| Tips for Avoiding Foreclosure Rescue Scams |
| Watch Out for These Scams |
| How to Protect Yourself |
| Where to Find Help |
| Online Security |
| Fake Check Scams |
| Telemarketing Fraud |
| To Avoid Insurance Fraud |
Comptroller of the Currency (OCC)
Consumer Tips for Avoiding Foreclosure Rescue Scams
Foreclosures are increasing nationwide, and so are scams that promise to “rescue” homeowners from foreclosure. What these scams do is take your money, ruin your credit record, and wipe out any equity you have in your home.
Foreclosure con artists take advantage of people who have fallen behind on their mortgages and face foreclosure. Con artists know that people in these situations are vulnerable and likely to be desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes. After reading such notices, con artists approach their targets in person, by mail, over the telephone, or by e-mail. They advertise their services on Web sites or publications. They often refer to themselves with titles that sound official, such as “foreclosure consultant” or “mortgage consultant,” and market themselves as a “foreclosure service” or “foreclosure rescue agency.”
Your mortgage lender – or any legitimate financial counselor – can help you find real options to avoid foreclosure. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. To protect yourself, follow the recommendations contained in this Consumer Advisory.
WATCH OUT FOR FORECLOSURE RESCUE SCAMS
* Lease-Back or Repurchase Scams – Be very suspicious if someone offers to pay your mortgage and rent your home back to you. This scheme often involves signing the deed to your home over to the con artist. The con artist may promise to sell your home back to you, but this may be very difficult, if not impossible, under the terms of the contract.
Signing over the deed gives the con artist the power to evict you, raise your rent, sell the house, or steal the equity you have in your home. You will still be responsible for your mortgage, so if the con artist stops paying it, your lender would have the right to foreclose on your home, and the foreclosure and any other problems would go on your credit record.
* Refinance Fraud – Look out for people posing as mortgage brokers or lenders and offering to refinance your loan so you can afford the payments. Con artists may trick you into signing over the ownership of your home by saying that you are signing documents for a new loan.
Signing over the deed to your home exposes you to the dangers described above. Even if you are a victim of fraud, you could still lose your home.
* Bankruptcy Schemes – Several scams attempt to abuse the bankruptcy laws. For example, a con artist may ask you to give a partial interest in your home to one or more persons. Each holder of a partial interest can then file bankruptcy, one after another. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan. In another kind of scam, a con artist may offer to obtain refinancing or negotiate a payment plan with your lender. If you may make payments to the con artist, he or she may keep the money rather than pay the lender on your behalf. The con artist may even file a bankruptcy case in your name, without your knowledge, as a part of the scam.
Bankruptcy laws provide important protections to consumers. Scams can only temporarily delay foreclosure, and they may keep you from using bankruptcy laws legitimately to address your financial problems. Signing over ownership of your home, or even partial ownership, can result in serious financial harm.
HOW TO PROTECT YOURSELF FROM SCAMS
* Know what you are signing. Read and understand every document you sign. If a document is too complex, seek advice from a lawyer or an approved, trusted financial counselor. Never sign documents with blank spaces that can be filled in later. Never sign a document that contains errors or false statements, even if someone promises to correct them later.
* Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all contracts you sign.
* Make your mortgage payments directly to your lender or the mortgage servicer. Do not trust anyone else to make mortgage payments for you.
* Be very careful about signing over your deed. Foreclosure scams often require you to sign over ownership of your home to a con artist or another third party. Never sign over your deed without getting the advice of your own lawyer, financial advisor, or other independent person that you know you can trust. Understand the terms of the deal you are making. By signing over your deed, you lose your rights to your home and any equity built up in the home.
* Report suspicious activity to the Federal Trade Commission and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
HOW TO FIND LEGITIMATE HELP FOR
YOUR FINANCIAL PROBLEMS
* Contact your mortgage lender or mortgage servicer as soon as you think you are unable to make your mortgage payment. Lenders are often in the best position to help, especially if you are current on your loan or not seriously late on your payments. Your mortgage lender or mortgage servicer may be able to identify options to help you bring the loan current or to modify your loan.
* Contact a legitimate housing or financial counselor to help you work through your financial problems. To find one:
*Call (800) 569-4287, or visit www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm to find counselors approved by the U.S. Department of Housing and Urban Development (HUD).
*Call the Homeownership Preservation Foundation at (888) 995-HOPE, or visit www.995hope.org, to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.
For additional information you can also visit:
Federal Trade Commission, www.ftc.gov/index.shtml
Finally, if you have a complaint or question involving a national bank and cannot resolve it directly with the bank, contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by e-mailing customer.assistance@occ.treas.gov, or by visiting www.HelpWithMyBank.gov.
Source: Comptroller of the Currency
Keep your Passwords Secret
With your password, anyone can access your account pretending to be you. Protect your passwords like you would the Personal Identification Number to your bankcards. Be especially suspicious if someone claiming to be with the company from whom you have a password asks for it — they should already have it!
* Don't create passwords that are similar to your real name, a commonly used nickname, or your online screen name. Use a phrase or a series of letters and/or numbers that you can easily remember but that would be hard for others to guess. For example, pick a phrase you can remember like "I only eat oysters on Sunday" and use the first letter of each word as your password. Replace I's with the numeral one and O's with zeros. Your password would be 10e00s.
* Changing your passwords from time to time reduces the chance that someone else might successfully impersonate you online.
* Don't store your passwords near your computer or on your desk where others might easily find them.
* If you get an email that looks like it's from your Internet Service Provider or someone else with whom you have an account asking to confirm your password, don't respond until you've checked with the company directly.
Source: National Consumer League
How do fake check scams work? There are many variations of the scam. It usually starts with someone offering to:
· Buy something you advertised for sale;
· Pay you to work at home;
· Give you an “advance” on a sweepstakes you’ve won; or
· Give you the first installment on the millions you’ll receive for agreeing to transfer money in a foreign country to your bank account for safekeeping.
The scammers often claim to be in other countries and say it’s too difficult to pay you directly, so they’ll have someone in the U.S. who owes them money send you a check or money order. The amount of the check or money order may be more than you’re owed, so you’re instructed to deposit it and wire the rest to the scammer or to someone else. In some cases, the scammer promises to transfer money directly to your bank account. You provide your account information for an electronic fund transfer. Instead, the crook sends your bank a phony check or money order with instructions to deposit it in your account. When you check your balance, it looks like the funds have arrived. Whatever the set-up, the result is the same — after you’ve wired the money, you find out that the check or money order has bounced.
Source: National Consumers League
According to the National Consumers League's National Fraud Information Center, nearly a third of all telemarketing fraud victims are age 60 or older. Studies by AARP show that most older telemarketing fraud victims don’t realize that the voice on the phone could belong to someone who is trying to steal their money.
Many consumers believe that salespeople nice young men or women simply trying to make a living. They may be pushy or exaggerate the offer, but they’re basically honest. While that’s true for most telemarketers, there are some whose intentions are to rob people, using phones as their weapons. The FBI says that there are thousands of fraudulent telemarketing companies operating in the United States. There are also an increasing number of illegal telemarketers who target U.S. residents from locations in Canada and other countries.
It’s difficult for victims, especially seniors, to think of fraudulent telemarketers’ actions as crimes, rather than hard sells. Many are even reluctant to admit that they have been cheated or robbed by illegal telemarketers.
THE FIRST STEP in helping older people who may be targets is to convince them that fraudulent telemarketers are hardened criminals who don’t care about the pain they cause when they steal someone’s life savings. Once seniors understand that illegal telemarketing is a serious crime—punishable by heavy fines and long prison sentences—they are more likely to hang up and report the fraud to law enforcement authorities. They can help catch the crooks and put them in jail—where they belong.
THE SECOND STEP in fighting telemarketing fraud against seniors is to understand why they are particularly vulnerable. It’s a myth that victims are incompetent, lonely, or isolated. In fact, AARP research shows that many older victims are active people who are simply lured by false promises of great deals or ways to add to their "nest eggs." Fraudulent telemarketers take advantage of the fact that:
· It’s difficult to tell whether someone is legitimate. Good salespeople are convincing, but so are crooks. They use many of the same sales tactics—being friendly, getting people excited, creating a sense of urgency;
· Seniors tend to be trusting. Since they have difficulty imagining that some telemarketers are criminals, they’re more likely to give them the benefit of the doubt;
· It’s easy to wear people down. Seniors are targeted relentlessly—some get more than 20 calls a day from scam artists. They may also receive dozens of mailings every week asking them to call about sweepstakes and other offers;
· We all want to believe. Who doesn’t want to win a valuable prize, take a free trip, or strike it rich on an investment? People want to believe that it’s their lucky day, and may react with anger or suspicion when others question their optimism; and,
· It’s hard to hang up. Many seniors feel that it’s impolite to hang up on people. Swindlers know how to take control of the conversation and are prepared to tell any lies necessary to keep potential victims on the phone.
THE THIRD STEP is helping older people recognize the "red flags" of fraud:
· A promise that you can win money, make money, or borrow money easily;
· A demand that you act immediately or else miss out on this great opportunity;
· A refusal to send you written information before you agree to buy or donate;
· An attempt to scare you into buying something;
· Insistence that you wire money or have a courier pick up your payment; and,
· A refusal to stop calling after you’ve asked not to be called again.
The common thread that runs through all telemarketing scams is the demand for payment upfront. Seniors need to know that:
· It’s illegal for companies that operate contests or sweepstakes to ask you to pay to enter or claim your prize or even to suggest that your chances of winning will improve if you buy something;
· It’s illegal for telemarketers to ask for a fee upfront to help you get a loan if they guarantee or strongly imply that the loans will be made;
· There is no reason to give your credit card number or bank account number to a telemarketer unless you are actually making a payment with that account; and,
· If you have to pay first before getting detailed information about the offer, it’s probably a scam.
THE FOURTH STEP is to recognize when older people have been victimized or may be in grave danger and know how to help them. Seniors may be in trouble if they:
· Receive lots of mail for contests, "free trips," prizes, and sweepstakes;
· Get frequent calls from strangers offering great deals or asking for charitable contributions;
· Make repeated and/or large payments to companies in other states or countries;
· Have difficulty buying groceries and paying utility and other bills;
· Subscribe to more magazines than anyone could normally read;
· Receive lots of cheap items such as costume jewelry, beauty products, water filters, and knick knacks that they bought to win something or received as prizes;
· Get calls from organizations offering to recover, for a fee, money they have lost to fraudulent telemarketers.
If you are trying to help an older person with a telemarketing fraud problem, don’t be critical. It could happen to anyone—con artists are very good at what they do. Encourage them to:
· Report actual or attempted fraud to the National Fraud Information Center, 800-876-7060, M-F, 9 a.m. to 5 p.m., or at www.fraud.org. That information will be transmitted to law enforcement agencies;
· Change his or her phone number if con artists call repeatedly; and,
· Change his or her bank account or credit card numbers if they have fallen into the hands of thieves.
THE FIFTH STEP in fighting telemarketing fraud is to inform older people about how to reduce the number of unwanted sales calls and mailings they receive and how to deal effectively with telemarketers.
· Avoid getting on sucker lists. Don’t fill out contest entry forms at fairs or malls—they are a common source of "leads" for con artists. Ask companies you do business with not to share your personal information with other marketers.
· Know your "Do-Not-Call" rights. Under federal law, you can tell a telemarketer not to call you again. Ask your state attorney general’s office or consumer affairs department if there is a state "Do-Not-Call" law and how it protects you.
· Know who you’re dealing with. If it’s an unfamiliar company or charity, check it out with your state or local consumer protection agency and the Better Business Bureau.
· Screen your calls. Use an answering machine, Caller ID, or other services that may be available from your phone company to help you determine who you want to talk to and who you want to avoid.
· Have a plan for speaking to telemarketers. Before you pick up the phone, know what questions you want to ask or what you want to say. Be polite, but firm. Hang up if someone refuses to answer your questions or you detect the"red flags" of fraud.
· Know that your phone number may be collected. When you call a company, your number can be displayed through Automatic Number Identification (ANI). If you have an account with the business, this enables the customer service representative to pull up your records and help you faster, but ANI can also be used for marketing purposes. Ask what information is being collected and tell the company if you don’t want to be put on a marketing list.
Resources
Better Business Bureau (BBB)
Check the complaint records of companies. Call the BBB nearest to you to find out how to reach the BBB where the company is located or use the BBB locator at www.bbb.org/BBBComplaints/lookup.asp.
Direct Marketing Association
Remove your name from telemarketing and mail lists of major companies (you’ll still hear from them if you are current customer). http://www.dmaconsumers.org/cgi/offmailinglistdave.
National Fraud Information Center
Get advice about telemarketing offers and report suspected fraud through this hotline operated M-F, 9 a.m. to 5 p.m., by the National Consumers League, 800-876-7060, www.fraud.org.
Securities and Exchange Commission
Get general advice and check the records of investment brokers and advisers, 800-732-0330 or www.sec.gov. Also check with your state securities regulator, listed in your phone book under state government or at the North American Securities Administrators Association Web site, www.nasaa.org.
Wise Giving Alliance
Check the records of national charities through this program operated by the Better Business Bureau. Visit www.give.org or call 703-276-0100.
Your state or local consumer protection agency
Ask if you have a state "Do-Not-Call" law or other telemarketing rights and get help with telemarketing complaints.
Source: National Consumers League
* Be wary of people selling insurance door-to-door and over the telephone.
* Be suspicious if, after an accident, a stranger contacts you to offer “quick cash” or recommends a particular attorney or health care provider. Report the incident to your police department.
* Don’t give your insurance identification numbers to companies you don’t know.
* Carry a disposable camera in your glove compartment. If you are in an accident, take pictures of the damage and the people involved. Ask for names, telephone numbers and driver’s license information for all those involved. Contact information for any witnesses is also a good idea.
If you suspect fraud, call the National Insurance Crime Bureau’s hotline at 1-800-835-6422. For more information, check out www.insurancefraud.org
PDF Files
How Not to Get Hooked by a ‘Phishing’ Scam
FTC
If Your Personal Information Has Been Compromised
FTC
New 'Red Flag' Requirements for Institutions and Creditors
FTC
Avoiding Getting Hooked by Phishers
National Consumer League
Avoiding Foreclosure Rescue Scams
Comptroller of the Currency
PDF Files
A Guide to Track Telemarketing Calls
National Consumer League
Don't Fall For Fake Check Scams
National Consumer League
Frauds and Scams: Protect Yourself and Your Money
Federal Reserve Bank of
San Francisco
Plastic Fraud
Federal Reserve Bank of
San Francisco
Five Steps to Help Seniors Targeted by Telemarketing Fraud
National Consumer League
Feeling up for a challenge? Then test your cyber smarts with one — or all — of our interactive quizzes below on everything from spam and spyware to phishing and file-sharing.
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OnGuard Online
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• Unsolicited offers from strangers or unfamiliar companies that sound too good to be true, including mail or phone calls proclaiming an elderly person to be the “winner” of prizes or investment “opportunities.
• Requests to send money or bank account information before a promised product or service is delivered.
• Pressure to quickly say “yes” to a proposal, especially an oral offer to sell you financial products, household equipment or home repairs that you may not really need.
• Indications of cash shortages when the elderly person should have enough money coming in.
• Checks payable to unfamiliar people or businesses for reasons that the elderly person can’t explain.
Credit Bureaus Fraud Divisions
Equifax
800-525-6285
P.O. Box 740250
Atlanta, GA 30374
Experian
888-397-3742
P.O. Box 1017
Allen, TX 75013
TransUnion
800-680-7289
P.O. Box 6790
Fullerton, CA 92634