Consumer Blog

Friday, our office announced the total restitution recovered through informal mediation efforts this year by the Consumer Protection Division. Our office recouped, returned or otherwise saved consumers $9.2 million in 2007.

While this is a record-setting amount, we would like to remind everyone of a few tips that can be helpful to avoid getting scammed in 2008.

1. Do your research before investing. This applies to all major investments, such as work on your home, a car purchase, refinanced loans and other important financial decisions.
2. Also check the company's track record for consumer complaints; our website as well as the credit report regularly. If this is something you don't already do, make it a New Year's resolution. Many problems can be corrected in a timely manner simply by bringing the issue to someone's attention. For example, there are forms to fill out with your bank or credit card company if you detect fraudulent charges, but they must usually be completed within 2 months of receiving your statement.
3. Brush up on common scams to avoid such as Nigerian letters and overpayment scams. The National Consumers League also has sponsored a great website with quizzes to test your knowledge.

As always, if you have questions, you can call our Consumer Hotline at 800-392-8222, or file a complaint.

I just finished reading an article on ScamBusters.org that really shook me to the core. Unfortunately, in this day and age, almost everyone has lost a family member or friend to cancer. When I read stories of people and families who struggle to battle this disease, my heart breaks—and that is exactly the reaction that some scammers hope to get.

The so-called "cancer fraud" scam works like this: A cancer-free person shares a story with the world that he or she has the disease and isn't financially stable enough to seek medical treatment. This dubious claim is targeted at churches, non-profit organizations and specific people to get money and gifts. Those of us who have lost a loved-one to the disease are good candidates that could fall victim to this type of scam. This rip-off is a hard to uncover, because scammers have found a way to forge records stating that they are sick. Not to mention, it's pretty hard to say, "I need proof that you really have cancer."

Con-artists who are capable of such a wicked offense, have found two effective ways of pulling off their scam. They may reach out to their community by asking for assistance and in return, they receive money and sometimes gifts. Or, they could choose to target their victims via email. The "Nigerian fee cancer emails"--often sent to religious organizations--state that a woman has cancer and needs assistance. The bonus is that she has millions of dollars set aside that she will send when she recovers!

So, how do you protect yourself from this type of scam, but still give to a cause that you care about? Ultimately, it is safer to give to a legitimate organization that helps cancer patients and their families than to give to an individual--whom you don't know--that is making the claim that he or she is ill. Many charities provide their mission and financial information to our office. Visit our our Check-a-Charity page to learn more. Secondly, if you receive an email suggesting you send money to an individual and in exchange they'll send you millions, be wary! This type of email is almost always a scam.

New consumer alert from AG Nixon today. We are getting word that Missourians in the Kansas City area that have recently lost a spouse are getting calls asking for that spouse's Social Security number. This is an identity theft scam - really, it's a phishing scam. The caller claims to be with a state agency that is finalizing some paperwork associated with the person's death, and that's why they need the info.

Can a dead person be an ID theft victim? Yes. The identity thieves are hoping to use the personal information to set up new credit accounts before word gets around that the person is deceased. It normally takes a little time for the Social Security Administration to register a death and report it to the three major credit bureaus. Thus, if the thieves can get ahead of that process, they may get some credit card or lender to open a new account for them. Thus, the family or the estate of the victim is stuck with the bills.

Have you ever bought an item at a store, only to find out it went on sale a few days later? At some stores, you can bring in your receipt and they'll give you money back after the fact.

But who pays such close attention to sales on items they've already bought? A couple of new Web sites, that's who.

For free, they let you register a recently purchased product, and if it goes on sale, you'll get an e-mail. Check them out here and here.

Another idea used by some consumers: just return the item, then go back and buy it on sale. But remember, there's no guarantee the store will accept your return. There's no law requiring any store to accept returned merchandise, though most do.

Fun article recently in the Washington Post about of the creative theories you may hear about what the tax laws actually say. My favorite is "paying taxes is voluntary." There are lots of other impressive theories in this article as well, along with the facts that belie them. We'll have more consumer info on tax season in the coming days - tax scams, ID theft traps using the IRS' name, refund anticipation loans (yikes!) and others.

A British TV reporter wanted to find out. He was convinced that he could not be robbed by someone who has his bank account number and routing number. So he published them online.

He found out he was wrong. Someone promptly set up an automatic draft from his bank account.

This is why you should protect your banking info and never give it out to anyone who calls or e-mails you. Such calls and e-mails are phishing scams. As we always say around here, only give out your personal information when you initiate the contact. Otherwise, you are opening yourself up to identity theft.

Get the lead out! Are your kids' new toys among the millions that have lead in them? As you know, recalled toys were all the talk in 2007 because of lead content. Now you can bring up to three toys to events AG Nixon is co-sponsoring Friday and Saturday, to have them screened for lead. The events are at two different St. Louis Community College campuses - Friday at Forest Park and Saturday at Florissant Valley.

Did you promise you would get into shape before hitting the beaches this spring? For many consumers, this time of year means joining gyms and health clubs to shed those unwanted holiday pounds. But before you jump on that treadmill, consider this article about problems consumers have faced after joining a gym.

The Attorney General's Office receives many complaints against gyms and health clubs and does take action to protect consumers. Also, learn how to protect yourself by clicking on this link for information on the laws that govern health clubs in Missouri.

Do you get much junk mail? Pre-approved credit card offers? Most consumers don't know you can opt out of a lot of that stuff.

Observe:

For junk mail, go to the Direct Marketing Association site or write: DMA Mail Preference Service PO Box 643 Carmel, NY 10512

For pre-approved offers of credit and insurance, you can opt out online or by callng 1-888-5OPTOUT (567-8688).

If this is any indication, we ran an anti-mail fraud project last year called Senior Sting 2006. During the month of May, 300 senior citizens from across Missouri kept all their junk mail. It amounted to 8,000 pieces.

AG Nixon is warning consumers in southwest Missouri that the phishers are up to it again - this time sending text messages, hoping to trick customers of Empire Bank into giving out their personal info. This is the first phishing scam we've seen using text messages to people's cell phones. They send consumers to a bogus Web site that looks just like the bank site. Here, by the way, is the official Empire Bank site.

At our first ever Get the Lead Out event in St. Louis, we had quite the learning experience. Consumers on Friday and Saturday brought in more than 300 toys to be screened for lead content. About 30 of them (10 percent) tested positive.

Here is a shot of one of the screeners using his X-ray gun on a coloring kit. (Before you get any ideas of buying one of these for home, I should tell you they cost $40K.) The toy with the highest lead content was actually an old metal tractor that's a hand-me down from my wife's family. This thing may be 60 years old or more. It had 85,000 parts per million of lead. Some perspective: no amount of lead is safe for children. The federal government allows lead content up to 600 parts per million in consumer products. So this tractor had 140 times the legal limit. Another hand-me down tractor had about 5,000 ppm. That one was probably 35 years old.

Interestingly, people brought in some coffee mugs that were off the charts with lead. The biggest hazard is to kids under six years old, but still it was startling to find lead in things designed for oral contact like a mug. Check out AG Nixon's Recall Clearinghouse to find the latest items recalled in several different categories.

Missouri consumer writes:

I'm getting a divorce, I'm on disability, I have a car payment of 570 per month, mortgage 1200, student loan payment 150 and credit card payments of 1000 per month. After the marriage is over I'll be in the red around 500 per month. I filed bankruptcy in 1991 and I just got my credit better. I'm thinking about filing again. What do you think?

Bankruptcy is a drastic step (as you found out from the last time). Before I took that step, I would talk to a good credit counselor. (Emphasis on good - there are a lot of scams out there.) To find a reputable counselor, contact the National Foundation for Credit Counseling online or at 800-388-2227.

After the phishing scam that hit this week using text messaging, this question has come up. The banks involved want to assure consumers that they are not selling cell phone numbers. They banks don't even necessarily have your cell number unless you gave it to them as a primary or secondary contact number. We in law enforcement can vouch for that.

We believe these scammers just generate random cell phone numbers. Once they know what prefixes are used in a certain area, that's fairly easy. For example, in Jeff City, 353, 230 and 619 are some of the cell phone prefixes. So a scammer has software that cranks out cell phone numbers starting with those prefixes. Obviously, he'll hit a lots of numbers that don't exist and lots that don't accept text messages. But he'll also hit a lot of real live people.

We have blogged in the past about this, but with such a crisis around the country, it's worth repeating.

If you are facing foreclosure, there are ways to avoid it. Remember, the bank does not want your house. They would much rather work out a solution with you. Here are some good suggestions from the show This Old House.

You may have heard of this product - relatively new - designed to provide spending money based on home equity. Seniors over 62 are generally eligible for a reverse mortgage.

Here's how it differs from a home-equity loan:

With a home-equity loan, you get a lump sum up front, and you pay it back monthly, like any other loan. With a reverse mortgage, you get either a lump sum, or you can get paid monthly. Then you don't have to pay it back until you die or move. You may be wondering, how do I pay it back if I die? The answer is, it comes out of the sale of your house, or it reduces the value of your estate. So if you plan to leave money or property to your heirs, take that into consideration. That effect on the estate is one of the downsides. The other is much higher fees and closing costs.

Bankrate.com has a nice Reverse Mortgage 101. And USA Today covered the topic recently with stories from people who took out or considered reverse mortgages. To determine if this is right for you, talk to your financial advisor. There are also scams out there. The Florida Attorney General put out this warning recently.

I write that headline half jokingly, because while rich people don't take out these loans, you almost have to be rich to afford them. You'll see lots of ads in the coming months of tax season, and they may sound like easy, quick money. Keep in mind that you pay a fee for these loans, and that means less money from your tax return. And by lending standards, those fees amount to an interest rate that's through-the-roof expensive.

If you can hold off about 10 days (that's how long it will take to get your refund), you can file electronically with the IRS. And it's a better deal, because there are no fees.

With a refund-anticipation loan (RAL), you will pay anywhere from $30 to $100 in fees. May not seem like a lot, but figure this: Let's say that fee is about 12 percent of your total refund. A 10-day loan at 12 percent is about 500 percent per year. Bad credit card interest rates are usually 20 percent annually, or APR. That puts RALs right up there with payday loans for some of the priciest loans you can find. Another concern with these loans: they may offer to give you a refund based solely on your W-2. That will be an estimate at best. If they are wrong, you are on the hook with the IRS. Nice column in the Washington Post has more on this.

Consumers complain frequently to our office about all these FINAL NOTICE warranty offers they get in the mail. So what's the story - are these truly an offer to continue your manufacturer's warranty?

They are not from your manufacturer - they're from a totally different company trying to sell you an extended service contract. Complaints touch on two things:

1. Mailings are misleading - they look like they're from the carmaker.
2. The warranty company doesn't pay for repairs they say are covered.

Nice story on a local TV station last week summarized what these are all about.

You can file complaints with our office if you have problems with these companies. Also, as the story points out, all these companies have to register with the state. You can call the Department of Insurance to see if a company is registered at 1-800-726-7390.

My son has unpaid bills, and a collection agency calls me frequently. I have told him on three occasions that this is not my son's telephone number and to stop calling me. I have refused to help him contact my son. He is very abrasive and often hangs up on me. Is there a way to stop him from harassing me?

You can file a consumer complaint with our office. We have great success getting debt collectors off the backs of people who are incorrectly targeted. This is becoming a bigger problem all the time. Debt is often sold from one company to the other. With each sale, the records get more blurry, and collectors more aggressive. Thus, lots of mistakes and lots of obnoxious behavior by the collector. By the way, even if you do owe the debt, there are still limitations on what debt collectors can do. The Federal Trade Commission offers a summary of your rights under the Fair Debt Collection Practices Act.

With Congress considering sending tax rebates as part of the economic stimulus package, con artists have gotten in on the act.

AG Nixon sent out a consumer alert today that identity thieves are calling consumers in Missouri, saying they need their Social Security number to process their tax rebate. As always, this is an ID theft scam. You should never give your personal information to anyone who contacts you. Only give that out when you initiate the contact.

This scam is similar to the IRS phishing scam we've written about.

Not all are created equal. Interest rates, fees, minimum balance, perks and cash back are just a few of the factors to consider. The KC Star has an article on how to shop for credit cards and checking accounts.

Missouri consumer writes:

I would like to know if the state of Missouri requires me to change the name on my car title. My name has changed due to getting married.

Under Missouri law, you can if you like, but you are not required to update your vehicle title (or certificate of ownership) if you change your name. If you like, you can contact your local contract office and apply for a duplicate title to submit new information.

PS: Thanks to the MO Dept of Revenue's Dave Griffith for the help answering this one.

We have blogged about these before, and we get complaints about them daily.

There are no legitimate foreign lotteries you can play in the U.S. - they are all scams. Generally, you get a mail or e-mail notice that you've won money in one of these. They may ask you to submit money for "processing fees" or taxes. That's the last you'll hear from them.

Here are just a few that we've heard about: Frenck Lottery, United Kingdom English Lottery, Internet Lotto, Canadian Lottery, Nigerian Lottery, Lotus Esoteric, Fortune Financial Services, Draxon Solutions, ABC Financial, Royal Trust Gaming, International Lottery, Atlantic Lottery, Australian Lottery, Astoria Financial, Gold Rush Lotteries, Euro Lotto, El Gordo, Union Trust Financial, Uniprize Promotion, New Castle Lottery, North American Lottery, International Award Payment Center, Survey Lotto, Montego Bay Lottery, Lucky Lotto, UK Lottery, United Global Award, Euro Continental, Lucky Lite Lotto, Global International, Ireland Lottery, Freedom Lotto, El Fidora, Lottery Approval Center, British Lottery, La Pritivia Lotto, Euro Lottery, Jamaica Lotto, Euro Millions Lottery International, Milo International Lotto, Irish Lottery, Lo Geneva, International Canada Lottery, Liverpool Lottery, Spanish Lottery, Dominican Lottery, Zurich Lottery, Lima Lotto, Romega International Lotto, English Lottery, National Lottery United Kingdom, Spain Lottery, El Mundo Spanish Sweepstakes, International Claim Depot, Euromillionesloteria International, Ontario Lottery, Coca Cola Lottery of UK, Omega Global Lottery, Deutsch International Lottery Program, International Premier Lotto, Hispavista Lottery.

We continue to be amazed at the explosive growth of readership on this blog. We had well over 100,000 page views in December. So I'm curious as to what brings you here. Are you having a problem, and found us in an online search? Are you a regular reader of the blog? We've had a number of people say these blog posts have helped them avoid a scam. I can't imagine a more rewarding piece of feedback. We want to keep this as useful as possible to you, so please comment below and let me know what brought you here.