Archive for the ‘Consumer Alerts’ Category

Protect yourself against scams before filing taxes

CONSUMER FORUM

 

Posted Jan. 25, 2016, at 11:18 a.m.
Federal officials have termed them the biggest scams ever. Together, they cost consumers billions of dollars every year. And they use people’s fear of the Internal Revenue Service as a weapon.

The first starts with an unexpected phone call. You’re told that you owe taxes and must pay immediately or you’ll be jailed. What do you do?

An IRS official says, just hang up … it’s a scam.

Hundreds of thousands of consumers have received multiple calls from different people, all posing as either IRS officials or law enforcement agents. All the callers claim that legal action is certain, unless they receive money via wire right away. A demand for immediate payment is the second tipoff that it’s a hoax.

The first was the threat of imprisonment.

The IRS does not typically call a taxpayer; the agency begins by sending a letter. It also does not seek payment by way of prepaid cards, and it does not have agents standing by with arrest warrants in case the taxpayer hesitates.

The criminals who use these techniques can be abusive, even threatening to hurt their victims. These hoax calls may originate halfway around the world — although a spoofed phone number may make them appear nearby — and any threatened action rarely happens.

The second major hoax involves the filing of a phony tax return. If a thief steals your name, birthdate and Social Security number, he or she can file a bogus return in your name. If the IRS doesn’t catch it, the agency might send a refund to the crook; it may not be until you file your legitimate return that the fraud is discovered.

The IRS has trained thousands of employees to help possible victims. It has also put in place a number of preventive measures, most of which it won’t discuss in order not to assist the scammers. In a public message last week, the IRS said it has teamed up with the states and tax preparers to “stop fraudulent returns at the door.”

One new piece of information from tax software providers will be the amount of time it took to prepare a return. That could be a tipoff when computer-generated returns are fraudulent and have been filed by the hundreds or thousands.

You can read about the new measures at IRS.gov/uac/IRS,-States-and-Tax-Industry-Deploy-New-Safeguards-for-2016.

Tax season brings with it a rash of scam artists trying new ideas. Crooks might point to last year’s hack of IRS computers, which compromised some information of about 200,000 taxpayers. They might pose as “IRS counselors” or “credit advisers” while their real goal is to steal more personal data.

IRS officials suggest that tax preparers do a “deep scan” of all their computer drives and devices to find malware and viruses that may hide in places that a “quick scan” can’t find. Firewalls and antivirus software also should be up to date; if you use a tax preparer, don’t be shy about asking if security systems are robust.

If you store your tax filings on your computer, make sure there’s a backup in case your hard drive crashes. If you store paper copies, keep them under lock and key (ideally in a fireproof container). Find more security and identity protection tips at IRS.gov.

If you get a phone call you suspect is a hoax attempt, call 800-366-4484 to find out if the caller is a real IRS employee with a legitimate reason to reach you. If a piece of mail seems suspicious, call 800-829-1040 to see if it’s legitimate.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

How the new federal spending plan affects consumers

CONSUMER FORUM

Posted Dec. 28, 2015, at 9:41 a.m.
Last modified Dec. 28, 2015, at 10:14 a.m.

The omnibus spending bill Congress passed earlier this month included $1 billion for a destroyer. Maine’s congressional representatives hope the contract goes to Bath Iron Works.

Passage of the 1,600-page, $1.1 trillion bill headed off a possible government shutdown, prevented another of the stopgap spending plans our lawmakers have made famous and it allowed the national debt to go up. It also included a number of added-on spending items, known on Capitol Hill as “riders.”

Our thanks to writers at The Washington Post, Christian Science Monitor and The Atlantic for spotting these items of interest to many consumers.

— A 1 percent pay raise for federal employees, starting Jan. 1, 2016. President Barack Obama ordered the increase and the omnibus bill retains it. Military service personnel will receive a similar raise, while pay for generals and flag officers are subject to a pay freeze.

— Multi-employer pension plans. The benefits of potentially millions of retirees could be cut to try to save some pension plans that are in financial trouble. There are about 1,400 such plans, most of them in good shape.

— More money for food safety. Funding for the Food and Drug Administration goes up $37 million from last year. The Food Safety Modernization Act gets $27 million in new funds, and there’s a $5 million increase for the Food Safety and Inspection Service.

— Some Dodd-Frank reforms reversed. The financial reform bill had required that banks “push out” some derivatives trading into other entities that did not have the backing of the Federal Deposit Insurance Corporation. Banks won a reversal of that rule; Democrats say that, in exchange, they received more funding for enforcement efforts by the Securities and Exchange Commission and the Commodity Futures Trading Commission.

— Internal Revenue Service cuts. Funding for the IRS drops by $345.6 million. The agency also is barred from singling out organizations that cite ideological beliefs to get tax-exempt status.

— School lunch programs. Flexibility goes to school districts that can “demonstrate a hardship” when buying whole grain products. There also are less rigid sodium standards until they are supported by “additional scientific studies.”

— WIC and potatoes. The Women, Infants and Children nutrition program for low-income families gets $6.6 billion, down $93 million from the last fiscal year. But WIC will have to guarantee that “all varieties of fresh vegetables, including white potatoes, are eligible for purchase.”

— Tired truckers. The trucking industry won a round in the fight to require that drivers get two nights sleep before going back to work. That Department of Transportation regulation would have cut a typical driver’s workweek from 82 hours to 70. Maine Sen. Susan Collins had pressed for suspension of that rule in favor of more study.

— Safer tracks. The omnibus bill includes $3 million to expand inspection of about 14,000 miles of track used by trains that include oil tanker cars.

— Veterans reform bill funding. The bill that was passed last summer gets $209 million to deal with new costs, including added medical staff and expanding facilities. The Veterans Administration’s Office of the Inspector General receives an additional $5 million to keep investigating the “wait list scandal.”

— Light bulb choice. The spending bill limits enforcement of a 2007 law to end use of incandescent bulbs. While many consumers have switched, others may be able to find the older style a while longer.

— Saturday mail delivery. It continues, courtesy of the omnibus bill, despite years of efforts to cut the service to save money.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

Even Maine’s attorney general can’t avoid online thieves

CONSUMER FORUM

Posted Nov. 30, 2015, at 9:47 a.m.

Maine’s attorney general knows firsthand what debit card fraud means.

Last month, a debit card belonging to Attorney General Janet Mills was breached. A spokesman for Mills said her credit union luckily spotted unusual activity and alerted Mills before the thief racked up too many charges.

CardHub says unauthorized use of debit and credit cards totaled $11.27 billion in 2012.

Card issuers and merchants absorb virtually all losses involving credit cards. Prompt reporting is critical to minimize a consumer’s liability in case of debit card breach or loss.

On Oct. 1, new rules made merchants liable for losses if they had not installed new card processing equipment. The aim was to make chip-embedded cards universally acceptable and to get outdated, magnetic stripe cards out of circulation. Card issuers embraced the chip, but many continue to require a signature as supposed authentication.

Technology known as chip-and-PIN, or personal identification number, boosts security sharply. A consumer can’t vary his or her signature; the consumer can change a PIN at will, and that’s an ability that consumers in about 80 other countries already have.

Mallory Duncan, senior vice president and general counsel of the National Retailers Federation, said recently that “continued reliance on an illegible scrawl isn’t good enough to protect American consumers when the technology of a secret, secure PIN is readily available.” Duncan’s remarks supported efforts by Mills and eight other attorneys general to get card issuers to embrace chip-and-PIN.

On Nov. 16, the eight attorneys general wrote to top officials of American Express, Bank of America, Capital One, Citigroup, Discover, JP Morgan Chase, Mastercard and Visa. Their letter calls for swift adoption of chip-and-PIN.

“Absent this additional protection, your customers and our citizens will be more vulnerable to damaging data breaches,” they wrote. “This is something we cannot accept, and nor should you.”

Debra Berlyn is president of the Consumer Privacy Awareness Project, an effort to educate consumers about online privacy issues. In an OpEd in this newspaper on Nov. 23, Berlyn echoed the attorneys general’s call, charging that “the big banks and credit card companies are cutting corners to cut costs, forgoing the added PIN feature to reduce the amount they would have to invest in new cards.”

Critics contend that requiring PINs could cause confusion among some consumers. Given the need for a PIN in many modern transactions, we doubt serious problems would arise.

An official of the Federal Reserve Bank wrote in 2013 that signature verification in the U.S. was likely to continue for some time. Fraud on lost or stolen cards would likely not drop as a result.

“Fraud may even rise,” Richard J. Sullivan wrote, “as fraudsters, unable to commit fraud on counterfeit cards, begin to target payments with relatively weak security, such as transactions that allow signature authorization.”

The attorneys general say they’re not interested in mandating any particular technology in law. Instead, they call on the executives “as good corporate citizens” to use and continue using available technologies that offer the best protection to consumers.

A spokesman said Mills will be receiving a new debit card, one that includes chip-and-PIN technology. She’s hoping more institutions will make similar shipments in the near future.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

New federal budget bill unleashes torrent of collection robocalls

CONSUMER FORUM

Posted Nov. 09, 2015, at 8:54 a.m.

There’s probably nothing more annoying than a pre-recorded call (robocall) asking you to buy something.

Unless it’s a robocall demanding you pay off a debt you might owe. Congress has just made it possible for some debt collectors to add robocalls to mobile phones to their toolkits. And a number of people and groups are unhappy.

Until passage of the latest federal budget, collectors placing robocalls or sending texts needed advance consent of those receiving such calls. That provision was part of the Telephone Consumer Protection Act of 1991.

Section 301 of the new budget bill repealed the advanced consent requirement for collectors of debt that’s owed to or guaranteed by the federal government. The change allows robocalls not only to student loan and mortgage borrowers, farmers, veterans and others with federally backed loans but also to their relatives, references and even unrelated people who get a reassigned cell phone number from such borrowers.

“They sneaked Section 301 in there. Nobody even knows how it got in [the budget bill],” said Tim Marvin of Consumers Union, the policy and action arm of the organization that publishes Consumer Reports.

Click image to access petition

Consumers Union had launched a campaign in February to pressure phone companies to help curb robocall excesses. When we checked its website, endrobocalls.org, more than 568,000 people had signed an online petition of support.

The outrage of consumers was matched by that of 10 U.S. senators who are co-sponsoring a bill to overturn Section 301. The bill is called the HANGUP (Help Americans Never Get Unwanted Phone calls) Act. Seventeen groups supporting the bill drafted a sample letter consumers can mail to their senators, in an effort to give the bill traction.

Critics say allowing robocalls to mobile phones will flood consumers with nuisance calls, and they contend the calls will generate relatively little in repaid debt. Such calls also offer consumers little recourse if they’re targeted unfairly.

Banks often sell bad loans to collection companies for pennies on the dollar — hard-to-collect loans might be sold several times.

The proper paperwork is supposed to accompany such sales, but that doesn’t always happen. As a result, people with similar names or Social Security numbers may receive dunning robocalls over debts they don’t owe, and it may not be easy to find a live person to straighten things out.

Consumers Union’s Tim Marvin says the Senate bill gives supporters of robocall reform “a great opportunity to mobilize all that support we’ve been building.” Despite what seems like popular backing, supporters of the bill aren’t predicting quick passage.

For help with particular debt collection issues, call Maine’s Bureau of Consumer Credit Protection at 1-800-332-8529.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

New website compares cost, quality of health care in Maine

CONSUMER FORUM 

Posted Nov. 02, 2015, at 6:25 a.m.

Click image to connect to website

Consumers in Maine have known for some time that there’s a lot of information about health care. However, it has often been difficult to use available data to make meaningful decisions about the quality and price of various medical procedures.

The quest for meaningful comparisons became easier last week. The Maine Health Data Organization, or MHDO, launched a new website, CompareMaine.org. The keyword MHDO acting Executive Director Karynlee Harrington uses to describe the site is “transparency.”

The organization put together a consumer advisory group about 18 months ago. The agency asked consumers what they would like to see in a user-friendly website.

“One of the things they said over and over is there is information out there, but nobody’s asked consumers what they want,” Harrington said last week.

What the consumers wanted was a single site comparing common medical procedures, in terms of cost and patient ratings. The MDHO working group looked at various websites — private and governmental — to see what information was available and how well organized it was. The result is the website, which was launched last week.

The site allows users to compare average costs of more than 200 medical procedures at more than 170 health care facilities around Maine. In many cases, users also can compare quality ratings for facilities. Florida is the only other state in the country where Harrington says people can find side-by-side cost figures and quality ratings. Maine users can compare costs by facility and by health insurance companies.

Users of the website should remember that figures they find are averages — a number of factors can affect actual costs of a given procedure.

“It’s not like going out and buying an appliance,” Harrington said.

The MHDO urges consumers to consult their health care providers and insurers to get a personalized estimate.

The website was developed through grants from the Centers for Medicare and Medicaid Services. Over time, more procedures will be added and the number of health care facilities will be increased. The website also will be accessible on additional devices.

Harrington describes the current website as a starting point. “It allows consumers to begin the conversation (with providers and insurers),” she said.

The MHDO is looking for feedback from people who visit the site. You can take a survey online when you visit the site, letting the agency know if it’s helpful.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer,ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

Hidden costs lurk in delayed interest payment offers

CONSUMER FORUM

Posted Oct. 26, 2015, at 6:52 a.m.

The phrase “no interest until…” may not be what some consumers think.

Offers to pay no interest until the payment period ends are enticing. But you must pay off your balance in full when the time’s up, and you must not be even a day late on a single payment.

The federal Consumer Financial Protection Bureau puts the warning bluntly on its website: “If one of your payments is late, or if you don’t pay off the full balance by the end of the deferred interest period, you could have to pay all of the interest that you expected to be deferred.”

William Lund, superintendent of Maine’s Bureau of Consumer Credit Protection, says consumers sometimes assume deferred interest means they won’t be charged interest on their credit card purchase until the deferral period ends. Lund says they might also expect a notice during month 11 in a 12-month deal, reminding them that full payment is due to avoid retroactive interest charges.

He says both assumptions are wrong.

“Interest and late fees are how banks make money, and they would not offer these plans if consumers all paid the purchase price fully within the promotional period and did not owe fees and interest,” Lund said.

The price of deferred interest, then, is ongoing borrower diligence.

In the case of major purchases — appliances, furniture, medical devices — a lump-sum interest payment could be several hundred dollars. Consumers can avoid such shocks by making sure of the terms of any deal before signing up, giving themselves plenty of time to meet the payment deadline, and not using that credit card for other purchases — making it easier to track a deferred interest balance.

Visit Consumer Financial Protection Bureau’s website consumerfinance.gov, then search “deferred interest,” for several helpful tips:

— Pay off deferred interest balance before the deferred interest period ends. Some offers may be in weeks instead of months, so the end date may differ from your regular payment date.

— Try to pay more than the minimum payment every month. Paying the minimum likely won’t pay off your deferred balance in time; keep close track of your deferred interest balance.

— Ask your credit card company to apply whatever you pay above the minimum monthly payment to your deferred interest balance. The company doesn’t have to agree; if it does, the move might help you pay your balance before the deferred interest period ends.

Lund reminds consumers that interest rates are high, often nearly 30 percent per year.

Some consumers think federal or state laws cap those rates, but neither does. No state or federal law limits interest rates on credit cards issued by national banks, another reason to know terms of any deal before signing up.

Lund also notes that, although credit cards are offered through retailers, they are underwritten by nationally chartered, out-of-state banks. Laws of the banks’ “home states” apply, and Maine regulations don’t apply.

In case of problems, consumers may complain to federal regulators — Consumer Financial Protection Bureau. Staff of Maine’s Bureau of Consumer Credit Protection can answer questions about protecting one’s credit. Call toll-free in Maine at 1-800-332-8529.

CardHub, which compares credit card offerings online, predicts credit card debt will rise a net $60 billion by the end of the coming holiday season. See the company’s study of deferred interest at its website cardhub.com.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

Hang up on phone calls that demand payment for utility bills

CONSUMER FORUM 

Posted Sept. 06, 2015, at 2:38 p.m.

You’ve heard the warnings: Don’t believe that threatening phone calls you receive are the real thing.

The scammers’ ruse is always the same; they tell you that you owe them money, and if you don’t pay up something awful will happen. Lately, they’ve been burning the phone lines posing as people from the billing departments of local utilities.

Click image to contact MPUCA

A customer of a water company in greater Bangor was a target of such a call just last month. Harry Lanphear of the Maine Public Utilities Commission, or MPUC, says the caller cut right to the chase.

“He said if the consumer didn’t get them some money through a prepaid credit card, they would shut off their water,” Lanphear told me last week. The consumer recognized the usual red flags of a scam, ended the call and reported the incident to MPUC.

Regular readers of this column know the red flags. Issuing a threat about service by phone instead of regular mail is one, demanding payment via prepaid credit card or wire transfer is another, and not knowing the customer’s account number or other information is a sure tipoff.

While often short on facts, scam artists tend to be experts in social engineering. They tailor their phone persona to the perceived vulnerabilities of the person on the line. Appealing to the need to “keep your credit record clean” might resonate with some consumers, while a heavy-handed threat could work with others.

Lanphear said his office has heard many complaints about crooks pretending to represent electric utilities

“Given how dependent we are on electricity, I think people just don’t want anything to happen to their service. I think scammers try to take advantage of that,” he said.

MPUC warned consumers recently, issuing these reminders:

— Utilities don’t call customers in good standing saying they have debt needing to be paid immediately.

— Instead of trusting a “cold caller,” hang up and call the utility at the number on your bill; that way, you can verify the status of your account.

— MPUC rules require proper notices regarding disconnection. If you can’t resolve a problem after speaking with their utility, call the MPUC Consumer Assistance Hotline at 1-800-452-4699.

— If you get any phone call demanding immediate payment for any utility or service, it’s likely a scam. Don’t make the payment; instead, report the call to the Maine Attorney General’s Consumer Information and Mediation Services at 1-800-436-2131 or the Federal Trade Commission at 1-877-FTC-HELP.

The FTC reports that some scammers have even shown up at consumers’ homes during power outages, saying they will have the power restored for a cash payment. Don’t fall for that one or for instructions to call a phone number and give account information. And never wire money to anyone you don’t know; when that money goes, it’s gone.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

 

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