AARP Fights Consumer Fraud – by Herb Weiss

Published in Pawtucket Times on November 30, 2020

Every year, fraudsters continue to operate government imposter scams falsely claim to be from federal agencies, including the Internal Revenue Service, Social Security Administration, to get people to turn over money or personal information. Every year, hundreds of thousands of Americans continue to fall victim to these scams.

FTC Compiles Fraud Complaints

Last January, the U.S. Federal Trade Commission (FTC) released its annual report detailing data from the Consumer Sentinel Network Data Book 2019, continuing to put a spotlight on the impact of imposter scams and identify fraud on consumers across the nation. Expect the FTC to release its 2020 data book early next year.

The data book, initially released in 2008, includes national statistics, as well as a state-by-state listing of top report categories in each states, and a listing of metropolitan areas that generated the most complaints per 100,000 population.

According to the FTC, its 2019 database network receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies and a number of private partners. Last year, the network received 3.2 million reports, including nearly 1.7 million fraud reports as well as identity theft and other reports.

The researchers found that younger people reported losing money to fraud more often than older people. But, when people age 70 and over had losses, the median loss was much higher, they say.  

Imposter scams, a subset of Fraud reports, followed closely behind with 657,472 reports from consumers of 2019. The most common type of fraud reported to the FTC last year was identified theft scams, with imposter scams following closely behind.    

Specifically, last year there were over 647,000 imposter scams reported to FTC’s database. Thirteen percent of those calling reported a dollar loss, totaling nearly $667 million lost to imposter scammers. These scams include, for example, romance scams, people falsely claiming to be the government, a relative in distress, a well-known business, or a technical support expert, to get a consumer’s money.

Of the 1.7 million fraud reports, 23 percent indicated money was lost. In 2019, people reported losing more than $1.9 billion to fraud – an increase of $293 million over what was reported in 2018.

Protecting Yourself Against Scammers

With the release of a new report, AARP continues its efforts to combat identify theft and imposter scams. The Washington, DC-based nonprofits continues to report on the latest scams, exploring its impact on U.S. adults age 55 and over and how technology may play a role in their ability to protect themselves from financial harm. The 16-page report, “Identity Fraud in Three Acts,” developed by Javelin Strategy & Research and sponsored by AARP, reveals that 26 percent of seniors have been victims of identity fraud. But researchers say that more are taking additional safeguards to prevent losses of personal information. Following an identity theft incident, 29 percent have placed credit freezes on their credit bureau information, and more than half have enrolled in identity protection or credit monitoring services.

“Older Americans are leading more digitally infused lives, with two-thirds using online banking weekly, so it’s encouraging to see that many are taking proactive steps to protect their identity following a data breach,” said Kathy Stokes, Director of AARP Fraud Prevention Programs in a statement announcing the release of the report. “Passwords still represent a security threat, however; using repeated passwords across multiple online accounts makes it easy for criminals to crack one of them so that all of your accounts – including financial accounts – become accessible,” says Stokes.

According to the AARP report, age 55 and over consumers call for banks to use stronger security authentication. About 90 percent support the use of more fingerprint scanning, and 80 percent view facial recognition capabilities as a reliable form of technology for financial transactions and private business matters. The report’s findings indicate that identity fraud victims age 65 and over do not necessarily change how they shop, bank or pay following a fraudulent event, with 70 percent exhibiting reluctance to change familiar habits.

“Criminals are regularly targeting age 55 and over Americans through a combination of sophisticated scams via computer malware and also through more traditional low-tech channels via telephone and U.S. mail,” says the AARP report’s author, John Buzzard, Lead Analyst, Fraud and Security at Javelin. “The combination of high-tech and low-tech strategies unfortunately gives the upper hand to the criminal — not the consumer,” he adds.

The AARP report provides these tips to older consumers to protect their pocketbooks. Just hang up on strangers. Independently verify everything.  Always adopt security practices that go beyond a single password.  Consider using a password manager tool or app to create and safely store complex passwords.  Always write down important numbers of companies you do business with rather than rely on a web search for a customer service number, as criminals post fake numbers online.  

The report also recommends securing your devices – mobile phones, laptops and tablets- with a complex password, preferably with screen locks that use a fingerprint or facial recognition and secure personal payments with digital wallets.

Be vigilant.  Don’t become a sucker for scams.  

To report a compliant, call the Consumer Sentinel HelpLine at 1.877.701.9595.

For a copy of Consumer Sentinel Network Data Book 2019, go to:  https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2019/consumer_sentinel_network_data_book_2019.pdf

For a copy of “Identity Fraud in Three Acts,” go to:  https://www.aarp.org/content/dam/aarp/home-and-family/family-and-friends/2020/10/aarp-Identity-fraud-report.pdf.

To learn more about AARP’s fraud prevention programs, visit aarp.org/fraudwatchnetwork.  

Kidnapping Scam” Hits the Ocean State

Published in the Woonsocket Call on October 6, 2019

Last Monday, local media picked up a warning issued on the Pawtucket Police Department ‘s Face Book page that called on residents to watch out for the “kidnapping scam” that has recently resurfaced.

According to a Pawtucket Police spokesperson, a Pawtucket family was targeted with the “kidnapping hoax” scam, this incident triggering the social media warning on Sept. 30, with the case being referred to the Rhode Island State Police.

The Alexandria, Virginia-based International Association of Chiefs of Police’s Law Enforcement Cyber Center (LECC), say the scammers “use fear and threats over the phone to manipulate people into wiring them money. First noted by the FBI in the Southwest border states, it has now spread throughout the country.

LECC warns that the scammers are using “increasingly sophisticated tactics” — extensive online reconnaissance utilizing social media and other digital information — to convince victims that a loved one is being held hostage.

Here’s how the “kidnapping hoax” works.

This extortion scam typically begins with a phone call, usually coming from an outside area code and sometimes from Puerto Rico with area codes (787), (939) and (856), saying your family member is being held captive. The caller may allege your son or daughter has been kidnapped and you may hear screaming in the background. Callers will typically provide the victim with specific instructions to ensure a safe return of the family member. Callers go to great lengths to keep you on the phone line until money is wired. Ransom money is only accepted via wire transfer services. The caller may claim not to have received the money and may even demand additional payments.

Advice on Keeping Out of Harm’s Way

The Pawtucket Police’s Face Book posting gives a simple tip on how you can protect yourself from this scam. Just hang up.

Or you can attempt to contact the alleged victim, either by phone, text or other social media, and request that they call you back from their cell phone. Do not disclose your family member’s name or identifying information. Also, avoid sharing information on digital profiles about yourself or your family.

The police also suggest that when responding to the scammer, request to speak to your family member, asking “How do I know my loved one is OK?” Always ask questions only the alleged kidnap victim would know the answers to.

The police warn people to not agree to pay ransom, by wire or in person. The kidnappers often have you go to multiple banks and multiple locations and have you wait for further instructions. Delivering money in person can be dangerous.

If you suspect a real kidnapping is taking place or you believe a ransom demand is a scheme, always contact your local or nearest law enforcement agency immediately, urge the police.

Rhode Island Attorney General Peter Neronha notes that the “kidnapping scam” is just a newer version of the Grandparent or Bail scam. “Most scams continue to evolve as more people start to recognize them,” he says. “All of these scams use fear to quickly manipulate people into sending their money away,” he says.

Neronha also gives advise as to how to protect yourself from becoming a victim of a scam. He says beware of scammers seeming to be legitimate organizations, agencies or companies such as the IRS, a utility company, bank or credit card, among others. If it doesn’t seem right, it probably isn’t. Don’t answer unrecognized calls or e-mails. Keep in mind that scammers can also make their number appear to be one that you may know or recognize. Finally, never give out solicited personal information.

AARP Continues its Fight Against Cybercrime.

“AARP has been fighting fraud and cybercrime for some time with education and resources – most notably the free AARP Fraud Watch Network,” says AARP Rhode Island State Director Kathleen Connell. “You can join and get email alerts and updates by registering at http://www.aarp.org/fraudwatchnetwork.
“Fraud Watch – free to both members and non-members – keeps people abreast of latest dangers, such as the nasty virtual kidnapping scam we first reported on in 2016. Some of these crimes never go away, they just get re-invented in subtle ways,” she added. “Once you’ve heard about a scam, you become far less vulnerable.

“During October’s National Cyber Security Month, AARP is getting the word out on three keys to staying safe online: Own it, secure it, and Protect it. The ‘it’ is your digital profile – the personal things about yourself that you put online. Living in the digital age means putting a lot of personal information online such as your home address, where you work, family members, and much more.

“Keeping that information safe requires a bit of work. First, you need to own it by understanding what you’re putting out there (such as what you’re posting on social media). Next, you have to secure it with strong passwords or using a password manager and enabling two-step authentication where available. Lastly, you need to protect it by staying current with the latest security updates on your devices and using Public Wi-Fi safely,” Connell said.

Another site Connell recommends is staysafeonline.org.

Student Loan Debt Takes a Huge Financial Toll on Seniors

Published in the Woonsocket Call on May 26, 2019

As the 2020 presidential campaign heats up, Democratic candidates are zeroing in on a key domestic issue for 44 million voters, carrying $1.5 trillion in student-loan debt. Their proposals range from free-public college for anybody, forgiveness of all college loans up to $50,000, free community college, to refinancing college loans.

With the national political spotlight put on student-loan debt, many are assuming that this issue impacts only younger Americans. That is not the case. A newly released AARP Public Policy report says it’s a skyrocketing problem impacting multiple age groups. Over recent decades, the report highlights the important role that older Americans play in financing college education for their children, grandchildren and other family members.

Federal Reserve data show that Americans owed $1.5 trillion in student loan debt as of December. An updated analysis shows people aged 50 and older owed 20 percent of that total, or $289.5 billion, a more than fivefold increase from $47.3 billion in 2004.

According to the PPI findings, of those age 50 and over who helped pay for ‘someone else,’ 80 percent helped a child, compared with 6 percent who helped a spouse or partner; 8 percent, a grandchild, and even smaller percentages ‘who helped other relatives or friends.’

Student Loan Debit Hits Seniors Hard in their Pocketbooks

“It is stunning that more families are taking on such sharply greater amounts of student debt than in the past,” says Lori Trawinski, director of Banking and Finance at the AARP Public Policy Institute, in a May 15 statement released with the report, “The Student Loan Debt Threat: An Intergenerational Problem.”

“For younger families, this burden impedes their ability to save for other purposes, such as for a home, their children’s education or for their own retirement,” adds Trawinski, who warns that the long-term financial security of seniors can be threatened by student loan debt.

The researchers noted that most older borrowers hold loans taken out for their own education, and the percentage of borrowers aged 50 and older in default is much higher than for younger borrowers. Data also show that Parent PLUS (direct federal loan) borrowers aged 65 and over are facing higher rates of default than younger age groups, they say.

The 10-page PPI report includes survey results that focus on the key role played by age 50 and older Americans in helping “someone else pay for college and other post high school education.”
(The survey specifically included only those individuals who have not yet fully paid off the debt or who have paid it off within the past five years.)

Of those 50 and over who helped “someone else,” 80 percent helped a child, compared with 6 percent who helped a spouse or partner; 8 percent, a grandchild and even smaller percentages “who helped other relatives or friends.”

One interesting finding of the PPI report was that the most common involvement by people aged 50 and older was cosigning a loan (45 percent), while a smaller percentage (34 percent) ran a balance on a credit card and 26 percent took out a Parent PLUS loan.

Among those who co-signed a private student loan, nearly 49 percent made a payment on the loan, often because they wanted to proactively assist the student borrower. Twenty-five percent said they had to make a payment after the student failed to do so.

The survey asked the one quarter of survey respondents who had taken out a Parent PLUS federal loan, and who had made a payment over the prior five years, whether they ever had any difficulty making payments. Nearly a third 32 percent did have a problem with at least one payment. The breakdown by race/ethnicity for those having a problem with a payment was: African-American/Blacks, 46 percent; Hispanics, 49 percent and whites, 29 percent.

Rhode Island Lawmakers Put Student Loan Debt on Radar Screen

Over a week ago, the Senate Finance Committee took testimony on S 0737, titled the Student Loan Bill of Rights. The legislative proposal, sponsored by Sen. Dawn Euer (D), a lawyer representing parts of Newport and Jamestown, would protect student loan borrowers and establish oversight of student loan services operating in the Ocean State. House Health, Education and Welfare Chairman Joseph M. McNamara has introduced the companion measure (H 5936) in the lower chamber.

“The heavy burden of student debt is challenging enough for the majority of college graduates. Incompetent, inefficient or even deceitful loan servicers should not be allowed to exacerbate their struggles. Student loan servicers must be held accountable to ensure that they are providing honest, reliable information and services to their borrowers,” said Senator Euer (D-District 13, Newport, Jamestown), in a Senate press release announcing the held Senate Committee hearing.

According to a press statement, more than 133,000 Rhode Islanders, including 16,000 senior citizens, have a combined $4.5 billion in student loan debt. Over $470 million of Rhode Islanders’ student loan debt is delinquent.

S 0733 would set standards for student loan serving, both prohibiting predatory behavior and providing best practices for protecting consumers’ rights. It also requires student loan servicers register with the state and allows state regulators to examine servicers’ business practices. Additionally, the Senate bill allows both the Attorney General and department of business Regulation to penalize servicers who violate borrow rights and to seek restitution on behalf of borrowers in Rhode Island. It would also require better communication from lenders to borrowers about any transfer of their loans to another institution and about any alternative repayment or forgiveness program for which the borrower may qualify.

Borrowers in Rhode Island report being double-charged or incorrectly marked as delinquent in payment, with loan servicers taking months, or ever years, to correct mistakes. Additionally, many student loan borrowers eligible for the national “Public Service Loan Forgiveness” program have received incorrect and contradictory information from their loan servicers, leading to improper denials of loan forgiveness.

Calling for Passage of Rhode Island’s “Student Loan Bill of Rights

Bill sponsors Euer and McNamara were joined by Treasurer Seth Magaziner, Attorney General Peter Neronha, Commissioner of Postsecondary Education Brenda Dann-Messier and department of business Regulation Director Liz Tanner, on March 28 at the statehouse to push for legislative fix to protect Rhode Islanders who are shouldering crushing student loan debt.

“By several measures, student loan debt has increased greatly in the last 10 years,” said McNamara at the news conference. “It has surpassed the amount households owe on auto loans, home equity loans and credit cards. This legislation will help to address the crisis by establishing oversight of the student loan process and prohibiting predatory practices,” he noted.

Euer added, “The heavy burden of student debt is challenging enough for the majority of college graduates. Incompetent, inefficient or even deceitful loan servicers should not be allowed to exacerbate their struggles. Student loan servicers must be held accountable to ensure that they are providing honest, reliable information and services to their borrowers.”

Treasurer Magaziner threw in his two cents. “Too many Rhode Islanders are vulnerable to deceptive and predatory practices by their student loan servicers, who make it hard for borrowers to keep their loan payments affordable.” He added, “Too often, borrowers aren’t receiving accurate information about their loan, which can result in higher interest, leave them in debt longer, and make them more likely to default. This legislation will hold student loan servicers accountable and help Rhode Islanders choose the options that are best for them.”

Finally, Attorney General Neronha touted the importance of passing the Student Loan Bill of Rights. “If and when borrowers have issues with their loans or loan servicers, this legislation provides them with a place to go to address those issues. While our primary focus will be on helping Rhode, Islanders get the information they need to solve their student loan problems, my office will be ready, on behalf of mistreated borrowers, to investigate and enforce violations of the student loan standards outlined in this bill.”

If Congress can’t tackle the student loan debt crisis, in a timely fashion, it is now time for Rhode Island lawmakers to offer assistance to Rhode Islanders faced with crippling student loan debt. The Rhode Island General Assembly should pass Euer and McNamara’s “Student Loan Bill of Rights.” and the legislative proposals should not “be held for further study. It’s the right thing to do.