For Release: March 6, 2011
For media inquiries only, contact: Brian J. Gottstein
Email: bgottstein@oag.state.va.us (best
contact method)
Phone: 804-786-5874
Attorney General Cuccinelli warns Virginians about
mortgage foreclosure rescue scams, other fraud during
National Consumer Protection Week
- 15- and 30-second radio PSAs are available for radio stations -
EMBARGOED UNTIL SUNDAY, MARCH 6, 2011
RICHMOND (March 6, 2011) – Attorney General Ken Cuccinelli is joining government agencies and organizations across the nation to mark National Consumer Protection Week (NCPW) from March 6-12. During NCPW, groups nationwide are sharing tips – such as the ones below – that can help consumers avoid mortgage foreclosure rescue scams and other fraud, protect their privacy, manage money and debt, and avoid identity theft.
“Scammers are defrauding Virginians by millions of dollars each year,” said Cuccinelli, “These thieves are sometimes internationally based, beyond the jurisdictional reach of the attorney general’s office, so educating yourself is the first step in fighting these scams.”
Cuccinelli added, “Mortgage foreclosure rescue services have also become very prevalent in this tough economy. While the service itself is not necessarily a scam, I brought suit against three Virginia companies in 2010 for allegedly charging upfront fees to consumers and for guaranteeing to stop scheduled foreclosures. Charging upfront fees for these services and making guarantees that likely cannot be kept are both violations of Virginia law.”
Below is a list of some of the more prevalent scams seen in Virginia, with warning signs and tips to avoid and report them. Additional information is available at the National Consumer Protection Week web site at www.NCPW.gov (the web site will be up year-round). By going to the web site’s “Consumer Topics” page and choosing items from the right-hand menu (a blue box), you can find more resources about various frauds, tips for financial security, and other consumer issues.
It is difficult to assign a dollar amount to losses from all the various types of scams. However, last month, the Javelin Strategy & Research group issued a report which indicates that in 2009, the dollar loss related to identity theft alone was $54 billion in the United States. Reports show that scams and fraud of all types are on the rise.
Radio PSAs
The attorney general has produced 15- and 30-second radio public service announcements which stations can run throughout the month of March and beyond, directing consumers to the tips at the National Consumer Protection web site. Please contact Brian Gottstein at bgottstein@oag.state.va.us and he can email you either MP3 or WMA files of the PSAs.
Mortgage Foreclosure Rescue Scams
Desperate and elderly homeowners are scammed by some mortgage foreclosure rescue services and given false hopes of rescuing their homes. Some victims not only lose their homes, but their savings, as well. If a company tells you not to contact your lender or tells you to make your mortgage payments directly to the service rather than to your lender, this is a sign you are probably being set up.
Some other warning signs to look for:
- A “guaranteed” loan modification or “guarantee” of halting the foreclosure process;
- A request for upfront fees before providing any services. Make sure your attorney has vetted any such arrangement thoroughly. Virginia’s Foreclosure Rescue law prohibits a supplier of foreclosure avoidance or prevention services from “charging or receiving a fee prior to the full and complete performance of the services it has agreed to perform, if the transaction does not involve the sale or transfer of residential real property;”
- An offer to lease your home so you can buy it back over time;
- An offer to transfer your property deed or title it;
- An offer to pay cash for your house far below the selling price of similar houses in your neighborhood; or
- A high degree of pressure to sign papers that you have not had a chance to read thoroughly or that you do not understand without the help of your attorney.
Tips for avoiding mortgage foreclosure rescue scams:
- Contact your lender immediately to discuss working out a plan to get help.
- Never pay a company up front for services pledged in the future.
- Know exactly with whom you are dealing.
For more information, go to these web sites:
http://www.fdic.gov/consumers/loans/prevention/rescue/index.html
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm
Fake Debt Collection Calls
Scammers posing as debt collectors use threats and scare tactics to get a target to “pay up” quickly. Some pose as national banks or government agencies and may threaten to repossess a house, issue an arrest warrant, or even garnish one’s wages. No legitimate creditor or debt collector would threaten such things, because they all run afoul of the Fair Debt Collection Practices Act rules.
Therefore, consumers should arm themselves with this information:
- Ask callers for identification before you provide any information over the telephone. Never pay money to someone you do not know;
- If it is a fairly small amount, avoid the urge to just pay the “bill” to avoid harming your credit score;
- Review your credit reports frequently to find inaccuracies and be aware of your current creditors and account balances. You can get all of your credit reports for free once every 12 months at www.annualcreditreport.com;
Sweepstakes/Fake check scams
Consumers should be very suspicious about offers to:
- Get paid to work at home;
- Receive an “advance” on a sweepstakes you have supposedly won; or
- Pay a fee or tax on the millions you are promised to soon receive from a bank account overseas.
Whatever the pitch, it may sound quite believable. These scammers practice their con every day, and can become exceptionally convincing. A major warning sign is if someone you do not know wants to pay you by check but wants you to wire some of the money back. Many mailings arrive with realistic-looking checks that are fake. Even though your bank may initially cash such a check, when it is determined to be fake months later, you will owe the money to cover it.
Tips to remember:
- Do not pay to collect “sweepstakes winnings.” Legitimate sweepstakes do not require you to pay “insurance,” “taxes,” or “shipping and handling charges,” or any kind of advance fee to collect your prize.
- Do not be pressured to wire money through commercial money transfer companies. Wiring money is the same as sending cash. When the money is gone, there is very little chance of recovery.
- Phone numbers are easily disguised. Some con artists disguise their area codes so they might look like they are calling from your local area, but they could be calling from anywhere in the world.
For more information on fake check scams:
http://www.fbi.gov/news/stories/2009/june/auctionfraud_063009
http://www.fakechecks.org/preventionOverpayments.html
For more information on sweepstakes fraud:
http://www.ftc.gov/bcp/edu/microsites/phonefraud/sweepstakes.shtml
Phone Scams – “Vishing”
“Vishing” is the technique that leverages fake Caller ID information to steal information or money from consumers over the telephone.
Consumers need to know these tips to avoid vishing:
- Be suspicious of all unknown callers and emailers asking for personal information. Security experts suggest letting all unknown callers go directly to voicemail.
- Do not trust Caller ID. Caller ID does not guarantee the call is really coming from the number or company appearing on the display. Fake Caller ID information (“spoofing”) is easy.
- Ask questions. If someone is trying to sell you something or asking for your personal or financial information, ask him to identify who he works for. Never provide credit card or other private information to anyone who calls you. Hang up and call a known legitimate number for the company (from a bill, for example) and check out the caller and offer on your own to see if they are legitimate.
- Register your number with the National Do Not Call registry at DoNotCall.gov. Criminals and unscrupulous telemarketers will likely ignore the list, but if you are on the list and get a call from a supposed telemarketer, that could be a tip that the offer is bogus. Most legitimate telemarketers obey the rules and laws about contacting consumers. DoNotCall.gov also provides a place where complaints can be filed.
Phishing
Phishing strategies aim to deliver legitimate-looking email messages from your bank or some other company with which you have an account. The message may be an ominous warning about the security of your banking information or some other warning that requires you to take immediate action.
Remember these things to avoid this scam:
- If you get an email or pop-up message that asks for personal or financial information, do not reply. Legitimate companies do not ask for this information via email. If you are concerned, independently verify the legitimacy of the email by contacting the company mentioned in the email through a phone number you know to be genuine. Never click or copy and paste the link from the email message into your Internet browser — scammers can make links look like they go to one place, but that actually send you to a different site.
- Use anti-virus and anti-spyware software, as well as a firewall. Update them all regularly.
- Do not email personal or financial information. Email is not a secure method of transmitting personal information. If you initiate a transaction and want to provide your personal or financial information through an organization’s website, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL for a website that begins “https:” (the “s” stands for “secure”). Unfortunately, no indicator is foolproof; some phishers have forged security icons.
- Review credit card and bank account statements as soon as you receive them to check for unauthorized charges.
- Be cautious about opening any attachment or downloading any files from emails you receive, regardless of who sent them. These files can contain viruses or other software that can weaken your computer’s security.
A copy of this news release may be found on the website of the Attorney General of Virginia at http://www.vaag.com/Media and News Releases/News_Releases/index.html.