Identity Theft: Prevention

This is part one of our two part series on identity theft where we are discussing what preventative measures can be taken against identity thieves. Next time we'll look at what should be done if your identity has been stolen. In 2012 around 16.6 million people in the US over the age of 16 were the victim of identity theft (more than 10% of those being over 50) and 68% of them reported financial losses associated with it (average loss of $1,769).

Your identity can be stolen from anything that has personally identifying information (PII) so you should consider anything of the sort “need to know.” There are many ways crooks can get your information: breaking into websites, convince you to type it into online forms/ emails, using skimmers when handling your card or hiding them on ATM machines, gas stations, a waiter may while taking a payment for your meal. Con-men also may try to get information from papers that aren't properly disposed of diving through dumpsters and opening pre-approved lines of credit or taking your account numbers.

Fourteen percent of people will experience identity theft at some point in their lives, what can you to to protect yourself from it?

Protect your mail by...

• Not using a traditional mail box
• Instead get a PO box, a mail slat or a mail box with a lock
• If you have a mail box and no intention of giving it up:
  • Remove mail promptly
  • Take outgoing mail with PII to the post office
  • Don't have a new check book mailed to it
  • Opt out of pre-screened credit opportunities
• If you go away from home request a vacation hold

Protect your information when using technology by...

• Not giving away PII by phone or over the internet unless you initiated the contact, know the company and are confidant you are actually on their web page (some phonies are very convincing, watch out!)
• Don't click links in emails
• Don't post too much information on social media, this includes dates of vacations, thieves look for that!
• Always personalize the privacy settings on your websites
• Don't send personal information over public WiFi (more information on why here)
• Avoid entering your PII into websites that have http instead of https at the front, the s stands for secure (this won't always be possible right now, since websites are still in the process of updating)
• If you sell or otherwise dispose of your computer wipe all the info and overwrite the hard drive first

You can protect yourself in general by...

• Only carrying the identification and payment cards you need for that outing and unless you need it NEVER your social security card!
• Consider your info “need to know”: if a location requests it ask why, how it'll be protected and what the repercussions are for not providing it
• Don't sign your credit card instead write “photo ID required”
• Destroy labels on prescription bottles before disposing of them or alternately see if your hospital, recycling center, or pharmacy takes them
• If you write checks to pay credit card bills don't write the full account number, just the last 4 digits
• Don't have your Social Security number printed on checks, ideally don't have your home address either
• Photocopy both sides of everything you carry in your wallet. Keep the copies in a safe place so you maintain account numbers and phone numbers
• Shred all receipts, credit offers, credit applications, insurance forms, physician statements, checks, bank statements, expired cards, and any other documents with PII
• Lock all financial documents and records in a safe place, keep the key off site if you can
• Check your credit reports and bank account statements for discrepancies regularly

Next week we will go over what to do if your identity has been stolen. What may be reassuring for people who have just discovered that their identity has been stolen is that 86% of people resolve the issues that arise within 24 hours.

Scams: Fake Debt Collection

The Fake Debt Collection Scam is an easy one to fall for. If you owe money to someone it's easy to assume that the person on the other end of the line may be a legitimate collector. Con artists trick you out of your money by taking advantage of any weaknesses they can exploit when they are talking to you on the phone. Information about you can be obtained in many ways and may be brought up during the call to establish that the caller is “legitimate”. Do not be fooled by this.

It is important to be aware of some of the more common scams. When swindlers find something that works they stick with it. The best thing is to not allow a conversation to continue if you suspect it is not legitimate. DO NOT be afraid to hang up on these people. Remember, If you have only exempt retirement income such as Social Security, VA Benefits, and/or most pensions, these callers cannot do anything to you – by law, they cannot take your income!

You might be dealing with a scammer or con artist if...

• You don't recognize the debt or loan (always check the account number).
• The caller won't give you their name, a mailing address, a company name, or a court case number.
• The caller asks for personal financial information.
• The caller uses high pressure tactics, often demanding payment TODAY, threatening arrest, or swearing. Remember, con artists know they get more suspicious over time and will try to force you to act without careful consideration.
• They offer limited payment options, be especially wary of ones requiring you to wire money or load a rechargeable money card since there is no way to prove that you made a payment.
• The caller claims to be with law enforcement (police and/or the courts will never call you regarding a debt).
• The caller (or letter) accuses you of some type of fraud and/or says that they are from a State Attorney General's office.
• You may always make a free call to HELPS Nonprofit Law Firm before paying someone who calls you on the phone.

If you suspect you are being targeted by a fake debt collector you should ask for the individuals name, company, street address (not a PO Box), and a validation notice for the debt. It may be a good idea to tell the caller that you are recording the conversation (even if you are not), often the caller will hang up immediately.

Remember - Never give or confirm personal information of any kind, particularly Social Security numbers or bank account information.

For HELPS clients: You may simply treat these calls like any other collector and tell them you are represented by a law firm, give them our name and number, then politely hang up. If you receive a letter, simply forward it to our office and forget about it. 

Scams and Technology

Crooks love to target seniors. It maybe that those who are older are perceived as having their finances more in line, and less mental aptitude for detecting scams. These scammers often disguise themselves as legitimate business people. Typically they pressure victims to make impulsive and expensive decisions. While some will show up on your front porch it's far more likely that they will target you through technology since it is much more cost effective. Generally, they do not engage in legitimate businesses practices which is fortunate because it makes it easier to spot a scam. Always exercise caution and remember the old but true saying; if something seems too good to be true, it is.

How do scammers operate?

Robocalls

Automated sales calls (excluding calls for charity or politics), when you have not given explicit permission to the business to call, are illegal, increasing the likelihood that any call of this nature is a scam. If you push buttons on these automated calls the swindler will know it's a live line and you're likely to receive more calls. Be aware that blocking these numbers is generally ineffective as they change numbers often. It is best just to hang up.

Email and the Internet

Emails

Emails are a great way for con-men (and women) to get your personal information either by tricking you into giving it to them or by inserting something called malware onto your computer through downloaded images or attached documents. When viewing emails from sources you don't know- or unusual emails from an account you do - you should never allow images, download documents, or click links. Additionally you shouldn't call any phone numbers given in the email.

Phishing emails are a common scam. These emails try to get you to enter your personal information by acting like a legitimate company. They can imitate your bank, a charity, a law firm or government agencies (they may falsify a logo or make one up). They may try to steer you to websites that look legitimate in order to get your account information. It is best never to go to business sites through links in an email, instead Google the website. Legitimate companies will generally not ask you to send private information via email as it is not secure.

Wi-Fi

Simply connecting to public Wi-Fi can be risky; anyone can set up a Wi-Fi hotspot so it's hard to ensure your safety. Malicious individuals will often set up hotspots with common names (e.g. linksys or Free Public WiFi) to take advantage of unaware individuals.

If you do use a public Wi-Fi, you should not enter any personal information such as passwords, or your credit card number. Be aware that this alone doesn't make you safe on public networks - if your computer has file-sharing turned on you could be given malware or have your sensitive documents accessed by other people on the network.

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In general, when it comes to your personal information you can't be too careful! It's always wise to insist on doing more research before giving someone your personal information or establishing yourself with a new company. Look into reviews online, see what credentials they possess and the legitimacy of those credentials. Be very wary of companies that ask you to wire money, or use a re-loadable debit or gift card to pay them. Most legitimate companies won't ask you to do that.

You can read about some common scams here: Common Scams Targeted at Seniors

Online Payday Loans

An online payday loan is similar to one you would receive from a lending store: a short-term, unsecured loan that you pay off your next payday. Lenders profit from trapping you in a cycle of debt. You may pay the loan, but then need to renew it to deal with your other financial obligations.These loans provide quick money, but their high interest rate (we've dealt with some near 500%) makes them difficult or impossible to pay back. 

The Debt Cycle

Online payday loans present their own unique problems because it’s difficult to locate and regulate online lenders. Companies can anonymously create websites, and locate themselves where there are limited regulations on lenders. Some of these companies are located overseas, and often have no physical address making it challenging to contact them, resolve complaints, and enforce consumer rights. We have had some HELPS clients come to us with payday loans. Even when we have a physical address and can send notices to the payday loan lender they often ignore our contacts and harass the HELPS client. They do this because they know they cannot be sued because they move around too fast and are based overseas (even though it may appear they are in the U.S.).

Lenders hide not only their personal information, but facts about the loan, including the annual percentage rate (APR). It’s important to consider the APR instead of just the fee on the loan, because the creditor will attempt to force it to roll over. In fact many lenders will require you to decline to refinance or your loan renews automatically. They utilize the banks system of direct deposit/ withdrawal; the automatic renewing can go unhandled resulting in more debt.

There are ways to defend against predatory online lenders. The easiest is to find other borrowing options: legitimate overdraft protection, borrowing from credit unions who offer safer alternatives, or from friends, family, or a religious institution. If you are going to take out a payday loan find one without an interest rate in the triple digits, avoid very short term loans (e.g. two weeks). Avoid sharing personal information with unfamiliar companies; above all, do not give your banking information to internet lenders. If you do, it is possible you will have to change banks to stop them from withdrawing from your account.

We strongly advise everyone to avoid or discontinue any use of payday loans.

For our clients:
If you continue to be harassed by a payday loan company, please advise us. We will take every step available to stop them. Resist the temptation to answer their calls or engage them in conversation. They often make false threats that scare people; including arrest and jail. It is best not to even speak with them.

To learn more about HELPS visit our website: http://www.helpsishere.org/

By Reese Tozier

What is Debt Consolidation and is it Worth it?

Last week I spoke with someone who told me something surprising. She had hired a debt consolidation company to settle her debts and it had actually settled one. But was it actually worth it for her to hire the debt consolidation company? Keep reading to find out. 

Debt consolidation companies use many tactics to snare their customers, most of which disregard the truth and target those most in need. An ad currently playing on the radio asserts that Congress has passed a stimulus bill which allows people to settle their credit card debt for pennies on the dollar. This is absolutely false. Congress passed no such bill. (Of course, people have always been free to try and negotiate with their credit card companies, so that is true.) 

The way the debt consolidation companies work is as follows:

 You sign a long contract with small print agreeing to have a certain amount of money drawn directly out of your checking account each month. The company takes this money. It also writes letters to your creditors telling them that they are interested in settling the debts. This causes the creditors to send future letters to the company, not you, giving you the sense that your debts are being handled.

However, these companies do NOT send any money to your creditors. After 6 months or so, the creditors have not been paid, your credit is ruined and creditors stop dealing with the consolidation company and again - look to you for payment.

These companies routinely get shut down by various state attorney general offices, but the same people behind the companies simply start new ones – doing the same rotten things, with a different name. They are not really interested in settling your debts but in collecting the money you pay them. Countless Americans have paid millions of dollars to these companies. It's unfortunate because these people have the best of intentions. 

The FTC is finally taking some action to help people avoid these companies. Hopefully, someday, laws will be passed to completely put them out of business. They are one of the most prevalent scams of our times and prey on people trying to survive in a tough economy.

 

Additionally, don't confuse debt consolidation companies with local consumer credit counseling or other nonprofit entities that help with debt issues. These entities can genuinely help people in need. 

Then there is HELPS nonprofit which is designed for seniors and disabled persons on Social Security, disability and protected pensions who do not have sufficient income to pay their debts. HELPS gives these persons peace from harassment and the freedom to use their income for their needs. 

By Rex Daines

Common Scams Targeted at Seniors

“Work at home and earn extra money!” Sounds good doesn’t it? Particularly when we could all use a little extra cash. Unfortunately, the vast majority of companies that offer “work at home” opportunities are simply trying to take your money. I recently discussed this topic with Patricia Swansick, an investigator with the Oregon Department of Justice. In a recent case, Mrs. Swansick had been able to recover a portion of what had once been one senior’s life savings. The senior had been talked into taking on significant credit card debt by telemarketers to help finance his new "Home Business".

All seniors need to be on the lookout for scam artists. Here are some commons signs that you might be getting scammed:

Sweepstake notices, free gift offers. 

Once a senior takes the bait for one scam, thieves sell the person's name, address and telephone number, and the fake mailings proliferate. These mail scam are of two types, the "pay to play" scheme or the "You've won! Here's your check" scam. The first ploy entices seniors to buy inexpensive trinkets or magazine subscriptions (which they really do receive) in order to have their name entered in the contest. In the second case, the elderly person receives an authentic-looking check, with notification they've already won the Jamaican (or another foreign country) lottery. What the senior should do: shred both offers. It's illegal for companies to require you to buy anything to enter a sweepstakes. If they do, they're scammers. It's also illegal for Americans to enter a foreign country's lottery. These scams require the "winner" to wire back a share of their "winnings" (which will initially clear the bank but later prove counterfeit) for taxes or administrative fees. The advice from HELPS is to simply tear these up without even opening them in the first place.

Telephone Sales Calls 

“Scammers know senior citizens answer their phone, and are reluctant to hang up on anyone‖, says Jean Mathisen, director of AARP's Fraud Fighter Call Center. And as with junk mail, rip-off artists sell names and phone numbers of seniors who prove to be phone-receptive. HELPS advises you to simply say no thanks and hang up the phone. Resist the temptation to engage in a conversation.

Identity Theft 

Be wary of any calls or emails requesting personal information. One ruse the thieves use: They tell the senior they need a bank account number so they can deposit big prize money in the account.

The grandparents scheme 

The senior answers his phone and a young voice says, "Hey, Grandpa, it's your favorite grandson, and I'm in trouble." Senior says, "John, is that you?" The caller responds, "yes, it's John," he's calling from a friend's cell phone and he's been in an accident. He's out of state and needs his grandpa to wire some money right away.

The discount prescription scam 

Callers offer seniors prescription drugs at 50 percent off. The catch: it requires a $200 "membership fee" to join a discount club, along with seniors' credit card numbers. Or the drugs never arrive as promised, or the "medicine" is actually a generic herbal replacement.

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Other common scams that target seniors include ―Mystery Shopper, solicitations for donations, Medicare enrollment, mortgage foreclosure relief, and home or auto repair scams. We want our clients to know that there are more scam artists operating than ever before. If it sounds too good to be true it’s because it isn’t true.