IRS scams starting early this year

via IRS scams starting early, clarionledger.com

PDF: IRS Scams off to early start 1IRS Scams off to early start 2

As each new year begins, so does tax-scam season. Consumer watchdogs, regulatory agencies and consumer writers like me start warning people about tax cons. Usually, we start ringing the warning bells sometime in January. But this year, Mississippi Attorney General Jim Hood is sending out an early warning about scammers seeking to swindle you out of your tax refunds or scaring you into sending money.

Few things strike fear into the heart of John Q. Taxpayer as a call or urgent letter from the IRS, demanding payment. And of course, crooks know this and are looking to cash in. This week, Hood’s office sent out a news release revealing that they’d received recent reports from Mississippi consumers who were contacted by people claiming to be with the Internal Revenue Service or Treasury Department and demanding payment.

“These con artists are intimidating and sound convincing and can even alter the caller ID to make it look like the IRS is calling,” Hood warned. “The number one thing to remember is that if the IRS needs to contact you, they’ll do it by postal mail first, and they will not threaten to arrest or sue you.” Hood added that the callers usually use frightening language such as, “This is your official final notice — the IRS is filing a lawsuit against you.”

“The caller claims the consumer owes money to the IRS and insists that it be paid promptly through a pre-loaded debit card or wire transfer,” he said. “If the victim refuses to cooperate, the scammer threatens the victim by stating that he or she will be arrested or that a lawsuit will be filed against them.”

Hood recounted another version of the scam, in which the scammer claims the victim has a refund available, but need a bank account number or other private information to process and deposit it. Often, the caller leaves an “urgent” callback request. Crooks have also been known to use fake names and bogus IRS badge numbers.

If you think you owe the IRS any amount, call (800) 829-1040 to get advice on payment. If you get such a call, and know you don’t owe anything, report the incident to the Treasury Inspector General for Tax Administration at (800) 366-4484 or visit www.tigta.gov.

Here are some other tips, courtesy of Hood’s Office of Consumer Protection:

  • Don’t answer the phone for a number you don’t recognize or that shows up as your own. If you do answer, hang up as soon as you realize it is a scam. Even answering simple questions in the affirmative or negative could be used to try to scam you.
  • Be suspicious of anyone who is vague or evasive in identifying themselves.
  • Never wire or send money in any form to unfamiliar people or organizations.
  • Don’t give out personally identifiable information; it could expose you to identity theft.

If you suspect your personal information has been compromised or think you’ve been a victim of fraud, identity theft or any other scam, call the Consumer Protection Division at (800) 281-4418. For more tips, visit http://www.ago.state.ms.us/releases/ag-hood-reminds-mississippians-of-fake-irs-collectors/.

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Dietary supplements not always what they claim

via Dietary supplements not always what they claim, clarionledger.com

PDF: Supplements 1Supplements 2

Americans spend billions of dollars each year on dietary supplements, touted to relieve everything that could possibly be wrong with you. The National Institutes of Health’s Office of Dietary Supplements estimates that, in 2014, Americans spent nearly $37 billion on these products, with much of that money going toward products promising to help you lose weight, build muscles, increase sexual function and ease pain (among many others).

But increasingly, consumer advocates and regulators are warning that the marketing claims made by some of these products are questionable, if not patently false. Recently, federal regulators put the brakes on schemes by three Florida-based companies that they accused of deceptively marketing and selling dietary supplements, promising relief for a wide range of ailments.

According to the FTC’s complaint, NextGen Nutritionals, Strictly Health and Cyber Business Technology and their owners made false or unsubstantiated representations for five dietary supplements including BioMazing HCG Full-Potency Weight-Loss Drops, Hoodoba diet pills, Fucoidan Force (touted to fight cancer, HIV/AIDS and even high cholesterol), Immune Strong (claimed to be able to strengthen the immune system), and VascuVite (for blood pressure). Ads for the products appeared on a variety of websites.

The FTC took issue with a number of specific claims for each product, accusing the companies of making unsubstantiated claims, not backed by adequate scientific evidence, and accused the companies of posting a “Certified Ethical Site” seal on several of their websites, which directed consumers to “click to verify.” “Consumers who clicked on the seal were taken to another website claiming that defendants’ website had been verified as ‘ethical’ and ‘trustworthy’ by Ethical Site, ‘the most reliable evaluator of trust in the online marketplace,’” the FTC alleged. In fact, the agency noted, Ethical Site was not an independent third-party certification program, but was in fact owned and controlled by the company’s owners.

In addition to ordering the companies to cease and desist from making false or unsubstantiated claims, the company was ordered to pay $29,030 out of a total judgment of $1,344,173, after claiming they didn’t have the money to pay.

If you are thinking about taking a dietary supplement, the U.S. Food and Drug Administration urges you to think carefully, check with your physician and consider these tips:

Avoid “one product does it all” claims. Be suspicious of products that claim to cure a wide range of diseases, the FDA advises.

Be suspicious of personal testimonials, even from trusted celebrities. Success stories such as “It cured my diabetes” or “My tumors are gone” are easy to make up and are not a substitution for scientific evidence, the FDA notes on its website.

Watch for claims of quick fixes. Unfortunately, most diseases and conditions take time to treat, even with established products. If a product claims to do anything “in a few days,” it’s a red flag.

“All natural” doesn’t necessarily mean “safe.” Just because some things are found in nature doesn’t mean they’re safe to consume, yet unscrupulous marketers have successfully used this claim for years. In fact, products sold with this claim might include toxins, allergens or even ingredients found in prescription drugs.

“Miracle cures” usually aren’t. If someone really found a cure for the common cold or cancer, it would be all over the news, wouldn’t it? Avoid products that claim miraculous results or that the product has been purposely kept from public use.

Doubt claims that products are “FDA-approved.” “Domestic or imported dietary supplements are not approved by the FDA,” the agency advises on its website.

To read the full story, visit http://bit.ly/2Bv0Dtt. The FTC’s complaint is available at http://bit.ly/2ncB9hj.

‘No-call’ reporting app blocks unwanted telemarketers

via ‘No-call’ reporting app blocks unwanted telemarketers

PDF: New PSC No Call App

We’ve all had those calls that are trying to sell us something, or that appear to be scams. In the past few years, we’ve gotten some help in the form of Caller ID and call blocking, but these remain only marginally effective at stopping unwanted telemarketing and scam calls. “Do-not-call” lists have been somewhat effective as well, but are challenged by the explosion in automated calling (“robocalls”).

Now, the Mississippi Public Service Commission has unveiled a new smartphone app that makes it easier and quicker to report an unwanted call. The free “MS No-Call App” is available from the Apple Store and Google Play, and it allows users to register numbers with the statewide list, and file complaints immediately from their smartphones.

“We want to empower people by placing a tool literally in their hands to help us get at these predatory telemarketers,” noted PSC Chairman Brandon Presley in a news release. “This free app was a long time coming, and I know it will revolutionize the way we track down the lawbreakers and shut their call operations down.”

Since the rollout of “no-call” legislation both at the national and state levels in 2003, Mississippians have been able to place their numbers on “do-not-call” lists. And last year, the PSC began allowing cellphone numbers to be added to the list.

Last December, the Federal Trade Commission reported that more than 226 million numbers had been placed on the national list since the do-not-call lists became active in 2003. And in 2015, that number increased about 3 percent. Some industry experts attribute that rise to increasing use of robocalling technology. It’s a big problem; billions of robocalls are placed every month, and CNBC reported 2.6 billion robocalls last May alone.

For companies or individuals who violate the state and/or federal do-not-call laws, there can be stiff penalties, and many companies have found themselves on the wrong end of judgments and lawsuits from regulators, costing them millions. Around 20,000 companies and organizations have applied for access to the national list, according to the FTC report. But the list has not stopped criminals from violating the law on a regular basis, a lot of them using robocall technology. Many robocalls originate from overseas, making it difficult to stop them.

When I heard about the new app, I decided to give it a try. After downloading and installing the app, I was asked to enter my name, address, and email, as well as the telephone number I wanted to add to the list. Once registered, the user can add additional numbers to the list, file a complaint about a call they received and sign up for additional information. There was a disclaimer that your number will be added to the do-not-call list, and you may be asked to file an affidavit to support your complaint, should it be needed.

Usage is simple and straightforward, and should allow you to immediately report numbers that come to your cellphone or landline. When reporting a questionable call or text, you’ll be asked for specific information about the number the caller used, the time and date of the call, what the call was about, whether you have an existing business relationship with the caller and whether you answered the call.

There are numerous apps that use the national registry, and others that block calls from known scammers, spammers and robocallers. A list of some of these is available at https://www.ctia.org/consumer-tips/robocalls.

For more information about Mississippi’s No Call Law, visit www.psc.state.ms.us or call 1-800-637-7722.

Student debt: Scams hit students struggling to pay back loans

Source: Student debt: Scams hit students struggling to pay back loans

Student loan debt has ballooned in the past few years. The Federal Reserve reported recently that Americans owe more than $1.45 trillion in student loans, making it the second-largest segment of U.S. debt (second only to mortgages).

While many students are financing their college education through a mixture of scholarships, grants, loans, personal savings and help from their families, there can be a lot of confusion about the student loan process.

That confusion can make borrowers prone to being victimized by predatory companies, who make false promises of relief and assistance. That’s why federal and state regulators and private watchdog organizations are taking a team approach to battle a variety of frauds and scams directed at students and their families.

The Federal Trade Commission recently announced “Operation Game of Loans,” which included 36 separate actions, including seven FTC cases and other casesbrought by chief law enforcement officers in 11 states and the District of Columbia. In total, the FTC reports, the scams collected about $95 million in illegal fees from consumers.

“Winter is coming for debt relief scams that prey on hardworking Americans struggling to pay back their student loans,” said Maureen K. Ohlhausen, FTC acting chairman. “The FTC is proud to work with state partners to protect consumers from these scams, help them learn how to spot a scam, and let them know where to go for legitimate help.”
Federal actions included cases brought against five companies, including California-based A-1DocPrep Inc., Alliance Document Preparation and Student Debt Relief Group; as well as Florida-based American Student Loan Consolidators and Student Debt Doctor. The companies have been charged with a variety of offenses.
For example, the FTC charged A1DocPrep with contacting consumers while claiming to represent the U.S. Department of Education, while “targeting distressed homeowners” and making false claims they could prevent foreclosure.
Others are charged with making false promises of loan forgiveness; charging illegal upfront fees to assist with reducing student loan balances; and collecting Social Security numbers and other sensitive information to be used to “hijack consumers’ accounts while cutting them off from their loan servicers or the U.S. Department of Education.”

In addition, the FTC announced they had sued two Florida-based operations that allegedly targeted borrowers with fraudulent or ineffective services, while collecting millions in fees.

While Mississippi was not among the states listed in the recent announcement, it’s likely that Mississippians have been victimized by these scams. To help consumers avoid becoming a victim of fraud, the FTC advises us to beware of promises that a company or organization can promise fast loan forgiveness, which often comes from a telemarketer, email or direct-mail piece that claims to be affiliated with the U.S. Government. Scammers can duplicate an official seal, so don’t be fooled.

“Consumers should never pay an upfront fee for help,” continues the agency, “and should not share their FSA ID — a username and password used to log in to U.S. Department of Education websites — with anyone.”

Borrowers can find out about — and apply for — deferment, forebearance or discharge programs for free directly from the U.S. Department of Education or their loan servicer.

For more information about repaying your student loans, visit https://studentaid.ed.gov/sa/repay-loans.

Brace yourself for Equifax scams

phishingSource: Equifax scams next consumer headache, clarionledger.com

It was perhaps only a matter of time before crooks jumped on the opportunity to cash in on the confusion following the massive Equifax data breach.

In case you have been in a cave the past couple of weeks, here’s a recap of what’s happened: Equifax, one of the “Big 3” credit bureaus that compile and sell credit data on hundreds of millions of consumers, announced recently that hackers had been playing around in its database for several weeks this summer.

The result: sensitive data on an estimated 143 million consumers from multiple countries had been compromised. Equifax is getting hammered by regulators and the public not only for having inadequate security in the first place, but also because they waited several weeks to report the breach; encouraged customers to sign up for free “credit monitoring” services that initially contained language that would potentially take away their legal rights, and then charged for “freezing” consumers’ credit accounts. After tremendous pressure, Equifax backpedaled on the last two items, but the damage to the company is likely to be long-lasting.

 Although it wasn’t the biggest breach in history by the numbers (that distinction belongs to Yahoo), it was particularly dangerous because thieves got away with information that connected Social Security numbers, names, addresses and other key pieces of information. These pieces of data are likely being sold on the black market, to be used by other thieves to steal your identity.

Last week, Attorney General Jim Hood joined with his counterparts across the nation to announce they were suing Equifax for failing to protect consumers’ information. Members of Congress are demanding investigations, and class-action lawsuits are certainly on the way.

The whole thing has left a whole lot of Americans trying to figure out what to do to protect themselves from the risk of identity theft. While freezing your account at Equifax and its counterparts TransUnion and Experian is the route most experts advise (as of this writing, the other two companies are charging for this service), scammers are already trying to convince people to give up personal information or even pay for additional scam services. A rising chorus of regulatory agencies is warning consumers not to take the bait.

According to the Federal Trade Commission, scammers are calling consumers claiming they’re with Equifax and are calling to “verify your account information.” But Equifax has stated they’ll only be sending notices through the mail to anyone who was exposed. “Stop. Don’t tell them anything,” warned the FTC in a blog post. “They’re not from Equifax. It’s a scam. Equifax will not call you out of the blue.”

The FTC advises that, if you get such a call, your best bet is to hang up. Do not press “1” or any other key or respond in any way. In any case, don’t give any personal information to the caller. Caller ID can’t be trusted, even if it looks like the call comes from your home area code and local exchange. It’s not; scammers have long ago figured out how to “spoof” the Caller ID information to fool you into thinking it’s a local call.

 It’s also likely that there’ll be email scams or even “snail mail” claiming to be able to help you deal with the Equifax breach. These communications might even look like they come from Equifax or some other known company, but in reality are “phishing” scams designed to fool you into clicking on links or call to get services. Again, don’t take the bait.

This week, Hood warned of scam websites that have popped up. He said some fake websites that attorneys general have gotten taken down included “equifaxsecurity2018” and another that had Equifax incorrectly spelled “Equifox.”

Equifax and the credit-reporting industry are in for what promises to be an extensive period of lawsuits, Congressional inquiries, and media thrashing. Consumer advocates and regulators have complained for decades that the industry is in need of serious oversight because of recurring patterns of shoddy record-keeping, failing to safeguard our data and wielding tremendous power over the financial lives of nearly every American without adequate oversight. Perhaps it’s time for a serious look at this industry and a national discussion about its place in the American economic landscape.

Scam? Many ‘Invention promotion’ companies are nothing but

 

invention promotion

Clarionledger.com

 

Source: Scam? Many ‘Invention promotion’ companies are nothing but, clarionledger.com

Inspiration is a funny thing. Sometimes it comes when we least expect it.

For me, the “a-ha!” moment often hits in the dead of night, or when I’m in the middle of a meeting or driving. We Americans are a nation of problem-solvers, and it’s no wonder that we’ve come up with some of the world’s best ideas. The list of world-changing inventions dreamed up by Americans is astounding.

Sometimes, what you or I think of as a revolutionary idea has already been tried; other times they’re not practical, not marketable or are hamstrung by red tape and competition. But every once in a while, somebody comes up with something amazing and makes millions. It’s this quest for fame and fortune that drives many people to take their idea for a “better mousetrap” and go for it.

TV shows such as “Shark Tank” have propelled many inventors to riches and glory, as celebrity investors decide whether the ideas are worth a shot. An industry has even sprung up around the potential profit in new inventions, promising to help get your idea patented, protected and marketed.

But, as some budding Edisons have discovered, many “invention promotion” companies are nothing but scams, designed to hook the hopeful into spending big bucks with dreams of getting their products to market.

Back in March, the Federal Trade Commission busted a Miami Beach, Florida-based company called World Patent Marketing, which had allegedly promised would-be inventors it could help its clients successfully develop and market their products. Instead, the FTC told a federal court, all but a few consumers found themselves shelling out big bucks with nothing to show for it. In all, the FTC’s complaint alleges, the scheme bilked consumers out of more than $10 million. The complaint also accused parent company Desa Industries and its CEO Scott Cooper of involvement in the scheme.

 The company is accused of using a variety of tactics to lure new customers and reassure existing ones, such as made-up “success stories” about people the company had helped. Adding insult to injury, some customers claimed that when they tried to complain or wrote negative online reviews, the company used intimidating tactics to shut them down, including threatening them with lawsuits.

One potential inventor told the Broward County, Florida, Sun-Sentinel that he had given $300,000 to the company to promote his idea for a net device that could be attached to a cellphone case to hold keys and other small items, only to come up empty-handed.

 For its part, Cooper’s legal team has noted in court filings that the invention-promotion business is risky, and that fact is made clear on its website and promotional materials as a warning to potential clients.

If you do come up with an extraordinary idea, the U.S. Patent and Trademark Office advises that you proceed carefully. The agency has a brochure at https://www.uspto.gov/sites/default/files/documents/ScamPrevent.pdf that lists some of the warning signs of an invention-promotion scam, and notes that the law requires invention promotion companies must disclose the following information:

  • The total number of inventions they’ve evaluated in the past five years and the number of those that received positive and negative evaluations.
  • The total number of customers with whom they’ve contracted for actual invention-promotion services.
  • The total number of customers who have received a net profit after working with the firm as a direct result of that relationship, as well as the total number of customers receiving licensing agreements as a result of the company’s work.
  • The names and addresses of all companies associated with the company.

If you want to find out more, visit https://www.consumer.ftc.gov/articles/0184-invention-promotion-firms, as well as http://ipwatchdog.com.

Freezing your credit after the Equifax breach

 

freeze credit

NASA Federal Credit Union

 

Source: Freezing your credit after the Equifax breach, clarionledger.com

A recent data breach from one of the nation’s largest credit bureaus has sent shockwaves throughout an industry that holds information affecting the financial futures of millions of Americans.

Hackers reportedly broke into the files of Equifax for a six-week period from May through July, making off with personal information for about 143 million consumers. This brazen heist is one of the largest to date, potentially exposing nearly half of Americans to the risk of identity theft (along with considerable numbers of Canadians and British citizens).

“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do,” an apologetic Equifax Chairman and CEO Richard F. Smith said in a video statement. “I apologize to consumers and our business customers for the concern and frustration this causes.”

 You may recall that Equifax and the other “Big 3” credit bureaus were sued in recent years by Mississippi Attorney General Jim Hood and his counterparts around the nation after allegations of shoddy record-keeping and reporting practices led to errors and damage for some consumers. The suit resulted in a 2016 settlement of more than $7 million.

Of course, data breaches are nothing new, and happen constantly as hackers probe the security of databases around the world. The threshold for making the national news has gotten higher, so if a breach makes big news, it’s usually one that has set a record.

“The types of data potentially exposed in this breach could ruin lives, businesses, and might I say, credit scores,” Hank Thomas, chief operating officer at Strategic Cyber Ventures, a Washington incubator of cybersecurity companies, told McClatchy News Services. The trove of data (with a potential value of hundreds of millions of dollars on the black market) included names, Social Security numbers, dates of birth, addresses, driver’s license numbers and credit card information.

As you read this news, you might be asking yourself, “should I be worried?” Most every source I’ve consulted says the answer is a resounding “yes.” The amount and type of data that has been compromised can expose you to the risk of identity theft for years to come. Using this data, fraudsters could open new credit accounts or lines of credit in your name, apply for driver’s licenses, even get speeding tickets on your record (for which you can be arrested) and steal government payments such as Social Security checks and tax refunds.

The danger is here, and it’s real. So, what next? In the wake of the announcement (which Equifax waited several weeks to do), the company announced it would be offering a year of free credit monitoring through its TrustedID Premier service. But many advocates pointed out that signing up for the service includes language that some said could be construed as signing away the consumer’s right to sue over the breach. After significant pushback, the language was changed. Still, some financial experts advise consumers not to sign up for the one-year monitoring, since the effects of the breach could last years.

Many experts advise that consumers who may be affected by the breach place a “credit freeze” on their reports at all three major reporting agencies: Equifax, TransUnion, and Experian. Placing a freeze on your account takes a little effort and can be inconvenient. But if you are applying for credit, you can temporarily lift the freeze yourself, and re-enable it later. A credit freeze blocks your credit reports from being shared with potential new creditors. Without a credit report, most lenders won’t open a new line of credit. (It won’t stop them from changing information on existing accounts, however.) Freezing your accounts will not affect your credit or score.

Note: Bowing to public outcry after the breach, Equifax announced Sept. 11 that it would waive all fees for the next 30 days for consumers who request a credit freeze. To freeze your file on Equifax, click on: https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp. (It wasn’t known at the time of this writing whether TransUnion and Experian would also be waiving fees on credit-freeze requests.)

For more on credit freezes, visit https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do.

Trying to ‘unsubscribe’ email can be a spam scam

 

Unsubscribe-Icon2

SEO Pressor Connect

From: Email opt-out may be scam, clarionledger.com

 

Today, I got a couple of emails from a textbook company. These messages had been coming with regularity every few days, and although I know the company, these particular messages are outside my area of interest. Tired of getting irrelevant messages, I scrolled to the bottom of the page and found the “unsubscribe” link. Upon clicking the link, my browser immediately sprang into action. But instead of getting the expected “We’re sorry to see you go” text on the page, I instead got a message saying, “This site can’t be reached” and cited a DNS error.

I tried several times, each time getting the same response (none). After my initial irritation, I just changed my email settings to mark future messages from the company as spam. Since I’m familiar with this particular company, I chalked it up to somebody not doing their job with checking to make sure the links actually work, as opposed to an intentional act of deception.

If you’re one of the world’s 3.7 billion email users (according to the Radicati Group), you probably get messages every day you don’t want. That’s part of doing everyday business, and most users just delete unwanted messages, send them to the “spam” folder or report them to the service provider. But companies can get into serious trouble if they don’t provide a (working) way to honor recipients’ requests for removal.

 The CAN-SPAM Act of 2003 governs how companies handle commercial email solicitations. The Federal Trade Commission holds the primary responsibility of enforcing the act, as well as administering fines for violations (which can penalize businesses thousands of dollars for each separate violation of the act). Specifically, CAN-SPAM requires that businesses avoid using false or misleading headers or subject lines, failing to disclose a message is trying to sell something and avoiding telling people where to find your company. But the most well-known portions of CAN-SPAM have to do with handling requests to be removed from mailing lists.

The FTC provides some guidance in its Compliance Guide for Business. Specifically, the document advises companies, “You can’t charge a fee, require the recipient to give you any personally identifying information beyond an email address, or make the recipient take any step other than sending a reply email or visiting a single page on an Internet website as a condition for honoring an opt-out request.”

 In addition, requests have to be clear and conspicuous, and although you may direct users to a page where they can select their preferences, it must include an option to opt out of receiving any more messages from you. Requests must be handled promptly, and be honored within 10 business days. And once you’re notified, you can’t “sell or transfer” their email addresses to another entity (unless you can show you’re hiring the other company to help with compliance with the law.

Computer security experts often get asked whether it really does any good (or whether it’s risky) to click “unsubscribe” links. Most experts agree that law-abiding companies who care about their reputations are going to comply. However, it’s also clear that much email traffic is unsolicited (spam) email that tries to hook you with scams and ripoffs, or those who want you to click a web link so they can steal your identity or install malware on your computer. Such entities aren’t likely to honor your requests to be removed, and clicking their links may actually make you get more spam.

Bottom line: exercise caution in clicking on any links in an unsolicited email, or opening it at all. If in doubt, just delete it, especially if it comes with an attachment. If they send you messages frequently, report it as spam to your Internet Service Provider, and use your email client’s rules feature to snare them before they even reach your inbox. After all, the best unwanted message is the one you never see.

Flood insurance scammers could be calling

From: Harvey bring out flood insurance scammers, clarionledger.com

Flood insurance is one of the most misunderstood types of insurance, and scammers are taking advantage of that fact to make money off victims of Hurricane/Tropical Storm Harvey.

The Federal Emergency Management Agency and other agencies are warning that residents of south Texas and Louisiana have reported getting robocalls saying their flood insurance premiums are past-due, and they need to pay right away to avoid a lapse in coverage.

This type of predatory behavior happens frequently after major floods, but given the size and scope of the unfolding devastation from Harvey, it’s likely many people will be taken in by this scheme. And as the storm moves east and north, it’s likely Mississippians will be getting such calls, too. FEMA warns homeowners not to fall for it. If you are really behind on your flood insurance, an automated phone call in the middle of the disaster won’t be your first notification.

“Insurance companies and agents selling flood insurance policies do not use this process to communicate with customers about their flood insurance policies,” noted a FEMA blog post. “In fact, if your payment is past due, your insurance company will send you several pieces of mail 90, 60, and 30 days before the policy expires.”

 Floods are so costly that only the federal government covers it. The National Flood Insurance Program began in 1968 to address the rising costs of floods. But despite nearly 50 years of the program, there is a lot of misinformation out there. According to the Insurance Information Institute, more than 40 percent of homeowners mistakenly think their standard homeowner’s policy covers rising water.

The institute notes that only about 12 percent of homeowners have flood insurance today, the lowest number since 2010, and down 14 percent from 2015. “Furthermore,” notes the organization, “the number of people buying NFIP policies nationwide has plunged by 549,000 — almost 10 percent —since 2009, even as coastal development surges and sea levels rise.”

 Many consumers might not realize they need flood insurance, as FEMA reports that more than 20 percent of claims come from outside areas considered to be at high risk for flooding. To find out about flood insurance, contact your insurance agent.

According to data on FEMA’s website, the average U.S. flood insurance claim is about $43,000, with the average homeowner paying $700 annually for premiums. (Some are much higher, depending on the area in which you live and the risk.) To get an idea of the history of flood events in your county, you can use an interactive map at https://www.fema.gov/data-visualization-floods-data-visualization.

And if you get a call informing you that your flood insurance policy has lapsed and you need to pay immediately, FEMA advises you hang up the phone. Don’t press 1 or obey other instructions. Once you’ve done that, contact your insurance agent to check the status of your policy (if you have one), or call (800) 638-6620 if your policy is through NFIP Direct.

To find out more about flood insurance, visit https://www.fema.gov/national-flood-insurance-program.

Negative option contracts keep you on the hook

freetrial

via ‘Negative option’ plans keep you on the hook, clarionledger.com

PDF: The_Clarion-Ledger_State_20170814_A003_1The_Clarion-Ledger_State_20170814_A005_2

This sounds pretty good, doesn’t it? For only $1.03 plus shipping, you could try a new product that promises “visibly whiter teeth.”

Teeth-whitening products have soared in popularity in recent years, and anything that promises to deliver a brighter smile is bound to get attention. But many consumers who signed up for one particular “trial” offer found themselves on the hook for hundreds of dollars per month until they were finally able to cancel their subscriptions.

The Federal Trade Commission last week got a federal court to put the brakes on a wide-ranging scheme involving 78 companies, at least 87 different websites and dozens of bank accounts. The agency accuses the operators of the plans with “using deceptive claims, hidden fine-print disclosures and confusing terms” to lure customers into providing billing information, and began charging them about $100 a month if they didn’t cancel within eight days. In addition, they allegedly used an “order confirmation page” to trick customers into signing up for a second subscription, leading some customers to pay more than $200 a month until cancelling.

Now, any reasonably-intelligent person would know there’s always a catch to an offer that starts out costing so little. Many of us remember the “buy a record for a penny, get 10 more free” plans that became common in the 1980s (and which still exist today). For a ridiculously small, up-front payment, you could get 11 albums for “free.” But if you signed up for this offer, you found yourself getting a shipment every few weeks, for which you had to pay full price, until you cancelled. (Of course, the terms of most of these offers were pretty clearly stated, even if you had to look at the fine print, and even if you had to wait on the phone awhile, you usually could cancel.)

This type of operation (legitimate or scam) relies on what’s known as the “negative option.” If you sign up for the offer, you’re obligated until you cancel. If they don’t hear from you, the assumption is that you are agreeing to continue the service. (If that’s what you want, it’s not a problem.) In reality, most recurring services are provided on a negative-option basis. But what distinguishes a scam from a legitimate offer is that scammers go out of their way to make it difficult for you to cancel, or trick you into more obligations.

Negative-option subscription plans (and their cousins, automatic-renewal contracts) are more common today than ever, and companies find them attractive because they don’t have to go to the expense of trying to get customers to renew. It takes a lot of expense and trouble to lure new customers or to try to persuade existing ones to renew their commitment.

But the problem for consumers is that, even if they try to cancel, it can be difficult. You’ve probably notice that most subscription services (there are some notable exceptions, such as Netflix) don’t readily supply you with an easy way to cancel, and make you call and explain why you’re trying to cancel.

For negative-option or auto-renewing contracts associated with subscription offers, the FTC requires the following information be provided clearly and conspicuously, and these are good questions to ask before you sign up for any subscription service or trial offer:

  • What is the minimum purchase requirement, if any?
  • How and when can I cancel my membership?
  • How many notifications will I have to respond to, and how often will you receive them?
  • How do I reject merchandise, and who pays for returns?
  • How much time do you have to reject merchandise?
  • Is postage and handling included in the product price?

Finally, it’s a good idea to keep copies or information for all transactions and conversations you have with the company or its representatives, and keep track of any dates required to cancel services. While a free trial should give you the chance to try something you might (or might not) end up wanting, it shouldn’t be a ticket to a customer-service nightmare.

For more info on buying plans and negative-option agreements, visit http://bit.ly/2fpP14s.