Scam tarnishes Wells Fargo’s image

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via Bill Moak: Scam tarnishes Wells Fargo’s image

PDF: wells-fargo

Wells Fargo is one of those companies that has always just seemed to be part of the American landscape. For the past 164 years, this iconic American brand has been associated as much with the spirit of American prosperity as with its core business of banking. Even today, the Old West image of the stagecoach can be found on company signage, hearkening to the days of westward expansion.

Until last week, Wells Fargo was considered the nation’s most valuable bank, with market capitalization in the hundreds of billions of dollars and holding nearly $1.7 trillion in assets. But last week, the company’s image was significantly tarnished by a stinging rebuke from the Consumer Financial Protection Bureau.

In its announcement of the findings from a review of Wells Fargo records, the CFPB alleged the company encouraged representatives to create up to 1.5 million phony bank and credit card accounts, allowing Wells Fargo to collect unearned fees and enabling employees to inflate their sales figures so they could take home unwarranted bonuses. In addition, the CFPB charged Wells Fargo with allowing its representatives to submit unauthorized credit applications for “ghost accounts,” which then generated annual fees, interest charges and overdraft-protection charges. Among the alleged nefarious actions were creation of fake personal identification numbers and fabricated emails. Wells Fargo announced last week that it had settled the cases and this week added that all sales goals in retail banking will be eliminated at the end of the year.

“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us,” the company said in a news release. “Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request.”

In the settlement, the CFPB will pocket $100 million, with an additional $85 million earmarked for various restitution funds (and a $5 million pool specifically for customer refunds). For its part, Wells Fargo announced it had fired 5,300 employees over the past few years for engaging in questionable behavior and has mandated ethics training.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” CFPB Director Richard Cordray noted in a news release. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

Just this week, with the drop in the company’s valuation, it lost its crown of “nation’s most valuable bank” to rival JPMorgan Chase. And it’s likely this story will continue; several sources report members of Congress are already calling for an accounting of the alleged fraud and whether it had a disproportionate effect on seniors.

So, what does it mean to you, if you’re a Wells Fargo customer? For starters, if you lost money from creation of an unauthorized account, you may already have gotten a refund. Wells Fargo reports it’s already issued $2.6 million in refunds to customers earlier this year. If you haven’t, you should contact the bank to investigate it. Identity theft is another concern on the minds of many who might have been affected. Many experts suggest checking your credit report frequently by visitinghttp://annualcreditreport.com.

Debt forgiveness in store for Mississippians

via Debt forgiveness in store for Mississippians

More than 300 Mississippi consumers will soon be getting some relief in the form of forgiven debts and updated credit reports as part of a nationwide $95.6 million settlement involving debt and collection practices of retail giant USA Discounters.

Mississippi Attorney General Jim Hood and all 49 of his fellow attorneys general announced Monday they have reached a settlement agreement with Virginia-based USA Discounters after accusing the company of unfair tactics targeting military personnel and veterans. The settlement affects 320 Mississippians, to the tune of more than $887,000.

 

“Our men and women in uniform, as well as our veterans, deserve better than what they were subjected to at the hands of this company,” Hood said in a news release. “These unfair, abusive tactics meant higher prices and high interest rates for our military families, who in turn were routinely at a disadvantage because of the company’s improper debt collection practices.”

The company (which declared bankruptcy after closing all its stores in 2015) did business as USA Living and Fletcher’s Jewelers, often locating its stores near military bases. The company sold furniture, appliances, televisions, computers, smartphones, jewelry and other consumer goods, principally on credit, and — despite the name — often at inflated prices. USA Discounters typically marketed to members of the military and veterans, advertising that military, veterans and government employees would “never be denied credit for goods purchased from the retailer.”

Hood and his fellow AGs alleged the company had “engaged in unfair, abusive, false and deceptive acts and practices.” One example was that, when trying to collect on outstanding consumer debts, company employees “constantly contacted” people in service members’ chains-of-command, causing some service members to lose their security clearances and face demotions.

In addition, the states alleged USA Discounters sold overpriced household goods at high interest rates, often using the military allotment system to guarantee payment. In some cases, the company filed collection suits in Virginia courts, making it difficult for members in other areas to defend themselves in court if they were stationed at other locations.

As part of the agreement, USA Discounters has agreed to write off all accounts with balances for consumers whose last contract was before June 1, 2012, and correct the negative comment from the company on those consumers’ credit reports. In addition, the company will apply a $100 credit to all accounts for contracts dated after June 1, 2012, and correct the negative credit report comment. Those actions equal about $74 million in debt being written off or credited. The company will also write off all judgments not obtained in the correct state.

For more information on the settlement, consumers can contact the Consumer Protection Division of the attorney general’s office at 800-281-4418 or visit http://www.AGJimHood.com.

DOJ launches offensive against mail fraud

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via DOJ launches offensive against mail fraud

“If it weren’t for junk mail, I’d have no mail at all,” you might mutter to yourself on your way back from your daily trip to the mailbox. Every day, Americans are inundated with unwanted solicitations for everything from promising lower rates on loans, to letters announcing they’ve won some sweepstakes, to contests promising big payouts. While most direct mail we get is legitimate, a growing percentage is fraudulent.

Direct mail fraud is a huge international industry, costing Americans hundreds of millions of dollars each year. Seniors are especially vulnerable and often tragically are left to deal with the consequences of falling for a convincing scam.

But last week, the Department of Justice and a host of cooperating agencies in the U.S. and abroad announced a sweeping series of enforcement actions to put a stop to some of the worst offenders. The DOJ made the announcement in a lengthy news release. The coordinated counter-attack on the alleged fraudsters included a variety of strategies, including criminal charges, economic sanctions, seizure of criminal proceeds and civil injunction lawsuits to combat what the DOJ called a “global network of mass mailing fraud schemes that collectively have defrauded millions of elderly and vulnerable victims across the United States out of hundreds of millions of dollars.”

The coordinated agencies working with the DOJ include the U.S. Postal Inspection Service, the Department of the Treasury’s Office of Foreign Assets Control and other law enforcement partners. Simultaneously, a consortium of government agencies and nonprofit groups led by the DOJ’s Consumer Protection Branch and Elder Justice Initiative announced a public education campaign to heighten awareness and educate potential victims and their families about these schemes.

The actions didn’t stop at the U.S. border; agencies worked with international partners in Canada, France, India, the Netherlands, Singapore, Switzerland and Turkey.

“The defendants targeted the elderly and vulnerable by selling false promises of cash and lavish prizes,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Not surprisingly, the only good fortune befell the defendants. We will employ every available means, including educating consumers, to protect the public from these schemes.”

“The mail schemes involve a complicated web of actors located across the world and each scheme follows a similar pattern,” the DOJ’s news release reported. “Fraudulent direct mailers create letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune. In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee or taxes. The letters appear to come from legitimate sources, typically on official-looking letterhead, and — even though they are in reality identical form letters — the letters appear to be personally addressed. Some solicitations even use fonts that appear to be handwritten.”

Targets included an India-based printer that manufactures the solicitations and arranges for bulk shipment to U.S. victims; list brokers who buy, sell or rent lists of victims from one mailer to another so once a victim has fallen prey to one scheme, others are able to target this victim; and a Canadian payment processor that, for more than 20 years, has helped dozens of international fraudsters gain access to U.S. banks and take money from victims.

“The Civil Division’s Consumer Protection Branch is working with international and domestic law enforcement through the International Mass-Marketing Fraud Working Group to dismantle these complex frauds through both civil and criminal actions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “And we will continue to work with federal partners and non-governmental organizations to educate the public about this threat to vulnerable consumers.”

Of particular interest to investigators was PacNet Services Ltd., described as an international payments processor and money service business based in Vancouver, Canada. PacNet was tagged as a “significant transnational criminal organization, resulting in freezing of its assets and making them off-limits to any U.S. firms.

This is one of the largest fraud busts in U.S. history and will doubtless remove at least some of those seeking to prey on vulnerable people. But you and I can do our part as well. By becoming aware of the signs that a piece of mail might be fraudulent, we can stop the problem before it starts. If you get a solicitation in the mail, proceed carefully. Never provide your personal information, bank account information or credit card numbers to anyone unless you initiate the transaction. And never, ever pay any money to someone who says you’ve won a sweepstakes or prize promotion.

Educate yourself about how to identify these scams. Ultimately, the best defense against scammers is an informed consumer.

ATM Skimmers on the rise

via Moak: Crooks target ATMs, clarionledger.com

PDF: Skimming

mainatmsafetytips

Bankofutica.com

Recently, media across the nation covered a story that should strike fear into the heart of anybody who uses an ATM card to withdraw cash from automated teller machines. Thieves have learned to use “skimming” technology to great effect, enabling a six-fold increase in the amount of ATM fraud in just one year.

Moak: Millennials are card smart

The phenomenon had been reported by FICO Card Alert Service, part of the organization behind those ubiquitous credit scores. According to the organization, the one-year increase was the biggest since it started keeping tabs on ATM fraud. FICO Card Alert Service monitors hundreds of thousands of ATMs across the nation.

“Criminals are taking a quick-hit approach to ATM theft and card fraud,” said T.J. Horan, vice president of fraud solutions at FICO, in a blog post. “They are moving faster to make it harder for banks to react and shut down the compromises. They are targeting non-bank ATMs, which are more vulnerable — in 2015, non-bank ATMs accounted for 60 percent of all compromises, up from 39 percent in 2014.”

ATM skimming isn’t exactly new; it’s been around for at least a couple of decades. The technology has gotten better and harder for most of us to detect, but it usually involves placing an illegal card-reading device on an ATM. Consumers unwittingly swipe their cards through the reader, capturing the card’s electronic information. Then, tiny cameras hidden nearby record consumers’ fingers as they enter their personal identification numbers. Equipped with those two pieces of information, crooks can then create fake cards, which can then be used to drain your bank account.

According to FICO, the most vulnerable ATMs were located in places like bars and convenience stores (these machines saw a 10-fold increase in theft from 2014 to 2015.) Often, consumers don’t pay a lot of attention to the ATM itself, and assume the machine is secure. And if it’s in a loud place with dim lighting — like a casino, bar or busy restaurant — it might be harder to determine the presence of skimming equipment. In some places, the lack of video surveillance may encourage crooks to target that location.

And while many consumers have been — or will soon be getting — new cards with “smart chips” that are usually more secure, most cards still use the old magnetic-strip technology that’s easier to compromise. If you have been a victim, you generally can get your money back, but you need to report it as soon as possible so your funds can be restored quickly.

Moak: Banks better at thwarting fraud

To avoid being victimized by skimming fraud, FICO Card Alert Services suggests the following:

  • If an ATM looks odd, or your card doesn’t enter the machine smoothly, consider going somewhere else for your cash. A location inside a bank branch is less likely to have been compromised, although some have been.
  • Contact your card issuer if you have completed a transaction and suspect that your card or PIN may have been compromised.
  • Check your card transactions frequently, using online banking and your monthly statement, and quickly challenge anything you didn’t authorize.
  • Ask your card provider if it offers account alert technology that will deliver SMS text communications or emails to you in the event fraudulent activity is suspected on your payment card.
  • Update your address and cellphone information for every card you have so you can be reached if there is ever a critical situation that requires your immediate attention.

Banks better at thwarting fraud

(fraud).

via Moak: Banks better at thwarting fraud, clarionledger.com, 2/3/2016

PDF: Banks getting better at fighting fraud

Banks are usually pretty peaceful places. Visit a local branch, and you will probably find a calm environment, hopefully with friendly people and nice surroundings. But behind the scenes of most banks, a constant battle against fraud is raging. Constantly, people are attempting to commit all types of bank fraud, and all banks work hard to ensure most of these fail. And fail they do, most of the time.

On Wednesday, the American Bankers Association issued an amazing statistic: During 2014, U.S. banks stopped more than $8 of every $10 of attempted deposit account fraud. That information was included in a report with the ponderous title of the 2015 American Bankers Association Deposit Account Fraud Survey Report.The survey included data from 101 banks nationwide.

According to the ABA, fraudsters attempted $13 billion in bank fraud, and bank security measures were credited with stopping $11 billion which might have been stolen.

“Banks’ sophisticated fraud prevention systems and customer vigilance successfully stopped 85 percent of fraud attempts in 2014,” said Doug Johnson, senior vice president, payments and cybersecurity policy at ABA. “We saw an increase in fraud losses in 2014 most likely due to the number of large-scale retailer data breaches, which resulted in a significant increase in attempted debit card fraud.”

Since banks bear much of the financial responsibility when fraud occurs, it’s a big problem. Even with an 85 percent success rate, fraud against bank deposit accounts cost the industry $1.9 billion in losses during 2014, an increase from $1.7 billion in 2012.

Much of that fraud (66 percent) was incurred on debit card accounts, such as counterfeit cards, card-not-present transactions, and lost or stolen cards. Paper check fraud still accounted for nearly a third of the remainder, even though the use of paper checks is declining as electronic transactions increase. The most common check fraud categories were counterfeit checks and return deposited items. The rest involved wire and other types of electronic banking.

Apparently, though, online security is getting better. Even as thieves attempted to defeat online security measures, they were thwarted more often, leading to a “significant” drop in losses during the year; your chance of being affected by online banking fraud is fewer than 1 in 1,000.

“Banks recognize that many customers are moving online to perform banking transactions and have invested billions of dollars to create very effective online fraud prevention systems that include features like multi-factor authentication and monitoring IP addresses,” Johnson noted.

To help make sure you don’t become a victim of bank fraud, the ABA recommends these tips:

  • Don’t share your secrets. Don’t provide your Social Security number or account information to anyone who contacts you online or over the phone. Protect your PINs and passwords and do not share them with anyone. Use a combination of letters and numbers for your passwords and change them periodically. Do not reveal sensitive or personal information on social networking sites.
  • Shred sensitive papers. Shred receipts, bank statements and unused credit card offers before throwing them away. (A number of organizations periodically offer community shredding events, in which they’ll destroy your documents for free.)
  • Monitor your accounts regularly. Rather than waiting for your monthly statement, use online banking to monitor transactions on your account regularly. If you see a fraudulent transaction, notify your bank immediately.
  • Sign up for text alerts. Sign up for text or email alerts from your bank for certain types of transactions, such as online purchases or transactions of more than $500.
  • Protect your mobile device. Use the passcode lock on your smartphone and other devices. This will make it more difficult for thieves to access your information if your device is lost or stolen. Before you donate, sell or trade your mobile device, be sure to wipe it using specialized software or using the manufacturer’s recommended technique. Some software allows you to wipe your device remotely if it is lost or stolen. Use caution when downloading apps, as they may contain malware and avoid opening links and attachments — especially for senders you don’t know.
  • Keep an eye out for missing mail. Fraudsters look for monthly bank or credit card statements or other mail containing your financial information. Consider enrolling in online banking to reduce the likelihood of paper statements being stolen. Also, don’t mail bills from your own mailbox with the flag up.
  • Monitor your credit report. Order a free copy of your credit report every four months from one of the three credit reporting agencies at annualcreditreport.com.
  • Protect your computer. Make sure the virus protection software on your computer is active and up to date. When conducting business online, make sure your browser’s padlock or key icon is active. Also look for an “s” after the “http” to be sure the website is secure.
  • Report any suspected fraud to your bank immediately.

For more on stopping bank fraud, visit http://www.aba.com.

Safeguarding against tax identity theft

Tax fraud image with grunge effect

via Moak: Safeguarding against tax identity theft, clarionledger.com, 1/22/2016

In February of last year, many consumers filed their tax returns, eagerly awaiting the refund that was sure to come. But when they went to file their taxes, they got an unwelcome surprise: someone had already gone in and filed returns in their name, in the process swiping their refunds electronically.

It turned out identity thieves had stolen information from 2013 tax returns, then used that information to file new returns in 2015. Both federal and state returns were affected. Once the fraud had been detected (according to the Wall Street Journal), several states shut down their tax return processing for a few days, and Intuit, owner of the self-tax-filing company Turbotax, temporarily halted filing of state returns.

As of May, the Internal Revenue Service (IRS) reported that it had identified more than 163,000 fraudulent returns, and was able to halt $787 million from going into the hands of scammers.

The brash action caught nearly everybody by surprise, but the issue had been on the radar of the IRS for years. According to the IRS, the agency had been following a major increase in tax identity theft cases, with the number of IRS investigations surging from 276 in 2011 to 1,492 in 2013. The IRS noted that its investigations into tax identity theft sent people to prison about 85 percent of the time in 2013, and that the number of fraud cases had been cut in half from 2013 to 2015 (the IRS credited its aggressive enforcement for the drop.)

There are some signs that this year will see its share of tax-related ID theft. Already, two states (Illinois and North Dakota) have announced they will be delaying processing of refunds because of fraud concerns.

But fake filing is not the only way scammers try to get their mitts on your hard-earned money: they also deceive thousands of consumers each year by calling and claiming to represent the IRS or another federal agency such as the Social Security Administration. In total, tax identity theft accounted for nearly a third of identity theft complaints to the Federal Trade Commission, generating about 109,000 complaints.

To help raise awareness of how to protect us from tax identity thieves, the FTC and other agencies will be holding Tax Identity Theft Awareness Week during Jan. 25-29. The event will try to increase awareness that there is a single point for information about identity theft called Identitytheft.gov.

The events will be coordinated across multiple agencies and organizations, including the FTC, IRS, AARP’s Fraud Watch Network, the Department of Veterans Affairs and others. Activities will include webinars, Twitter chats and events across the nation. For a list of events, visit ftc.gov/taxidtheft.

In the meantime, the IRS suggests these actions to help prevent a repeat of last year’s theft events:

  • Always use security software with firewall and anti-virus protections, and strong passwords.
  • Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card companies and even the IRS. Neither the IRS nor any federal agency will call you or email you to request financial or personal information.
  • Don’t click on links or download attachments from unknown or suspicious emails.
  • Protect your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure.

In general, if you file for a refund, but get a notice that a return has already been filed, you should report the crime immediately to the IRS at 800-908-4490. Also, once the crime has been confirmed, it’s a good idea to have a fraud alert placed on your credit reports, to avoid problems later and to prevent further theft. You can learn how by visiting http://www.consumer.ftc.gov/articles/0008-tax-related-identity-theft

Fraud, ID theft top consumers’ nightmares, studies find

Clarionledger.com, 9/28/2015

PDF: Studies – Consumers fear fraud, ID theft

Americans are gearing up to do battle on their doorsteps this weekend. The foe takes the form of tiny superheroes, movie baddies and zombies demanding candy. It’s OK, though; we know that underneath the masks are sweet kiddies, not real monsters. But increasingly, many people are worried about the real threats that lurk under the bed – ghouls who can take your life savings with a keystroke, derail your carefully-laid plans for retirement or your kids’ education, or even destroy your reputation.

Within the past week, news of two separate studies (from Bankrate.com and the American Bankers Association) hit my inbox, highlighting the fact that Americans are worried about their financial and information security and feel vulnerable to predators.

Much of the angst stems from recent data breaches, which have exposed the security vulnerabilities in a system trusted to protect vital information. Hardly a day goes by that we don’t hear about some new breach, whether it’s customer contact information, credit card numbers, or embarrassing publication of names from sites like Ashleymadison.com. All this bad news is eroding our trust in the financial system at a time in which technology should be giving us more security than ever.

According to Bankrate’s study, nearly eight in 10 Americans worry about having their identity stolen. Nearly a quarter of consumers described themselves “very frightened” about the prospect of identity theft.  Then there’s this shocking claim: about half of Americans (46 percent) report that they’ve either been a victim of identity theft or know someone who was. That’s up significantly (12 percent) from just a few years ago.

While about one in five consumers (many of them Millennials) appear oblivious to or unconcerned about the threat, many have taken it seriously. Many in the Bankrate.com study say they aren’t checking their credit reports regularly, and 41 percent say they conduct banking and other sensitive tasks on unprotected Wi-Fi networks that don’t require a password. Both of these activities could help detect fraud, or prevent it from happening in the first place.

“When asked where cardholders feel most vulnerable to fraud following a credit card purchase,” the ABA’s study concluded, “64 percent say they are most concerned about hackers breaking into retailers’ computer systems, compared to just 16 percent who cite physical card theft and 13 percent who cite “phishing” scams.”

Similarly, the ABA study found that many worried consumers are holding the system responsible. Nearly eight in 10 consumers believe the government should “hold retailers, banks and other companies involved in the payments system to the same security standards.”

“Millions of Americans have had their most sensitive information compromised in retailer data breaches, so it’s understandable that consumers are concerned that retailers aren’t doing more to prevent future hacking incidents,” said Doug Johnson, ABA’s senior vice president of payments and cybersecurity policy. “These survey results reaffirm what we’ve believed all along.  Retailers need to join with banks and payment networks to combat fraud and focus on the future by updating their payment security systems and proactively working to address emerging threats head-on.”

The recent card conversion was part of a “liability shift” for credit and debit-card fraud, in which merchants could bear the cost of fraud if they don’t take sufficient steps to secure the data. Previously, such liability was borne almost exclusively by banks and the financial system.

That’s especially true with the recent conversion to new card reader (EMV) technology; the messy transition has confused customers and reinforced existing security concerns. “Following high-profile data breaches at major retailers including Target and Home Depot, 94 percent of consumers say it is important for retailers to upgrade their security controls, and 70 percent say retailers should be installing EMV chip-enabled card readers as soon as possible,” the ABA noted.

But many merchants and industry groups have protested that the new technology – while a step in the right direction – is vulnerable because it doesn’t take full advantage of the security features available, besides being expensive and difficult to implement. For example, the new EMV cards still in many cases don’t require the use of a PIN, a feature which could enhance security.

The National Retail Federation (NRF) and other industry groups have been vocal about these concerns. “EMV is all new to me, and banks and the networks are not contacting small businesses to help the transition in any way,” noted small business owner Keith Lipert, who recently testified before Congress on behalf of the NRF to protest the new requirements. “No one from my bank, processor or existing supplier even contacted me about the need to add a new EMV device, let alone a deadline by which to do so.”

The NRF’s David French recently stated that credit and debit card fees are the second-largest expense for many small businesses after labor, and that the card industry imposes “a multitude of complex rules on small businesses.” Chip-card readers and installation can vary from “a few hundred dollars to thousands of dollars” per terminal, he said, with an industry average of $2,000.

Whatever the outcome of this battle will be, consumers are looking for a hero to protect them from the very real monsters that wait to prey upon their livelihoods, identities and futures. So far, said hero remains out of sight.

Online daters warned to watch for predators

If you’re lonely, “looking” or just trying to find some companionship, you’re probably familiar with online dating sites. Well-funded companies are spending millions on advertising that promises you can find your soulmate, showing dreamy pictures of happy couples. Their lure is the chance to find that “special someone” to share your hopes and dreams, and Americans pay up big. Online dating has become a huge industry worth more than $2 billion.

While there are indeed true success stories out there in the online dating world, on the other side of the glitzy ads is a much-darker reality; online dating has become a feeding ground for predators, looking to separate you from your money. Often, criminals troll social media sites and chat rooms, falsely claiming to be Americans traveling or working abroad. According to the FBI, their most common targets are women over 40 who are divorced, widowed and/or disabled, but every age group and demographic is at risk.

The FBI reports that the typical dating scammer will contact a potential target, expressing interest. Often, their profile and photo match nearly perfectly with what you’re looking for, piquing your interest. Contact can go back and forth for weeks or months, establishing a bond of trust. Eventually, though, he or she asks you to send money, tugging at your heartstrings with a tale of calamity.

But sending money only ensures you will get more requests. They may ask you to cash checks for them, or to forward packages. All the while, you’re becoming further entangled in a web of lies, and in some cases you may become an unwitting accomplice to other illegal activities.

In one scam reported to the FBI, victims met someone on an online dating site and then were asked to move the conversation to a particular social networking site, where the talk often turned intimate. Victims were later sent a link to a website where those conversations were posted, along with photos, their phone numbers and claims that they were “cheaters.” In order to have that information removed, victims were told they could make a $99 payment — but there is no indication the other side of the bargain was upheld.

Americans lose an estimated $81 million per year through this or similar scams. The industry has been struggling to catch up, but it’s not been fast enough for at least one organization.

Recently, AARP has called on the online dating industry to better protect its members and has organized a petition drive to demand changes to the industry. Once completed, the petition will be sent to the top online dating websites: Match.com, eHarmony, Plenty of Fish, Zoosk, OK Cupid, SeniorPeopleMeet and Our Time.

Individual scammers and highly organized groups attempt to steal hearts and wallets from online dating site users every day,” Kelly Cress, interim state director of AARP Mississippi, said in a news release. “The sites don’t yet do enough to protect their members from known scammers. Our petition asks the companies to take commonsense steps to help put a stop to the scammers’ abilities to prey on the unsuspecting.”

The AARP has urged the online dating industry to implement a series of steps advocated by its Fraud Watch Network, including employing algorithms to detect suspicious language patterns used by scammers, searching for fake profiles across multiple dating websites, issuing alerts to any member who has been in contact with someone using a fraudulent profile; and educat­ing members with tips on how to avoid romance scammers.

But while we wait for the industry to enact stronger safeguards, AARP suggests there are things you can do to help avoid the risk of becoming a victim. First, use Google’s “search by image” feature to see if that person’s image shows up in other places using a different name. And if an email from a potential suitor seems suspicious, cut and paste it into Google and see if the words pop up on any romance scam sites. And the FBI suggests watching for these red flags. It may be a scam if your online date:

  • Presses you to leave the dating website you met through and to communicate using personal email or instant messaging.
  • Professes instant feelings of love.
  • Sends you a photograph of himself or herself that looks like something from a glamour magazine.
  • Claims to be from the U.S. and is traveling or working overseas.
  • Makes plans to visit you but is then unable to do so because of a tragic event.
  • Asks for money for a variety of reasons, which may include travel, medical emergencies, hotel bills, hospitals bills for child or other relative, visas or other official documents or losses from a financial setback or crime victimization.

It you believe you’ve been victimized by a dating scam or any other online scam, file a complaint with our Internet Crime Complaint Center (www.ic3.gov). You can sign the AARP’s online petition and get more tips at http://tinyurl.
com/qynebb8.

Originally published in the Clarion-Ledger on 6/11/2015.

Retailers preparing to deal with return fraud

Originally published in the Clarion-Ledger on 12/22/2014.

PDF:Moak_ Retailers preparing to deal with return fraud

The aftermath of Christmas morning likely will be the same in households across America. The floor will be littered with torn wrapping paper, twist ties and bits of cardboard. The kids will have retreated to their rooms (or outside if the weather’s agreeable). Exhausted parents will have settled down for an afternoon nap as neighborhood kids whiz by on their new bikes and motorized scooters.

It’s not really over, though. That rumbling sound you hear isn’t just your turkey-weary stomach; it’s Christmas’ second act, as retailers hunker down for the crush of holiday returns. As consumers decide they’d rather return that ridiculous tie and use the money for something they actually want, shoppers line up in droves. And stores will be ready, with return policies in place. Most people return items in good faith, but increasingly, stores find their holiday profit margins being nipped away at by what’s known as “return fraud.”

The National Retail Federation has just released the results of its 2014 Return Fraud Survey, which asked 60 major retailers to estimate how much money they’ll lose from fraudulent returns. The result: Fraudulent returns will cost businesses about $3.6 billion this holiday season. Increasingly, criminals are getting more sophisticated as they learn how to take advantage of stores’ generous return policies.

Fraudulent returns include several practices, such as returning stolen merchandise for cash or store credit, using counterfeit receipts or fake payment methods. Another increasing concern is “wardrobing,” when consumers buy an item, use it, and then return it, never intending to keep it in the first place. Sadly, much of the crime is an inside job, with more than 80 percent of retailers reporting employee collusion with thieves (that statistic is down a little since last year, one of the few bright spots in the survey.)

“Today’s sophisticated technology does well keeping criminals at arm’s length but often isn’t enough to completely stop the unethical practices of organized and individual retail fraud occurrences,” said NRF Vice President of Loss Prevention Bob Moraca. “Return fraud has become an unfortunate trend in retail thanks to thieves taking advantage of retailers’ return policies to benefit from the cash or store credit they don’t deserve. Additionally, many of these return fraud instances are a direct result of larger, more experienced crime rings that continue to pose serious threats to retailers’ operations and their bottom lines.”

That’s right; he was referring to organized crime. More 3/4 of those polled (78.2%) say they have experienced return fraud through returns by organized retail crime groups, up from 60.3 percent last year.

The rapid growth of wardrobing has gotten the attention of retailers; nearly three-quarters of retailers polled say they have experienced wardrobing in the past year, up from 62.1 percent last year.

All of these statistics point to an inevitable conclusion for consumers: stores are tightening their return policies, making it harder to return anything. Most stores now require you to provide identification if you are returning something, even if you have the original receipt.

Last year, Consumer Reports published some tips to keep in mind to decrease the unpleasantness of returning items. Here are a few of their suggestions:

Be sure before you open that box: Merchants can impose a restocking fee (often 15 percent of the product’s cost), and many do for electronics items. Products such as computer software, CDs, and DVDs aren’t generally returnable once they’re opened. It might also be hard to return products with damaged packaging or missing tags.

Keep all gift receipts: These days, more merchants will turn you away if you don’t have a receipt. If you didn’t get a gift receipt with a product you want to return, you may be out of luck, unless you’re prepared to ask the giver for the receipt.

Check store return procedures online and note any time limits: Big merchants usually allow 90 days for returns of most items but might have far shorter periods for electronics, software, and CDs and DVDs. During the holidays, however, some retailers will extend their deadlines.

Bring your ID: Some companies require a government-issued ID with a receipt. That way, they can track serial returners even if the transaction is in cash.

Know your options: If an item was purchased online and the merchant has walk-in store locations, check the merchant’s website to see if you can return it at a store and avoid repacking and a trip to the post office, as well as shipping fees.

Counterfeit tires hit U.S. market

I was perusing Consumer Reports’ website and came across an interesting headline: Counterfeit tires pose consumer risk:. It seems that at least one shipping container of Chinese-made knockoff tires have been distributed in the U.S. This is an alarming development on many levels.

Of course, we have all heard about counterfeit goods; the proliferation of fake Rolexes and CDs are well-known, and law enforcement occasionally announces that a counterfeiting ring has been smashed. Until recently, though, you just didn’t hear about someone making knockoffs of tires. Since tires are a high-cost item, and greed is a powerful motivator, someone has decided it’s worth the risk. But unlike fake handbags, substandard tires could cost you much more than embarrassment; they could be deadly.

Consumer Reports issued the alert on Monday to warn consumers that the tires may not be all they’re cracked up to be. Following an investigation highlighting just how complicated it can be to determine the birthplace of a product, the organization has raised a new concern for consumers. Consumer Reports began investigating the phenomenon earlier this year when they tested several tires. The organization tests tires on a regular basis, but this was the first time they had included Chinese-made tires in their tests. During testing, Consumer Reports’ investigators found that one particular brand of tire (Pegasus Advanta SUV, which sold for $95) scored the lowest among all the brands. After the ratings came out and showed the tires tested poorly in a couple of key areas, the American company that owns Pegasus (Arizona-based American Pacific Industries, or API) contacted Consumer Reports to find out their testing methodology. API also asked for the data codes from the tires being tested, and quickly responded that they didn’t make them.

It turns out that API had been manufacturing tires under contract with a Chinese company, but when the contract ended and the factory was destroyed in 2012, some of the molds used to make the tires went missing.  It appears now that someone took the molds, may have used them to make new tires, then exported them to the U.S. under the Pegasus brand.

Consumer Reports notes that one retailer, Economy Tire, allegedly bought a “single container of 400 to 500 tires.” But when investigators tried to follow the trail back to China, it went cold. The result was a lot of finger-pointing; no one wanted to take accountability. The National Highway Traffic Safety Administration reported that no issues regarding the tires have been brought to their attention. For its part, API says it is pursuing “active litigation” against the company it thinks produced the tires.

So what’s the upshot for consumers? Be careful. Since tires are one of the most important safety features on your car, buy as much quality as your budget can afford. And while you may find cheaper prices on the Internet, doing business with local shop with a good reputation is a good hedge against possible counterfeiting. Consumer Reports recommends that you check any tires carefully and regularly for wear and proper inflation. Look for bulges, cracks or signs of abnormal wear. If you do see any abnormalities, report them to the seller from which you purchased them.