCIES on AGING 804-644-2804

Oversees Medicare/Medicaid waste, fraud, and abuse.

Other places for help

• Motor Vehicle Dealer Board 804-367-1100 Handles complaints against automobile dealers

• State Corporation Commission 804-371-9733 Regulatory authority over many business’ including

insurance companies, public utilities, financial institutions, and securities companies.

• Virginia State Bar 804-775-0570 Handles complaints against Lawyers

Places to Visit – Web SitesSOME USEFUL WEBSITES

National BBBhttp://www.bbb.org/Charity Giving BBBhttp://www.centralvirginia.bbb.org/charity.html

VA Dept of Health Professionalshttp://www.dhp.state.va.us/VA Dept of Consumer Affairshttp://www.vdacs.state.va.us/

Securities and Retail Franchisinghttp://www.state.va.us/scc/division/srf/webpages/databd.htm

Nursing Home Info – VAhttp://www.medicare.gov/nhcompare/Search/StateCustomize.asp?

Language=English&State=VA0%7CVirginia

Fed Trade Commission http://www.ftc.gov/

Online Shopping Safety• Shop only at Internet merchants you know and trust; if in doubt check with the

Better Business Bureau (www.bbb.org). • Beware of emails offering cut-rate prices on popular toys, software or other gifts; if

the offer sounds too good to be true, it probably is. • If you receive an unsolicited email from an Internet merchant, don't click on the

links within it. Instead, locate the merchant's Web site address through a reputable search engine.

• Check Internet merchants' refund policies; some merchants set a deadline for returns or charge a fee to accept returned merchandise.

• Pay with a credit or debit card; for extra protection enroll your card in anti-fraud programs like Verified by Visa.

• Protect your private information. When shopping online, look for the merchant’s Web site privacy policy and never provide your Social Security number, birth date, or mother's maiden name.

• Ensure your computer has the latest anti-virus software installed before shopping online.

• Always print and save the confirmation page when completing an online purchase. • Don't wait for paper statements. Check your credit card and bank statements for

suspicious activity by either calling your bank or visiting your financial institution’s Web site.

• Look for an encryption certificate such as Verisign to help safeguard your information.

Credit Card OPT OUT• If you wish to limit the number of pre-approved credit

solicitations that you receive you may contact the National Opt-Out Center to have your name removed for two years from all of the major credit bureaus' mailing lists. Call the National Opt-Out Center toll-free at :

1-888- 5OPTOUT (567-8688)

• To Stop Junk Mail: Direct Marketing Assn (202)-861-2475

• Do Not Call Registry: (888)-382-1222 or (866)-290-4236

Credit Card Liability• It's important to report lost or stolen ATM and debit cards

immediately because the amount you can be held responsible for depends on how quickly you report the loss.

• If you report your ATM card lost or stolen within two business days of discovering the loss or theft, your losses are limited to $50.

• If you report your ATM card lost or stolen after the two business days, but within 60 days after a statement showing an unauthorized electronic fund transfer, you can be liable for up to $500 of what a thief withdraws.

• If you wait more than 60 days, you could lose all the money that was taken from your account after the end of the 60 days and before you report your card missing.

• After notification about an error on your statement, the institution generally has 10 business days to investigate. The financial institution must tell you the results of its investigation within three business days of completing it.

Credit Card Liability (cont) It must correct an error within one business day after

determining that the error has occurred. If the institution needs more time, it may take up to 45 days to complete the investigation - but only if the money in dispute is returned to your account and you are notified promptly of the credit. At the end of the investigation, if no error has been found, the institution may take the money back if it sends you a written explanation.

• Note: VISA and MasterCard voluntarily have agreed to limit consumers' liability for unauthorized use of their debit cards in most instances to $50 per card, no matter how much time has elapsed since the discovery of the loss or theft of the card

• The best way to protect yourself in the event of an error or fraudulent transaction is to call the financial institution and follow up in writing - by certified letter, return receipt requested - so you can prove when the institution received your letter. Keep a copy of the letter you send for your

Top online cons• According to the FTC, here's what

online consumers are complaining about most:

• Internet Auctions

• The Bait: Shop in a "virtual marketplace" that offers a huge selection of products at great deals.

•The Catch: After sending their money, consumers say they've received an item that is less valuable than promised, or, worse yet, nothing at all.

• The Safety Net: When bidding through an Internet auction, particularly for a valuable item, check out the seller and insist on paying with a credit card or using an escrow service.

Top Cons (Cont)

• Internet Access Services

• The Bait: Free money, simply for cashing a check.

• The Catch: Consumers say they've been "trapped" into long-term contracts for Internet access or another web service, with big penalties for cancellation or early termination.

• The Safety Net: If a check arrives at your home or business, read both sides carefully and look inside the envelope to find the conditions you're agreeing to if you cash the check. Read your phone bill carefully for unexpected or unauthorized charges.

Top cons (cont)

• Credit Card Fraud

• The Bait: Surf the Internet and view adult images online for free, just for sharing your credit card number to prove you're over 18.

•The Catch: Consumers say that fraudulent promoters have used their credit card numbers to run up charges on their cards.

• The Safety Net: Share credit card information only when buying from a company you trust. Dispute unauthorized charges on your credit card bill by complaining to the bank that issued the card. Federal law limits your liability to $50

if your card is misused.

Top Cons (Cont)

• International Modem Dialing:

• The Bait: Get free access to adult material and pornography by downloading a "viewer" or "dialer" computer program.

• The Catch: Consumers complained about exorbitant long-distance charges on their phone bill. Through the program, their modem is disconnected, then reconnected to the Internet through an international long-distance number.

• The Safety Net: Don't download any program to access a so-called "free" service without reading all the disclosures carefully for cost information. Just as important, read your phone bill carefully and challenge any charges you didn't authorize or don't understand.

Top cons (cont)• Multilevel Marketing Plans/ Pyramids

• The Bait: Make money through the products and services you sell as well as those sold by the people you recruit into the program.

• The Catch: Consumers say that they've bought into plans and programs, but their customers are other distributors, not the general public. Some multi-level marketing programs are actually illegal pyramid schemes. When products or services are sold only to distributors like yourself, there's no way to make money.

• The Safety Net: Avoid plans that require you to recruit distributors, buy expensive inventory or commit to a minimum sales volume.

Top Cons (cont)

• Travel and Vacation

• The Bait: Get a luxurious trip with lots of "extras" at a bargain-basement price.

• The Catch: Consumers say some companies deliver lower-quality accommodations and services than they've advertised or no trip at all. Others have been hit with hidden charges or additional requirements after they've paid.

• The Safety Net: Get references on any travel company you're planning to do business with. Then, get details of the trip in writing, including the cancellation policy, before signing on.

Top cons (cont)• Business Opportunities

•The Bait: Be your own boss and earn big bucks.

•The Catch: Taken in by promises about potential earnings, many consumers have invested in a "biz op" that turned out to be a "biz flop." There was no evidence to back up the earnings claims.

• The Safety Net: Talk to other people who started businesses through the same company, get all the promises in writing, and study the proposed contract carefully before signing. Get an attorney or an accountant to take a look at it, too.

Top Frauds (Cont)

• Investments

• The Bait: Make an initial investment in a day trading system or service and you'll quickly realize huge returns.

•The Catch: Big profits always mean big risk. Consumers have lost money to programs that claim to be able to predict the market with 100 percent accuracy.

• The Safety Net: Check out the promoter with state and federal securities and commodities regulators, and talk to other people who invested through the program to find out what level of risk you're assuming.

Top cons (cont)• Health Care Products/Services

• The Bait: Items not sold through traditional suppliers are "proven" to cure serious and even fatal health problems.

• The Catch: Claims for "miracle" products and treatments convince consumers that their health problems can be cured. But people with serious illnesses who put their hopes in these offers might delay getting the health care they need.

• The Safety Net: Consult a health care professional before buying any "cure-all" that claims to treat a wide range of ailments or offers quick cures and easy solutions to serious illnesses.

Advice

• Can you avoid getting caught by a scam artist working the web? Not always. But prudence pays. The FTC offers these tips to help you avoid getting caught by an offer that just may not click:

• Be wary of extravagant claims about performance or earnings potential. Get all promises in writing and review them carefully before making a payment or signing a contract.

• Read the fine print and all relevant links. Fraudulent promoters sometimes bury the disclosures they're not anxious to share by putting them in teeny-tiny type or in a place where you're unlikely see them.

• Look for a privacy policy. If you don't see one - or if you can't understand it - consider taking your business elsewhere.

• Be skeptical of any company that doesn't clearly state its name, street

address and telephone number. Check it out with the local Better Business Bureau, consumer protection office or state Attorney General.

BBB Senior Fraud – Public Education Services

The BBB offers public awareness seminars, free of charge, to groups interested in learning how to avoid being taken in by fraud.

Special sponsors such as Ukrop’s Grocery and First Market Bank make this possible through generous donations.

Contact us at 804-780-2222 for details

Federal Laws• Fraud and related activity in connection with identification documents and information -

Title 18 U.S.C. 1028

Fraud in connection with identification documents and information is committed when an individual:

1. knowingly and without lawful authority produces an identification document or a false identification document;

2. knowingly transfers an identification document or a false identification document knowing that such document was stolen or produced without lawful authority;

3. knowingly possesses with intent to use unlawfully or transfer unlawfully five or more identification documents (other than those issued lawfully for the use of the possessor) or false identification documents;

4. knowingly possesses an identification document (other than one issued lawfully for the use of the possessor) or a false identification document, with the intent such document be used to defraud the United States;

5. knowingly produces, transfers, or possesses a document-making implement with the intent such document-making implement will be used in the production of a false identification document or another document-making implement which will be so used;

6. knowingly possesses an identification document that is or appears to be an identification document of the United States which is stolen or produced without lawful authority knowing that such document was stolen or produced without such authority; or

7. knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law, or that constitutes a felony under any applicable State or local law;

• Identity Theft and Assumption Deterrence Act of 1998

The Act makes it a federal crime when someone "knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law." The Act considers a name, social security number, a credit card, cellular telephone, electronic serial number or any other piece of information that may be used alone or in conjunction with other information as a "means of identification."

Fair Credit Billing Act

The Act establishes procedures for resolving errors on credit card bills and statements with regard to your credit card accounts. These errors include fraudulent charges made by someone else on your accounts. The act also limits your liability for unauthorized credit card charges to $50 per card.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA), is designed to promote accuracy and ensure the privacy of the information used in consumer reports. Recent amendments to the Act expand your rights and place additional requirements on credit reporting agencies. Businesses that supply information about you to credit reporting agencies and those that use consumer reports also have new responsibilities under the law..

•Mail Fraud - Title 18 U.S.C. 1341

Mail fraud is committed when an individual uses the postal system in furtherance of a scheme to obtain money or property from someone else by offering a product, service, or investment opportunity that does not live up to its claims.

Fraud by Wire, Radio or Television - Title 18 U.S.C. 1343

Wire fraud is committed when an individual, having devised a scheme for the purpose of obtaining money or property by means of false pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice.

Bank Fraud - Title 18 U.S.C. 1344

Bank fraud is committed when an individual knowingly executes, or attempts to execute a scheme or artifice to defraud a financial institution or to obtain any of the moneys, funds, credits, assets, securities or other property, owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises.

• Identity Theft Penalty Enhancement Act

The Identity Theft Penalty Enhancement Act amends title 18 of the United States Code to establish penalties for aggravated identity theft.

The Act adds to section 1028 the following language: "whoever, during and in relation to any violation enumerated in subsection (c), knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 2 years.

The Act also includes the following language pertaining to terrorism offenses: "whoever, during and in relation to any felony violation enumerated in section 2332b(g)(5)(B), knowingly transfers possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 5 years.

Fair and Accurate Credit Transactions Act of 2003

The Fair and Accurate Credit Transactions Act is actually an amendment to the Fair Credit Reporting Act and provides several new measures to protect consumers from identity theft.

The act calls for mandatory credit card account number truncation on electronic receipts, the establishment of a national fraud alert system, identity theft account blocking by credit reporting agencies when a police report is filed, and the development of guidelines to assist financial institutions and creditors to spot "red flag" indicators in credit applications and other financial transactions that may suggest identity theft. In addition, the act gives consumers the right to obtain records from businesses where identity thieves used their names and gives consumers the right to block fraudulent information from appearing on their credit reports.

Most importantly, the Act allows consumers access to free consumer credit reports from each of the three national bureaus on an annual basis and gives consumers the ability to make one call to obtain fraud alerts on all three credit reports. Reports may be obtained by visiting www.annualcreditreport.com.

VIRGINIA LAWS

•

Forging Public Records, etc. - Title § 18.2-168. If any person forge a public record, or certificate, return, or attestation, of any public officer or public employee, in relation to any matter wherein such certificate, return, or attestation may be received as legal proof, or utter, or attempt to employ as true, such forged record, certificate, return, or attestation, knowing the same to be forged, he shall be guilty of a Class 4 felony.

Forging Coin or Bank Notes - Title § 18.2-170.If any person (1) forge any coin, note or bill current by law or usage in this Commonwealth or any note or bill of a banking company, (2) fraudulently make any base coin, or a note or bill purporting to be the note or bill of a banking company, when such company does not exist, or (3) utter, or attempt to employ as true, or sell, exchange, or deliver, or offer to sell, exchange, or deliver, or receive on sale, exchange, or delivery, with intent to utter or employ, or to have the same uttered or employed as true, any such false, forged, or base coin, note or bill, knowing it to be so, he shall be guilty of a Class 4 felony.

• Identity Theft - Title § 18.2-186.3In Virginia, It shall be unlawful for any person, without the authorization or permission of the person or persons who are the subjects of the identifying information, with the intent to defraud, for his own use or the use of a third person, to: Obtain, record or access identifying information which is not available to the general public that would assist in accessing financial resources, obtaining identification documents, or obtaining benefits of such other person; Obtain goods or services through the use of identifying information of such other person; Obtain identification documents in such other person's name; or Obtain, record or access identifying information while impersonating a law-enforcement officer or an official of the government of the Commonwealth. It shall be unlawful for any person without the authorization or permission of the person who is the subject of the identifying information, with the intent to sell or distribute the information to another to: Fraudulently obtain, record or access identifying information that is not available to the general public that would assist in accessing financial resources, obtaining identification documents, or obtaining benefits of such other person; Obtain goods or services through the use of identifying information of such other person; Obtain identification documents in such other person's name; or Obtain, record or access identifying information while impersonating a law-enforcement officer or an official of the Commonwealth. It shall be unlawful for any person to use identification documents or identifying information of another person or of a false or fictitious person, whether that person is dead or alive, to avoid summons, arrest, prosecution or to impede a criminal investigation.

•Credit Card Theft - Title § 18.2-192. In Virginia a person is guilty of credit card or credit card number theft when:

He takes, obtains or withholds a credit card or credit card number from the person, possession, custody or control of another without the cardholder's consent or who, with knowledge that it has been so taken, obtained or withheld, receives the credit card or credit card number with intent to use it or sell it, or to transfer it to a person other than the issuer or the cardholder; or He receives a credit card or credit card number that he knows to have been lost, mislaid, or delivered under a mistake as to the identity or address of the cardholder, and who retains possession with intent to use, to sell or to transfer the credit card or credit card number to a person other than the issuer or the cardholder; or He, not being the issuer, sells a credit card or credit card number or buys a credit card or credit card number from a person other than the issuer. Credit card or credit card number theft is grand larceny and is punishable as provided in § 18.2-95.