BBB’s Naughty List: 5 holiday scams and how to avoid them

ID-100221118The holiday season certainly makes most of us feel merry and bright, but it can also bring out scammers looking to take advantage of you. Better Business Bureau (BBB) serving Central, Coastal, Southwest Texas and the Permian Basin wants people to beware of the following five scams and frauds this holiday season.

  1. Fake websites promising fake deals. Some scammers will send fake emails or advertisements promising unheard of deals for a product, leading you to a fake website that steals your credit card information when you try to check out. Protect yourself by staying away from deals that are too good to be true, checking the URL and checking BBB’s Business Directory before buying.
  2. Santa letter scheme.While some legitimate companies sell letters from Santa Claus, some scammers are using this idea to steal credit card and personal information from unsuspecting consumers. When looking for a customized letter, research different companies and go to their sites straight from your browser, not from emails or social media.
  3. Fake gift cards.Gift cards are the most popular holiday gift, but also the most susceptible to fraud. Criminals will go to a store and record the activation code on a gift card. After checking if the gift card is still valid online, fraudsters can use the online code to cash the gift card for resalable products. Before buying, make sure the security code on the gift card is scratch-free and look for gift cards that come in an unopened, plastic container.
  4. False data breaches. Taking advantage of data breach fears, scammers will call pretending to be retailers asking for personal information to “sort things out.” If an incident does occur, the company will alert its consumers through their website or social media and will not call the consumer directly. If you are unsure, call the customer service number and ask to speak to the fraud department. Since you called the correct number, you should be safe to give out personal information if asked.
  5. Card skimmers. To steal your credit or debit card information, scammers will install skimming devices at ATMs or put faceplates over payment terminals so they can access your accounts. When shopping, stay alert by keeping your cards in sight and covering the screen when entering your pin.
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BBB Investigation: Austin-based custom clothing website claims to support charities, doesn’t deliver

investigationAustin-based Threadstart.org promotes itself as a way for non-profit groups and individuals to create, buy and sell custom T-shirts and other apparel. Unfortunately, consumers and non-profit groups told BBB ThreadStart did not deliver products after taking payment and did not give promised donations. Consumers also allege they haven’t received promised refunds.

Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin, has closed 17 complaints about ThreadStart in the last year as of Dec. 17. Recently, BBB has also received complaints that are pending a resolution.

The business is owned by Zachary Folk of Austin, who is also a director of a non-profit corporation called Common Threadz. According to Commonthreadz.org, the charity is “a non-profit helping disadvantaged children & rural villages in the developing world through community development programs that empower the kids, their community, and the local grassroots organizations that support them.” According to BBB’s Wise Giving Alliance (give.org), the charity chose not to disclose requested information.

Folk responded to some BBB complaints by promising refunds and in some cases delivery of the consumer’s order and a refund. However, some complaints were closed unresolved because consumers stated the business already made similar promises and did not follow through.

A BBB investigator contacted several complainants who said the company promised to refund their money, but did not actually issue a refund. Consumers typically stated they ordered products in an effort to benefit a charity which had promoted ThreadStart via social media.

The BBB investigator also contacted complainants who said ThreadStart had made arrangements to sell custom clothing and contribute a portion of the proceeds to their charity. However, the complainants told BBB that ThreadStart never contributed to their organizations and had charged their supporters for products that were never delivered.

A BBB investigator contacted Threadstart by phone on Dec. 4 and left a voice message saying BBB had questions about unresolved complaints, but has not received a return call as of Dec. 17.

ThreadStart.org’s website was active on Dec. 4, but as of Dec. 17, the website’s main page is blank except for the words, “Coming Soon.” However, links to fundraiser pages for various organizations appeared to be active as of Dec. 17.

ThreadStart is not registered with the Texas Secretary of State, but Folk told BBB in March 2014 that it is a sole proprietorship that is in the process of being incorporated in Nevada.

Folk is also a registered agent for Scholartees.org, an apparel-related website with the same address as ThreadStart, in a residential neighborhood in Austin. Scholartees.org states that teachers and students can design T-shirts and receive $8 for their classroom projects for each item sold. The website is still active as of Dec. 17.

Tiffany Fisher said ThreadStart agreed to produce clothing to support a cancer-related charity in Canada, but people who ordered to support the fundraiser did not receive their items. She said the company has made many promises to refund consumers, but hasn’t done so after more than a year.

“It was an initiative I spearheaded,” Fisher said. “People with our organization paid several thousand dollars. They said they would design the T-shirts for free. ThreadStart said a percentage of the sales would go back to the charity.

“I lost $500. My brother lost $500. I think people supporting our organization lost a total of around $5,000, but that’s a guess. I can’t tell how many people bought from them to support us. He won’t tell us. Everyone I asked didn’t get their order.”

Joanne Zimmermann of New Jersey said she ordered $74.95 worth of merchandise from ThreadStart to support an animal rescue organization and never received her order. She ordered two shirts and a pair of sweatpants.

“The rescue group posted a fundraiser on Facebook,” she said. “You could order different clothing with dogs and $10 per order was to go to the rescue group. I placed an order. It had been a while and my order didn’t come in. When I first contacted them, they said they had problems with a printer and assured me it would come. I let it go a little more. A couple of months later, they still promised a refund and an extra item. They still haven’t sent the items.”

When buying merchandise online, BBB offers the following advice:

  • Pay with a credit card. Under federal law, charges made on a credit card can be disputed up to 60 days after the purchase.
  • Keep documentation of your order. After completing the online order process, there should be a final confirmation page or an email confirmation. Save any receipts for future reference.
  • Know your rights. Federal law requires that orders made by mail, phone or online be shipped by the date promised or, if no delivery time was stated, within 30 days. If the goods aren’t shipped on time, the shopper can cancel and demand a refund. There is no general three-day cancellation right, but consumers do have the right to reject merchandise if it’s defective or was misrepresented. Otherwise, it’s the company’s policies that determine if the shopper can cancel the purchase and receive a refund or credit.
  • Do your research. Check the company’s BBB Business Review at bbb.org before making a purchase to see its complaint history, details about complaints and any advertising-related issues.
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Scam Alert: Identity thieves posing as government agents or debt collectors targeting consumers

scam alert 150x150Scammers frequently claim they are collecting child support debt

The Texas Office of the Attorney General (OAG) is investigating a scheme by callers claiming to be with government or debt collection agencies who have been attempting to steal consumers’ money and identities.

According to a Dec. 16 press release, the OAG has received dozens of calls in recent months from Texans who say they received phone calls from people claiming to be collecting overdue payments. In particular, the callers claimed the consumers owed child support payments.

Your BBB also regularly receives calls from consumers who were contacted by phony debt collectors claiming to be with various government agencies, including the IRS, and making various threats.

Imposters claiming to be with the Texas Attorney General’s Office typically claim the consumer owes funds to the OAG and that a warrant has been issued for their arrest. After scaring consumers with the possibility of being arrested, the scammers ask for Social Security and other personal information.

The scammers then tell the victim the problem can be resolved if they purchase a pre-paid debit card, load it with money and call them back with the number from the back of the card. The scam artists can then steal the victim’s money and use their sensitive personal information to steal their identity.

Texas residents who believe they are a victim of this scam should file a consumer complaint at www.texasattorneygeneral.gov. If you believe the scam put you at risk for identity theft, visit www.texasfightsidtheft.gov for a copy of the OAG’s Identity Theft Kit and also file a complaint with the Federal Trade Commission at www.ftc.gov.

BBB offers the following advice to prevent being victimized by scam callers:

  • Go off the call. If a caller claims to be with a government agency, find the number independently and get verification.
  • Protect your money. Never wire transfer money or purchase a Green Dot card without verifying who is on the other line. These payment forms are the most commonly used because they cannot be traced. Green Dot MoneyPak users also need to remember that anyone they share their card number with has instant access to their funds.
  • Stay private. Do not give your Social Security number or other personal information to unsolicited callers. Check your privacy settings on all your social media sites. Scammers often make their stories more believable by trolling for information on Facebook, Twitter and similar sites.
  • Resist the pressure to act quickly. Don’t let a potential scammer push you into sending money before you verify the situation.
  • Know where to turn. If you fall victim to a scam, report the incident immediately to local police and your state Attorney General’s office.
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FTC shuts down mortgage relief scam

ID-100247782It’s hard enough to get behind on your mortgage, without having a scam artist get you into even more trouble.

The Federal Trade Commission (FTC) recently shut down an operation it says perpetrated a wide-ranging mortgage relief scam. At the FTC’s request, a federal court issued orders against 22 defendants who offered cash-strapped consumers home loan modification services that the FTC says violated the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule.

The orders ban 21 defendants from operating debt relief services. The 22nd defendant must turn over proceeds from the defendants’ activities. Monetary judgments from all defendants total almost $51 million.

According to the FTC, the defendants’ loan modification enterprises falsely claimed to provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments. They charged advance fees of between $2,500 and $3,500, but delivered little or no help.

Defendants (each subject to a court order, resulting from either a negotiated settlement, a default judgment, or a sanction for failing to participate in the litigation) are as follows:

  • A to Z Marketing, Inc.; Apex Members, LLC; Apex Solutions, Inc.; Expert Processing Center, Inc.; Smart Funding Corp.; Ratan Baid; and Madhulika Baid entered into a stipulated final order;
  • Top Legal Advocates, P.C., entered into a stipulated final order;
  • Backend, Inc., entered into a stipulated final order;
  • William D. Goodrich and William D. Goodrich Atty, Inc. had a judgment entered against them as a sanction. Both defendants answered the amended complaint but then failed to respond to discovery or otherwise participate in the litigation.
  • Evergreen Law Offices, PLLC, had a default judgment entered against it for its failure to respond to the Commission’s amended complaint;
  • Backend Services, Inc.; Emax Loans, Inc.; Legal Marketing Group, Inc.; Nationwide Law Center, Inc.; United States Law Center, P.C.; Interstate Law Group, LLC; Millennium Law Center, P.C.; and SC Law Group, P.C., had default judgments entered against them for their failures to respond to the Commission’s amended complaint;
  • Amir Montazeran had a default judgment entered against him for his failure to respond to the Commission’s amended complaint;
  • Business Team, LLC, had a default judgment entered against it for its failure to respond to the Commission’s amended complaint.

Business Team and Montazeran are appealing their judgments.

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Don’t send Santa letters to a grinch by mistake!

ID-100216754BBB offers advice to avoid scam holiday websites

The holiday season is here and unfortunately so are scammers. Just like the Grinch they are looking to steal your holiday joy. Better Business Bureau (BBB) serving Central, Coastal, Southwest Texas and the Permian Basin is warning of fraudulent websites offering a “Letter from Santa.” Some of these sites promise a custom letter from jolly Saint Nick himself, but don’t deliver.

The con artist will attempt to get your attention with an email selling a handwritten letter from Santa to your child. It encourages you to make your child’s holiday by purchasing “Santa’s special package” for $19.99.

If you click on the link it takes you to a website that promises a special package containing an official “nice-list” certification and customized letter from Santa. There may even be a free shipping special that ends “in just few hours”. If you purchase the item and enter your credit card information, you are out the $19.99. Plus, you just shared your credit card information with scammers, who can potentially use it for identity theft.

In another version of this scam, the site promises a free letter from Santa. It doesn’t request any credit card information, but it does require plenty of personal information, such as your full name, address and phone number. These sites can then turn around and sell your personal information to spammers.

BBB offers this advice for spotting an online scam:

  • Do your research. Check out the business at bbb.org and do a quick web search.
  • Ignore calls for immediate action. Many scams try to get you to act before you think by creating a sense of urgency (including the scam above). Don’t fall for it.
  • Hover over links in emails to check their source. Scammers will make links look like something else. Place your mouse over hyper-linked text and the true destination will appear, which in the case of a scam website, may be a long jumbled URL address.
  • Make sure the website has verifiable contact information. If something goes wrong with your order, you need to be able to contact the business. When in doubt, confirm that the address and phone number are real.
  • Make sure you pay through a secure connection. When entering credit card information online, be sure that the URL starts with “HTTPS” and has a lock icon in the browser bar.
  • Watch for poor grammar and spelling. Scam emails and websites often are riddled with typos. This is often a giveaway that you aren’t dealing with a real business.
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Seeking fast cash for the holidays could cost you a bundle

ID-100259641BBB warns consumers to be wary when applying for payday or car title loans

Your cash reserves are running low. Holiday presents need to be bought and you don’t get paid until next week. What can you do to get some extra last minute cash?

Many cash-strapped consumers may find themselves in need of a small loan this holiday season. Payday lenders may seem like an easy way to get cash fast, but for most this ends up being a burden.

Your BBB warns you to research a company or website’s reputation before you give out your personal information or sign an agreement. Payday lenders target people whose credit may not be good enough to obtain a credit card or bank loan and who therefore rely on short-term loans to get by.

In 2013, BBB received more than 5,500 complaints nationwide against payday lenders. Many of those complaints allege fraud — including companies initiating loans or withdrawing money without permission, or calling to collect a debt that the consumer claims was never owed. Other complaints allege poor customer service or unscrupulous collection tactics.

Before you take out a loan, your BBB offers this advice for borrowers:

  • Start with trust. Check out the company’s BBB Business Review to see its rating, history of complaints and other information.
  • Never pay an upfront fee. Some short-term loan providers will ask for a post-dated check to cover the amount you borrowed plus interest and fees. However, if any lender asks for those fees in cash before giving you any money, walk away — especially if it’s an online lender asking for money via wire transfer. Charging upfront fees is illegal, and cash sent by wire cannot be traced.
  • Limit the amount you borrow. Only borrow what you know you can pay off with your first paycheck. Most companies will allow you to “rollover” the balance for several weeks or months, but tack on fees the whole time. This can result in you owing several times what you borrowed in the first place.
  • Know your rights. In Texas, payday lenders are required to disclose certain information before initiating a loan. That information includes the costs, how it compares to other loans and the interest rate if not paid in full. Members of the military enjoy even more protections, thanks to federal law.
  • Read the fine print. Pay close attention to fees and consequences of non-payment. Will the company allow you to make arrangements if you cannot pay? How quickly will the company repossess your car?
  • Keep your documentation. Many consumers said they started receiving calls from collections agencies years after they paid off a payday loan. Some of these calls were simple errors; others were attempts by scammers to collect a debt that is not owed. Protect yourself by having documentation that all loans were paid in full.
  • Know where to turn. If you feel a lender has committed fraud or taken advantage, file a complaint with BBB, the FTC and the Texas Attorney General.
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Check cashing scam goes digital: Here comes the banking app version

ID-100215081The check cashing scam comes in many flavors: fake lottery, fake work-at-home, fake inheritance, Nigerian Prince, etc.

Consumers have told Your BBB about all those and more, but they’re really all the same.

In all cases, someone wants you to deposit a check in your account, send money to them or someone else and “take a cut for yourself.” If you do it, you soon discover the check is counterfeit and have to pay everything back.

Now that so many people have banking apps on their smartphones, it’s no surprise that crooks have come up with a digital version.

How the scam works:

An acquaintance–who might also pose as a potential employer or lender–offers to pay you several hundred bucks (or more) if you will accept money for them through your bank or credit union account.

You give the scammer your bank account number, PIN and contact information. The next thing you know, you get a call or email from your bank. A check deposited into your account didn’t clear, and your account is now overdrawn.

It turns out the scammer used a mobile app from your bank to deposit fake checks into your account. Then, he or she withdrew the cash before the bank spotted the fake. You now have to pay the bank back for whatever the scammer took out.

Tips to Avoid Fake Check Scams:

Here are tips to avoid check scams:

  • Know the consequences of bad credit: Taking cash in exchange for sharing your banking information (or getting a new smartphone contract) may sound tempting. But scammers will leave you owing thousands. These unpaid bills will be sent to a collections agency, and this could make it hard to get a loan, a job or even housing later.
  • Confirm before you withdraw cash: A check can take several days to clear, and, until then, you are responsible for any funds withdrawn against it. To make sure the check cleared, call your bank.
  • Be wary of checks received from unknown individuals: When selling to someone you don’t know, it is safer to accept PayPal, cash or credit card payments.
  • Do not accept overpayments: When selling on Craigslist.org or similar sites, don’t take more than the sales price, no matter what convincing story the buyer tells you.
  • Check your online bank statements frequently.Don’t wait for monthly statements. If you see something you don’t recognize, call your bank or credit union immediately.

For More Information

Read more about check scams and banking apps on National Consumers League’s Fraud.org. To find out more about other scams, check out BBB Scam Stopper.
This Scam Alert has been sponsored by Western Union, a BBB National Partner.
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Making last-minute plans for a holiday party? BBB has tips to help you pick the right venue

ID-100220642Planning a holiday gathering?  Your BBB wants your event to be memorable, for all the right reasons.

Last year, BBB received more than 1,000 complaints against event planning, catering and entertainment services nationally. Common complaints included; items listed in contract that were not provided, excessive fees and unfulfilled refund requests.

Feeding and entertaining a large group can be stressful. Many will hire a catering service or event planner to make party planning a lot easier. BBB offers this advice when choosing the right party services for your event:

  1. Start your search with BBB. Find a BBB Accredited Businesses at org and utilize the Request-a-Quote feature for an estimate. Also, check out their BBB Business Review for details on the company, including business details, how they handle complaints, customer reviews and any advertising issues.
  2. Decide what services you need. Live music or DJ? Appetizers or dinner? There are so many details to consider when planning and with little time left, it’s important to trust the company. Be sure to understand what each service will provide and budget accordingly. Each service should provide a detailed written agreement for provided services.
  3. Know who you’ll be working with. Get the name and contact information of the person who will be in charge on the day of the event in case problems arise. If possible, talk with this person during the planning stages so that you will have a good working relationship before the event.
  4. Get everything in writing. Discuss conditions and get a written agreement. Be sure this includes details of any changes in plans such as the number of guests, menu selection or unexpected issues that require cancellation. Keep a written copy of the agreed terms.
  5. Understand the fees. Discuss and fully understand what each service will cost and ask about any deposits or additional fees. Ask for an invoice before paying, this should include a breakdown of costs, including taxes and fees. Your agreement should also include the number of staff involved, charges for overtime, and the starting and ending time of the event. Get a written, signed and dated copy of all receipts after payment.
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Think you won a prize from a sweepstakes you never entered? Think again!

scam alert 150x150It’s one of the most common scams we hear about at Your BBB: Someone is told—by mail, phone or email—that they’ve won a big prize in a contest they never entered, but in order to collect the prize, they first have to pay some kind of tax or fee.

Many times the scammers claim to be with Publishers Clearing House or some type of official-sounding agency.

If this happens to you, beware. The only ones who stand to “win” anything are the scammers, if you fall for their tricks.

A consumer recently contacted us after receiving one of those calls. She’s been getting similar calls for a long time. This time, the caller claimed to be with the “International Claims Company” in Las Vegas. He said she had won a prize and wanted to send her a check for $250,000. But first, he wanted her to send $105 with a Green Dot card. The scammers claimed they would meet her at her bank to deliver the first $25,000 and a check for $250,000 would arrive in 24 hours.

The caller claimed the money would come from Publishers Clearing House. The Las Vegas address the caller gave turned out to be an apartment complex.

Fortunately, she didn’t fall for it. It might have been “just $105,” but paying $105 for nothing is still expensive. Not to mention, scammers sometimes come up with a second or third fee/tax until the victim gives up.

One of the phone numbers the scammers used to call her was disconnected. The other one went to a voice recording that sounded staticky and was likely outside the U.S. I left a number and asked, “Does your mother know what you do for a living?”

Not that scammers who make a living by ripping people off have much of a conscience for me to bother.

Publishers Clearing House has a blog post about how to recognize fake PCH award scams: Five Ways to Know If It’s a Publishers Clearing House Scam.

If you think you might have won a sweepstakes BBB offers the following advice:

  • Don’t expect to win a contest you never entered. You can only win a sweepstakes you enter. If you have entered a sweepstakes, keep track of who you’re entering with.
  • Don’t get tricked by “official-looking” material. Seals, official-sounding names and terms that imply affiliation with or endorsement by a government entity are commonly used by scammers to fool consumers into thinking they are legitimate.
  • A true sweepstakes will not make its winner pay fees. If you are asked to mail or wire money to pay fees or taxes, you’re looking at a scam. Legitimate prizes do not come with processing fees and taxes are paid directly to the Internal Revenue Service (IRS) after winnings are collected.
  • Never agree to deposit a check and send a portion to someone else. This is a well-known scam. No matter how legitimate the check may appear to be, no matter what story or reasonable-sounding explanation you are given, you will get burned. A bank teller might accept the check, but when it turns out to be fake, you will have to reimburse the bank.

 

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Avoid red flags when shopping online during Cyber Monday

ID-100198092 (1)Black Friday is over, but the holiday shopping season is just getting started. For many, the biggest shopping day of the year is now Cyber Monday. It’s a great chance to find bargains and avoid the crowds.

According a survey by the National Retail Federation (NRF), 56 percent plan to shop online, the most in the survey’s 13-year history.

If you’re one of those people, Your BBB wants you to get the real deal and avoid getting ripped off. Be on the lookout for these red flags:

  • Little to no basic business information listed. The online store should have phone numbers and physical addresses of the business, make note of these before you buy. Be cautious if this information is not available as it may not be a legitimate business.
  • No signs of online security. Some attackers try to trick you by creating malicious websites that appear authentic. Don’t enter your personal and financial information, unless a site includes a URL address that begins with “https” or a closed padlock icon on your web browser’s address. This indicates that the purchase is encrypted or secured.
  • Too good to be true deals. Online stores that offer merchandise for unusually low prices should raise concern. Before you jump on a bargain, visit bbb.org and check a business’ BBB Business Review to see how they respond to complaints, customer reviews and any advertising concerns.

It’s important to secure personal information when shopping online, BBB offers this advice:

  • Use safe payment options. Credit cards are generally the safest option because they offer protection if the product isn’t delivered or isn’t what was ordered. Also, unlike debit cards, credit cards may have a limit on the monetary amount you will be responsible for paying if your information is stolen and used by someone else.
  • Keep a paper trail. Print and save records of your online transactions, including the product description, price, online receipt, terms of the sale, and copies of any email exchange with the seller. Read your credit card statements as soon as you get them to make sure there aren’t any unauthorized charges. If there is a discrepancy, call your bank and report it immediately.
  • Turn your computer off. According to the National Cybersecurity Alliance, many people leave computers running and connected to the internet all day and night. This gives scammers 24/7 access to your computer to install malware and commit cybercrimes. To be safe, turn off your computer when it’s not in use.
  • Beware of phishing. If you receive an email claiming problems with an order that asks for personal information or financial information, call the contact number on the website to confirm that there really is a problem with the transaction.
  • Keep a clean machine. Having the latest security software, web browser and operating system are the best defenses against viruses, malware and other online threats.
  • Check the seller’s privacy policy.  Some sellers resell personal information, buying preferences, and other data to market research companies, telemarketers, and spammers. Read carefully and always make sure that you are opting-out and not opting-in when asked whether you want to have your information shared with third parties.
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