Counseling Agencies: Protect Yourself

Be wary of credit counseling organizations that:

* charge high up-front or monthly fees for enrolling in credit counseling or a DMP.
* pressure you to make “voluntary contributions,” another name for fees.
* won’t send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers, and balances.
* try to enroll you in a DMP without spending time reviewing your financial situation.
* offer to enroll you in a DMP without teaching you budgeting and money management skills.
* demand that you make payments into a DMP before your creditors have accepted you into the program.

Managing Your Secured Loans:

Managing Your Auto and Home Loans: Your debts can be unsecured or secured. Secured debts usually are tied to an asset, like your car for a car loan, or your house for a mortgage. If you stop making payments, lenders can repossess your car or foreclose on your house. Unsecured debts are not tied to any asset, and include most credit card debt, bills for medical care, signature loans, and debts for other types of services.

Most automobile financing agreements allow a creditor to repossess your car any time you’re in default. No notice is required. If your car is repossessed, you may have to pay the balance due on the loan, as well as towing and storage costs, to get it back. If you can’t do this, the creditor may sell the car. If you see default approaching, you may be better off selling the car yourself and paying off the debt: You’ll avoid the added costs of repossession and a negative entry on your credit report.

If you fall behind on your mortgage, contact your lender immediately. You want to avoid foreclosure. Most lenders are willing to work with you as long as they believe you’re acting in good faith and the situation is temporary.

Some lenders may reduce or suspend your payments for a short time. When you resume regular payments, though, you may have to pay an additional amount toward the past due total. Ask about the additional fees would be assessed.

If you and your lender cannot work out a plan, contact a housing counseling agency. Some agencies limit their counseling services to homeowners with FHA mortgages.

Call the local office of the Department of Housing and Urban Development or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency near you

Help Yourself out of Debt

Developing a Budget: Take control of your financial situation.
Do a realistic assessment of how much money you take in and how much money you spend.
Start by listing your income from all sources.
Then, list your “fixed” expenses — those that are the same each month.
Next, list the expenses that are not fixed.
Prioritize your non fixed expenses according to necessity.


Contacting Your Creditors: Contact your creditors immediately if you’re having trouble making ends meet.
Be honest and tell them why you are having trouble.Try to work out a modified payment plan.

Dealing with Debt Collectors: The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.

FTC Creates Consumer Hotline for Consumers Who Paid for Debt Reduction Services

The Federal Trade Commission has created a consumer hotline for consumers who purchased “debt reduction services” from Edge Solutions, Money Cares, the Debt Settlement Company, the Debt Elimination Center, and Pay Help Inc. The hotline is in addition to a letter that was recently sent to the customers of Edge Solutions and the other companies, notifying them that the companies were shutdown.

Consumers who call the FTC’s hotline at 202-326-2998 will be advised that on October 11, 2007, the Commission obtained a restraining order against these companies, which allegedly falsely claimed that they negotiate with creditors and begin paying creditors within weeks of consumers joining their program. The order appointed a temporary receiver to be in control of the companies, and froze the assets of the companies and their owners.

The companies are not operating now, so that automatic withdrawals of monthly fees from consumers’ bank accounts have ended. Affected consumers should verify with their financial institution that all automatic debits to any of the companies has ceased.

Consumers are strongly urged to take immediate action on their credit accounts to ensure that they pay any creditors with whom they have a payment plan, and to contact any other creditors as soon as possible to arrange payment on their accounts or take other steps to avoid further damage to their credit. Consumers also may want to inform creditors about the FTC case against the companies. (See press release dated October 3, 2007).

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

Consumer Alert::Don’t get hung up by telemarketers.

By Sid Kirchheimer

November 2007


In June Rosemary McDougall got an unsolicited phone call at dinnertime from a telemarketer selling automotive warranties.

"I find it more than coincidental," says her son, Graham, "that she had taken her car to the dealer for repairs the day before. But they deny providing her car or contact information to the caller."

The phone solicitor had specific details about her 2002 Dodge Durango—no longer under factory warranty but driven only 21,000 miles—and persuaded her to buy a "protection" policy for $295.

"It sounded like a good deal," says the 82-year-old widow, a cancer survivor who lives in Metairie, La. She gave her credit card number to the salesman—but immediately regretted it.

The next day, McDougall, a retired IRS auditor, called Colby Evans, the salesman from Automotive Warranty Solutions. The Florida-based company has generated numerous complaints, often for telemarketing to people who, like McDougall, are enrolled in the National Do Not Call Registry.

"I left several messages, but he never returned them," Rosemary McDougall says. Her son, a gerontologist at the University of Texas School of Nursing, Austin, intervened and eventually reached Evans. "He told me, 'Your mother bought it, and we're not going to cancel.' Then he hung up on me."

Two weeks later a bill arrived in the mail from Automotive Warranty Solutions. "It was for $2,700, the 'balance due' on that $295 policy, which already had been charged on my mother's credit card," says Graham McDougall Jr. "I have no doubt they were trying to scam her. She was vulnerable and exhausted from her chemotherapy."

Only after Graham complained to the Better Business Bureau, the Federal Trade Commission and AARP did his mother get her $295 refunded and the policy canceled. Automotive Warranty Solutions CEO Ralph Mancuso also wrote a letter of apology to McDougall, but he declined to comment to Scam Alert.

Since taking effect in 2003, the Do Not Call Registry has significantly curtailed the number of unwanted phone sales calls. Still, the FTC, which manages the list, gets 3 million complaints a year from registrants. Here's how to prevent unwanted sales calls—and protect yourself if you make a telemarketing purchase you later regret:

* Re-register. Those enrolled in the Do Not Call Registry must re-register after five years. To verify when you need to re-register—or sign up for the first time—visit www.donotcall.gov or call 1-888-382-1222 toll-free.
* Act locally. Some states operate their own do-not-call registries. Go to www.ataconnect.org for a list of state programs.
* Check caller ID. Telemarketers are required to display their phone numbers and, if available, the name of the company selling the products. Be wary of ID numbers marked "private" or "unknown"—and never buy from a caller who won't give a callback number.
* Sleep on it. No matter how enticing the offer, don't buy during the sales call. Don't reveal your credit card number without getting a written contract with all the terms, and don't trust anyone who asks for a fee upfront.
* Know the rules. Some states allow up to three days to cancel a purchase from a telemarketer; in others the sale isn't final until you receive written confirmation from the seller—and there may be a brief grace period after that.
* Complain. You can file a complaint about unsolicited calls with your state consumer office or with the FTC (go to www.donotcall.gov and click on "File a Complaint") if you've been on its registry for at least 31 days.

To learn more, go to the National Fraud Information Center at www.fraud.org and click on "Telemarketing Fraud."

Sid Kirchheimer is the author of AARP/Sterling's Scam-Proof Your Life.

BBB Advises College Football Fans: Be Smart When Buying Bowl Tickets Online

12/18/2007

ARLINGTON, Va. – December 18, 2007 – With college football’s bowl season kicking off this week and more than one million students, alumni and fans searching for tickets, Better Business Bureau (BBB) is warning consumers to look out for fraudulent sellers when shopping for expensive and hard-to-get bowl tickets online.

BBB has discovered a scam involving a secondary seller of championship game tickets on eBay. The scammer said he was in England on business and would not be attending the game in New Orleans. Before he’d agree to send the tickets, he wanted payment wired through Western Union in advance. The phony “seller” even provided pictures of the tickets to convince potential buyers he was honest. The scammer claimed the ticket transfer would be handled by an escrow company in California called the Square Trade Center, but BBB confirmed that the company, Square Trade, is not an escrow company, and doesn’t handle buyer/seller transactions.

“The most common ways secondary-ticket sellers are scamming sports fans is by delivering counterfeit tickets or simply not sending the tickets,” said Steve Cox, spokesperson for the BBB System. “Even if the tickets do arrive, they are sometimes not for the seats the seller advertised – which can mean the fan is stuck with seats that aren’t next to each other, are in the opponent’s section, are up in the nosebleed area, or have an obstructed view.”

The secondary-ticket market for sporting events, which includes tickets bought and sold by professional brokers, speculators and season-ticket holders, is a $10-billion-a-year industry, with online sales accounting for one-third of transactions, according to StubHub.com. As an example of the money flowing through this year’s bowl games, online broker, TicketCity.com, expects the championship game between Louisiana State University and the Ohio State University will be the “biggest college bowl game of all time besides the Rose Bowl of two years ago” in terms of ticket prices, at more than $1,500 per ticket.

“College football bowl tickets are extremely tough for the average fan to find and purchase at a reasonable price and that’s driving buyers to the Internet and the secondary-ticket market,” added Cox. “Fans must balance their passion for their teams with awareness that not all online ticket sellers will deliver on their promises, and a bad transaction could leave them at home on the couch instead of at the big game.”

From its BBBOnLine database of more than 30,000 online businesses, BBB reports that a number of secondary-market ticket firms offer regulated Web sites, providing buyer protections that include money-back guarantees on the legitimacy of tickets and in some cases, brand new tickets with unique barcodes identifying them as the new owner of those tickets. It’s on the hundreds of online auctions, online classifieds, and bulletin boards using person-to-person sales that fans need to be most skeptical and on the alert. BBB reports that every big sporting event is followed by complaints from people who were ripped off buying tickets – almost invariably online.

College football is big business, and where there is big money to be made, scams always follow. Beginning Thursday, over the course 19 days, teams from 35 states, representing 64 colleges and universities will participate in the 2007-2008 bowl season. The NCAA Postseason Football Licensing Subcommittee notes that last year’s bowl season drew about 1.6 million fans and about $217.6 million in revenue was distributed to participating schools and conferences.

BBB offers the following advice when searching online for sporting events tickets:

* Only the event, the venue and the event’s authorized ticketing company can guarantee the ticket you purchase online will be valid to attend the event.
* When buying from a merchant, always look for the BBBOnLine seal. The logo will tell you that you’re dealing with a company that has a good reputation for satisfying customers and a secure Web site for processing your payment.
* When buying from an individual through an online exchange don’t be lured away from the Web site by the seller. Even if you met the seller on the exchange Web site, the company may not guarantee any lost money if a transaction occurs outside their domain.
* If you buy tickets through an online auction, choose a seller with a long, continuous history of satisfied customers. Scammers can hijack old accounts, so make sure they have recently bought or sold other items.
* Pay with a credit card or through PayPal, which offer some protection and potential reimbursement. Never pay with a cashier’s check or wire money to a seller; you’ll have no way to get your money back if the tickets do not arrive.
* Many sellers will include pictures of the tickets with their posts on auction sites or bulletin boards. Scrutinize the tickets closely for any inaccuracies or alterations, and cross-check the seat assignment with the map on the venue’s Web site before you buy.

For more tips and advice you can trust for safe shopping online go to www.bbb.org, or visit BBBOnLine at: www.bbbonline.org/consumer.

AN INCREASE IN INTERNET SCHEMES PURPORTEDLY FROM THE FBI

07/17/07 We have increasingly received reports of fraudulent schemes misrepresenting the FBI and Director Robert S. Mueller III. The e-mails may include pictures of the FBI Director, the seal, letter head, and banners. The letters may also claim to come from domestic or foreign FBI offices.

Most of the schemes that use the Director’s name or refer to the FBI are lottery endorsements and inheritance notifications. They also include threat and extortion e-mails, website monitoring containing malicious computer program attachments (malware), and online auction scams.

Beware of any unsolicited e-mail referencing the FBI, Director Mueller or any other FBI official endorsing any type of Internet activity.

Fraudsters pretending to be from the FBI—which is an old trick—hope to cash in by intimidating their victims.

If you have experienced this situation please notify the IC3 by filing a complaint at www.ic3.gov .