Service Call Scam Warning

I am publishing this warning which came from the Federal Trade Commission because scams like this are an opening to ID theft and an endless list of difficulties. Falling for this scam can eventually get you sued by the debt collectors. It can also get you put onto a “sucker list,” which is a list of contact information that bad guys sell to others as “easy marks.”
And people sued by debt collectors seem to be targeted for this sort of scam. Stay alert and don’t give your information to wrong people.

by

Amy Hebert
Consumer Education Specialist, FTC

Tech support scams, which get people to pay for fake computer help or steal their personal information, are convincing. You might already know the signs of a tech support scam, but do your friends and family? Here’s what they need to know now:

  • Companies like Microsoft don’t call and ask for access to your computer. If you get a call like that, it’s a scam.
  • Real companies also won’t ask for your account passwords. Only scammers do.
  • Tech support scammers try to convince you they’re legitimate. They’ll pretend to know about a problem on your computer. They’ll ask you to open normal files that look alarming to make you think you need help.
  • If you do need computer help, go directly to a person, business, or website you know you can trust. General online searches are risky because they might pull up another scam.

If people you know were already scammed, here’s what to tell them:

  • If you paid with a credit or debit card, call your credit card company or bank immediately and tell them what happened.
  • If you paid with a gift card, contact the gift card company (iTunes, Amazon, etc.) ASAP to see if the funds are still on the card and can be frozen before it’s too late.
  • A tech support scammer who has access to your computer can install malware. Update your computer’s security software, scan your computer, and delete anything it identifies as a problem. Restart your computer to be sure the changes take effect. Going forward, download security updates as soon as they are available. Most operating systems have a setting to download and install security updates automatically. Use it. And install updates for your other software, including apps.
  • If the scammer got your password for a financial account, or a site like Amazon, change the password immediately. Contact the company directly to make sure nobody has broken into your account.

Report your experience to ftc.gov/complaint. You’re not alone, and reporting these scams helps law enforcement go after the people behind tech support scams.

Getting the State to do the Dirty Work

There is a disturbing trend in debt collection these days: getting the state to do the dirty work of intimidation and collection.

In some jurisdictions, notably Illinois, debt collectors are actually managing to get people who supposedly owe them money thrown into jail. This is obviously a dirty trick and happens primarily because the debt collectors are managing to set cases for trial where attendance in mandatory; whereas in most civil cases failure to show up for trial results in a default judgment, in these cases the judge issues a warrant for arrest.

The subject of this Scam Alert, however, is a little different. A scam involves trickery and deception, and that is what is happening in Missouri and elsewhere. In some places, Payday loan companies and other vulture companies are issuing short-term loans. What they do is require a post-dated check for the repayment.

Of course if you have a job – and keep it – and the post-dated check is made with that in mind, then when the money rolls in, you just pay off the debt.

Of course you do it at heart-breaking interest rates, but at least theoretically that is what you bargained for, and there’s no real confusion about what the deal is costing.

The problem comes in if something keeps you from getting that money you expected. In most loans, if you fail to make a payment you can be sued, and generally it is not a fun thing to be sued. If you have written a post-dated check, however, if you fail to make the payment (and cover the check), you are immediately subject to a civil penalty doubling the value of the check (in Missouri), and you may also be prosecuted to passing “bad checks.” Many lawmen are willingly allowing themselves to become the hitmen for these loan companies.

This is a “scam” because no one tells the people borrowing the money that failure to pay could result in an instant doubling of the loan or criminal prosecution, so payday loans, which charge such a high rate to account for the fact that people so often cannot make the payments, gets an extra level of security against default. And foists the risk of criminal enforcement onto people who don’t know what is happening.

It is also a perversion of the law.

Bad check laws were created to protect people who trusted the people writing them checks – writing a check is, legally, a sort of guarantee that the check-writer has the money to pay for the check in the bank at the moment the check is written.

Writing a check without the money in the bank is a type of fraud. But when a payday loan company accepts a post-dated check in exchange for a loan, they know the money is not there. There is no fraud when the check is written – and fraud requires that the intent to rip off the victim be present at the time the action which does rip them off (writing the check) is done. What’s happening here is that people who made a mistake about having money at a certain point in the future are being thrown into jail for that mistake. And the people on the other side of the transaction – the payday lenders – are perfectly aware that their customers have trouble with money – that’s who they target.

It is morally totally wrong for this to happen. But it is happening. So the lesson is, never pay for a loan – any loan under any circumstances – with a post-dated check. If the money isn’t in the bank, do not use a check.

Defend Yourself – No one Else Will

If you’re being sued, you’re going to have to defend yourself – there’s no magical solution, and you will lose if you ignore the suit. Please don’t think that just because you’ve never heard of this debt or don’t think you owe it for any reason, you will win. Once you’ve been served with a lawsuit, you will lose if you don’t take steps to win it. Nothing is automatic.

And the lawyer on the other side just wants to win as quickly as possible. He or she has very little interest in “doing the right thing.” It’s up to you to protect yourself.

If you are being sued for debt, you must defend yourself. What that means, very simply, is actually proving you don’t owe the money to anyone – or, more likely, that the plaintiff cannot prove you owe it to it. There are simple ways to do this (not necessarily easy), and our job is to help you use those methods.

Anything that promises or appears to be an easy or automatic way to win is probably a mistake or a scam.

No Free Lunches

There are other products out there for people being sued for debt, and some of them will encourage you to invoke magic words like “fractional reserve banking” or other concepts which, though legitimate in their place, will not drive the debt collectors out of your life.

Remember that there are no free lunches for regular people in this world. The judges are not concerned about the U.S. Money supply or system, and they are not concerned about any abstract rights of yours at all. You’ll be lucky if you have a judge who understands what hearsay is and doesn’t want to allow the debt collector to use it. Trust me on this. If this case reaches litigation, you must be prepared to understand the way debt law actually works, tell the judge how it works, and hold the judge to his or her job of making sure the trial is fair.

Luckily you can do all that. If you spend your time invoking the ghost of Andrew Jackson or fighting the monster of Jeckyl Island, claiming that the government sold you somewhere as part of the Social Security program, or other, similar ideas, you will lose the case. Debt collectors have a tough time proving what they must prove to be able to win. Don’t let your desire for a shortcut to victory make you lose.

Do not get fancy when defending

As I have pointed out elsewhere, there are other products out there that will tempt you in various ways. One way is to find a shortcut. Another, equally dangerous thing, is to try to hide behind legalese. You may think you’ve found an excellent phrase, like “I know nothing about what you’re saying and therefore deny…”, but you could be burying yourself under an admission. (In this case, that you “know nothing about…” – the denial is a conclusion with no real impact, but admitting you know nothing? – that’s a fact you’ve just admitted.)

Don’t Try to Hide behind Legalese against Debt Collectors

I have recently had a customer tell me she bought a package that told her to answer requests for admissions with “after reasonable inquiry, defendant cannot either admit or deny… [each request].”

It sounds so much more reasonable, doesn’t it, to say “defendant has no knowledge to admit or deny…” or “after reasonable inquiry defendant cannot either admit or deny…” requests for admissions or allegations in petitions. The problem is, if you cannot admit or deny, and the debt collector alleges, there is nothing in opposition to the debt collector’s allegations. The debt collector just says, “defendant admits that, after reasonable investigation, she cannot deny…”

The standard for judgment on the pleadings is no genuine issue of material fact.

Just deny what you can. And you can deny anything you don’t have to admit in almost every jurisdiction. Don’t get fancy. Hiding behind fancy sounding legalese is, in the final analysis, just hiding. The judge knows it, and the lawyers know it. You know it too – or you wouldn’t try it.

You have very strong arguments to make in terms of law and justice. The debt collector has an extremely tough burden to carry. Your every effort should be to make that burden crystal clear – and to prove that the debt collector cannot do it. Legalese of any sort will simply distract from this sharp, clear mission. A clear, rigorous reading of the facts and law is your friend. Vagueness is your enemy. Products which encourage you to hide behind legalese invite you to disaster.

Scam Report – Free Credit Report Dot Com

Like a lot of scams, this one may not be illegal, but I would argue that FreeCreditReport.com, which advertises “free” credit reporting, is deceptively marketed and designed to take advantage of people who are worried about their credit scores.

The Product: Freecreditreport.com

First, what is the product sold by the company? It is monitoring of your credit report created by Experion, including alerts warning you of new information which might harm your score. Since Experion is just one of the three main credit reporting agencies, and since these agencies may report different information on your report, the product is of very limited utility.

Second, there’s nothing free about this “free” credit reporting “service.” You can sign up for a trial offer of seven days. It costs a buck and gives you pretty much what you could get for free if you followed links provided by the government. Credit agencies are required to give you a free credit report once a year. At the end of the seven-day “trial” period (but the service may be inactive for the first two of those days), if you forget to cancel the service, they’ll be billing you for $16.95 per month until you do cancel.

Why It’s a Scam

I believe that setting up and heavily advertising something as free when it isn’t free is deceptive marketing. A trial period of only seven days – two days of which don’t even work – is clearly designed to trap and rip off people who aren’t on their toes. And it isn’t even free.

Maybe most important of all is the whole service anyway. To suggest that constantly monitoring one credit bureau is enough is false because the credit bureaus can have different information and you would need to check all three. Ironically, it is also true that getting your credit report every month is also much more than you need – you won’t need your report nearly that often if you are in process of repairing your report (as i suggest how to do in this month’s Life after Litigation article). The process moves much more slowly than that.So your actual need of the product is very limited. The service costs far more than it is worth in my opinion.

And finally, the who marketing of the service is designed to create impulse buys. The ads raise the prospect of identity theft or sudden action by credit bureaus and offer FreeCreditReport.com as some sort of solution. It would not in fact help much with either of these problems. Simply knowing that you’ve suffered identity theft or negative credit reports is only the small tip of the iceberg in protecting your rights.