Consumer Federation of America notes and promotes credit score awareness

Washington, DC
June 18, 2018

PRESS RELEASE

OVER THE PAST FOUR YEARS, AN INCREASING NUMBER OF CONSUMERS HAVE OBTAINED THEIR CREDIT SCORES AND KNOW MUCH MORE ABOUT CREDIT SCORES THAN OTHERS DO

The following highlight some of the information released today.  Access the full report here.

Consumer Understanding of Factors Used to Calculate Credit Scores and How They Can Raise a Lower Score Is Incomplete

Large majorities correctly identify three key factors used to calculate credit scores – missed payments (86%), high credit card balances (81%), and personal bankruptcy (79%).

But significant minorities also incorrectly think that age (41%) and marital status (38%) are used in this calculation. And majorities incorrectly believe that tax liens (64%), medical collection accounts less than six months old (62%), and civil judgments (63%) are used in the computation of credit scores.

Similarly, majorities correctly identified individual actions that help raise a low credit score or maintain a high one – make all loan payments on time (89%), keep credit cards balances under 25 percent of the credit limit (72%), and do not open several credit card accounts at the same time (66%). Yet, little more than half of respondents (56%) correctly identified all three factors.

And, only 21 percent know that on a $20,000, 60-month auto loan, borrowers with a low score would typically pay more than $5,000 in interest charges than would a borrower with a high score.

How Consumers Can Raise Their Credit Scores

In brief, consumers can raise their credit scores or maintain high scores by:

  • Consistently making their loan payments on time every month. A late payment may lower one’s credit scores by dozens of points.
  •  Using a small portion of the credit available on a credit card. In general, the higher the percentage of a credit line that is drawn down, the lower one’s credit scores.
  • Paying down credit card debt rather than just shifting it to another credit card or to a home equity loan.
  • Regularly checking one’s credit reports to make sure they are error-free. This can be done for free annually by contacting http://www.annualcreditreport.com or by calling 800-322-8228.

Just 12 questions.

To improve their credit knowledge, nearly 200,000 individuals have taken an online credit score quiz (www.CreditScoreQuiz.org) developed and maintained by CFA and VantageScore.

CreditScoreQuiz.org is one of the only resources that is free from commercial conflicts and created with both industry and advocacy input,” said Barrett Burns, president & CEO of VantageScore Solutions. “Whether you are an educator or a consumer, it’s a terrific resource that can enable financial empowerment.”

Other key survey findings include:

  •  A large majority correctly identify key factors used to calculate credit scores but have an incomplete understanding of all the factors.
  • Similarly, a large majority correctly indicate some, but not all of the ways to raise credit scores.
  •  Over the past four years, even though the percentage recently obtaining their credit reports (versus their credit scores) in the past year has increased (from 29 percent in 2014 to 36 percent in 2018), the percentage who say it is important to check these reports has declined (from 72 percent in 2014 to 67 percent in 2018).

The survey was commissioned by CFA and VantageScore and undertaken by ORC International, which from May 31 to June 3, 2018, interviewed 1005 representative Americans by cell phone and landline. The survey’s margin of error is plus or minus three percentage points.

Advertisements

Protecting your devices from cryptojacking

Instead of min(d)ing their own business, are scammers using your computer as their virtual ATM? Three years ago, the FTC warned the public and took action against cryptojacking. That’s where scammers use your device’s processing power to “mine” cryptocurrency, which they can then convert into cold, hard cash.

Cryptojacking scams have continued to evolve, and they don’t even need you to install anything. Scammers can use malicious code embedded in a website or an ad to infect your device. Then they can help themselves to your device’s processor without you even knowing. You might make an unlucky visit to a website that uses cryptojacking code, click a link in a phishing email, or mistype a web address. Any of those could lead to cryptojacking. While the scammer cashes out, your device may slow down, burn through battery power, or crash.

So what can you do? Try the following:

  •  Follow tried-and-true advice for avoiding malware: use antivirus software, set software and apps to update automatically, never install software or apps you don’t trust, don’t click links without knowing where they lead, and be careful about visiting unfamiliar sites.
  •  Look for and close performance hogs: It can be hard to diagnose cryptojacking, but one common symptom is poor device performance. Consider closing sites or apps that slow your device or drain your battery.
  •  Consider playing defense: Some browser extensions and ad blockers say they help defend against cryptojacking, doing things like blocking mining code. These tools may be worth considering, but always do your homework first. Read reviews and check trusted sources before installing any online tools. Remember, too, that some websites may keep you from using their site if you have blocking software installed.

If you think cryptojacking has happened to you, the Federal Trade Commission wants to know. Report it to www.ftc.gov/complaint.

Tagged with: cryptocurrency, scam

Winners are losers in lottery & sweepstakes scams — FTC SCAM ALERT

You get a card, call, or email telling you that you won! Maybe it’s a lottery, sweepstakes, or some other prize. The person calling is excited and can’t wait for you to get your winnings.

But here’s what happens next: they tell you there’s a fee, some taxes, or customs duties to pay. They ask for your bank account information, or ask you to send money via a wire transfer or to purchase gift cards and provide the card numbers.

Any way you send it, you lose money instead of winning it. You don’t get a big prize. Instead, you get more requests for money, and more promises that you won big. Scammers can be very convincing, and who wouldn’t want to win big!

Lottery and sweepstakes scams are one of the most common consumer frauds operating today. According to the FTC, these scams were the third-most common type of fraud reported to the agency in 2017.

Earlier this year, the FTC took action against an operation we alleged targeted older people with phony sweepstakes offers. The company sent mailers that made people think they had won $1 million (or more!), and that the recipient only needed to pay a small fee to claim it.

Help us help you and others by using the FTC’s top tips to avoid lottery and sweepstakes scams:

1. Keep your money – and your information – to yourself. Never share your financial information with someone who contacts you and claims to need it. And never wire money to or share gift card numbers with anyone who asks you to. Both payment methods are a sure sign of a scam.

2. Pass this information on to a friend. You probably throw away these kinds of bogus offers or hang up when you get these calls. But you probably know someone who could use a friendly reminder.

3. If you spot a scam, report it to the FTC at ftc.gov/complaint. Your report can help FTC investigators identify the scammers and stop them before they steal someone’s hard-earned money.

 

Timeshare resale scheme preyed on older adults — Federal Trade Commission SCAM ALERT

If you’re thinking about selling your timeshare through a resale company, research the company first. Read about this recent FTC case against Pro Timeshare Resales, and you’ll know why.

Timeshare Resales is a Florida-based company that called people – many of whom were older adults – and promised to sell their timeshare properties. The company often said it had a buyer in mind and that the sale would occur quickly. Once the timeshare owner agreed, the company would charge an up-front fee, usually of $500 to $2,500.

But, according to the FTC, the company did not sell the property quickly – or even at all. Often, it would ask for additional fees and refuse to grant refunds.

As result of its FTC settlement, Pro Timeshare Resales is now banned from timeshare resale services and telemarketing. It’s not allowed to make misrepresentations or collect any more payments for their timeshare services. Plus, it agreed to surrender more than $3 million.

How can you avoid timeshare resale scams? Here are some things to keep in mind:

  • Check out the reseller. Contact the State Attorney General and local consumer protection agencies in the state where the reseller is located. Ask if they have any complaints on file. You can also search online for complaints.
  • Ask about fees. It’s better to do business with a reseller that takes fees after the timeshare is sold. If you must pay a fee in advance, get refund policies in writing.
  • Get everything in writing. Read the contract carefully to make sure it matches promises you’ve been given verbally. It should include the services the reseller will perform, plus any fees you must pay and when. If the deal isn’t what you expected or wanted, don’t sign the contract.

For more information, check out Timeshares and Vacation Plans. And, if you’ve been a victim of a scam, report it to the FTC.

 

Google is not calling you — Federal Trade Commission SCAM ALERT

May 23, 2018

by

Rosario Méndez

Attorney, Division of Consumer and Business Education, FTC

Have you gotten a robocall at work, telling you that you have to take action or your Google business listing will be removed? Or maybe even marked as permanently closed? That kind of thing could be tough for a business — if the threat was real. But those calls are not legit—and not from Google.

The FTC just filed a lawsuit against Point Break Media and others, saying they made just those kinds of calls. According to the complaint, people who believed the calls and then spoke to a live telemarketer were told that they could avoid the problem by paying a fee (up to $700). When people paid this fee, the scammers then allegedly targeted them with offers for even more expensive services that would supposedly improve Google search results.  Of course, nobody making those calls is affiliated with Google. And businesses can — for free — manage their own Google business listing.

In this case, the scammers targeted music instructors, house painting companies, car dealerships, and other small businesses. They knew that appearing in online searches is crucial for those businesses, and threatening that connection with customers might make people act before stopping to think.

If you get a call like this, don’t press any buttons. Don’t call the number back, and don’t engage. That just encourages the scammers. The best thing to do? Immediately hang up the phone, and then talk about it with your colleagues or employees. Let them know that:

  • Scammers pretend to be someone you trust. They pretend to be connected with a company you know or a government agency
  • Scammers create a sense of urgency. They want you to rush and make a quick decision without considering options.
  • Scammers use intimidation and fear. It’s okay to hang up the phone and confirm what’s really going on before taking any action.

Then, sign up for the FTC’s Business Blog (FTC.gov/Subscribe), which will keep you up to date on what’s happening at the FTC, and how it affects your business. Also, check out FTC.gov/SmallBusiness. Knowing about scams that target small businesses will help you protect yours.

Tagged with: business, imposter, phone, telemarketing

Blog Topics:

Jobs & Making Money

Asked to pay by gift card? Don’t. — Federal Trade Commission SCAM ALERT

Has someone asked you to go get a gift card to pay for something? Lots of people have told us they’ve been asked to pay with gift cards – by a caller claiming to be with the IRS, or tech support, or a so-called family member in need. If you’ve gotten a call like this, you know that the caller will then demand the gift card numbers and PIN. And, poof, your money is gone.

Scammers are good at convincing people there really is an emergency, so lots of people have made the trip to the Walmart or Target or CVS to buy gift cards to send these callers. And scammers love gift cards – it’s one of their favorite ways to get your money. These cards are like giving cash – and nearly untraceable, unless you act almost immediately.

So here’s the most important thing for you to know: anyone who demands payment by gift card is always, always, always a scammer. Try this gift card buying exercise out at home – especially when anyone asks you to pay with a gift card:

Q: Should I buy an iTunes, Google Play, Steam, Kroger, Walgreens, BestBuy, Amazon, CVS, Rite Aid or ANY OTHER gift card for someone who demands payment? For any reason?

A: NO.

Gift cards are for gifts, not payments. If you’ve bought a gift card and lost money to someone who might be a scammer, tell the company who issued the card. (The contact info might be on the card, but might require some research) Call or email iTunes or Amazon or whoever it was. Tell them their card was used in a scam. If you act quickly enough, they might be able to get your money back. But – either way – it’s important that they know what happened to you. And then please tell the FTC about your loss. Your report helps us try to shut the scammers down.

New alert for Western Union refunds

Did you lose money to a scam, wiring the money via Western Union between January 1, 2004 and January 19, 2017? If so, you might know that May 31 is the deadline for filing your claim to get money back from the FTC’s and the Department of Justice’s settlement with Western Union. With the deadline fast approaching, we know two things: (1) there will probably be a rush of last-minute filers; and (2) scammers will try to take advantage of the people filing claims.

We’re sure about those scammers  because we’ve already seen them (and told you about them). And we’re still seeing scams that offer to get you special access, so-called easier ways to file, and promises of big amounts of money. This includes one recent email that said it came from the FBI, promised a refund of more than $500,000 – and said you could claim it just by emailing a Gmail address.

So, as the days click down until the May 31 deadline for filing, remember: if anyone promises you a refund – or says they’re the only way to get one, that’s a scam. If anybody tries to charge you to get your money back, that’s also a scam. If you’re still planning to submit a claim, here are a few quick pointers:

  • Start your claim at FTC.gov/WU. You don’t need to email anybody or hire a lawyer. Just start here, put in as much information as you have, upload whatever documents you have, and submit.
  • It’s free to file your claim. Don’t pay anybody to get a refund. Ever.
  • There are no guarantees. Nobody can promise you a refund at all, much less a specific amount of money. There’s a whole process that will happen once all the claims are in – to validate them, and then divide up the money among all the people who qualified.
  • There are no short-cuts. That validation process? It’ll take a while. There’s no short-cut or special access. It might take a year to get your money back, but nobody can help you get it any faster.

If you spot anybody making any of those promises, or charging for a refund, the FTC wants to know about it.

%d bloggers like this: