Top ten scams report finds rising rate of ‘phantom debt’ scams – National Consumers League

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January 20, 2015

Contact: NCL Communications, Ben Klein, (202) 835-3323, benk@nclnet.org

Washington, DC — The National Consumers League (NCL), the nation’s pioneering consumer advocacy organization, today released its annual compilation of the top ten scams reported to Fraud.org, NCL’s flagship project for reporting and tracking scams. Based on an analysis of more than 10,000 consumer complaints submitted in 2014, NCL is warning consumers to be on the lookout for so-called “refund and recovery” scams, also known as “phantom debt” scams.

The predominant version of the “refund and recovery” scams involved a fraudster contacting consumers claiming to be collecting unpaid debts. If consumers questioned the debt, they reported frequently being threatened with jail time, legal action, or other consequences. In 2013, this was the fastest-growing type of telemarketing scam reported to NCL’s Fraud.org campaign. This trend continued in 2014, as the “refund and recovery” scams jumped by 6.23 percentage points, rising to #4 on the overall complaint list.

Fake check scams, which were at the top of the Top Ten Scams list in 2013, dropped to the #3 spot in 2014, down more than 7 percentage points. Topping the list in 2014 were two other perennially frequent frauds—Internet merchandise scams and bogus prizes/sweepstakes scams, ranked #1 and #2 respectively. 

“Fraud remains one of the most pernicious threats facing consumers today,” said NCL Executive Director Sally Greenberg. “We are particularly concerned about scammers increasingly relying on the ‘old-fashioned’ telephone as a way to reach millions of potentially vulnerable consumers.”

The telephone was reported by 42.85% of complainants as the way that they were first contacted by a scammer, ahead of the Web (30.97%), email (15.71%) and postal mail (6.92%). The telephone was the top method of first contact in 2013 and increased even more in 2014 (6.49 percentage point increase).

A positive trend in the 2014 report is the shift in how victims reported sending money to con artists. Previously, wire transfer had been the most popular payment method reported to Fraud.org. In 2014, nearly half (48%) of all victims reported paying by credit card when they lost money to a scam—continuing a trend first noted in 2013 (35%). Victims who pay with credit cards can more easily recover lost funds than those who pay via wire transfer service when they promptly report the suspicious charges to their banks or credit card companies.

“Credit card transactions are a safer way for consumers to pay for products since they can dispute fraudulent charges with their credit card company,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “Unfortunately, when a fraud victim sends money via wire transfer or prepaid debit card, the chances of getting their money back are much lower.”

Read the full 2014 top ten scams report here.

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer 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 https://nclnet.org.

Guide to good med smartphone apps – National Consumers League

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92_med_apps.jpgThree out of four Americans struggle to take their medications as directed, and this costs our healthcare system $300 billion every year! New smartphone apps can help consumers — especially those with chronic conditions or multiple medications — take their medication as directed and become healthier. These apps can be a great tool to help you keep track of your meds, but not all medication apps are alike and some are more useful than others.

Today’s health apps range from helping users eat healthier, to looking up symptoms, providing daily motivation tips, or helping you take your medications as directed (or adherence). 

The purpose of medication management apps is to help you take your medication(s) as directed. Once you download a medication management app, you are often asked to input information about all the meds you are taking, including the dose (how much), how often, and when you take them. The apps usually offer an alert or reminder when you are supposed to take each medication.

Before picking a medication management app check to make sure it has the following features:

  • Good Security – Apps often store your private, personal information so be sure to pick an app that has safeguards in place to protect you. The app should have a log-in that requires a password and a disclaimer that guarantees that your information will not be shared with third parties without your knowledge. The app should not ask you to provide sensitive, identifying information, such as your social security number.
  • Reminders – Reminders, often sent as alerts, remind you when to take your medications according to the times you have set. The best systems let you indicate that you have taken the medication, need to delay taking the medication, or have stopped taking the medication altogether. Make sure the reminder is in a format that works for you.
  • Personalizing Information – You should be able to input medication in the form of pills, inhalers, injections, liquids, or other forms. Some medication management apps only allow a certain number of medications, which is not helpful if you are taking many medications or if you are managing medications for more than one family member.
  • “Notes” Field – You should be able to add in additional information about who prescribed the medication, directions about taking the medication, or any additional information in a “notes” field.
  • Functionality (or usability) – Make sure the app is available for your particular type of smart phone or tablet, and you feel comfortable using it. 

These additional features are helpful in a medication management app, but might require additional fees:

  • Tracking missed doses – Apps that let you record whether you have taken or missed doses and use visual reports to track your progress can help you identify areas of weakness to improve overall adherence.
  • Sharing information with health care providers and family caregivers – Apps that let you email, print, or export your prescriptions and habits can help make it easier to share this information with health care providers and family caregivers. Some apps allow your health care providers (with your permission) to update your medication regimen on your app and send you information automatically, which can be helpful when you need to make changes.
  • Dose limits – Some medications have strict dose limits. For example, for pain medications with acetaminophen, it is important to not take more than directed. Apps that monitor the dose limits you input can be helpful to make sure you don’t take too much. These apps can adjust next dose reminders according to when you indicate you took your last dose, rather than on a strict “every X hours” type schedule, which could be harmful if you ended up taking your last dose late.
  • Options for caregivers – If you manage the medications of one or more family members, some apps allow you to organize medication information and schedules for multiple family members.
  • Other reminders – Some apps incorporate medication reminders that involve more than just an alert when it’s time to take your next medicine. This includes when you need to refill your prescription or when your prescription is about to expire.
  • Reminders for more complicated medication schedules – If you have a complicated medication schedule, make sure your app fit your needs. Does that app let you mark a medication “as needed” but with strict dose limits? Does it let you mark a medication “every X days rather than every day? Can you group your meds?
  • Medication database – These apps access a database of medications that allow you to enter, search, and select medications. This feature can save time and improve accuracy when entering your medication’s name and schedule.
  • Accessing the app online – Some apps have a companion website that allows you to input information from a computer and sync it to your smart phone or tablet.

Make sure the app you pick works for you and makes it easier to manage your medications. Always ask your health care provider if you have questions about when and how to take your medication. Medication management apps can help you take care of your health by helping you take your mediation as directed.

Chicago conference explores Multi-Level Marketing in minority communities – National Consumers League

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This week, I participated in a town meeting held at a local Methodist church on Damen Street, in the heart of Chicago’s Hispanic community.  I was invited by the League of United Latin American Citizens (LULAC) to discuss frauds and pyramid schemes that prey on members of minority communities. 

NCL has a longstanding history of opposition to pyramid schemes and other fraudulent business opportunities. We are the only consumer group with a Fraud Center. In 2009, we published a guide to help consumers distinguish between legitimate sales opportunities (Multi-Level Marketing) and pyramid schemes, with the support of the Direct Selling Association, the industry group that represents MLMs.   

Last night’s town meeting began when I walked through a wall of pro-Herbalife demonstrators, who waited outside for an hour on a very cold Chicago night, wearing t-shirts bearing the words “Yo Soy Herbalife.” Inside we started the evening with prayers, the Pledge of Alliance, and the Star Spangled Banner.

Brent Wilkes, executive director of LULAC, opened the forum by describing the problem of Hispanics falling victim to fraud. He discussed notarios, who pose as lawyers—as well as actual lawyers, who promise to help clients obtain legal status, but then take large sums of money, lie to them, and do no work on their behalf.

It was this work fighting fraud perpetrated against Hispanics that led to his interest in pyramid schemes and phony business scams. He described meeting with officials at the Federal Trade Commission (FTC) about Herbalife, a company with $3.2 billion in revenues that has aggressively pursued Hispanics to distribute their products. Indeed, 60-83 percent of Herbalife distributors are Latino. The chances of making any money at all—after expenses—as a distributor of Herbalife are tiny, estimated at less than one percent, according to the company’s own filings with the Securities and Exchange Commission.

My part of the evening’s agenda focused on what consumers should ask to avoid falling victim to pyramid schemes that are posing as legitimate MLMs.

I noted that NCL wrote to the FTC in March of 2013, asking the agency to sort out the truth. Herbalife claims it’s a legitimate business, hedge fund manager and Herbalife critic Bill Ackman and Pershing Square argue that it’s an illegal pyramid scheme. NCL asked the FTC to use its resources to clear the company’s name if these allegations aren’t true or to determine that the allegations against Herbalife are accurate and take steps to put a stop to illegal practices. The FTC agreed to investigate, but alas, the wheels of bureaucracy grind slowly and we have yet to hear the results of their probe.

The most powerful part of the evening for me—and I think for everyone in the room—were the voices of the community telling their stories. At least five people described paying lawyers and notarios their last dollar to get a husband or wife into the U.S. or to get them papers, only to find out they’d been duped by an unscrupulous actor. Many people spoke about investing thousands of dollars in Herbalife, their life savings, and having nothing to show for it. Several said they were encouraged to buy more and more products they couldn’t sell, to attend conferences, and to exaggerate Herbalife’s ability to treat cancer, diabetes, or high blood pressure in order to make sales. They also spoke of being ashamed to come forward until now.

We hope that the FTC’s investigation will lead to a reexamination of practices that may be widespread throughout MLM industry. For example, our review of the income disclosure statements of several other MLM’s showed that the vast majority of MLM participants have little profit to show for the large amounts of time and money they are often asked to devote to these businesses.

Data aside, it is the personal stories I heard last night that reinforced for me how important NCL’s work is. No one there last night could avoid feeling the pain flowing from these individuals. Single fathers, out-of-work carpenters, and struggling musicians all shared their Herbalife woes.

My life’s work is fighting fraud and championing consumer protection. The stories I heard in Chicago last night galvanized me to stand with these communities and to demand that regulators and bar associations crack down on the illegal, criminal practices that steal money from the poor. Depriving those who only want to pursue the American Dream of their opportunities and hopes is intolerable. What last night told me is that I—and NCL—must redouble our efforts to protect the most vulnerable of our citizens.  

2015 Consumer Policy Agenda – National Consumers League

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January 13, 2015

FOR IMMEDIATE RELEASE
Tuesday, January 13, 2015

Consumer Action • Consumer Federation of America • Consumers Union • Association of Consumer Advocates • National Consumers League • National Consumer Law Center • Public Citizen • U.S. Public Interest Research Group

Consumer Groups Urge President, Congress to Support “Robust Agenda” for Consumers in 2015 

WASHINGTON, D.C. – With a new session of Congress underway, eight of the nation’s leading consumer organizations are calling on President Obama and lawmakers to help “level the playing field for consumers” by supporting a comprehensive agenda for consumer rights. In letters to the President and members of the House and Senate, the organizations wrote, “American consumers want and deserve a fair shake in the marketplace.  The safety of the food we eat, the products we buy, the healthcare we receive and the financial services we choose depend upon it.  Yet too often, the scales are tipped in favor of industry.  As the financial crisis made brutally clear, unchecked abuses in the marketplace can wreak havoc on individuals, families and the economy at large.  Now more than ever, consumers need the strong support of the Administration and Congress to defend existing consumer protections and promote further improvements where needed. The groups presented a list of priorities and concerns for the 114th Congress entitled “A Robust Agenda for Consumers.”  The priorities include:

  • Ensuring financial security for consumers
  • Making health care affordable, accessible and safe
  • Protecting regulatory safeguards
  • Making sure our food, products and cars are safe
  • Building on environmental progress
  • Ensuring the Internet remains affordable and accessible
  • Keeping legal avenues open to all consumers
  • Working for greater competition and consumer choice
  • Promoting fair trade
  • Reducing the influence of money in politics

The letters were signed by presidents and chief executive officers of Consumer Action, Consumer Federation of America, Consumers Union, National Association of Consumer Advocates, National Consumers League, National Consumer Law Center (on behalf of its low-income clients), Public Citizen and U.S. Public Interest Research Group. “By working together and helping consumers make more informed decisions, we want to build an influential consumer movement that will be a force for change,” the groups wrote. Available online are the agenda and the letters to the President, the Senate, and the House.

National Consumers League statement on Obama Administration action on data security – National Consumers League

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January 13, 2015

Contact: Ben Klein, National Consumers League, benk@nclnet.org, (202) 835-3323

Washington, DC – The National Consumers League (NCL), the nation’s pioneering consumer advocacy organization, today applauded the Obama Administration’s efforts to better protect consumers from the threat of cyber attacks. In a speech yesterday at the Federal Trade Commission, the President proposed a new Personal Data Notification and Protection Act that would set a 30-day national data breach notification standard.

NCL has supported a strong national data breach notification standard, modeled after state law in California, which would set a national floor for breach notification without preempting stronger state laws. NCL has also called on Congress to strengthen civil and criminal penalties for malicious hacking and welcomes the recent announcement that the President’s proposal addresses this by criminalizing the overseas trade in stolen identities.

The following statement is attributable to Sally Greenberg, NCL Executive Director:

“The threat of criminal hacking is eroding consumers’ faith in our interconnected digital economy. We must not allow the immense benefits of our information revolution to fall victim to those who would steal consumers’ personal data for their own gain. The President’s proposal for a national data breach notification standard is an important step forward in giving consumers more control over their data, but there is much more to do. We look forward to learning more about the Administration’s proposal so that consumers will benefit from the strongest possible protections.”

As part of the #DataInsecurity Project, NCL has called on the new Congress to enact a range of reforms to better protect consumers’ data. In addition to data breach notification, NCL has called on Congress to create national data security standards, strengthen the Federal Trade Commission’s civil penalty authority; promote the growth of cyber insurance underwriting standards; increase criminal and civil penalties for malicious hacking; and strengthen international anti-cybercrime partnerships.

For more information on NCL’s 2015 Congressional Data Security Agenda, click here.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer 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.

Seven tips to creating a winning LifeSmarts team – National Consumers League

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This post originally appeared on the LifeSmarts blog.

Hello all, I hope everyone had a wonderful holiday. Over the break the members of the LifeSmarts team were hard at work making sure that the 2015 Nationals will be the best one yet! In addition to our usual preparation we have put together the top 7 tips to creating a winning LifeSmarts team. Below, I have included a few highlights from our list.

The first tip for a winning team is of course…PRACTICE, PRACTICE, PRACTICE. Work with your teammates daily using our quizzes and vocab calendars. When practicing, make sure to use buzzers if at all possible. Buzzers help to simulate live matches and make sure you are following all of the rules correctly.

Another tip includes looking back at previous LifeSmarts questions as well as creating your own questions. By creating your own questions and checking archived questions you will be able to create personal flashcards that help to reinforce knowledge that can be shared with your coach and teammates during practice sessions.

Lastly, USE IT ALL. LifeSmarts.org has tons of resources to help students prepare for competition. For example, be sure to check out our monthly TeamSmarts quizzes, they are a wonderful way to stay ahead of the game.

If you follow these tips, have a positive attitude, and remember to have fun, I guarantee you will be prepared for anything in LifeSmarts!

Check out our LifeSmarts infographic. 

An end to secret settlements could save lives – National Consumers League

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en, corporations are able to settle lawsuits brought against them in secret, paying off litigants and hushing up the hazards that lurk in their products. Consumers deserve more transparency and accountability from these corporations. USA Today editorialized last week on this very problem, focusing on a product I’d never heard discussed in this debate, ironically a rifle. 

 

In 2000, a nine-year-old Montana boy, Gus Barber, on a family hunting trip, was killed when his mother released the safety on a Remington 700 rifle to unload it and the gun discharged. Gus’ father later discovered that the company knew they had a safety problem for decades and never changed the design, admitted the problem, or recalled the rifles. By the time Gus was shot, more than 100 people had been injured and two-dozen killed. All these cases were buried through secret settlements, with judges sealing these confidential settlements, thus depriving the public from knowing about this deadly hazard.

The practice of sealing health and safety hazards, many of them deadly is unconscionable and dangerous. NCL and our fellow safety advocates have supported legislation introduced over the years in Congress to stop this practice, requiring judges to reject requests from plaintiff and defense lawyers to enter into secret settlements where dangerous products remain in the marketplace.

Gus Barber’s case is so outrageous that Montana joined four other states in adopting an anti-secrecy statute that prohibits their state courts from concealing information about public hazards.

Things may finally be turning around on this issue. In a recent case in Missouri, federal judge Ortrie Smith refused to seal a case against Remington for safety issues. That’s a hopeful sign. If we could get a federal bill passed, every judge would be required to follow Judge Smith’s example and refuse to deprive citizens of critical safety information that could have saved nine-year-old Gus Barber’s life. 

You committed to being healthier in 2015. Now what? – National Consumers League

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A new year is upon us and once again the time has come for New Year’s Resolutions. Making goals can be a rewarding or loathsome experience based on your ability to achieve them. By making extreme resolutions you could be setting yourself up for failure. It might not be feasible to exercise every day or never eat another cookie. Instead try making small changes and staying committed to those changes. By devoting yourself to something that doesn’t seem like that big of a change for a whole year, you can make a huge difference in your health.  

Here are a few ideas:

  1. Scale back on portion sizes: Instead of embarking on a full diet, cutting your portion sizes to 2/3 or 3/4 of what you would normally eat can have a significant impact over the course of a year. It can be difficult to know what a normal serving size should look like as restaurants often serve big portions so consumers feel like they are getting a good deal. In reality, it’s a bad deal for the environment if you waste the food and a bad deal for your health if you overeat. More information on appropriate portion sizes can be found here.
  2. Limit consumption of processed foods: These foods tend to have more added salt, fat and sugar.  Spotting processed foods at the grocery store is easier than it might seem. Avoid foods in boxes, bags or other packaging that list unfamiliar ingredients.
  3. Eat more meals at home:  Meals prepared in the home tend to be lower in calories fat and sodium. It can be challenging to make a fresh meal every night but cooking food in large batches a couple times a week helps provide ample homemade lunches and dinners. 
  4. Decrease soda consumption:  Soda is a large, nutrient-void source of calories. Drinking too much can increase your risk of diabetes, heart disease and other obesity related diseases. It can be difficult to cut back if soda has become a part of your daily food routine. Try limiting the amount you drink each week until it becomes a treat enjoyed on special occasions.
  5. Cut back on alcohol:  Similar to soda, alcohol is a large source of empty calories in many American’s diets. Alcohol doesn’t need to be completely eliminated from your diets. Instead put a cap on how many drinks you will allow yourself each week or each day. It will make the drinks you do consume that much sweeter. And remember, the Dietary Guidelines recommend no more than one alcoholic drink a day for women and two a day for men.
  6. Increase the amount of fruits and vegetables at every meal:  USDA’s “My Plate” recommends making half of each meal fruits and vegetables. Doing so is one simple way to ensure you are filling up on nutrient dense low calorie foods instead of those that are high in calories but neglect to provide adequate vitamins and nutrients.   
  7. Incorporate whole grains into your daily food routine: Try to switch the grains you eat on a daily basis to whole grains, substituting white rice for brown rice or buying whole grain bread instead of white bread. Experiment with baking with whole grain flour instead of white flour. If using all whole grain isn’t palatable to you, use half white and half whole grain. Consuming more whole grains provides more naturally occurring fiber and other vital nutrients. 
  8. Eat less meat:  Cut back especially on fatty processed meats like bacon, pepperoni and prosciutto. Instead, try replacing the meat in your favorite dishes with tofu or fish, both of which are high in protein but low in fat. 
  9. Commit to being active, not to exercise: Setting out to exercise daily can be a daunting. While it is still good to hit the gym or go on a run a few days a week, signing up for a class like dancing, rock climbing or kick boxing ensures you get plenty of movement in an enjoyable way.  Develop a new active hobby such as kayaking, biking, or hiking. Taking more walks, committing to taking the stairs, or parking at the furthest corner of the parking lot can all make a difference.
  10. Accept yourself as you are:  Imagine how hard life would be if you had someone following you around constantly criticizing you every minute. That’s what happens sometimes when we are displeased with ourselves.  If you accept and love yourself you will make achieving your new year’s goals that much easier. 

Changes do not need to be extreme to matter. Only create new goals that seem sustainable for a lifetime otherwise you may eventually give up and reverse the positive progress you have made. Have a happy and healthy 2015!

Reflections on 2014 victories for consumers and workers – National Consumers League

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As we wind down another year advocating for consumers and workers, it is inspiring to reflect on the two major victories we saw in 2014 for consumers and workers. NCL is America’s only advocacy group with a dual mission to protect both consumers and workers, and we are proud of our work advocating for these changes.

  

Increased minimum wages

Minimum wage increases are essential for helping get America’s low-income workers—and our economy—back on track.

As of Jan. 1, 2015, 29 states and Washington, DC will have minimum wages above the federal minimum wage. America’s lowest paid workers will see their meager hourly wages increase, and it’s not just happening in the states with the most liberal voters! Four states (Alaska, Arkansas, Nebraska, and South Dakota) approved minimum wage increases through ballot measures in the 2014 general election. In Illinois, voters approved an advisory measure.

NCL and our allies have been beating the drum for increased minimum wages, helping to build momentum in recent years that resulted in these real victories. We are hopeful that this trend will continue across the country to help improve the quality of life for millions of working families.

Health care accessibility advances

For consumers, access to health care under the Affordable Care Act (ACA) will improve the nation’s quality of life. Despite conservatives’ pledge to unwind and repeal the ACA, sign-ups have surged, representing a huge amount of pent-up demand for health care across America.

As of mid-December, total enrollment for 2015 plans in this year’s open-enrollment season is about 7.44 million. Experts are saying the surge was bigger than expected and that the Obama administration will exceed its target of having 9.1 million people enrolled in the ACA by the end of 2015.

NCL was a part of this movement—last year, we hosted events across the country to educate consumers about their options and helped them sign up for the exchanges.

All told, the National Center for Health Statistics says that 11.3 percent of Americans lack health insurance, compared with 14.4 percent in 2013. That is progress! More and more Americans, especially children, are insured today than ever before—a huge victory for consumers and for our nation’s health.

There are still many obstacles to overcome for our country’s working families. With your support, we will continue to fight for livable wages, access to healthcare, and so much more in 2015.  

Shopping season is almost behind us! The season of gift returns is just around the corner

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Returning merchandise successfully — and getting a refund you’re satisfied with — can pose a few challenges any time of year, but there are a number of you can do to reduce stress, ease the process, and increase the odds of a successful transaction. To help ease the burden of returns, NCL is offering advice for increasing the chances of painless holiday gift returns this year.

Tips for easy holiday gift returns:

  • Know a store’s return policy before you buy. When you buy, know what you’re getting into — whether the return will be in the form of cash or store credit, at full price, the price that was paid by the purchaser, or some more recent marked-down price. Know whether having the receipt factors into this so you can decide whether politely going back to the gift giver to ask for the receipt is warranted.
  • Keep a paper trail. Go to the trouble of saving receipts from the beginning and keeping them handy in case there’s a need for a return. Having a receipt dramatically increases the chances of an outcome that’s to your liking.
  • As a gift-giver, give items in their full packaging. And as a recipient, don’t open the packaging of anything you know you don’t want to keep, particularly electronics. Policies that don’t allow returns for opened electronics items are common. If they do take it back, they may withhold a certain percentage of the return price and call it a “restocking fee.”
  • Spend your gift cards. They may lose value over time, so look at the fine print and spend them before they expire.
  • Prepare yourself for the worst. Stores have been tracking customers’ return habits for years. Some retailers subscribe to services that keep track of what consumers are purchasing and bringing back in an attempt to curb consumer return fraud — the returning of stolen goods. For honest consumers, this can cause problems, as some stores limit the amount of return activity to a certain number or value of annual merchandise returns. There’s a possibility if you’ve returned a lot of merchandise, you’ll be denied.
  • Be smart. Don’t wear it. Don’t damage it. Increase the chance of having a successful return by taking care of the item on its way back to the store and being a pleasant, polite customer. The post-holidays are stressful enough. Don’t contribute with a less-likely-to-be-helped attitude.

Check out the return policy of an online purchase. You may be able to bring it in-person to the brick-and-mortar store. You may have to pay to send it back, or the vendor may have provided you with a pre-paid postage slip. Or you may not be able to return it at all. Read the delivery information and return instructions for anything you purchase online, particularly if it’s meant to be a gift.