FTC For The Consumer Federal Trade Commission Scams Targeting Seniors Todd M. Kossow Assistant...

FTC For The Consumer www.ftc.gov

Federal TradeCommission

Scams Targeting Seniors

Todd M. Kossow

Assistant Director, Midwest Region

Federal Trade Commission


Background on FTC

• Nation’s general jurisdiction consumer protection agency

• Oldest independent agency of the federal government

• Five Commissioners appointed by the President

• About 1000 staff in Washington, D.C. and eight regional offices


FTC – What We Do

• Enforcement through federal district court and administrative litigation– Exclusively civil, not criminal, jurisdiction

• Maintain the Consumer Sentinel Network complaint database

• Perform outreach and education


FTC’s Consumer Sentinel Network• Database of millions of consumer fraud and

ID theft complaints maintained by the FTC• Number of Third Party Contributors, including

the BBB and a number of state AG’s• In 2014, received more than 1.5 million fraud

complaints, reporting losses of more than $1.7 billion; median amount paid was $498

• FTC acts as clearinghouse, making complaints available to law enforcement around the world


FTC National Fraud Survey

• 2011 Fraud Survey showed that 10.8% of the entire adult population in U.S. were fraud victims – an estimated 25.6 million people

• Less than 10% of victimized consumers complain to a third party


Mass Marketing Fraud – Going Global• Victim and scammer never meet• Connect by phone, email, internet, mail• Consumers may have no idea who they’re

dealing with or where they are• To get consumers’ money, they use

anonymous payment mechanisms like a money transfer or a GreenDot MoneyPak


What Would You Do . . .


Money Transfers

• Via Western Union or MoneyGram

–Can be useful when sending money to someone you know and trust

–Are inappropriate when dealing with strangers


Why Money Transfers?

• Wiring money is like SENDING CASH

– Can be picked up within minutes at multiple locations

– Can be sent anywhere in the world

– Cannot reverse or charge back the transaction once it’s been picked up

– Difficult to trace/identify the recipient


Money Transfer Complaints

• Consumer Sentinel Data 2009-2014

– 2009: 17,167 complaints, nearly $120 million in reported consumer losses

– 2011: 115,901 complaints; nearly $440 million in reported consumer losses• MoneyGram and Western Union complaints now

included

– 2014: 106,472 complaints; over $500 million in reported consumer losses


Reloadable Debit Cards

• Green Dot cards are reloadable debit cards sold in stores like Wal-Mart.

• MoneyPaks are advertised as a safe and secure way to send money – e.g., to reload prepaid cards, add money to PayPal accounts, or make payments to major companies.

• Also work like cash, allowing consumers to shop online without providing credit card or bank account information.


Green Dot MoneyPaks and Similar Reloadable Products

• They are NOT:– Credit cards – no chargeback rights

– Paper checks – cannot be traced to recipient accounts

– Debit cards – no fraud insurance

– NO REFUNDS!


Green Dot MoneyPaks and Similar Reloadable Products• Exercise caution in using a Green Dot MoneyPak

to pay an unfamiliar company or individual, particularly for Internet purchases.

• Anyone who requires an upfront payment with a Green Dot MoneyPak or similar product is likely operating a scam.

• Wal-Mart recently stopped selling MoneyPaks• Have been used extensively for Jamaican lottery

scams


Types of Advance Payment Scams

• “You’ve Won!” Scams• Employment Scams (Mystery Shopper

and Car Wrap)• Rental Scams• Nanny or Caregiver Scam


• You’re the “BIG WINNER!”– A call– An e-mail– A card in the mail

• You’ve won:– A prize– A sweepstakes– The lottery– A trip, car, television

• But wait... There’s more!– Before you can claim your winnings,

you need to send money to pay for:• Fees• Taxes• Customs duties

“You’ve Won!” Scams

LotteryInvestment

Board


“You’ve Won!” Scams• Hit older consumers disproportionately• Play on your emotions – how the money can

help family/friends


Counterfeit Checks

• “You’ve Won!” mailing includes a check to cover fees associated with your winnings.

• Your instructions are to deposit the check and use the funds to pay the fees via a money transfer.


Counterfeit Checks

• The check looks real but it’s a fake!

• Banks are required by law to make funds available within a few days of your deposit.

• When the check bounces, you will likely end up owing the bank the money you withdrew.


Universal Information Services

• Defendants sent mailings all over the world telling people they had won $2.7 million and needed to send $20

• Collected more than $12 million over several years

• FTC action ended the scam


Mail Tree

• In May 2015, FTC sued Florida operation that took in more than $28 million from consumers in several countries

• Letters touted “guaranteed” prizes of more than $2 million

• FTC action ended the scam• Defendants have been indicted• Still many similar scams operating


Mystery Shopper Scams

• You are hired to be a mystery shopper and asked to evaluate a wire transfer company’s customer service. You get a check to deposit in your personal account. All you have to do is withdraw the amount of the check in cash and wire it using the money transfer service you are evaluating…


Mystery Shopping – Counterfeit Check


Car Wrap Scams

• Get solicited to have your car shrink wrapped with ads for Red Bull or Monster Energy

• Receive a fake check to compensate you and pay for the wrapping


Rental Scams

• Two types:– Scammer agrees to rent something

you’ve advertised; provides a fake check for the deposit, and then changes mind and wants the deposit back

– Scammer posts potential rental units online with beautiful pictures; asks consumers to wire their deposit sight unseen


Nanny or Caregiver Scam

• Nannies and caregivers listed on sites like Care.com or sittercity.com are contacted by scam artists and offered employment by someone moving to their area

• Receive a fake check with instructions to purchase medical equipment or supplies before the patient arrives


Other Scams Targeting Seniors

• Imposter Scams– Grandparent or Friend-in-Need Scam– IRS Imposter Scams

• Health Care Scams• Medical Alert Robocalls• Tech Support Scams• Charity Frauds


Imposter Scams• What are they?

– You get a telephone call or email from somebody pretending to be someone else

– It could be from:• A “government official”• Someone you know – a grandchild, other relative, or

friend• Someone you met online

• What do they want?– Whatever the story, they always want your

money


Imposter Scams

• In 2014, the FTC received 276,662 complaints about imposter scams, which was 11% of all complaints received.

• Third highest complaint category overall – first time in the top three


• Pretends to be a grandchild or other family member• In trouble in another country• “Please don’t tell mom or dad”• Injured in car crash;

arrested and in jail• Need money immediately!• Send the money by

Western Union or MoneyGram• If you send some money, they’ll want more

Hi Grandma, it’s me. I need help! I’m in England studying for my semester abroad, but I got in some trouble. Can you please send me some money to help bail me out? Please don’t tell mom or dad. They’ll be mad, and they won’t let me come back!

Bobby

Grandparent Scams


• How big is the problem?– 2012: 11,793 complaints. Reported losses of $18 million.– 2013: 12,400 complaints.– 2014: 14,521 complaints.

• A lot of call centers—called “boiler rooms”—are in Montreal, Canada.

• Difficult to find perpetrators.• Royal Canadian Mounted Police have busted several

boiler rooms.• Perpetrators have been extradited to the U.S.

Grandparent Scams


Friend-in-Need/Family Emergency

• You get an e-mail out of the blue from someone who claims to be your friend or family member in dire need of help.

• All you have to do is wire money right away and keep it confidential…

• May be hacking into contacts on smart phones or into gmail; yahoo mail accounts


IRS Imposter Scams• Pretends to be with the IRS or another

government agency; caller ID may show 202 number and IRS

• Claims that there will be severe consequences unless you pay taxes you owe right now

• You’re told to wire the money or put it on a prepaid debit card

• Over 52,000 complaints in 2014 and about 45,000 in first six months of 2015


• You might get (or see)– A TV ad– An e-mail– A phone call

• They say you need...– A new Medicare card– A new health insurance card– Discounted health insurance

• You must “act now!”– Threaten you’ll lose Medicare or Social Security benefits.– You won’t be covered.– You’ll have to pay full-price for prescription drugs.

Health Care Scams


AFD Medical Advisors

• Called seniors in the U.S. from Montreal, Canada

• “Updating” information so you could retain Medicare benefits

• Took $300 directly from your bank account• Sent a worthless prescription drug discount

card• Out of business and operators under federal

indictment


Medical Alert Robocalls

• “John from the Shipping Dept” robocalls: Someone already ordered this for you and we just need to confirm shipping details

• Tell seniors it’s “free,” but later disclose monthly monitoring fee


Tech Support Scams

• Claim that something is wrong with your computer, but “we’ll help you fix it.”– May be through a phone call or pop-up window

• Caller tries to get remote access to your computer for the purpose of fixing a problem that doesn’t exist; may even install malware on your computer

• Want you to pay for “security” or “technical support” programs you don’t need; they ask for your account information so you can pay


Avoiding Tech Support Scams

• If you get a call like this, hang up and call your computer support company yourself on a number you know to be genuine

• Don’t give control of your computer to a third party who calls you out of the blue

• Don’t rely on caller ID alone to determine who is calling• Never provide financial account information to someone who

calls you and claims to be from tech support• Don’t give out your computer passwords to someone who

calls you on the phone


Charity Fraud• How it works:

– Someone contacts you asking for a donation to their charity. I sounds like a group you’ve heard of, it seems real, and you want to help.

– They might “thank you” for your prior pledge, creating the impression you’ve dealt with them in the past.

• What’s legitimate and what’s a scam?– Scammers want your money quickly. They pressure you to

donate now! (They might ask for cash or a wire transfer.)– Scammers often refuse to send you information, give you details,

or tell you how the money will be used

• What you can do:– Take your time! Ask for information. Check them out.


Cancer Fund of America

• In May 2015, FTC and all 50 states sued four sham cancer charities, charging they bilked more than $187 million from consumers.

• Alleged that less than 3% of donor contributions were spent on goods or services for cancer patients in the U.S.

• Most of the money was spent by the sham charities supporting themselves, as well as the families and friends of the operators; money spent on things like luxury cruises, jet ski outings, and sporting event and concert tickets.


Tips for victims: If you’ve wired money to a scammer…

• Call MoneyGram or Western Union ASAP to report the fraud and ask for the transfer to be stopped

• Call MoneyGram and Western Union even if the transaction can’t be stopped

AND…


Complain to the FTC

• To file a complaint– www.ftc.gov/compl

aint– Toll-Free Hotline

1-877-FTC-HELP (1-877-382-4357)

*English and Spanish

http://www.ftc.gov/complaint

http://www.ftc.gov/complaint


• Start a conversation.• Share what you know, your strategies, your ideas.• Get more information at ftc.gov/PassItOn.

...Pass it ON

Order free consumer education

materials byvisiting ftc.gov/bulkorder.

Order as many as you need! Available inEnglish and Spanish.


Federal TradeCommission

Questions??

Todd M. Kossow

312-960-5616

[email protected]

FTC For The Consumer Federal Trade Commission Scams Targeting Seniors Todd M. Kossow Assistant...

Documents

Transcript of FTC For The Consumer Federal Trade Commission Scams Targeting Seniors Todd M. Kossow Assistant...