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Posts Tagged ‘fraud’

Federal authorities have just issued a report to Congress about a rise in scholarship scams and fraudulent academic grants – just in time for the back to school season.

The September 2011 report was a multi-agency effort, with the Federal Trade Commission, the Department of Justice and the U.S. Department of Education all teaming up to weigh in on the issue of scholarship and financial aid fraud.

The study found that the majority of consumer complaints about financial aid fraud have been changing in recent years.

A decade ago, in the early 2000s, most complaints involved scam companies offering bogus search services or businesses that forced students and their families to pay an upfront fee for scholarship and grant opportunities.

By the end of the decade, the biggest problems centered on firms offering questionable financial aid consulting and planning services that would allegedly maximize student eligibility.

In the 2011 report, however, authorities said complaints about scholarship scams and bogus grant opportunities appear to be on the rise again. The report covers developments in the 2010 calendar year.

Among the findings:

• Overall complaints specifically about scholarship scams are down, although the total number of financial aid-related complaints rose in 2010 to 718 complaints from 315 such complaints in 2009

• The federally reported numbers about scholarship fraud may be under-reported. The study noted:
  

“The number of complaints contained in the Consumer Sentinel database does not provide a complete picture of the extent of consumer injury from any particular type of fraud (because):

(1) some consumers may complain directly to the company or to law enforcement authorities that do not forward complaints to the Consumer Sentinel database; and

(2) some financial aid scams on the Internet are relatively inexpensive and consumers often do not complain when the financial injury is low”

• The scholarship and financial aid complaints lodged by consumers involved many different companies and did not indicate a pattern or practice of fraud by any one company

For more information about avoiding scholarship scams, check out the Department of Education’s Office of Inspector General, which hosts a fraud awareness website at www.ed.gov/misused.

The Department of Education and the FTC have also created a 2011–12 Counselors and Mentors Handbook, which includes a fact sheet based on the FTC’s consumer publication, “Don’t get scammed on your way to college!,” in addition to other information sources on sidestepping financial aid scams.

Finally, the Department of Education’s www.studentaid.ed.gov website and the FTC’s microsite, www.ftc.gov/scholarshipscams, are cross-linked to give consumers the latest, up-to-date information on scholarship scams.

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The Secret Service is investigating a surge in credit card theft. The crime spree appears to have started in Wythe County and is spreading up and down the East Coast according to a report from WDBJ Channel 7 in Virginia.

Dozen’s of people have reported fraudulent charges on their bank statements over the past week with reports coming in from businesses between Atlanta and New Jersey.

Authorities say a business that does contract work processing credit card transactions, is likely the culprit.

Investigators recommend that you examine your bank statements carefully and report all suspicious activity to your bank and police.

Tip: Most banks and credit card issuers allow you to place an alert which will notify you via email or text message if and when your credit or debit card is used. Many banks also offer daily balance alerts as well. Use these available features to carefully monitor all activity on your credit cards.

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The Securities and Exchange Commission went on the offensive in a big way Monday – cracking down on several shady investment dealers and warning the public about numerous financial scams nationwide.

In a series of announcements, the SEC:

-  charged a Chicago area family with insider trading in a million-dollar scheme
http://www.sec.gov/news/press/2010/2010-178.htm

- revealed that it won a fraud trial in which two Miami companies and and three owners were accused of stealing investor money via inflated mutual fund commissions and fees

http://www.sec.gov/news/press/2010/2010-180.htm

- charged an internationally syndicated radio show host and two others in California with misappropriating $2.5 million in money raised through the fraudulent sale of real estate investment funds
http://www.sec.gov/news/press/2010/2010-186.htm

- accused a Chicago area company and it’s owner with conducting a Ponzi scheme based on a supposed successful real estate business
http://www.sec.gov/news/press/2010/2010-185.htm

- halted a web-based scam that defrauded investors who are deaf
http://www.sec.gov/news/press/2010/2010-184.htm

- charged penny stock promoted with receiving a series of illegal kickbacks to manipulate stock prices
http://www.sec.gov/news/press/2010/2010-187.htm

- charged two Florida-based hedge fund managers and their firms with illegally funneling more than $1 billion of investor funds into a Ponzi scheme operated by Minnesota businessman Thomas Petters.
http://www.sec.gov/news/press/2010/2010-195.htm

- warned individuals and small business about potential investment frauds targeting those receiving lump sum payouts from BP due to the Gulf oil spill
http://www.sec.gov/news/press/2010/2010-193.htm

Taken together, all these actions show that the SEC continues to turn up the heat against financial swindlers who are trying to rob people of their hard-earned money.

Kudos to the SEC … and keep at it!

Related articles

• UPDATE 1-U.S. SEC charges 2 more in Petters Ponzi scheme (reuters.com)
• Richard Dalton Ponzi Scheme Allegations: SEC Freezes Account Of Golden-Resident (huffingtonpost.com)

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Q:  What should I do if someone filed a tax return in my name and has stolen my credit identity?

A: If the person that  is your spouse, you need to file a request for what the IRS calls “innocent spouse relief”. Get IRS form 8857 to do this. If not, you should still notify the IRS and Federal authorities that you have been the victim of fraud and identity theft. Lock down your credit reports by getting a credit freeze and putting a fraud alert on your credit files with Equifax, Experian and TransUnion.

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