Archive for the ‘Federal Agencies’ Category

How to avoid getting hit with a big fee to cash tax refund checks

CONSUMER FORUM

Posted Feb. 06, 2017, at 8:07 a.m.
The Internal Revenue Service or IRS recommends that anyone earning $54,000 or less find out more about the Earned Income Tax Credit.

Last year 27 million Americans qualified, and the EITC average was more than $2,455. This year, officials say even more taxpayers will qualify.

As we’ve written earlier, IRS officials will be scrutinizing reviews to curb fraud; that will slow the pace of returns for those claiming EITC and the Additional Child Tax Credit. Once those refunds do arrive, some consumers will face hard choices about cashing those refund checks.

Those are consumers who do not regularly use a bank or credit union. Often referred to as “the unbanked,” these consumers use a variety of alternative methods to pay monthly bills and buy goods in other than brick-and-mortar stores.

In doing so, they rack up on average more than $2,400 per year in interest charges. Financial advisers say much of that interest burden could be reduced or eliminated.

Many of those advisers suggest turning first to local banks and credit unions. Responding to competition from multi-state banks, Maine-based financial institutions have been looking for ways to attract customers who until recently may have avoided traditional banks or credit unions.

“The playing field has expanded as far as low or no-cost banking services go,” David Leach, adjunct professor of banking at the University of Maine at Augusta, said. “I think the challenge for policy makers and politicians is to get the word out, through social service agencies and through governmental regulatory agencies, that there are low- and no-cost banking services.”

Lloyd Lafountain III is superintendent of banking for the state of Maine. He said Maine-based financial institutions combine the latest technologies with local knowledge.

“Many offer low-cost accounts, and consumers can avoid overdraft fees by not using paper checks and not opting into overdraft protection programs,” he said.

Check-cashing outlets, pawnshops and payday loans are costly substitutes for a bank or credit union. Federal and state officials have launched efforts over the years to attract consumers to the world of traditional banking. Still, millions of Americans find themselves using short-term, high-cost solutions to get past the next round of bills.

A lot of those quick-fix solutions are found on the internet, but many are less than economical. Few of them offer the kinds of customer service that face-to-face relationships can provide.

Tips on opening a low-cost account can be found online at maine.gov/pfr/financialinstitutions/consumer/saveandprotectyourmoney.pdf.

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.

You can’t avoid death and taxes, but you can dodge identity theft

CONSUMER FORUM

Posted Jan. 30, 2017, at 8:25 a.m.

Last year, the Internal Revenue Service, the states and tax professionals teamed up to reduce incidents of taxpayer identity theft.


The crime occurs when a criminal steals your Social Security number and files a return in your name; the thief claims a refund to which he’s not entitled. When you file your legitimate tax return, the IRS flags it because it has already received a return in your name.

It’s believed that more diligent enforcement helped the IRS to prevent more than $180 million from going to fraudulent claimants. Now, officials are doubling down on their efforts to fight taxpayer ID theft.

The Federal Trade Commission has proclaimed the week of Jan. 30-Feb. 3 as Tax Identity Theft Week. The agency is offering a series of events to educate consumers and business people on ways they can minimize the risk of thieves stealing refunds.

At 3 p.m. Tuesday, Jan. 31, the FTC and Identity Theft Resource Center will hold a Twitter chat dealing with tax identity theft, ways to protect yourself and what to do if you are a victim.

A similar session is planned for 11 a.m. Wednesday, Feb. 1, about tax ID theft for service people, veterans and their families. At 4 p.m. Wednesday, Feb. 1, FTC and the IRS will hold a tax ID theft chat for small business people. Find a link to these and other events at www.ftc.gov and look under “Latest News.”

Income tax season is big business for high-tech criminals, so be on guard for all sorts of scams. You might get a call from someone posing as an IRS official, seeking to “verify” tax return information by phone.

Other scammers may mention news reports of tax fraud and try to trick victims into “verifying the last four digits of their Social Security number.”

Others might pretend to be from the tax preparation industry … in short, they’ll use any tactic they think might work to fool consumers.

The crooks also take aim at business people. They might call human resources professionals and ask for information found on W-2 forms; a variation of that scam has an email message bearing the name of a corporate officer seeking personal information about an employee. Some scammers have posed as providers of software to trick tax preparers.

The variations are virtually endless. The IRS lists many of the most often used tricks at its website, www.irs.gov/uac/tax-scams-consumer-alerts.

Many tax pros suggest filing early, thereby giving the crooks less time to file fraudulently ahead of you. Once you have filed, you can check the status of your refund at www.irs.gov/Refunds.

You also can call the IRS Identity Theft toll-free at 800-908-4490 or visit www.irs.gov/identitytheft.

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.

If robots call to say you owe back taxes, don’t believe them

Posted Jan. 16, 2017, at 6:19 a.m.

Which of the following is a scam?

— You get a phone call saying you owe money to the Internal Revenue Service and should pay by way of an iTunes card.

— A caller says she is an IRS official demanding immediate payment of overdue taxes, and the number on your caller ID appears to be from the local IRS office.

— A caller identifies himself as a law enforcement officer and says you face immediate arrest if you don’t wire money for overdue taxes.

— An email bearing an official-looking IRS logo asks you to “update your IRS e-file immediately.” The email mentions IRSgov — without a dot separating “IRS” and “gov.”

If you answered that all of the above are scams, you are correct.

The investigative arm of the IRS says that 1.8 million people have reported receiving impostor calls. More than 9,600 victims have been scammed out of more than $50 million.

Phishing and malware incidents rose roughly 400 percent during the 2016 tax filing season. Despite officials’ best efforts to curb the increase, it’s expected that the numbers of tax-related scam attempts will continue to grow.

Increasingly popular with scammers is the robo-call. The crooks leave urgent call-back requests, demanding payment of “back taxes” with gift cards. IRS officials say such demands are clear signs of a scam.

Other callers may ask for payment of a nonexistent “federal student tax.” People they call are told to wire money — another sure sign of a scam — with threats of legal action unless payment comes at once.

Another scheme involves a call saying the IRS “just needs a few details” to speed up the processing of your refund. The scammer tries to get personal information such as Social Security numbers, bank routing numbers or other sensitive data such as credit card numbers.

Human resources and payroll professionals have been targeted as well, through requests for information about employees. A scammer posing as the company’s CEO requests personal and financial information, including Social Security numbers.

In an effort to catch scammers and identity thieves, the IRS is delaying refunds this year for anyone claiming the earned income tax credit (EITC) or the additional child tax credit (ACTC). That move is expected to give the IRS added time to weed out more sophisticated fraudulent returns. It may also hurt lower income taxpayers who file early and likely will be waiting at least until late February for refunds. Offers to “help speed up your refund” may be more scams.

Sen. Susan Collins, R-Maine, chairs the Senate’s Special Committee on Aging, which has published a guidebook on avoiding scams. Read it online at aging.senate.gov/imo/media/doc/217925%20Fraud%20Book%20Final.pdf. You also can call the committee’s fraud hotline (1-855-303-9470) for information or to report fraud attempts.

The IRS offers a summary of our legal protections in the Taxpayer Bill of Rights at irs.gov/taxpayer-bill-of-rights.

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.

Rogues tap holiday spirit, disaster relief to steal in the name of charity

CONSUMER FORUM

Posted Dec. 26, 2016, at 9:11 a.m.
Your free directory of IRS-recognized charities and nonprofits: 9127 organizations. Search Maine or your town

Your free directory of IRS-recognized charities and nonprofits: 9127 organizations found in Maine.

When soliciting donations from 2008 to 2012, fundraisers for four now-defunct “charities” said they spent 100 percent of their money on services including taking patients to chemotherapy sessions, buying pain meds for children and hospice care.

Instead, the money went for meals, rides on jet skis and cruises to the Caribbean.

In a lawsuit, the Federal Trade Commission called all four groups “sham charities.” Officials from all 50 states and the District of Columbia joined in the suit, which accused charity officials of spending most of the $187 million they raised on themselves and their fundraisers.

The legal action led to the shutdown of the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society. Only a fraction of the millions of dollars the groups took from consumers was recovered.

The amount of money fundraisers were able to garner shows how willing consumers are to donate to causes they believe are genuine. Scammers know this, and for that very reason they create names for their fake groups that sound like real charities.

At this time of year, when many of us make donations to our favorite causes, let’s make sure we’ve done our due diligence. Be skeptical of cold calls or bulk mailings that you may receive, seeking donations that supposedly will benefit veterans and military families, sick children or police and firefighters.

Scam artists follow the news closely, and they look for items that will make readers respond emotionally. In June, crooks reacted quickly following a shooting rampage that killed 49 people and injured 53 others in Orlando, Florida. They set up phony charities pretending to help the victims and their families; in fact, the money they scammed lined their own pockets.

Pretending to help victims of floods, earthquakes and other disasters is a multibillion-dollar criminal enterprise. Before you decide to donate, ask questions to find out how your money will be used.

If you’re responding to an online appeal and preparing to click to “donate,” look at the name of the organization in your browser window. If the domain name is hidden, is not familiar or is different from the one in the text, think twice about clicking.

Treat all pleas for your money with a healthy dose of skepticism. Real charities welcome the chance to send you literature by mail. They know that informed consumers will support them and tell others about worthwhile causes. Scammers want a decision right away, and some ask for payment through gift cards or wire transfers — these clearly are scams.

Maine Attorney General Janet Mills has tips on giving to charities and avoiding getting ripped off in the process. Visit maine.gov/ag/consumer/charities/index.shtml for those suggestions.

The Federal Trade Commission has additional information at consumer.ftc.gov/features/feature-0011-charity-scams.

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.

Deck the halls with vows of safety

CONSUMER FORUM

Posted Dec. 19, 2016, at 1:22 p.m.

The greatest gift that you could give this season might be yourself, safe and sound, arriving for a visit with a loved one or a friend.

Safety messages are everywhere this time of year. However, we all seem to be so busy that we may dismiss the cautions. Here are a few suggestions for consumers who want to keep themselves and those close to them safe:

—  Replace batteries and smoke/carbon monoxide detectors. Many of us replace batteries when we set clocks ahead in the spring and back in the fall. If you forgot, do it now. Smoke and CO detectors need good batteries to save lives. They also don’t last forever. If the date of manufacture on your smoke detector is more than 10 years old, it’s time to replace the unit. CO detectors are generally effective from five to seven years.

— Decorate safely. Spun glass known as “angel hair” can irritate eyes and skin. Wear gloves when you’re using it or use non-flammable cotton instead. Decorate with children in mind. Ornaments with metal hooks should go high on the tree. Use a good step ladder for hanging decorations.

— Clear your path. Keep wrapping paper, decorations and toys out of areas where you walk. The National Safety Council has tips about avoiding falls at nsc.org/learn/safety-knowledge/Pages/safety-at-home-falls.aspx.

— Keep pets safe. Holiday plants such as mistletoe and holly may attract household pets, and eating some plants can cause harm. Don’t feed table scraps to the dog or cat. Carmela Stamper, a veterinarian with the Food and Drug Administration, says rich, fatty foods can cause a potentially lethal condition called pancreatitis. And be careful of alcoholic beverages and chocolate around pets.

— Be aware of toy recalls. Check SaferProducts.gov for recall notices to avoid things such as lead paint, laceration risks or other hazards.

Officials in the insurance industry offer a number of tips, beginning with indoor tree safety. Avoiding open flame (candles) and frequent watering head the list.

Careful inspection of lights is another must. Allstate advises that holiday lights may contain PVC and may be tainted with lead. After you’ve decorated, wash up and keep children away from lights they might handle before sticking fingers in their mouths.

You can look for labels reading “RoHS” (Reduction of Hazardous Substances) meaning lead was not used in making the lights.

Outside your home, most safety precautions revolve around shopping. Make sure purchases are safe and out of sight when leaving them in your vehicle. Keep close watch on your wallet or purse, and be cautious of prying eyes when entering a PIN.

Back at home, be careful when cooking; the festive season can distract us and might increase the risk of a fire. Party responsibly. Celebrate safely, and make the season bright.

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 to keep scoundrels away from your holiday gift cards

CONSUMER FORUM

Posted Dec. 12, 2016, at 11:06 a.m.

Gift cards are likely the most popular holiday presents, both for givers and recipients. However, experts estimate that $1 billion in gift cards go unredeemed every year.

Retailers try lots of ways to keep sales of gift cards up: adding worth above face value and tacking on reward points are two popular methods. It’s in businesses’ best interest for consumers to redeem gift cards, because they have to carry the value of unused cards on their books, sometimes for years.

A recent caller asked Northeast CONTACT if a gift card she purchased could be misused before being given. When buying gift cards at a store, remember that crooks seeking easy money may be nearby.

It’s probably wise to avoid cards on open display racks. Some criminals jot down the numbers of unsold cards and use illegal online software to determine when cards have been activated. When the number of a card you’ve bought becomes active, the crooks begin their spending spree.

Gift card makers have added security strips to the cards; you scratch off the strip to reveal a security code or PIN. Clever thieves open packages with razors and remove the strips, disguising the tampering with their own security strips — we found several sources from online sellers.

If you pick a card off a rack and can see the security code, pick another one. Better still, buy from a store employee and watch while the employee activates the card. Get a receipt and make sure the stated value matches what you bought.

There are several options for consumers who find unused gift cards with some funds left on them. You can find ideas on getting value from unused cards at carefulcents.com/unused-gift-cards/.

Federal law bans inactivity fees, unless a card has not been used for at least one year. Any fees and expiration date of a card must be stated clearly on the card or packaging.

In Maine, state law requires that gift cards be honored indefinitely, even if they are ruled to be abandoned property. You can read about unclaimed property at the Maine State Treasurer’s website, maine.gov/treasurer/unclaimed_property/.

Many of us have been frustrated when holding a gift card to a company that’s gone out of business. Before buying, check into the corporation’s financial health. The Federal Trade Commission has more tips on buying and using gift cards at consumer.ftc.gov/articles/0182-gift-cards.

The FTC reminds consumers not to comply when a seller demands payment through a gift card from iTunes or Amazon. Check the website giftcards.com/gcgf/giftcard-scams for tips on avoiding scams.

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.

Magnet maker wins court ruling despite injuries to children

Posted Dec. 05, 2016, at 1:45 p.m.

In 2012, the Consumer Product Safety Commission issued a rule banning the sale of sets of small magnets. In November, the company that defied the agency won a federal appeals court victory; the firm’s website trumpeted, “Ban cleared. Game on.”

The Consumer Product Safety Commission’s action came after reports of injury to some children who swallowed the powerful neodymium (rare earth) magnet balls. If they ingested more than one, children were at risk of having the magnets attach and tear internal tissues or organs. Surgery sometimes was needed to remove the magnets.

Most distributors heeded the urgings of the group to stop selling the magnets, despite the warning labels stating that the toys were meant for adults and not children. One manufacturer — Zen Magnets of Boulder, Colorado — refused first the urgings and then orders to stop selling magnet sets. It did so with the backing of lots of consumers, who liked the variety of patterns they could form using the magnets.

The safety commission’s research in 2011 had found that some magnets sold in sets were 10 times more powerful than allowed in standards for children’s toys. Manufacturers insisted that the sets were for adults only, but the agency pointed to a rising number of emergency room visits involving children who had swallowed magnets.

A 2015 news release from the safety group blamed the death of a 19-month-old girl on magnet ingestion and estimated that 2,900 ER visits between 2009 and 2013 resulted from swallowed magnets. That news release focused on a federal judge’s order that Zen Magnets — at the time the only known seller of small magnet sets — to stop selling recalled magnets. The Justice Department had charged that Zen bought 917,000 magnets from another company, comingled them with other magnets and sold them after the other company issued a recall. Federal law bans the sale of recalled products.

In November of this year, a federal appeals court overturned the ban on magnet sales and sent the matter back to the Consumer Product Safety Commission. Two of the three judges wrote that they found the safety group’s emergency room statistics did not show that the agency rule “is reasonably necessary to eliminate or reduce an unreasonable risk of injury.” Those judges wrote that they had “no opinion” on the number of injuries that would support issuing a new safety standard.

The minority judge on the panel wrote, “In my view, the record sufficed for the Commission’s finding of an unreasonable risk of injury.” A commission spokesperson told us “the hazard from these small, powerful magnets has not changed” if more than one is swallowed. The agency is “assessing its options and takes the matter very seriously.”

While the safety commission assesses its options, magnet sales abound on the internet. After doing his victory dance, the founder of Zen Magnets called for education over regulation. Shihan Qu wrote on his company’s website that swimming pools and toy balloons are more dangerous than his magnets and that education is the key to the safe enjoyment of most products.

They may not be toys, but that’s how magnet sets may appear to little eyes. Qu agreed with many critics when he wrote, “… high powered magnets should be kept away from any mouths and young children who don’t know better.”

In the same article Qu wrote, “Instead of driving Zen out of business, and pushing production further from the CPSC’s field of view, I’d rather use our resources to fight alongside the CPSC for successful educational and awareness campaigns focused on consumers and medical professionals.”

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 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

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