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Don’t Be A Victim: A Review of Common Scams Used to Take your Money. Resource made available by the Department of Financial Institutions for Tennessee Financial Literacy Month 2010. Online Crime by the Numbers.
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A Review of Common Scams Used to Take your Money
Resource made available by the Department of Financial Institutions for Tennessee Financial Literacy Month 2010
**Source-IC3 web site: http://www.ic3.gov/media/2009/090331.aspx
Since 2004, there has been a 289 percent increase in the dollar amount of losses experienced by victims of various fraud-related scams.
“Bad credit or no credit…No problem!”
The following is a recent consumer alert issued by our Department on such a company
The loan was reportedly approved for a 10 year repayment term, yet the maturity date is listed as November 1, 2010 from a loan origination date Of October 30, 2008. This is only two years!
A $25,000 loan at 7.00 percent over a term of 10 years actually has payments of $290.27 per month.
“Borrower” paid $1160 for the collateral payments, plus $72 in fees to send.
The original agreement was dated October 23, 2008. The “borrower” wired $1160 on October 24, 2008.
However, on October 27, 2008 when the “company” realized they could take further advantage of this consumer, they sought to get another $870 out of them.
This looks official; however, it asks the receiver to send them $5, along with a claim form to obtain their winnings.
The back of the check indicated a security feature was that “VOID” will appear if scanned or photocopied. Void didn’t appear in either case, except where it was written on check since we received the original item.
The back of the check also indicated a security feature in which the “Original Document” text should not appear if scanned or photocopied. This didn’t appear when scanned, but it did when copied.
The check that was sent looks authentic; however, there were not any “Void” indicators that will typically show up when a check is copied. You would also want to hold the check up to the light at an angle to see if it has any type of watermark that shows up in the paper on which it is printed.
You may have received an e-mail similar to this example. These typically request your bank account information to establish a “business” relationship.
These account for nearly 3 percent of the total complaints received by IC3. The median loss amount suffered by victims of this scam was $1,650 in 2008.
275,284 complaints received in 2008 involved online
auction scams, or fraudulent activity.
scams to be aware of:
Overpayment fraud targets the seller. A seller advertises a high-value item—like a car or a computer—on the Internet. A scammer contacts the seller to purchase the item, then sends the seller a counterfeit check or money order for an amount greater than the price of the item. The purchaser asks the seller to deposit the payment, deduct the actual sale price, and then return the difference to the purchaser.
Wire transfer schemes start with fraudulent and misleading ads
for the sale of high-value items posted on well-known online
auction sites. When buyers take the bait, they are directed to wire
money to the crooks using a money transfer company. Once the
money changes hands, the buyer never hears from them again.
Second-chance schemes involve scammers who offer losing
bidders of legitimate auctions the opportunity to buy the item(s)
they wanted at reduced prices. They usually require that victims
send payment through money transfer companies, but then don’t
follow through on delivery.
** Source-FBI and IC3 online data-
Under the Tennessee Consumer Protection Act (Tennessee Code Annotated 47-18-5401 et seq), it is illegal to charge an up-front fee for a loan modification.
The law only allows a fee to be collected by the loan modification company AFTER all services that are listed in a written agreement are completed. This agreement has to be provided to the homeowner within three hours of their signature.
If you are a victim of an online scam, you can file a formal complaint with the Internet Crime Complaint Center (IC3). Their contact information is as follows:http://www.ic3.gov/complaint/default.aspx
If you are a victim of an advance fee loan scam where funds may have been wired to a Canadian address, you can contact Phonebusters, a division of the Royal Canadian Mounted Police.http://phonebusters.com/
Toll Free:1 (888) 495-8501
Overseas and Local:
1 (705) 495-8501
Toll Free Fax:
1 (888) 654-9426
Mailing Address:Box 686 North Bay, Ontario P1B 8J8
If you are facing possible foreclosure proceedings on your property, there is free foreclosure prevention counseling available through the Tennessee Housing Development Agency (THDA). The following is a link to contact information for their 23 certified counselors throughout the state:
Finally, you always have the opportunity to file a formal complaint with the Tennessee Department of Financial Institutions concerning a bank, credit union, mortgage company, title pledge lender, payday loan company, or any of the situations we have discussed. If we’re not the appropriate regulatory agency that has jurisdiction your complaint, we will direct it to the correct area for assistance.
Alan E. Smith
Consumer Resources Division
Tennessee Department of Financial Institutions
Alan.email@example.com or www.tn.gov/tdfi