Month: March 2016

Image source: FDA Health Fraud For Consumers http://1.usa.gov/1Rebco7

Women targeted in consumer fraud

March is Women’s History Month. When we focus on the consumer marketplace, we often find that women make a considerable amount, if not the majority of decisions regarding purchases and finances for themselves and families. Women make up more than 50 percent of our U.S. population[i] and the individuals engaged in deceptive business practices and consumer fraud use scams targeting women. In several reported cases, unscrupulous individuals and companies appealed to women’s emotions in trying to sell those products, hoping their guard would be down. Women should be particularly aware of consumer fraud and should learn to spot it when salespeople make claims that seem to good to be true. When the consumer fraud operation violates consumer rights laws, individual women and members of class action lawsuits can sue and win in court, helping shut down scammers who prey on women.

The Federal Trade Commission (FTC) recently published an article highlighting their noteworthy efforts in stopping scammers targeting women.

The FTC enforces federal consumer protection laws that prevent fraud, deception and unfair business practices. There FTC is engaged in the administration and enforcement of more than 70 laws relating to competition and consumer protection.[ii] With so many actors in the consumer marketplace, it is no wonder many deceptive business operators get creative with their scams. The following examples highlight frauds and scams aimed at women.

Revenge porn

Section 5 of the FTC prohibits “unfair or deceptive acts or practices in or affecting commerce,[iii]” and unfair acts or practices are those which cause or are likely to cause substantial injury to consumers, cannot be reasonably avoided by consumers, and are not outweighed by their purported benefits to consumers or competition. Deceptive acts or practices include a representation, omission or practice likely to mislead a customer, and a consumer who interprets that material misrepresentation and reasonably relies upon it is as true or reasonable under the circumstances.

The FTC used Section 5 to shut down the revenge porn website operated by Craig Brittain, who solicited sexually explicit pictures of women for his website. In many cases, Brittain paid some individuals to find pornographic images of women along with their names, addresses and Facebook pages.[iv] Women who found out private pictures of themselves on Brittain’s revenge porn website, could pay hundreds of dollars to have their profiles stricken from the site. Following the FTC takedown and order to destroy all the images, many individuals concerned about this type of scam, are working on additional legislation specifically addressing this type of consumer fraud involving elicit images.

Bogus health and weight loss

Women are constant targets of health and weight loss products. The claims that new discoveries in science and health may be used to sell hope for a quick fix for all that ails an individual. Lunada Biomedical advertised their “revolutionary formula” in the drug, Amberen, promising to relieve menopause symptoms, including weight gain and hot flashes.[v] The FTC claims there is no evidence supporting the claims made by Lunada Biomedical, who is currently under investigation and the case is ongoing.

Meanwhile, most women know that spilling coffee on their skin does not cause weight loss, but there were two companies called Norm Thompson and Wacoal America who advertised caffeine-infused underwear/shapewear designed to reduce weight by taking inches off hips and thighs, and reducing cellulite.[vi] Women watching these advertisements may be aware about laws against false advertising, and assume the products perform as they are advertised. Unfortunately, unscrupulous business operators do not follow the law. Of course the claims made by these companies were unsubstantiated and claims that undergarments could include caffeine and other substances to be absorbed by the skin to reduce weight and cellulite were absolutely unfounded, with no adequate support for the claims made. By administrative agreement, both companies are barred from making weight loss claims and they are refunding women customers duped by bogus claims.

Income scams

The FTC obtained a temporary court order shutting down Oro Marketing, a company who made phone calls to Spanish-speaking Latinos, advertising high-end goods they were selling in packages to customers who could re-sell the items for a profit.[vii] Oro Marketing sold packages of goods for $400 to $500, and when these packages of high-end goods were received, the purchasers quickly learned the contents were of little or no value, were not the quality promised, and had little to no value in a re-sale market. The FTC settled its case with Oro Marketing in which a permanent ban prevents Oro Marketing or it’s principal from doing business in the telemarketing industry. The FTC used this case to produce a Spanish-language graphic novel, Estafa de Ingresos, to highlight the risk of income scams.

Women consumers and compensation for fighting against consumer fraud

Individual consumers who spot consumer fraud and unfair or deceptive practices, and work with consumer rights lawyers to file complaints, can and do receive statutory damages, direct damages and they payment of their attorney’s fees, depending on the consumer laws violated. The responsible course of action is reporting consumer fraud when you think you encounter it, to help prevent others from being taken and swindled by frauds who prey on women.

The Zamparo Law Group helps women fight back against the individuals and organizations who target women in consumer fraud. We fight and win in court, individually and in class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] United States Census Bureau, Quick Facts, Age and Sex.

[ii] U.S. Federal Trade Commission, Enforcement, Statutes Enforced or Administered by the Commission.

[iii] Federal Reserve website, Federal Trade Commission Act, Section 5: Unfair or Deceptive Acts or Practices.

[iv] FTC Consumer Information, Is anybody horrified?, by Melinda Claybaugh, Jan 29, 2015.

[v] FTC Consumer Information, Attention Women Over 40: Claims may slim your wallet, not your waist, by Coleen Tressler, May 12, 2015.

[vi] FTC Consumer Information, No support for shapewear’s slimming claims, by Coleen Tressler, Sept. 29, 2014

[vii] FTC Consumer Information, Shutting down an income scam, by Laura Solis, Jan 13, 2015.

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Consumer complaints, rising with with new technologies, help warn the public

Technology and the increased access to consumer complaint information may correlate with recent consumer complaint data collected and summarized by the Federal Trade Commission (FTC). The FTC’s mission is to “prevent business practices that are anti-competitive or deceptive or unfair to consumers; to enhance informed consumer choice and public understanding of the competitive process; and to accomplish this without unduly burdening legitimate business activity.” The FTC collects information received about debt collection, identity theft, and improper scams. In response to the analysis of consumer complaints, the FTC compiled a new agency data book, full of state-by-state statistics, as well as they increased enforcement efforts, to take action against companies that violate the laws protecting consumers from illegal debt collection practices and other similar fraudulent behavior. Compared to years past, when consumers were violated and felt alone, today we can easily identify other victims and patterns of negative and abusive behavior, which is increasingly easy to report and fight back through the FTC and attorneys who sue and win individual civil and class action lawsuits.

Frequent consumer complaints about debt collection, tax identity theft and general scams

Reviewing the FTC Annual Summary of Consumer Complaints, one might think debt collection efforts and disputes are at an all time high, rising to the top spot among consumer complaints, with 897,655 recorded FTC complaints, representing 29 percent of the total number of complaints. According to the FTC report, a new mobile app contributed to a significant increase in complaints through mobile devices. The takeaway is when it is easier for consumers to file a complaint, more consumers are likely to do so. When more consumers make complaints, other consumers can find that information and learn to avoid doing business with companies who do not follow consumer laws.

In second and third place, respectively, are consumer complaints about tax identity theft and general scams operated by the typical bad actors. Tax identity theft is particularly threatening because victims usually have no idea there was an identity theft until after the IRS rejects their tax return, telling them they have already filed and received their refund. The FTC report indicates identity theft accounts for 490,220, 16 percent of consumer complaints. To learn more about tax identity fraud and identity theft please refer to our blog article titled, Identity theft awareness, prevent fraudulent use of personal information.

The general, imposter scams make up 11 percent of consumer reports to the FTC, totaling 353,770 complaints in 2015. The FTC publishes consumer information used to spot government imposter scams, where imposters pretend to be government officials as they contact taxpayers and try to get them to pay them directly for taxes or fees they owe. Government imposter scams often target less sophisticated consumers and may involve threats of jail if they do not immediately pay the money the imposter says they owe. When consumers report the details of the scams, the FTC and similar agencies and law firms representing individual clients, are better able to warn the public about the types of scams being used to defraud innocent consumers.

About the new FTC agency data book

The Consumer Sentinel Network Data Book for January – December 2015 is 104 page PDF resource based on consumer complaints received by more than a dozen state and federal agencies to whom consumers report fraud and bad actors and scammers. These agencies share information through the Consumer Sentinel Network, a secure online database only available to law enforcement. The collection of information started in 1997 and the Consumer Sentinel Network has increased its efforts since its inception and today it receives almost 12 million complaints the FTC sorts into 30 complaint categories. The information in the data book is compelling and worth a review, to become more aware of the typical threats to consumers.

FTC enforcement efforts against unscrupulous companies violating consumer laws

The FTC summary addresses the increased enforcement efforts underway in 2015, involving federal, state and local cooperation in sharing information, investigating and prosecuting defendants engaged in illegal debt collection, and banning those offenders from the industry.

The purpose of the FTC is to enforce consumer rights laws, such as the Fair Debt Collection Practices Act (FDCPA) and the Federal Trade Commission Act (FTC Act). For more information, please review our blog article group explaining enforcement of the FDCPA. The joint efforts of agencies engaged in FTC enforcement help bring consumer law violators to justice, and face being banned and paying significant penalties. As more summaries of reports of consumer law violations are promoted to the public, there is an increased opportunity for individual consumers to help law enforcement take down individuals and companies who use deceptive, unfair and abusive debt collection practices.

Being vigilant in addressing consumer fraud: Good consumer habits

The attorneys at the Zamparo Law Group frequently advocate for consumers who have been injured by consumer rights violators. Many victims are already cautious consumers, and are still victimized despite their best precautions. The best defense against consumer fraud can be early detection and damage mitigation. Knowing your finances exactly, and having quick access to all your financial information and records is important. Good record keeping of financial statements may also be important in the event your identity is stolen. In the event of FDCPA abuses, early action in following the right legal procedures is important. There are so many formats of consumer fraud abuse, and it if something does not seem right, it is a good idea to say something and ask an attorney to review your situation.

The Zamparo Law Group can help consumers fight for their consumer rights. Being knowledgeable and aware of consumer law is important. When you see something, say something. We fight and win in court, individually and in class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our Facebook, Twitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

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Fighting identity theft and making identity theft victims whole

White-collar crime is not victimless crime; victims of identity theft suffer significant losses and hardships. Advances in technology and Internet commerce are helping safeguard our private information but thieves and hackers are learning advanced methods to steal identities. Damage suffered by identity theft victims can be extensive and lead to long-term problems. Unfortunately, most people will not know their identity is stolen until after damage is done. The identify thief may have obtained a drivers license, insurance, bank accounts, credit cards and bought a new car, all in your name. What happens when the identity thief does not pay the bills that are in your name and affect your credit? What happens with the identity thief is arrested for DUI with their license in your name? What happens when a police officer comes to your house and arrests you for a crime you did not commit?

We say, “It won’t happen to me, I’m safe and cautious with my personal information.”

Imagine you never use credit or debit cards online or over the phone; you shred all mail with your personal information and pick up your mail the minute the post office delivers it to your home. Identity thieves will get your information if they want it. Whether they hack into systems, where your private information is kept or they buy illegal lists of identities and private information on the black market, there is little anyone can do to stop a thief. Another target for identity theft may be a company, such as an insurance provider, that failed to adequately secure your information from thieves. On a local scale, the family law firm down the street may have client files, full of private information, and an unscrupulous night cleaning crew who hit the identity theft jackpot. In many cases, the thieves simply sell your identity on the black market, to domestic and foreign buyers.

Identity theft can be a disaster for victims, left with a damaged life and reputation.

Cancelling and ordering new credit cards is one thing. Proving you did not commit a hit and run collision causing death is quite another. An identity thief could feasibly obtain all necessary information to register a stolen vehicle in your name and even insure it with your driver’s license number. If the thief causes a collision while pretending to be you, they can simply abandon the assumed identity, move along to the next victim, and become them. Along the way, your credit could be ruined and the work it takes to restore your credit rating is extensive. Tax identity theft is also on the rise. Thieves use tax filing websites to file phony returns in your name, have tax refunds deposited into phony accounts they open in your name, and when you file your actual tax return the IRS rejects your return, and audits everything tied to your name and social security number.

There are state and federal criminal and civil penalties for thieves, and remedies for victims.

In Illinois, a person commits identity theft, “uses any personal identifying information or personal identification document of another person to fraudulently obtain credit, money, goods, services, or other property.[i]” Illinois law classifies identity theft as a felony with increasing severity and penalties as the value of the theft of goods or services increases:

  1. Identity theft of credit, money, goods, services, or other property not exceeding $300 in value is a Class 4 felony.
  2. Identity theft of credit, money, goods, services, or other property exceeding $300 and not exceeding $2,000 in value is a Class 3 felony.
  3. Identity theft of credit, money, goods, services, or other property exceeding $2,000 and not exceeding $10,000 in value is a Class 2 felony.
  4. Identity theft of credit, money, goods, services, or other property exceeding $10,000 and not exceeding $100,000 in value is a Class 1 felony.

Under federal law, possession and transfer of private information to create or use a false identity is punishable by fines and prison terms of not more than five to 30 years.[ii]

Individual victims of identity theft may have a cause of action and file a lawsuit against the identity thieves, if they catch them and can collect damages if the thief is caught and illegally obtained assets are available for sale and recovery by a victim. A much more likely scenario is a lawsuit against a company who was negligent with your information and the identity theft occurred as a result of that negligence. The Fair Credit Reporting Act (FCRA) is a source of federal law providing remedies for consumer victims of identity theft.[iii] Victims can recover money for violations of the FCRA when your information was mishandled, and recovery can include actual damages, statutory damages and attorney’s fees.

To learn more about the FCRA and its enforcement, read our blog article, The Fair Credit Reporting Act, responsibilities and remedies for consumer reporting violations.

Cleaning up the damage: What else we can do to remedy your negative effects

If you are an identity theft victim, the attorneys at the Zamparo Law Group can assist and advise you about the process of contacting all the contacts on your accounts with banks, credit agencies, driver’s license facilities, the Social Security office, and with making proper reports of identity theft crime to the proper state and federal agencies. The paperwork involved can be extensive and there may be a specific order in the process of restoring your proper identity and canceling your bogus version of you.

The Zamparo Law Group can help consumers fight identity theft and companies who fail to safeguard your private information. We fight and win in court, individually and in class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

 

[i] 720 ILCS 5/16-30

[ii] 18 U.S. Code § 1028

[iii] Fair Credit Reporting Act, 15 U.S.C. § 1681

Image Source: Identity theft complaints on the rise in Wisconsin http://bit.ly/1L7ksKd

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