AARP Fraud Prevention 2009A Part of the AARP Foundation & Investor Protection Trust Fund

What is a Fraud Fighter?

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My Goal today is to help you to:

Recognize

Report

Resist Fraud

Recognize

–IdentityTheft

–Consumer Fraud

–Investment Fraud

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What Defines Identity Theft?

Federal Trade Commission (ftc.gov):

"Identity theft occurs when someone uses your personal

information without your permission to commit fraud or other

crimes.”

However . . . There are actually 4 types of Identity Theft!

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Identity Theft Targets

Who Are Targeted?

18 – 29 Year Olds (males and females equally)

In 2008, ID Theft rose 15% in Wisconsin!

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How It Affects You:

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Warning Signs of A Crime:

• Failure to receive expected mail

• Unsolicited Change of Address notice

• Receiving credit cards that you didn’t apply for

• Denied credit, or being offered less favorable credit terms

• Receiving calls or letters from debt collectors or businesses about merchandise or services you didn’t buy.

• Newly opened accounts on your credit report

• Increased mortgage or other insurance rates as a result of a lower credit score

What Defines Consumer Fraud?

> Charity Fraud> Credit Card Interest Rate Reduction> Foreclosure Rescue Scams> Foreign Lotteries> Foreign Money Offers

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> House Stealing> Internet Auctions> Phishing> Subscriptions / Sweepstakes> Work at Home Scams

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Investment Fraud

The Wisconsin Department of Financial Institutions oversees/investigates Investment Fraud in Wisconsin

Stats from their office:

> Average 120-130 actual complaints and 1500 inquiries per year> Top 3 problems include

> Fraud> Unsuitable recommendations> Unauthorized activity

Types of Investment Fraud

> Affinity Fraud> Annuities> Ponzi Scheme> Promissory Note Scams> Viaticals> Miscellaneous

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Affinity Fraud

> Donna Vogt Case

• Fox Valley• Targeted young retirees (early 50’s) at phone co.

– They heard about her by word of mouth from other employees

• Unsuitable recommendations• Employing broker has paid over $10 million to investors so

far.

Annuities

> You’ve been invited to a meal and an investment workshop> Urged to switch your investments to variable annuities> But you need to sign now> For ‘added security’

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Ponzi Scheme

The Bernard Madoff Case > Madoff until early December was a New York broker and fund manager

> His funds attracted investors with the promise of consistently high returns and low fees.

> Through his ponzi scheme, he caused financial destruction across the world.

> Investors were primarily members of the wealthy Jewish community in New York, Florida and up and down the east coast of the US

> On turning himself in to authorities on December 11, Mr. Madoff estimated the losses at $50 billion. That figure now stands at more than $65 billion.

Promissory Notes

> Investor is making a loan to a company> Some are legitimate> Company promises to return the buyer’s fund and make

interest payments> Guarantees that the investment is government backed> Promise of high return

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Viaticals

> Converting a life insurance policy to cash> Purchase life insurance of a terminally ill person at a

discounted price> Ill person gets needed money to help pay expenses> Investor gets the full face value of the policy when the person

dies> Investor is told that they are helping older people stay

financially solvent in their golden years with a high rate of return

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Miscellaneous

> Business Opportunities> Oil and Gas Schemes> Payday Loans> Rare Coins / Antiquities / Collectibles

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Report

• Contact Wisconsin’s Office of Privacy Protection

Mediate your complaint

Investigate and assist law enforcement

Provide support and assistance

• File a Police Report

• Notify your Financial Institution and Creditors

• Request your Credit Report

• Place a Fraud Alert on your accounts

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What if a loved one becomes a victim?

> Follow tips in previous screen

and –> Use the FTC’s ‘Do Not Call Registry’> Put a short script by the phone> Consider putting in a change of address to your home> Consider changing their phone number> Gather scam mail into an envelope marked ‘Forward to Postal

Inspector – suspected mail fraud’ and put in mailbox

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Resist

> Safeguard your identity> Be aware that fraud is out there> Be informed> Do your homework

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Safeguarding Your Identity

Request a credit report and review regularly

Financial records

• Check your bills and statements upon arrival and report any suspicious activity

• Password protect your accounts if possible

Do a wallet check

• Photocopy everything in your wallet and place in a secure place

• Do not carry your SSN in your wallet

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At Home

• Place personal documents in a secure place out of plain view of servicemen, sales persons, visitors

Your Mailbox

• Place outgoing mail in an official mailbox

• Arrange for mail pickup if you are away more than one day

• Opt out of pre-approved offers

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When you Travel

• Be aware of your surroundings when providing information in person or on the phone - someone may overhear

• Use a credit card whenever possible

On your Computer

• Use virus, spy-ware and firewall protection

• Don’t be a victim of “Phishing”

• Don’t click on pop-ups, they can re-direct you to a site that is not secure or may download key stroke capture files

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On the Phone

• Sign up for the NO CALL List to limit incoming sales calls

• Renew every two years

• Do not give out personal information – legitimate companies will not ask for it

• Be aware of Caller ID [spoofing] scams

Shred Documents

• “Dumpster divers” can obtain your identity through your garbage

• Shred all personally identifiable documents (catalogs, pre-approved credit offers)

• Use a shredder that shreds in pieces rather than strips (strips can be re-constructed

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What We Need To Watch Out For:

• Phone Sales

• Door to Door Sales

• Direct Mail Sales

• Offers that are too good to be true – because they usually are!

• One time offers

• Offers “Just for You”

• Offers by anyone who isn’t a licensed financial professional!

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Who Can Help You Invest Safely?

> Trained/Licensed Professionals:

• Financial Planners• Investment Advisors• Brokers• But remember, it is your responsibility to

understand and review what they have recommended

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Do Your Homework!

> Check out the person AND the product> 1-800-47-CHECK > (608) 266-1064> www.wdfi.org/fi/securities/

> If you suspect a scam, REPORT IT!> 1-800-47-CHECK> (608) 266-1064> http://www.wdfi.org/contact_us/complaint.asp

Thank You!

Life long learning begins anytime you want it to . . .

Questions?

Mary Volmer

262-253-1126 / 262-312-4565

mvolmer01@aol.com

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