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How to Avoid the Latest Consumer Scams

Fraudsters are dreaming up clever schemes on everything from Obamacare to vacation rentals

By Caroline Mayer

P.T. Barnum famously said “there’s a sucker born every minute,” but these days there seems to be a rip-off created every 30 seconds.
That’s the sad conclusion I’ve reached after reading the latest report on the Top 10 consumer complaints just issued by the Consumer Federation of America and the North American Consumer Protection Investigators, a consortium of government consumer agencies.
As usual, complaints about autos (advertising and sales misrepresentations, faulty repairs, leasing and towing disputes) top the list, followed by home improvement and construction gripes. Credit and debt complaints ranked No. 3. No surprises there.
(MORE: Lowdown on Scams, Schemes and Swindles Targeting You)
But what caught my eye in the 2013 report was the long list of new problems that many consumer-protection officials are beginning to encounter.
I’ve already written about some of them, including nasty timeshare resale scams. Florida’s Pinellas County Department of Justice and Consumer Services noted a new twist on this scheme: Sales calls from individuals purporting to be associated with legitimate timeshare resale companies but who were actually former employees.
There were also four troubling consumer complaints on the Top 10 list that I haven’t written about. Here’s how they work and ways to avoid becoming a victim:
1. Advertising phony rental properties online As travelers increasingly turn to the Internet to book hotels or rent vacation homes, scammers are finding new ways to snare them.
The Kansas attorney general found Craigslist ads for vacation rental properties that didn’t belong to the people who placed the ads. The scammers pretended to be property owners serving on a mission abroad who needed to rent their homes quickly. After wiring money to secure the rental, the unsuspecting customers never heard back from the purported landlord. One Kansas resident ponied up for a Florida vacation home, but when he arrived there, the owners had no idea what he was talking about.
(MORE: Beware of 2 Travel Scams on Your Next Trip)
Moral: Tom Kelly, a real estate journalist, offers smart advice on booking a vacation rental in an article for Inman News: Beware of super-cheap rates because scammers love to lowball to lure customers, he says, and check out the owner on Facebook, Twitter and LinkedIn to confirm that the place where the owner lives is the same as what you were told.

If possible, Kelly suggests, speak to the owner over the phone before you commit — it’s easier to fool someone online. Most important: Pay by credit card, never by wire transfer.
2. Taking advantage of confusion surrounding the Affordable Care Act (Obamacare) Scammers often drum up schemes playing off the news. Law enforcement officials say con artists have seized on Obamacare as a prime opportunity.
For instance, the Los Angeles County Department of Consumer Affairs said an elderly resident was tricked into providing her Social Security number and medical information by a caller pretending to be from the federal government and asking to confirm her eligibility for the new health care program.
The Better Business Bureau reported that a caller, also claiming to be from the federal government, said the recipient had been selected as part of the initial group of Americans to receive Affordable Care Act insurance cards. But before a card could be mailed, the caller needed to collect some personal information, such as the person’s bank account and Social Security numbers.
In truth, not only isn’t there a need to confirm eligibility, there’s no card required for Obamacare.
(MORE: Your Guide to Obamacare Options)

Moral: Hang up on anyone pretending to be from the government calling about the new health care law. And don’t trust Caller ID with the name of a government agency; scammers use clever technology to show phony numbers or words that look official.
As the BBB notes in a blog post about Affordable Care Act scams, federal agencies normally communicate through the mail, so beware of unsolicited calls, text messages or emails. 
And remember, if a government agency does contact you, it should already have your basic personal information, including your Social Security number.
Never give an unfamiliar caller personal information, like your credit card number, bank account number, date of birth or Social security number. If you’re in doubt about the legitimacy of a caller, contact the group that he or she claims to represent.
3. Posting misleading and damaging personal information online Maryland's attorney general received three complaints about a website that posted individuals’ traffic convictions online, implying they were serious criminal matters and saying that it would remove the information for a $9.95 fee.
The consumers contacted the Maryland attorney general’s office, which mediated with the website (now defunct, it appears) and got the offending material removed at no charge.
Moral: Run a periodic Internet search on your name to see if there’s any misleading or inaccurate information that needs correcting. If you can’t figure out how to get the problem fixed, contact your local or state consumer protection agency for help.
4. Charging customers penalties for disputing bills or complaining For example, when an 8-year-old girl saw an optometrist in Fairfax County, Va., her father signed a lengthy agreement that included fine print (that the dad didn’t read) saying he’d owe a penalty if he complained to a third party about the bill.
After the visit, the parents wound up disputing the bill because they said it included a charge for an unauthorized service. Unaware of the agreement, the girl’s mother refused to pay for the service and contacted the county consumer agency and the BBB for help in resolving the issue. Both organizations tried to mediate, but the optometrist refused to cooperate and is now using a collection agency to seek $135 “in penalties” from the parents for complaining.
Fairfax County officials also say one fitness chain’s contract allowed the company to suspend or terminate membership if a customer makes “disparaging statements” about the business. Under this provision, the company is entitled to hold on to any unused portion of a member’s advance fees. 
In Massachusetts, one consumer discovered she could be penalized by an Internet store for canceling an online order less than 30 days after the purchase.
The woman had bought the item because the e-tailer had promised that orders would be “processed the next day.” When her item didn’t arrive quickly, she called to inquire and learned that although the paperwork gets processed within 24 hours, delivery could take up to 30 days and she’d be charged $50 for canceling before then. Worse, if she filed a dispute with her credit card issuer and lost the battle, the company would bill her another $100. Ultimately, the customer waited 30 days to cancel, so she wouldn’t incur any fees.
Moral: Read the terms and conditions of any contract or online offer carefully. If you’re about to use a health care provider or online company for the first time, do some online research first to see if there have been any complaints.
Even if you encounter penalty provisions, stand up for your right to question bills or unfair charges by asking your local consumer-protection agency for assistance. The government office may help you discover that restricting your right to complain is against the law — as it ought to be.

Caroline Mayer is a consumer reporter who spent 25 years working for The Washington Post, covering such issues as product safety, scams, and credit cards. Mayer has received several awards, including the Betty Furness Consumer Media Service Award. She has written for Consumer Reports, CBS MoneyWatch, Ladies Home Journal, Kaiser Health News and others. Follow her on Twitter @consumermayer Read More
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