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New legislation to protect fraud victims from tax penalties 

/in Featured Home - Fraud Prevention, Press release/by
Media Contact: Lisa McDonald, Vice President of Communications, 202-207-2829
Washington, DC – The National Consumers League (NCL) is appreciative of Representative Haley Stevens’s (D-MI) proposed legislation designed to protect fraud victims from being unfairly taxed when they are forced to tap into their 401(k)s early due to fraudulent schemes. Fraud prevention and consumer protection are central to NCL’s mission, and we strongly support this critical step in ensuring that fraud victims are not penalized further.
“Fraud victims are harmed enough when criminals steal their life savings,” said John Breyault, NCL Vice President of Public Policy, Telecommunications, and Fraud. “The last thing victims should worry about after being scammed is a bill from the IRS. NCL is thankful for Representative Stevens’ efforts to reduce the burdens fraud victims face after a crime has occurred.”
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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL supports AI liability rule, recommends extending its reach

/in Consumer Protection, Featured Home - Consumer Protection, Fraud Prevention, Press release, Privacy & security, Scams, Technology/by

May 2, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – This week, NCL and six other consumer advocacy and public interest organizations submitted comments in support of a Federal Trade Commission proposal that would establish legal liability for AI developers who know (or have reason to know) that their AI is facilitating fraud.

The FTC’s proposed rule would enable the agency to crack down on scams that use deepfakes and voice cloning. It would also help to fill a glaring gap in its ability to hold impersonation frauds accountable, like romance and grandparent scams. This hole in the Commission’s capacity to return funds to victims of fraud is a direct result of the Supreme Court’s decision in the 2021 AMG Capital Management v. FTC case.

“While some AI developers implement safeguards to prevent the misuse of their products, many do not,” said NCL Public Policy Manager Eden Iscil. “The FTC’s initiative in this space should put companies on notice that they cannot put out unregulated AI tools and allow criminals to supercharge their frauds with them.”

Recent trends have shown the urgent need for the FTC to have strong enforcement options to combat impersonation fraud. NCL’s Top Ten Scams report for 2023 found significant consumer losses attributed romance and family-and-friend imposter fraud, with victim complaints showing median losses at $8,000 and $1,040, respectively. Generative AI, including text generation, voice cloning, and visual deepfakes, can enable these scams to be significantly more effective. The Federal Bureau of Investigation noted a 322% increase in sextortion reports between 2022 and 2023, attributing much of the increase to the proliferation of AI tools.

The Center for American Progress, Consumer Action, Consumer Federation of America, Electronic Privacy Information Center, the National Association of Consumer Advocates, the National Consumer Law Center, and NCL urged the Commission to clarify that the liability for AI developers in facilitating fraud should also apply to companies that provide scammers access to AI tools, even if the companies did not develop the AI themselves. The full comments can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

National Consumers League praises FTC’s multilingual fraud reporting announcement

/in Press release/by

November 8, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

The National Consumers League (NCL), America’s oldest consumer advocacy organization today praised the Federal Trade Commission’s (FTC) announcement that consumers can now file fraud and identity complaints in their preferred languages. NCL is the home of the Fraud.org campaign, which is a long-time contributor of complaint data to the FTC’s Consumer Sentinel Network as well as being an ally in the Commission’s efforts to educate consumers about frauds.

The following statement is attributable to NCL Vice President of Public Policy, Telecommunications, and Fraud, John Breyault:

“All consumers are at risk of fraud, regardless of the language they speak. Making it easier for fraud victims to report these crimes in their own language to the FTC is a critically important step in the fight against scams. We are thrilled with today’s announcement and look forward to continuing to work with the Commission and our allies in the anti-fraud community to protect consumers from criminal scammers.”

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

Preying on the vulnerable – National Consumers League

/in Blog, Blog, health, Blogs, food/by

cheniahd_92.jpgEarlier this November, NCL held a meeting with our Alliance Against Fraud coalition. We had presenters from the Federal Trade Commission (FCC) representing the government and AARP representing advocacy interests. If Frank Abagnale Jr. of Catch Me If You Can, and AARP’s newest spokesperson, taught us anything, it’s that scammers know their targets and their sights are almost always set on the most vulnerable consumers. Scammers also work together by distributing “sucker lists” amongst themselves that keep victims at the mercy of scammers.As AARP can attest, older Americans are frequent scam victims. Perhaps you’ve heard about the “grandparent scam.” In grandparent scam scenarios, fraudsters claim to be calling on behalf of a grandchild asking for funds to bail themselves or another loved one out of jail or out of some trouble. It was discussed that some scammers actually monitor obituaries of grandparents to find the information of a grandchild to use that name when making the call to the surviving grandparent.

They convince the grandparent that their loved one needs their money and direct the victim to a store to load money onto a gift card. Once the codes on that card are sent to the scammer, there is no turning back, the money is gone.

A new trend revealed at the meeting was that scammers are increasingly turning to iTunes, Target, and Amazon gift cards as payment methods. These cards, unlike credit or debit cards, don’t offer robust anti-fraud protection. Even wire transfer services like Western Union and MoneyGram–which have historically been a favored payment method amongst fraudsters–now have more protective anti-fraud protection protocols. But, as we’ve seen, as soon as one tactic starts to fail, scammers will undoubtedly find a new way to take advantage of victims.

In an interview with CBS News’ Carter Evans, a former scammer noted that elderly people are more “gullible, accessible, more likely to get emotionally invested and likely to do anything for their grandchildren.” It should also be noted that the strength of the bond between grandchild and grandparent will sometimes facilitate the willingness of the grandparent to not involve the child’s parents. We can keep older Americans and immigrants safe from scams that exploit them. NCL’s Fraud.org website and AARP’s Fraud Watch Network offer tips and resources for detecting and avoiding scams. For victims or family members of fraud victims, we suggest filing a complaint at Fraud.org or with the Federal Trade Commission at www.ftc.gov or by phone at 1-877-382-4357.