College kids and credit: making smart choices – National Consumers League

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This time of year, many parents are thinking about giving their college-bound children a credit or debit card to help pay for living expenses. Once they get to campus, many students may be shocked at the costs they encounter and be tempted to open their own credit card accounts. For these young consumers and their families, abiding by a few simple rules could help them avoid costly headaches down the road.

Thanks to the 2009 Credit CARD Act, credit card companies can no longer swarm college campuses armed with marketing “freebies” like t-shirts, water bottles, or pizzas to give to new customers. In addition, consumers under the age of 21 can no longer open a credit card account without a co-signer (usually a parent).

In response to these restrictions (which NCL supported), many major credit card companies, such as Chase and Bank of America, then stated they would no longer target college campuses. However, cards are still marketed to college students in other ways, and many students may be carrying a prepaid debit card or a credit card belonging to their parents.

At an exciting and confusing time of their lives, college students may be unaware of the challenges and responsibilities that come with having a credit card. New cardholders must understand that credit cards are important to building up a credit history but the risks of misuse and abuse – which may cost them and their parents further down the road – are very real. Responsible use of a credit card can pay off in the long-term via lower interest rates when financing a home or automobile purchase.

The financial information blog, Charge Smart, recommends consumers take six steps before and after acquiring a credit card.

  1. Compare offers (specifically avoid 0 percent interest introductory offers because once the introductory period is over, you’re likely to be stuck with higher than usual interest rates)
  2. Set a budget for spending, and pay off as much as possible each month
  3. Read the fine print credit card contracts BEFORE signing on the dotted line. Fees and other costs often lurk in that tiny mouseprint.
  4. Pay on time: It’s important for building up your credit historyCredit limit: The best way to build your credit score is to charge no more than 30 percent each month and pay off the balance promptly
  5. Set up an online account, so it’s easier to pay on time

The Consumer Financial Protection Bureau (CFPB) recently launched a powerful tool to help consumers compare cards: a searchable credit card complaints database. While the tool is still in its beta stage and a bit clunky to use, it can be useful for consumers to see what types of complaints a particular credit card issuer is dealing with. Too many unresolved complaints, particularly for a company you’re not familiar with, could be a sign that it’s time to shop elsewhere.

A consumer who has been taken advantage of by their credit card company can file a complaint, and the CFPB will investigate it. Filing a complaint is easy, and can be done online, by telephone, mail, email, fax, and referral from other agencies. The CFPB reviews each complaint and, if the complaint is complete and legitimate, sends the complaint to the credit card company for response. The company usually responds back to the consumer, who can take a further step in disputing the company’s response. Only about 16 percent of those who file a complaint with the CFPB take that action. The most common complaints are billing disputes, so consumers should always read their contract over extremely carefully before signing.

The CFPB also provides information on its Website about a typical credit card contract, as well as a glossary of common credit card-related terms. Credit card users of all ages can benefit from studying this information carefully before and after acquiring a credit card. If something does happen, don’t be afraid to file a complaint with the CFPB if the issuer can’t resolve the problem to your satisfaction.

Enjoy making smart consumer choices in college!

Tweens and cell phones: A guide for responsible use – National Consumers League

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Cell phones are becoming increasingly common among younger teens and tweens. To help parents manage their tween’s use of a cell phone, NCL has put together advice for families on how to shop for tweens’ phones, how to keep down costs, and how to set some simple rules to make sure a child doesn’t misuse the phone.

Cell phones seem to be as much a part of teenage life as schoolwork, hanging out at the mall, and obsessing over what to wear to prom. But these days, children are beginning to receive their first wireless phones at progressively younger ages. According to a new 2012 NCL survey, nearly six out of 10 parents with tweeners surveyed (56 percent) have purchased cell phones for their young children.

Although cell phones are becoming more common among younger teens and tweens, there are major differences in the issues parents face when shopping for and managing the use of a tween’s mobile device as opposed to an older teenager’s phone. For example, a 16-year-old driving herself to an after-school job is likely to use a wireless device differently than a 12 year-old who is still dependent on a parent for rides to soccer practice and not venturing far from home independently.

Figuring out how to manage a child’s use of one of these high-tech gadgets can often require the skills of a seasoned diplomat, the steely nerve of a tightrope walker, and the tech savvy of a Silicon Valley computer geek. To help parents plan for and manage their tween’s use of a cell phone, NCL offers the following advice on how to shop for tweens’ phones, how to manage their costs, and how to set some simple rules to make sure a tween doesn’t misuse the phone.

Before you buy

Before beginning the shopping for a tween’s cell phone, ask yourself some basic questions to set expectations for your family.

  • Why does your child need a cell phone?
  • Will the phone be used primarily to stay in touch with parents and for emergency use? Or will your child be using the phone for entertainment or to communicate with friends?
  • How much to you want to spend per month on service?
  • How much do you want to spend on the initial purchase of the cell phone itself?
  • Is your tween mature enough to keep their minute use, texting and data within plan limits?
  • Is your tween mature enough to use the phone responsibly and avoid viewing or sending inappropriate content?
  • What is your tween’s school’s policy on cell phones in school?
  • Does your tween have a habit of losing things or can he or she handle the responsibility of caring for a phone?

Write out your answers to these questions and keep it with you when you shop. Having this list with you can help keep these important factors in mind when shopping for a cell phone. It will also help you stay focused when your tween inevitably starts to drool over phones that may not fit their and your needs.

Things to consider: Shopping for a tween’s cell phone

Once you have a good grasp on what exactly your want out of your tween’s cell phone experience, it’s time to start shopping. You may want to start online. There are dozens of Web sites that offer consumer reviews of cell service, handsets, and features. Checking these out first can help you narrow your choices before you check out the carriers’ Web sites and start being influenced by their marketing hype.

Coverage

Once you’ve narrowed down your choices, check out Web sites of the carriers that offer service in your home calling area. The carrier should fully cover all of the places that your tween is likely to use a cell phone on a regular basis. Many carriers’ Web sites feature coverage maps that show where voice and data service are offered in a particular geographic area. These maps aren’t foolproof, however.  It may be necessary to ask friend and family if they know of persistent “dead zones” in areas that your tween will be frequently using her phone. Once you’ve found a carrier that covers your area, talk to friends who use the carrier or carriers you are considering to see how they rate the service.

Postpaid or prepaid?

The second major decision involves choosing between a prepaid and a postpaid service. Most consumers are familiar with postpaid/contract-based services from national companies like AT&T, Sprint, T-Mobile, and Verizon Wireless or regional carriers like US Cellular, Cellular South or nTelos. With postpaid, subscribers pay based on a monthly bill that lists out costs of use. One benefit of postpaid service for parents shopping for a tween’s cell phone is that the phone itself is likely to be significantly discounted or even free (though an activation fee is typically charged). You will also get a monthly bucket of minutes, text messages, and data to draw from, and you may be able to place limits on your child’s use to ensure he or she doesn’t go over and rack up extra costs.

On the minus side, to get cheap phone, a new subscriber typically must sign a 1-2 year service agreement, which generally includes a hefty early termination fee. Going over monthly voice, text, or data limits can quickly run up big overage charges as well. This could be an issue if your tween has trouble controlling her usage. Finally, if you already have postpaid cellular service, you can generally add your child’s line to your account (typically, for an additional fee) and have them share your monthly allotments of voice, text and data. Keep in mind that you may need to increase your plan limits to accommodate this new usage without going over plan limits.

Alternatively, a prepaid plan typically contains no contract or overage charges. Instead of paying for a defined allotment of minutes, texts, and data every month, the subscriber pays for their allotment up front (commonly known as a “top up”). Subsequent usage then deducts from this allotment (often referred to as “units”). Unless the prepaid plan provides for unlimited calling/browsing/texting, once the allotment is used up, the phone can no longer be used until additional units are purchased or the monthly allotment is replenished (on monthly prepaid plans). In addition to not having to worry about contracts or overages, prepaid offers the benefit of only having to pay for what is used. Postpaid cellular plans typically add a significant amount of fees and taxes to the advertised prices. These fees are generally included in the initial cost.

On the minus side, prepaid handsets are not discounted as heavily as postpaid. For moderate-to-heavy users, the per-unit cost of use may be more expensive than postpaid plans, unless you have an unlimited minutes, Web browsing, and texting prepaid plan. Prepaid carriers are just now starting to offer the latest current-generation smartphones, which might be an important consideration for your family.

The importance of texting

Teens are texters – more than face-to-face contact, email, instant messaging, and voice calling, the primary way kids prefer to communicate with each other is via text messaging. Among 12-year-olds, 35 percent report sending a text message to a friend on a daily basis. Among tweens ages 11-13, 43 percent prefer texting to emailing as a way to communicate with their friends.

This means, for parents of tweens, text-messaging costs are key when shopping for a plan. The most expensive option for frequently-texting tweens is typically pay-as-you go, where each text sent and received typically costs between 15 and 20 cents. A more affordable option may be to buy a bucket of text messages or an unlimited texting plan, which tend to run anywhere from $10-20 per month. Many prepaid plans that bill monthly offer unlimited texting as part of the monthly fee.

Mobile data

More and more these days, it seems everyone is using a smartphone – cell phones that are essentially pocket-sized mini-computers. They can be used to send email, download apps, play music, surf the Web, and more. All of these gee-whiz features come with a significant catch, however: the need for a data plan. Data plans vary greatly in cost and capacity. The big national carriers typically offer metered postpaid data plans starting in the $10 for less than 100 megabytes per month and ranging up to $100 for 10 or more gigabytes per month. Some of the smaller prepaid carriers offer unlimited data plans for as little as $35 per month. Bundles of unlimited voice, text, and data are being increasingly offered on prepaid plans as well.

From a parent’s perspective, whether or not to get a data plan for a tween will likely come down to a question of budget and how comfortable you are with your child’s ability to manage their use. A data-enabled smartphone has many of the same capabilities of a small computer, allowing a tween to surf the Web, download apps (often at a price) and send instant messages. Setting clear rules and taking advantage of available parental controls to manage usage of the device are important factors to consider before getting your tween a data plan.

On the plus side, many free apps are available to allow users to send text messages at no cost. If you are comfortable with your tween having a smartphone, using one of these apps could allow you to avoid paying for a text-messaging plan.

Try before you buy

It’s generally a smart idea to have your tween see the phone in person and try it out before you purchase it. Test out the keyboard or number pad (for texting comfort), and place a test call to test volume and microphone pickup. Check out the user interface to see if it’s easy to navigate. How comfortable is it for your tween to hold the phone up to her ear for an extended period of time?

Once you’ve settled on a particular handset, see what kinds of discounts are being offered. Often, the carriers offer special online-only discounts that beat the price of the handset in the store.

NOTE: Many carriers offer a 14-30 day money-back guarantee. If you find that the phone isn’t working as advertised or if coverage is spotty, you may be able to return it in this window and avoid an early termination fee (in the case of postpaid plans).

Setting the rules of the road

Managing usage of your tween’s new cell phone can easily become a source of conflict unless clear rules are set ahead of time. Since each tween is different, the rules they are expected to follow will differ. However, there are many areas that parents and tweens should have an understanding about to ensure responsible use.

  • Set a monthly budget and stick with it. Be clear about our commitment to avoiding overages (for postpaid plans) or your willingness to purchase additional minutes (for prepaid plans),
  • Discuss whether the phone may be used for making purchases of ringtones, apps, games, etc. If you don’t want it used for these, consider setting up parental controls to block these features.
  • Talk to your children about cyberbullying. A quarter (26 percent) of teens report having been bullied or harassed through text messages and phone calls. Discuss strategies for handling cyberbullying responsibly.
  • Discuss inappropriate use of the phone. “Sexting” or sending or receiving inappropriate photos can quickly come back to haunt a tween.
  • Discuss whom the tween is and is not allowed to contact with their phone. A good strategy is to program in all allowable numbers into the phone’s contact list so that the caller ID function shows who is calling. Be clear about whether you want your child to answer calls from unknown numbers.
  • Make sure your tween knows not to give out their cell number to people they don’t know, particularly online.
  • Make sure your tween knows about distracted biking. Just as adults need to make sure and avoid texting while driving, tweens should remember to keep their eyes on the road, not their cell phones, while they’re on two wheels or walking in public places where traffic could be an issue.

NCL thanks TracFone Wireless for its support for these tips for smart and safe family use of cell phones.

Bogus charities expected to prey on donations for wildfire aid – National Consumers League

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Recent wildfires in Colorado have destroyed hundreds of homes and have forced tens of thousands of residents to evacuate. In June, President Obama declared the situation a national disaster, and the Forest Service warned it could take weeks to get the blaze under control. After disasters such as this, many Americans try to help out those who have been affected by donating by charities that promise to assist the victims.NCL is warning consumers to be careful about what charity they choose, or risk becoming the victim of a charity scam.

Scam artists are opportunistic, and charity scams are a perfect illustration of this. Following high-profile disasters such as the 2004 Indian Ocean tsunami, the 2007 Virginia Tech shootings and the 2010 Haiti earthquake, there were numerous reports of consumers receiving solicitations from fraudulent charities. Regardless of the specifics of the disaster, the scammers use the visibility of these disasters in the news media to generate sympathy and cash from their victims.

Consumers should watch out for the following “red flags” for charity scams:

  • The charity refuses to provide any documentation of their 501(c)3 non-profit status or other identifying information such as a mailing address, annual report or website
  • You are pressured to commit to a donation immediately or are asked to provide sensitive personal information
  • Requests for donations to be made in cash or via wire transfer
  • Guarantees of sweepstakes winnings or other prizes if you donate
  • Charities with unfamiliar names that you’ve never heard of

Before giving to a charity, be sure to check their reputation on sites like Charity Navigator and GiveWell.org, which rank charities based on efficiency, transparency and accountability. Be cautious if a charity contacts you first or pressures you to give money or information immediately. Legitimate charities give donors as much time as they need. Remember, the cause will be just as worthy tomorrow as it is today. Also, be sure to ask whether the person calling you represents the charity itself or a professional fundraising company. If the caller represents a professional fundraising company, be sure to ask how much of each donation they collect for “administrative costs” or “overhead.” It is not uncommon for such companies to take 80% or more of every donation for these fees.

After donating, you should still be thoughtful and careful about interacting with the charity. Many organizations continue to contact donors after a donation and may sell or rent your contact information to other organizations. If you are frequently contacted by organizations you do not wish to donate to, ask them to put your name on a “Do Not Call” list.

Keep track of your contribution(s) so you can put them down as tax deductions. If you give a large contribution or frequent contributions, feel comfortable asking for the organization’s annual report and financial statements. This will give you an idea of what the organization is currently doing with your and other people’s money.

Millions of people, both in the United States and worldwide, are suffering and charities do amazing work in benefiting the world. Unfortunately, scam artists masquerading as charities are only out for their own gain. They will take advantage whoever they come across in order to benefit themselves. Do not fall for their traps.

You on Twitter? So are scammers – National Consumers League

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Many consumers find the popular social media site, Twitter, useful for staying in touch with friends and family and getting updates from organizations or famous people. Unfortunately, scammers see the millions of Twitter users very differently: as potential targets.Scams on Twitter usually involve some kind of link or promise from either a user you don’t know or a user whose account has been compromised.

A common scheme is for a scammer to create an account then follow or direct message hundreds or thousands of other users. Each time a user is followed, they receive an alert with a link to the scammer’s profile. The profile often contains links to malware or phishing sites. A recently popular method of this is a direct message or tweet with a message like “lol is this really you?” with a link attached.

Yet another scheme scammers use is to post something that leads to a link that looks like a Twitter login page, but isn’t, and thus when a user types in his username and password, the fraudster has access to their account and can use it to target others.

Other signs of a fraudulent account are: repeatedly posting duplicate updates, abusing basic functions of Twitter to get attention, and posting links with unrelated tweets.

How can Twitter users avoid falling for a scam?

Twitter users should ignore any direct messages or tweets that promise that by simply clicking on a link they will receive thousands of followers. Any “get followers quick” method promised by someone else is a way to steal money or private information.

Twitter is aware of scammers using its site, and shuts down the accounts of spammers users report, so users shouldn’t hesitate to report a suspicious Twitter handle that displays any of the red flags. Other tips for using Twitter and avoiding the pitfalls of a scam are:

  • Use a strong password
  • Always make sure you’re on Twitter.com before giving login information
  • Use HTTPs for security
  • Beware of direct messages from people you don’t know, especially if they promise to help you “immediately” get thousands of followers
  • Be suspicious is you are followed by someone posing as a celebrity. Well-known Twitter users often have Verified Accounts (signified by a check mark next to their profile name)
  • If you don’t know someone following you, don’t click on links in their profile.
  • If you encounter abusive and/or annoying behavior on Twitter, block and ignore the profile responsible and report it to Twitter.

There are many organizations with Twitter accounts that work to protect people from online fraud and other consumer issues such as the Better Business Bureau (@BBB_US) and the Federal Trade Commission (@FTCgov), Visa Security Sense (@visasecurity), StopBadware.org (@StopBadware), StopThinkConnect.org (@StopThinkConnect) and the National Cyber Security Alliance (@StaySafeOnline).

Twitter’s Help Center (@Support) also provides useful information on identifying spammers and protecting your account.

Stay safe and have fun in the Twittersphere!

Ticketing gift guide for dads and grads – National Consumers League

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Tickets are a popular gift as Father’s Day, graduations, and summer concert series fill the calendar. However, many consumers may be unaware that restrictions – and scams – could make giving tickets as gifts a big headache. To help prepare consumers, NCL and the Fan Freedom Project have teamed up to warn consumers about the most common online ticket-buying risks.

“Too often consumers meet with unpleasant surprises – from scams to restrictions – when they try to buy or give away event tickets. The last thing we want to happen is someone buying a thoughtful present for Father’s Day or a new grad only to find out they ended up with fraudulent tickets, or tickets that can’t be given as gifts, such as non-transferable paperless tickets,” said John Breyault, Vice President of Public Policy, Telecommunications, and Fraud at NCL.

Tips for buying tickets as gifts
Use reliable sellers: Beware of fly-by-night ticket sellers. If you’re unsure whether a company is legitimate, check its ratings with the Better Business Bureau. If purchasing from a ticket broker, check to see if they are members of the National Association of Ticket Brokers, whose Code of Ethics requires members to adhere to basic consumer protections

Check your ticket vendor’s guarantee policy: For example, Web sites like Stub Hub, TicketsNow, Ace Tickets and All-Shows guarantee every ticket sold on their sites and will replace them or provide refunds to consumers if they receive the wrong tickets, their tickets are invalid or an event is cancelled. Craigslist and other online classifieds sites do not offer such guarantees; it’s “buyer beware” when shopping there.

Pay attention to URLs: When buying tickets directly from a venue, check the Web site’s URL to ensure that you don’t get duped by an imposter. For example, a Bruce Springsteen fan was recently tricked by a Web site he thought was for the Times Union Center in Albany, but was actually a resale site. Remember, even if a Web site looks like the official site, it may be bogus.

Read the fine print: Just because you bought a ticket doesn’t mean you can give it away. Some concerts and sporting events sell restricted paperless tickets, requiring the buyer to show up at the venue and present the purchasing credit card and photo ID. With such tickets, the buyer does not receive a physical ticket and cannot easily transfer these tickets. When buying paperless tickets as a gift, Ticketmaster recommends that you pay with the recipient’s credit card and reimburse them.For a list of artists and sports teams that use restricted tickets, visit Fan Freedom Project’s FAQ

Know the rules: Some venues limit the number of tickets you can buy. A Radiohead fan recently reported purchasing a block of tickets to share with friends. When she ordered more tickets as a wedding gift, the venue threatened to cancel both orders because she was over the four-ticket max. Some events may also require the ticket purchaser to attend the show to pick up their tickets at the “will call” window. If you purchase tickets for such shows but don’t plan to attend, the gift recipient could be denied admittance to the event.

Buy with a credit card: Regardless of where you buy tickets, be sure to use a credit card so you can dispute any unfair or unauthorized charges. Before entering your credit card information online, be sure the site has “https://” at the beginning of the Web site address. This means the site is encrypted and safer for use.

Be prepared to pay additional fees: Unlike airline tickets, which are now required by law to disclose all taxes and additional fees upfront, the ticket price listed at the start of the purchasing process will likely not be your final price.

Watch out for scholarship scams – National Consumers League

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92_graduates.jpgGraduation season means optimism about a bright future ahead. Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money: scholarship scams. As millions of college graduates don their caps and gowns this spring, advocates are warning them of the signs of too-good-to-be-true aid offers.Congratulations, graduates! Prospective college students often look to scholarships as a way to lessen the financial burden on parents and to avoid taking out student loans. Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money – scholarship scams.

Scholarship scams prey on consumers’ eagerness to find ways to pay for higher education. They come in a variety of guises, but a common thread is that usually there is need for the victim to pay money or provide a credit or debit card number up front before a supposed scholarship or grant is awarded. A good rule of thumb is that if you have to pay money to get money, it’s probably a scam.

Other red flags when it comes to scholarship scams are offers that promise “guaranteed” scholarships or pressure to act quickly in order to secure money. Consumers should also be wary of services that offer to match grant seekers with scholarships (sometimes known as financial aid advice services), especially if they offer to apply for you or require a big fee. Some scholarship scams ask you to pay money for information you can get for free, such as the federal FAFSA form. There are any number of free sources of financial aid information, including school counselors, state education agencies, the U.S. Department of Education and the Federal Student Aid Information Center. Be careful, too, when you receive unsolicited offers to help with financial aid from people or organizations you’ve never heard of or can’t find reliable information about.

Resources

For more information about scholarship scams and other resources you can use, visit StudentAid.Ed.gov, the U.S. Department of Education’s site for free information on preparing for and funding education beyond high school. You can complete the FAFSA here, and learn about other FAFSA filing options here. You also can call 1-800-4-FED-AID.

If you think you’ve been scammed, file a report via:

Top 10 red flags of home repair scams – National Consumers League

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Have you made your first spring trip to your local hardware store yet? With the arrival of spring, many consumers are already busy with projects around the house. Unfortunately, warm weather ushers in both blooming flowers and scammers offering all manner of shoddy home repair “services” and outright scams.This spring, don’t be a victim of home repair scams. Arm yourself by being aware of the following red flags of potential home repair scams:

  1. Contractors who appear uninvited at your doorstep or who call or email you out of the blue.
  2. The contractor says they are doing work in your neighborhood and claims they have “extra material” left over
  3. You feel pressured to make a decision and sign a contract for the work immediately
  4. The contractor offers a “special deal” available “today only”
  5. The contractor points out a “problem” with your home that you never noticed yourself before. Some unscrupulous scam artists have been known to offer “free” inspections and then break something on purpose so they can be paid to “fix” the problem
  6. The contractor demands full payment up front, particularly if payment is demanded in cash.
  7. The contractor lacks identification, such as a permit from the city or locality
  8. Offers to give you a discount so that your home can be used as a “model” or if you find additional customers for him/her
  9. The contractor offers to help finance the project, either from his own funds or the funds of an associate, especially if your home equity or home deed is involved.
  10. The contractor insists you come and examine “damage” with him (while an associate steals valuables from your home)

Some of the more common types of home repair scam involve duct cleaning, driveway sealant, leaky foundations, landscaping, furnace and roofing repair. This is by no means an exhaustive list, however.

Consumers can take some precautions to avoid home repair scams, including:

  • Get multiple estimates on any home repair job before signing a contract
  • Check out the contractor’s references and visit the site to check out the quality of the work itself, if possible
  • Check for complaints with the Better Business Bureau and make sure the contractor is registered with your state board of contractors and your local building inspection office
  • Never pay in full up front, especially if cash is the only payment accepted
  • Make sure the contractor is insured and bonded
  • Document in writing the scope of the work to be done and the complete cost and time necessary to complete the job and how payment will be handled.

Prizes/Sweepstakes bump fake checks as top scam – National Consumers League

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The data is in! NCL’s Fraud Center has released the Top 10 scams of 2011, and bogus prizes and sweepstakes have bumped fake check scams to take the #1 spot. Also on the rise, and a concern for advocates, is that scammers posing as loved ones and preying on victims’ emotions, like the Grandfather Scam we’ve reported on in recent months, are on the rise.Another significant finding is that scammers appear to have targeted their scams at particular age groups more than ever in 2011. For example, complaints involving bogus prizes, sweepstakes, and free gifts made up 26.98 percent of complaints overall. However, among consumers ages 56-65 and above 65, these types of complaints made up 40.96 percent and 60.12 percent of the total, respectively. Similarly, fake check scams made up 26.65 percent of complaints overall. Among consumers age 18-25, fake check scam complaints made up 45.74 percent of the total.

Top 10 scams of 2011:

  1. Prizes, sweepstakes and fake free gifts
  2. Fake check scams
  3. Internet scams for general merchandise
  4. Phishing and spoofing
  5. Advance fee loans and “credit arrangers”
  6. Scholarships and grants
  7. Friendship and sweetheart swindles
  8. Nigerian money offers (not prizes)
  9. Family or friend imposters
  10. Fraudulent Internet auctions

New to the Top Ten Scams list this year is the Family/Friend Imposter Scam, the 9th-most frequently reporter type of fraud. In response to a rash of complaints, NCL’s Fraud Center began tracking this fraud (also known as the “Grandparent Scam”) in 2011. In these scams, a con artist typically poses as a relative in distress or someone claiming to represent the relative (such as a lawyer or law enforcement agent). The scammer frantically describes an emergency situation in which they have found themselves (such as being arrested, in an auto accident, in need of a lawyer, etc.) and asks the victim to send money for bail, lawyer’s fees, hospital bills, or other expenses. The victim is urged not to tell anyone, such as the parent of the “grandchild” because they do not want them to find out about the trouble they’ve gotten themselves into.

“Scam artists will stop at nothing to defraud consumers,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “The scary part about these scams is that they prey on our natural inclination to want to help a loved one who is in distress.”

According to the consumer group, the majority of money lost was sent via wire transfer, a popular payment method among scammers because of the difficulty to track – and particularly devastating to consumers because of the improbability of recovering lost funds. Consumers should be wary of any offer that requires wiring of money, said NCL.

The report, which is compiled from consumer complaints submitted to NCL’s Fraud Center, examined trends in Internet and telemarketing fraud in 2011.

“Fraudulent telemarketers and Web-based scammers are hardened criminals out to take their victims’ life savings,” said NCL Executive Director Sally Greenberg. “The best way for consumers to fight back is to get educated and not be afraid to report such fraud to law enforcement. Scammers know all too well that their victims are often embarrassed and count on this to continue to perpetrate their crimes.”

For more information on NCL’s 2011 Top Ten Scams report, click here. Consumers who wish to report a fraud or potential fraud can do so via the online complaint form at NCL’s Fraud.org Web site.

Cruise drama highlights vacation risks – National Consumers League

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The dramatic story of thousands of passengers stranded on a power- and plumbing-less Carnival cruise ship in the Carribean has many consumers wondering not only about cruise ship safety, but also their rights as passengers. What exactly are you risking when purchasing a vacation getaway?

According to a recent Reuters article, consumers sign away a handful of rights when they buy a ticket — which is essentially a contract — to embark on a cruise. According to the story, Carnival makes up about half of the cruise market, but its contracts are quite typical. Here’s what consumers are handing over — along with their cash:

A guarantee that the cruise will actually happen.

Carnival can cancel any cruise at any time, according to the contract. It will owe you a refund if the cruise is completely cancelled, or a partial refund if the company changes its mind and leaves you at some port along the way. There’s no additional refund in the contract for airfare home. If you cancel within two weeks of booking you’ll most likely owe full fare anyway, under the contract.

The right to sue when and where you want.

Like most consumer legal contracts these days, the Carnival ticket contract includes an arbitration clause that requires you to submit claims for lost luggage and the like to binding arbitration in Miami-Dade County, Florida. If you do want to file suit for a personal injury, you would be required to do that in the U.S. Federal District Court in Miami.

Furthermore, there are lawsuit deadlines in cruise contracts that many attorneys and passengers aren’t even aware of. The contract requires injured parties to notify Carnival within six months and file suit within a year.

The right to ask for sizeable punitive damages.

There are two different kinds of ticket contracts: Domestic ones, which do not cap liability, and international contracts, such as the ones the passengers of the Costa Concordia likely agreed to when they boarded their ship. That contract is subject to an international agreement called the “Athens Convention,” which limits liability to about $80,000.

The right to emotional distress.

What if you’re traumatized by your cruise – say, if a loved one is injured or killed on the ship? Unless you personally were at risk for the same injury (as would likely be the case in a disaster like the Costa Concordia’s accident), you probably waived your right to claim emotional distress in the contract.

The right to privacy.

When you sign the contract, you give the company the right “at all times with or without notice” to search your bags and personal effects. That’s so they can make sure you’re not smuggling any firearms, explosives, or alcohol onto the ship.

The contracts give the cruiseline the right to use pictures and videos of you for commercial purposes–without any further permission from – or compensation to – you. The right to use your own pictures. Carnival reserves the rights to your pictures – you don’t. Passengers agree that they “will not utilize any photographs … for non-private use without express written consent of Carnival.”

Protection from theft.

In the event that personal items go missing on the ship or luggage is lost,  The ticket contract limits the company’s liability for lost or damaged bags and their contents to $50 per guest or $100 per stateroom. If your items are worth much more than that, you can buy added coverage by declaring the value of what you are bringing onto the ship and paying 5 percent of its value.

Reuters recommends if you’re bringing expensive jewelry or other items on board, make a written list of the value, pay the 5 percent and make sure the crew gets a copy of that list.

Still planning that winter cruise to the Caribbean? Remember the golden rule of the educated consumer: do your research, know what the risks are, and don’t sign anything you don’t understand.

Stress-free gift returns – National Consumers League

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Lining up for post-holiday sales and returns? To help ease the burden of returns, the National Consumers League, the nation’s oldest consumer group, offers advice for increasing the chances of successful — and painless — holiday gift returns.

As surely as people buy holiday gifts, they also return holiday gifts. 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 things consumers can do before the return, or even before the purchase, to reduce stress, ease the process, and increase the odds of a successful transaction.

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.