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Florida’s Attorney General: Consumers Need to be Vigilant Against Scams

TALLAHASSEE – Florida’s Attorney General Bill McCollum today (March 2) joined with federal, state and local government agencies and national consumer advocacy organizations to launch National Consumer Protection Week (March 1-7).

The week will highlight consumer education efforts across the nation and encourage everyone to become better informed consumers to avoid falling prey to scammers and con artists. This year’s theme is “Nuts and Bolts: Tools for Today’s Economy.”

“When economic times are tough, we often see a correlating increase in scams and in the number of people who are trying to take advantage of our citizens,” said Attorney General McCollum. “Over the past month, we have seen a significant increase in the number of consumer complaints reported to the Attorney General’s Office. National Consumer Protection Week gives us an excellent opportunity for a refresher course in protecting our pocketbooks and our families from rip-off artists.”


Bill McCollum

As part of the national event, McCollum announced the top categories of fraud complaints received in 2008 by the Attorney General’s Office via the fraud hotline, the Attorney General’s website and the postal system. Complaints about mortgage loans and loan practices topped the list, followed closely by complaints about debt collection. The Attorney General urged consumers to be aware of the current trends that may victimize Floridians and to remain vigilant in their efforts to protect themselves from the following scams:

1. Mortgages/Loans – Last year, a significant percentage of the complaints about mortgages were about fraudulent foreclosure “rescue” services or loan modification services. As of October 1, 2008, companies are no longer allowed to charge up-front fees until they have provided the “rescue” services as promised, under a new law supported by Attorney General McCollum. Additionally, the Attorney General’s Mortgage Fraud Task Force has over 35 active investigations and has filed lawsuits against several companies and individuals for allegedly taking advantage of homeowners desperate for assistance..

2. Debt Collection, Collection Agencies and Credit Reporting Companies – Debt collectors are legally prohibited from lying to consumers or threatening them to collect payments. They are also prohibited from calling after 9:00 p.m. and may not contact consumers at work if they know the consumer’s employer disapproves. If concerned about their credit scores, consumers should remember the only official source for free annual credit reports is http://www.annualcreditreport.com. The website works in conjunction with Equifax, Experian and TransUnion, the three national credit reporting companies.

3. Internet-related – Scams that were common last year included an increasing variety of check overpayment scams and phishing, a form of identity theft. Consumers should never give out personal identification information to a stranger over the internet, and should be wary of anyone who writes a check for more than the required amount and then asks to have the difference wired back to them. Consumers also complained about online companies that fail to deliver ordered merchandise.

4. Auto Dealers – Many complaints addressed the issue of used vehicles which were in worse condition than advertised by the dealer or “bait and switch” advertising used to lure consumers to dealerships. Other complaints referenced contracts that included unclear or confusing terms which consumers did not understand, including monthly payments, fees or interest rates higher than expected.

5. Travel – Complaints against travel agencies involved supposed “all-inclusive” vacation packages with hidden consumer fees or other fees and surcharges added to hotel bills and cruises. Last year, the Attorney General’s Office reached settlements with three major cruise lines which provided for approximately $61 million in consumer restitution for retroactively imposed fuel surcharges. A separate settlement was reached with two additional cruise lines in February. Other travel-related complaints addressed timeshare scams, which occur both at the time of the original purchase and at the time of resale.

6. Nigerian Emails and Foreign Scams – Con artists may email individuals claiming to be officials, businesspeople, or the surviving spouses of former government officials in another country whose money is somehow tied up for a limited time. These emails are from thieves trying to steal money or a person’s identity.

7. Financial Issues and Investment Scams –Emails tout “investments” that promise high rates of return with little or no risk. Promoters of fraudulent investments operate a particular scam for a short time, close down before they can be detected, and quickly spend the money they take in. Consumers should take their time in evaluating the legitimacy of an offer. The Attorney General is also supporting legislation this Session which provide the Attorney General’s Office with some authority to pursue securities fraud.

8. Credit Repair – Emails and websites tout a way to consolidate bills into one monthly payment without borrowing; stop credit harassment, foreclosures, repossessions, tax levies and garnishments; wipe out your debts; or rid bad credit. These offers often involve bankruptcy proceedings, but they rarely say so. While bankruptcy is one way to deal with serious financial problems, it is generally considered the option of last resort because it has a long-term negative impact on your creditworthiness. Before resorting to bankruptcy, consumers should talk with their creditors about arranging a modified payment plan, contact a credit counseling service to help them develop a debt repayment plan, or carefully consider a second mortgage or home equity line of credit.

9. Multilevel Marketing Schemes – Multilevel marketing operations or pyramid schemes are fraudulent if there is no legitimate source of revenue generated by the company and it depends on new investments to keep the scheme running. Often, the con artists depend upon new victims to turn over cash in order to make promised payments to those who had earlier given money.

10. Business to Business Scams – These scams target business owners with offers of advertising, corporate services, and other fraudulent “opportunities.” For example, the Florida Attorney General’s Office and 25 other states reached a settlement last year with an online yellow pages directory company over allegations it used “live” activation checks to subscribe businesses to the directory’s listing.

According to the Federal Trade Commission, well-informed consumers are often able to recognize a rip-off or scam. Fraudulent promotions seek to exploit people’s financial fantasies, needs and optimism.

The Attorney General’s Office can provide practical tips for consumers on how to make well-informed purchase decisions, avoid scams, protect their personal information and file a complaint if they feel they are the victims of fraud.

Consumers who wish to file a complaint may do so by calling the Attorney General’s fraud hotline at 1-866-9-NO-SCAM (1-866-966-7226) or by filing a complaint online at http://myfloridalegal.com. Additional information about National Consumer Protection Week is available at http://www.consumer.gov/ncpw.

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