Breyault and Amazon’s Alyssa Betz discuss policing fake reviews and counterfeits

 

By NCL Staff

 

This week, John Breyault, our Vice President of Public Policy, Telecommunications, and Fraud, sat down with Amazon’s Director of Public Policy, Alyssa Betz. On this episode of NCL’s We Can Do This! podcast, Alyssa and John discussed fake reviews, Amazon’s product liability, and more. This has been the latest collaboration between Amazon and NCL in our partnership towards improving consumer safety and online experiences.  

Fake Reviews 

With users increasingly relying on user reviews to make buying decisions, having access to trustworthy reviews is critical for consumers. Last month, Amazon sued a group of review brokers who were allegedly paying for fake reviews at large scale. In addition to discussing the suit, Betz outlined some of the steps they have taken to ensure that user reviews are trustworthy and accurately reflect consumers’ experiences. 

Counterfeits 

Given the vast number of products sold through nearly two million sellers worldwide, Amazon has an enormous responsibility to ensure consumer safety. Alyssa discussed some of the measures Amazon has taken to reduce criminals’ ability to operate on their platform, including investing over $700 million and employing more than ten thousand people to protect its store from fraud and abuse, including counterfeit products.

To hear the full episode, including John and Alyssa’s conversation about product liability and how to spot those phony Amazon delivery phishing texts, click here. 

If you have received suspicious communications or packages claiming to be from Amazon, you can find Amazon’s support page here. 

Annual fraud report highlights crypto insecurity

By Eden Iscil, Public Policy Associate

Earlier this month, NCL’s Fraud.org project released its annual Top Ten Scams report. After collecting thousands of consumer complaints, we sorted through the data to share the major trends from the past year. We saw some interesting trends! 

As the pandemic has entered its third calendar year, notable patterns included median dollar losses from fraud reaching a 10-year high and investment-related scams increasing by almost 170 percent, likely due to the rising popularity of cryptocurrency. So, consumers who lose money to scams are losing more of it. And cryptocurrency-related scams are something we all need to start paying attention to. 

These are the top ten scams reported to Fraud.org in 2021: 

  1. Prizes/Sweepstakes/Free Gifts  
  2. Internet: General Merchandise  
  3. Phishing/Spoofing  
  4. Fake Check Scams  
  5. Friendship & Sweetheart Swindles  
  6. Investment: Other (incl. cryptocurrency scams)  
  7. Advance Fee Loans, Credit Arrangers  
  8. Family/Friend Imposter  
  9. Computers: Equipment/Software (incl. tech support scams)  
  10. Scholarships/Grants 

The categories with the highest median losses were fake check scams at $2,000 and investment scams at $1,750. 

Focus: Cryptocurrency driving investment fraud 

Fake check scams have often scored near the top on our annual trend reports, but investment scams jumped several ranks, more than doubling their share of consumer complaints. Given the explosive growth of cryptocurrency usage in 2021, the emerging market likely provided an opening for fraudsters to take advantage of still-developing regulations and a lack of consumer knowledge about these new forms of investing.  

Fraud.org’s data appears to take the same shape as trends from the Federal Trade Commission (FTC), which had reported a ten-fold increase in cryptocurrency fraud. The FTC’s data spotlight on cryptocurrency scams also included a median loss of $1,900, a figure further demonstrating the heightened risk that consumers face within this sphere. Unfortunately, consumer protections in cryptocurrency usage are largely a patchwork of state-by-state rules, with some trading regulated by the Securities and Exchange Commission (SEC). 

Notably, Bitcoin and Ethereum (the two most popular cryptocurrencies) have so far been exempt from the SEC’s strictest oversight requirements, as it is considered a commodity rather than a security. The lack of comprehensive, nationwide protections coupled with the fact that these coins exist to be anonymous, instant, and irreversible creates an unsafe environment for consumers—especially ones who may be entering this space for the first time.  

Although media buzz has generated a lot of interest in crypto, with reports often centered on the potential for eye-popping returns, these articles do a disservice to readers if they don’t include the risks involved. Market volatility, a lack of consumer protections, and environmental damage only scratch the surface when it comes to hazards related to virtual currencies. These liabilities can be minimized by sticking with traditional forms of payment and investment—pending comprehensive regulation of digital coins. 

The full Top Ten Scams Report for 2021 can be found here. Additionally, Fraud.org’s February Fraud Alert includes great tips to help consumers better protect themselves against 2021’s top scams. 

The boom in e-commerce has been a boon for fraudsters

The COVID-19 pandemic has greatly accelerated the growth of e-commerce…

A step forward on privacy legislation

By Sarah Robinson, Public Policy Manager

Earlier this monthNCL joined other consumer advocates and industry stakeholders in an event to highlight our consensus that Congress must act to create strong federal consumer privacy rights urgently. We joined colleagues at the 21st Century Privacy Coalition, the Business Software Alliance, and Common Sense Media in calling on Congress to commit to passing comprehensive privacy legislation by the end of the 117th Congress. In a virtual press conference, the groups, along with Rep. Jan Schakowsky (D-IL), Rep. Gus Bilirakis (R-FL), and Sen. Richard Blumenthal (D-CT) agreed that Congressional action to strengthen consumers’ privacy rights is long overdue.   

The Washington Post Editorial Board highlighted our event stating, “the surprising degree of consensus around not only the general necessity of nationwide data protections but also the particulars” makes taking action a “no-brainer.” recent poll from Morning Consult revealed 80 percent of both Democrats and Republicans said Congress should make privacy a “top” or “important” priority in 2021.

There is bipartisan consensus and agreement from organizations across the spectrum that Congress must act. NCL’s message at the event is that it is now time to craft legislation that gives consumers back control over their personal data. At the event, Rep. Schakowsky, the chairwoman of the House Subcommittee on Consumer Protection and Commerce, announced her intention to hold a series of bipartisan roundtable discussions to examine ways to pass comprehensive privacy legislation. NCL is ready and eager to participate in those conversations to help ensure that a comprehensive bill gives all consumers strong, enforceable privacy rights.  

While passing legislation this Congress is a priority, NCL made clear that we are not going to simply bargain away long held principles on data privacy. NCL believes that in order to protect the privacy and security of consumers’ personal data, the legislation must not preempt stronger state laws, must include strong enforcement provisions, including a private right of action and provide consumers with strong substantive privacy rights. The right legislation will include effective enforcement mechanisms that safeguard privacy rights for consumers and enshrine rules of the road for businesses.  

We applaud Reps. Schakowsky and Bilirakis, and Sen. Blumenthal for their leadership antheir commitment to continue fighting for comprehensive privacy legislation. We hope to continue to cooperate with this esteemed group as we work to achieve our shared goal. 

Annual Fraud.org report shows link between COVID-19, recession, and scammers preying on Americans

Watchdog group’s annual report tracking trends out today 

For immediate release: February 1, 2021

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—An analysis of the scams most frequently reported by consumers in 2020 tells the story of economic downturn, social isolation, pandemic fears, and opportunistic criminals, according to a new report released today by the National Consumers League’s (NCL) Fraud.org campaign. Through the Fraud.org website, NCL collects complaints from consumers about suspected and confirmed fraud incidents, tracks trends, and shares the data with law enforcement. 

The report’s findings note the pandemic’s impact on fraud trends, including increases in “get rich quick” schemes and predatory scams of the heart. The number of complaints received at Fraud.org regarding bogus prizes, sweepstakes, and free gifts nearly doubled year-over-year. Another pandemic scam trend: a notable increase (30 percent) in romance scams, which experts at Fraud.org are linking to the social isolation brought on by the COVID pandemic and Americans turning to online communication for companionship. 

“The COVID recession has fueled a rise in get-rich-quick schemes and romance scams,” said John Breyault, NCL Vice President of Public Policy, Telecommunications, and Fraud and the new report’s author. “The pandemic created a perfect storm for criminals: millions out of work and struggling with new financial hardship; people forced to isolate and seek companionship online; and incredible uncertainty about the future. Last year was a good year to be a con artist.” 

With many of the conditions from 2020 still in place, the consumer watchdog is cautioning consumers against the most common scams that plagued Americans last year.  

“While the exact pitch differs from scam to scam, there are red flags that consumers should consider,” said Breyault. “A request to send money to someone you’ve never met in person is almost always a scam. Another tried-and-true tactice scammers use is to create a false sense of urgency to get victims to send money before they stop and think. The best advice we can give to consumers is to stop, think, and talk to a friend or loved one before you send money.” 

In 2020, consumers submitted more than 5,700 complaints to Fraud.org. Forty-three percent of complaints reported a monetary loss, with the median loss of $1,628.  

Top Ten Scams of 2020 

  1. Internet: Gen Merchandise 
  2. Phishing/Spoofing 
  3. Fake Check Scams 
  4. Friendship & Sweetheart Swindles 
  5. Prizes/Sweepstakes/Free Gifts 
  6. Advance Fee Loans, Credit Arrangers 
  7. Computers: Equipment/Software 
  8. Internet: Auctions 
  9. Investments: Other (note in comments) 
  10. Internet: Extortion 

Other topline findings from the report include:  

New fraud entered top ten: extortion scams. 

 “As the pandemic and the recession continue to grind on in 2021, we are paying special attention to so-called ‘Internet extortion’ scams, which entered the top ten scams for the first time last year,” said Breyault. Such scams fall in to two broad sub-categories. The first category are “sextortion” scams, where consumers receive a message where the scammer threatens to release embarrassing photos, videos, or other personal information to the victims’ friends and family. The second sub-category involves “psychic” services, where the scammer claims to had discovered that a “curse” or other tragic event is about to befall the victim. Only by paying a significant fee can the victim have the “curse” lifted.  

Younger consumers and seniors are being targeted more frequently.  

The percentage of complaints received from consumers aged 26-65 decreased by an average of 8.76% in 2020.  By comparison, complaints from consumers aged 25 and below and those 65 and older increased by an average of 30.60% and 15.82%, respectively versus 2019. For consumers aged 25 and under, the top three most reported fraud categories were Internet merchandise scams, fake check scams, and romance scams. For those 65 and older, the top complaint categories were prize/sweepstakes scams, phishing/spoofing, and Internet merchandise scams.  

The Web and the telephone remain scammers’ preferred contact methods. 

With email spam filters growing increasingly successful at blocking out scam emails, fraudsters continued to turn to the Web and the telephone to find victims. Those two contact methods were mentioned in more than 81% of the complaints. “This highlights the need for consumers to be wary when responding to messages from unknown senders, particularly those encountered on social media,” said Breyault. “Consumers should also continue to be on guard for unknown callers seeking to offer them prizes or other inducements to send money.”  

Read the full 2020 Top Scams report from NCL.

###

About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneering consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

How you should respond to the security threat likely inside your computer

Nearly two years ago, researchers revealed flaws in the chips of virtually every computer made since the mid-1990’s. The flaws—primarily found in Intel’s chips—create a vulnerability that can be exploited by allowing hackers to obtain unauthorized access to privileged information.


Since the initial exploits were first exposed, new versions have continued to be discovered—the most recent of which was found this past November. While software “fixes” have been released, they tend to reduce the speed and performance of computers—as much as 40 percent, according to some reports. In addition, since the flaw is hardware-based, the “fix” is only good until the next exploit is discovered.

At the time of the discovery of one of the “worst CPU bugs ever found,” there was significant alarm expressed in the news as well as across the cybersecurity community. Since that time, public attention has waned. Unfortunately, the problem has only grown worse. And while there has been considerable discussion of the impact these flaws have on businesses, the impact on consumers has been somewhat overlooked.

That’s why NCL’s #DataInsecurity Project recently released a paper detailing the threat that these bugs—with scary names like Meltdown, Spectre, and Zombieload—pose to consumers, their data, and the performance of their computers.

Every organization or individual running a server or computer with affected hardware should take action to protect themselves. Unfortunately, consumers are less likely to know what to do or have the resources to do it, leaving them more exposed.

For example, consumers are more likely to be running older or outdated software. Consumers are also likely to keep their computers much longer than a business, making their hardware older as well. The way these flaws work, older hardware generally sees a greater slowdown when the security patches are applied.

Additionally, the small businesses that consumers interact with may also be running “legacy” hardware or software. These businesses may not be able to afford the high cost of additional servers to offset the speed loss from the patches or of entirely replacing old systems. This difficult choice for small businesses could mean that some decide against applying patches – with potentially severe consequences for consumers’ data security.

Google has taken preemptive steps to protect consumers, but it also warned that as a result of these security measures, “some users may notice slower performance with some apps and games.” Apple, conversely, has offered software patches but left other security measures as an “opt-in” for consumers.

So, while consumers may not face the same type of risk as businesses, they do face a lot of challenges when it comes to addressing these exploits. Consumers already live in a heightened threat environment, filled with phishing emails and computer viruses. They shouldn’t have to choose between the security of their data or the performance of their computers.

To learn more about these issues and the best way to protect yourself, you can find NCL’s white paper here.

Sign up for the #DataInsecurity Digest

Scammers coming out of woodwork to prey on vulnerable

Today’s economic news is grim. Nearly 40 million Americans have found themselves without employment due to the COVID-19 pandemic. For the newly jobless, state unemployment insurance benefits are a lifeline that helps them keep the lights on and provide food for their families. Unfortunately, the combination of billions of dollars in federal stimulus money flowing to state unemployment funds and the tens of millions of new claimants has created a once-in-a- lifetime opportunity for identity thieves: unemployment benefits scams.

According to the Secret Service and media reports, organized rings of criminals are working to siphon off unemployment insurance payments, potentially worth hundreds of millions of dollars, intended for workers who have been laid off due to the COVID-19 pandemic. In the state of Washington, for example, scammers reportedly made off with nearly $1.6 million in a single month. This scam is reportedly even affecting consumers who have not yet lost their jobs.

The recent spike in this type of scam is unfortunately not unique. When news captures the public’s attention—think major hurricanes, terrorist attacks, and economic slowdowns—scammers come out of the woodwork to take advantage of legitimate fears and concerns. In today’s coronavirus environment, there is an unprecedented opportunity for criminals to use the public’s fears about the virus and the resulting economic downturn to defraud consumers.

Since the pandemic began, NCL’s Fraud.org project has seen an uptick in complaints about a variety of scams preying on increasingly vulnerable, financially strapped, and fearful consumers.

“Scammers running phishing schemes, stimulus check fraud, and even pet adoption scams have all been working overtime to use the COVID-19 pandemic as a way to defraud consumers,” said John Breyault, director of NCL’s Fraud.org campaign. “We forecast these scams will continue to increase and evolve and are eager to get the word out about how Pennsylvanians can protect themselves.”

Over the last several months, NCL has devoted monthly Fraud Alerts to giving consumers the tools to spot and avoid some of the many types of scams related to COVID-19. Alerts have featured the most pernicious types of scams that are increasing due to coronavirus, ranging from job scams to increased reports of fraudulent robocall activity.

“As the coronavirus has upended daily life, robocall operators have quickly shifted to blasting out spam phone calls offering all manner of coronavirus-related products and services,” said Breyault. It’s estimated that at least one million robocalls per day are inundating Americans’ cell phones. Fraudulent robocallers are offering air duct sanitation services, work-from-home opportunities, cut-rate health insurance, and immune-system boosting nutritional supplements. Other robocalls have reportedly offered free insulin kits to diabetics, along with free coronavirus testing kits.

“At best, consumers who respond to these calls are setting themselves up to lose money for a non-existent product or service,” said Breyault. “At worst, delaying needed emergency treatments on the belief that a fake coronavirus treatment will save your life could be deadly to you and those you come into contact with.”

In May, NCL hosted a virtual fireside chat with Pennsylvania Attorney General Josh Shapiro and a panel of consumer protection experts on the growing threat of scams linked to the COVID-19 pandemic. NCL’s Breyault and AG Shapiro discussed what they are hearing from consumers, tactics for reaching the most vulnerable populations, and the importance of collaboration for getting key messages out to consumers.

“The work [NCL] is doing to get the word out is so important,” said General Shapiro. “There will be some people who hear my voice, and some people who hear your voice. But the key is that collectively we are warning people about scams and that we’re working together to share actual information—not myths—and not propaganda by one group or the other.”

NCL urges Administration to take action to combat COVID-themed fraud, patient harms online

April 10, 2020

Contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC – April 10, 2020 – The National Consumers League (NCL), in partnership with 42 patient and provider advocacy, public health, industry, and research groups, has issued joint letters to Vice President Mike Pence, the U.S. Department of Justice (DOJ), U.S. Federal Trade Commission (FTC), U.S. Food and Drug Administration (FDA), and other state and federal leaders calling for swift action to protect consumers against COVID-19 misinformation, scams, and fraud online.

“NCL commends the White House Coronavirus Task Force and other officials for their dedication in responding to the coronavirus crisis,” said NCL Executive Director Sally Greenberg. “The COVID-19 pandemic makes your work against healthcare and financial fraud more important now than ever. However to further flatten the curve and save lives, we urge the Administration to quickly implement increased evidence-based actions and to help protect consumers from predatory attempts to take advantage of our new economy.”

Since the start of the pandemic, criminals launched thousands of COVID-specific global scams and phishing attacks, using the coronavirus crisis to profit at patients’ expense. “Criminals have exploited the fear and confusion caused by the coronavirus for their own personal profits. More must be done to mitigate the health and financial harms experienced by consumers nationwide,” said Greenberg. In the past few weeks alone, more than 100,000 website domain names have been registered containing terms like “covid,” and “corona,” most of which have been found to be outright dangerous. The Federal Trade Commission indicated receipt of nearly 14,000 coronavirus-related complaints totaling fraudulent losses nearly $10 million.

NCL has long called for increased regulation and enforcement against illegal online acts that result in public health and economic harm. The joint letter encourages the Administration to move swiftly to enact and enforce existing no-cost solutions to better protect consumers. Additionally, it calls on the Administration to  ground their efforts in science, address systemic internet policy problems and prepare for an ongoing wave of COVID-19 related scams during the economic downturn.

Co-signers of the letters include Alliance for Safe Online Pharmacies, BIO, Coalition for a Safe and Transparent Internet, Consumer Brands Association, Kroll, Lilly, LegitScript, and USP. The full letter can be read here.

###

About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneering consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Imposter scams drive big increases in phishing and spoofing complaints in annual top ten scam report

February 27, 2020

At the start of National Consumer Protection Week 2020 (March 1-7), watchdog group issues warning about most common scams plaguing Americans 

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832 

Washington, DC—Consumers on the receiving end of scary calls and emails claiming that the government is coming after them drove a big increase in phishing and spoofing complaints to the National Consumers League’s Fraud.org campaign in 2019, according to the organization’s annual Top Ten Scams report issued today. With National Consumer Protection Week 2020 kicking off this weekend and being observed next week (March 1-7), the national consumer watchdog org is cautioning consumers against imposter frauds and the other most common scams that plagued Americans in 2019. 

In 2019, consumers submitted 5,647 complaints to Fraud.org. Fifty-three percent of complaints reported a monetary loss; the median loss reported was $749. 

In 2019, the percentage of complaints Fraud.org received about scams involving phishing or spoofing nearly tripled versus the previous year. NCL attributes the increase to the high number of imposter scam calls that consumers reported receiving. Scammers reportedly impersonated government agencies such as the IRS, FBI, and USCIS, and some of these criminals even claimed to be representatives of the National Consumers League.  

“Scammers know all too well that impersonating a government agency and threatening consumers is one of the best ways to get victims to pay up, and they depend on authentic-looking emails or spoofing Caller ID to get victims to pay attention to their threats,” said John Breyault, NCL Vice President of Public Policy, Telecommunications, and Fraud and the new report’s author. “The best advice for consumers is to remember that a government agency will never reach out to you via email or telephone to demand money, so hang up or delete. If you’re worried about back-taxes, your immigration status, or a debt you may owe, look up the phone number for the bank or government agency yourself and call to check. Don’t take the word of someone on the phone making threats.” 

Top Ten Scams of 2019

  1. Internet: Gen Merchandise
  2. Fake Check Scams
  3. Advance Fee Loans, Credit Arrangers
  4. Phishing/Spoofing
  5. Friendship & Sweetheart Swindles
  6. Prizes/Sweepstakes/Free Gifts
  7. Investment Related
  8. Computers: Equipment/Software
  9. Employ Agency/Job Counsel/Overseas Work
  10. Internet: Info/Adult Services

Other topline findings from the report include: 

Romance scams and friendship swindles on the rise in 2019. 

The percentage of complaints involving romance scams increased by nearly 50 percent versus 2018. This is especially worrisome considering that romance scams tend to be among the most expensive type of fraud for victims. 

Web remains most common place scammers are finding victims. 

While the telephone was the method of first contact used by scammers in nearly a third of complaints to Fraud.org in 2019, the Internet remains the most likely place for complainants to have encountered a scammer. Almost 45 percent of complaints to Fraud.org in 2019 said that they first encountered a scammer on the Web. 

Wire transfer no longer scammers’ top choice of payment method. 

After many years of wire transfer being the payment method of choice by scammers, credit cards bumped wire transfers as the most frequently-reported method of payment in 2019. More than 44 percent of complainants to Fraud.org reported that their loss occurred because a scammer charged their credit card. 

Read the full 2019 Top Scams report from NCL.

###

About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneering consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.