WAR SCAMS

Deployed Soldiers and their families need to be aware of the many consumer scams that target the military. A scam is a fraudulent business scheme, a swindle, to cheat or defraud (someone) of money or property.

In an April 2003 article, the Better Business Bureau President, Edward Johnson noted several war related scams. “Take for example the web site selling patriotic t-shirts with the claim that 10% of all profits will go to the Red Cross Disaster Relief Fund. This site is promoted by mass emails with the subject line “support our troops.” The American Red Cross has never heard of the web site and has no affiliation with it. Another Better Business Bureau investigation uncovered a program touting the slogan “adopt-a-soldier.” The program sells overpriced lapel pins and U.S. flags and is supposed to benefit military families. Or, how about the recent Federal Trade Commission (FTC) efforts at shutting down a Florida-based telemarketing operation called Community Affairs which contacted people on behalf of legitimate charities, misled the donors and then kept for themselves 75% - 90% of the donations? Another Federal Trade Commission action deals with an individual that set up six different California-based sham nonprofit corporations, with official-sounding names such as American Veteran’s Council and Firefighters Assistance Foundation. Accordingly, the faux (false) charities were created and then controlled by the fundraisers for their own personal profit.”

Now in June 2004, the scams are still around. The Judge Advocate General’s School identified the following: telemarketers who call claiming to represent the government and offering to sell survival kits purportedly required by the government — all they needed before sending you the kit is your checking account number; telemarketers are offering military families an Internet service providing daily alerts and bulletins from the front lines. They ask for a credit card number in payment for this service; email advertisements offering survival kits and “Nuke” pills; and, door-to-door salesman offering to build “safe” shelters. Other marketing scams include the offer to buy a military remembrance coins for every military person in Iraq if you buy one for yourself and one for the Service member.

Given the ever increasing cleverness of scam artist, what can you do to protect yourself? According to article written by Alan S. Kopit - The Today Show - Courtesy of MSNBC.com, here are some protection tips:

“Unless you know the organization to which you are giving your money, consider the following precautions to ensure that your donation dollars benefit the people and organizations you want to help:

• Use common sense.
• Ask for written information, including the organization’s name, address and telephone number. Remember that any legitimate organization will give you materials outlining its mission or purpose, how your donation will be used, and proof that your contribution is tax deductible (if they claim that it is). If someone refuses to provide that information because there “isn't time” or because it is “too costly,” give your money somewhere else.
• Do not reveal personal information or financial information, including credit card numbers, bank account numbers, or social security numbers, to anyone you do not know. Often the actual (hidden) scam is to steal your personal information rather than to get you to donate money or buy some product.
• Refuse all high-pressure appeals. Do not succumb to sales pressure. Take your time to evaluate the offer or request and determine whether the offer sounds legitimate. Particular attention should be paid to high-pressure “investment” offers.
• Ask if your contribution is tax deductible. Not all organizations whose names sound like a charity really are, and your contribution may not be tax deductible even though you think it is. Make your check payable to the official name of the group or charity. Do not use initials and do not send cash.

If you suspect fraud, don't get involved. If you have any suspicions, hang up the phone on a telemarketer, ignore the unsolicited email, and throw away the mail you received. There are many fine, legitimate charities who are helping our troops and their families, and there is no need to get involved with anyone who is the least bit suspicious.”

There are several organizations you can contact to verify the legitimacy of the solicitor:

• The Council of Better Business Bureaus, 4200 Wilson Boulevard, Suite 800, Arlington, Virginia 22203-1838, (703) 276-0100, website: www.bbb.org.
• Contact your local Consumer Protection Agency or your State Attorney General’s toll free fraud line.
• If the scam involves homeland security, check with the U.S. Department of Homeland Security (www.ready.gov) for tips on how to protect your family in case of a terrorist attack. There is a lot you can do on your own without incurring substantial expense.
• If you are considering stocking medical-related products or supplies, consult the U.S. Food and Drug Administration (www.fda.gov) about drugs/health remedies and the Centers for Disease Control (www.cdc.gov) for information on terrorism and public health.
• One final word: Don't be swayed by claims of government affiliation, government approval, or other government references. It is a common tactic used by scam artists to imply legitimacy and establish trust. And above all, use your common sense.

Below are some additional articles on consumer scans. They are taken from the Judge Advocate General’s School, United States Army, website at: http://www.jagcnet.army.mil.

AUTOMATIC DEBIT SCAMS

Fraudulent telemarketers have found yet another way to steal your money, this time from your checking account. Consumers across the country are complaining about unauthorized debits (withdrawals) from their checking accounts.

Automatic debiting of your checking account can be a legitimate payment method; many people pay mortgages or make car payments this way. But the system is being abused by fraudulent telemarketers. Therefore, if a caller asks for your checking account number or other information printed on your check, you should follow the same warning that applies to your credit card number -- do not give out checking account information over the phone unless you are familiar with the company and agree to pay for something. Remember, if you give your checking account number over the phone to a stranger for "verification" or "computer purposes," that person could use it to improperly take money from your checking account.

How The Scam Works
You either get a postcard or a telephone call saying you have won a free prize or can qualify for a major credit card, regardless of past credit problems. If you respond to the offer, the telemarketer often asks you right away, "Do you have a checking account?" If you say "yes," the telemarketer then goes on to explain the offer. Often it sounds too good to pass up.

Near the end of the sales pitch, the telemarketer may ask you to get one of your checks and to read off all of the numbers at the bottom. Some deceptive telemarketers may not tell you why this information is needed. Other deceptive telemarketers may tell you the account information will help ensure that you qualify for the offer. And, in some cases, the legitimate telemarketer will honestly explain that this information will allow them to debit your checking account.

Once a telemarketer has your checking account information, it is put on a "demand draft," which is processed much like a check. The draft has your name, account number, and states an amount. Unlike a check, however, the draft does not require your signature. When your bank receives the draft, it takes the amount on the draft from your checking account and pays the telemarketers' bank. You may not know that your bank has paid the draft until you receive your bank statement.

What You Can Do To Protect Yourself
It can be difficult to detect an automatic debit scam before you suffer financial losses. If you do not know who you are talking to, follow these suggestions to help you avoid becoming a victim:

· Don't give out your checking account number over the phone unless you know the company and understand why the information is necessary.

· If someone says they are taping your call, ask why. Don't be afraid to ask questions.

What To Do If You Are A Victim
If telemarketers cause money to be taken from your bank account without your knowledge or authorization, they have violated the law. If you receive a written confirmation notice that does not accurately represent your understanding of the sale, follow the refund procedures that should have been provided and request a refund of your money. If you do not receive a refund, it's against the law. If you believe you have been a victim of fraud, contact your bank immediately. Tell the bank that you did not okay the debit and that you want to prevent further debiting. You also should contact your state Attorney General. Depending on the timing and the circumstances, you may be able to get your money back.

CREDIT CARD PROTECTIONS

Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways. For example, someone may use your card number without your knowledge. It's not always possible to prevent credit or charge card fraud from happening. But there are a few steps you can take to make it more difficult for a crook to capture your card or card numbers and minimize the possibility.

Here are some tips to help protect yourself from credit and charge card fraud.

Do:

· Sign your cards as soon as they arrive.

· Carry your cards separately from your wallet, in a zippered compartment, a business card holder, or another small pouch.

· Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place.

· Keep an eye on your card during the transaction, and get it back as quickly as possible.

· Void incorrect receipts.

· Destroy carbons.

· Save receipts to compare with billing statements.

· Open bills promptly and reconcile accounts monthly, just as you would your checking account.

· Report any questionable charges promptly and in writing to the card issuer.

· Notify card companies in advance of a change in address.

Don't:

· Lend your card(s) to anyone.

· Leave cards or receipts lying around.

· Sign a blank receipt. When you sign a receipt, draw a line through any blank spaces above the total.

· Write your account number on a postcard or the outside of an envelope.

· Give out your account number over the phone unless you're making the call to a company you know is reputable. If you have questions about a company, check it out with your local consumer protection office or Better Business Bureau.

Reporting Losses and Fraud

If you lose your credit or charge cards or if you realize they've been lost or stolen, immediately call the issuer(s). Many companies have toll-free numbers and 24-hour service to deal with such emergencies. By law, once you report the loss or theft, you have no further responsibility for unauthorized charges. In any event, your maximum liability under federal law is $50 per card.

If you suspect fraud, you may be asked to sign a statement under oath that you did not make the purchase(s) in question.

The first step in avoiding scams or unwise consumer transactions is to plan your purchases carefully. There are some businesses that see military members as easy prey. These scams often involve sales of cameras and film processing packages, encyclopedias or other books, educational materials, jewelry, vitamins, magazines, dance lessons, time shares, health club memberships, and discount buying services. Discount buying services often sound appealing, but are rarely a wise investment. Many of these deals involve an obligation to purchase products in the future. Almost all of these deals require you to make monthly payments over a long period of time. The monthly payment will often include an inflated interest rate. You should also be cautious when ordering goods advertised as "free" or "unusually low priced" or "as a special trial offer." Before entering into these types of agreements, read the fine print. Let someone in your chain of command or a legal assistance attorney review the contract. Do not rely on what the sales person says!

A credit card holder may be liable up to $50.00 for the unauthorized use of the card, unless he or she notifies the card issuer of loss before the unauthorized use occurs. Before any liability can be incurred, however, the card issuer must have notified the cardholder of the potential liability and provided the cardholder with a description of a means by which the card issuer may be notified of any loss or theft of the card. Finally, unless the card itself provided some means of identifying the holder, such as a photograph or signature, no liability will be incurred for unauthorized use.

INTERNET FRAUD

The Internet has made life easier for everyone-including scam artists. Now scam artists can reach thousands of people with a mouse click. Scam artists often target military personnel and their families. The fraudulent offers they promote still sound great, but could wind up costing you a lot of money. If something sounds too good to be true, it probably is. Consider looking before leaping at some of the consumer offers you receive. You might contact your legal assistance office or Army Community Service or other installation information offices for the latest warnings. In addition, here is some information to help you be a smarter consumer and avoid scams.

Learn how to protect yourself with a new package from the Federal Consumer Information Center. Get the facts on the top ten online scams from Dot Cons, a publication from the Federal Trade Commission. Find out how these scams lure you in and hook you, and what you can to do to avoid falling into the trap. Use Internet Fraud: How to Avoid Internet Investment Scams from the U.S. Securities and Exchange Commission to learn where fraudulent investment opportunities are most likely to pop up, how you can get the facts on investment offers you receive, and where to turn if you run into trouble. Use its "Ten Questions to Ask before You Invest" to protect yourself when investing and its warning signs of fraud to avoid claims that sound suspicious.

If a web site features an offer that sounds too good to be true, it probably is. Be wary of extravagant claims-get all promises in print and review them carefully before making a payment or signing anything. Read the fine print and review any relevant links you are given.

If you receive an enticing investment opportunity, save a copy to your hard drive and print a hard copy. Make sure to note the Internet address and the date and time you received the offer. Anyone can set up a web site or advertise online. Don't believe everything you read-investigate the opportunity before investing your cash. Get written financial information such as a prospectus or annual report and check out the opportunity with a trusted financial advisor and the appropriate regulatory offices.

For more information on consumer scams, see the Federal Consumer Information Center's Scam Resources at http://www.pueblo.gsa.gov/scamsdesc.htm.