Stopping the gravy train
Last month, the Federal Trade Commission (FTC) announced a new proposed rule to prohibit junk fees, which are hidden and bogus fees that harm consumers and undercut honest businesses. These added charges can result in tens of billions of dollars per year in unexpected costs, according to FTC estimates. Public input requested by the agency last year revealed that consumers are fed up with hidden fees in everything from hotel stays to online event ticket purchases. Many consumers said that sellers often do not advertise the total amount they will have to pay, and disclose fees only after they are well into completing the transaction. They also said that sellers often misrepresent or do not adequately disclose the nature or purpose of certain fees, leaving consumers wondering what they are paying for or if they are getting anything at all for the fee charged. The FTC is seeking a new round of comments on a proposed junk fee rule that would ban businesses from advertising prices that hide or omit mandatory fees and require them to disclose upfront the amount and purpose of the fees and whether they are refundable. This would make it easier for consumers to comparison shop for the lowest total price, and would level the playing field for honest businesses. The proposed rule would also have enforcement teeth, allowing the FTC to secure refunds for harmed consumers and seek monetary penalties against companies that do not comply with its provisions. Submit comments on the proposed junk fee rule here by Jan. 8.
This will tick you off
A sneaky social media trick was reported by the London-based Guardian a few months ago—a scam that could easily jump the pond and target U.S. consumers. As the Guardian explained, consumers who complained on the X platform (formerly known as Twitter) of poor customer service delivered by various companies were targeted by scammers after X changed its account verification process. Until this year, a blue checkmark (or tick mark, in British English) denoted a business account that had been officially verified by X, explained the Guardian. A more recent report, by the internet security company Kaspersky, spells out plain and simple why you can’t trust accounts with blue checkmarks on X anymore: Anyone can buy one. Fraudsters masquerading as customer service agents, the Guardian explained, responded under fake X handles, typically displaying the trusted (but no longer trustworthy) blue checkmark, and tricked victims into disclosing their bank details to get a promised refund. Bank and airline customers, the Guardian said, were among those at risk of the phishing scams. With the validity of checkmarks now in question, Kaspersky explains that the most useful indicator of a profile’s authenticity is the creation date, since this cannot be bought. If a profile was created "a long time ago," there’s some reason to trust it, although, Kaspersky added, it’s important to remember that a profile can always be renamed. Ultimately, scammers will always find a way to scam. Instead of relying on checkmarks (or tick marks) for protection, do your best to avoid becoming a mark. Be discreet when using social media, and never give financial information to anyone on X or any other platform.
Stuffing and stockings
Cyber-Funday. As fortunate consumers finish off the last of their Thanksgiving dinner, their minds may turn to what they will be buying for friends and family over the holidays. Since nearly half of shoppers expect to buy all or most of their gifts online, according to a recent Shopify/Gallup survey cited by Forbes, now is a good time to review the latest National Consumers League (NCL) tips for reducing the risk of shopping-related fraud during the holidays. One key point to remember, as highlighted in NCL's article, is that, due to differences in consumer protection law and the ways payment methods are designed, how you choose to pay can determine if you are entitled to a refund in the case of fraud. For online purchases, stick with the payment system set up for third-party marketplaces like Amazon, eBay and Etsy, NCL advises. These platforms often ensure that the seller will deliver your purchase, while giving you the ability to file a dispute if they don’t. Credit cards and debit cards, NCL goes on, offer the most protection, with card issuers allowing you to dispute phony charges. Check out the NCL piece for more tips on spotting cheap knock-offs, avoiding delivery impersonation schemes, and filing a complaint if you're a victim.
Speaking of giving. With the Giving Season here, and Giving Tuesday right around the corner, consumers will want to keep in mind that several sources offer reports and ratings on how charities spend donors’ money and operate their organizations. Consumers can turn to BBB Wise Giving Alliance (Give.org), Charity Navigator, CharityWatch, and Candid for info on a charity, as listed in the FTC's fact sheet on donating wisely. Since, as AARP reported, one-third of all charitable giving happens during December, we can expect scammers to be especially active in the coming weeks. Red flags to watch out for, according to the FTC posting, include being rushed into making a donation; being thanked for a donation you never made, in order to trick you into making a payment; names that sound like (but aren’t) the names of real charities; and vague and sentimental claims without specifics about how your donation will be used. Since most states require charities and their fundraisers to register before asking for donations, visit NASCOnet.org to find the website of your state’s charity official and do some research about the charities you're considering. To determine if your donation will be tax deductible, use the IRS’s Tax Exempt Organization Search Tool. If you're looking for a fun learning/educational tool on this topic, check out the recent Money Talk with Tiff podcast episode on recognizing and avoiding charity scams. Host Tiffany Grant, a speaker at our recent virtual convening, covers all the key points in 14 minutes.
Tips
Decisively creamed. As a result of an FTC lawsuit, the owner of a series of companies that charged consumers millions of dollars in undisclosed and recurring subscription fees for skin creams agreed to a lifetime ban on "negative option marketing," the agency announced last month. (In negative option marketing, a customer’s failure to take an affirmative action, either to reject an offer or cancel an agreement, is interpreted as agreeing to be charged for goods or services.) The FTC sued Gopalkrishna Pai and eight companies he owned in 2019, charging that he marketed a number of skin creams online for a nominal “shipping and handling” fee, usually $4.99. Consumers who bought the products were not aware that they would later be charged the full price for the products and a recurring monthly charge. The proposed settlement order would, among other things, ban Pai from negative option marketing for life. In a related Consumer Alert, FTC Consumer Education Specialist Gema de las Heras offers consumers tips on what to consider before accepting a free trial offer. These include searching for the company online and looking up the name with the words “scam” or “complaint” to see what other people are saying about the free trial offers; looking for information on how you can cancel future shipments or services; and watching for pre-checked boxes that might give the company permission to keep charging you. For more on negative option subscriptions, see the FTC's fact sheet here.
Malware maybes. Mark Stockley, senior threat intelligence researcher with Malwarebytes, appeared on a recent Rich On Tech podcast episode to talk about malware (malicious software). Host Rich DeMuro asked Stockley what common signs might indicate that a computer or device is infected with malware. Stockley's response may surprise you. "These come with big caveats," Stockley responded, explaining that if you’re infected, you may find that your computer is running slowly or hot, you’re inundated with pop-up ads, and your computer is crashing more often. The big caveat, Stockley said, is that all of these things can be caused by things that aren't malware, and there is no guarantee that malware on your computer will cause any of these things. Stockley explained that the more well-written the malware is, the less of these signs you're likely to see. The "really bad stuff," Stockley said—the malware that will steal from you—is "really, really good at staying hidden," leaving no obvious signs. Check out the podcast interview (starting at minute 18) to learn about how our devices are getting infected with malware (hint: many more ways than just via your inbox!); why not to get caught up with terms like virus vs. worm vs. trojan horse; and how, and on what devices, security software can help.
Walking past the open door. The Rich On Tech podcast mentioned in the previous segment also provided a good reminder that the fake Opendoor rental scam is still making the rounds. (During the podcast, the show's producer recounted how he almost fell for the scam.) As the year's end approaches, you may be coming to the end of an apartment lease and looking for a new place to rent. You'll want to be wary of a rental scam that's been periodically reported over at least a couple of years. One case, reported in June by the San Antonio-based ABC affiliate KSAT, described a local family that moved into a rental home only to learn it was never for rent. A scammer had posted the home on Craigslist, when in reality it was up for sale on Opendoor. The victims spoke to the scammer by phone and he directed them to download the Opendoor app so they could visit and tour the home in person, on their own. They paid $1,500 to the scammer and started moving in, during which a potential buyer showed up with an agent to tour the home. That's when the victims discovered they'd been defrauded. Opendoor, which in the ABC story described the scam as an “unfortunate and growing trend across the U.S.,” offered these tips to rental property hunters: Google the address to see if the home is listed on another website; verify the true owner by using public tax or property records; and beware of prices that seem too good to be true. You can find Opendoor's own Q&A about this scam here.
A healthy fortune. Fortune reported last week in a Fortune Well article by Richard Eisenberg (who will speak at our upcoming investing webinar; look for information here) that, while Americans over 65 are busy choosing Medicare coverage for 2024, fraudsters are busy looking for ways to entrap them in Medicare scams and to bilk Medicare. Many of the scams, the article explains, are variations on identity fraud, designed to steal your Medicare number or vital financial information through texts, “phishing” emails, social media and online platforms. Eisenberg runs down a litany of Medicare scams to watch out for, including Medicare imposter scams, free medical equipment scams, and Medicare Advantage sales scams. If you think you may have been defrauded or see that Medicare has been bilked by a crook using your name or ID, Eisenberg provides several tips, including calling Medicare (800-MEDICARE) or the U.S. Department of Health and Human Service’s (HHS) fraud hotline (800-447-8477); reporting identity theft to the FTC; and filing a complaint with the HHS Office of Inspector General. For more scam examples, and tips to avoid them, check out the Fortune article here.
Pulling a fast one. According to the Governors Highway Safety Association, 18 states and the District of Columbia have passed laws that permit the use of speed safety cameras as of July 2023. These are cameras that capture images of speeding drivers and quickly result in speeding tickets arriving by mail. (To see if your state is among them, you can check a frequently updated list here.) Now, as SCAM GRAM readers have surely come to understand, hardly can a new technology emerge without a conniving schemer trying to find a way to use it to rip off unsuspecting consumers. Alas, the "speeding ticket scam" may soon arrive in your inbox. A Boston-based CBS news station reported last week that Massachusetts police are warning residents about this trickery. The sample scam email message posted by police on social media informs recipients that they've been cited with a traffic violation and must pay the citation within 72 hours. The considerate scammers even make "payment plans available," but require online payment and will not accept checks. Here’s the kicker: Massachusetts does not even have a traffic camera enforcement system that fines people in this way—only a police officer can stop a driver and issue a citation at the time of the incident, as WBZ News reported. We think the many red flags in the posted email message should be enough to convince anyone to follow the police chief's advice: fuhgettaboutit!
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