ATTORNEY GENERAL WARNS CONSUMERS ON FINANCIAL FRAUDS

Vermont Attorney General William Sorrell is warning Vermonters to be on their guard against a variety of financial frauds that are taking their toll on consumers.

Current scams targeting Vermont consumers:

• Grandparent Scam - Calls from someone claiming to be a loved one in trouble in Canada, seeking money by wire transfer. Don't send money!
• Free Security System Scam- "Phishing" calls claiming to offer a free security system for a monthly service fee. Don't give out any information!
• Sweepstakes Scam- Calls claiming consumer has won a sweepstakes, requesting wire transfer, check or credit card for fees to "receive your winnings". Don't wire money!
• Credit Card Rate Scam- "Phishing" calls claiming they can reduce your interest rates.  Seeking credit card account information. Don't give out any information!
• Phony Payday Loan Collection Scam- Threatening calls claiming you owe money on a payday loan, threatening arrest for check fraud or other threats.  Ignore the calls, do not agree to pay!
• Craigslist/Classifieds Scam- Emails purporting interest in an item you list on a classified site, offering to send a money order or cashier's check as payment. Meet in person, take cash only!
• Phony Work-at-home Offers- Classified ads and internet sites offer great earnings "processing payments from your home," doing at-home "medical billing," "minor assembly," "envelope stuffing," "internet searches" or other such tasks.  Many of these are outright scams, some cost more money than they pay and some never pay at all.  Never pay money to work at home!

Hear VPR news coverage of these scams.

If you or someone you know have been targeted by one of these scams, contact us.  

• How Do I Spot a Scam?
• What Do I Do?

1. The "Grandparent" or "Distressed Relative/Traveler" Scam
2. The “Nigerian Scam” 
3. The "Mystery Shopper" Scheme
4. Unauthorized Bank Debits
5. The Counterfeit Cashier’s Check
6. “Advanced Fee” Loan Scams
7. Fraudulent Emails
8. Identity Theft

The "Grandparent" or "Distressed Relative/Traveler" Scam

A particularly common and devastating scam, this fraud typically involves a phone call or e-mail, purportedly from a loved one or friend, claiming to be in distress and emergent financial need. Typically, the caller claims to have been wrongly arrested or detained, or to have been robbed of their wallet and passport. Often the caller asks the targeted consumer not to contact other family members out of embarassment. ALWAYS verify the status of your loved ones or acquaintances independently with someone you know if you receive one of these calls or e-mails. DO NOT assume they are real!

The “Nigerian Scam” 

In this scam, the consumer receives a letter or email supposedly from a bank or other official in West Africa, claiming that there are several million dollars (sometimes said to belong to a foreigner who died leaving no next of kin) that needs to be deposited in a U.S. bank account. In exchange for providing a bank account number or wiring money to the official, the consumer will receive a share of the millions. The story is a fake. One Vermonter who fell prey to this scheme lost over $40,000.

The "Mystery Shopper" Scheme

This scam targets consumers looking for work they can do at home or on their own time.  Classified ads in newspapers and online offer purported employment to consumers as "mystery shoppers".  If you respond to the ad, you may receive an official-looking check (see The Counterfeit Cashier’s Check, below) with instructions to go various businesses, purchase items or services, and report on your experience.  One of these "assignments" will be a wire-transfer of funds to someone else.  The check is fake, but the money you wire off will be your own.  When your bank takes the funds from the fake check out of account, you will owe the bank and the scammers will have your money.  Don't cash that check, and don't wire transfer money to someone you do not know.

Unauthorized Bank Debits

Many people may not be aware of the fact that a stranger can withdraw (debit) money from their bank accounts without permission. Fraudulent telemarketers have been doing this lately, either by electronically debiting consumers’ bank accounts, or by printing and depositing unsigned checks called demand drafts, which include the consumer’s bank account number in “microcode” at the bottom of the check. Consumers have lost hundreds and even thousands of dollars from their bank accounts this way.

The Counterfeit Cashier’s Check

This scam involves receipt of a cashier’s check in the mail (see a sample scam and check here). The sender may claim that the consumer has won a foreign lottery and the check is part of the winnings, or may be paying for goods offered by the consumer over the Internet. In either case, the sender asks the consumer to send money back to him—either as taxes or fees required to collect the lottery winnings, or because the amount paid for goods offered by the consumer is more than the purchase price. Even though the cashier’s check may look real to the bank, and even though the bank may indicate at first that it has “cleared,” the cashier’s check turns out to be counterfeit, and the consumer is the loser. Find out more about counterfeit checks on our Bogus Check Scams web page, or on the website for the Federal Trade Commission.

“Advanced Fee” Loan Scams

Newspaper ads often claim to offer credit cards, a loan, or some way of erasing bad credit, regardless of a consumer’s credit history. When the consumer is asked to pay a fee up front—before the credit card, loan or credit improvement materializes—he or she can expect to be fleeced. The truth is that companies do not knowingly offer regular credit cards or loans to people with badly damaged credit, nor can they magically upgrade a bad credit history. However, by the time the consumer realizes that fact, the fee is long gone.

Fraudulent Emails

Recently, someone sent emails to consumers that looked as if they came from the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits. The email said that the Department of Homeland Security had advised it to suspend all deposit insurance on the consumer’s bank account due to suspected violations of the USA PATRIOT Act, until the consumer verified his or her personal identity, including bank account information.  The email was a hoax, but once the scammer gets a consumer’s bank account information, unauthorized debits cannot be far behind.

Identity Theft

Identity theft occurs when someone uses personal information such as a name, Social Security number or credit card number without the consumer’s permission to commit fraud or other crimes. Identity theft is a serious crime. People whose identities have been stolen can spend months or years—and their hard-earned money—cleaning up the mess thieves have made of their good name and credit record. In the meantime, victims may lose job opportunities, be refused loans, education, housing or cars, or even get arrested for crimes they did not commit.

What Do I Do?

Attorney General Sorrell has the following suggestions on how Vermonters can protect themselves from these and other financial frauds:

• If a caller asks for your checking account number or other information printed on your check, follow the same warning that applies to your credit card number: don’t give out account information over the phone unless you are absolutely familiar with the company and agree to pay for something.
• Always review your monthly bank account statement to ensure that there are no unauthorized debits. If your statement shows a debit you did not authorize, contact your bank at once, and insist on filling out an affidavit stating that you did not consent to the debit. This allows your bank to take steps to get your money back.
• If someone tells you that you have won something, but that you need to pay something in return for it (“fees,” “taxes” or the like), don’t do it! And don’t fall for the “Nigerian” scammer’s offer to deposit millions in your bank account.
• Don’t assume that a check you have received from a stranger is good just because a bank teller says so, or because your bank tells you the check has “cleared.” And never accept a check for more than the price of an item that you are selling, with the understanding that you will send back the balance.
• If you think that your identity has been stolen, contact the fraud department of one of the three major credit bureaus to place a fraud alert on your credit file; close the accounts that you know or believe have been tampered with or opened fraudulently; and file a police report right away, keeping a copy of the report to submit to your creditors and others that may require proof of the crime.
• If you’ve been scammed, call the Vermont Attorney General’s Consumer Assistance Program (CAP) toll-free at 1-800-649-2424, or email CAP.

Last modified March 05 2013 10:10 AM