Getting ahead of the crypto scam curve
A new unit within the Ohio Attorney General's Bureau of Criminal Investigation recently recovered $130,000 lost in a cryptocurrency scam in the Columbus area, marking its first victory as a specialized team assigned to help local law enforcement with such cases. An attorney general's office press statement explains that the funds were recovered as part of a case in Worthington, a northern suburb of Columbus, in which a 75-year-old woman received a pop-up message on her computer warning that she was the victim of “fraud.” The woman called the number provided in the warning and was told about “fraudulent activity” in her husband’s bank account. The scammers (who are still unknown to police) instructed the victim to withdraw $1,000 from her accounts and deposit the money into a Bitcoin ATM. The scam escalated from there, the AG's statement explains, as the victim continued to comply with the bad actors’ demands, making additional deposits, providing personal information, and granting access to bank accounts and a cryptocurrency wallet. The victim reported a total loss of $280,000. Although Attorney General Dave Yost said that “recovering lost electronic funds can be a sophisticated goose chase," he explained that agents and analysts are getting ahead of the curve to help victims recoup their money. In this case, agents used specialized investigative tools to trace the cryptocurrency on the digital ledger known as the blockchain. They were able to locate and freeze about $130,000, which will be returned to the consumer. The attorney general offers information to help vulnerable consumers detect and avoid cryptocurrency scams. Read them here.
Category 5 scams
As the nation braced for Hurricane Milton last week, the Federal Trade Commission (FTC), along with the Department of Justice and the Consumer Financial Protection Bureau (CFPB), warned consumers about those looking to take advantage of natural disasters by engaging in potential fraud or price gouging. An FTC press release explained that there are bad actors who quickly exploit weather emergencies to take advantage of people who are either trying to recover from the disaster or trying to help. “As Americans seek safety from natural disasters, we’re hearing troubling reports of price gouging for essentials that are necessary for people to get out of harm’s way—from hotels to groceries to gas,” said FTC Chair Lina M. Khan. “In partnership with state enforcers, the FTC will keep fighting to ensure that Americans can get the relief they need without being preyed on by bad actors exploiting a crisis,” Khan continued. The agencies went on to warn about the types of natural disaster scams we’ve seen often, including: fraudulent charities soliciting donations while posing as legitimate charities; government impersonators offering disaster relief in exchange for personal information or money; and scammers promoting non-existent businesses or investment opportunities related to disaster recovery, such as rebuilding or flood-proofing. Find links for filing complaints and accessing several resources, including the CFPB’s disasters and emergencies toolkit (focusing on preparing and protecting your finances before, during and after a disaster), here.
As goes California
Enemies with 'benefits.' California Attorney General Rob Bonta last month announced that his office secured a preliminary injunction against MV Realty, a Florida-based company that engaged in a predatory scheme targeting vulnerable homeowners in financial trouble. MV Realty lured homeowners by offering them immediate cash and then locked them into so-called “homeowner benefit agreements”—contracts that required homeowners to exclusively use MV Realty to sell their homes for the next 40 years or pay a penalty of 3% of the home’s value. MV Realty also placed illegal liens on homes and charged homeowners the 3% penalty to remove the lien. The court ruling describes how MV Realty assured homeowners that the money was not a loan and never needed to be paid back. All the homeowner supposedly had to do was give MV Realty the "chance" or "opportunity" to be the real estate agent if the homeowner decided to sell their home in the future. The preliminary injunction is part of a lawsuit first filed in December and now requires MV Realty to remove the liens it has recorded statewide, stop recording new liens, and, during the pendency of litigation, not enforce the agreements with California homeowners. HousingWire also reported last month that MV Realty filed for Chapter 11 bankruptcy in 33 states; is facing lawsuits in several states; and has essentially been banned from operating in 14 states through legislation. On a related noted, if you're a homeowner with a lot of equity, you might want to learn about the pros and cons of tapping into home equity here.
'Decades of deception.' It's been busy times for California Attorney General Rob Bonta. In a lawsuit filed last month, his office alleged that ExxonMobil has misled consumers by engaging in an aggressive campaign to deceive the public and "perpetuate the myth that recycling will solve the crisis of plastic pollution." For decades, the attorney general's statement said, ExxonMobil has dumped the cleanup and environmental costs of its deception and plastic production onto the public. Separate lawsuits with similar allegations were filed by several environmental groups. The attorney general's office explained that ExxonMobil falsely promoted all plastic as recyclable, when in fact the vast majority of plastic products are not—and likely cannot be—recycled, either technically or economically. In reality, only about 5% of U.S. plastic waste is recycled, and the recycling rate has never exceeded 9%, according to the statement. The AG's office asserts that ExxonMobil's actions caused consumers to purchase and use more single-use plastic than they otherwise would have due to the company’s misleading public statements and advertising. In addition, the statement continues, the “advanced recycling program" that ExxonMobil is currently promoting is "nothing more than a public relations stunt meant to encourage the public to keep purchasing single-use plastics." The AG's office contends, for example, that the plastics produced through this process contain so little plastic waste that they are effectively virgin plastics deceptively marketed as “circular” (think "sustainable") and sold at a premium. We'll keep an eye on this litigation (and debate). In the meantime, we might occasionally splurge on some of those fancy glass-bottled waters.
Tips
Un-American pie. As you dust off your favorite fall recipes (pumpkin-pecan coffee cake, anyone?) and reach for that trusty glass measuring cup that so precisely helps ensure perfection of your culinary creations, you may be in for a surprise: Your measuring cup might be one of 110,000 Chinese-made measuring cups falsely marketed as “Made in USA” by Instant Brands, the maker of Pyrex-brand products. As announced by the FTC (and reported by Southern Living, home to some amazing-looking Southern classic recipes), the federal agency is sending more than $88,000 in refunds to 10,259 consumers who bought the deceptively marketed, Chinese-made measuring cups from March 2021 to May 2022. Consumers who have questions about their payment can contact the refund administrator, Simpluris, at 833-244-7320, or visit this page to view the FTC's frequently asked questions about the refund process. The Southern Living piece included a quote from Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, from an earlier press statement: “Consumers rely on marketers to make truthful ‘Made in USA’ claims. If marketers move their manufacturing outside the United States, even temporarily, they must update their advertising to make it accurate.” Agreed. Plus, accuracy is paramount when it comes to oven-baked treats!
When 'donate' means 'do not.' With election season peaking, CNET's article "4 Signs the Political Donation Text You Just Received Is a Scam" couldn't come at a better time. CNET explains that bad actors are finding ways to take advantage of our generosity, and offers us tips for avoiding the scammers. First, recommends CNET, watch for a pushy tone. The article cites Mike Nellis, founder and CEO of Authentic, a digital marketing and fundraising agency, who says that “a good faith actor is going to treat you with respect.” He also explains that a message from a candidate usually includes a personal story, as well as a cadence and voice that's recognizable as the candidate. Organizations that just want to trick you into donating money tend to write with less finesse, the article explained. Other warning signs include the lack of a disclaimer letting you know who's behind the text, and ads or donation pages that weren't created by campaign or party committees registered with the Federal Election Commission or, for state or local offices, the state election commission. Check out the article for tips on avoiding add-on donations that you might inadvertently agree to (like recurring debits) and what to do if you donate to a legitimate organization by mistake. Kudos to CNET for the timely tips.
Scammers hitting the (Google) streets. The Philadelphia-based NBC Responds team reported last week that women in the area are being targeted by a "Google Street View" sextortion scam. One woman told NBC that she received an email message in which the sender told her they had tracked her phone, had access to her camera, and could see what she was doing. They also sent the consumer a street view image of a home she previously lived in and demanded $1,950 in bitcoin. If she didn't pay, the email threatened, they'd send revealing footage of her to others. NBC spoke to Rob D’Ovidio, an associate professor of criminology and justice studies at Drexel University. D'Ovidio told NBC that a quick way to check on suspicious emails is to take snippets from the email and paste them into Google to see if other people are getting the same email. When NBC tried this, their results yielded a warning from Maryland State Police about the same type of email, and a Facebook post showing that others were getting the same message. As the article explains, another woman who spoke to NBC about the same experience was able to figure out that several targets of the scam had all ordered food from the same local supermarket. The current owners of that market told NBC they were investigating and were aware of a data breach that occurred under previous ownership. We commend the woman in the NBC story for wanting to get the word out about the scam because, she noted, due to fear or shame, some people may decide to pay the extortionist just to get them to stop. Let's spread the word.
Outsized crypto scam losses. Although we opened this issue with good news about crypto scams, things don't always turn out so well in this scam category. As reported by the Associated Press, citing a report released by the FBI in September, Americans were duped out of more than $5.6 billion last year through fraud schemes involving cryptocurrency. The FBI's Michael D. Nordwall, assistant director of the Criminal Investigative Division, wrote in this year's Cryptocurrency Fraud Report (covering 2023) that the report was released to bring attention to the proliferation of losses linked to cryptocurrency-related fraud, bolster awareness of the most prevalent schemes utilizing cryptocurrencies, and educate the public on the ways to protect themselves against these kinds of frauds. Nordwall also wrote that, while the number of cryptocurrency-related complaints represents only about 10% of the total number of financial fraud complaints, the losses associated with these complaints account for almost 50% of the total losses. For the principal federal law enforcement agency's tips on how to protect yourself, go straight to page 17 of the report. Among the many tips, one commonsense one you can take to the bank is to hang up on unsolicited and unknown callers and then independently research and call the publicly published phone number of the company or agency they claim to represent to confirm the original call's authenticity. Report suspected crypto scams to the FBI's Internet Crime Complaint Center at IC3.gov.
Open season for scams. Today is the first day of the Medicare open enrollment period, which runs through Dec. 7. In a recent consumer alert, the FTC warned that during this time, we might see lots of ads and get calls about Medicare Advantage plans. The FTC pointed out that Medicare Advantage plans are offered by private companies, and can differ from original Medicare when it comes to key things like in-network coverage, out-of-pocket costs, and referral policies for specialists. In its article "The Great Medicare Advantage Marketing Scam," The American Prospect quotes Jayne Kleinman, a retired social services professional in New Haven County, Connecticut, who said the problem with Medicare Advantage ads was that so many were inaccurate. "They neglect to say that the amount of coverage you get is limited. They don’t talk about what you are losing by leaving traditional Medicare,” Kleinman told The American Prospect. (Not to mention the possibility that, due to medical underwriting, consumers in most states could find themselves “trapped” in Medicare Advantage if they ever try to switch back to original Medicare.) Also quoted is Sheldon Toubman, an attorney with Disability Rights Connecticut, who talked about two big downsides of leaving traditional Medicare: "You give up the broad Medicare provider network, which has nearly every doctor. And, should you need expensive medical care in Medicare Advantage, you will learn there are prior authorization requirements." Toubman sees as most problematic the marketing of Medicare Advantage plans to low-income consumers who are dually eligible for Medicare and Medicaid (a broader program). If they leave traditional Medicare, these low-income consumers will be switching to a more limited provider network and will have to contend with prior authorization requirements. (In this article, U.S. News further explains that prior authorization requirements are rare in original Medicare.) As recommended by the FTC, consumers can get help comparing Medicare costs, coverage, and plans by contacting a State Health Insurance Assistance Program (SHIP), available in all U.S. states and territories. The independent, nonpartisan Center for Medicare Advocacy has a trove of helpful information about Medicare, including a brand-new webinar to help beneficiaries understand their options during the current open enrollment period. Take a listen to the detailed discussion, at minute 26, of the tradeoffs between Medicare Advantage and traditional Medicare. We encourage consumers to learn about all of their options and make informed choices.
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