Scammers prey on the elderly in 2010 – National Consumers League

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A phone ringing at 3AM usually means one thing: bad news. That’s certainly the case with a Grandparent Scam, in which fraudsters play on the fear that a friend or relative is in danger by calling an elderly victim and posing as a grandchild or acquaintance.The scammer then frantically tells a story of distress (they’ve been arrested, in an auto accident, are in need of lawyer, etc.) that requires money to be wired immediately. The “grandchild” begs the victim not to tell anybody about the call to avoid getting in trouble with their “parents.”

Scammers, always on the look-out for an easy mark, have been mercilessly targeting the elderly, according to the NCL’s Fraud Center and its recently released Top Ten Scams Report. The report, which is compiled annually from consumer complaints submitted to NCL’s Fraud Center, looks at trends in Internet and telemarketing fraud in the last year.

Consumers over the age of 55 make up nearly a third of all reports (32.8 percent), while baby boomers and older consumers total 54 percent of all complaints to the NCL’s Fraud Center in 2010.

“Fraudulent telemarketers and Web-based scammers aren’t just pushy salespeople trying to make a living – they are hardened criminals out to take their victims’ life savings,” said NCL Executive Director Sally Greenberg. “Con artists know that older consumers may be particularly vulnerable to falling for a bogus pitch, using scare tactics, posing as legitimate outfits, or making the offer sound so sweet that it’s difficult for consumers to resist.”

Top ten scams of 2010

  1. Fake Checks: 29.67%
  2. Internet: General Merchandise: 27.24%
  3. Prizes/Sweepstakes/Free Gifts: 20.49%
  4. Phishing/Spoofing: 8.90%
  5. Advance Fee Loans, Credit Arrangers: 2.44%
  6. Timeshare Resales: 1.56%
  7. Nigerian Money Offers: 1.28%
  8. Internet: Auctions: 1.14%
  9. Friendship & Sweetheart Swindles: 0.99%
  10. Scholarship/Grants: 0.65%

Fake check scams—in which fraudsters lure their victims with phony mystery shopper jobs or sweepstakes “winnings,” asking their victims to cash realistic-looking checks and wire a portion of the proceeds back to the scammer before the check bounces—continued to be the most frequently-reported scam to NCL’s Fraud Center, making up 29 percent of all complaints.

“There is no legitimate reason for someone to give you money and then ask you to wire money back,” said John Breyault, NCL Vice President of Public Policy. “If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.”

Fraudsters on the line

Despite our increasingly digital society and the growing prevalence of Web-ready devices such as smartphones and tablet computers, scammers have not abandoned the telephone as a method of contact. Nearly a quarter – 23.67 percent – of victims reported being defrauded over the phone, up 7.62 percent from last year.

In 2010, NCL’s Fraud Center saw a spike in telemarketers focusing on bogus prize and sweepstake scams. Among scams where the con artist contacted the victim by phone, these scams increased by 19 percent and are this year’s most frequently reported telemarketing scam.

Wire transfers: Con artists’ preferred method of payment

Wire transfers are great for scammers. Unlike reversing a credit card charge or canceling a check, consumers have virtually no way of getting their money once a transfer has been made. Because it’s such an unsafe way for consumers to pay for transactions, wire transfer remains the payment of choice for scammers, with more than 2 in 5 (41.5 percent) of consumers who reported losses sending money via wire transfer.

For more information on the top scams of 2010, read NCL’s report.

Government grant scams: promise free money but deliver debt – National Consumers League

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With high unemployment and a still sluggish economy, many Americans are on the lookout for new opportunities to get some cash—a fact that scammers are well aware of and eager to exploit. Government grant scams have been a frequently reported scam to NCL’s Fraud Center in recent months.NCL’s Fraud Center was recently contacted by a woman we’ll call “Maureen.” Maureen received a phone call from a woman who said she was a “customer service representative” from the United States government who was happy to inform Maureen that she was “eligible” to receive a government grant in the amount of $5,600. The friendly woman on the phone informed Maureen that, in order to receive her money, all she had to do was pay a onetime “processing fee” to the tune of $1,100. Maureen quickly wired the money to the address she was given, only to learn that she had to pay an additional $419 in order for her grant to be “released.” Maureen was now growing concerned and began to ask why she had to pay so many fees. The caller calmly explained that Maureen’s grant was “guaranteed” as soon as she made the final payment, which Maureen reluctantly made. Unfortunately for Maureen, the guarantee was bogus and the only thing she got was a $1,500 hole in her bank account.

With high unemployment and a still sluggish economy, many Americans are on the lookout for new opportunities to get some cash — a fact that scammers are well aware of and eager to exploit. Government grant scams have been a frequently reported scam at NCL’s Fraud Center in recent months. A typical scam can go one of two ways: the scammer requests a “processing fee” or “security deposit” (as in Maureen’s case), or the victim is instructed to provide personal information, such as bank account and Social Security numbers, under the guise that the caller will “deposit” the funds directly into the victim’s accounts. Once the caller has the victim’s banking information, the scammer drains the account.

The experts at NCL’s Fraud Center are tracking scams like Maureen’s and reminding consumers of the most obvious red flags for spotting fraudulent government grants, such as:

  • The government doesn’t telephone people or send unsolicited letters or emails to offer grants. If someone contacts you unexpectedly and offers you a grant, it’s a scam. Don’t provide your financial account numbers, Social Security numbers, or other personal information in response to such an offer. Crooks “phish” for that information to steal victims’ money and impersonate them for other illegal purposes.
  • Government grants never require fees of any kind. You might have to provide financial information to prove that you qualify for a government grant, but you won’t have to pay to get one.
  • Government grants require an application process. They aren’t simply given over the phone and are never guaranteed. Applications for government grants are reviewed to determine if they meet certain criteria and are generally awarded based on merit. If you didn’t apply for a government grant and someone says you’re receiving one, it’s a scam.
  • Government grants are made for specific purposes, not just because someone is a good taxpayer. Most government grants are awarded to states, cities, schools, and nonprofit organizations to help provide services or fund research projects. Grants to individuals are typically for things like college expenses or disaster relief.
  • Don’t be fooled by official or impressive-sounding names. Swindlers claiming to provide or help get government grants often invent impressive-sounding names and titles for themselves and the organizations they claim to represent. They operate under many different names and phone numbers, take your money, then often leave town to start all over again.

If you’ve been a victim of a government grant scam, know someone who has, or have been approached by a scam artist, contact your local law enforcement, your state attorney general and file a complaint with the National Consumers League’s Fraud Center at www.fraud.org.

What’s new with gift cards this season? – National Consumers League

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The Credit Card Accountability, Responsibility and Disclosure Act of 2009 that went into effect earlier this year mandated a lot of changes in the credit card industry. It also has some implications for the gift card industry. There’s good news for consumers planning to purchase gift cards for friends and loved ones this holiday season.

Here are the key elements of the new Credit CARD Act that affect gift cards:

Better expiration dates. Gift cards cannot expire less than five years after purchase.

Better fine print. the gift card issuers must clearly disclose dormancy and inactivity fees.

No more unused balance fees (for the first year). Starting now, no cards purchased in the previous 12 months can carry fees for going unused.  In the past, unused cards lost value more quiclkly due to these inactivity fees. The good news is that now, issuers must not start tacking on the fees for a full year. The bad news is that there is no limit on the amount of this fee, which can only be assessed once a month.

Fees subject to these restrictions include monthly maintenance or service fees, balance inquiry fees and transaction-based fees, such as reload fees and point-of-sale fees.

More you should know about gift cards

The new Credit CARD Act rules do not apply to reloadable prepaid cards that are not marketed or labeled as a gift card or gift certificate. They also don’t apply to prepaid cards received through a loyalty award or promotional program. The majority of the cards we’re used to seeing however, such as those offered by major retailers or card networks like Visa, Mastercard, or American Express, will be covered. However, consumers should be wary of reloadable cards or cards received through the loyalty and promotional programs. A card that would fall into this category is a free “loyalty card” that gives the user $10 off a $50 or more purchase from the same store.  Such cards must still clearly disclose expiration dates and associated fees. These may be hard to distinguish from cards that are covered by the rules.  Consumers should be sure to check the disclosure language on cards to ensure that they are purchasing cards that are covered.

Tips for buying and giving gift cards

  • Encourage the recipients of gift cards to use them quickly to avoid losing the value of the cards to fees.
  • Ask for a gift receipt for each card purchased and include the receipt when giving a gift card. This will allow the card holder to replace the card if it is lost or stolen.
  • Read all terms and conditions prior to purchasing a card. If the terms are not disclosed or if they are too difficult to understand, consider purchasing a different card.
  • Be wary of gift cards sold on online auction sites. These cards are often stolen or counterfeit.
  • Keep all gift cards and receipts in a safe, easily accessible place to avoid loss and neglect of gift cards.
  • If a card requires registration prior to use, be sure to do so soon after receiving the card.
  • If a card’s value is too low to cover an entire purchase, a merchant may be able to do a “split-tender” transaction that will allow part of a purchase to be paid with the gift card and the balance to be paid by another means (cash, check, credit/debit card). If an employee seems unsure how to conduct a “split-tender” transaction, ask a manager to help.
  • Be aware of state laws pertaining to gift cards. These may affect expiration dates, fees, and card replacement.
  • Don’t throw away depleted cards. Some merchants require a card for returns.

‘Tis the season for charity scams – National Consumers League

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It’s that time of year, when many consumers are ready to open their hearts and wallets to many deserving charities. But con artists are well aware of this. How can you be sure you’re giving to a good cause — or a cause at all?If you’re thinking of giving to a charity this season, good for you! But be careful — some scammers out there may be looking to take advantage of your generosity. Complaints to the Federal Trade Commission about charity scams have become more frequent recently. The volume of complaints to the FTC’s Consumer Sentinel system increased by 8.6 percent from 1.23 million in 2008 to 1.33 million in 2009.  While the volume of complaints regarding bogus charitable solicitations remained a small fraction of overall complaints, they were reported much more frequently in 2009, increased by 82.1 percent over the same period (1,908 in 2008 versus 3,474 in 2009).

Avoid being a statistic this holiday season! If you decide to give, start by doing your homework.

Non-profit tracking Web sites like GuideStar.org and CharityNavigator.org have a free databases (registration may be required) with detailed information on many charities. Do your due diligence to make sure the charity is for real before donating.

Your local newspaper or television or radio station often compiles lists of reputable charities responding to emergencies. Consider consulting these sources for information on how to give.

Be proactive! Contact the charity of your choice directly on the phone or via the Internet to ensure that your donation is going directly to the charity of your choice.

Consider setting up a personal charity/giving budget and deciding ahead of time who you want to give to, rather that being pressured into giving on the spur of the moment by a phone or e-mail solicitation.

Don’t pay in cash, if possible. It is safer to pay by check or credit card. Be sure to get a receipt for any donation for tax purposes

If a charity contacts you, be cautious.

If you’re approached by an unfamiliar charity, check it out. Most states require charities to register with them and file annual reports showing how they use donations. Ask your state or local consumer protection agency how to get this information. The Better Business Bureau Wise (BBB) Giving Alliance also offers information about national charities. Call 703-276-0100 or go towww.give.org.

Ask for written information. Legitimate charities will be happy to provide details about what they do and will never insist that you act immediately.

Beware of sound-alikes. Some crooks try to fool people by using names that are very similar to those of legitimate, well-known charities

Ask about the caller’s relation to the charity. The caller may be a professional fundraiser, not an employee or a volunteer. Ask what percentage of donations goes to the charity and how much the fundraiser gets.

Be especially cautious after natural or other disasters. Fraudulent charities take advantage of those situations to trick people who want to aid the victims.  If you’re not sure whether a charity is legitimate, check it out with your state charities regulator and the BBB before you donate.

Be wary of requests to support police or firefighters. Some fraudulent fundraisers claim that donations will benefit police or firefighters, when in fact little or no money goes to them. Be wary of any claims that your donation will get you “special treatment” from these organizations. Contact your local police or fire department directly to verify fundraiser claims.

Consumer U: tips for college students – National Consumers League

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Millions of young people are arriving on the nation’s college campuses this summer. Many of them will be embarking on a life without parents for the first time. Unfortunately, many of these young people will be entering the marketplace on their own, with precious little understanding of how to navigate it successfully. Worse, many students may fall prey to scams targeting college students.

With this in mind, here are a few tips for young consumers heading out on their own, whether to college or just their first apartment:

  • DO read the fine print. While credit card companies are now largely prevented from offering their wares on college campuses, there are still many “gotcha’s” lurking out there for unsuspecting consumers. Those gotcha’s love to hide in the fine print of things like apartment leases, gym memberships, cell phone contracts, student loan applications, spring break vacation package agreements and yes, credit card applications.
  • DON’T sign anything until you understand your responsibilities. Will you be locked in to that gym membership for years to come? Does that free t-shirt come with a credit card that has a high interest rate and annual fee? How much will it cost to break the lease on your apartment if your roommate unexpectedly moves out and leaves you with the full month’s rent?
  • DO make sure you have contact info (the phone numbers or Web addresses for services that can help) if you get in trouble. The local Better Business Bureau, Office of Tenant Advocate, and state and local consumer protection bureaus are good numbers to have handy if you feel that a local business or landlord is taking advantage of you.
  • DO create a budget and stick to it. Create a list of all the expenses you’ll be responsible for, like books, regular meals, rent, and transportation. That way you’ll have a system to help make sure nights out with friends don’t eat in to you required living expenses.
  • DON’T leave personal information unsecured. While young consumers may not have a lot of money to drain from bank or credit card accounts, their credit reports are often clean. This makes them tempting targets for identity thieves. File away important documents, shred credit card offers and keep a close eye on credit and debit card statements for suspicious charges.
  • DO watch out for scams targeting young people. For example, educational grant scams were on NCL’s Top Ten Scams list for 2009, suggesting that scammers may be going after students looking for ways to pay for college in a tough economic environment. Watch out for scams that promise “guaranteed scholarships” or “an inside track on getting money for college.” Also stay away from any service that requires a credit or debit card account number to apply for or hold a scholarship.
  • DON’T leave your social network privacy settings unattended. Scammers scan these networks for information they can use to pitch believable-sounding scams. It usually only takes a few minutes to set privacy settings to make them more secure. Many college students may be surprised to find just how much of their personal information they were sharing in the first place.

Consider these tips the beginning of your journey to becoming a savvy consumer. Remember that the good consumer habits you develop as a college student can yield benefits in school and beyond.

Add Twitter to your customer service arsenal – National Consumers League

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Consumers exhausted by customer service phone lines – and the muzak they’re subject to while waiting to speak with a real live human – are increasingly turning to an alternative: Twitter.

“Your business is very important to us, please remain on the line and a customer service representative will assist you in the order your call was received.”

“Due to extremely high call volume, your wait time is estimated to be…”

Many of us are all-too-familiar with these and other phrases that accompany the soothing muzak used by many companies to manage our limited patience when we’re on hold with their customer service departments. Unfortunately, even after a human is eventually reached, consumers often find that by the time they hang up the phone, the issue they called about remains unresolved. What can a frustrated consumer do?

One alternative that consumers are increasingly turning to is Twitter. By now, many of us are using Twitter, a social networking and microblogging Web site that allows its users to post short messages (known as “tweets”) that can be read by our “followers.” Use of Twitter has exploded in the past few years. At last count, Twitter users were tweeting nearly 50 millions tweets per day. 

Since Twitter is a public service, consumers’ tweets are visible to everyone on the Internet (unless the user blocks access to his or her account). Twitter has become a powerful megaphone for consumers. In the past, if a customer had a problem with a company, their negative experience was communicated mostly to friends and associates by word-of-mouth. In recent years, consumers have started voicing business reviews on the Internet, via blogs or review sites. With Twitter, there is even greater potential for thousands of users to hear – many, instantly – about bad experiences. For companies that are eager to protect their reputations, this is an issue they would be wise to manage. 

Numerous companies are doing just that — assigning staff to monitor Twitter for customers who are dissatisfied and respond directly (via Twitter) to that customer. Many Fortune 500 companies have set up their own Twitter accounts, allowing customers to direct their tweets to a designated Twitter agent for a particular company (via Twitter’s “@” reference system). Companies as varied as Comcast, JetBlue, Wachovia, Bank of America, UPS, and Blue Cross Blue Shield have set up Twitter accounts to complement their traditional customer service lines.

While the quality of Twitter-based customer service varies from company to company, consumers who have tweeted about their bad experiences have frequently received much quicker and more competent follow-up from the companies they’ve tweeted about.

So how can frustrated consumers make use of Twitter to improve their customer service experience? Here are some tips and tricks that might help:

  1. Try the conventional method first. Most companies have dedicated customer service lines that can address common problems, though time spent on hold should be expected.
  2. While you’re on hold, use a search engine to search for “[company name] Twitter.” This will usually bring up a list of Twitter accounts associated with a particular company.
  3. If the traditional customer service route doesn’t solve the problem, tweet away! Be succinct in your tweet (Twitter has a 140 character limit on tweets) and reference one or more of the Twitter accounts for the company in question, using the “@” reference. Example: “The widget I ordered from @acmewidgets showed up broken today. Customer service was no help.”
  4. Keep your expectations reasonable. Some companies have set up their Twitter accounts primarily to tweet about company news, not respond to customer complaints. Review the last few tweets of a particular company’s Twitter account to make sure your tweet goes to the right account.
  5. If you are contacted by a representative of the company, take your conversation to email or phone. This is a better way to describe the exact problem and get it fixed quickly.
  6. Look for Verified Accounts. Twitter’s openness has led to numerous accounts impersonating real companies or celebrities. Look for accounts that have been verified as legit by Twitter. Note that Verified Accounts for businesses are still in the beta, or testing, stage, so don’t rely on this exclusively.
  7. If your tweet led to the problem being solved, tweet about that, too! Companies will be more likely to help you and others in the future if they know that going the extra mile on Twitter led to positive feedback for all the world to see.

Twitter is a valuable tool in the consumer’s toolbox for resolving customer service issues. If going the usual route of calling the customer service line doesn’t solve your problem, don’t be afraid to try Twitter to express your displeasure. The old saying that the squeaky wheel gets the grease has never been truer.

Avoiding online car buying scams – National Consumers League

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When it comes time to buy a car, consumers are more empowered than ever thanks in large part to the Internet and its offerings of car reviews, online vehicle history reports, detailed car listings, and more. The Internet has also, unfortunately, given scammers a new venue to find auto-buying victims.When it comes time to buy a car, consumers are more empowered than ever thanks in large part to the Internet and its offerings of car reviews, online vehicle history reports, detailed car listings, and more. The Internet has also, unfortunately, given scammers a new venue to find auto-buying victims.

One car-buying venue that consumers are increasingly turning to is online classifieds sites such as Craigslist. There are many advantages to using such sites to purchase an automobile, most notably cutting out the dealership middlemen. Unfortunately, NCL’s Fraud Center also hears frequently from consumers who have fallen victim to fraud when purchasing a car via these services. Different scams tend to affect buyers and sellers. Here are some of the more common variants, though this list should not be considered exhaustive, as con artists are among some of the more inventive criminals out there.

The “Price Too Good to Be True” scam

In this scam, a prospective buyer sees an attractive-looking car (often a classic or exotic car) for a price well below market value. When the buyer contacts the seller, he or she is notified that the seller and the car is outside of the country and will arrange for shipment of the car upon receipt of payment, most often via wire transfer (such as Western Union) or bank-to-bank transfer (for very large payments). When the money is transferred and collected, the “seller” breaks contact and the buyer is out the money.

The overpayment scam

A legitimate seller posts a car for sale. He or she is then contacted by a prospective “buyer” (really a scammer) who offers to send a cashier’s check immediately plus additional funds to cover shipment of the car overseas. When the check arrives, the seller is instructed to deposit it and wire the overage to the “shipper.” When this is done and the wire transfer picked up, the “buyer” breaks contact and the seller is left on the hook to their bank for the fraudulent check and the missing funds.

Escrow scams

Many consumers are rightfully wary of sending large amounts of money to someone they’ve never met. Scammer frequently recommend the use of fake “escrow” services that will hold funds involved in the transaction until both parties are satisfied that the transaction has been completed. In a typical scam, a legitimate buyer will be approached by a scammer selling a car (again, often an exotic or classic car priced, but usually priced well below market value). The scam seller will offer to ship the car and that there is no risk of fraud due to the “escrow” service (purportedly eBay, PayPal, or another service). Once the money is transferred, contact is broken (or sometimes additional funds are requested to cover “unforeseen” events). In any case, the legitimate buyer never receives a car and loses their money.

How to avoid car-buying scams

  • NEVER wire money or use a bank-to-bank transfer in a transaction.
  • ALWAYS try to deal locally when buying or selling an automobile or other high-value merchandise
  • DO NOT sell or buy a car from someone who is unable or unwilling to meet you face to face.
  • NEVER buy a car that you have not seen in real life and had inspected by a professional. A vehicle history report may also be a good idea, though scammers have been known to use fake vehicle identification numbers to defeat this countermeasure.
  • WAIT until a check (personal, cashier’s, certified, or otherwise) has cleared the bank to transfer title or the car itself. Funds being made available by a bank DOES NOT mean the check is not counterfeit. Clearing a check can take days or weeks depending on the financial institutions involved. Check with your bank about their particular processes for clearing checks.
  • NEVER trust a seller or buyer who says that the transaction is GUARANTEED by eBay, Craigslist, PayPal, or other online marketplace. These sites explicitly DO NOT guarantee that people using their services are legitimate.
  • BEWARE sellers or buyers who want to conclude a transaction as quickly as possible. Scammers want to get your money before you have time to think or have a professional examine the deal.
  • CALL the buyer or seller to establish phone contact. If the buyer or seller seems to neglect details agreed to via e-mail or is unable to answer questions about their location or the location of the automobile in question, it is likely to be a scam.
  • ALWAYS trust your gut. If a deal feels “fishy” or sounds too good to be true, it probably is. Plenty of people use online classified ads to buy and sell cars every day. The vast majority of these transactions are legitimate and go smoothly. Losing out on a “great” deal in order to work with someone you trust could save you big in avoiding a possible scam.

If you feel you or someone you know has been a victim of a car-buying scam, report the scam to NCL’s  Fraud Center at www.fraud.org.

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

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

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

Top Ten Scams of 2009

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

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

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

How the scams work

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

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

Older consumers falling prey

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

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

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

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

Mobile commerce: what’s all the buzz? – National Consumers League

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You may have seen advertisements for things you can purchase using your wireless phone, such as jokes or ring tones. This new form of shopping, called mobile commerce, lets consumers order products or services using their phones or personal digital assistants (PDAs), with the charges usually appearing on their next wireless bill. NCL’s got the latest on how mobile commerce works and what to watch out for.

How mobile commerce works

Products and services may be offered on either a per-item or an ongoing subscription basis. It’s important to understand that the price and terms of the offer are set by the company selling the product or service, not by your wireless service provider.

Let’s say an advertisement for a ringtone catches your eye online or on TV. This could be a chart-topping musical hit, a popular television theme tune or a sound effect. You are usually provided what is called a “short-code” (Example: Hip1234). To make a purchase, you typically send a text message from your wireless phone to the seller at the number shown in the advertisement and type in the short-code for the ringtone you’ve chosen. The seller sends instructions for downloading the ringtone to your phone, and the corresponding charge will appear on your next wireless bill.

If the offer is for a single ringtone, you will be charged once; if it is a subscription package that enables you to download up to a certain number of ringtones in a specific time period, there may be monthly charges on your wireless bill.

Alternatively, you might pre-arrange to have the charges for products or services you’re going to purchase billed to a credit card or debited from a bank account or prepaid account.

Unfortunately, some sellers don’t make the cost or terms of their offers clear or use good procedures to ensure that consumers are only charged for purchases they agreed to make. Sometimes products or services advertised as “free” may require a subscription. Read advertisements and the terms of sale carefully.

Before you make a purchase, it’s important to know…

  • Exactly what products or services you’re buying
  • Whether it is a one-time purchase or an ongoing subscription
  • The full cost, and how and when you will be billed
  • Whether you can cancel, and the terms of any cancellation policy
  • How to reach the seller in case there is a problem – when signing up, make sure the seller has an 800 number

If you are purchasing music or other downloads, it’s a good idea to make sure you know whether it will work on your mobile device. If it turns out your phone can’t handle the download, some sellers may not offer a refund, so be sure to check to ensure compatibility with your particular phone or PDA before signing up or downloading.

It is also important to know the contract terms of your wireless service provider. Some add charges for downloading content or sending / receiving text messages.

Kids and mobile commerce: set rules

Many parents allow their children to carry a wireless phone to make communicating easier, especially in case of an emergency. Some have found out the hard way, however, that it’s easy for kids to rack up hefty phone bills with text messages or other purchases. Children may make mobile commerce transactions without understanding the charges or asking for parental permission.

Parents should set firm rules for what their kids are allowed to purchase and monitor their accounts closely. Parents may also have the option to block their children from purchasing certain types of content. Ask your wireless provider and companies that sell products and services through mobile commerce what controls are available to you and how they work. Remember, you may be held responsible to pay for purchases billed to your account. For the same reason, don’t lend your mobile device to others to use.

Consumers should choose vendors that…

  • Provide clear and complete information about their offers in their advertisements, including the costs and whether they are one-time purchases or subscriptions
  • Send a text “welcome message” confirming the purchase, the cost, and the terms of sale
  • Provide clear instructions for downloading content
  • Provide multiple protections to ensure only those consumers who agreed to buy products services are billed for them
  • Offer a simple, uncomplicated method to end subscriptions without further obligation
  • Have 800 numbers and live operators available to assist consumers with technical problems and billing questions
  • Provide refunds in the event that children fail to seek parental permission to make purchases
  • Respect your privacy and won’t send you offers you didn’t request

Review your credit card and wireless bills carefully. If you find any questionable charges for mobile commerce transactions, call the number shown for billing inquiries and complaints (or, if you get your bills online, you may see an email or Web site address to use for that purpose). Be sure to notify the company that billed you on behalf of the seller – your wireless service provider or credit card company – if you are contesting the charges, and pay the rest of your bill on time. If you are unable to resolve the problem contact your state or local consumer protection agency or the local Better Business Bureau for help. You can also report a problem to the Federal Trade Commission, www.ftc.gov, (877) 382-4357.

Social networking security and safety tips – National Consumers League

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Social networking sites enable people to post information about themselves and communicate with others around the world. While you can make new friends through social networking sites, you may also be exposed to embarrassing situations and people who have bad intentions, such as hackers, identity thieves, con artists, and predators.

Protect yourself by taking some common-sense precautions.

  • Guard your financial and other sensitive information. Never provide or post your Social Security number, address, phone number, bank account or credit card numbers, or other personal information that could be used by criminals.
  • Picture social networking sites as billboards in cyberspace. Police, college admissions personnel, employers, stalkers, con artists, nosy neighbors – anyone can see what you post. Don’t disclose anything about yourself, your friends, or family members that you wouldn’t want to be made public. And remember that once information appears on a Web site, it can never be completely erased. Even if it’s modified or deleted, older versions may exist on others’ computers. Some social networking sites allow users to restrict access to certain people. Understand how the site works and what privacy choices you may have.
  • Be cautious about meeting your new cyber friends in person. After all, it’s hard to judge people by photos or information they post about themselves. If you decide to meet someone in person, do so during the day in a public place, and ask for information that you can verify, such as the person’s place of employment. 
  • Think twice before clicking on links or downloading attachments in emails. They may contain viruses or spyware that could damage your computer or steal your personal information – including your online passwords and account numbers. Some messages may “spoof,” or copy the email addresses of friends to fool you into thinking that they’re from them. Don’t click on links or download attachments in emails from strangers, and if you get an unexpected message from someone whose address you recognize, check with them directly before clicking on links or attachments.
  • Protect your computer. A spam filter can help reduce the number of unwanted emails you get. Anti-virus software, which scans incoming messages for troublesome files, and anti-spyware software, which looks for programs that have been installed on your computer and track your online activities without your knowledge, can protect you from online identity theft. Firewalls prevent hackers and unauthorized communications from entering your computer – which is especially important if you have a broadband connection because your computer is open to the Internet whenever it’s turned on. Look for programs that offer automatic updates and take advantage of free patches that manufacturers offer to fix newly discovered problems. Go to www.staysafeonline.org or www.onguardonline.gov to learn more about how to keep your computer secure.
  • Beware of con artists. Criminals scan social networking sites to find potential victims for all sorts of scams, from phony lotteries to bogus employment and business opportunities to investment fraud. In some cases they falsely befriend people and then ask for money for medical expenses or other emergencies, or to come to the United States from another country. Go to www.fraud.org to learn more about how to recognize different types of Internet fraud.