First Tuesdays: Financial Literacy, Facts vs Fiction

First Tuesdays: Financial Literacy, Facts vs Fiction


Nono Burling: I wanted to welcome you all to the Washington State Library’s First Tuesday webinar. It’s a monthly webinar we hold
on, guess what, the first Tuesday of the month. Um, so if this is new to you, you
should check back and see what else we offer. So… let me go through our slides. So
I am your facilitator here, my name is Nono Burling. For technical support we
have Jeremy Stroud and Joe Olayvar and, Jeremy and Joe, would you put your
contact information into the chat and so in case anyone has any trouble you can
contact either of them by phone or by email and they will help you out.
So I wanted to let you know that this webinar is brought to you by the Washington
State Library, which is part of the Office of Secretary of State, and the
Institute of Museum and Library Services. So I wanted to introduce to you today
our topic is Financial Literacy, Fact versus Fiction, and we have a team of
four people from the Federal Trade Commission (FTC) today who are speaking for us.
So first we have Tina Kondo, I don’t know which is the order they’re going to come
in, but the people I’m introducing are Tina Kondo and she is the assistant
Regional Director of the FTC’s Northwest regional office in Seattle. Prior to
joining the FTC in 2014, she was the Deputy Attorney General with the
Washington State Attorney General’s Office, overseeing several divisions of
Consumer Protection Division. At the FTC, she also supervises attorneys and
investigators who investigate and litigate
consumer protection and competition cases. Next we have Richard McKewen and he
is an attorney who investigates and litigates false advertising, fraud, debt
collection, and telemarketing cases. Mr. McKewen has served as an attorney adviser
to an FTC commissioner on consumer protection issues and spent several
years in the agency’s Office of International Affairs and the Division
of Marketing Practices. He has a JD from NYU School of Law and an
LLM from Georgetown University Law Center. Um, next we have Nadine Samter and she is
an attorney who investigates and litigates cases involving telemarketing fraud,
fraudulent business opportunities, and investigates predatory lending, mortgage
fraud, credit reporting, debt collection, privacy law, and fraudulent advertising
–makes me exhausted just to be read that list. Ms. Samter served as an attorney
advisor to an FTC commissioner and worked in the division of credit
practices. She was an associate at Hogan and Hartson in Washington, D.C.,
where her practice focused on antitrust law and general litigation. She has a JD
from Georgetown University Law Center. And finally we have Laura Solis and she
is an attorney who has filed several lawsuits, including those involving
business practices that target underserved communities. She’s received
several awards for her work protecting the nation’s consumers. Before joining
the FTC Ms. Solis was an associate at Perkins Coie, LLP. She graduated from
University of Washington School of Law in 2004 and received her BA cum laude, in
political science and American ethnic studies
from the University of Washington in 1999. And now I’m going
to stop talking and let the people who you came here to hear take over, so thanks everyone.
Tina Kondo: Thank you Nono and thank you to Jeremy and Joe for
providing technical help for us this morning. We’re really excited to be here
and to have the opportunity to reach a statewide audience through the State
Library so we’re glad that you could all join us here this morning. Today we’re
going to talk about financial scams and how the lack of financial awareness can
make consumers, who are otherwise known as your library patrons–or maybe
yourselves, can be susceptible to all sorts of financial scams. I want to spend
a second talking about the Federal Trade Commission and who we are because
there’s a common misconception that the Federal Trade Commission regulates
exports and imports. In fact, just the other day somebody asked me what I
thought about the proposed trade deal and I said I didn’t know anything about
it. We actually are a regulator of domestic trade in the sense that we
regulate to make sure that businesses are not basically scamming consumers or
competing unfairly. So that’s what we do. And we’re an independent commission
which means that we’re bipartisan. Currently we have one Democrat and one
Republican serving as commissioners and that will probably change fairly soon,
but but we do remain a bipartisan Commission. We’ve been protecting
consumers since 1914, and here in Seattle, or up in Seattle, we’ve had an
office since 1925. So we’ve been here quite a long time and developed a lot of
expertise. One thing I want to note is that we do have materials that are
available in Spanish as well as other languages. All of our materials are
available for free, which is something that I think most libraries like. If you
get our website, FTC.gov, you’ll see our consumer information and
and you’ll see all of the information that we have available. And everything we
talk about here today will will be available on our website. We want to
partner with our community members to get our information out to the public,
and we see libraries as being one of our primary partners to get the word out. So
today as Nono mentioned, we have four different presenters and we’ve divided
our content in four different sections. I’m going to give you some unfortunate
data on just how many Washington consumers are the victims of financial
scams in one year and what kinds of financial scams are prevalent here.
Richard McKewen will talk about the importance of financial literacy and the
FTC’s resources available to help your patrons work toward financial literacy.
Nadine Samter is our expert on debt and credit issues, she’s going to talk about
how debt and credit issues impact consumers and what resources the FTC can
give you to help people address those issues, and finally Laura Solis will
focus on some of the most common scams that target our most vulnerable
populations; things like job and employment and educational or school
scams. And we’re especially happy to be here this week because it’s National
Consumer Protection week and each year the FTC in our partners such as state
libraries or the Better Business Bureau and state AG’s offices work together to
target stakeholders in the consumer protection community and we help share
resources that will educate consumers. In addition to today’s library
webinar, the FTC has been doing a series of consumer webinars throughout the
country for all consumers stakeholders, not just libraries, so we will let the
Secretary of State’s office or the library know when we get the schedule
for the webinar that will be held in Washington and you can help us get the
word out. We’re also happy to announce that just last week we released our
Consumer Sentinel data book that gave us updated statistics that will report on
here today. So let’s go ahead and get started with some of that. So let’s look
at some of the unfortunate facts about fraud reports in Washington. We have a
database called Consumer Sentinel. Consumer Sentinel is a massive system of
consumer complaints that shared by law enforcement partners throughout the
country. So if someone complains for example to an attorney general’s office,
their complaint probably ended up in our Consumer Sentinel database and this is
one of the things that helps us target our defendants. You can see, well you
probably can’t see because it’s very small writing, but I want to to emphasize for
you here that Washington in the list of states that reported fraud in 2017
Washington ranked at number 25 which is just about where you’d expect us to be
because Washington is about 2% of the population so it’s about what you would
expect. But, if you look at the numbers of fraud reports we heard in in 2017 you’ll
see that we got 38,000 reports of fraud in 2017. Our data also also showed that
in Washington the total amount paid to reported fraudsters in 2017 was 17.8
million with a median loss of 460 dollars per person reporting. That’s
quite high. So how did consumers get our money? According to Consumer Sentinel,
these were the top categories with respect to financial frauds in
Washington. Impostors, this is IRS or government
agency imposters; identity theft; Debt Collection; prizes sweepstakes and
lotteries; and what we call credit bureau and information furnishers and users;
which I think Nadine is going to talk about later. Comparing our data to the
nationwide data, we can see that Washington consumers have the same scams,
are subject to the same scams, as everywhere else in the country, and comparing
our 2016 data to the 2017 data that was just released, the categories really
don’t change. The top five are the same, they might flip-flop a little bit in
terms of you know one two or three, but they’re pretty much the same. So let’s
drill down on each of these let’s talk first about imposter scams.
What’s an imposter scam? It’s just what it says. It’s when somebody calls and
says that they’re someone that they’re not, and this was Washington’s number one
complaint in 2017. Nationwide there are about three hundred and forty-seven
thousand complaints. We have a flier here you can see on the right. This is
something that’s available for free as a tear sheet for you or your patrons
if you think you might benefit from this. You can get this from our website and,
(cough) excuse me, one of the most common red flags with an imposter scam is that the
caller will ask you to pay by wire or debit card or iTunes or some sort of
immediate payment, and they also emphasize that there’s some urgency to
the problem. So let’s look at some of the fictions or the things that people tell
you when they’re, when they’re pretending to be someone they’re not. They could
call saying that they’re from the IRS and right now
because it’s tax season, IRS scams are a very very common thing. You know they
call and they say you owe us money, you owe back taxes, there’s some sort of
problem, you have a penalty. Housing lotteries: this is when somebody calls
and says, you know we can help you increase your odds of winning. We have a
way to to help you do that, you just have to pay us a certain amount of money and
well we’ll help you get into that Section Eight housing that you might
want. Another common scam is a utility scam and this is one that’s often
aimed at small businesses where someone will call threatening to shut the power
off if they don’t pay a fee that’s supposedly owed for that payment and
because most small businesses can’t afford to have their power shut off for
even a day, they might succumb to this scam. An educational grant is a scam
where they call then they say they’re from the Department of Education or some
other educational institution, and for a fee they can help you get a grant. We
have heard about Social Security scams,
we’ve heard about scammers impersonating the Federal Trade Commission saying that
they’re offering to help the consumer but you just have to pay a small fee. One
of the things that we heard last year in King County that was fairly common was a
juror scam, and this was a scam where people would get called saying that
there was going to be a warrant out for their arrest, they hadn’t shown up for
jury duty, and they needed to pay a fee for that and the King County Court
actually had a blurb on their their website warning people against this
juror scam. Because of the recent disasters that we’ve experienced across
the country, we’re also hearing about FEMA scams where people impersonate FEMA
and say that they can help you but you have to pay a fee in order to do that.
Property taxes and mortgage scams, same sort of thing. The final thing is
mandatory posters, this is a very common scam where a small business will
be contacted saying, the scammer is calling from the Department of Labor and
Industries or the Department of Transportation, and they’re required to
be posting certain notices and their businesses and they can, they can, supply
these posters for a certain amount of money.
So remember when you hear phone calls from people pretending to be from a
government agency, there are some things that you can bear in mind. First
of all, government agencies rarely, if ever, call people asking for money for
back payments. Secondly, whenever anybody calls asking for, whether it’s an
imposter scam or any other kind of call, if you’re asked to pay by wire transfer,
or iTunes giftcard, or Green Dot, or MoneyGram, chances are that’s a scam. Now
let’s talk about identity theft. Even though identity theft is number
three in the number of complaints, it can potentially do more harm than any of the
other ones because it can do so much long-term damage. We like to say there
are only two types of people in the world, people who’ve had their identity
stolen or people who are going to have their identity stolen. Here’s some of the
statistics on this slide that show you where Washington is in terms of the
numbers. We had over 7,000 reports of identity theft in 2017 alone and that
can involve stolen Social Security numbers
or credit-card theft and the research has shown, I heard this at an IRS seminar
last year from some investigators who do nothing but specialize in trying to hunt
down IRS Impostors and Social Security theft, the value of your identity now on
the dark web, which is where the criminals hang out, is less than a dollar
now. So think of all of the trouble it causes you to have someone steal your
identity when somebody has bought your identity for less than a dollar on the
dark web. And if you look at the state rankings for identity theft, you can see
here where Washington ranks. Again you probably can’t read this on your
computers, but Washington is hanging out there at about number 16 for identity
theft reports from 2017 and, I’m not really sure why, but I do think that
Washington, because we’re a very high-tech population and people
tend to be online a lot, that tends to be an invitation for for identity theft and
and you know the Internet is one of the prime places where people find find your
identity. If we break down the identity theft complaints by age, and I don’t have
2017 on here but the statistics are very comparable from year-to-year as you can
see, identity thefts don’t discriminate. They’ll steal from anybody whose
information they can grab. But you can see from the statistics that that tends
to be lower for consumers under 19 primarily because their personal
information isn’t available, they’re not using credit cards because they don’t
have them yet and for very young young teens they don’t have driver’s licenses
yet. Similarly for older adults the
information tends to be less available because they’re just simply not on the
internet as much. So what do you do if you’re a victim of identity theft? The
FTC has free identity theft resources. you can go to identitytheft.gov to
find these free resources and we also have a recovery plan there. For all of
our free resources, if you just go to FTC.gov/bulkorder, you can see a whole list of
all of the free materials we have that you’re welcome to to take and either put
in your library or direct your patrons to, to these websites so they can order
them from themselves. People are willing welcome to co-brand
with us, for example if you have an association
or an organization that wants to download our materials and then put
their logo on it they’re more than welcome to do that. We have examples of
letters to write and reports to make with respect to identity theft and we’ve
now integrated our system with the IRS reporting system for tax identity theft.
So I would say in terms of the things I’m talking about here today, if there’s
one packet of resources that you choose to grab for your libraries it would be
these free identity theft resources because we find that they’re one of the
most popular things that we commonly hand out. Let’s talk next about debts,
debt collection and debt scams. There are two aspects to these kinds of complaints.
First, consumers complain because debt collectors are violating debt collection
laws by doing things like harassing consumers, contacting your employer,
calling late at night. The second type of complaint in this category tends to be
collection on fake debt and, how does that occur? Callers might claim to
be some college, might claim that someone owes a debt that was either paid or is
no longer valid because it’s beyond the statute of limitations and it’s so
old and the callers will make threats and sometimes combined with a claim that
they’re calling from the government. Sometimes the debt could be related to
another type of scam, for example you ordered a beauty product online and you
didn’t order and then years later you get a call asking to pay for an old debt.
So you know these scammers don’t stop at just one scam, they’d like to
combine them as well. Next let’s talk about prize or sweepstakes and lottery
scams. You can see the number of nationwide complaints we got and the
high number of dollar volume of losses. These are the scams where they call and
say, oh you’ve won a prize or a sweepstakes and all you have to do is
pay us a twenty dollar processing fee or a ten dollar processing fee. Or they can
say you can pay us by some sort of instant cash transfer method like iTunes,
or Green Dot, or wire transfers. Scammers rarely if ever award these prizes and
Richard just sued somebody who was running this kind of game and they were
taking millions of dollars from elderly consumers. So that’s another area we want
to educate consumers about. And the final thing I’ll
talk about today is credit information and reports. You can see the number of
nationwide scams we, uhm complaints we saw last year. This includes
problems with credit bureaus reporting incorrect information about a consumer.
We might see an uptick in this category next year because of the epic Equifax
breach. Sometimes it takes a little bit of time between a time of breach happens
and and the consumer gets impacted by it, but you can see here just how large the
the problem is and I think Nadine is going to talk a little bit more about
credit and debt issues. So now that you’ve seen some of the grim statistics
about how prevalent fraud is in Washington, we want to give you some of
the tools for preventing fraud and what to do if you feel like you’ve been
scammed and to start with Richard McKewen is going to talk a little bit about
financial literacy and some of the tools that we have available for your use.
Richard McKewen: Hi everybody I’m Richard, happy to be here. So what I thought I would talk about
today are some tools that the FTC has to help you help others or, you know, free
you to help yourself. And I’m gonna first talk about our
website, consumer.ftc.gov, and what sort of materials are on there, and I’m going
to talk about another website that we maintain which is just consumer.gov,
and and then finally I’m going to talk about how you can actually get hard
copies of materials, of the educational materials that we have. Not everything is
available in hard copy, a lot of stuff you have to download yourself and print
out, but we do have stuff that we will print for you and ship you for free, as many
copies as you want now. So these three websites that we maintain, they’re geared
towards give different audiences. Our first one, consumer.ftc.gov, here’s a
screenshot of it, and you can see it covers a number of different topics on
which Tina’s already talked, about I talked about. You can see across the top,
money and credit, health and fitness, privacy identity, all those
sorts of things. You can click through and explore these topics. You can see
that there are links to multimedia. We have videos on here. We have blog posts.
We have all sorts of information on here. You can subscribe to have stuff, you know,
directed into your inbox every day, you name it. And so if I were to just sort of
click through here to the tab at the top that says money and credit, I drill down
a little bit and here’s more specific money and credit.
Information, say there in the middle, you can see how to shop smartly,
how to save money, some tips on buying and owning a car, etc. Now all this
information that is a consumer.FTC.gov is geared towards people with, say a high
school education or maybe a high school education plus. We try to keep it,
you know, focused, keep it simple, keep it so it’s, you know, understandable by a pretty
wide swath of the population. The next website I’m going to talk about consumer.gov,
you’re gonna notice right away it looks quite a bit different and
consumer.gov is a lot more pared down, a lot more bare-bones, and I don’t mean
that as a criticism. I mean it in the sense that it’s simplified and in fact
we worked with the Center for Applied linguistics to develop this website and
it’s geared to people who have tenth grade education and then we also try to
gear it towards people who, in which English may not be their first language. So it’s a
lot more simpler a lot more easier to navigate, not so many things to sort of
distract you when you look at it lots of things to click on to drill down at, etc,
and you can see once again there’s the three tabs across the top and you can
sort of drill down into those. The fourth tab across the top, Toolbox, is actually
for people who are interested in making this information
available to others, say for educators who want to use this in class, or, you
know, people who are leading discussions at community groups and things like that.
We’ll talk about in just a second, but first, so for example, if I were to
click on the Managing Your Money tab at the top or on that Manage and Use Your
Money Wisely bar in the middle, it’s going to take me down to this which is
just a straightforward list of topics that you can drill through. It’s like I
said, it’s very simplified and it tries to keep it as easy to follow as
possible without getting into too many sort of details or distractions. So what
I do when I’m sort of talking to community groups, you know, and it can be
a group of seniors where I’ve presented for at a community center. I’ve gone out
to prisons and presented to the reentry community. I’ve gone to high
schools and talk to high school kids about stuff like this, and I use this
website as the starting point and then I build on to it in my presentation and
one of the things I actually like to do is I like to try to make my
presentations as interactive as possible and as interesting for the audience
and so I have actually, with the help of some other folks at the FTC, developed a
PowerPoint game, “Who Wants to be a Millionaire” and then you can see a little
asterisk, there it’s okay not really a millionaire, but it’s a good reminder to
always read the fine print. And what I do with this is I try to just act instead,
rather than just, you know, throwing information at the audience is I
immediately jump into this game and start dividing the group into teams and
asking them questions. And so my first question, or one of my easier
beginning questions here is, “Sofia is trying to come up with a monthly budget
for when she goes and gets out,” this is aimed towards, this was, I gave this to them
to some of the inmates at Purdy a couple of months ago and so she’s trying
to come up with a monthly budget for when she gets out. Which of the following
would not be considered a fixed expense? A grocery bill, a car payment, car
insurance, or rent. So you know it gives the audience the opportunity to discuss
and figure out what the correct answer is and hopefully they are able to deduce
that the correct answer is a grocery bill. And then what I do then is I go
into the toolbox, and this is in the toolbox on consumer.gov, and it’s “Sophia
Starts a Budget” and then you know I’d give this handout to the class and we
talk about how to draft a budget in ways that say, with fixed expenses you
can’t really save money, but with variable expenses you can find ways to
save money. Next question, “Marcella lands a job
paying $400 a week. On her budget worksheet, she should put down $1,600 as
her monthly income. True or False?” Once again, you know, let the
audience discuss this a little bit and usually come to the right answer, that is
false. You don’t put that down as your income on your budget. Why not? Well it’s
because you have deductions, you have taxes, and maybe your wages are garnished.
There may be any number of reasons why your paycheck is going to be less
than what you actually earn in total. Then we pull out our budget sheets
and, once again you can order these, we can send you boxes of these for
free, or you can print them out yourself online; and we figure out how to make a
budget filling in the income this month, etc. So if you are leading a workshop

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about these topics, once again this is in the toolbox, it
gives you even more detailed teachers notes that you can use to help structure
your presentation. We also have some very fancy objectives and standards
that you can use as well. If you want to, you can look at the columns here left
and right. The right is for more basic beginning students, people say with
limited language capabilities or people who don’t have a high education level. On
the left you have your lesson plan for people who are have a higher
education level. Another question, “Jessica’s Bank offers her a credit card.
before she agrees, one of the most important questions she should ask is:
Can I get the Seahawks logo on it? Does it come in a color that matches my
handbag? What are the fees? Or, can I have the bill sent to my ex? And the idea with
these questions is not to make them so hard that people can’t get them, you want
them to sort of have fun with it and of course the answer is “what are the fees.”
And for these sorts of questions they get progressively more difficult. This is
one of my favorite publications that I use in my presentations and it’s focused
on finances. It’s geared towards college-age kids, people who have
graduated from high school with maybe a little bit more education and it’s about
getting out of their parents home and getting started on their own. So it
covers things on how to rent an apartment, how to buy a car, how to make a
budget, credit skills 101, etc. So one of the things that’s discussed in this
publication is how to use a credit card and things to ask and look for, and how
to examine the fine print, figure out what the annual fees are, etc. Another
more difficult question, “Jessica decides to celebrate her birthday in Las Vegas.
She charges $500 in airfare and $500 for hotel on her credit card. If she pays
only the minimum payment each month and doesn’t use the card again, how long can
she expect it to take to pay for her mini vacation?” Now the idea here
isn’t to make them actually do, you know, complicated math though. The idea is to
just to get them thinking about these things that they might not have thought
about when they’re out there spending money on their credit card. If you put
$1,000 on a credit card and if we assume that’s
a 12% interest rate and we assume that the minimum payment is 2% of the balance,
it’s going to take eight years to pay off that little mini-vacation if you
just make the minimum payment. So once again, turning back to the focus on
finances publication, this explains the math in a little more detail. You can, it
tells you how long it’s going to take to pay off that debt. So the last thing I’m
going to talk about is our bulk order website.
This is ftc.gov/bulkorder and everything that we produce in hardcopy
is available here and you can see up on upper right-hand corner, it says um En Espanol,
um everything that we produce in hardcopy is also available in Spanish
hardcopy and then if you drill down, for example, if I click on the consumer.gov
education sample pack here. Oops, they’re not here, I’m sorry I thought
I put them down. Well, if you drill down into these, you can find the actual
publications that I’ve just talked about. You can order them and if it’s not
available in hardcopy, you’re welcome to print it out yourself and use it
yourself but most of the stuff is available here in hardcopy. You just have
to give yourself plenty of lead time if you order, it can take up to four to six
weeks to actually get some of this stuff. Some of the items aren’t actually
maintained in stock, like once you order it then they actually print them out and
ship it to you, so it can take a while, so definitely give yourself at least four
weeks if you are ordering materials from the website. And with that I will turn it over to Nadine.
Nadine Sumter: Hi everyone thank you so much for being here today and for giving
us an opportunity to share some of this information with you. As promised I’m
here to talk about debt collection and credit issues.
I know Tina talked about what type of collection problems and credit bureau
problems there are. I’m going to provide a little practical advice about what to
do because oftentimes libraries are the first places people go to get
information about what to do and they’re having financial problems. So I’m going
to go through a series of questions which are probably the most common
questions that you will hear and give you some quick answers that you can give
them and then also point you to resources that we have on our website,
either for bulk order or that you can just pull up, to help them resolve whatever
their particular issue is. So often people come in saying, “hey, debt
collectors keep calling me. What do I do?” So some practical advice is, first of all,
they need to write everything down because they need to keep a record of
who they’re talking to and what these debts are because oftentimes, as
I’ll talk about later, these may not be real debts. So the first thing they need
to do is tell the collector I’m only going to talk to you when I get written
validation notice showing what I owe, who I owe it to, and when I first owed this
debt. They also need to know that they don’t have to be on the phone with
people who are threatening to do something they can’t legally do. Tina had
talked about, you know, threats of, threats such as violent threats or profanity or
anything like that, but this also includes legal threats so if they don’t
intend to sue they can’t threaten to sue and they can’t tell your children or
third parties about the debt. It’s all against the law and they don’t have to
stay on the phone for that. So the next question invariably is, “How do I make
them stop calling me?” Well whether or not you owe a debt, you don’t have to receive
calls from debt collectors. So the way that in the law that they can do this is
write a Cease Notice Letter and that’s a letter telling the debt
collectors to stop calling. In the resource materials I’m going to show you,
there are sample letters that they can use. We recommend that, even
though it costs money, it is worthwhile to send by certified mail with a return
receipt to ensure that you can prove that you sent the letter. And the law
does require the calls to stop but it doesn’t, but you ought to tell people
that just by getting a collector to stop calling doesn’t make, doesn’t mean, the
debt collector can’t still sue or you know seek other legal remedies if those
remedies are lawful. So what do I do when I get the validation notice? So assuming
that the debt collect, the debts real, and the debt collector sends you a
validation notice, it should list the creditor, and this is the time when the
consumer can figure out whether it may be a real debt. And if they don’t believe
the debt is theirs, they can follow the instructions on the notice because a
proper validation notice should tell them what to do next and if the
debt is theirs they can start figuring out how to pay for it
or talk to a credit counselor to help them figure out how to deal with that
debt. So one of the best resources we have online, which is very comprehensive,
is this debt collection booklet. You can get it online or in bulk order and it is
one of those things that I recommend really having on hand. It’s a great
booklet that contains pretty much anything that the consumer might want to
know about how to deal with debt collectors and debt collection. We also
have a couple others that are really good to have, Coping with Debt which
actually helps, I believe, work out payment plans and then, Choosing a Credit
Counselor which is a really important thing because there are a lot of people
out there posing as credit counselors and offering credit repair services that
are scams. So this booklet, which you can also obtain online, will help a person
discern who might be an appropriate person for them to deal with for
credit. And one of the things that we tell people is, they’re not, anyone who’s
offering to help you resolve credit should never, ever, charge you an advance
fee. That is illegal and so we, that’s, one of the key flags for for whether someone
is legitimate. And so as I was saying, consumers need to beware
companies that offered a fixed credit or reduce the debt for a fee in advance,
often they will offer to enroll consumers in loan forgiveness or reduced
payment plans and one of the biggest areas we’re seeing now is student loans,
where they claim that they can get get loan forgiveness and other types of
relief from student loan debt and there are other materials for that on the
Department of Education website. But what we tell people is, it doesn’t cost
anything to renegotiate or get loan forgiveness from the Department of
Education and it can only be done through the Department of Education. So
companies that offer to enroll consumers and you know loan forgiveness programs
are almost always a scam. We also have a booklet on Credit Repair, how to fix your
credit, because as I will get into in a moment you can’t really have a debt
collection problem without also having a credit problem. So one of the things
though that comes up for consumers, and this is where we see areas where
consumers may have an issue as to whether or not they really owe the debt.
Sometimes there are debt collectors who will buy up old debt for pennies on the
dollar and the reality is they only have a limited amount of time to collect a
debt and then the debt becomes out of statute which means that legally they
can’t sue on the debt anymore. Washington gives written contracts and accounts
receivable six years before the unpaid debt becomes time-barred. If you’re in
another state that time may vary but typically the clock starts on the
time period when the consumer fails to make a payment and a debt collector
can’t, they can still attempt to collect a debt, but they can’t threaten to sue
and they can’t take legal action for what we call time-barred debts. They can
call for time-barred debts, but consumers can go through the whole process that I
originally told you about to get them to stop calling. Oftentimes, consumers ask
“Well, I may have once owed the debt but, you know, but it’s old.”
We don’t ever tell people not to pay their debts if they owe them, but, you
know, in a time-barred debt it really shouldn’t lower your credit score if
it’s past the credit reporting period. But in general, we don’t tell people not
to pay debts but they’re not legally required to pay time-barred debts. If
a person does agree to make a partial payment they need to know that in some
states that can revive the debt, so I think if a person’s in doubt you might
tell them to make sure that, you know, even making a partial payment may come,
make the whole process start off again. But if they do decide to pay off
the debt, they should make sure to get a release for the debt before paying it
back otherwise that record of the debt can be resold and another debt
collection company may come back and say they still owe it. Oftentimes, what we see
are debt collectors will sue people and oftentimes people won’t get notice or
they’ll ignore the notice because they won’t know what to do. Even if the debt
is time-barred, some debt collection mills will still file lawsuits and the
only way you can actually get those dismissed is if the person shows and
comes with evidence that it’s time-barred. If that’s the case then the judge will
dismiss the lawsuit, but really never ignore a lawsuit otherwise the collector
can get a judgment and then it’s much harder to get that overturned.
So again, as Richard said, we have resources for this. This is the link for
time-barred debts. We have a flyer on that and there’s another brand of debt
collector which is a pure scam and these are callers seeking to collect a phantom
or fake debt. They get consumers names and then they claim that they owe
a debt which they never owed and oftentimes the red flags for this are
refusing to give a mailing address, they ask for personal information, or they
phish as we say, for information because maybe actually they are an identity
thief thief, or they threaten you with action that isn’t legal to try and scare
consumers into paying in debt they don’t owe. If consumers are getting calls like
that they need to go back and ask for identification and validation of the
debt. If they are sure it’s not their debt, just hang up hang up and don’t give
any personal information and if they think it might be a legitimate debt they
can always contact the creditor to find out whether it’s a legitimate debt. And
anytime, and I don’t know if any of us said this, but anytime you have consumers
come in with scam problems or identity theft problems or any of the scams that
we’ve mentioned today they can always report it to us or the state AG’s office
and we do act on those. We get a lot of them and again here are the websites
where they can get information on fake debt collectors and and collections on
debts owed by deceased relatives which is another type of scam. I’m now, I’m
going to get into the credit issues real fast. A lot of people are having issues
with background checks and they don’t know what to do. One of the issues that
keeps coming up more and more recently are landlords want to do a background
check and they want, they often come back, and tell people well you have bad credit
so I don’t want to rent an apartment to you. If this happens, they have to give an
adverse action notice to the consumer and
the notice has to tell the consumer who created the background or credit report
so that the consumer can go and correct it if there’s a mistake.
So this is really a way for consumers to fix the problem. There are ways for
consumers who have bad credit to get a landlord to rent to them and
oftentimes we tell people, you know, maybe you can show, through pay stubs or bank
statements, that you are a good risk or maybe offer to pay more
for security deposit or pay the first and last month’s rent first in order to
secure the housing. And we do have these tear-off sheets. They can be obtained
online through consumer.gov and they’re really helpful too. Again, background
checks come up in the employment context. There are strict rules for employers.
They have to provide a stand-alone written notice before they do a
background check and obtain a written consent. They can’t ask about medical
information before giving a job offer and they can’t treat people differently
because of race, national origin, and the usual suspect categories. Consumers often
are upset when they’re denied a job based on a background check and they
don’t know what to do. Employers have to let them know what it was that made
the adverse action happen and usually it’s in a credit report and they have to
give the consumer a summary of their rights to show them how to correct an
error. Essentially, what consumers need to do is go straight to the credit
bureau and if it’s a mistake, and this comes up with identity theft also, they
need to get it clarified and they need to clean it up and notify the consumer
of the mistakes. We have resources specifically about background checks
that are available free, in bulk, in English and Spanish or
you can obtain them on our website and these are joint publications with EEOC
and the FTC. So how do consumers correct errors on a consumer report? You can go
to the website and there is some confusion about which websites are
actually free. The correct website to go to check your credit reports for free
is www.annualcreditreport.com, free reports can be gotten within 60 days to
make sure the reports been corrected, and consumers can also stagger asking for
the reports because there are three credit bureaus and that way you can
check your report every four months. We also have resources on this that are
very helpful. They walk you through how to dispute errors and how to get free
credit reports, again something that people often will come in and need. And
also, consumers don’t always know their rights with regard to credit so we do
have brochures that help lay that out. And again I believe these are drafted to
be for around a high school education so they should be pretty informative and of
course you can always send consumers to the FTC and we will help to resolve
problems when we can. And that’s it for me thank you so much.
Laura Solis: Thanks, Nadine. This is Laura Solis. I’m going to be focusing
my portion of the talk on scams that target vulnerable populations. I’m gonna
forward through some of these slides. There we go, Scams Targeting Vulnerable Populations. So
what do we mean by vulnerable populations? Consumers can be targeted
specifically because, they well, consumers can be disproportionately affected by
certain scams. There are some scams that target consumers on purpose and there
are some consumers that, when they are targets of scams, they can suffer greater
impacts for a variety of reasons. So this can
include consumers who are low-income, Latino consumers, African American
consumers, Asian American consumers, military consumers, seniors, that’s sort of
who we’re talking about but I don’t want to leave the impression that if
you’re not in one of those categories that you’re not vulnerable because the
truth is scammers really target everybody and we all have
vulnerabilities. One of my vulnerabilities is I will basically buy anything a
salesperson tells me to buy. So, I have that vulnerability, I know I do, and
there’s really no sense in sort of getting around it. It’s just something
that I know. So we all have vulnerabilities and we can all be
vulnerable consumers depending on the certain situation, but we’re gonna be
talking about scammers who target consumers who may be non-fluent English
speakers. They may be unfamiliar with U.S. systems or governments, and they may be
looking for an opportunity to get ahead, which really probably defines most of us.
In 2016, the FTC issued a report to Congress and in that report we
discovered that African American and Latino consumers were more likely to
become the victims of fraud than their white counterparts. But at the same time
that this is true, they’re less likely to report scams and frauds when they’re
victims. And then two types of fraud stood out for its effect on Latino
consumers and african-american consumers, and that is debt-related fraud and
income-related fraud. So it’s some of the things we’ve already talked about. We’ve
talked about credit repair, debt relief, mortgage relief. On the income side, it
can be business opportunities things like pyramid schemes and then last
year, when we’re just looking at consumers aged 50 and older, this segment
of consumers reported three hundred and sixty-five million dollars in losses due
to fraud which was, I think, about a hundred and thirty thousand million, I’m
sorry, 130 million more dollars than consumers under 50 years old.
And as consumers age, the median amount of their losses increases. The kinds of
scams that we see targeting older consumers are grandparent scams, tech
support scams, and sweepstakes scams. We’re going to talk a little bit about
some of these in the next slide. Our enforcement actions affecting where
the scammers were targeting senior consumers include the first two cases on
this slide, FTC versus Next-Gen and FTC vs. Genius Technologies. These were two
cases that were filed out of our office last month. They both targeted seniors.
Next-Gen is a sweepstakes scam where defendant sent millions of mailers to
consumers that falsely said that consumers have won or were likely to win
substantial cash prizes–typically, a million or two million dollars. And what
consumers were told is all they had to do is pay a fee between $9 and $139.99.
The scammers used official sounding names like Award Notification Commission,
International Award Services, or Central Award Distribution. Many people paid the
fees several times before realising that they had been deceived. Collectively
consumers lost more than 110 million dollars as a result of the scam.
Ingenious Technologies, our complaint alleged that defendants worked with
telemarketers in India to trick older consumers into buying bogus technical
support services. They would do this, they would initiate contact with consumers by
cold-calling them and also a pop-up would appear on the consumers computer
saying that they needed to call right away if they wanted to get protection
from an imminent harm. The callers claimed to be from well-known tech companies and
once they had consumers on the phone, they told consumers that hackers were
going to break into their computers very soon and steal their bank accounts if
they didn’t purchase expensive security software which they said was affiliated
with the US government in many cases, which it was not.
In fact, what consumers got downloaded on their computers was worthless or old
software, was available elsewhere for free or for a very low cost.
While remotely connected to computers the scammers in this case also took the
opportunity to steal information from the consumers computer. They charged
between several hundreds to several thousands of dollars. They also, in many
cases, when consumers consented to having this software downloaded, the scammers
would call again and say you need to update your software and they were able
to get more money from consumers that way.
Several people paid more than fifty thousand dollars and one consumer paid
almost four hundred thousand dollars during a period of several years. FTC
versus ABC Hispana; actually the next three cases on this slide
were scammers targeting spanish-speaking consumers. In the first of those cases,
FTC versus ABC Hispana, the scammers worked with callers, telemarketers who
were located in Peru, who pretended to be affiliated with the government or with
“centro de ayuda” which is a non-government help center. They told
consumers they had won, or had been specially selected to receive, an English
language learning course. They told consumers that they had qualified
for a grant or a scholarship and that they were gonna or they were gonna
receive as much as an 80% discount on the fee. They claimed that the course
included personal instruction oftentimes from university professors, as well as a
certificate or diploma upon completion of the program. Here the scammers charged
between one hundred and ninety-nine and eight hundred dollars for what ended up
being, when consumers got the package, was basically self-instruction materials
that included booklets and CDs, and in many cases this, the stuff that they got,
didn’t even work but it certainly didn’t include any personalized instruction. It
wasn’t affiliated with the government. They didn’t receive a deep discount. They
didn’t receive scholarships. There was no certificate or diploma.
These scammers also had a sort of a second version of a scam which was that
the telemarketers would call and pretend to be affiliated with well-known
companies like Walmart or Colgate or they said that they were calling from a
spanish-language radio station and that the consumer had won a prize and the
prize was a tablet computer, top-of-the-line is how they described it.
The consumer all they had to do is pay $200 for what was described as shipping
and handling, taxes, insurance or warranties. Essentially there was no
contest. Consumers got generic tablets for older models and there was
no insurance or warranty. In these cases and, in these cases what was
a common feature of the three cases that we’re gonna talk about
here, that were targeting Latino consumers is that consumers were
routinely threatened with arrest, jail, referral to law enforcement, losing
their homes, damage to their credit. In ABC Hispania, consumers were also
given a number that when the consumer called said that it was the United
States Citizenship and Immigration Service. Centro Natural was a bogus debt
collection scheme which Nadine has touched on. Consumers were told that they
owed thousands of dollars in debt that they didn’t owe and were told that they
could pay hundreds of dollars to settle that debt. Consumers were also threatened
in this case and Cream Group, a similar situation, this was a work from home scam
which, where consumers were told that they were gonna receive high-end, often
designer, products for about $400. When consumers opened their packages that
they paid for with the money order, they discovered that what was in it was just
junk. It was often used clothes, very cheaply made clothes, not name brand,
was not a deal at all and they were not able to resell the products as they
were told again this scam also threatened people with legal actions,
arrests, and referral to law enforcement authorities. And we were able to get
redress for consumers in the Centro Natural case and Cream Group
and we also were able to obtain bans in all of these, the last
three cases. So some of the things you can do to avoid fraud if we had to boil
it down because I think we’re running out of time, but if we had to boil it
down to the top three things you could do essentially it’s slow down. As we
have discussed in the sample cases that we talked about, what consumers or what
scammers really want is for consumers to not think through a decision. They want
to create this false sense of urgency so, for example, in the sweepstakes scams,
it’s you’ve won a lot of money. Who couldn’t use a million dollars, like
immediately? So consumers have this sense that they have to answer or they have to
say yes before they get off the phone. So that is often a trap that scammers
use to get consumers to agree to things that they later, when they think about it,
it’s like you know what? this doesn’t make a whole lot of sense.
Spot imposters is important. How do you do that? Well imposters basically, Tina
mentioned, pretend to be people that they’re not. So they pretend to be
trusted friends, relatives, companies that you know and that you do trust. One way
to spot an imposter is to to be suspicious of unexpected requests. That’s
where they really try to get you. If it’s something that you’re not expecting
but you think may be legitimate, hang up the phone and dial the number of the
company that you do know and that you do trust and you know it’s a good number.
People doing searches, I often use this to search for phone numbers and you’ll
find a lot of information from consumers who are posting their experiences online.
You can use your favorite search engine, type in scams, complaints along with the
names or the identifying information or the kind, even the kind of scam it is so
IRS fraud or an IRS call, is a good search term to use if you are suspicious
of someone calling you, you’re not familiar with.
Nono Burling: Laura, this is Nono and I just wanted to interrupt for a second
because we’re reaching the top of the hour but I wanted to let any of the attendees
who may have to leave at 10 o’clock know that we are recording this and you’ll
get a copy of the recording so if we go over and you want to come back and see
the end of it don’t worry, okay back to you Laura. Sorry.
Laura Solis: Thank you Nono. Again, so another… something that as a tip that
kind of goes throughout each of these ten points is to talk to someone and it
also relates to the slow down. Talking to people really helps get your thought
process going, it helps you to slow down. It helps to talk to the people who may
have had similar experiences or who may sort of clue into something that you
weren’t thinking about. So you know, talking to someone includes doing online
searches and looking for other consumers experiences and in many ways
scammers are able to take advantage of people who don’t talk to people and who
maybe are ashamed of having fallen victim to a scam and they shut down and
you know they’re trying to keep it secret and they’re trying to work with
the company and you know, in many cases it ends up working against that
consumer because they’re not talking to people and they’re not having, you know,
they’re trying to resolve the issue themselves. Finally, um, sign up for free
scam alerts from the FTC at ftc.gov/scams. This is where you can get
the most recent information about the kinds of scams that we’re seeing, our
most recent enforcement actions, and general consumer education updates. I’m
gonna forward to this slide so we can get through them. This is, um, our Division
of Consumer and Business Education develops great consumer
resources and they do this by learning things about our, as you can tell we have
a lot of enforcement actions, they distill information and tips that they
then turn into great consumer education resources. This is our fotonovela line
for Spanish-speaking consumers and I think most, if not all, of these
fotonovelas are based on actual FTC actions so they have really practical
tips in a way that is very digestible for Spanish-speaking consumers. This is
one of our most popular consumer-ed pieces when we go to
education events where it’s predominantly Spanish speakers. There’s
also information, many of us have already touched on this, videos and multimedia
available in Spanish and, as we have discussed, it’s important to report fraud
to the FTC–particularly for those groups of consumers who are maybe under
reporting frauds. We encourage people to report fraud as its it’s part of the
work that we do, it’s part of how we bring enforcement actions, it’s part of
how we decide what kinds of consumer education we need to do, and what kinds
of policies we need to focus on. You can do that by going to ftc.gov/complaint.
We also have a Spanish version at ftc.gov/queja and a
phone number where people are available to answer the call in Spanish as well as
English – 877-FTC-help. Finally there is a library specific
resource page. We’ve talked a lot about the information that’s available on this
page, but there’s a page specifically for librarians and ftc.gov/libraries
where you can use the content that is designed for your programs. There are
free written materials, bookmarks and brochures, free videos, as we’ve seen, to
embed in your websites. We’ve talked about the blog post we’ve talked about
the book order website, we’ve talked about consumer.gov, we also maintain the
do-not-call list. You can go to donotcall.gov to report unwanted calls,
verify a registration, register your phone number, and your
registration does not expire and I think we open it up if people are still on the
phone for any questions that anyone might have.
Nono Burling: um yeah, this is Nono and we had one question come in which says,
and this person is left so hopefully they’ll get back to the recording, it
says what sort of information should you try to get from the caller if you
suspect it as a scam? Laura Solis: So are you speaking about like as a librarian if, if someone is…
Nono Burling: I think, I don’t know the person, again the
person who asked the question has had to leave, so but I’m assuming that they’re
probably talking about themselves as an individual, if you’re and they can apply
that then to their tell their patrons. If someone gets a call and you think it’s a
scam, what kind of information should they try to collect so that they can help the FTC track it down.
Laura Solid: I see. So one thing to be suspicious about again,
as it’s sort of on the 10 things you can do to avoid fraud, is to is it, you know,
it I think one of the questions you should ask is this a call that I was
expecting to receive. Are they asking for my personal information? Are they asking
me for money? And if it’s something that you suspect is a scam but you’re not
entirely sure, what you can do is hang up the phone and call, you know, either if
it’s like say someone is pretending to be your (inaudible) or maybe pretending to be
your bank, saying that they need your social security number to verify your
account information. You can hang up the phone and call the number that’s on your
bank statement or somewhere where you know that that’s the actual number. You
know, it’s really I think, in this day and age because people can spoof
caller ID, this is what happened in some of our the cases that we were just
talking about, the scammer spoofed caller ID to make it look
like friends and relatives were calling or emergency services was calling, so be
suspicious of that. If you look at your phone and you see that it’s someone that
you may trust, it may not actually be that person. And, you know, again if
there’s a sort of sense of urgency about what they’re asking I think that’s
another thing to be suspicious. Don’t feel pressured. You can, again, hang up the
phone. If they’re willing to give you their contact information or whatever
information, I’m going to write it down, plug that stuff into your favorite
search engine, and see what you can find to see what other consumers experiences are.
Nono Burling: That’s it, yeah that’s that sounds great. And then I
personally had a question which is… On the Do Not Call list, is there any way to
get robocalls, oh I mean, I swear, that’s pretty much all the phone calls that
come in to our landline at my house is robocalls. Is there a way that the Do
Not Call list can stop those? Because I thought I was on a Do Not Call list. Nadine Samter: Uhm, this is Nadine. Part of the problem with robocalling is, the Do Not Call list works really well for legitimate telemarketers and others who want to call you. But, it doesn’t work very well for really
bad scammers. A lot of the calls that you get, especially fraudulent robocalls, are originating offshore and we do spend a lot of time trying to trace
them and we have been able to sue many of the really fraudulent robocallers,
but the best way for us to deal with that is for you simply to report it. But
no, there’s no way to really stop them. I mean you could use caller ID and just not answer. But, for someone who gets your phone number and wants to call it who is a real scammer, they’re not going to be registering anyway with the Do Not Call list.
Laura Solis: The thing we also tell people is that robocalls are illegal so if you do get a
robocall just hang up, it is completely illegal to do that. Don’t push one,
because I think that oftentimes they have that option push one if you want to
get off our list and people do that and what happens is, they end up getting more
calls. So just hang up on robocalls and I think that there are ways you can call
your service provider, your telephone service provider, and get certain numbers
blocked but in many cases you know those numbers change and so that’s not a
foolproof way to stop the robocalls from happening. Nadine Sumter: One way that I personally deal with it, but it may be too expensive for some people is, we do have a landline and we also have
cell phones. I never give out my cell phone number for anything other than to
people and companies that I can trust. Otherwise I always give my home phone and
about 99 percent of the calls, or more, that come to my landline are calls I don’t want.
Nono Burling: Yeah, that’s the way it is for me too. That’s why my landline is almost all junk.
Nadine Samter: So that’s one option too, just have a separate phone number to give out when you think it might be sold. Jeremy Stroud: I actually have a VOIP landline at home
that I don’t want but comes with my package and they’ll charge me more to
get rid of it, so it’s not actually hooked up. But I do get voicemail on it. I
think I’m gonna start doing that myself, just giving that out whenever I don’t
necessarily want phone calls from the people.
Nadine Samter: Right, and I give that to some businesses if I know that I’m not going to have a continuing relationship with them or my relationship is purely one where I go to the store and buy things in person because they often do sell the numbers. Nono Burling: It’s great. Thank you so much this has been so informative and what great
resources you have produced. I suspect you’re going to be getting some orders
for those things from libraries because this is all really really useful
excellent material.

1 comment on “First Tuesdays: Financial Literacy, Facts vs Fiction

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