Foreclosure Rescue Scams

The Iowa Attorney General has issued a “Consumer Advisory” warning about scam-artists trying to cheat Iowans who are caught up in the nationwide foreclosure crisis.  Mortgage foreclosure “rescue” schemes ask homeowners to pay hundreds of dollars up-front for so-called assistance or “rescue” from foreclosure – but they just take the homeowner’s money and do little or nothing to help.  The scam puts the homeowners in a deeper financial hole, does nothing to save the home, and diverts homeowners from obtaining real help.

The Attorney General’s Office has received scores of complaints from families who were conned into paying $1000 to $1500 or more to companies that promised to help them obtain a loan modification and avoid foreclosure, but then the con-artists did little or nothing to help.

Warning signs

Bank employees and customers should be alert to these common warning signs of a foreclosure rescue scam:

• Beware of Internet ads promising loan modifications.
• Beware if someone contacts you, claims they can help, and asks you to pay for their help.  They might contact you by phone, mail, or e-mail, or even might come to your door, because information about people facing foreclosure is included in public court records.
• Beware if someone claims to have a “special relationship” with your lender or “servicer” (they don’t!)
• Beware if they tell you not to talk to your lender or servicer directly (that’s just what you should be doing.)
• Beware if they ask for payment “up-front” (it’s illegal in Iowa to charge any fee until all services under the contract are provided.)
• No legitimate company will ask you to pay hundreds of dollars in advance to help save your home.

False Representations of FDIC-Owned Real Estate for Sale

The Federal Deposit Insurance Corporation (FDIC) warns the general public and interested investors of false claims from various entities (individuals and companies) claiming to represent the FDIC in the sales of FDIC-owned properties.

These individuals and companies present a common theme. First, they claim to have “inside access” and, secondly, they attempt to charge fees or collect money up front from potential buyers of FDIC Owned Real Estate (ORE) properties with promises of steep discounts off appraised values. Information on ORE assets in the FDIC’s inventory is free to the general public. Any person approached by an individual or business entity with an offer, requiring upfront fees and/or the disclosure of personal bank information, should exercise extreme caution.

The FDIC has contracted with and authorized a number of asset management companies to market, sell, and maintain FDIC ORE properties. In representing the FDIC, they are not brokers or brokerage services firms. Rather, they are asset managers who contract with licensed real estate brokers and other vendors in the disposition FDIC-owned properties.

FDIC-owned properties currently being marketed for sale are available for FREE public viewing and access on the FDIC Web site at http://www2.fdic.gov/drrore/.  The listing for each asset includes the name(s) of the assigned asset management company, local brokers, and contact information.

How to Combat FRAUD

We live in a world which revolves around technology.  We have access to information at the touch of a button on a computer screen or on a small hand held electronic device.  While this technology opens up a whole new world of convenience, it also opens up new ways for fraud to be committed.

So, how do you combat FRAUD?  By NOT giving out your personal information, account details, or card information over the telephone, cellular phone, or through e-mail.  The Bank will NEVER call you or email you and ask you for that type of information.  If you are contacted by phone or email and asked to provide this information DO NOT DO IT.  We already have this information so why would we contact you for it?  If you receive an email that appears to be from the bank and you are asked to click on a link in order to take you to a website where you can  update your account information DO NOT DO IT!  The bank simply does not do this. 

Be cautious of unsolicited telephone calls, emails, or text messages that allege to come from a trusted source. If you ever have doubts about whether or not a request is valid, call the bank yourself or go to the bank web site on your own (not by clicking on a link).  A legitimate business will never initiate a request for sensitive information through a recorded call, text message, or e-mail.  If you did not initiate the contact (by either calling the bank or business yourself or going to their website on your own) do NOT give out any information.

AVOID RAPID TAX-REFUND LOANS
A very costly way to gain just a few days on tax refunds

It's tax season, and tax preparers may invite you to get a "Refund Anticipation Loan" or "RAL" - a loan borrowed against the expected tax refund.  Such a loan may come a few days faster than a refund--but you pay extremely high fees to borrow your own money.

Remember, a "Refund Anticipation Loan" is a very shot-term loan, secured by your expected tax refund, arranged by a tax preparer through a bank.  You pay finance charges and, most often, you pay tax-preparation charges as well.  (The loan is repaid when the IRS sends your full refund to the lending bank.)
These types of loans are expensive.  The loans cost $100 on average depending on the size of the refund.  And then they add an extra $146 charge for tax preparation, and another $100 for assorted other fees. That means the interest rate on "RAL" loans could range from about 40% to over 700% APR (annual percentage rate of interest).  That's a bad bargain for an "advance" of just 7 to 10 days.

Consumers Need to Ask Tough Questions
How much will I pay for the loan?  An average refund is about $2,150, with a typical finance charge of $100 for a refund anticipation loan--a 178% APR.  Fees for tax preparation, electronic filing, or check-cashing can double or triple that cost.
What does the fee buy me?  An RAL loan gets your refund to you in 1-4 days, compared to just 7-10 days if by ordinary electronic refund deposit to your bank.

Beware also of "pay stub RALs."  Pay stub RALs are offered earlier than traditional RALs before a tax payer receives a W-2. The loans are based on the taxpayer's latest pay stub, which indicates his or her estimated tax return.  However, the estimated amount may be incorrect.  The taxpayer will have to pay the full amount estimated on the pay stub, whether or not the refund is large enough to cover the cost of the loan and fees.  Pay stub RALs charge high fees like other RALs.

IRS data shows that nearly one in three low-income workers or Earned Income Tax Credit recipients (EITC) took out an RAL.  Avoid high costs - get free help from organizations that assist low-income filers.  In February, a list of "Volunteer Income Tax Assistance" sites and a list of "Tax Counseling for the Elderly" sites in Iowa will be available at Iowa Attorney General.  For more information, contact the Attorney General's Consumer Protection Division.
Call 515-281-5926, Orr 888-777-4590 toll-free

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Phishing

FRAUD ALERT:  Senior Citizens

Why should Senior Citizens be concerned?

It has been the experience of the FBI that the elderly are targeted for fraud for several reasons:

1) Older American citizens are most likely to have a "nest egg," own their home and/or have excellent credit all of which the con-man will try to tap into. The fraudster will focus his/her efforts on the segment of the population most likely to be in a financial position to buy something.

2) Individuals who grew up in the 1930s, 1940s, and 1950s were generally raised to be polite and trusting. Two very important and positive personality traits, except when it comes to dealing with a con-man. The con-man will exploit these traits knowing that it is difficult or impossible for these individuals to say "no" or just hang up the phone.

3) Older Americans are less likely to report a fraud because they don't know who to report it to, are too ashamed at having been scammed, or do not know they have been scammed. In some cases, an elderly victim may not report the crime because he or she is concerned that relatives may come to the conclusion that the victim no longer has the mental capacity to take care of his or her own financial affairs.

4) When an elderly victim does report the crime, they often make poor witnesses. The con-man knows the effects of age on memory and he/she is counting on the fact that the elderly victim will not be able to supply enough detailed information to investigators such as: How many times did the fraudster call? What time of day did he/she call? Did he provide a call back number or address? Was it always the same person? Did you meet in person? What did the fraudster look like? Did he/she have any recognizable accent? Where did you send the money? What did you receive if anything and how was it delivered? What promises were made and when? Did you keep any notes of your conversations?
The victims' realization that they have been victimized may take weeks or, more likely, months after contact with the con-man. This extended time frame will test the memory of almost anyone.

5) Lastly, when it comes to products that promise increased cognitive function, virility, physical conditioning, anti-cancer properties and so on, older Americans make up the segment of the population most concerned about these issues. In a country where new cures and vaccinations for old diseases have given every American hope for a long and fruitful life, it is not so unbelievable that the products offered by these con-men can do what they say they can do.


Some links to more information on Phishing scams - please note that by clicking on a link below you will be leaving the Community State Bank website. We assume no responsibility for content of these sites and simply offer them as a way for you to gather more information on this important topic.

Phishing Alerts

Anti-Phishing Organization/

Privacy Rights on Phishing

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ID Theft

Protect Your Financial Identity
from the ABA Education Foundation

Identity theft is one of the fastest-growing types of financial fraud. Without stealing your wallet, a crook can steal your financial identity with as little information as your social security number. It is also called "account-takeover fraud" or "true-name fraud," and it involves crooks' assuming your identity by applying for credit, running up huge bills and stiffing creditors - all in your name.

Take these steps to protect yourself:
1. Order copies of your credit report once a year to ensure they are accurate. You can call each of the three national credit-reporting agencies because each may contain different aspects of your credit history, or you can contact the Annual Credit Report Service for one free credit report each year.
If you have been denied credit in the past 60 days, the credit-reporting agency that sent the report to your prospective creditor must provide you with a copy of the report for free. However, it will not be sent automatically so you have to request a copy from the credit-reporting agency.

AnnualCreditReport.com    1-877-322-8228 or annualcreditreport.com
Equifax    1-800-685-1111 or equifax.com
Experian    1-800-311-4769 or experian.com
TransUnion    1-800-916-8800 or transunion.com

2. Keep an eye on your accounts throughout the year by reading your monthly/periodic statements thoroughly. That's an easy way for you to be sure that all of the activity in your accounts was initiated by you.

3. Tear up or shred pre-approved credit offers, receipts and other personal information that link your name to account numbers. Don't leave your ATM or credit card receipt in public trash cans. Crooks (a.k.a dumpster divers) are known to go through trash to get account numbers and other items that will give them just enough information to get credit in your name.

4. If your credit card or other bills are more than two weeks late, you should do three things: First, contact the Postal Service to see if someone has forwarded your mail to another address. Second, contact your bank to ask if the statement or card has been mailed. Third, contact the businesses that send you bills.

5. When you pay bills, don't put them in your mailbox with the red flag up. That's a flashing neon light telling crooks to grab your information. Use a locked mailbox or the post office.

6. Protect your account information. Don't write your personal identification number (PIN) on your ATM or debit card. Don't write your social security number or credit card account number on a check. Cover your hand when you are entering your PIN number at an ATM.

7. Don't carry your Social Security card, passport or birth certificate unless you need it that day. Take all but one or two credit cards out of your wallet, and keep a list at home of your account information and customer service telephone numbers. That way, if your wallet is lost or stolen, you'll only have to notify a few of your creditors and the information will be handy.

8. Never provide personal or credit card information over the phone, unless you initiated the call. Crooks are known to call with news that you've won a prize and all they need is your credit card number for verification. Don't fall for it. Remember the old saying, "if it sounds too good to be true, it probably is."

More Tips to Protect Your Financial Identity

Take action if you are a victim:

1. Financial fraud is a crime; call your local police department.

2. Contact the fraud units of all three credit bureaus. Ask them to "flag" your account, which tells creditors that you are a victim of identity fraud. Also, add a victim's statement to each of your credit bureau reports that asks creditors to contact you in person to verify all applications made in your name. Call the fraud units of the credit bureaus at:

?    TransUnion Fraud Assistance Department 800-680-7289
?    Equifax Fraud Assistance Department 800-525-6285
?    Experian Fraud Assistance Department 888-397-3742

3. Call the Federal Trade Commission's ID Theft hot line at 1 (877) ID THEFT.  The hot line is staffed by counselors trained to help ID theft victims.  Check out the FTC Web Site, which includes an Identity Theft Affidavit to help simplify the process of clearing up accounts opened by an identity thief.

4. Notify your banks. They can help you obtain new account numbers for all of your checking, savings and other accounts. Be sure to pick a new PIN number for your ATM and debit cards. Close all of your credit card accounts and open with new account numbers.

5. Notify the Postal Inspector if you suspect mail theft - a felony.

6. Depending on your situation, you may want to contact the Social Security Administration to get a new Social Security number. Their telephone number is 800-772-1213. You also may want to contact your telephone, long distance, water, gas and electrical companies to alert them that someone may try to open an account in your name.

7. Finally, make sure to maintain a log of all the contacts you make with authorities regarding the matter. Write down each person's name, title, and phone number in case you need to re-contact them or refer to them in future correspondence.


Phone numbers for the 3 major credit unions:
Equifax: 1-800-525-6285
Experian (formerly TRW): 1-888-397-3742
Trans Union: 1-800-680-7289

Social Security Administration (fraud line): 1-800-269-0271

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Scam Alerts

DON'T BE TAKEN IN BY PHONY CHARITIES
For all of our human foibles, Americans are a very generous people. Whenever we see or hear of someone in need, it is our instinct to help.  There are no better examples of this American spirit than the recent hurricanes that have hit our shores.  But before you write that check or charge your credit card for that donation, a little homework and investigation can ensure your generosity benefits a legitimate cause.

It would be advisable not to donate to a charitable cause over the phone.  Request that the caller mail you literature about the charity so that you can read and investigate the organization before giving money.  Many times these calls come from telemarketers who keep most of the donation while sending only pennies to the actual charity.

Give only to those charities you know to be reputable.  If you receive a charitable solicitation by mail, make sure it includes specific details on exactly how the money will be used and what percent of donations actually go to the charity.  You can also go to www.charitywatch.org, which rates more than 500 charities, to help you make an informed giving decision.

Checklist for giving:
•    Reputable charities don't send unsolicited e-mails via SPAM.
•    A reputable charity has a street address and a phone number.
•    Reputable charities don't use Pay Pal and always provide an e-mail address that is part of their website.  For example: donations@name of charity.com.
•    Beware of scam artists who don't want your contribution, but want your personal and confidential information such as your name, address and credit card number.
•    If the telemarketer pressures you to give immediately, be suspicious.  A legitimate charity will give you all the information you request and all the time you need to make sure it is legitimate.
•    Don't give cash.  A legitimate charity will take a check.

Some charities hire professional fund raisers rather than use their own staff or volunteers.  These people are in
business to make money and are entitled to keep a portion of the proceeds they collect.  If you are approached by a professional fund raiser, you may want to ask what percentage of the donation they will keep.  If you're uncomfortable with that amount, you may wish to give directly to the charity and bypass the professional fund raiser.

Know the difference between “tax exempt” and “tax deductible”.  “Tax exempt” means the organization doesn't have to pay taxes.  “Tax deductible” means you can deduct your contribution on your federal income tax.  If a tax deduction is important to you, ask for a receipt so you can file it with your year-end tax return.

The Federal Trade Commission has announced a new rule governing telemarketing calls that feature prerecorded messages.  Beginning September 1, 2009, telemarketing companies must obtain the call recipient's written permission before contacting them with a prerecorded message.  In the more immediate future, effective December 1, 2008, prerecorded telemarketing calls must have an opt-out mechanism so that a recipient can elect not to receive these unsolicited calls in the future.

With these new regulations, charitable organizations can continue contacting their members or previous donors, but will need to offer an opt-out mechanism once the new rule goes into effect.

If you believe an organization may not be operating for charitable purposes or making misleading solicitations, contact your state Attorney General, local consumer protection office or Federal Trade Commission.

This information is provided with the understanding that the association is not engaged in rendering specific legal, accounting, or other professional services.  If specific expert assistance is required, the services of a competent, professional person should be sought.

Provided as a public service by the member banks of the Iowa Independent Bankers.