Familiar faces in 2012 Top Ten Scams Report – National Consumers League

In 2012, fake check scams earned the dubious distinction of being the top scam reported by consumers to the NCL’s fraud complaint site, Fraud.org. Nearly 32 percent of the total scams reported fell into this category, and it is the second time in three years fake check scams topped our list.Many consumers do not realize that if they deposit a fake check the account holder is responsible for paying the money back to the bank. Fake check scams take many forms, but the common thread in nearly all fake check scams is a request to wire money to a third party. Tip: Don’t wire money to someone you’ve never met and you should be able to avoid this scam.

Read the full report.

Internet-based scams including bogus online merchandise scams, lottery scams, and phishing scams totaled more than half of all complaints received by Fraud.org this year. The Jamaican lottery scam, which asks people to send an advance fee before receiving their prize, was widely publicized in 2012. While American and Jamaican law enforcement authorities have begun working together to curb this widespread fraud, prevention remains the best option for most consumers.

Consumers reported being contacted by phone in more than 42 percent of the total complaints received in 2012. Tip: Whenever someone asks you on the phone to send money ahead of time in order to receive a prize, don’t do it! In fact, never send money to anyone you don’t know and you will avoid much heartache and headache.

A growing scam in Fraud.org’s complaint data is the office directory/ad sales scam. Complaints about this scam increased by 7.36 percent from 2011 to 2012. In a typical office directory scam, a small business or non-profit organization is called and the receptionist or other front-line employee is asked to verify information about the business. If the mark does so, the organization shortly begins to receive threatening invoices for bogus online business listings or other advertisements. The scam artist may even threaten legal action if payment is not sent.

Regardless of the type of scam, many instances of fraud can be avoided by remembering the old rule of thumb: if something seems too good to be true, it probably is.

If you ever do have questions about a potential fraud or think you might be a victim of a scam, report it immediately via Fraud.org’s secure online complaint form. Embarrassment or fear of friends and relatives finding out about the crime causes many victims of fraud to remain silent. Only by speaking out can we give law enforcement the tools they need to bring these criminals to justice.

Smartphone theft a ‘national epidemic’? – National Consumers League

92_shopping_apps.jpgThe explosion in smartphone use has put the Internet in the palms of consumers’ hands. Consumers use smartphones every day; whether it is for work, to pay their bills, or to find out who “that guy” from “that movie” is. Now imagine that little device vanishes. Might someone use the personal and private information on your phone against you?


This is a fear that too many people are facing. Smartphone theft in the United States is increasing at an alarming rate. According to the Federal Communications Commission (FCC), in New York City alone smartphone thefts increased 40 percent in just one year. In other cities the problem is even more dire. In San Francisco, about half of all robberies involved mobile phones and nationwide one in every three robberies involve a stolen cell phone. In total, 1.6 million Americans had a handheld device stolen last year. San Francisco District Attorney George Gascon has called smartphone theft, “a national epidemic.”

High demand for stolen smartphones on the black market is fueling this trend. A typical stolen iPhone can be sold on the street for around $200. However, many stolen smartphones are sold internationally for even more money. According to the California Department of Justice, a stolen iPhone can sell for upwards of $2,000 in Hong Kong.

In 2012, former FCC Chairman Julius Genachowski, in collaboration with major police department chiefs, wireless companies, cell phone manufacturers, and members of Congress, launched a broad initiative to address the increase in smartphone thefts. The project’s two major goals were to build a national database to prevent the use of stolen cellphones and to educate consumers about how to better protect their smartphone.

So far, the initiative has proved to be a great success. Many U.S. wireless companies have set up stolen phone databases that will allow them to see if a phone, reported stolen, is reactivated and can then prohibit it from being used on their network. Many smartphone manufacturers have also taken steps to improve security. For example, Apple’s iOS7 mobile operating system includes a “Find My iPhone” app and requires the user to log in before he or she can do anything with the lost/stolen device. Also, Samsung’s Galaxy S4 smartphone customers, can purchase a LoJack system, which is very difficult for thieves to remove without damaging the phone.

While there is no guaranteed way to protect your smartphone from theft, there are several tips consumers can use to better safeguard their devices. These include:

  1. Be aware of your surroundings when using a smartphone. Thieves prey on distracted victims when they initiate the theft
  2. Use your phone’s security features, particularly password or PIN locks. Choose a hard-to-guess password and change it on a regular basis
  3. Consider installing an app that can remotely track, lock, or wipe the memory of a stolen smartphone
  4. Export sensitive personal information (photos, emails, contacts, etc.) to external devices like a computer or USB drive
  5. Consider purchasing a smartphone insurance policy if the you are prone to losing phones, particularly if the phone is a newer, more desirable model; and
  6. Write down the phone number or website to report a stolen phone to your wireless carrier and keep the information in a safe place. Report a stolen phone immediately to your carrier and local law enforcement.

More information about protecting your smartphone:

Federal Communications Commission advice
Helpful information from the wireless industry

Launching an all-new Fraud.org! – National Consumers League

NCL is proud to announce the relaunch of its anti-fraud education and advocacy campaign, Fraud.org. Today’s announcement is the culmination of nearly a year of work by the League to update its signature anti-fraud program to address the continued challenge of fighting rampant online and telemarketing fraud.

For more than 20 years, anti-fraud education and advocacy have been at the center of NCL’s mission. In 1992, under the leadership of former NCL President Linda Golodner, NCL launched the Alliance Against Fraud, a coalition of groups from the governmental, business, non-profit, and labor communities all united around the common goal of educating and empower consumers to avoid telemarketing scams. This collaboration led to the creation of the National Fraud Information Center, which operated one of the first consumer hotlines dedicated to counseling consumer victims of telemarketing fraud.

In the mid-1990’s millions of consumers were getting online for the first time via home dial-up connections and early broadband networks. This provided fertile ground for scam artists to use the new communications medium to reach millions of potential victims. In 1996, in response to the dramatic growth in Internet-based scams, the League launched Internet Fraud Watch and the original incarnation of Fraud.org. Then, as now, the program was designed to help consumers find up-to-date information on emerging scams and connect them with law enforcement and consumer protection agencies. In the 2000’s the NFIC/IFW (rebranded as NCL’s Fraud Center) regularly published educational brochures, Web content, and anti-fraud educators’ toolkits to help consumers and the agencies that work with them to fight back against fraud.

A new decade has brought new leadership and new challenges to the Fraud Center. With the vast majority of the U.S. population connected to broadband and carrying mobile phones, con artists have never had a more lucrative audience for their schemes. According to estimates from the Financial Fraud Research Center, the annual cost of consumer financial fraud in the U.S. is approximately $50 billion, on par with the annual gross output of the radio and television broadcasting industry. There is a global community of scam artists, as networked and tech-savvy as any Silicon Valley entrepreneur. Their global reach makes it especially difficult for American law enforcement to prosecute the con artists. As billion-dollar scams like the Bernie Madoff case illustrate, even savvy consumers remain vulnerable to fraud.

In the face of this, NCL has not been idle. In 2012, under Executive Director Sally Greenberg, the League launched Fraud Alerts – a monthly email service designed to directly alert consumers to emerging scams and empower them with tips on how to avoid being defrauded. Through the Alliance Against Fraud, NCL will in the coming months redouble its efforts to identify emerging scams and develop new tools to help consumers avoid becoming fraud victim statistics. Today, NCL continues that mission with the relaunch of its anti-fraud campaign. Focused on its iconic Web site, Fraud.org, NCL remains committed to consumer education and empowerment in the fight against fraud.

Through a complete overhaul of its design, the new Fraud.org will make it even easier for consumers to find the information they need to avoid scams. The new user experience includes:

  • An updated search function to help consumers search for scams in multiple ways, enabling them to go directly to a specific type of fraud or, using a more advanced search, identify the type of scam they’ve been exposed to if they aren’t sure;
  • Content that is easily shareable via social networks so that consumers can quickly pass along fraud warnings to friends and loved ones in need;
  • The ability to sign up for regular Fraud Alerts to help consumers stay abreast of emerging scams before they become victims; and
  • As always, consumers who have been victims of fraud or been approached by scammers can file complaints through our secure online complaint form. These complaints are then shared with our network of law enforcement and consumer protection partners.

Even with these new resources, the League can’t do it alone. Fraud.org depends on partner organizations and individual consumers to join in the fight against fraud. That’s why we continue to encourage consumers to come forward and report scams via the secure online complaint form on Fraud.org. We are also seeking to expand the membership of the Alliance Against Fraud, so that, through a growing coalition of like-minded partners in the fight against fraud, our concerns will be better heard by policymakers who can help make a difference.

The relaunch of Fraud.org isn’t just about a new Web site. It’s about rededicating ourselves to the notion that no one deserves to be a victim of fraud. With the new resources of Fraud.org and the collective power of the Alliance Against Fraud, we stand a real chance of putting a dent in the pain that scam artist inflict on consumers every day. We hope you love the new site! Check it out today.

Avoid a Valentine’s Day hangover: Don’t fall for a romance scam – National Consumers League

Think you’re lucky in love? People who find that special someone online could be in for a rude awakening if they don’t take precautions against con artists, who use clever tactics to meet victims online, form a bond and gain their trust, and bilk them out of hard-earned money.At first, it seems like the perfect match. You meet someone online that you can really connect with, who is everything you’ve ever dreamed of in a significant other. As the relationship develops, you start to talk seriously about meeting each other face-to-face. It’s a big step in any online relationship, but it seems like the two of you just click so why wouldn’t you take a chance on love? When the request for money to help with travel expenses comes, you send the money. After all, it seems like a small price to pay for the chance at a lifetime of happiness.

Unfortunately, this scenario is what happens all too often to victims of the romance scam. A scam artist is the person on the other end of the relationship, who knows just how to make someone believe a story and ultimately send money. If the victim sends money, it’s followed by additional requests for cash, which continue until the victim either catches on to the scam or runs out of money.

A woman we’ll call “Sarah” recently shared her story with Fraud.org. Sarah met a man calling himself “Robert” on a popular online dating website. Robert claimed to be from Georgia and he and Sarah began exchanging emails and text messages.

A few weeks into the relationship, he told Sarah that he was sent on business to the Philippines. While allegedly abroad, he claimed that he was robbed, had emergency surgery, and was arrested for tax evasion among other misfortunes. He asked Sarah to send him money to help him get back on his feet and make the return journey to the U.S. He promised to pay her back once he had access to his late wife’s safe deposit box back home.

Robert convinced Sarah to help and she sent the money. Before she caught on to the scam, Sarah had lost almost $30,000.

Sarah is not alone. In 2013, romance and friendship scams were the 10th-most reported type of scam to Fraud.org. They were also by far the most expensive type of scam for their victims, with losses averaging more than $13,000 per incident. It’s not surprising to see why, either. Love is one of the most powerful emotions. What wouldn’t you do to help out someone with whom your share a deep connection? Scammers operating these scams are skilled in manipulating their victim, gaining their target’s trust, and ultimately defrauding them of as much money as possible.

This Valentine’s Day, NCL is urging consumers to learn more about these scams so that they can spot the warning signs and avoid a costly fraud. Red flags include:

Any request to send money from someone you’ve never met in real life.

Wire transfer services like Western Union and Moneygram are favorites of scammers, but we’ve also received complaints where the victim is asked to send money via bank transfers, prepaid debit cards (like Green Dot MoneyPaks), newer services like Xoom, or even mailing cash stuffed inside magazines or books.

The person you’re communicating with says they are located overseas.

A favorite tactic by romance scammers is to claim to be a U.S. citizen who is temporarily out of the country on business or military deployment.

Requests to communicate outside of an online dating sites’ internal messaging system.

Many online dating sites monitor their messaging services for suspicious activity. Romance scammers will often ask to use other communications technologies such as instant messenger, text messaging, or email.

Requests to cash a check or money order from someone you’ve never met in real life.

Often, the check is fake and the scammer is only trying to get you to cash the check and wire her or him the proceeds before your bank catches on.

Allusions to great wealth.

Romance scammers will often claim that they have access to or are about to have access to significant amounts of money. With their victim’s financial help, they claim they’ll be able to access the cash and potentially share it with their “lover.”

Think you’re a victim of a Sweetheart Swindle? Report it to Fraud.org.

Consumers beware: Learn how to avoid buying flood-damaged cars – National Consumers League

NCL works closely with advocates in the auto industry who know a lot about cars damaged in crashes, rebuilt wrecks, and flood cars. Hurricane Sandy brought new opportunities for fraudsters to pawn off cars damaged by flood waters to unknowing consumers.According to the National Insurance Crime Bureau, there have already been some 230,000 flood related auto claims reported by insurance companies as a result of Hurricane Sandy. In addition to these insurance reported claims, there have been many thousands more in claims from both self-insured fleets as well as private parties who did not have insurance coverage for their vehicles.

The National Salvage Vehicle Reporting Program (NSVRP) is recognized by the US Department of Justice as an independent third party standards body for the federal government’s comprehensive database on vehicle damage history. NSVRP has already identified more than 40,000 water/flood total loss vehicles that have been listed for sale by the salvage auctions. Thousands have already been sold at auction since the beginning of November. A number of these are being offered for sale under clean title paperwork – which is false and deceptive – and in some cases apparently in violation of state branding requirements. Many others have been moved to other states before being offered for sale. Once these vehicles have been sold at a first salvage auction, some are likely to be transferred by the first buyer to a different auction and then resold as clean title vehicles without any documentation or visible photographic indication that they were originally a flood total loss.

NSVRP is monitoring much of the salvage activity related to Hurricane Sandy. To avoid buying a flood car, we urge consumers to check the Vehicle Identification Number (VIN) of any car they are considering buying – it is found under the windshield on the driver’s side of the vehicle. Check that VIN by going to the database of the National Motor Vehicle Titling Information System, found at  https://www.vehiclehistory.gov. The cost is nominal, $2.00 per report – or possibly a little more depending on the information being sought.

NSVRP has found that flood damaged vehicles with clean titles are showing up at salvage auctions. As a result, NSVRP, which works closely with state regulators, is urging states to strongly consider reviewing their statutes and regulations and recommend that if possible that jurisdictions try to implement the following best practices:

  • Make sure their state has an available title brand for flood and water damaged vehicles.
  • Make sure the state supports branding carry forward provisions to reduce the opportunities for title washing between jurisdictions when vehicles are transferred between states.
  • Require mandatory non-repairable branding on vehicles that are flood vehicles and salt water damaged vehicles.
  • Require mandatory non-repairable branding on vehicles that have been damaged to 80% of ACV or some other similar threshold.
  • Check out the NSVRP Web site for more information at www.NSVRP.org.

The best advice is for a consumer not to buy any used vehicle until it has been thoroughly checked out by a competent automotive technician who has no relation to the seller. This is especially true today and for the foreseeable future given that many Hurricane Sandy vehicles we be resold on the open market for the next year or more – many with an undisclosed title history.

Also, buy from someone with a good reputation who will stand behind what they sell. Always test drive before you buy, and always require that you can have the vehicle inspected at a shop of your choosing before deciding to buy. As always, two good rules to live by for consumers: Better safe than sorry and caveat emptor!

Need extra cash for the holidays? Beware of online payday loan offers – National Consumers League

With increased expenses around the holidays, consumers may find themselves running short of cash for other bills, and some may be considering payday loans to cover the short-term need. Thinking about a short-term loan? Better think twice.These days, a payday loan is only a mouse click away thanks to the proliferation of online payday loans. While even legitimate payday loans should only be considered as a last resort due to their extremely high interest rates, we are seeing a large number of reports about payday loan companies that are nothing but scams.

The scam works like this: A consumer in search of an online payday loan sees an ad online, on a newspaper classified page, in an email, or somewhere else. The ad guarantees a payday loan without a credit check. The consumer is directed to a Web site that looks very official and legitimate. They are instructed to enter in personal information, presumably to begin the loan application process. In some cases, the scammers have even posted fake video “testimonials” online to make the scam seem more legitimate.

Once the personal information is entered, the consumer is contacted by the alleged payday lender (in reality, a scammer) and asked to send money to cover fees “before the loan can be processed.” The scammers claim that this money is necessary to pay for things like “application fees,” “insurance,” “taxes,” or other important-sounding costs. If the victim sends the money, they are typically contacted again with another ask for additional money for other fees before the loan can be processed. This sequence may continue until the consumer catches on to the con or runs out of money.

Here are a few tips to help you spot and avoid these scams:

  1. If you are asked to pay money to get money, it’s probably a scam. While most legitimate payday lenders charge a (typically hefty) fee, this is generally assessed when the consumer repays the loan. Requests for up-front fees before a loan can be granted is a sure sign that something is fishy.
  2. If you’re asked to wire money or use put money on a prepaid card before your can get a loan, it’s a scam. Consumers report that online payday loan scammers usually ask to have the fictitious “fees” wired via Western Union or Moneygram. Increasingly, scammers are also telling victims to load funds on a prepaid card (such as a Green Dot MoneyPak) and then either send the card to the scammer or give out the access code on the back of the card. In either case, the scammer gets cash from the money order or deducts the cash from the prepaid card and the victim gets nothing.
  3. If the online payday lender says they don’t need a credit check and then asks for sensitive personal information, it’s probably a scam. Many online payday lenders advertise that they do not require a credit check or other documentation of the borrower’s credit-worthiness. However, they then require the victim to enter sensitive information such as a Social Security Number online to apply for the loan. In reality, this information is used to target the consumer with even more bogus offers, or worse.
  4. Just because an online payday lender looks legitimate doesn’t mean that it is. Online payday loans scam artists are experts at setting up legitimate-looking Web wesites, providing official-looking documentation and even creating dummy business addresses. Consumers who are unfamiliar with the company should not simply rely on these materials. Do your own due diligence by checking with state banking regulators, the Better Business Bureau, and the state corporation commission to make sure the business is legit.
  5. If you’ve been approached by or lost money to an online payday loan scam, report it! These scams defraud consumers from every walk of life every day. Scammers count on their victims being too embarrassed to report the crime. By speaking up, you can help others avoid being victims. Complaints can be reported to NCL’s Fraud Center and we will forward them to the appropriate law enforcement agency.

Shop smart online this holiday season – National Consumers League

As Americans return to the workplace next Monday after the long holiday weekend, many will spend a portion of their day surfing the Internet for deals from online retailers. Monday, December 2 — “Cyber Monday” – is what the retail industry claims to be one of, if not the, busiest Internet shopping days of the year, and with more and more consumers opting to avoid the mall, e-shopping next week is expected to be higher than ever. Spending on Cyber Monday is expected to be in the billions of dollars.Whether consumers do their shopping online at the workplace or at home, advocates are reminding them to practice safe e-shopping habits in the coming weeks and year-round. The Internet can make your shopping faster and easier, but there can also be pitfalls if you’re not careful. There are ways to ensure you have a safe online shopping experience, so that gift-giving is a joyous occasion, not an opportunity for cyber thieves.

NCL’s Top Ten Cyber Monday Shopping Tips

  1. Don’t shop online on an unencrypted or open wireless network. As convenient as they seem, an airport or coffee shop’s wireless network is not an appropriate place to conduct financial transactions. Entering personal financial information over an unsecured connection may leave your computer open the to hackers and thieves to capture your financial information. Home Wi-Fi networks can also be compromised, so consumers should find out how to secure their connections.
  2. Secure your computer before shopping online. Before connecting to the Internet or shopping online, take the following three core protections: 1) Install anti-virus and anti-spyware programs and keep them up to date; 2) Install a personal firewall; 3) Regularly update operating system and anti-virus programs to current protections.
  3. Know who you’re dealing with. Before shopping online with an unknown e-store, check out the seller and be sure to get the name and physical address of the vendor in case something goes wrong. If you’re buying gifts on an online auction site, check the track record of the seller before you bid.
  4. Pay the safest way – by credit card, especially when you’re purchasing something that will be delivered later. Under federal law you can dispute the charges if you don’t get what you were promised. You may also dispute unauthorized charges on your credit card. Consider using a “virtual” credit card number.  These numbers replace your plastic credit card number with a new number that is linked to your real account number.  When you’re prompted to enter your credit card number at checkout, you enter the virtual number instead of the real number.  These “virtual” numbers can be set to have a low credit limit, to only work at certain Web sites, or to expire after a certain period of time (two months from date of purchase is a good rule of thumb).  This way, if the Web site you’re shopping at is compromised, the crooks likely won’t be able to run up charges on your real credit account since the virtual number.  A note of caution, however: think twice before using a virtual credit card number for services where you will be billed repeatedly or for things like rental car reservations, since the card may not be billed until you pick up the car.
  5. Only shop on safe sites. When providing payment information, the Web site URL address should change from “http” to “https,” (or, less frequently, “shttp”) indicating that the purchase is encrypted or secured. Look for an icon on the browser (generally in the bottom right of the window), such as an image of a padlock closing, to indicate that the page is secure.
  6. Don’t fall for a phishing email or pop-up. Legitimate companies don’t send unsolicited email messages asking for your password, login name, or your financial information. But scammers do, and it’s called “phishing.” Crooks often send emails that look like they’re from legitimate companies – but direct you to click on a link, where they ask for your personal information. Delete these emails.
  7. Be careful when shopping for a gift in an online auction. Consumers sometimes turn to auctions for harder-to-find collectibles or expensive electronics. Understand how the auction works, and check out the seller’s reputation before you bid. Use safe ways to pay, like a credit card. If you use a 3rd party payment system, read the terms carefully to understand what protection, if any, it offers if you don’t receive what you were promised. Always ask about terms of delivery and return options. Be especially wary of auctions that ask for payment via wire transfer.
  8. Turn your computer off when you’re finished shopping. Many people leave their computers running 24/7, the dream scenario for scammers who want to install malicious software—“malware”—on your machine and then control it remotely to enable them to commit cyber crime. To be extra safe, switch off your computer when you are not using it.
  9. Don’t be tempted by offers of free money. Con artists take advantage of cash-strapped consumers during the holidays to offer personal loans or credit cards for a fee upfront. These scammers simply take the money and run. Beware of emails offering loans or credit, especially if you have credit problems.
  10. Visit www.fraud.org to learn more about protecting yourself from online scams year-round and to report suspicious sites, sellers, or scams. You don’t have to be a victim to report a scam, and your information will help law enforcement go after cyber grinches.

Above all, look into the business or individual with whom you are doing business before making the transaction. For more information on avoiding scams throughout the year, visit www.fraud.org.

Business directory scams preying on small business owners – National Consumers League

The National Consumers League’s Fraud Center is warning businesses and non-profit organizations to be on the guard for con artists armed with bogus “invoices” for business directory listings. We regularly receive complaints about this scam, but so far in 2012, we have received more than 100 complaints, a 500 percent increase (no, that’s not a typo) versus the first nine months of 2011.“Scams tend to come in and out of fashion,” said John Breyault, Director of NCL’s Fraud Center. “It certainly appears that the business directory scam is once again the ‘con du jour’ for fraudsters.”

In a typical business directory scam, the victim (often a small business or non-profit organization) will receive a call asking the recipient to “verify” or “confirm” information such as business address, business name, or fax number for a business directory listing. If the recipient of the call provides this information, the organization shortly receives an urgent “invoice” for the cost of the alleged directory listing. In some cases, a copy of the listing accompanies the invoice, which is often just a printout of an existing online business directory listing.

In many cases, the business receiving the invoice will simply pay the bill without questioning the charge. If the charge is questioned, scammer may threaten legal action or offer a “discount” to get the organization to pay up. In some cases, the scammer may even produce a recording of the original verification phone call as “proof” that the charge was authorized.

Examples of recent scams reported to our Fraud Center:

  • A consumer from Northern California recently contacted us about a directory ad scam she was caught up in. She received a $599.99 bill for an online directory listing for a defunct company she had owned. She was told that they would close the account and zero out the bill. However, she later started receiving collections despite her clear indication that her company that was out of business could not have placed online directory listing ads. Her alleged “bill” is now up above $750 and the harassing faxes have kept coming.
  • Another consumer from Santa Barbara, California described to us a similar online directory scam. After taping an assistant manager’s alleged “authorization,” the consumer’s business received a $599 bill for online directory listings. The assistant manager had in fact received a call, but the scammer claimed it was simply to authorize the removal of an ad. After refusing to pay, the consumer has continued to receive harassing phone calls and faxes threatening to send the account to collections.

Business and non-profit organizations can take action to spot and avoid this scam:

  1. Train staff to spot this scam especially the “verification” phone calls, in staff meetings, on bulletin boards and email alerts. Special attention should be given to employees who answer phones for the organization or who have authority to write checks on behalf of the organization.
  2. Verify existing arrangements for business directory listings before paying invoices for such services. If you’re not sure you’ve ordered such a service, don’t pay the bill.
  3. Don’t be fooled by the “walking fingers” logo or the name “Yellow Pages,” as neither is trademarked or unique to any particular company.
  4. We wary of any invoice that arrives without a phone number or mailing address for the company allegedly billing for the listing service. Even if such information is on the invoice, check up on the business to ensure that it actually exists.
  5. Check with the local Better Business Bureau for the state where the business address is listed. Legitimate businesses should also be registered with their state, typically with the state’s Department of State or Corporation Commission.

Businesses or non-profit organizations that have been approached by this scam or fallen victim to it should be sure to report it to NCL’s Fraud Center at www.fraud.org. For more information on this scam, check out NCL’s fact sheet on bogus invoice scams.

Worrying trends emerging in mobile text messaging and malware – National Consumers League

Several new trends in fraud perpetrated via mobile phones are making it more important than ever for consumers to educate themselves about these next-generation scams.According to security firm Symantec, 31 percent of mobile users have received a text message from someone they didn’t know asking them to click on a fishy link or dial an unknown number. According to security firm Cloudmark, during the first week of September, text messaging (or SMS) phishing attempts increased by 913 percent, making this type of scam the single largest SMS messaging threat. In a typical SMS phishing scam, the consumer receives a text message purportedly from their bank, credit card company or even a health service provider. In each case, the consumer is asked to divulge sensitive personal information that can be used by the scammer to perpetrate fraud or identity theft.

While there’s no foolproof way to avoid these phishing attempts, consumers can take some steps to mitigate the risk:

  • First, don’t share your cell phone number widely, particularly on Web sites that ask for your number as part of a survey or sweepstakes.
  • Second, never click on suspicious links in text messages, particularly if they come from unknown or unfamiliar senders.
  • Third, many wireless carriers offer spam controls that can reduce unwanted text messages. Consumers should contact their carrier to get details. In extreme cases, you could even turn off the ability to receive all text messages.

Consumers can also help report suspicious text messages by forwarding them to 7726.

Malware threats

Smartphone users should also be aware of the increasing prevalence of malicious software, called “malware” for short. Mobile security firm Lookout predicts that four in ten American mobile users will click on an unsafe link this year. This unsafe clicking can lead to so-called “toll fraud” where consumers are billed for premium SMS services, often without their knowledge. According to Lookout, in the first quarter of 2012, toll fraud malware surpassed spyware as the most prevalent form of mobile malware. It is estimated that more than six million people were affected by mobile malware on Android phones from June 2011-June 2012 alone.

Consumers can take steps to protect themselves from mobile malware:

  • First, don’t click on suspicious Web links from your phone’s browser.
  • Second, be wary when downloading apps from independent app stores or unfamiliar sites.
  • Third, pay close attention to your monthly wireless bill and dispute any suspicious charge.
  • Finally, consider installing a mobile security app, which will scan new apps and can protect you from unsafe sites.

Consumers who have been a victim of SMS or mobile malware fraud should report these scams to NCL at Fraud.org.

Payday lending scams kicking consumers when they’re down – National Consumers League

Payday loans are notoriously bad deals for consumers, providing short-term fixes to financial dilemmas at an extremely high cost. Con artists are finding ways of making them even worse.These days, fraudsters targeting consumers who are down on their luck and desperate for money are providing another reason for consumers to avoid the temptation of a payday loan. The growing popularity of online loans has attracted scam artists who are eager to prey on these vulnerable consumers.

In a typical payday loan scam, the victim, who may or may not have ever actually applied for or taken out a loan, receives a call or email demanding that they pay back an overdue debt. Because of porous information-sharing practices, consumer’s personal information often finds its way into the hands of fraudsters, making it easy for them to recite the consumer’s personal and confidential information.

The scam artist may threaten the consumer with immediate arrest if he or she does not pay right away. This is a clear giveaway that it’s a scam, but it also causes people to act irrationally out of fear. Scammers have been known to make dozens of such threatening phone calls to victims’ homes or places of work in order to extract funds. Victims are often accused of perpetrating check fraud, forgery or money laundering to scare them into paying up immediately, when in fact no money is owed.

Consumers shopping for an online payday loan should be aware that even legitimate-looking Web sites could in fact be fronts for scammers. Some “red flags” of a possible scam loan Web site include:

  • Requests to pay upfront before receiving a loan
  • Payment is requested via wire transfer
  • Payday loan Web sites that lack working phone numbers or mailing addresses
  • The payday lending company is based overseas
  • Loan packages that sounds “too good to be true”

Even legitimate payday loans, whether acquired online or in person, are already notorious for outrageously high interest rates. There costs are often hidden in fine print or outright lied about. The Federal Trade Commission recently sued several payday loan companies for “lying about interest rates, requiring borrowers to let the company take money out of their bank account automatically and threatened to sue borrowers or have them arrested for non-payment.”

Payday loans should be a last resort for cash-strapped consumers. They may solve financial issues in the short term, but paying it back will put you further into debt. For example, a recent survey of online payday lenders by the Consumer Federation of America found that the typical cost of a two-week $500 loan is $125, or a whopping 652 percent APR.