ScamSafe

New law offers help for ID theft victims

Free credit reports, more useful fraud alerts and less frustration for victims are all great. But Congress could have done much, much more to protect the public as it revised the law.

Congress’ recent update of the Fair Credit Reporting Act wasn’t the hideous train wreck it could have been. The new rules actually provide some significant protections to identity-theft victims in most areas of the country.

Unfortunately, the reforms may turn out to be a step backward for residents of California, Texas and some other states that have much tougher laws in place. And lawmakers could have done a lot more to attack the real reason behind identity theft’s huge rise: lax practices by lenders.

from MSN

Police say man ran identity theft scam from jail [Portland, OR]

MEDFORD — Police in Southern Oregon say a man convicted of identity theft there is at it again — this time from prison.

Authorities said Eric Ziegler had gotten access to Social Security numbers, victims' names and birth dates from police reports provided by his defense attorney.

Then, telephone services were set up at the homes of Ziegler's friends and relatives using other people's personal information. Ziegler placed collect calls to the accounts from Eastern Oregon Correctional Institution in Pendleton, investigators said. He also gave other prisoners access to the telephone numbers, said Detective Colin Fagan of the Jackson County Sheriff's Office.

from Corvallis Gazette Times

Seniors: Beware of Living Trust Mills and Annuity Scams

California Attorney General Warns Seniors about "Living Trust Mills" and Annuity Scams

(SACRAMENTO) – Attorney General Bill Lockyer today warned California consumers to be on the lookout for "living trust mill" con artists who fraudulently sell trusts and annuities to senior citizens.

Sales agents for these scam operations often misrepresent the disadvantages of seniors' current investments and the advantages of the investments the agents are selling. They may even make seniors believe their bank accounts are less safe than the annuities or other investments they want seniors to buy. To give themselves a cloak of legitimacy, these sales agents pretend to be experts in living trusts. They often work in assisted living centers, churches and other places where seniors gather, hooking elderly victims through free seminars and other sales presentations.

"Consumers, particularly seniors and their families, should be wary," said Lockyer. "We believe there are living trust mills violating the law -- and the trust placed in them by seniors. We are determined to investigate and punish fraudulent conduct, but we also want to help seniors avoid becoming victims."

Seniors pay substantial sums of money to sales agents for living trust mills. But through fraud and deceit, the sales agents damage seniors' estate plans, and the security of their investments and life savings.

A state appellate court recently affirmed a multi-million dollar judgment the Attorney General obtained against an insurance company that conspired with a living trust mill to commit fraud in selling trusts and annuities to seniors.

In their solicitations, sales agents often pose as expert financial or estate planners. They pass themselves off as a "trust advisor," "senior estate planner" or "paralegal," and schedule an initial appointment with seniors in their homes. Under the guise of helping set up or update a living trust, the sales agents find out about seniors' financial assets and investments.

Usually, the sales agents then schedule a second visit to deliver a completed trust and have documents signed and notarized, and title of assets transferred to the trust. Typically, the agents go over the assets to be placed in the trust. They use that review of seniors' investments to scare them into believing their investments are unsafe, and that by "moving" their money, they can earn higher interest with no risk. The agents may have seniors sign documents that transfer the senior's CD, mutual fund accounts, or other investments to an annuity, or a so-called "promissory note" or other investment.

Planning an estate and choosing investments involve important legal, financial and personal decisions. If estate planning documents are not properly prepared or executed they can be invalid and cause lasting damage.

Following are additional tips to help consumers avoid becoming victims of living trust mills and their scams:

- Living trust mills' sales agents are not attorneys and are not experts in estate planning.
- Documents in the trust packages may not comply with California law.
- Sales agents may not follow procedures set by law for executing or witnessing wills and other documents. These violations may make the documents subject to challenge.
- Watch out for companies that sell trusts and also try to sell annuities or other investments.
- Sales agents may fail to disclose possible adverse tax consequences or early withdrawal penalties that may be incurred when transferring stocks, bonds, certificates of deposit or other investments to annuities.
- An annuity is not 100% safe, and only a portion is guaranteed by the state. Insurance companies can and do fail, and their assets may not be enough to pay the full value of their customers' investments.
- So-called "promissory notes" are not insured by the FDIC or any other government agency and may be very risky. They may not be registered as securities with the state.

An attorney qualified in estate planning can help consumers decide if they need a living trust or other estate planning documents, or help them review an existing trust or will. To obtain a list of attorneys who are certified as estate planning specialists, and to receive other written information about estate planning and how to select an attorney, call the State Bar of California's toll-free number for seniors at 1-888-460-7364. Before consumers buy an annuity or any other investment, they should review it with people they know and trust, such as their financial or tax advisor, their attorney and trusted family members.

For CA residents: Consumers who feel they have been victimized by a living trust mill, or annuity or promissory-note fraud, should report it to their local district attorney and the California Department of Insurance. Consumer complaints also may be filed online at the Attorney General's Website. Residents of other states should contact their state Attorney General, department of consumer affairs or department of elder services.

Anti-identity theft freeze gaining momentum

The security freeze on your credit file (which is different from an "alert") is not for everyone. But it offer the most protection possible from identity theft--at a price. See the FAQ for more about freeze and alerts. Also note that freezes are only available in California, Texas, Louisiana & Vermont. --ScamSafe Editor

NEW YORK (AP) -- Little by little, a weapon against identity theft is gaining currency -- but few people know about it.

It's called the security freeze, and it lets individuals block access to their credit reports until they personally unlock the files by contacting the credit bureaus and providing a PIN code.

The process is a bit of a hassle, and the credit-reporting industry believes it complicates things unnecessarily.

from CNN

Auction Fraud & Int'l Crime Rings

In the THE WALL STREET JOURNAL, August 3, 2004, there is a story by Nick Wingfield about auction fraud on Ebay. Excerpts:

"By letting strangers sell goods to each other without meeting, eBay has created a marketplace of awesome breadth -- and a huge potential for fraud. The Federal Trade Commission says it received more than 166,000 Internet-related fraud complaints last year with reported losses of nearly $200 million. About half of the complaints involved online auctions." One detective in LA says alone "he's received more than 1,000 fraud complaints about eBay since 2002, with five to eight more coming every day."

"Despite those numbers, the high-tech crimes unit at the Los Angeles County district attorney's office estimates it has filed only about 15 cases since 2002 involving Internet-auction fraud. The biggest obstacle often is finding a suspect. Fraudsters, some of them in distant countries, use an endless supply of tricks to disguise their identities."

In one instance, a woman detained by police for taking payment on an auction and not delivering the item, actually "had been hired by a European nonprofit health organization to receive charitable donations in her account and forward them to Western Union offices in Germany and Romania." She had no idea that the money was coming from fraudulent auctions--and that the nonprofit was a hoax.