The IC3 receives a high volume of complaints from victims of payday loan telephone collection scams. In these scams, a caller claims that the victim is delinquent in a payday loan and must repay the loan to avoid legal consequences. The callers purport to be representatives of the FBI, Federal Legislative Department, various law firms, or other legitimate-sounding agencies. They claim to be collecting debts for companies such as United Cash Advance, U.S. Cash Advance, U.S. Cash Net, and other internet check cashing services.

One of the most insidious aspects of this scam is that the callers have accurate information about the victims, including social security numbers, dates of birth, addresses, employer information, bank account numbers, names and telephone numbers of relatives and friends. The method by which the fraudsters obtained the personal information is unclear, but victims often relay that they had completed online applications for other loans or credit cards before the calls began.

The fraudsters relentlessly call the victim's home, cell phone, and place of employment. They refuse to provide to the victims any details of the alleged payday loans and become abusive when questioned. The callers threaten victims with legal actions, arrests, and in some cases physical violence if they refuse to pay. In many cases, the callers even resort to harassment of the victim's relatives, friends, and employers.

Some fraudsters instruct victims to fax a statement agreeing to pay a certain dollar amount, on a specific date, via prepaid visa card. The statement further declares that the victim would never dispute the debt.

These telephone calls are an attempt to obtain payment by instilling fear in the victims. Do not follow the instuctions of the caller.

If you receive telephone calls such as these, you should:

• Contact your banking institutions;
• Contact the three major credit bureaus and request an alert be put on your file;
• Contact your local law enforcement agencies if you feel you are in immediate danger;
• File a complaint at www.IC3.gov.

Other timely topics include deposit insurance coverage and dealing with debt problems

FOR IMMEDIATE RELEASE
November 30, 2010
 
Media Contact:
Jay Rosenstein
(202) 898-7303
jrosenstein@fdic.gov
 

Con artists are very good at tricking consumers into parting with money or divulging personal information that can be used to commit fraud. To help test people's knowledge about financial scams, the Fall 2010 issue of FDIC Consumer News, published by the Federal Deposit Insurance Corporation, features a quiz on common frauds and their warning signs. Other timely articles discuss FDIC insurance coverage, solutions to mortgage and other debt problems, "credit protection" offers, student loans, ways to save money at tax time, and automated overdraft payment programs.

Here's an overview of the topics, tips and information in the latest newsletter:

Can you spot a scam? The FDIC's seven-question quiz on frauds involves common scenarios, including transactions with strangers who pay by check, work-at-home solicitations, lost or stolen ATM and debit cards, offers to rescue a home from foreclosure, and e-mail requests for personal financial information. Each answer comes with additional information and guidance on how to learn more.
What to know about two key changes in FDIC insurance: There continues to be confusion over what has or hasn't changed recently with FDIC insurance coverage. The FDIC offers an overview of two key areas — the permanent increase in the basic coverage amount from $100,000 to $250,000, and the new, temporary insurance category that will fully insure all funds in checking accounts that pay no interest, regardless of the dollar amount.
Estate planning and FDIC-insured accounts: This article looks at different types of deposit accounts that can be used to pass funds on to heirs and how to make sure the money is fully insured if the bank fails.
Mortgage payment problems: The reminders and updates in this article center on refinancing opportunities and loan modifications available through the federal government, plus how to obtain help from a non-profit housing counselor and avoid foreclosure rescue frauds.
Dealing with debt overload: Borrowers who think they won't be able to make a loan payment need to work out a solution with their lender. One option is to find a reputable credit counselor who can help develop a personalized plan to solve the problems. The article also discusses protecting against scams and understanding consumer rights.
What to consider before buying credit protection. Credit card issuers and other lenders offer products that would postpone or make a borrower's loan payments in the event of a personal hardship, such as a death, illness or job loss. These products may provide security and peace of mind, but it's important to understand the costs, limitations and alternatives.
The latest on student loans: With college costs soaring and student loan debt at a record high, the newsletter offers an update on what families need to know about borrowing to pay for an education.
Tips for saving money at tax time: Moves to consider include using tax refunds to pay off high-interest debt or build up savings, avoiding costly loans arranged by tax preparers, and being on guard against tax-related frauds.
New guidance to banks on overdraft costs, usage: For the more than 4,700 institutions it supervises, the FDIC has issued guidance for close monitoring and oversight of overdraft payment programs, especially automated programs that can lead to excessive use and high costs for consumers.
The goal of FDIC Consumer News is to deliver timely, reliable and innovative tips and information about financial matters, free of charge. The Fall 2010 edition can be read or printed at www.fdic.gov/consumers/consumer/news/cnfall10.

To find current and past issues of FDIC Consumer News, visit www.fdic.gov/consumernews or request paper copies by contacting the FDIC's Public Information Center toll-free at 1-877-275-3342, by e-mail to publicinfo@fdic.gov, or by writing to the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226.

There are two ways to subscribe to the quarterly FDIC Consumer News. To receive an e-mail about each new issue with links to stories, go to www.fdic.gov/about/subscriptions/index.html. To receive the newsletter in the mail, free of charge, contact the Public Information Center as listed above.

The FDIC encourages financial institutions, government agencies, consumer organizations, educators, the media and anyone else to help make the tips and information in FDIC Consumer News widely available. The publication may be reprinted in whole or in part without advance permission. Organizations also may link to or mention the FDIC Web site.

# # #

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,760 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars -- insured financial institutions fund its operations.

FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-260-2010

Holiday shoppers this year are expected to spend more than ever online.  A few simple precautions can make a big difference. Bank of Ann Arbor wants to help make sure that you have the information you need to shop safely and securely anywhere, anytime. 

Here are some points to keep in mind to help protect your personal information when shopping online and to lessen the likelihood of fraud.

• Make sure your computer and browser are secure. Set your firewall, anti-virus and anti-spyware software to automatically update and scan your PC. Check to ensure the firewall protection is turned on and is at the highest setting.

• Don’t create passwords that include easily accessed personal information, such as mother’s maiden name or date of birth. Instead, use something unique that only you know and include uppercase and non-alphanumeric characters.

• Don't give personal information over the phone, through the mail or on the Internet unless you know who you’re dealing with and preferably only if you’ve initiated the contact. Never give out Social Security or driver’s license numbers or date of birth, particularly over the phone in public places. If you must share personal information, confirm that you are dealing with a legitimate organization.

• If you receive an e-mail asking for personal information, do not hit the reply button or click on any link in the e-mail. Instead, go directly to the sender’s website by typing in its web address.

• Look for secure sites with an “s” in the URL (https://) and a closed-padlock icon on the webpage.

• Always double-check the URL to be sure you are shopping with the company you intended to shop with. A simple typo can help identity thieves.

• Know who you are dealing with. If you’re using a company’s site for the first time, consider checking it out with the Better Business Bureau (www.bbb.org) or use a search engine with the name of the company and “fraud” to determine if other consumers have posted negative reviews.

• Never respond to an offer by way of a spam or bulk e-mail. If something sounds too good to be true, it usually is.

• Avoid providing unnecessary information, such as annual income, spending habits, hobbies and lifestyle data.

• Shop with U.S.-based companies. Domestic state and federal consumer-protection laws apply. You’ll be protected and have recourse should something go awry.

• Register your credit and debit cards at www.verifiedbyvisa.com or www.mastercardsecurecode.com for a more secure online shopping experience. Some banks offer virtual credit card account numbers that are generated each time you make a purchase, and some e-mail providers let you create several aliases to protect your personal e-mail address.

• Above all, monitor your online card or bank account statements for unauthorized activity and report this immediately to the bank.  Credit cards and Visa and MasterCard branded debit cards offer consumer protections in the event of fraud. Keep records of all your purchases in case there’s a problem.

The Internet Crime Complaint Center (IC3) continues to receive reports of letters and emails being distributed pursuant to prize sweepstakes or lottery schemes. These schemes use counterfeit checks that bear legitimate-looking logos of various financial institutions to fool victim into sending money to the fraudsters.

Fraudsters tell victims they won a sweepstakes or lottery, but to receive a lump sum payout, they must pay the taxes and processing fees upfront. Fraudsters direct individuals to call a telephone number to initiate a letter of instructions. The letter alleges that the victim may elect to take an advance on the winnings to make the required upfront payment. The letter includes a check in the amount of the alleged taxes and fees, along with processing instructions. Ultimately, victims believe they are using the advance to make the required upfront payment, but in reality they are falling prey to the scheme.

The victim deposits the check into their own bank, which credits the account for the amount of the check before the check clears. The victim immediately withdraws the money and wires it to the fraudsters. Afterwards, the check proves to be counterfeit and the bank pulls the respective funds from the victim's account, leaving the victim liable for the amount of the counterfeit check plus any additional fees the bank
may charge.

Persons may fall victim to this scheme due to the allure of easy money and the apparent legitimacy of the check the fraudsters include in the letter of instruction. The alleged cash prizes and locations of the financial institutions vary.

Tips to avoid being scammed:
- A federal statute prohibits mailing lottery tickets, advertisements, or payments to purchase tickets in a foreign lottery.
- Be leery if you do not remember entering a lottery or sweepstakes.
- Beware of lotteries or sweepstakes that charge a fee prior to delivering your prize.
- Be wary of demands to send additional money as a requirement to be eligible for future winnings.

If you have been a victim of this type of scam or any other cyber crime, you can report it to the IC3 at: www.IC3.gov. The IC3 complaint database links complaints for potential referral to law enforcement for case consideration. Complaint information is also used to identify emerging trends and patterns to alert the public to new criminal schemes.

The Federal Deposit Insurance Corporation (FDIC) has received numerous reports of suspicious telephone calls where the caller claims to represent the FDIC and is calling regarding the collection of an outstanding debt.

To date, the callers have alleged that the call recipient is delinquent in payment of a loan that was applied for over the Internet or made through a payday lender. The loan may or may not actually exist. The caller attempts to authenticate the claim by providing sensitive personal information, such as name, Social Security number, and date of birth, supposedly taken from the loan application. The recipient is then strongly urged to make a payment over the phone to “avoid a lawsuit and possible arrest.” In some instances, the caller is said to sound aggressive and threatening.

These suspicious telephone calls are fraudulent. Recipients should consider them as an attempt to steal money or collect personal identifying information. The FDIC generally does not initiate unsolicited telephone calls to consumers and is not involved with the collection of debts on behalf of operating lenders and financial institutions.

If a caller demonstrates that he or she has the recipient’s sensitive personal information, such as Social Security number, date of birth, and bank account numbers, the recipient may be the victim of identity theft and should review his or her credit reports for signs of possible fraud. The individual should also consider placing a “fraud alert” on his or her credit reports. This can be done by contacting one of the three consumer reporting companies listed below. Only one of the three companies needs to be contacted. That company is required to contact the other two, which will place an alert on their versions of the report.
TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, California 92834-6790
Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, Georgia 30374-0241
Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9554, Allen, Texas 75013

Information about counterfeit items, cyber-fraud incidents and other fraudulent activity may be forwarded to the FDIC’s Cyber-Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-3054, Washington, D.C. 20429, or transmitted electronically to alert@fdic.gov. Questions related to federal deposit insurance or consumer issues should be submitted to the FDIC using an online form that can be accessed at http://www2.fdic.gov/starsmail/index.asp.

The Office of Financial and Insurance regulation (OFIR) and Allstate Insurance Company are working together to warn consumers of an international mail fraud scheme.

An OFIR employee received a counterfeit check that appeared to originate from Allstate. The fraudulent check was issued for $4,970.20 and came with a letter informing the recipient that they won a $250,000 "Consumer's Promotion Draw" for consumers who shop at a number of the nation's major stores. The letter also explains the $4,970.20 check was issued to cover the "Non-Canadian Residential Tax" The consumer will have to pay to a tax agent. The consumer is also expected to pay $200 in insurance and delivery charges. The individuals sending these letters and counterfeit checks have no affiliation with Allstate and are illegally using the company's name.

Michigan consumers who receive or have received what appears to be a $4,900 check from Allstate should immediately contact OFIR toll-free at 877-999-6442 and the agency can direct their call to the proper authorities.