Preventing Fraud and Identity Theft

Use these tips to prevent fraud and identity theft, and protect your assets and property.

Telemarketing Fraud
Internet Fraud
Check Scams
Identity Theft
Wi-Fi Hacking
Bankruptcy Foreclosure Rescue
Property Tax Relief
High-Pressure Sales of Financial Products at Free-Meal Seminars
Predatory Insurance Sales Practices
Unscrupulous Contractor Scams
Credit Repair
Prize Notification by Mail
Protecting Your Assets

Additional information on preventing identity theft and other frauds and scams is available at no cost from the California Department of Consumer Affairs. A complete list of its publications is online at www.dca.ca.gov/publications/index. Publications can be viewed online or ordered by calling (866) 320-8652.

Telemarketing Fraud

Callers claiming to represent everyone from police officers to the disabled take advantage of the public’s sympathy and generosity to the tune of billions of dollars each year. They also offer chances to earn enormous profits from no-risk, high-yield business and investment opportunities, miracle cures for everything from baldness to cancer, vacation homes, sweepstakes prizes, etc. Be suspicious of all solicitors, especially if the caller:

Says you have won a prize but asks you to send money first or provide bank account information..
Says you have to act right away. Remember, if it’s a good deal today it will still be a good deal tomorrow. Don’t let anyone rush you into signing anything.
Fails to identify the sponsor, uses a variation of an official or nationally-recognized name, e.g., Salvation League instead of Salvation Army.
Offers to have someone pick up a cash payment from your home.
Says he or she is a law enforcement officer who will help you for a fee.
Requires you to attend a sales meeting.
Directs you to dial a pay-per-call 900 number.
Delays the delivery or a product or prize, etc.
Says he or she is calling from the Security and Fraud Department of your credit card company and asks you for the 3-digit security number on the back of your credit card to verify your possession of the card to aid it in a fraud investigation.
Says that Medicare now requires a National ID Card and offers to provide one for a fee.
Says he or she is a U.S. Food and Drug Administration (FDA) agent or official and that you must pay a fine because you have bought or attempted to buy discounted prescription drugs from a foreign pharmacy. Report such calls to the FDA Office of Criminal Investigations at (800) 521-5783.

The following tips will help you resist these criminal appeals.

Never give your credit card, checking account, Social Security or Medicare number, or any personal information to an unknown caller. Just say “no” and hang up on anyone who asks for personal information. Don’t ever assume a friendly voice belongs to a friend.
Ask a charity to send written information about its finances and programs before making any commitments.
Call the Better Business Bureau of San Diego County at (858) 496-2131 to check on any unsolicited offers. Or visit its website at www.sandiego.bbb.org for general consumer information and tips on avoiding various types of fraud.
For additional information contact the Federal Trade Commission Consumer Response Center at (877) 382-4357 and www.ftc.gov, Federal Communications Commission Consumer Center at (888) 225-5322 www.oispp.ca.gov/consumer_privacy/identitytheft.asp, and the California Department of Consumer Affairs Consumer Information Center at (800) 952-5210 and www.dca.ca.gov/consumer/cic .
Call the Health Insurance Counseling and Advocacy Program’s Senior Medicare Patrol (HICAP/SMP) at (800) 434-0222 to check on any solicitations regarding Medicare.

And be sure to list your home or mobile phone number free on the National Do Not Call Registry to reduce pre-approved credit offers and telemarketing calls. Call (888) 567-8688 or register online at www.donotcall.gov. Telemarketers check the registry every 31 days so it may take that long before your number is removed from their call lists. This should stop calls from all but nonprofit groups, charities, political organizations, survey companies, and companies you have dealt with recently or signed a contract with that includes permission to call you. If telemarketers ignore the fact that your number is on the registry you can report them at the above number or website and sue them for violating your rights. For this you’ll need to keep a record of their names and the dates of the calls.

In a relatively new scam criminals use Voice Over Internet Protocol (VOIP) technology to make telephone calls from anywhere in the world pretending to be a legitimate business, often using a fraudulent called ID matching the identity of the misrepresented company. This scam called “vishing” or “voice phishing,” directs recipients to call an illegitimate telephone number where they are tricked into giving up personal information. They might receive an urgent recorded message telling them that their credit card number has been compromised and directing them to call the following telephone number immediately and punch in their 16-digit account number to verify their identity. The best defense against vishing is to treat any unsolicited telephone message with suspicion and only give your personal information out when you have initiated the call and are sure the other party is legitimate.

Internet Fraud

In 2007 the Internet Crime Complaint Center (IC3), which acts in partnership with the National White Collar Crime Center and the FBI, received more than 206,000 complaints on its website and referred about 90,000 to law enforcement agencies for further consideration. The total loss from all of these cases was about $239 million. If you become a victim of Internet fraud or receive any suspicious e-mails you should file a complaint with the IC3 at www.ic3.gov. Its website also includes tips to assist you avoiding a variety of Internet frauds. Some of these are presented below.

Delete any suspicious e-mail without replying, especially the following:

Business opportunities to make money with little effort or cash outlay
Offers to sell lists of e-mail addresses or software
Chain letters involving money
Work-at-home schemes
Health and diet claims of scientific breakthroughs, miraculous cures, etc.
Get-rich-quick schemes
Free goods offered to fee-paying group members
Investments promising high rates of return with no risk
Kits to unscramble cable TV signals
Guaranteed loans or credit on easy terms
Credit repair schemes
Vacation prize promotions

Do not use a debit card when shopping online, especially on an unfamiliar website. When you use a credit card you have better fraud protection and you can dispute billing mistakes and unauthorized charges before you pay. With a debit card your account can be emptied quickly without your knowledge. This can result in overdrafts, fees, and an inability to pay your bills. Even if your bank offers a fraud guarantee it is not obligated to restore your funds for at least two weeks while it investigates. And the $50 maximum liability under Federal law only applies if you notify your bank within two business days of the discovery of the fraud. For additional information on this and other privacy issues visit the Privacy Rights Clearinghouse’s website at www.privacyrights.org.

In an e-mail scam known as “phishing” identity thieves fish for personal information by sending realistic-looking e-mail that asks recipients to go to a bogus website and provide personal information such as credit card and Personal Identification Numbers (PINs). Legitimate banks and financial institutions don’t send e-mails asking you to verify your account information. They already have it.

Each year during tax preparation time there is a surge in the number of frauds by criminals posing as IRS officials to obtain personal information for identity theft. The IRS never sends out unsolicited e-mails or asks for detailed personal and financial information. Any such e-mail is a fraud. So are telephone calls from someone stating they are from the IRS. Go to the IRS website at www.irs.gov for information on the latest scams and instructions on how to protect yourself from suspicious e-mails or phishing schemes. The IRS also recommends forwarding the suspicious e-mail to it at phishing@irs.gov.

Fraudulent e-mails have also been sent out by criminals posing as FBI agents and officials. They give the appearance of legitimacy by using the FBI seal, letterhead, and pictures of the FBI Director. They may also claim to come from the FBI’s domestic or overseas offices. Like the IRS, the FBI does not send out e-mails soliciting personal or financial information. For more information on this kind of fraud go to the FBI website at www.fbi.gov and click on New E-Scams and Warnings under Be Crime Smart.

Use the following tips to counter phishing:

Do not open any e-mail from an unknown sender.
Do not open any unexpected e-mail attachments.
Do not click on website addresses in e-mails you get even if they look real. Retype them into your browser.
Do not click on links within e-mail messages purporting to come from your bank.
Do not double click on an Internet pop-up offering a link or provide personal information in response to an e-mail or Internet pop-up offer.
Use the latest versions of Internet browsers, e.g., Microsoft Internet Explorer 7, which is designed to identify phishing attacks.
Make sure the website you are entering sensitive information in is secure. The address should begin with https:// rather than http://.
Keep your computer up to date with the latest firewalls, and anti-virus and anti-spyware software. The latter counters programs that secretly record what you type and send the information to the thieves. They are often installed when you visit websites from links in e-mail. Visit www.OnGuardOnline.gov for more information.
Contact your e-mail provider. Most keep track of scams. Send your provider the suspicious message header and complete text.

In another scam known as “whaling” fake e-mails have been sent to high-ranking executives to trick them into clicking on a link that takes them to a website that downloads software that secretly records keystrokes and sends data to a remote computer over the Internet. This lets the criminal capture passwords and other personal or corporate information, and gain control of the executive’s computer. In one case fake subpoenas have been sent to executives commanding them to appear before a grand jury in a civil case. The link that offers a copy of the entire subpoena downloads the malicious software.

Information on various Internet frauds is available at no cost to the public on Websense’s website at www.websense.com. Click on Security Labs and then on Most recent Alerts to see warnings of malicious Internet events by date. For example, on December 2, 2008 there was a warning on malicious holiday coupons and promotions purportedly from McDonald’s and Coca-Cola. Opening the attachments would infect your computer with a virus. You can also sign up to receive Websense security alerts regarding phishing, malicious websites, etc. by e-mail by clicking in the Quick Links box on the Security Labs page.

Check Scams

Someone sends or gives you a check and asks you to deposit it in your bank and then wire back a portion of the amount, leaving you with a net profit. This can happen in many ways and will sound like a good deal. But the check will be counterfeit. It will be returned to your bank and the full amount deducted from your account. You can avoid this problem by not cashing the check in the first place, but if you do you should wait until it clears before withdrawing any of it.

In January 2007 The Office of the Comptroller of the Currency (OCC) sent out bulletin OCC 2007-2 to all national banks warning them of an increasing number of complaints relating to fraudulent cashier’s checks and advising both depositary and paying banks of actions to take to address risks to them. These fraudulent checks have often been received by bank customers who sell goods or services over the Internet. And in some cases they are asked to wire other funds to third parties. In all these case the customer believes the cashier’s check to be valid and deposits it in his or her account. When the bank makes the funds “available” the customer sends the goods or funds. Later the check is returned unpaid because it is discovered to be fraudulent. To avoid losses from this check fraud bank customers should wait until the check clears before sending goods or funds.

Identity Theft

Every person who willfully obtains personal identifying information, e.g., name, address, date of birth, Social Security number, mother’s maiden name, etc. as defined in Cal. Penal Code Sec. 530.5(b), and uses that information for any unlawful purpose is guilty of a public offense. Identity theft is the fastest growing crime in the United States. Every year about 15 million people become victims. Everyone is vulnerable. Skilled identity thieves use a variety of methods to steal your personal information. These include the following:

Dumpster diving. They rummage through trash looking for bills and other paper with your personal information on it.
Skimming. They steal credit/debit card numbers with a special storage device when processing your card.
Phishing and Whaling. See preceding tips on preventing Internet fraud.
Changing your address. They divert your billing statements to another location by completing a change-of-address form.
Stealing. They steal wallets, purses, mail (credit card statements, pre-approved credit offers, new checks, tax information, etc.), employee personnel records, etc.

Some of the things you can do to minimize your risk of identity theft are listed below.

Protecting personal information:

Give out credit card, bank account, or other personal information only when you have initiated the contact or know and trust the person you are dealing with. Beware of e-mail or telephone promotions designed to obtain personal information.
Put strong passwords on your credit card, bank, and other accounts. Avoid using easily remembered numbers or available information like mother’s maiden name, date of birth, phone number, or the last four digits of your Social Security number. Passwords should be more than eight characters in length, and contain both capital letters and at least one numeric character. Use of non-dictionary words is also recommended.
Use different passwords for banking, e-commerce, e-mail, and other accounts.
Memorize your passwords. Don’t carry them in your purse or wallet.
Keep personal information in a secure place at home, especially if you have roommates, employ outside help, or are having work done in your home.
Make sure that the copying machines used by you and others who have your personal data, e.g., tax preparers, have data security measures installed to prevent unauthorized access to data on the copier’s disk.
Protect you health insurance cards like you would your credit cards. If asked for your policy numbers or any other personal information in a doctor’s office make sure no one else is near enough to hear or see them. And protect your Medicare card number as you would your Social Security number.
Shred or tear up any documents with personal or financial information before throwing them in the trash. Use a cross-cut shredder.

Using credit cards:

Cancel accounts you don’t use or need. Carry only the cards and identification you need when you go out.
Never loan your card to anyone.
Pay attention to billing cycles. Check with the credit card company if you miss a bill to make sure that your address has not been changed without your knowledge.
Only put the last four digits of your account number on checks you write to your credit card company. It knows the whole number and anyone who handles your check as it is processed won’t have access to the number.
Notify your credit card companies and financial institutions in advance of any address or phone number changes.
Bring home all credit card receipts and match them against your monthly statements. Look for charges you didn’t make. Dispose of them at home. Never toss your receipts in a public trash container.
Call the credit card company or bank involved if a new credit card you applied for hasn’t arrived in a timely manner.
Monitor the expiration dates of your credit cards and contact the card issuer if new cards are not received before your card expires.
Report all lost or stolen credit cards immediately. Contact the issuer if replacement cards are not received.
Sign and activate new credit cards promptly on receipt. Or write “See ID” on the back of the card. Then a thief won’t have your signature.
Never put your credit card number on a post card or on the outside of a mailing envelope.
Make sure only the last four digits of your credit care number show up on your receipts. A 2001 state law banned the use of full credit card numbers on electronically printed receipts and gave businesses three years to comply. (Note that the merchant copy can show the full credit card number.) Report non-complying businesses to the Methamphetamine Strike Force hotline at (877) 662-6384.
Cancel accounts you don’t use or need. Carry only the cards and identification you need when you go out.
Tear into small pieces or shred any pre-approved credit card offers. They can be used by thieves to order cards in your name.
Ask your credit card company to stop sending blank checks. Call (888) 567-8688, the Consumer Credit Reporting Industry Opt-In and Opt-Out toll-free number, to stop pre-approved credit offers.

Protecting your Social Security number:

Examine your Social Security Personal Earnings and Benefits Estimate Statement for possible fraud. You will receive it about three months before your birthday each year.
Provide your Social Security number only when it is required by a government agency, employer, or financial institution. Never use it for identification. Don’t carry your number or card in your purse or wallet. Don’t write it on a check.
Do not have your Social Security or drivers license number printed on your checks.

Managing your accounts:

Keep a record in a secure place of all your credit card, and bank and investment account and phone numbers for quick reference if identity theft occurs.
Review your bank statements carefully. Match your checkbook entries against paid checks. Look for checks you didn’t write.
Never leave transaction receipts at bank machines or counters, trashcans, gasoline pumps, etc.

Carrying personal information in a purse or wallet:

Carry only a driver’s license and one credit card. Don’t carry anything with a PIN written on it.
Keep a record of its contents. Photocopy both sides of your credit cards and driver’s license and keep them in a safe place at home.
Don’t carry your Social Security card or anything with your Social Security number on it. Persons with Medicare cards should carry photocopies of the cards with the last four digits of their Social Security number removed. Keep the card is a safe place at home.
If you carry a wallet in a purse, keep personal checks and credit cards in separate compartments and not in your wallet.
Don’t carry personal information of your family members.
Put a strong password on your Personal Data Assistant (PDA).
Take the measures listed below for victims of identity theft if your wallet is lost or stolen. Don’t wait for someone to find and return it. These include filing a police report, reporting your credit and debit cards missing, closing checking accounts, having a fraud alert placed on your credit reports, notifying your medical insurance companies, reporting a missing driver’s license, etc.

Using the mail:

Deposit mail in boxes or slots inside a post office. Use an outside box only if there is another pickup that day. It is not safe to leave mail in a box overnight. Also, do not leave mail for pickups from personal curbside boxes or cluster box units.
Pick up your mail as soon as possible after it arrives in your personal curbside box or cluster box unit. If this is not possible, have a trusted friend or neighbor collect your mail, especially if you are expecting a check or credit card.
Consider having new checks mailed to your bank for collection to avoid possible theft from your mailbox.
Use a locked mailbox and make sure the lock works.
Investigate immediately if bills do not arrive when expected, you receive unexpected credit cards or account statements, you are denied credit for no apparent reason, and you receive call or letters about purchases you did not make.
Report the non-receipt of expected valuable mail by calling the sender and the Postal Inspection Service as soon as possible.

Checking for possible identity theft:

Obtain free copies of your credit reports from the three nationwide consumer reporting companies – Equifax, Experian, and TransUnion -- by visiting www.AnnualCreditReport.com or calling (877) 322-8228, a service created by these companies. Check them for fraudulent activities, e.g., additional accounts opened without your consent, unauthorized charges billed to your accounts, etc. You can get one free report annually from each company. Stagger your requests to obtain one every four months. That way you can monitor them during the year.
Before signing up with a company that promises to protect you against identity theft make sure you understand exactly what protection and services it will and will not provide. Some services you will pay for you can do yourself at no cost, e.g., ordering credit reports and placing fraud alerts.
Place a security freeze on your credit reports. This will protect you against fraud in new accounts by prohibiting the credit bureaus from releasing your credit reports to a potential creditor without your express permission. Go to their websites for the procedures and fees for placing and lifting freezes: www.equifax.com, www.experian.com, and www.transunion.com.
Check your medical bills and health insurance statements to make sure the dates and types of services match your records. Once a year request a list of all benefits paid in your name by your health insurer. If the thief has changed your billing address you would not be receiving any bills.

Protecting your child’s identity:

Provide your child’s Social Security number only when it is required by a government agency or financial institution. Never provide it for identification.
Carry your child’s Social Security number or card in your purse or wallet only when you know you will need it.
Teach your child never to give out personal information over the phone or on the Internet.
Check to see if your child has a credit report. There should not be one unless someone has applied for credit using your child’s Social Security number. No minor should have a credit report.
Watch you child’s mail for credit card applications, bills, or bank statements. They are signs that someone has started a credit history in your child’s name.
Request that banks in which your child has an account remove his or her name from marketing lists.
Report any suspected identity theft to the three nationwide consumer reporting companies and obtain copies of any credit reports in your child’s name and Social Security number. If your child does have a credit report ask to have all accounts, application inquiries, and collection notices removed immediately. Tell the credit issuer that the account is in the name of your minor child who by law isn’t permitted to enter into contracts.

If you become or may become a victim of identity theft:

File a police report as soon as possible. Call the SDPD non-emergency number, (619) 531-2000 or (858) 484-3154. Then do the following:

Set up a folder where you can keep a log of all your contacts and documents.
Contact the Federal Trade Commission (FTC) to report the theft. Its Identity Theft Hotline is (877) 438-4338. Or visit its website at www.ftc.gov/idtheft. The FTC is the federal clearinghouse of complaints of victims of identity theft. It helps victims by providing information to resolve financial and other problems that could result from identity theft. Its booklet entitled Take Charge: Fighting Back Against Identity Theft deals with bank accounts and fraudulent withdrawals, bankruptcy fraud, investment fraud, phone fraud, and other specific problems. It also describes the immediate steps victims should take and ways to minimize recurrences.
Report the theft to the fraud units of Equifax at (800) 525-6285, Experian at (888) 397-3742, and TransUnion at (800) 680-7289. Ask to have a fraud alert placed on your credit reports. It will tell creditors to follow certain procedures before they open new accounts in your name or make changes to you existing accounts. In placing a fraud alert you will be entitled to free copies of your credit reports. Review them carefully. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain. Fraud alerts are good for 90 days and can be renewed. They are free.
Alert your banks to close your accounts and open new accounts with new checks, ATM cards, PINs, and passwords. Also replace outstanding checks with new ones.
Contact all your creditors by phone and in writing to inform them of the theft.
Call the security or fraud departments of each company to close any accounts that have been tampered with or established fraudulently. Follow up the request in writing and ask for written verification that the accounts have been closed and any fraudulent debts discharged. Keep copies of all documents and records of all conversations about the theft.
Contact the Social Security Administration’s Fraud Hotline at (800) 269-0271 or by e-mail to the Office of the Inspector General at www.ssa.gov/oig.
Contact the California DMV at (800) 777-0133 or www.dmv.ca.gov to see if another driver’s license has been issued in your name.
Notify the U.S. Postal Inspector if your mail has been stolen or tampered with. Its number is (626) 405-1200.
In the case of medical identity theft request a copy of your current medical files from each health care provider, and request that all false information be removed from your medical and insurance files. Enclose a copy of the police report with your requests. For more information things to do if you are a victim of medical identity theft or concerned about it go the World Privacy Forum’s website at www.worldprivacyforum.org/medicalidentitytheft.html
Call the Health Insurance Counseling and Advocacy Program’s Senior Medicare Patrol (HICAP/SMP) at (800) 434-0222 to report any fraud involving Medicare.

Additional tips on avoiding and resolving identity theft problems are available on the State of California Office of Information & Privacy Protection website at www.oispp.ca.gov/consumer_privacy/identitytheft.asp. Legal Guide P-3 also explains your rights and liabilities under California law when your credit identity is stolen. Another useful website is that of the Identity Theft Resource Center (ITRC) at www.idtheftcenter.org. It contains information ranging from advice for people who have had a wallet stolen to tips for reducing the risks of identify theft. It also contains fact sheets, solutions to various identity theft problems, letter forms, and answers to frequently asked questions. You can also call ITRC at (858) 693-7935.

Any San Diego resident over the age of 60 can obtain free legal advice on recouping money lost to scams by calling Elder Law & Advocacy at (858) 505-4587. This state- and county-funded nonprofit corporation provides no-cost routine legal services to seniors and caregivers of seniors.

Wi-Fi Hacking

Using unprotected public Wi-Fi poses major security risks. An insecure laptop or iPhone makes it easier for a hacker to intercept information to and from the Web, including passwords and credit card numbers. It is also vulnerable to virus and spyware infections, and to having its contents stolen or destroyed. A hacked laptop or iPhone can also create a security risk for the user’s workplace if it contains a password to the corporate network. Wi-Fi users should take the following steps to reduce these risks:

Turn the Wi-Fi on your laptop, PDA, and smart phone off when you aren’t using the network. Otherwise your Wi-Fi card will broadcast your Service Set Identifier (SSID) looking for all networks it was previously connected to. This enables hackers to figure out the key that unscrambles the network password.
Use a known service instead of Free Public Wi-Fi or similar risky, unknown signals called ad hoc networks.
Check the Wi-Fi security policies of your service provider and install the protections they offer to ensure it’s a known network and not an “evil twin” hacker site pretending to be the legitimate one.
Pay attention to warnings that a Secure Sockets Layer (SSL) certificate is not valid. Never accept an invalid certificate on a public wireless network. Log off and look for a trustworthy network. Look for the padlock indicating an SSL connection. Keep your firewall on. And keep your operating system updated.
Find out if your company offers a Virtual Private Network (VPN) and learn how to use it. Encrypted VPN sessions offer the highest security for public wireless use.
Upgrade your Wi-Fi cards. The older Wired Equivalent Privacy (WEP) security is easily hacked. The new Wi-Fi Protected Access (WPA and WPA2) are much more resistant to attack.
Learn to connect securely. Even the vulnerable WEP offers more privacy and protection than an unsecured public connection. It’s not something the average hacker can crack.

Bankruptcy Foreclosure Rescue

Bankruptcy foreclosure scams target people whose home mortgages are in trouble. Scam operators advertise over the Internet and in local publications, distribute flyers, or contact people whose homes are listed in foreclosure notices. They may promise to take care of your problems with your mortgage lender or to obtain refinancing for you. Sometimes they ask you to make your mortgage payments. But instead of contacting your lender or refinancing your loan they pocket the money you paid and then file a bankruptcy case in your name, often without your knowledge. If this happens you could also lose your home. So proceed with care in dealing with an individual or company that:

Makes an unsolicited contact and uses high-pressure sales techniques,
Calls itself a mortgage consultant, foreclosure service, or similar name,
Contacts people whose homes are listed for foreclosure,
Asks you to make your home mortgage payments directly to them, or
Asks you transfer you property deed or title to them.

Some ways to avoid becoming a victim of a loan-modification scam are listed below:

Do not transfer ownership of your home to someone who promises to save it.
Do not pay advance loan-modification fees to anyone except a California licensed attorney in the course of his or her legal practice if your lender has recorded a notice of default against your property.
If your lender has not recorded a notice of default against your property and you consider paying a real estate broker in advance for loan-modification services, check with the California Department of Real Estate to see that broker has submitted his or her advance fee agreement to the Department for review and that he or she has received a “no objection” letter regarding its use. You can do this and read the Department’s consumer alert on advance fees and loan modification services on its website at www.dre.ca.gov/mlb_adv_fees.html.
Read all documents carefully before signing them.
Do not make your mortgage payments to anyone other than your lender.
Do not work with anyone who tells you not to contact your attorney, lender, or a credit or housing counselor.
If you deal with a foreclosure consultant as defined in California Civil Code Sec. 2945.1 who is not an attorney or a real estate broker, make sure that person has obtained a Certificate of Registration as a Mortgage Foreclosure Consultant from the California Department of Justice. This requirement goes into effect on July 1, 2009.

If you can’t pay your mortgage, call your lender or contact and attorney as soon as possible for help. The further behind you fall the more likely you are to lose your home. There are also many non-profit agencies that can help you with loan modification without a fee. You can get a list of housing counselors approved by the U.S. Department of Housing and Urban Development on its website at www.hud.gov on the page entitled Foreclosure Avoidance Counseling. Their services are provided free of charge. There is no need to pay a private company for these services. However, if you do engage a real estate broker or attorney, pay their fee only after they have completed their work.

Other sources of assistance are the San Diego Housing Opportunities Collaborative and the Homeowner’s HOPE Hotline. The former provides free clinics and counseling. It can be contacted at (619) 283-2200 or online at www.hocnetwork.squarespace.com. The latter partners with mortgage companies, local government, and others to reduce foreclosures. It can be contacted 24/7 at (888) 995-4673.

If you suspect a scam call the Real Estate Fraud Subdivision of the San Diego County District Attorney’s Office at (619) 531-3552. If bankruptcy proceedings are involved, call the United States Trustee at (619) 557-5013. The Trustee is a U.S. Justice Department official who monitors the bankruptcy system.

Property Tax Relief

Some companies have been offering to help homeowners reduce their property taxes for an up-front fee and not performing any reassessment or reassessment-appeal services. Their mailers featured official-looking logos and warned homeowners that their files would by ineligible for tax reassessments if they did not respond by a certain date. Homeowners should be wary of such solicitations and consider filing for property tax themselves. There is no cost for this. The procedure is explained on the website of the County Assessor/Recorder/County Clerk at http://arcc.co.san-diego.ca.us. Click on Reassessment/Ownership under Assessor Services, then on Proposition 13, and then on Application for Review of Assessment in the answer to the question: Can the assessed value of my property be decreased? You will get a page entitled “Property Tax Relief” and an Application for Review of Assessment. For additional information you can call the County Tax Assessor at (858) 505-6262.

High-Pressure Sales of Financial Products at Free-Meal Seminars

Many financial services firms sponsor sales seminars and offer a free meal to entice attendees. While these seminars are advertised as educational workshops at which “nothing will be sold,” they are actually held to get attendees to open accounts and buy investment products, if not at the seminar itself, then in follow-up contacts. In a 2006-2007 study of these seminars by the U.S. Security and Exchange Commission, the Financial Industry Regulatory Authority, and state securities regulators, it was found that about half featured exaggerated or misleading advertising claims and about one-quarter involved unsuitable investment recommendations. Attendees need to understand that these seminars are primarily sales events and that all claims and recommendations should be evaluated with great care before taking any actions.

Predatory Insurance Sales Practices

These practices involve insurance agents holding informational meetings or seminars about finances, living trusts as a way to avoid probate, or insurance investments that guarantee you will not outlive your retirement savings. These sessions are often held in senior centers, religious institutions, and restaurants. Attendees are required to sign in and give the agent their names, addresses, and phone numbers. Some time after the session the agent, who may claim to be a “specialist” or “advisor,” will contact the attendees to set up a meeting in their homes. It is in these one-on-one meetings that attendees can get pressured into buying an insurance product that is completely inappropriate for their needs. If you attend one of these information sessions you should not give any personal information to the agent, and should talk to a trusted advisor before making any changes in your investments and insurance.

Unscrupulous Contractor Scams

These are characterized by the following:

Door-to-door solicitations to do work at a reduced price. Once payment is made little or no work is done and the project is abandoned.
High pressure for an immediate decision leaving no time to get competitive bids, check licenses, or contact references.
Offer to perform a free inspection in which non-existent problems are found.
Demand for immediate payment in cash. Unscrupulous contractor will take the money and run.
Illegally large down payments. By law a down payment cannot exceed the lesser of 10 percent of the project price or $1,000.
Verbal agreements instead of a written contract.

Any suspicious solicitations should be reported to the SDPD at (619) 531-2000 or (858) 484-3154 with a description of the person and his or her vehicle license plate number.

You can avoid scams in hiring a contractor by doing the following:

Get a contract in writing and don’t sign anything until you understand the terms. The contract should include a specific description of the work to be done, materials to be used, total cost and payment schedule, and start and completion dates.
Don’t pay cash and not more than the legal limit for a down payment.
Get at least three bids and check the contractor’s references.
Hire only licensed contractors. Anyone performing home improvement work valued at $500 or more must be licensed by the Contractors State License Board (CSLB). Get the contractor’s license number and verify it online at www.cslb.ca.gov or by calling (800) 321-2752. Ask to see a second piece of identification with a photo.
Go to the Guides and Pamphlets page of the CSLB website for more information about safe contracting.

Credit Repair

If you encounter a credit service that promises to remove negative items from your credit reports is safe to assume it’s a scam. In exchange for a fee the service will promise to pester the credit reporting companies until they wipe out debts and bankruptcy records. They’ll string you along saying the process will take several months. By then you may be out hundreds or even thousands of dollars. In the meantime, debts can stay on your credit record for up to seven years, and a Chapter 7 bankruptcy can remain for up to 10 years. If you think you were duped by a credit-repair company you should call the Federal Trade Commission Consumer Response Center at (877) 382-4357.

To keep from being scammed you should avoid any company that does any of the following:

Wants you to pay for credit repair before they provide any services,
Will not tell you your legal rights,
Will not tell you what you can do on your own at no cost,
Tells you not to contact a credit reporting company directly,
Advises you to dispute all negative items in your credit report, or
Suggests you create a new credit identity, e.g., by applying for an Employer Identification Number to use instead of your Social Security number.

There are many things you can do to improve your credit reports. First you should check your reports regularly for mistakes or collections you didn’t know about. Free copies are available annually from Equifax, Experian, and TransUnion, the three nationwide consumer reporting companies, by visiting www.AnnualCreditReport.com or calling (877) 322-8228, a service created by these companies. Contact the reporting companies about any mistakes or disputed collections. If a mistake is confirmed you can ask the reporting company to send a corrected report to prospective lenders. Second, if you are having trouble paying a debt try to negotiate a lower interest rate or late fees. Speak to a supervisor who has authority to change the terms of your loan. Third, if you can’t handle your debts on your own consider seeing a credit counselor. Consultations are usually free. Two organizations that can refer you to a counselor are the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. You can call the former at (800) 388-2227 or visit its website at www.nfcc.org. You can call the latter at (866) 703-8787 or visit its website at www.aiccca.org. These and other things you can do to repair your credit are explained on a page entitled Building a Better Credit Report on the Federal Trade Commission’s website at http://www.ftc.gov/bcp/edu/pubs/consumer/ credit/cre03.shtm#scams.

Prize Notification by Mail

In this scam a person is notified by mail that he or she has won a prize and told to send the contest or lottery sponsor a signed release form and money to cover various expenses before the prize can be awarded. You lose not only the money but provide the scammer with information for use in stealing your identity and committing various other financial crimes. Never respond to such a notice. Prize winners don’t have to pay a fee or taxes up front. And report the scam to U.S. Postal Inspector at (877) 876-2455.

Protecting Your Assets

The following tips will help keep you from becoming a victim of various frauds and confidence schemes.

Don’t discuss your assets or finances with strangers.
Don’t keep large sums of money at home. Keep stocks, bonds, expensive jewelry, coin collections, etc. in a bank safe deposit box.
Read contracts carefully and understand the terms before signing.
Don’t pay for work in your home in advance.
Call the Better Business Bureau of San Diego County at (858) 496-2131 if you have any doubts about the reliability of a person or company you are going to hire.
Never get involved with and provide or show money to strangers. Some common confidence schemes involve phony bank examiners who ask you to help trap a crooked teller, strangers who want to share found money, strangers who want to donate money to a charity of your choice, and strangers who want you to help prove that banks can be trusted. Note that all these schemes involve strangers and stories that sound too good to be true.