Damper on deception
The Federal Trade Commission (FTC) announced last month a final Junk Fees Rule to prohibit bait-and-switch pricing and other tactics used to hide total prices and bury junk fees in the live-event ticketing and short-term lodging industries. “People deserve to know up-front what they’re being asked to pay—without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan, referring to “resort,” “convenience,” and “service” fees associated with live event tickets, hotels and vacation rentals. The announcement explains that the new rule will make comparison shopping easier, save consumers money and level the playing field for honest businesses. Although this is great news for consumers, it doesn’t ban or limit fees, as clarified in the FTC announcement: "The rule does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategy. Rather, it simply requires that businesses that advertise their pricing tell consumers the whole truth up-front about prices and fees." As for industries outside of live-event ticketing and short-term lodging, the FTC also emphasizes that they are already prohibited from deceiving consumers about fees and pricing per longstanding law. The FTC says it will use its law enforcement authority to continue to pursue bait-and-switch pricing tactics in other industries through case-by-case enforcement. All in all, good news for those ready to jump on the post-holiday getaway deals.
Jury duty scam is out (again)
We've heard about jury duty scams for years—fraudsters demanding payment from consumers to avoid arrest for supposedly failing to appear for jury duty. In a hard-to-believe twist on the scam, the perpetrators are inmates coordinating the fraud from prison using illegally obtained prepaid cell phones. Tampa-based U.S. Attorney Roger B. Handberg announced last week an indictment charging a Georgia prison inmate and his not-incarcerated associate with conspiracy to commit wire fraud in a jury duty scam. Citing court documents, the U.S. attorney explains that a Sarasota consumer reported receiving a call from a scammer impersonating a deputy with the Sarasota County Sheriff’s Office. The caller told the consumer that an arrest warrant had been issued against her because she had missed jury duty. The consumer was directed to a “Bonding Transition Center” to make a payment to satisfy the warrant. The so-called "center" turned out to be a Bitcoin ATM that allows users to buy and sell cryptocurrencies. The consumer deposited over $12,000 into three separate accounts as cryptocurrency and the funds were subsequently transferred to the unincarcerated associate's Bitcoin wallet, and later to other accounts. The U.S. Attorney's office explained that the law enforcement investigation revealed that the inmate in this case is even accused of directing his associate to send more phones into the prison via drone. This example of the jury duty scam reminds us to be on guard against even the more familiar scams. The U.S. Attorney also reminds us that, in an attempt to gain our trust, fraudsters often provide correct personal information, such as our correct home address or date of birth, and that fraudsters' caller ID often matches the telephone number of a local law enforcement agency. Speaking of duty, we hereby summon you to spread the word.
Scrub-a-dub-dub
A good soaping. As fires in the Los Angeles area continue to burn at press time, consumer alerts about disaster relief scams have, fortunately, also been spreading. Whether you're in a fire zone or not, knowing what to watch out for when disaster strikes is a good thing for everyone. The Los Angeles Police Department put out a list of disaster scams to be wary of, as reported by KTLA 5. These include fake job opportunities related to fire recovery, government impersonators asking for payments for government services, fake charities, and more. For those looking to assist communities impacted by the Southern California fires, USA Today assembled a list of legitimate services, charities and organizations here. And, a hyperlocal and unexpected consumer alert was issued by General Hospital soap opera star Cameron Mathison, who lost his home in the Los Angeles wildfires last week. As reported by (naturally) Soap Hub, Mathison warned against donating to fraudulent GoFundMe accounts. In an Instagram video, Mathison asks followers not to donate to a GoFundMe page in which a fraudster is trying to steal money from the public using Mathison's likeness, videos and images. "We are not asking for money. It is not us," Mathison said in the video. GoFundMe explains how they protect donors here, and we'd suggest internet searches using terms like "fake gofundme" to find recently reported schemes.
Washed up in Tinseltown. Speaking of stars, Los Angeles Magazine reported that actor Keith Middlebrook, who appeared in Moneyball and Iron Man 2, was sentenced this month to over eight years in prison for a COVID-era scam. Citing an FBI affidavit, the magazine explained that Middlebrook's scheme was largely carried out on Instagram (here we go again!). Middlebrook claimed to have developed a cure for COVID as well as a pill to prevent the disease, and solicited potential investors in several states via text messages, videos and statements posted on YouTube and Instagram. Middlebrook, the magazine story continued, made claims of miraculous results, promised enormous investment returns, and falsely asserted—even in open court—that former Los Angeles Lakers point guard Earvin “Magic” Johnson was a director and officer of his company. Middlebrook also lied about securing investments of up to a million dollars from several people and about a nonexistent multibillion-dollar offer to purchase his companies. He was arrested after delivering pills to an undercover "investor." For tips on investment schemes of all sorts, check out this page from the Federal Trade Commission. Also keep in mind the age-old adage: If it sounds too good to be true, it is!
Tips
Heads up, parents. MSN ran a recent NewsNation story reporting that the California Highway Patrol (CHP) is warning parents about scammers who use the fear of child abduction to gain sensitive information. In a Facebook post, the state's Highway Patrol stated that scammers are placing phone calls to parents while posing as “AMBER Alert representatives” and offering to “register” their children. The fraudsters request confidential information and even ask to meet parents at their home. "This is NOT how the AMBER Alert system works!" read the CHP post. The agency emphasized that, at least in California, the Highway Patrol is the only agency authorized to activate AMBER alerts, and that no registration by community members is required; that we should never provide personal information or answer calls from unknown or “possible scam” numbers; and that, if contacted by a scammer, we should report it to local law enforcement immediately. For nationwide information about AMBER alerts and how they work, see here and here.
No parking, baby. Concert- and event-goers across the country are used to the sometimes-mad rush to find a parking spot before enjoying a special event. A recent warning from Michigan Attorney General Dana Nessel, aimed at Detroit Auto Show attendees, offers tips we can put to use to protect ourselves from parking scams any time we're away from home. The AG's alert says that scammers take advantage of these types of events to sell parking spaces for lots they don’t have authority over, which could lead to cars being ticketed, towed, or even stolen. Nessel advises consumers to plan their parking ahead of time and to be cautious. She encourages residents to ask for a receipt or other proof upon payment, and to never give their keys to an attendant unless there are posted valet signs and they’ve confirmed ahead of time with the location that the valet service is one they offer. As if that weren't scam enough, Nessel also warns about bad actors who, armed with the right technology, create seemingly authentic parking tickets requesting payment online or via QR code. Nessel advised citation recipients to visit the municipality’s website directly or call the court to verify that the ticket is real before following the web or QR code instructions. The AG includes a list of related tips from the Better Business Bureau and a link to a BBB alert. Among the always smart tips: Use a credit card to pay traffic citations, if possible, so that it's easier to contest fraudulent charges if necessary. Wishing you the best parking karma in 2025!
Brush up on this scam. We hope your holiday season was joyous and free of scams. One scam that's good to be wary of anytime—even with the holiday shopping season in the rearview mirror—is the so-called brushing scam, warned about last month by USA Today. This scam involves unexpected packages you did not order arriving at your doorstep. They might be addressed to you or someone else, and they might ask you to scan a malicious QR code. The story quotes Jennifer Leach, associate director of the Federal Trade Commission's Bureau of Consumer and Business Education, who said that "Dishonest businesses and scammers are sending all sorts of unordered junk in the mail—and then writing good reviews for their business in your name." Leach explained that these scams can signal that the scammer has created an account in the consumer's name, taken over the consumer's account on the shopping site, or created new accounts in other names, yet tied to the consumer's address. It can also cause future shoppers to make poor buying decisions based on pumped-up reviews, the story continued. USA Today also cited Melanie McGovern of the Better Business Bureau, who recommended that consumers receiving an unexpected package take steps to protect their identity, including by notifying the retailer about receiving the package, checking their account for recent orders, and changing their passwords. Also recommended: reporting the activity to the BBB's Scam Tracker to warn others. The story also noted that Amazon prohibits third-party sellers from sending unsolicited packages to customers, and takes action when policies are violated, including by withholding payments, suspending selling privileges, and reporting bad actors to law enforcement. Among the Amazon suggestions included in the story were to contact friends, family and Amazon if you receive an unsolicited package, to make sure it's not a gift; and to contact Amazon customer service if you receive a package addressed to someone else. If you're wondering whether you'll one day inexplicably receive an unexpected diamond ring, wonder no more. As the story notes, items are usually inexpensive things you wouldn't necessarily want, like ping pong balls or a flashlight. So much for hoping to make the most of a bad situation.
FBI tackles AI. Last month, the FBI issued an alert warning the public that criminals are exploiting generative artificial intelligence (AI) to commit fraud on a larger scale. The use of AI makes schemes more believable, and the technology can correct for human errors that might otherwise serve as warning signs of fraud. The FBI alert notes that the creation or distribution of synthetic (artificially generated) content is not inherently illegal, though it can be used to facilitate crimes, such as fraud and extortion. Because it can be difficult to identify when content is AI-generated, the FBI provided several examples that you'll want to review of how criminals use generative AI to commit fraud. Criminals can use AI-generated text to, for example, create social media profiles that trick people into sending money, and to help them generate grammatically correct translations. They can also use AI-generated images to create believable social media profiles, identification documents, disaster scenes (to elicit donations), and compromising photos of a sexual nature (to extort their targets). Also included are examples of how criminals use AI-generated audio (voice cloning) and video in fake emergency scams, fake investment promotions, and real-time video chats with fake company executives, law enforcement or other authority figures. Check out the list of tips for protecting yourself from AI-generated scams here. The alert also describes what you'll want to include in your report to the FBI's Internet Crime Complaint Center if you're impacted by this type of fraud. We think a well-informed authentically intelligent—the best kind of "AI"—consumer can send artificial intelligence fraudsters back to the drawing board.
Ad so bad. Virginia-based WSLS 10 News is warning viewers about social media ad scams in the new year. The report points to an AARP survey that found that more than a third of U.S. adults who made purchases from social media ads have experienced fraud. The news story offers three key tips to keep in mind when coming across potentially fraudulent social media ads. First, they recommend, if the ad is from a known retailer, retype the address into a browser or use the retailer’s app. Clicking on fake ads can redirect consumers to scam sites. Second, for ads from unknown retailers, they recommend researching the company and looking for complaints filed with organizations such as the Better Business Bureau. (We regularly recommend putting the name of a business or product into a search engine along with the phrase "consumer complaint" or "scam.") And, third, the news piece recommends being wary of bait-and-switch scams, such as receiving items of lower quality than advertised, or worse, not receiving the ordered item at all. Also-good recommendations by WSLS 10: Report scams to local law enforcement, and, if you need help, reach out to AARP's Fraud Watch Network. AARP can provide support and guidance on what to do if you're targeted by a fraudster. Young folks among our readership will be glad to know that the AARP's Fraud Watch Network serves everyone—not just retirees!
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