TODAY’S SCAMS Kevin V. Olsen Director Division of Consumer Protection.
Consumer Protection, Financial Scams Identity...
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Consumer Protection, Financial Scams & Identity Theft What are consumers rights and responsibilities? What is the purpose of consumer protection laws and agencies? How can I avoid identity theft and fraud? How do I understand financial contracts? What are ways to avoid financial scams?
Transcript of Consumer Protection, Financial Scams Identity...
Consumer Protection, Financial
Scams
&
Identity Theft
What are consumers rights and responsibilities?
What is the purpose of consumer protection laws and agencies?
How can I avoid identity theft and fraud?
How do I understand financial contracts?
What are ways to avoid financial scams?
Consumer Rights &
Responsibilities
RIGHTS RESPONSIBILITIES
To Safety To Use Products Safely
To Be Informed To Seek Information and Use it to make Decisions
To Choose To Choose Goods and Services Carefully
To Be Heard To Speak Up and Let Likes and Dislikes Be Known
Consumer Bill of Rights (State of the Union Address of 1962, President John F. Kennedy)
Source: Thomson South-Western, Economic Education for Consumers; USOE Adult Roles & Responsibilities
What is government regulation?
• The national and state governments provide many services to protect consumers from unsafe and fraudulent business practices.
• The goal of the government in a “free market” economic system is to protect, regulate, and enforce laws for society.
Federal Trade Commission (FTC)
• PURPOSE: to regulate businesses in order to protect consumers.
• Created in 1914 to prevent businesses from limiting competition.
• Protects consumers by prosecuting businesses for unfair or deceptive practices.
FTC Bureau of Consumer
Protection www.ftc.gov• PURPOSE: TO provide information and
other resources to consumers• identity theft issues• getting credit and loans (CFPB)• https://www.youtube.com/watch?v=1V0Ax9
OIc84• equal opportunities in jobs and education• If a violation is reported, the BCP will work
with consumers to prosecute offenders and get a resolution for victims.
Filing a complaint• https://www.youtube.com/watch?v=
3LvMO5UMCl8• Job scam• https://www.youtube.com/watch?v=A-
4N9z21U7o&list=PL6967B767809B9857• Online shopping tips• https://www.youtube.com/watch?v=3w4t1
dYCayM&list=PL13BDA056C386E83F• Wi-fi hotspots• https://www.youtube.com/watch?v=bzoEy-
t8Y-8&list=PL13BDA056C386E83F
Consumer Product Safety Commission (CPSC) www.cpsc.gov
PURPOSE: to create and enforce policies for safe products other than food, pharmaceuticals, alcohol, and guns.• The CPSC can issue a recall (all products
returned and removed from store shelves) for products deemed to be unsafe for consumers.
• https://www.youtube.com/watch?v=g6oHH9GTzsg&list=TLqo_lOxSJwObP9ZinVZWgqQsDJNqsoxmq
http://www.nytimes.com/2016/04/07/business/teenage-driver-dies-in-texas-after-takata-airbag-ruptures-in-crash.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
Food and Drug Administration (FDA) www.fda.gov
• PURPOSE: to provide the same regulations as the CPSC for food, pharmaceuticals, and cosmetics.
• The FDA also funds testing of new drugs before they are allowed to be sold.
• https://www.youtube.com/watch?v=H45GYPAuTdg&list=PL0F318EA5D70D9168
Federal Communications
Commission (FCC):
http://www.fcc.gov/• PURPOSE: to determine content that can
be shown/aired on TV and radio.
• Prevents businesses from intentionally lying in advertisements.
• http://www.upworthy.com/video-net-neutrality-explained-in-under-2-minutes
Bureau of Alcohol, Tobacco,
Firearms, and Explosives (ATF)
• PURPOSE: to regulate the sale and safety of these products.
• https://www.youtube.com/watch?v=YFwWJAQGar8
• https://www.youtube.com/watch?v=RT3VMGKWye8&list=UUjS30VXuyVqGrLA-UGmxbMQ
Federal Department of Justice DOJPURPOSE: To enforce the law; ensure public safety; prevent and control crime• http://www.justice.gov/agencies• https://www.youtube.com/watch?v=NOqUJ-
WEkkM&list=UUJJGP5tnAqV5iaxpXj_J2Qw• Utah Department of Justice• PURPOSE: to protect consumers and
regulating businesses.• http://attorneygeneral.utah.gov/
Who Protects Savers?
NCUA- National Credit Union Association-Insures funds in a credit union up to $250,000 per account.
FDIC- Federal Depository Insurance Corporation-Insures funds in a federally chartered bank up to $250,000 per account.-Created in 1933 to maintain public confidence and stability
Pyramid Scheme
financial fraud in which
people pay to join an organization
sell memberships/training materials to other people
https://www.youtube.com/watch?v=EGUywSX-cu8
Ponzi Scheme
https://www.youtube.com/watch?v=zRTPKcJGwe4
https://www.youtube.com/watch?v=5UVpLPtgdF4
promoter is “selling” high return investments that aren’t real
no products or commissions involved
early investors get paid with other investors money and “recruit” new investors
Later investors get nothing
Affinity Fraud
targets members of a specific group
elderly, ethnic groups, and religions.
Perpetrators exploit characteristics common to the group
faith, trust, fear, hope, etc.
https://www.youtube.com/watch?v=vUv4dDavC6U&index=1&list=PLDF985F76B59B68E7
Predatory Lending
• Sell properties for much more than they are worth, using false appraisals.
• Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
• Knowingly lend more money than a borrower can afford to repay.
• Charge excessive rates and fees to a borrower who qualifies for lower rates and fees
https://www.youtube.com/watch?v=OLtMtxIzo8s
https://www.youtube.com/watch?v=MNM7nvcVm-0
Common Scams
Advance fee scams• require you to pay a fee in advance to
receive a credit card, loan, or scholarship
• you get something that is worthless, or nothing at all.
• https://www.youtube.com/watch?v=xNJXtcI88Jk
The prize that will cost you You have “won a free ______”
You must first pay taxes or a handling fee
You end up with nothing “free”
Example: you have won a “free” resort vacation
You must buy your own airline ticket
airline ticket price is inflated to cover the cost of the resort
Online auctions
Beware of auction items that are priced far too low.
The item may be fake or in bad condition. The item might even be stolen.
Fraud jobs
work-at-home opportunities
someone who claims to work in the “human resources department” requests your personal information and then uses it to steal your identity.
an individual who promises you a job, but only if you pay an employment fee.
Counterfeit check schemes
a letter or email message from overseas seeking your help in obtaining payment on a check
If you cash the check, you can keep a portion of it and mail the rest in a cashier’s check to the schemer
The original check is bad, so you have to “pay back” the bank for the amount of the original check.
https://www.youtube.com/watch?v=hGpUYG5PWFM
Bogus NGO (charities)
Non-governmental organization
Never give payment information to anyone calling or e-mailing you, claiming to be with an NGO.
Any reputable charity will be happy to send you paperwork on their NGO.
You can also research online and with the Better Business Bureau.
https://www.youtube.com/watch?v=lLmU-KhN3wM
Scam schools promise of lucrative job upon
“graduation”
after you’ve amassed a sizeable debt
but are left with only substandard training and no job offer
How to Avoid Scams
• Investigate deals “too good to be true”.
• Don’t be fooled by appearances.
• Watch out for those who prey on fears.
• Monitor your financial accounts.
• Report fraud or abuse.
• Do your homework.
Identity Theft
Someone wrongfully acquires and uses a consumer’s personal identification, credit, or account information without your permission.
This information may include:
Social Security Numbers
Name
Address
Date of Birth
Mother’s Maiden Name
Passwords or PINs
http://www.pbs.org/wgbh/nova/blogs/education/2014/10/four-ways-to-help-students-avoid-online-identity-theft/
Identity Theft Look through your wallets, purses, backpacks,
etc. for all information that tells something about who you are (your identity).
How easily could your identity be stolen?
Brainstorm ways think this information can be used fraudulently.
http://www.howstuffworks.com/identity-theft.htm
https://www.youtube.com/watch?v=z26pnq9SXgQ&list=PLEE07277B1E6B5F15&index=1
https://www.youtube.com/watch?v=FuP8SEyorP8&list=PL6xNo7bpGKUatVPxt75Ugv3EaS2FsdRRq&index=3
How Identity Thieves Work
Dumpster Diving
Computer Spyware
Phishing
Wireless Hacking
Stealing
Shoulder Surfing
https://www.youtube.com/watch?v=g5_H9dxUO_g&list=PL6xNo7bpGKUatVPxt75Ugv3EaS2FsdRRq&index=12
Ways to Avoid Identity Theft Monitor your credit report. Don’t give out personal information to unknown
people or companies. Protect your credit and debit cards. Protect your mailbox. Protect your wallet. Use passwords and PINs that cannot be easily
guessed. Use anti-virus software on your computer. Notify your bank when you change your address
or phone number.
Dana went out to dinner and left her credit card at the restaurant. The next day she called the restaurant and they said they didn’t have the card. List ALL the steps she should take.
Sam purchased a bicycle using his brand new credit card. When he received his credit card statement, he noticed several charges he did not make. List ALL the steps Sam should take to solve his problem and to make sure this doesn’t happen to other consumers.
