Saturday, August 14th, 2010
The ever-evolving technology that makes our lives easier and more fun has a flip side: it gives the “bad guys” and endless stream of options for tricking us out of our hard-earned money, racking up debts on our accounts and even stealing our identities.
Here’s a look at some of the latest scams that can pose a threat to your money and identity, adapted from this post from WalletPop.com.
- Infant Identity Theft: This dastardly scam involves stealing the Social Security numbers of children and selling them to people. Once these people have “bought” the “clean” numbers, they can then run up debts they might have no intention of paying back, which can mean serious trouble for the children down the road. The most frightening part? It’s possible that nobody would discover the scam for years: when the child applies for a driver’s license, when the parents open a savings account for him or when he applies for college (more information here).
- Fake Timeshare Relief: As many financially struggling Americans look for ways to shed debts, many have sought to unload their timeshare properties. Unfortunately, scammers have caught on to the trend and are reportedly posing as sales agents, demanding upfront fees to help sell the homes, and running away with the money without offering any real help. As with other types of scams, proceed with caution any time a seller approaches you and/or demands payment before performing services (more information here).
- Phony Online Car Sales: This scam advertises used cars at steep discounts, claiming that the vehicles have been repossessed to explain the low prices. Interested buyers are prompted to wire part of the purchase price up front and send the remainder when the car is delivered a few days later—but, of course, the car never is delivered, because the whole thing is a scam. This one can be especially deceptive because scammers apparently use information from the web sites of legitimate auto dealers to make themselves look more credible.
- Busy Phone Lines: If you begin to notice that your phone lines are inexplicably busy (with dead air, prerecorded messages or similar), you could be the victim of a scam. It works like this: fraudsters collect personal information (such as bank account numbers, passwords or other sensitive info), usually by trolling social networking sites, using phishing emails or calling your number and posing as someone else. Then, they tie up your line and drain your accounts of money by asking for transfers or other transactions—usually the bank calls to verify such activity, but it cannot when your phone is busy. In some cases, the scammers even call the banks pretending to be their victims and ask for the transactions to go through. By the time you realize what has happened, it can be too late, so take a tied-up phone seriously—get to a free line and call your bank and credit card issuers!
For more details about these scams and how to protect yourself and your money, visit the FTC’s web site and check out the consumer protection information.
Additional Resources
Online Software Scams
Recognizing and Avoiding Email Scams
Posted in Fraud, Identity Theft, online scams, scams | Comments Off
Tuesday, February 16th, 2010
If you're committed to managing your finances, you likely know how to spot questionable offers. However, simply shopping at trustworthy web sites may not stop you from seeing surprise charges.
A recent press release from the office of New York Attorney General Andrew Cuomo details an online scam that seems to be shockingly widespread among big name, well respected online retailers.
According to the press release, Cuomo has subpoenaed 22 companies for information about their relationship with companies executing the scam. Here’s the deal.
The Scam: Sharing Your Card Info
The online scam reportedly works like this:
- You make an online purchase. You buy something at one of your favorite web sites. As part of the transaction, you enter the number of either a debit or credit card.
- You proceed to checkout. Once you’ve completed your purchase, you’re offered a promotional or discount deal for future purchases.
- You follow a link. In order to redeem the offered "deal," you must navigate away from the web site of the company with whom you just did business.
- Things get murky. Once you’ve clicked a link that takes you away from the initial shopping site, you don't have to enter any more information. You may only have to click an "accept" button, or do nothing at all.
- Your bill has unexpected charges. Next time you receive your bill or statement, you may notice charges on it that you don’t recognize.
What has apparently happened during the "murky" stage is this: trusted retailers sell your card information to third party sites, which offer you a membership or subscription to something you probably don’t want.
Because you never have to re-enter your credit card details, you likely will not realize you ever signed up for anything. And the details about the terms and costs of the service or product are likely hidden in fine print on the third party website.
What's Being Done
Luckily, Cuomo’s office has taken steps to address these practices (though, according to sources, no law currently exists that prevents retailers from selling your card information to others).
The New York AG’s office reports that the following companies have been contacted for information related to this scam (though they have not been charged with anything): Barnes & Noble, Orbitz.com, Buy.com, Ticketmaster.com, MovieTickets.com, FTD.com, Shutterfly.com, 1-800Flowers.com, Avon.com, Budget, Staples.com, Priceline.com and more (see site).
Bottom line: Proceed with caution when shopping online. When in doubt, don’t click on any link, especially those offered at checkout. And if you suspect foul play, file a complaint with the FTC.
Additional Resources
Online Identity Theft: Changing the Game (PDF)
Types of Scams (PDF)
Posted in Financial Literacy, credit card fraud, ecommerce, online scams | Comments Off
Saturday, December 26th, 2009
The Federal Trade Commission recently released a statement warning about the potential cost of free trial offers that end up costing consumers significant amounts of money. The warning, made jointly by the FTC, the Better Business Bureau (BBB) and Visa, includes red flags to watch out for and action to take to avoid getting scammed.
The “Negative Option”
Offering free trials is a common technique companies use to introduce consumers to new products and services. Sometimes, though, free trials are offered by scammers bent on collecting money from unsuspecting consumers. Often, the scam works like this:
- Emphasis on free: An online advertisement may offer something free (usually for a trial period), available to you by clicking a link. In most cases, you’ll have to enter a credit card number of some sort.
- Excessive fine print: In the fine print, the offer notes that, once the trial period is over, you will be charged for the product or service unless you cancel it. This is known as the negative option, because you must opt out in order to stop paying.
- Charges to your card: Once the trial period ends, your account will be automatically charged on a regular basis for the product or service. Even if you cancel after a month, you can end up paying significant money for something you never wanted.
Avoiding Free Trial Scams
So how can you make sure you aren’t lured in by an expensive online scam? Here are some tips, as posted on the FTC’s web site.
- Read everything. If there’s more fine print than you care to sift through, that’s usually a bad sign. Any time you’re giving out personal information, make sure you know exactly what you’re getting yourself into.
- Note the checks. Some offers trick customers by pre-checking boxes that seem insignificant but actually include continued-payment agreements. Uncheck any boxes that offer something you don’t want.
- Review your statement. When your credit card bills arrive each month, check for strange or questionable charges.
- Take action. If you do find any charges that you don’t agree with, call the merchant and ask to have the charge clarified, and, if necessary, removed. If you cannot work anything out with the merchant, contact your card issuer and contest the charge.
If you think you’ve been scammed by a free trial offer, don’t hesitate to file a complaint with the FTC or contact the BBB in your state.
Additional Resources
FTC’s Risk-Based Pricing Notice (PDF)
Posted in Financial Literacy, consumer awareness, online scams, opt-out | Comments Off
