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Fraud and Scams

Do not become a victim of fraud. A basic understanding of how scam artists work and knowledge of common tactics to be on the lookout for can help you avoid fraud and protect your hard-earned money. Learning how to invest safely can also assist you in reaching your financial goals and avoid becoming a victim. Below is more information on some common scams including what to look for and how to avoid falling prey to fraudsters.

Mortgage Relief Scam

In tough financial circumstances like the possibility of losing a home, many people look for assistance paying their mortgage. Meanwhile, scammers hope to cash in on a person’s desperate situation. 

Phone/ Mail Pitch: We can help you keep your house by working with your mortgage lender to change the terms of your loan and decrease your monthly payment by lowering the interest rate or principal loan amount.

Target: Anyone who is behind on their mortgage, at risk of losing their home.

Result: You pay them upfront for assistance or provide personal information- they don’t assist with your mortgage payment or, worse, use the personal information you provided to steal your identity.

How to avoid this scam: If you need help with your mortgage you should contact your lender directly to discuss a new payment schedule or other form of loan adjustment. You may also wish to contact a legitimate mortgage relief service dedicated to helping those at risk of losing their homes.

For more information on mortgage relief, visit the Federal Trade Commission’s website- http://www.ftc.gov/ or contact your lender directly.  

Computer Scam

Many seniors are very good with computers and enjoy having access to the internet to stay in touch with friends and family. Unfortunately, many scam artists attempt to prey on unsuspecting seniors who are not as familiar with computers and may be easily tricked into revealing personal financial information over the phone or through email.

Phone/ E-Mail Pitch: You receive a phone call that the “Technical Department” needs to install new software on your computer. They ask you a series of questions and instruct you to turn on your computer so they can remote into it to install the program. The person on the phone says that you will then need to purchase new security software for $400 and asks for your credit card number.

Target: Anyone with a computer and access to the internet, but especially seniors.

Result: You have compromised your credit card information and have paid for computer software which most likely is not legitimate. The scam artist may have also installed “spyware” which can harm your computer.

How to avoid this scam: Your internet provider or computer manufacturer should never call and ask you to reveal personal financial information over the phone or by email. If you receive such a call or email, ask the person for a full name and phone number and then look up your internet provider’s number and call them directly to verify their identity. Never give out personal financial information by email or over the phone unless you initiated the phone call and you are certain of the person with whom you are speaking with.

Debt Reduction Scam

In challenging economic times, many people are looking for help getting out of debt or keeping their home, and almost as many scammers appear to take advantage of these desperate situations.

Phone/ Mail Pitch: We can help you keep your house by dealing with your mortgage company for you or we can help you reduce your debt.

Target: Anyone who is behind on their mortgage, in debt or in other financial trouble.

Result: You pay them, they do nothing, and you are in more debt than when you started.

How to avoid this scam: There are many look-alike websites that have been created to try to convince consumers into parting with their money. Some may sound like a government agency, or even part of a non-profit consumer organization. Most will ask for an upfront fee to help you deal with your mortgage company, creditors or the government (services you could easily do yourself for free), and almost all leave you in more debt than when you started.

Don’t pay upfront fees to a company or organization you are not familiar with. Check with the Better Business Bureau or the Department of Business and Professional Regulation to get information on their history and track record.

Unauthorized Insurance Scam

One example of unauthorized insurance came with the signing of the Federal Affordable Healthcare Act, a flurry of fake and discounted insurance plans are being sold via phone, door-to-door salesmen, the Internet and email. 

The most common type of cyber fraud is unauthorized insurance, selling insurance without a state license. If a company is not licensed in the state of Florida, it may not pay your claims and you could lose your premium payments. Call DFS’ Consumer Helpline at 1-877-MY-FL-CFO (877-693-5236) to check a company’s or agent’s license status.

Pitch:  Somebody tells you an insurance product isn’t insurance and is exempt from state regulations, or if they tell you they don’t need a license to sell a particular type of insurance, contact DFS. This is a common insurance fraud pitch. If you suspect insurance fraud, call DFS to report it or you may report it directly on the Division of Insurance Fraud website at www.MyFloridaCFO.com/fraud. You may be eligible for a reward.

Target: Consumers that can’t afford health insurance or other insurance products

Result: You pay for something that doesn’t cover your medical needs, prescriptions, or other care or services you were promised.

How to avoid this scam: DFS suggests buying insurance only from licensed companies and agents. It is against the law to sell insurance without a license in Florida; further, if they are not licensed in Florida, DFS may not be able to help you should you have a problem with the company. To learn more about a company or agent, including license status, call DFS’ Consumer Helpline at 1-877-My-FL-CFO (1-877-693-5236) or visit the Company Directory located on our Division of Consumer Services website.

Fake Debt Collector Call Scam

The Federal Trade Commission warns consumers to be alert for scam artists posing as debt collectors. Sometimes it may be hard to tell the difference between a legitimate debt collector and a fake one. Sometimes fake debt collectors may even have some of your personal information, such as a bank account number.

Pitch: Phony debt collectors may pose as attorneys or law enforcement officers demanding immediate payment on delinquent loans or on loans consumers received but for amounts they do not owe.

Target: All consumers.

Result: Consumers are threatened with lawsuits or arrests if payments are not made and may end up giving money or personal information out of fear.

How to avoid this scam: Ask the caller for their name, company, street address, and telephone number. Tell the caller that you refuse to discuss any debt until you get a written "validation notice." The notice must include the amount of the debt, the name of the creditor you owe, and your rights under the federal Fair Debt Collection Practices Act.

If a caller refuses to give you all or any of this information, do not be afraid to hang up and do not pay! Paying a fake debt collector will not always make them terminate contact. They may make up another debt to try to obtain more of your money.

Sweepstakes & Lottery Scam

Sweepstakes and lottery scams come in all shapes and sizes, but the bottom line is almost always this: You’ve won a lot of money, but in order to claim it you must first send in some money. You could also be told to keep the information confidential until “we’re ready to announce your big winnings.”

Online Pitch: You won! The company or CEO wants to send you money!

Target: Social network users.

Result: Clicking these can allow scammers access to your personal information and potentially that of your friends.

How to avoid this scam: Often these types of scams use celebrities or other famous names to make their offer seem more genuine. If you aren’t sure, don’t click on the link.  Instead, go directly to the homepage of the company mentioned. If they are really giving away $1 million, there will be some kind of announcement on their website.  It is also important to remember that you can’t win if you didn’t enter.

Identity Theft Scam

There are a million ways to steal someone’s identity and once a thief has your personal information, they can max out your credit cards, drain your bank account, and ruin your credit score. Identity theft scams come in many shapes and sizes – friends or grandchildren “stranded” in a foreign country, the hotel front desk “verifying” your credit card in the middle of the night, “charity” solicitations from groups you’ve never supported in the past and countless others.

Pitch: A consumer receives a text message, email, phone call etc. from her credit union saying that in order to activate her credit card, she needs to provide the last four digits of her account number or a similar situation.

Target: All consumers.

Result: The scammer has a complete access to your personal and financial information.

How to avoid this scam: You can protect yourself from identity theft by safeguarding your information.  It is important to monitor your statements and to review your credit report annually.  Visit www.AnnualCreditReport.com to access your credit report for free from one of the three nationwide credit reporting companies – Experian, Equifax, and TransUnion – every 12 months.

Check Cashing Scam

Whether you are selling a couch on Craig’s List or responding to a job ad, this scam usually works this way: The person you are doing business with “accidentally” sends you a check for more than the amount they owe you. They ask you to deposit it into your bank account and then send them the difference via a wire service such as Western Union. A deposited check takes a couple of days to clear, whereas wired money is gone instantly. When the original check bounces, you are out whatever money you wired…and you’re still stuck with the old couch.

Pitch: Sorry I wrote the check for too much.  Can you wire or transfer me the difference?

Target: People making transactions with strangers (selling on Craig’s List, mystery shopper jobs, etc.)

Result: Their check bounces and the money you sent them is gone forever.

How to avoid this scam: Don’t trust anyone you don’t know, especially if they are asking for money.

Grandparent Scam

This scam tugs at the heartstrings of seniors with grandchildren.

Pitch: The caller identifies themselves as your grandchild and states that they have been arrested in another country and need money wired immediately for their bail and to please not tell mom or dad, since this will upset them.

Target: Seniors

Result: You wire money only to find out later that your grandchild is safe.

How to avoid this scam: Tell your family to not post travel plans online. Con artists can use online information to contact family members. Don’t trust caller ID. Con artists can disguise the number that appears on the caller ID with a practice called “spoofing.” If you get a call from your “grandchild” asking for bail money, ask for the name of the bond company and call them directly to verify its truth. You can also contact the family of the grandchild to confirm that they are in fact traveling.

When in doubt, ask callers questions that only your real family member would know the answer to or create a code word that only family members know to use in the case of an emergency.

Foreign Lottery Scam

This scam is very similar to the sweepstakes scam with a slight variation.  The scam begins with a telephone call congratulating the consumer on winning the Jamaican, Mexican or some other foreign country Lottery. Once the caller convinces the consumer of their new-found wealth, the only thing left to do is claim the jackpot. To do this, the consumer is told they have to send money to cover fees and taxes associated with their winnings.

Pitch: Congratulations! You have just won the lottery! Don’t tell your family or friends because they might want to take some of your money.

Target: All consumers, especially seniors living on a fixed income.

Result: You wire money to the scammer to claim your prize and never hear from them again or they continue calling you stating that the fees have increased and you need to wire just a little more money to secure your winnings.

How to avoid this scam: You can’t legitimately win a lottery that you have not entered. If you hear you have won a free gift, vacation or prize, simply say “No thank you,” and hang up the phone.

Job Scam

Whether it’s a secret shopper scheme, work-from-home scam, or a phony offer of employment, job-related scams can not only dash your hopes, but also steal your money or your identity. It’s easy for scammers to create false email addresses, websites and online “job applications” that seem very professional.

Email Pitch: You get an email that looks professional, the website looks professional, and you even have a telephone interview. Then they inform you that you have got the job! They will then ask you to fill out an online form.

Target: Those looking for work.

Result: The scammer will now have all of the information needed to commit identity theft and steal your hard-earned money.

How to avoid this scam: Be cautious of those who wish to interview you only over the phone, who ask you to wire money for any reason, or who ask you to fill out an online application or credit report asking for sensitive/personal data like your Social Security or bank account number.  Be especially cautious of offers that claim you can make big or quick money with no experience necessary.

Home Improvement Scam

This scam typically starts with a knock on your door with a story or a deal – the roofer who can spot some missing shingles on your roof, the paver with some leftover asphalt who can give you a great deal on driveway resealing or some similar claim. These contractors will continually move around to avoid contact with law enforcement and past customers.

In-Person Pitch: I’ve got a deal on resealing your driveway (fixing your roof, trimming trees, etc.)

Target: All property owners, especially seniors.

Result: After you agree to the work to be done, you may have a shoddy job that will not last, a false injury claim against your insurance company or a worker who simply takes your money and runs.

How to avoid this scam: Verify the company with the Better Business Bureau. Collect copies of their license and contractor number for your records and Verify Before You Buy! You can also verify with the Department of Financial Services Division of Workers’ Compensation if they have workers’ compensation coverage. If they don’t, you could be liable for any injuries.

Sales Scam

Sales scams have been around for a long time and the internet has introduced new ways for fraudsters to attempt to scam you.  It is important to remember, if it sounds too good to be true, it probably is.

Pitch/Mail Pitch: Win an iPad, a new camera, a laptop, etc. for just a few pennies a bid.

Target: All consumers, especially those who want to get an online shopping bargain.

Result: You pay for every bid you make, even if you don’t receive the merchandise.

How to avoid this scam: High-pressure sales tactics, “limited time offers,” and prices that seem too low are all tips that something may not be quite right. Be wary of products that claim to help you lose weight without trying, settle debt for a few cents on the dollar, make you rich quick, make you look years younger and other similar claims.

Gold Buying Scam

In an economy of unpredictable investments and low rates of return, scammers are jumping on the band wagon to offer “hope.” It is this hope of getting ahead that has deceived consumers into purchasing precious metals from phony companies that have no other intention than to steal hard-earned money from honest consumers.

Phone / Mail Pitch: Telemarketers pressure consumers with the threat of the falling stock market and the rising price of gold to “wake up” and take charge of their money by investing in gold or other precious metals. Another spin-off scam encourages seniors to pay for their gold investments with a reverse mortgage.

Target: Consumers with money to invest in precious metals and seniors who wish to add to their retirement savings.

Results: Consumers lose money by investing in gold that was never truly purchased.

How to avoid this scam: Do not allow yourself to be coerced by pushy telemarketers to make an “investment” that sounds too good to be true – because it usually is. Never send money to a company without full proof of their legitimacy.  You can check with the Better Business Bureau to ensure that a dealer is licensed.

Puerto Rico Scam

Phone / Mail Pitch: The consumer answers a call and hears the caller screaming something like “We’ve got your son and we’re going to harm him if you don’t send $2,000!” A person with a strong Spanish accent is calling from the Puerto Rico area code of 787 or another foreign country.  Area codes and phone numbers can be falsely created.

Target: This scam has been targeting South Florida consumers in particular since 2011 but any consumer can be impacted.

Results: Consumers wire money out of concern for their loved ones. Unfortunately, it is next to impossible to recover the money once the transaction is completed.

How to avoid this scam: Be aware of these types of phony calls and never wire money in response to threats over the phone. Call your loved ones to ensure that they are safe and then call your local law enforcement.

Advanced Fee Scam

There are a great variety of advance fee scams and con artists are continually developing new versions and spin-offs to scam consumers.  Advance fee scams occur when a victim gives money in anticipation of receiving something of value such as a loan, contract, gift or investment and actually receives little to nothing in return.

Pitch: I can help find financing agreements for you if you pay me a finder’s fee in advance.

Target: All consumers.

Result: The individual will require you to sign a contract in which you agree to pay the fee.  You will then find that you are ineligible for the financing but have already paid the non-refundable finder fee.

How to avoid this scam: An overarching phrase for most all scams is, if it sounds too good to be true, it probably is.  These advance fee scams are no different.  You will want to make sure to completely understand any agreement that you enter into before signing. 

Romance Scam

Pitch: The scam artist will pretend to develop romantic intentions through online dating websites or other social media sites.  After communicating for some time, the scam artist will begin asking for money.  They will claim the money is perhaps for an airline ticket to travel to the United States to visit you, medical expenses or high internet/phone bills for the relationship to continue.

Target: Any consumer online with seniors in particular.

Results: You send this individual money for their sited expenses and receive nothing in return.

How to avoid this scam: Be vigilant while on the internet.  You should also be weary of those you meet online.  It is also advised that you do not send money to an individual that you do not know. 

Unclaimed Property Scam

This scam uses the promise of finding money that belongs to the consumer that is sitting idly and unclaimed.  There are legitimate unclaimed funds out there and scammers will make you think that you have money to be claimed.

Pitch: The scammer will send an email with a message telling you that you have thousands of dollars in unclaimed property just waiting to be accessed.

Target: All consumers.

Result: You pay the individual a fee for their assistance in locating your funds and never receive your supposed thousands of dollars.

How to avoid this scam: It is important to know that you will not be contacted by email regarding unclaimed property.  Remember that you will never be asked your bank account information when claiming your unclaimed property and that there is no fee related to filing a claim.  By visiting the State of Florida Unclaimed Property website at www.fltreasurehunt.org you can search to see if you have any unclaimed property.

Utility Company Scam

A recent tactic among fraud artists is to pose as a representative of your utility company in order to obtain cash or personal financial information. These fraudsters contact you by phone, email or through the internet and often times seem very legitimate.

Phone/ E-Mail Pitch: You receive a phone call or email explaining that an agency is offering to pay your utility bill as a part of a government approved program. They ask for your social security number and bank account information in order to pay your bill. The bill is never paid and your financial information has been compromised.

These scam artists will also pose as utility company representatives and try and scare you into believing your utility bill is past due and demand payment before your lights are cut off. Once they have your financial information they hang up never to be heard from again.

Target: Anyone with a local utility account especially seniors who may live alone.

Result: You have compromised your credit card information or even given a credit card payment to someone posing as your utility company.

How to avoid this scam: Your utility company will never call or email you demanding payments. If you receive a phone call or email and are unsure whether it is legitimate you should hang up and call your utility company directly to confirm your account information and billing status. Never give out personal financial information over the phone, online, or the internet unless you are positive of the legitimacy of the recipient.

For more information please read this fact sheet.

Resources

Here are some helpful websites with information on frauds and scams.  Stay a step ahead of scam artists and keep yourself updated with the latest information on scams and tips to help prevent yourself from becoming a victim.

Federal Trade Commission – Scam Alerts

The Federal Trade Commission’s Scam Alerts page keeps consumers up to date on recent scam alerts with what to know and do about scams in the news. 

www.consumer.ftc.gov/scam-alerts

Federal Bureau of Investigation – Common Fraud Schemes

The Federal Bureau of Investigation has developed their Common Fraud Schemes website to inform you on the most common scams that the FBI investigates and tips to help prevent you from becoming a victim.

www.fbi.gov/scams-safety/fraud

USA.gov – Consumer Frauds and Scams

The USA.gov Consumer Frauds and scams website hosts information and tips on how to avoid scams and fraud with a special section dedicated to current scams to be aware of.

www.usa.gov/topics/consumer/scams-fraud.shtml

Better Business Bureau - Scam Stopper

The Better Business Bureau’s Scam Stopper website has information on scams including top scams, the science of scams, who gets scammed and report a scam.

www.bbb.org/council/bbb-scam-stopper/

 

If you feel you or someone you know has been a victim of one of these or a similar fraud or scam please call the Division of Consumer Services' toll-free helpline at 1-877-MY-FL-CFO (1-877-693-5236).