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Consumer Alert: Five Common Financial Scams

The Florida Office of Financial Regulation (OFR) urges consumers to be aware of potential scams when making financial decisions. Knowing what scams are and how to spot them, helps defend against financial fraud.

The following are the five most common scams used to target victims in Florida:

  • Tax-Refund Fraud – Typically, the scammer will file a false tax return using a stolen identity, arranging to have the refund electronically transferred to debit cards or have the checks mailed to an address where they can pick it up. By the time the victim files their tax return and the IRS tells them they have a duplicative filing, the scammer is long gone with their refund.
  • Advance Fee Loan Scam – In this type of scam, the victim is told that they qualify for a loan, but they must pay a fee to process the application. Commonly, victims are told to pay the fee using a reloadable debit card or send cash through a service, such as Western Union or MoneyGram. Once the fee is paid, the scammer walks away with the money and the victim is left without a loan.
  • Timeshare Resale Telemarketing Fraud – This type of fraud involves scammers who market advertising services to timeshare owners who want to sell or rent their interest in a timeshare unit. The scammer charges a fee, which they say will be refunded to the victim after the sale. However, no sale materializes and the scammer absconds with the money.
  • Affinity Fraud – This investment fraud involves targeting members of identifiable groups as victims, typically ethnic, religious or professional communities. The scammer takes advantage of the trust that exists in these groups of people, who generally have something in common, to pitch a fake investment opportunity. Commonly, the scammer is also a part of the group.
  • Ponzi Scheme – This investment fraud involves payment of purported returns to previous investors from funds collected from new investors. The scammer typically attempts to lure new victims by promising high returns with little to no risk. The scam collapses when new investors can't be recruited to pay 'returns' to the previous investors.

Consumer Alert: Advance Loan Fee Scams

The Florida Office of Financial Regulation (OFR) warns Floridians of frequent advance fee loan scams. The scam starts when a consumer is told that they qualify for a loan or credit card, but must pay a fee, security deposit or insurance to process their application. Once you pay the fee, the scammer walks away with your money, leaving you without a loan.

To avoid becoming a victim, follow these tips:

  • Verify the lender license: The OFR provides consumers with convenient online access to licensing information of lenders and investment professionals who are licensed in the State of Florida. Verify a license online.
  • Don't pay for the promise of a loan: It is illegal for a loan broker to charge any fees in advance of a loan closing.
  • Question any fees: You may be asked to pay processing and application fees or the first month's payment. If you are you are assessed a fee prior to closing, and you are not dealing with a licensed lender, you may be the victim of advance fee loan fraud.
  • Get your agreement in writing: Ask the lender to detail in writing specifically why the fee is being assessed. If you're dealing with a loan broker and paying an advance fee to receive the loan, chances are it's a scam.
  • Be wary of companies that advertise "No Credit Check" or "Guaranteed Loans." No loan is ever guaranteed.

To report suspicious activity, please file a complaint with the OFR online or call 850.487.9687.

NCUA Alerts Credit Unions About Phone Scam

The National Credit Union Administration is warning consumers about a telephone scam in which consumers are contacted by a caller claiming to work for NCUA and asking for personal and financial information.

The caller claims that the consumer's credit or debit card has been frozen or blocked. They then ask for the consumer's Social Security number, account number, date of birth and home address to supposedly verify the information. Consumers should never give out any personal information to a caller. Plus, the NCUA would never request personal or financial information over the phone.

The NCUA provides information to help consumers identify frauds and scams at its Fraud Prevention Center. The NCUA suggests that consumers also contact the three major credit bureaus — Equifax (866.349.5191), Experian (888.397.3742), and TransUnion (800.916.8800) — to request a fraud alert be placed on their credit reports.

Phishing Attempt – Email Solicitation Using NCUA Address

A recent phishing attempt has been made to obtain member credit card account numbers, expiration dates and electronic signatures. In cases reported to the National Credit Union Administration (NCUA), the perpetrators sent fraudulent emails, representing to be from the NCUA, to credit union members and the general public.

The emails state the NCUA will add $50.00 to the member's account for taking part in a survey. The link embedded in the message directs members to a counterfeit version of NCUA's website with an illicit survey that solicits credit card account numbers and confidential personal information.

The NCUA, like Alive Credit Union, will never ask credit union members or the general public for personal account or personally identifiable information as part of a survey. Any e-mail that alleges to be from the NCUA and asks for account information is fraudulent and should be treated as suspicious.

The NCUA has taken steps to shut the fraudulent site down, but all credit union members should remain alert to possible variations of this fraudulent e-mail.

Tips to Save You from an ATM Skimmer

The skimmer is becoming more and more widespread, and most of us will, sooner or later, encounter one. If you don't have your wits about you, it could cost you a bunch of cash.

A skimmer is usually composed of two sections. The first attaches to the card slot, usually covering it completely. The second is a camera, which can be very close to the card slot or some distance away, at the top of the ATM. The card reader records the electronic data from your ATM card, which the thief can use to make an exact copy of it. The camera is there to record your PIN.

Here are some tips to avoid ATM Skimming happening to you:

  • Trust your instincts: If anything looks out of place on an ATM, don't use it. If you see a wire poking out, or the plastic on the card reader doesn't quite match, or there appears to be some unusual wear and tear around the card slot, walk away.
  • Guard your PIN carefully: As most skimmers require two pieces of information from you, the PIN is something you can at least stop them from getting. You may seem a little paranoid to anyone waiting in line behind you, but who cares? Just cover your actions by cupping one hand over the numbers as your other hand enters them. It's rudimentary but it works.
  • Take advantage of the debit card "cash back" feature: A grocery or convenience store will give you cash back if you pay for your purchase with a debit card. Simply hit the amount of cash you need. It's free, and it's safer.
  • Become a creature of habit and use the same ATM each time: This won't protect you from encountering a skimmer, but you're much more likely to notice something fishy if you are familiar with the machine.
  • Look for ATMs with video surveillance: These machines have extra security and this additional level of protection deters thieves from installing the skimming devices.

Finally, if you do suspect something, let the local branch, gas station, or store kno It may be a false alarm, but you could prevent someone being ripped off who isn't as vigilant as you are.