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Consumer protection a primer on how to identify avoid and recover from consumer fraud l.jpg

Consumer Protection:A Primer on How to Identify, Avoid, and Recover from Consumer Fraud

(Enter Date of Presentation Here)

(Enter presenter’s name here)

(Enter presenter’s job title here)

The views expressed are those of the speaker and not necessarily those of the SMP or any other person.


Introduction l.jpg
Introduction

IDENTIFY AND AVIOD CONSUMER FRAUD

  • Know the hallmarks of consumer fraud

  • Know how to respond to a scammer

    RECOVER FROM CONSUMER FRAUD

  • Know who to direct consumers to for complaints & refunds

  • Know consumers’ rights under the law

  • Know the smart steps to advise consumers to take to avoid repeat victimization


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INTRODUCTION

TYPES OF CONSUMER FRAUD:

  • Deceptive Telemarketing

  • Employment and Business Opportunity/Franchise Scams

  • Charity/Current Event Scams

  • Deceptive Health Product Advertising

  • Foreclosure Rescue Scams



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Deceptive Telemarketing

What is telemarketing?

  • “plan, program, or campaign” that is “conducted to induce the purchase of goods or services or a charitable contribution” by use of the telephone


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Deceptive Telemarketing

How do Telemarketers find their victims?

  • Cold Calls

  • Direct Mail

  • Broadcast and Print Advertisements


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Deceptive Telemarketing

Why are the elderly susceptible to deceptive telemarketing?

  • Targeted based on theory that the elderly are more trusting and polite to strangers

    Why is telemarketing susceptible to abuse:

  • No face-to-face contact

  • Providing unencrypted financial account information

  • Friendly callers

  • Difficult to discern legitimacy

  • Loneliness

  • Urge to not be rude

  • Too good to be true offers with urgency


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Protecting Against Telemarketing Scams

Recognizehow to identify common telemarketing scams

Report phone fraud to the FTC

Register your phone number and the phone numbers of your beneficiaries on the National Do Not Call Registry


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Recognizing Telemarketing Fraud

  • Push for money up-front

  • Requests for financial account information or other personal information, such as Social Security number

  • Questions intended to get the answer “yes” or “okay”

  • Too good to be true offers

  • Requests to verify personal information

  • Free gift offers

  • Wire money


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Recognizing Telemarketing Fraud

Examples of Telemarketing Scams

  • Medical discount plans

  • Charities & Fundraising Fraud

  • Government Grant Scams

  • Credit & Loan Offers

  • Sweepstakes & Lotteries

  • Travel Scams

  • Work-at-Home Business Opportunities


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FTC v. Med Provisions

The Campaign Target: Elderly American Consumers

The Pitch:

  • 30 to 50 percent savings on prescription drugs through online pharmacy, or

  • Membership necessary to retain Medicare benefits

    The Cost: $389

    The Benefit to Consumers: None.

    The Benefit to the Defendants: $3.5 Million in Gross Sales


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FTC v. Med Provisions

Hallmarks of Deception:

  • The pitch is too good to be true

  • Push for financial account information

  • Impersonation of government agency or threat to government benefits

    What can your beneficiaries do?

  • Hang up the phone

  • Dispute charges with bank and close bank accounts

  • Report the fraud to the FTC


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The Grandparents Scam

“Grandma! Hi, how are you?”

“Hi, Billy. How are you?”

“Actually, I’m in some trouble, and don’t want Mom and Dad to know . . .”


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The Grandparents Scam

How can your beneficiaries avoid this type of scam?

  • Verify the caller’s identity (personal questions)

  • Resist the pressure to act immediately.

  • Call the local police on a non-emergency line

  • Do not wire money or send money via an overnight courier

  • Report the fraud to the FTC


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Defensive Moves

Defensive moves you can teach your beneficiaries:

  • Don’t be pressured to make immediate decisions

  • Don’t give your financial account information or Social Security number over the telephone

  • Don’t buy something merely because it comes with a “free” gift

  • Don’t fall for statements that you have won a prize, especially if you must send money to claim it

  • Don’t send cash by messenger or overnight mail


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Defensive Moves

Other Defensive Moves:

  • Do get all information in writing before agreeing to a purchase

  • Do ask for written information before giving to a charity

  • If the offer is an investment, do check with the state securities regulator to see if it is registered

  • Be wary of offers to help you recover money you lost to a previous scam


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Reporting and Registering

To Report Telemarketing Fraud:

  • Go to www.ftc.gov to file online complaint, or

  • Call the FTC at 1-877-FTC-HELP

    To Register Telephone Number on Do Not Call Registry:

  • Go to www.DoNotCall.gov, or

  • Call 1-888-382-1222



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Employment and Business Opportunities

WORK-AT-HOME FRAUD

  • Medical Billing

  • Envelope Stuffing

  • Assembly or Craft Work


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Avoiding Business Opportunity Fraud

  • Ask questions and get answers in writing

  • Distrust unbelievable earnings claims

  • Distrust claims of low work hours in return for high income

  • Due diligence – checking with local BBBs, state agencies, and conducting online research



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Scammers Following the Headlines

  • Relief Efforts

  • Product sales

  • Government Benefits


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Identifying Valid Charity Telephone Solicitation

  • Calls between 8:00am and 9:00pm

  • Prompt identification of the charity and that the call is to ask for money

  • May not call you again if you ask them not to


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Warning Signs of Charity Fraud

  • Refusal to provide written information

  • Refusal to provide proof that contribution is tax deductible

  • Uses a name that closely resembles a better-known, reputable organization

  • Request for donation in cash

  • Uses high pressure appeals


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Avoiding Charity and Fundraising Fraud

  • Donate to recognized charities with a history

  • Be skeptical if someone thanks you for a pledge you do not remember making

  • Do not do business with a charity offering to send a courier or overnight delivery service to collect payment

  • After receiving a call for a donation, call the charity in question to ask if it is aware of the solicitation


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Checking up on Charities

BBB Wise Giving AllianceAmerican Institute of Philanthropy

4200 Wilson Blvd, Ste 800 PO Box 578460

Arlington, VA 22203 Chicago, IL 60657

(703) 276-0100 (773) 529-2300

www.bbb.org/charitywww.charitywatch.org

Charity NavigatorGuide Star

1200 MacArthur Blvd 4801 Courthouse St, Ste 220

Mahwah, NJ 07430 Williamsburg, VA 23188

(201) 818-1288 (757) 229-4631

www.charitynavigator.orgwww.guidestar.org



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Signs of a Health Product/Treatment Scam

  • No on treatment works for every cancer or every body

  • Natural does not always mean effective

  • Bogus marketers use trickery and vague language

  • Technical jargon ≠ proven effectiveness

  • Money back guarantees ≠ proven effectiveness


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Avoiding Health Product and Treatment Scams

Five questions to ask your doctor:

  • Does this product work? Is there any research to support its effectiveness?

  • What are the possible risks, side effects, or benefits in my specific case?

  • Will it interfere with my current treatment plan?

  • Has this product been proven to be safe?

  • Can we talk about other treatments or products that could reduce my discomfort of some of my symptoms?


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Resources for Patients and Families

  • Local Library

  • National Center for Complementary and Alternative Medicine (NCCAM).

    • http://nccam.nih.gov/health

    • [email protected]

    • 1-888-644-6226

  • National Cancer Institute

    • www.cancer.gov/cancerinformation

    • www.canncer.gov/clinicaltrials

    • 800-4CANCER (800-422-6237)


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Resources for Patients and Families

  • MedlinePlus.gov

  • HealthFinder.gov

  • Food and Drug Administration

    • www.fda.gov

  • ClinicalTrials.gov

  • National Institute of Health, Office of Dietary Supplements

    • www.ods.od.nih.gov


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Reporting Bogus Health Product Claims

Federal Trade CommissionFood and Drug Administration

-- www.ftc.gov or -- www.fda.gov or

-- PHONE -- 1-888-463-6332

State Attorney GeneralAmerican Cancer Society

-- www.naag.org -- www.cancer.org or

-- 1-800-227-2345



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  • Types of Scams

  • False Promises

  • An actual FTC Case

  • Earmarks of the typical phony company

  • Where to get help


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Foreclosure Rescue Scams

  • Sale/Leaseback

  • Bait & Switch

  • Phantom Help

    -- Loan Modification

    -- Saving Home from Foreclosure

    -- Bankruptcy


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Common Sales Slogans

  • “We have special relationships within many banks that can speed up case approvals.”

  • “We Can Save Your Home. Guaranteed. Free Consultation”

  • “We stop foreclosures everyday. Our team of professionals can stop yours this week!”


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Loan Modification

  • Modify existing mortgages by:

    • Reducing the interest rate and/or

    • Reducing the principal in order to

      -- LOWER MONTHLY PAYMENTS

  • Making Home Affordable Program

    • Free

    • Based on lender participation and specifics of the mortgage at issue


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Red Flags of a Mortgage-Related Scam

  • Advance Fees

  • Guarantees

  • Money Back Guarantee

  • Advice To Stop Paying Mortgage

  • Advice To Not Contact Lender

  • Collecting Little To No information On The Mortgage


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Legitimate Help

  • Contact Local Community Not-for-Profit Housing Assistance Groups

  • Contact Lender Directly

    • Lender’s modification programs

    • Making Home Affordable Program

  • Contact HOPE NOW

    • www.hopenow.com

    • 888-995-HOPE

  • Delaware Attorney General

    • www.deforeclosurehelp.org

    • 800-220-5424

  • Federal Trade Commission

    • www.ftc.gov/yourhome

    • 877-382-4357



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Funeral Rule Regulations

  • Disclosures: Itemized Pricing and Other Information

  • Unbundles Services and Goods

  • Prohibits Misrepresentations

  • Prohibits Mandatory Purchases of Goods and Services


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Required Disclosures

  • General Price List – itemizes and identifies the prices for certain goods and services

  • Casket Price List – price list of the caskets and alternative containers offered by the funeral provider

  • Outer Burial Container Price List – price list of the vaults offered by the funeral provider


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General Price List

When must a funeral provider give it?

  • Face-to-face inquiries (whether at the funeral home or elsewhere)

  • As soon as the discussionbegins on:

    • Funeral arrangements

    • Funeral goods or services offered, or

    • The prices of goods or services offered

      Who receives it?

  • Anyone who inquires in person about funeral goods or services OR the prices of such goods or services

    What do they receive?

  • A copy to take home


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General Price List

Mandatory Disclosures:

  • Right of Selection

  • Basic Services Fee

  • Embalming

  • Alternative Containers for Direct Cremation

  • Casket Price List

  • Outer Burial Container Price List


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General Price List

Required Itemized Prices:

1. Forwarding of remains to another funeral home

2. Receiving remains from another funeral home

3. Direct cremation

4. Immediate burial

5. Basic services of funeral director and staff, and overhead

6. Transfer of remains to funeral home

7. Embalming


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General Price List

Required Itemized Prices:

8. Other preparation of the body

9. Use of facilities and staff for viewing

10. Use of facilities and staff for funeral ceremony

11. Use of facilities and staff for memorial service

12. Use of equipment and staff for graveside service

13. Hearse

14. Limousine

15. Casket prices: either individual or range of prices

16. Outer burial container prices: either individual or range of prices


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Casket Price List

Who receives a Casket Price List?

  • Anyone who asks in person about caskets or alternative containers offered by the funeral provider

    When must a funeral provider show a Casket Price List?

  • When the discussion on caskets and alternative containers begins, but before showing the caskets or alternative containers


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Casket Price List

Present Casket Price List by:

  • Providing a copy to the customer;

  • Posting a copy or chart on the wall; or

  • Displaying in a notebook on table, etc.

    No requirement to provide a copy for customer to take home with them, but information must be displayed in a clear and conspicuous manner


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Outer Burial Container Price List

Who receives an Outer Burial Container Price List?

  • Anyone who asks in person about outer burial containers offered by the funeral provider

    When must a funeral provider show an Outer Burial Container Price List?

  • When the discussion on outer burial containers begins, but before showing the outer burial containers


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Outer Burial Container Price List

Present Outer Burial Container Price List by:

  • Providing a copy to the customer;

  • Posting a copy or chart on the wall; or

  • Displaying in a notebook on table, etc.

    No requirement to provide a copy for customer to take home with them, but information must be displayed in a clear and conspicuous manner


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Statement of Funeral Goods and Services

Funeral Providers Must:

  • Give customers an itemized list of goods and services selected during the arrangements conference

  • Give customers the itemized list at the end of the arrangements conference


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Statement of Funeral Goods and Services

Must Contain:

  • Cost information

  • Mandatory disclosures:

    • Legal requirements

    • Embalming

    • Cash advance items


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Forced Purchasing

Funeral Providers cannot require consumers to purchase:

  • Unwanted or unneeded goods or services

  • Casket or outer burial container handling fees

    Three exceptions:

  • Basic services fee

  • Items required by law

  • Impossible, impractical and excessively burdensome requests


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Misrepresentations Prohibited by Rule

  • Embalming

  • Casket for Direct Cremation

  • Outer Burial Container

  • Legal and Cemetery Requirements

  • Preservative and Protective Value Claims

  • Cash Advance Items

  • Other Misrepresentations


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Reporting Funeral Providers

The Federal Trade Commission

-- www.ftc.gov or

-- 1-877-FTC-HELP

State Regulator



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Immediate Responses to Consumer Fraud

  • Close financial accounts

  • Request refunds

  • File complaints

  • Keep detailed records


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Closing Financial Accounts and Requesting Refunds

Types of charges:

  • ACH

  • Remotely Created Checks

  • Credit Cards

  • Debit Cards

  • Wire transfers

  • Requesting Refunds

    • Directly from the company

    • Indirectly from the financial institutions


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Filing Complaints

Where can your beneficiaries file complaints?

  • FTC

  • the Attorney General’s office in your state and the company’s state

  • local consumer protection offices

  • local BBB

  • local postmaster if the mail was used

  • the advertising manager of the publication that ran the ad for the business opportunity


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Keeping Detailed Records

  • Bank records

  • Written notes of dates and times of correspondence

  • Copies of written correspondence

  • Copies of promotional literature

  • Information on “product” or “service” received


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(Enter Presenter’s Contact Information Here)

The views expressed are those of the speaker and not necessarily those of the SMP or any other person.


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