Phishing Related to Issuance of Economic Stimulus Checks
The Federal Bureau of Investigation recently warned consumers of recently reported spam email purportedly from the Internal Revenue Service (IRS), which is an attempt to steal consumer information. The email advises the recipient that direct deposit is the fastest and easiest way to receive their economic stimulus tax rebate. The message contains a hyperlink to a fraudulent form that requests the recipient’s personally identifiable information, including bank account information. To convince consumers to reply, the email warns that a failure to complete the form in a timely manner will delay the issuance of the rebate check.
Consumers are advised that the IRS does not initiate taxpayer communications via email. In addition, the IRS does not request detailed personal information via e-mail or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank or other financial accounts. Please be cautious of unsolicited e-mails. It is recommended not to open e-mails from unknown senders because they often contain viruses or other malicious software. It is also recommended to avoid clicking links in emails received from unknown senders as this is a popular method of directing victims to phishing websites. If you have received an e-mail similar to this, please notify the IC3 by filing a complaint at ic3.gov.
Beware of Fraudulent Company
DISB recently issued a warning against Capital Trust Resource Finance, a company that claims to be doing business at 626 8th Street, NE, in Washington, DC, which is suspected to be a false front that solicits advance fees to guarantee loans. This company does not exist in the District of Columbia at the above address, and directs its clients to wire funds to a location in Canada. If you have any dealings with this company, please contact the consumer complaint staff in the Enforcement and Investigation Bureau at (202) 727-8000.
DISB Warns About Online Payday Lenders Who Offer Loans to District Residents Illegally
DISB warned residents earlier this month to be wary of online payday lenders who are not licensed to do business in the District of Columbia. The agency has seen an increase in the number of persons trying to take advantage of residents since the Payday Loan Consumer Protection Amendment Act came into effect January 9, 2008. This amendment prohibits lenders from charging more than 24 percent annual interest in the District of Columbia for an unsecured loan, effectively rendering payday lending unprofitable. A payday loan (also known as a paycheck advance) is a small, short-term loan typically used by a borrower to cover expenses until his or her next pay check.
Some payday lenders make loans available illegally to District residents, mainly over the Internet. These lenders may charge a borrower as much as 2,000 percent interest, take payments from a borrower’s checking account without authorization, or initiate harassing telephone calls.
The following websites are not licensed to offer payday loans to residents in the District of Columbia: payday-loan-yes.com, cashnet500.com, bestquickcash.com, payday-quickcash.com, abcpaydayloan.com, poor-credit-personal-loan.com, pluslending.com, e-payday-loan.com, fastcash-advance.com.
The telephone for these sites is (800) 654-7444. Other toll free numbers are also used to solicit loans and to receive faxes. If anyone has been a victim of fraud, call the consumer complaint staff in either the Banking Bureau or the Enforcement and Investigation Bureau at (202) 727-8000.
Insurance Regulators Protect Seniors From Abusive Sales, Marketing
The National Association of Insurance Commissioners (NAIC) adopted early June a model bulletin and Consumer Alert to help protect seniors from unscrupulous, abusive sales practices and fraud.
The model bulletin cautions insurers and producers against the improper use of senior designations, stating that producers who misrepresent their level of expertise in marketing and sales activities will be subject to penalties under state law. And insurers that allow their producers to use misleading designations will also be subject to penalty under state law. According to the NAIC, of which DISB is a member, state officials entrusted to protect consumers must remain vigilant in their oversight. At the same time, they need to keep reminding seniors to be cautious and to evaluate all options before making important financial decisions.
Specifically, the Consumer Alert offers the following tips:
- Question the credentials of “experts”
- Beware of “free lunch” investment seminars
- Ask yourself: Does this product make sense for me
- Never make a final decision at a seminar
- Report scams
- Contact DISB for more information
Seniors are uniquely vulnerable and deserve special protection; and this is a first and critical step in protecting them from those in this industry who would exploit them.
DISB Wins Blue Pencil & Gold Screen Award
DISB recently won a 2008 Blue Pencil & Gold Screen Award from the National Association of Government Communicators (NAGC) for its general brochure. Under the leadership of DISB’s Office of Communication and Public Affairs, the physical design was created by an outside vendor, Group 360, and most of the content was written and edited by DISB staff. The agency won with an updated version of its old brochure. It is more consumer-friendly and easier to read, keeping within DISB’s branding and social marketing campaign, which was launched last year with a brand new logo.
The 2008 competition included more than 600 entries competing in 47 categories. DISB received the Excellence Award under the Booklet/Brochure category. The award was announced at the NAGC Blue Pencil & Gold Screen Awards reception and banquet on April 29, in Albuquerque, N.M. Established since 1977, the NAGC is a national not-for-profit organization consisting of employees from federal, state and local governments who publish internal and external documents. Members include editors, writers, graphic artists, video professionals, broadcasters, photographers, information specialists and agency spokespersons. NAGC is the only organization for, by and about government communicators and communications.
DISB in the Community
|DISB at the Greater Washington Urban League’s Annual Housing Fair
||DISB and Consumer Protection for Older Americans|
|DISB’s Senior Insurance Specialist Carolyn King (in black) interacts with attendees at the Greater Washington Urban League’s Annual Housing Fair on April 12 at THEARC in southeast Washington. Sitting is Securities Licensing Specialist Yvonne Henderson. DISB also kicked off its public forums on subprime lending and preventing mortgage defaults at the event.
||DISB Consumer Protection Advocate Idriys Abdullah addresses seniors about financial scams at the United Planning Organization’s Foster Grandparents Program on April 25 at the Martin Luther King Jr. Library. More than 150 seniors attended.|
Workshop: How to Save Your Home the Right Way—Saturday, July 12, 1 pm to 5 pm, DISB’s Consumer Protection Advocate will make a presentation on predatory lending and scams at the workshop sponsored by the Washington Area Community Investment Fund. Woodridge Neighborhood Library, 1801 Hamlin Street, NE, at 18th Street and Rhode Island Avenue, NE. RSVP to (202) 529-5505 or email email@example.com.
Presentation—Wednesday, July 16, 7 pm to 8 pm, DISB Commissioner Thomas E. Hampton will present to the South Columbia Heights Neighborhood Association about services and resources the agency provides to residents. Topics include financial fraud, subprime lending and mortgage issues. Josephine Butler Parks Center, 2437 15th Street, NW.
For additional updates, select the agency calendar on disb.dc.gov.
DISB Issues Warning to Public About Fraudulent Use of Agency Letterhead and Logo
DISB has received several complaints of consumers being victimized by a scam in which documents, bearing the logo and letterhead of this agency have been used. These fraudulent schemes have involved securities offerings or securities insurance, which are supposedly verified by DISB to encourage the forwarding of funds from the victim to the perpetrator of the scam. In some cases, a telephone number bearing the Washington, DC, area code, (202), is also offered as further verification of the transaction. Normally, the telephone calls to the 202 number are relayed to a location outside the United States where the scammers are operating.
DISB is warning all consumers to:
- independently verify the authenticity of DISB documentation before making any financial transaction claiming to have been reviewed or have originated in Washington, DC, and
- do not pay any advance fee for obtaining or liquidating securities, securities insurance, loans or any other financial instruments.
Should you have any questions about the authenticity of DISB documentation or about entities or individuals offering or selling financial services or products in Washington, DC please contact the consumer complaint staff in the Enforcement and Investigation Bureau at (202) 727-8000 or send an e-mail to firstname.lastname@example.org.
New Insure U Topics Reflect Changing Nation--Program Adds Domestic Partners, Single Parents, Raising Grandchildren, Military
In early June, DISB announced the expansion of the award-winning Insure U consumer education program with new topic areas for consumers in four life situations: domestic partners, single parents, grandparents raising grandchildren, and members of the military.
Expanding the Insure U program directly reflects the varied life situations and needs that characterize a diverse city, according to DISB Commissioner Thomas E. Hampton who was on hand for the announcement in San Francisco. “Insure U is an important resource to help consumers better understand insurance issues specific to their experiences. I’m proud that we have four new ways for District residents to get smart about insurance.” The Insure U curriculum, insureUonline.org, provides insurance tips and special considerations on four basic types of insurance: auto, home, health, and life. The expanded topics build on the four life stages already available on the site: young singles, young families, established families and seniors.
The Insure U curriculum also provides information about how to avoid being scammed by fake insurance companies selling fraudulent insurance policies. Disaster preparedness and long-term care insurance tips are also included. After reviewing the curriculum, consumers can take an online quiz and download an Insure U diploma. Consumers who want to check on an insurance company before purchasing a policy or who have other questions about insurance should contact DISB at (202) 727-8000 or visit its website at disb.dc.gov. For more information about their particular insurance needs, consumers can also visit insureUonline.org.
DISB Wraps up Successful Financial Literacy Month in April
DISB wrapped up its second annual Financial Literacy Month in April with updates by several nonprofit organizations on the state of financial literacy in the District of Columbia. Attendees heard from the Maryland and DC Credit Union Association, Manna Mortgage and the District of Columbia Insurance Federation, among others on April 30 at DISB’s office in northeast Washington, DC Chief Advocacy Officer Jennifer Porter Gore of the credit union association said that while credit unions have always been involved in financial literacy, they’re always seeking partnerships to do more, especially for the youth. In 2007, the association had teamed up with other nonprofits to provide more targeted financial education.
“DISB uses this month to provide specific information on the most efficient ways for consumers to deal with their finances, credit or debt for their various life stages,” said Commissioner Thomas E. Hampton, who also read the proclamation Mayor Adrian Fenty signed to recognize its importance to District residents. Mortgage Counselor and Reverse Mortgage Specialist Lewis Smith of Manna Mortgage said that the nonprofit has been encouraging homeowners with problem mortgage loans and other obstacles to come in for counseling, education and budgeting. His main point of contention is getting more people to create a budget and outreach efforts. Throughout the month of April, DISB attended several city events where staff provided financial-service information and advice. This will continue through the year.
DISB Issues Investor Alert on Auction Rate Securities
DISB Commissioner Thomas E. Hampton recently warned District residents to be aware of widespread problems concerning securities investments called auction rate securities (ARS). Such investments, with a total face value estimated at $330 billion, are in the form of long-term municipal bonds or preferred shares of closed-end mutual funds. Interest rates or dividends on these securities are reset at weekly or monthly auctions run by major broker-dealers. The auction feature gives ARS the appearance of liquidity. ARS has often been sold by securities firms to investors as “cash equivalent” short-term, low-risk investment alternative to money market funds or certificates of deposit with slightly higher returns.
However, with the credit crisis in February 2008, hundreds of ARS auctions failed when the large investment banks stopped supporting them. When the auctions were unable to attract enough buyers, investors found they were unable to sell their auction rate securities. Interest rates were reset to predetermined penalty rates, some as high as 18 percent. As auctions failed, the ARS market remained largely frozen and investors were unable to access funds they had put into securities that they thought would act like cash.
DISB has received complaints from investors alleging they were told that ARS were safe, liquid investments, and they were not warned of the risks. The North American Securities Administrators Association (NASAA), an association of state securities regulators, of which DISB is a member, has established an ARS Task Force that will focus on sales practices and supervisory issues related to auction-rate securities. (For more details, go to nasaa.org.) District residents are encouraged to contact DISB at (202) 727-8000, if they have invested in ARS and are unable to access their investment funds as promised. To file an online complaint, please visit disb.dc.gov.