Scammers preying on weak economy in top frauds of 2009 – National Consumers League

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The recession is helping at least some people prosper despite tough economic times – scammers preying on consumers who are looking for ways to earn money. NCL’s Fraud Center has just released its annual Top Ten Scams report, and the news for consumers is that scammers are going after those of us hit hard by the economy in 2009.The report, which is compiled from consumer complaints submitted to NCL’s Fraud Center, looks at trends in Internet and telemarketing fraud in 2009. What the report finds is startling.

“Consumers are looking for ways to supplement their income or learn new skills,” said NCL Executive Director Sally Greenberg. “Unfortunately, fraudsters know this all too well and they target vulnerable consumers with business opportunity or scholarship-related scams.”

Top Ten Scams of 2009

  1. Fake Checks 42.01%
  2. Internet: General Merchandise 24.87%
  3. Prizes/Sweepstakes/Free Gifts 9.57%
  4. Phishing/Spoofing 7.17%
  5. Nigerian Money Offers (not prizes) 2.88%
  6. Business Opportunities 2.02%, Franchises/Distributorships 2.02%
  7. Advance Fee Loans, Credit Arrangers 1.82%
  8. Internet: Auctions 1.17%
  9. Friendship & Sweetheart Swindles 1.00%
  10. Scholarships/Educational grants 0.95%

Fake check scams—in which fraudsters lure in their victims with phony mystery shopper jobs or sweepstakes “winnings,” asking their victims to cash realistic-looking checks and wire a portion of the proceeds back to the scammer before the check bounces—continued to be the most frequently-reported scam to NCL’s Fraud Center, making up 42 percent of all complaints. Internet merchandise scams, fake sweepstakes, phishing, and Nigerian money offers remaining unchanged as second through fourth most-reported scams, respectively. Business opportunity scams and scholarships and educational grant scams, which were not top ten in 2008, became the sixth and tenth most-reported scam in 2009, respectively.

This year, NCL’s Fraud Center saw a spike in complaints related to bogus business opportunities and scholarship grants. Clearly, scammers know how the economic environment is affecting consumers, and they are profiting from it.

How the scams work

In a typical business opportunity scam, the victim is promised unrealistic or “guaranteed” profits in return for a significant up-front investment in a business – such as magazine stands, vending machines, or Internet kiosks. Though the profits almost never materialize, the victim still loses their initial fee and the scammer disappears. In a scholarship or educational grant scam, the victim pays a fee to the scammer in return for promises of a “guaranteed” scholarship award or generous financial aid package, which never come to fruition.

With many consumers making efforts to improve their education level or skills in order to make themselves more marketable in a tough economy, scammers are taking advantage. With state and local consumer protection budgets cut to the bone by the recession, it’s even more important for consumers to stay vigilant to avoid falling victims to these frauds.

Older consumers falling prey

NCL’s Fraud Center has also noted a link between age and vulnerability to fraud. In 2009, consumers in the top age groups—56-65 and those over 65—made up a larger portion of fraud reports than in the previous year, increasing by about 2 percent versus 2008.

Advocates fear that older consumers may not be as quick to check out a company’s bogus claims on the Internet, where many scams have been exposed by previous victims or watchdogs. NCL urges relatives and caregivers to pay special attention to older family members who suddenly start exhibiting the signs of having fallen victim to a fraudster.

These signs include a sudden inability to pay monthly bills, unusually heavy volumes of junk mail or telemarketing calls, or a reluctance to discuss repeated large payments to “a friend.“ Consumers concerned that an elderly friend or relative is a fraud victim should contact their local consumer protection office or state attorney general.

Read the full report, which includes a breakdown of telemarketing and Internet fraud, locations and ages of victims, and further analysis here.

Health insurance reform: Should consumers foot the bill? – National Consumers League

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Update: at the press conference held by HHS Secretary Sebelius, a report, “Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System,” was released, calling for health care reform that would result in lower insurance premiums for consumers, as well as “placing additional oversight on health insurance companies to ensure that people get value for the premiums they pay.”

This just in: today, Health and Human Services Secretary Kathleen Sebelius will hold a press conference to illustrate the national problem of insurers significantly raising the insurance premiums, particularly of those buying coverage individually.

Last week, Well Point and Sebelius squared off after it was revealed that one of the company’s health plans in California, Anthem, intended to raise premiums by as much as 39 percent. While both sides cite different motives, it is clear that rate increases of this magnitude are unmanageable for many consumers. It also demonstrates the greater issue of sky rocketing health care costs.

The people of this country need reform. We hope that politics and profit can be put aside in the interest of the American people when President Obama convenes a bi-partisan health summit next week.

Smile! It’s National Children’s Dental Health Month – National Consumers League

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By Mimi Johnson, NCL Health Policy Associate

This February, we celebrate National Children’s Dental Health Month. Each year, the American Dental Association spends February educating the public about the importance of good oral health and developing good habits early in life. You can help to spread the word by sending an “*Oral Health for Kids” e-Card.

According to the *Centers for Disease Control and Prevention, tooth decay affects children in the United States more than any other chronic infectious disease. More than half of all children have had some tooth decay, which when left untreated can cause pain so severe it hampers eating, speaking, playing, and learning. In fact, more than 51 million school hours are lost annually because of dental-related problems.

Tooth decay is largely *preventable, making it all the more important that children have access to proper dental care and the resources to develop healthy dental habits. But for every child without medical insurance in the United States, there are 2.6 who lack dental insurance. Many are working to improve access to pediatric dental care, whether through legislation or on-the-ground donation of time and resources. NCL issued a letter last summer with several other organizations urging Congress to cover oral health within the large health reform bill.

You can get involved by putting your dental care skills to the *test. *Click here for more facts about children’s oral health. And visit this site if you need help finding a dentist.

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings

Advocates looking for improved Child Nutrition Reauthorization in 2010 – National Consumers League

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Part three of a four-part series, in which we present the food issues we anticipate will affect American consumers the most in 2010.

By Courtney Brein, Linda Golodner Food Safety and Nutrition Fellow

The Child Nutrition Act comes up for reauthorization every five years. The legislation, which covers all federal child nutrition programs (a group that includes the National School Lunch Program, the School Breakfast Program, the Child and Adult Care Food Program, the Summer Food Services Program, the After School Snack and Meal Program, and WIC) is permanently authorized, but the periodic reauthorization allows Congress to make changes where needed. The Act came up for reauthorization on September 30, 2009, but, in light of more pressing issues on the table, Congress voted to extend the current school food program, with only minor modifications (such as additional funding for summer meals, infrastructure, and automatic enrollment) for one year, postponing the process to 2010.

As a member of the National Alliance for Nutrition & Activity, the National Consumers League supports a series of reauthorization recommendations for improving the nutritional quality of food both served to and chosen by children. Priority lists put forth by the American Public Health Association (APHA) and the Food Research and Action Center (FRAC) contain additional, important suggestions for improving the diets of the nation’s youngest generation, both now and in the future.

Consumers both young and old benefit from improvements to the federal child nutrition programs. Students eating breakfast and lunch at school and over the summer; children and elderly adults eating meals and snacks in day care; and pregnant women, breastfeeding women, and young children participating in the WIC program all directly benefit from nutritional improvements, nutrition education, and increased access to food. As previously mentioned, NAHO and others report research findings that adequate, nutritious food plays a fundamental role in a child’s physical, cognitive, academic, emotional, and social development, and childhood hunger impedes individuals’ ability to compete in today’s workforce, while increasing their health costs. Passing meaningful Child Nutrition Reauthorization in 2010 will not only improve the quality of school foods, accessibility to healthier foods, and understanding of healthy choices, but will help to chip away at childhood hunger and improve the health and competitiveness of our nation’s citizens.

NCL’s Fraud Center: recession-linked scams on the rise in 2009 – National Consumers League

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February 16, 2010

Contact: (202) 835-3323, media@nclnet.org

Washington, DC — The recession is helping at least some people prosper despite tough economic times – scammers preying on consumers who are looking for ways to earn money. The National Consumers League’s (NCL) annual Top Ten Scams report, released today, found that while fake check schemes continued to be the most frequently-reported scams, frauds targeting consumers hard hit by the down economy soared in 2009. The report, which is compiled from consumer complaints submitted to NCL’s Fraud Center, examined trends in Internet and telemarketing fraud in 2009.

“Consumers are looking for ways to supplement their income or learn new skills,” said NCL Executive Director Sally Greenberg. “Unfortunately, fraudsters know this all too well and they target vulnerable consumers with business opportunity or scholarship-related scams.”

Fake check scams—in which fraudsters lure in their victims with phony mystery shopper jobs or sweepstakes “winnings,” asking their victims to cash realistic-looking checks and wire a portion of the proceeds back to the scammer before the check bounces—continued to be the most frequently-reported scam to NCL’s Fraud Center, making up 42 percent of all complaints. Internet merchandise scams, fake sweepstakes, phishing, and Nigerian money offers remaining unchanged as second through fourth most-reported scams, respectively. Business opportunity scams and scholarships and educational grant scams, which were not top ten in 2008, became the sixth and tenth most-reported scam in 2009, respectively.

“This year, we saw a spike in complaints related to bogus business opportunities and scholarship grants,” said John Breyault, vice president of public policy, telecommunications and fraud at the League. Clearly, scammers know how the economic environment is affecting consumers, and they are profiting from it.

In a typical business opportunity scam, the victim is promised unrealistic or “guaranteed” profits in return for a significant up-front investment in a business – such as magazine stands, vending machines, or Internet kiosks. Though the profits almost never materialize, the victim still loses their initial fee and the scammer disappears.  In a scholarship or educational grant scam, the victim pays a fee to the scammer in return for promises of a “guaranteed” scholarship award or generous financial aid package, which never come to fruition.

“It is especially heinous that scammers would seek to capitalize on the weak job market to make a buck off economically vulnerable consumers,” said Breyault. “Scammers offering bogus scholarships prey on people’s efforts to improve their education level or skills, efforts aimed at making themselves more marketable in a tough economy. With state and local consumer protection budgets cut to the bone by the recession, it’s even more important for consumers to stay vigilant to avoid falling victims to these frauds.”

A second notable trend in the NCL report was the link between age and vulnerability to fraud. In 2009, consumers in the top age groups—56-65 and those over 65—made up a larger portion of fraud reports than in the previous year, increasing by about 2 percent versus 2008.

“Older consumers may not be as quick to check out a company’s bogus claims on the Internet, where a lot of these scams are exposed,” said Breyault. “We urge relatives and caregivers to pay special attention to older family members who suddenly start exhibiting the signs of having fallen victim to a fraudster.” These signs include a sudden inability to pay monthly bills, unusually heavy volumes of junk mail or telemarketing calls, or a reluctance to discuss repeated large payments to “a friend.“ Consumers concerned that an elderly friend or relative is a fraud victim should contact their local consumer protection office or state attorney general.

For more information on NCL’s 2009 Top Ten Scams report, click here.

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About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

A Valentine to Florence Kelley – National Consumers League

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By Sally Greenberg, NCL Executive Director

Friday’s Washington Post featured a story about the recession sending more women into the workplace, many returning to work after spending years at home with their kids. In 2008, the first year of the recession, employed wives contributed 45 percent of the household income, a high for the decade.

Experts think that the unemployment rate for men is higher at 10 percent because industries that are male-dominated, like construction and manufacturing, have been hit hardest in the economic downturn. Health care and education industries tend to be women-dominated, and in many cases they have actually added jobs, opening doors to women’s return to work. The women quoted in this article talk about how “hectic” life becomes once they go back to work, how getting home in the evening means daycare pickup, homework, dinner, and bedtime.

I find all of this really interesting when viewed through the lens of history. I’m currently reading the fascinating new publication, “The Selected Letters of Florence Kelley, 1869-19311” the National Consumers League’s first General Secretary. Kelley – who, from the very first day of NCL’s founding in 1899, fought valiantly for basic rights and protections of women that many of us take for granted today. Kelley worked for the right of women to earn minimum wage and not be forced to work more than 10 hours per day, six days a week (a protection upheld in the 1908 Supreme Court case of Muller v. Oregon).

When NCL was founded, millions of women in the United States went to work each day in factories, bakeries, mills, hospitals, or laundries in the near-dawn hours – or started work at night – and never knew when they would return home. Their employers controlled how long they worked and what they would get paid. And no one got paid overtime. To make matters worse, women often worked for pauper’s wages, while being exposed to dangerous working conditions, including exposure to chemicals, repetitive movements, poor ventilation, or dangerous machinery.

The worst thing the women quoted in Friday’s Washington Post article complain of are hectic nights now that they aren’t at home during the day with their children. Of course, many less fortunate women in this country still face sweatshop working conditions, low wages, and even “wage-theft” where they put in hours that their employers don’t pay them for. And NCL continues to support efforts to improve their lot.

But for millions of working women, conditions have improved enormously. On this Valentine’s Day, we owe a debt of thanks to Florence Kelley and the many women and men of the National Consumers League who fought in the courts, in the state legislatures, and in Congress to provide millions of women far better working conditions today

The working poor lose a great friend and advocate – National Consumers League

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By Sally Greenberg, NCL Executive Director

On Tuesday I attended the funeral of Beth Shulman, a Washington, DC-based labor leader and a champion of the working poor. I didn’t know her well; I had met her a few times at various events, most recently at the Retirement USA conference in October. Shortly after the conference, she was diagnosed with brain cancer. As I listened to the eulogies at the funeral this week, I had a feeling of deep regret that I hadn’t taken the time to get to know Shulman better, for her life’s work — advocating for low-wage workers, including working for minimum wages, paid sick days, and paid family leave — closely tracks the work of NCL.

Shulman was a vice president of the United Food and Commercial Workers Union and in 2003 wrote the book, “The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans,” arguing that society pays scant attention to the people upon whom it depends every day.

She was a sought-after guest on news and talk shows, including The Oprah Winfrey Show, PBS NewsHour, CNN, ABC’s World News Tonight, and National Public Radio. Like Florence Kelley, NCL’s first inspirational leader, she kept the drumbeat going on behalf of the working poor.

In a Washington Post op-ed in 2004, she wrote:

If work does not work for millions of Americans, it undermines our most fundamental ideal: that if you work hard, you can support yourself and your family. …Consigning millions of Americans to dead-end, low-wage jobs endangers the notion of equal opportunity. A key to turning this around is understanding what made ‘good jobs’ good. There is nothing inherent in welding bumpers onto cars or manufacturing steel girders that makes those better jobs than caring for children or guarding office buildings. Workers organizing through unions, and the passage of social legislation, raised wages and created paid leave and retirement benefits in these initially ‘bad’ manufacturing jobs, changing them into good middle-class positions.

Shulman became assistant general counsel at the UFCW, which has a seat on the NCL Board of Directors, in 1976 and worked for the union until 2000, with her last 13 years there as international vice president and executive board member for the 1.4 million-member organization.

Like Florence Kelley, Shulman was a prolific writer and advocate. She traveled the country speaking, serving on boards and committees dedicated to improving the lives of the lowest paid workers in America and calling upon Americans to recognize the dignity of their work and how dependent we all are on workers who earn low wages and receive few, if any, benefits. Tragically, Shulman leaves an 11-year-old-son and grieving husband. They should both know that her contributions will not be forgotten and that she inspired many young people to work in the labor movement. I feel sure Shulman would have felt right at home with Florence Kelley and her progeny at the NCL. If America had more Beth Shulmans, we might finally provide decent wages and benefits to our working poor and treat them with far more dignity and respect. Now that’s a goal to work toward.

CBS investigates antibiotic use in livestock – National Consumers League

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by Courtney Brein, Linda Golodner Food Safety and Nutrition Fellow

For the last two evenings, Katie Couric has presented a special *CBS news investigation into the use of antibiotics in factory farms. For decades, farms around the country have routinely added antibiotics to animal feed, in order to cause animals to grow more quickly and to keep disease from rapidly spreading in the confinement pens that characterize factory farming.

The CBS investigation segment began with a focus on a group of farm workers who have experienced repeated cases of methicillin-resistant staph (MRSA), due to their jobs handling poultry. Unfortunately, these workers are not the exception – and poultry not the only problematic farmed animal. CBS referenced a University of Iowa study conducted last year, which found a new strain of MRSA in 70 percent of hogs and 64 percent of farm workers on antibiotic-using farms in Iowa and Western Illinois. These numbers present a stark contrast to antibiotic-free farms, where researchers did not find MRSA in any hogs or workers.

These findings present a problem, not only for farm workers, but for the broader population. Health officials at the FDA and elsewhere have started to express concern that overuse of antibiotics in factory farming will contribute to antibiotic-resistant infections, a rapidly increasing problem in the United States.

While watchdog groups have long called for an end to the use of antibiotics in factory farming, no government action has been taken on the issue, as of yet. The FDA, however, intends to change that, according to Joshua Sharfstein, FDA deputy director.

“We want to put in place measures to reduce inappropriate use and we want to see that those are working – in order to do that we have to have a good surveillance system,” Sharfstein told CBS’ Couric. “There’s no question that needs to be improved.”

Not everyone agrees that American factory farms overuse antibiotics. Liz Wagstrom, a veterinarian with the National Pork Board, told Couric that she believes that the majority of pork producers use antibiotics appropriately. Other beef and pork industry groups, such as the National Cattlemen’s Beef Association, have also made statements about the need for the current antibiotic use in factory farming.

One thing seems certain: this issue will not be resolved anytime soon. Interested consumers should stay tuned as the battle over antibiotics in American meat heats up, and those who are concerned about consuming antibiotic-tainted meat should look for the statements “no antibiotics administered” or “raised without antibiotics” on packaging at the grocery store.

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

Snowmageddon: Day Six observations – National Consumers League

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By Sally Greenberg, NCL Executive Director

Today is Wednesday, February 10 in Washington DC: Day Six of a week of unrelenting cold weather and powerful snow storms that rival anything we’ve seen in the last few decades – or century, even. The federal government and local school systems have shut down all week. That’s unthinkable for a power center like Washington, and it means no Congressional hearings, no Supreme Court arguments, no lobbyist meetings with Senators, no presidential press conferences. The only stories on television are about the weather: the white-out conditions, heavy snowfall and 40+ mile per hour winds. Kids and their parents are stir crazy, cooped up at home without access to the usual entertainments – Starbucks coffee, movies, museums, and in some cases cable television and heat!

Because of the hazards to workers trying to slog their way into the office, including our hardworking NCL staff, we told everyone to stay indoors, work from home where possible, and be safe. In fact, local municipalities have asked that people stay off the streets to allow their dedicated staff to do their jobs of clearing the roadways. Their safety too is important; they don’t want cars running into their trucks on the slippery streets or vice versa. The safety and well-being of workers everywhere should be the priority during this most unusual weather crisis.

I was out early shoveling but like Sisyphus (who was compelled to roll a huge rock up a steep hill, but before he could reach the top of the hill, the rock would always roll back down again, forcing him to begin again). To no avail, the wind blew the snow right back onto icy steps. I then slogged through the snow with my dog to deliver a promised homemade loaf of bread to friends who were hosting a gaggle of boys (my son included) who had camped out at their house for the night. My Welsh Terrier eventually refused to walk any further, stopping dead in his tracks in blowing winds. He was fed up with the mounds of snow he had to climb through. I carried him the rest of the way.

It’s interesting to see the most powerful city in the world brought to a standstill by weather that none of the three branches of government can control. Bipartisan bickering has halted, if only for a day or two, and the extremes of this city – the powerful and wealthy and poor and disenfranchised – all contend with inconveniences and danger ranging from digging out their cars to power outages. The only substantive debate seems to be whether the federal government should kick in to support local snow removal budgets in Maryland, Virginia, and the District. We have yet to see how that turns out.

No doubt all will be back to normal in a few days. The weatherman is predicting dry, 36-degree days ahead, but none of us will forget the week in February 2010 when snow storms closed the schools, closed the museums, and closed every branch of government in Washington DC.

‘Let’s Move’ to eliminate childhood obesity in a generation – National Consumers League

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By Mimi Johnson, NCL Health Policy Associate

While the thought of ‘moving’ in the knee-deep snow outside here in the nation’s capitol might be a bit daunting at the moment, the First Lady just announced an initiative to get American youth active and to make childhood obesity a thing of the past in a generation.

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Let’s Move seeks the support and resources of a community to reach and teach children about making healthier choices.  The initiative brings together families, schools, private industry, and government, in an effort to make an easier transition to healthier living.  NCL commends the First Lady and the many different sectors for reminding us to take responsibility for the health, well-being and future of a generation.

According to Michelle Obama, “it’s not about being 100 percent perfect, 100 percent of the time.”   Herself a fan of french fries and a good burger, the First Lady said, “there’s a place for cookies and ice cream, burgers and fries – that’s part of the fun of childhood.”  With one out of every three children overweight or obese, this has become a $150 billion a year issue that transcends politics.  As Obama reminded us all, we need to take the necessary steps today to ensure a generation of kids won’t be lost to this epidemic.

In conjunction with the launch of Let’s Move, the President issued a memorandum establishing the first-ever national task force on childhood obesity.  Through cross-department collaborations with the Departments of the Interior, Health and Human Services, Agriculture and Education, this bi-partisan effort is anchored by four pillars – nutrition information, increased physical education, easier access to healthy foods, and personal responsibility.

More specifically, some of the initiative’s elements include:

  • Empowering Consumers: By the end of this year, the Food and Drug Administration will have collected research, conducted dialogue with the industry, consumers and experts, and completed guidance for retailers and manufacturers to adopt new nutritionally sound and consumer friendly front-of-package labeling. This will put us on a path towards 65 million parents in America having easy access to the information needed to make healthy choices for their children. Many are already answering FDA’s call – including the nation’s beverage industry who are taking steps to provide clearly visible information about calories on the front of their products, as well as on vending machines and soda fountains.
  • A prescription for healthier living: The American Academy of Pediatrics, in collaboration with a broader medical community, will educate doctors and nurses across the country about obesity, ensure they regularly monitor your child’s Body Mass Index, provide counseling for healthy eating early on, and even write a prescription for parents laying out the simple things they can do to increase healthy eating and active play.
  • Next Generation Food Pyramid: To better help the public make healthier food and physical activity choices, the US Department of Agriculture plans to revamp the famous food pyramid  symbol and online interactive tools.  MyPyramid.gov is one of the most popular websites in the federal government and  a 2.0 version of the Web site will offer consumers a host of tools to  put the Dietary Guidelines into practice.
  • Empowering Change: The USDA has created the first-ever Food Atlas, an interactive database that maps components of healthy food environments down to the local level across the country.   This information can be used by all sectors – including parents, educators, government and businesses – to empower and create change across the country. It will include tools to identify the existence of food deserts, high incidences of diabetes, and other conditions in their communities.
  • Let’s Move start-up tools: This spring, Let’s Move will provide parents with simple and easy to use tips and toolkits to help get them moving. Check back for Let’s Move toolkits, including your interactive family contract to set your goals, pick your activities, and track your success.