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consumer protection a primer on how to identify avoid and recover from consumer fraud

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
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
introduction3
INTRODUCTION

TYPES OF CONSUMER FRAUD:

  • Deceptive Telemarketing
  • Employment and Business Opportunity/Franchise Scams
  • Charity/Current Event Scams
  • Deceptive Health Product Advertising
  • Foreclosure Rescue Scams
deceptive telemarketing
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
deceptive telemarketing6
Deceptive Telemarketing

How do Telemarketers find their victims?

  • Cold Calls
  • Direct Mail
  • Broadcast and Print Advertisements
deceptive telemarketing7
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
protecting against telemarketing scams
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

recognizing telemarketing fraud
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
recognizing telemarketing fraud10
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
ftc v med provisions
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

ftc v med provisions12
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
the grandparents scam
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 . . .”

the grandparents scam14
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
defensive moves
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
defensive moves16
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
reporting and registering
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
employment and business opportunities
Employment and Business Opportunities

WORK-AT-HOME FRAUD

  • Medical Billing
  • Envelope Stuffing
  • Assembly or Craft Work
avoiding business opportunity fraud
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
scammers following the headlines
Scammers Following the Headlines
  • Relief Efforts
  • Product sales
  • Government Benefits
identifying valid charity telephone solicitation
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
warning signs of charity fraud
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
avoiding charity and fundraising fraud
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
checking up on charities
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

signs of a health product treatment scam
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
avoiding health product and treatment scams
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?
resources for patients and families
Resources for Patients and Families
  • Local Library
  • National Center for Complementary and Alternative Medicine (NCCAM).
    • http://nccam.nih.gov/health
    • info@nccam.nih.gov
    • 1-888-644-6226
  • National Cancer Institute
    • www.cancer.gov/cancerinformation
    • www.canncer.gov/clinicaltrials
    • 800-4CANCER (800-422-6237)
resources for patients and families33
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
reporting bogus health product claims
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

slide36

Types of Scams

  • False Promises
  • An actual FTC Case
  • Earmarks of the typical phony company
  • Where to get help
foreclosure rescue scams
Foreclosure Rescue Scams
  • Sale/Leaseback
  • Bait & Switch
  • Phantom Help

-- Loan Modification

-- Saving Home from Foreclosure

-- Bankruptcy

common sales slogans
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!”
loan modification
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
red flags of a mortgage related scam
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
legitimate help
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
funeral rule regulations
Funeral Rule Regulations
  • Disclosures: Itemized Pricing and Other Information
  • Unbundles Services and Goods
  • Prohibits Misrepresentations
  • Prohibits Mandatory Purchases of Goods and Services
required disclosures
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
general price list
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
general price list48
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
general price list49
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

general price list50
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

casket price list
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
casket price list54
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

outer burial container price list
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
outer burial container price list56
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

statement of funeral goods and services
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
statement of funeral goods and services58
Statement of Funeral Goods and Services

Must Contain:

  • Cost information
  • Mandatory disclosures:
      • Legal requirements
      • Embalming
      • Cash advance items
forced purchasing
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
misrepresentations prohibited by rule
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
reporting funeral providers
Reporting Funeral Providers

The Federal Trade Commission

-- www.ftc.gov or

-- 1-877-FTC-HELP

State Regulator

immediate responses to consumer fraud
Immediate Responses to Consumer Fraud
  • Close financial accounts
  • Request refunds
  • File complaints
  • Keep detailed records
closing financial accounts and requesting refunds
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
filing complaints
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
keeping detailed records
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
enter presenter s contact information here
(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.