In New York, there is Consumer Protection Week, where consumers are given tips to beat scams. Two top frauds in New York are Internet and credit scams, according to a 2010 survey. Educating consumers with information on fraud red flags may be the best way for them to defend against fraud schemes.

In 2010, the highest number of consumer complaints in New York was Internet-related. Following Internet scams were credit-related complaints including debt collection, credit card invoicing, and identity theft. New York Attorney General’s Office Top 10 Consumer Complaints:

1. Internet (7,024 complaints): privacy issues, spyware and consumer frauds
2. Credit (5,455): debt collection, credit card billing, debt settlement
3. Consumer-Related Services (3,817): security systems, restaurant/catering services, tech repairs
4. Automobile (3,661): buying, leasing, repair, service contracts, rentals
5. Landlord/Tenant (2,009): residential repairs, deposit releases, tenant harassment
6. Mortgage (1,927): mortgage and loan broker fraud, foreclosures
7. Retail Sales (1,364): any sale of goods (food, clothing, rent-to-own)
8. Home Repair/Construction (1,299): home improvement services not delivered or done poorly
9. Mail Order (1,266): purchases made online or from a catalog
10. Telecommunications (1,202): phone cards, cellular services, pay-per-call

New Yorkers should report instances of fraud to the New York Attorney General to help investigators and attorneys halt scammers. Wrongdoers cannot be held accountable for frauds that are not reported to the authorities. Reports assist in limiting the damage to consumers.

Internet scams come from people shopping online, and target immigrants and seniors the most. People who have their noses in computers, and do not step out to brick and mortar stores do not know when a deal is not really great. Sometimes people get scammed when they respond to unsolicited emails or pop up ads. Consumers are being told not to respond to unsolicited ads and emails, and to be cautious when giving personal information. For example, the federal government would not ask immigrants for money. People should periodically check the IP address data to make sure the logins to their email accounts are actually their own.

Another example, there are scammers who pose as loved ones in trouble overseas and in need of money. Do not reply. Sometimes the email addresses of scammers are similar to those of real friends and families. People should change their email account passwords often.

The founder of Credit.com and IdentityTheft911.com offers these identity fraud tips:

• Shred personal information such as everything that has a name and address, rather than recycle.
• Black out registration and insurance proof left in cars so a person who steals a car cannot go to a home to steal some more.
• Encrypt emails and computer files that contain personal or account information.

If you or a loved one has suffered from physical injuries, emotional damage, or financial fraud, contact a consumer fraud attorney to learn how to get a full recovery.

Consumer fraud can occur on the Internet, and the government is using wire fraud and computer access laws to prosecute people for violation of website and company computer terms of use. In oral argument before the 9th Circuit Court of Appeals on the case of U.S. v. Nosal, 642 F.3d 781 (9th Cir. 2011), members of the court, spent a lot of time questioning the government attorney on whether a Facebook user could be criminally prosecuted under the Computer Fraud and Abuse Act (“CFAA”) for lying about personal information when signing up for a Facebook account.

The CFAA makes it criminal to gain unauthorized access to a computer. This means, a person perpetrating consumer fraud on Facebook could face prison for lying about information posted on the site, or when signing up for an account. Facebook’s terms of service prohibit the public from providing false information in signing up for a Facebook account. The concern expressed by the court was whether a violation of Facebook’s rules such as lying age would mean access to Facebook is unauthorized, making an indivdiual subject to criminal prosecution under the CFAA.

The Nosal case facts: David Nosal, a Korn/Ferry International executive, was indicted for stealing confidential data from his company’s computers before working for a competitor. The issue before the 9th Circuit was whether Nosal exceeded authorized access to his employer’s computers when he violated Korn/Ferry’s computer policies that restricted the scope of its employees’ access to the employer’s computers to “legitimate Korn/Ferry business.”

The Nosal decision brought ordinary people fear and legal debate that a minor offense such as lying on Facebook could be a crime. Besides the CFAA, the wire fraud statute, makes it a crime to scheme to defraud using interstate wires. The wire fraud statute could be used against someone who lies on Facebook. The Circuit case that addressed this issue, U.S. v. Mitra, 405 F.3d 492, 496 (8th Cir. 2005), ruled: “[t]here is no constitutional obstacle to enforcing broad but clear statutes” and that “[t]he statute gives all the notice that the Constitution requires.”

So far, the only government prosecution under the CFAA brought based on lying about age in signing up for a social networking site, was against Lori Drew in the federal court in Los Angeles. Drew was a 49-year-old woman who, according to the government’s indictment, used a MySpace account to harass a 13-year-old girl, who committed suicide. Drew posed as a fictitious 16-year-old boy in violation of MySpace’s terms of service that required her to provide truthful information and not use MySpace to abuse or harass other people or solicit personal information from someone under age 18. The jury convicted Drew of a misdemeanor for unauthorized access to MySpace’s website. She did not get convicted of the felony for intentionally inflicting emotional distress on the girl. The Department of Justice did not appeal the decision to the 9th Circuit.

If you have been harmed due to consumer fraud, contact an experienced consumer fraud attorney to discuss if you may be entitled to pursue any civil actions against the offender.

Since early 2009, the New York State Attorney General has been investigating “foreclosure rescue” industry. The Attorney General’s investigation stems from allegations that some companies unlawfully manipulate, misrepresent, and defraud consumers through illegal tactics, leading to delinquent mortgage payments and increased foreclosure for homeowners.

The Attorney General has focused efforts on loan modification companies. Companies send consumers who receive foreclosure notices and filings promises that they will negotiate with the consumers’ lenders to lower mortgage interest rates, obtain fixed rates, rid late fees and past due payments, and reduce principal. Consumers desperate to save their homes fail to see the companies do not deliver as promised, charge illegal fees, and use misleading advertising. The consumers end up paying for services, and going deeper into debt. Scams similar to loan modification schemes the Attorney General’s Office is going after are “equity-stripping” and “sale-leaseback” schemes.

The New York State Attorney General, in late June 2010, sent letters to over 210 companies that may be offering services to New York residents to assist them to avoid foreclosure or get a loan modification. The letter warned these firms to not use illegal and deceptive conduct such as collecting upfront fees, failing to give required consumer notices, and making unsubstantiated guarantees regarding the results the company will achieve.

The Attorney General’s office has gone after 20 mortgage loan modification companies. The Attorney General has sued some of these companies, and settled with others. In one case, the New York Supreme Court issued a favorable decision for the Attorney General against American Modification Agency, a.k.a. Amerimod, formerly a large foreclosure rescue company in the US, and its president. The court found Amerimod and the president engaged in fraudulent, deceptive and illegal business practices that violated New York consumer protection and real property laws. Amerimod violated New York’s distressed property consultants law by charging illegal, upfront fees for loan modification services, failing to provide contracts in the language of consumers, such as Spanish, and failing to provide homeowners with legally required notice of their right to cancel transactions within five business days. The company allegedly made numerous false claims in advertisements, including misrepresenting the number of homes it saved, and falsely claiming a 90% to 100% success rate.

In another case, in March 2010, the Attorney General sued Infinity Mitigation Services and National Modification Service in New York Supreme Court. The Attorney General obtained a court order and default judgment against Infinity and its principals, closing down the company, freezing assets and ordering them to pay a judgment of $8.8 million.

If you or a loved one have suffered from financial fraud, contact an experienced consumer fraud attorney to learn how to receive a full recovery.

The Federal Trade Commission (FTC) should be coming out with its list of top consumer complaints for 2011 soon. In 2010, the #1 top consumer complaint was identity theft for the 11th year in a row.

In 2010, of 1,339,265 complaints received in 2010, 250,854 (19%) were related to identity theft. Debt collection complaints came in second, with 144,159 complaints. The report broke out complaint data on a state-by-state basis and contained data about the 50 metropolitan areas reporting the highest per capita incidence of fraud.

Similar to identity theft, “imposter scams”, defined as scams where people posed as friends, family, respected companies or government agencies to get consumers to send money also got into the top 10. The top consumer complaints roundup:

• Identity Theft – 250,854 (19%)
• Debt Collection – 144,159 (11%)
• Internet Services – 65,565 (5%)
• Prizes, Sweepstakes and Lotteries – 64,085 (5%)
• Shop-at-Home and Catalog Sales – 60,205 (4%)
• Imposter Scams – 60,158 (4%)
• Internet Auctions – 56,107 (4%)
• Foreign Money/Counterfeit Check Scams – 43,866 (3%)
• Telephone and Mobile Services – 37,388 (3%)
• Credit Cards – 33,258 (2%)

The FTC helps consumers prevent fraudulent, deceptive, and unfair business practices and provide information to flag, stop, and avoid these situations that take advantage of consumers emotionally and financially. To file a complaint with the FTC in English or Spanish, visit the online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The complaints enter into Consumer Sentinel, a secure, online database available to civil and criminal law enforcement agencies in the U.S. and abroad.

An identity theft victim should take these steps to record the details of conversations and correspondence:

• Place a fraud alert on credit reports,
• Review credit reports,
• Close the accounts tampered with or opened fraudulently,
• Use new Personal Identification Numbers (PINs) and passwords to open new accounts, avoiding easily available information like a mother’s maiden name, birth date, telephone number,
• If the identity thief made charges or debits on accounts, or fraudulently opened accounts, ask the company owed funds for the forms to dispute those transactions.

If you or a loved one suffers financial, physical, or emotional loss from consumer fraud, contact an experienced consumer fraud attorney.

Identify theft has been ranked by the Federal Trade Commission (FTC) as the #1 consumer complaint. After being a victim of identity theft, take these steps to resolve accounts:

1. If the thief opens new unauthorized accounts, file a dispute with the company owed funds, or file a report with law enforcement, and provide a copy of the police report, called an “Identity Theft Report,” to the company.

2. After resolving an identity theft dispute with a company, ask for a letter stating the company closed the disputed accounts and discharged the fraudulent debts. This letter will help with there are errors relating to an account on a credit report.

3. File a complaint with the FTC. The FTC has an online complaint form; or call the FTC’s Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. Call the Hotline to update a complaint if there is any additional information or problems. The FTC provides information from complaints to law enforcement to track down identity thieves.

4. Provide a printed copy of an online FTC Complaint form to the police to incorporate into any police report. The printed FTC ID Theft Complaint, along with the police report, can constitute an Identity Theft Report and entitle an identity theft victim to (1) permanently block fraudulent data from showing up on a credit report; (2) make sure debts do not reappear on a credit report; (3) prevent a company from continuing to collect debts that stem from identity theft; and (4) place an extended fraud alert on a credit report.

5. File a report with the local police where the identity theft took place. If the police hesitates to take a report, ask to file a “Miscellaneous Incident” report, or try another jurisdiction that is close-by. Check with the state Attorney General’s office to find out if state law requires law enforcement to take identity theft reports. Check www.naag.org for a list of state Attorneys General.

6. Place an initial fraud alert on a credit report for at least 90 days. With an initial fraud alert, potential creditors must use “reasonable policies and procedures” to verify identity before issuing credit.

7. Place an extended fraud alert on a credit report for seven years. An automated Identity Theft Report, such as the printed ID Theft Complaint available from the FTC website, should be enough to get an extended fraud alert. With an extended fraud alert, potential creditors must contact an individual, or meet the individual in person, before they issue credit.

If you or a loved one suffers financial, physical, or emotional loss from consumer fraud, contact an experienced consumer fraud attorney.

When struck with identity theft, the Federal Trade Commission (FTC) advises identity theft victims to place a fraud alert on their credit reports. What do fraud alerts do?

A credit fraud alert assists to keep an identity thief from opening new accounts in a person’s name. However, a fraud alert is not a solution to all categories of identity theft. A fraud alert will not protect a person from an identity thief using existing credit cards or other financial accounts. A fraud alert will not protect an identity theft victim from opening new accounts in a person’s name that do not require a credit check. These types of accounts are those that are opened by telephone or wireless.

After being hit with identity theft, many state laws let consumers freeze their credit. A consumer restricts access to the person’s credit report. Potential creditors will not be able to get access to a credit report unless the individual temporarily lifts the freeze. This makes it unlikely for an identity thief to open a new account in the identity theft victim’s name. Placing a credit freeze does not affect the credit score.

There may be a cost for placing, temporarily lifting, and removing a credit freeze. Many states make credit freezes free for identity theft victims, while other consumers who are not identity theft victims may pay a fee for each of the credit reporting agencies.

After a credit freeze, companies that a person does business with will continue to have access to a credit report. For instance, existing mortgage, credit card, or cell phone company provider may access the credit report. Potential employers, insurance companies, landlords, and other non-creditors may still get access to your credit report with a credit freeze in place.

If, after a freeze, a person wants to apply for a loan or credit card, or otherwise need to give someone access to a credit report and that person is not covered by an exception to the credit freeze law, the person would need to temporarily lift the credit freeze by using a PIN from each credit reporting agency.

The difference between a fraud alert and credit freeze is that with a fraud alert, businesses may still check a credit report. With a credit freeze, potential creditors and other third parties may not access a credit report at all, unless a person lifts the freeze or has an existing relationship with the company.

To put fraud alert in place, a person should file an Identity Theft Report with the police. The report
includes details on the crime for the credit reporting companies to verify a person is an identity theft victim. The identity theft victim can make a complaint on the FTC website first, and then print an ID Theft Complaint Form to provide details for the police report.

If you or a family member is a victim of identity theft, consult with a consumer fraud attorney about possible legal remedies.

Baratunde Thurston gave an inspirational talk in San Francisco on 1/12/2012 on collaboration. He was not only funny, but showed without a business degree or long term work history with an established big name company, he had business sense and technology savvy. Thurston, who lives in Brooklyn, NY, talked about his mix of activities – writing a book, travel around the world, comedian, news reporting. In his green scarf, he was truly someone who defined himself rather than let the rules of a company or an industry smudge a part of him to become successful.

During his talk, Thurston, who is Harvard educated, spoke about how he collaborated with people around the world in getting ideas for his projects. With the onslaught of online collaboration, on sites such as Join Dot Me, Dropbox, Twitter, and Basecamp, consumers need to be more aware of online fraud.

A new top 10 scam complaint with the Federal Trade Commission relates to imposters. Imposters are people who intend to commit scams by posing as friends, family, respected companies, or government agencies.

Scammers trick people when they are not alert. For example, an ad may pop up on a person’s screen saying that the person suddenly won a laptop, smartphone, or other technology device. To redeem the prize, all the person has to do is give a cell phone or credit card to verify identity. The person becomes so hooked on obtaining the prize that s/he forgets judgment. To give legitimacy to the prize or ad, the scammer may use the names of government agencies like the FTC, respected companies like, or friends and family whose names they get from social networking sites. A consumer may not be able to spot the impostor until after being scammed.

People need to be more alert when they get communications asking them to wire money. Wiring money is similar to sending cash. Once wired funds are sent, it is gone forever, and a person cannot get it back, unlike a credit card payment that can be reversed. Many wire fraud scams are found on craigslist. A person looking for a job may get an email from a person abroad saying he will pay the person some money to look after a child. The person will tell the consumer to deposit a check, and to wire the scammer a difference between the consumer’s fee for services, and the amount left in the check. These checks usually turn out to be fake. Another popular wire fraud may deal with a friend or family member being caught on vacation with stolen funds and unable to return to the United States. The scammer would send an email to someone to ask for money to get out of a country. To make sure it’s not actually a loved one in distress, call the person or someone in the family or friend circle to check the story out.

If you encounter an impostor scam, contact a consumer fraud attorney to learn how to pursue a lawsuit for remedies.

If a person is behind in paying bills, or a creditor’s records erroneously make it appear that a person is, a debt collector may contact the person by phone or mail to pay off the bill.

When responding to collection communications, be careful of what information is said. For example, after a car accident, if an injured person receives a settlement for medical expenses, the person’s insurance provider may contact the person with a letter demanding reimbursements for any medical payments made. When responding to the letter by phone, the party may ask for personal information such as social security number, date of birth, or phone number. The person answering the phone may act as if s/he is verifying information s/he already has before speaking with the consumer. By answering the personal information without question, the consumer unknowingly gives away private information which may be used to investigate his/her assets to collect on the debt.

The Federal Trade Commission (FTC), a consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from using abusive, unfair, or deceptive practices to collect. A debt collector is a party who regularly collects debts owed to others, including collection agencies, attorneys who collect debts regularly, and companies that buy delinquent debts and then attempt to collect them.

The FDCA covers personal, family, and household debts, including money owed on a credit card, a car loan, a medical bill, and mortgage. The FDCPA doesn’t cover debts incurred to run a business.

A debt collector may not contact a debtor at inconvenient times or places. For example, a collection agency may not call someone prior to 8 am or after 9 pm, unless an individual agrees. Collectors may not contact a person at work if they’re told either orally or in writing.

When contacted by a collector, speak with the party once to see if there can be a settlement or to better understand the situation. If the party keeps contacting, tell the collector in writing no further communications are welcomed. Make a copy of the letter. Send the original letter by certified mail, and pay for a “return receipt” to prove the collector received the letter. Once the collector receives the letter, the collector may not contact the person who objects to communications again, except a collector can contact a person to tell the person there will be no further contact or to let the person know the collector or the creditor intend to take a particular action, such as filing a lawsuit.

If an attorney is representing an individual about the debt, the debt collector must contact the attorney, rather than the debtor. Every collector must send a person accused of owing a debt written “validation notice” telling the person how much money the person owes within five days after they first contact the person. This notice must include the name of the creditor to whom the person owes the funds.

If you or a family member is struck by consumer fraud, contact an experienced consumer fraud attorney to learn about remedies for financial, emotional, and physical injuries.

Many companies are becoming savvy about marketing on the Internet.  Attorneys, tutors, consultants get many of their clients from people who do searches on the Internet for products and services.  One industry that has become very competitive is the bar exam tutoring business.

It appears that many unemployed or underemployed attorneys or law school graduates are looking to tutoring to generate income.  On craigslist and ebayclassifieds, there are many postings for bar exam and law school tutoring.  Struggling law school graduates who do not have many funds, and are stressed out about passing a tough exam, need to be wary about misrepresentations on Internet sites about these bar exam preparation and tutoring services.

For example, one company that offers bar exam tutoring services appears to have many online testimonials. Consumers need to be wary of reading testimonials in extremes, such sites that have testimonials from people giving a place of business all five stars.  The testimonials may be coming from a paid public relations company who goes onto the Internet to open false accounts and posts positive reviews for a business.  Many of the reviews may not be from real customers, or the company may ask the real clients to sign their names to company written testimonials in return for some pricing or other incentives.  A site that has several testimonials from different people in a short time frame, such as all on the same day, or all in the same month, may bring into question whether the statements made in the testimonials are fabricated or misrepresent the true products and services.

Other types of marketing scams may be a no cost trip or free meal.  These freebies come by telephone call, letter, unsolicited fax, email, or postcard informing a consumer of winning something.   Be careful of trip traps or wins for doing nothing.  In the marketing material, there may be fine print discussing hidden charges.

To avoid freebie scams, verify reservations.  Call in to get details about the trip or prize. After getting the names, postal addresses, and telephone numbers of the airlines, car rental companies, and hotels confirm arrangements. Have each vendor send the details in writing.  Obtain copies of cancellation and refund policies. Use a credit card for reservations so that the vendor does not provide what is paid for, a consumer can dispute the charges with the credit card company. Be careful of any charges. If a promotion is legitimate, a consumer does not need to pay for a prize.

If you encounter a marketing scam, contact a consumer fraud attorney to learn how to pursue a lawsuit for remedies.

A buying club is a group where consumers buy goods or services automatically at regular intervals such as monthly. The types of merchandise may be wines, cookies, beauty products, or cookware.

If a consumer accepts a free offer from a buying club, the consumer end up being billed for a product or service the consumer never ordered. When someone receives something free in the mail, the person can usually keep it without paying anything. The person gets in trouble if the company sees the keeping of the goods as an acceptance of an acceptance of an offer to continually receive similar goods.

To prevent agreeing to a free trial as acceptance of an offer for magazines, music, or some other merchandise that is delivered regularly, read the fine print on when the trial should be cancelled.

If a free trial offer is made by phone, listen carefully. Sometimes the caller may be reading a long list of terms. If a consumer does not understand the terms, ask the caller to repeat them or to mail them to the consumer. Write down the caller’s telephone number or address. Sample questions to ask a caller offering a free trial:

• Is the free trial related to a membership, subscription, or extended service contract?
• Does the consumer have to contact the company to avoid receiving any merchandise?
• If a consumer has to initiate a cancellation, when does the consumer need to do it?
• Who does a consumer contact to cancel?
• Can the cancellation be done by phone or does it need to be in writing?
• Is there a membership fee?
• Are fees refundable?
• Will a credit card be automatically billed?

Consumers often get defrauded when they join a gifting club. A gifting club promotes itself as a private club with members enthusiastic to help new friends such as people from their neighborhood or church. The clubs are actually pyramid schemes that continually recruit people so that the people at the top get commissions or compensation. When the gifting clubs don’t attract new members, they go under. Most consumers who paid to join the clubs do not receive the gifts they expected, and lose the funds they paid to join.

If you’re approached about joining a club but you aren’t sure if it’s legal, obtain an experienced consumer fraud attorney to help. The Federal Trade Commission educates consumers to consider that a legitimate gift has no requirements for payments attached and is not an investment.