Wednesday, March 04, 2009

FTC Warns Of Stimulus Scams

Looking to cash in on the recent stimulus bill signed by president Obama scammers have begun setting up shop with phony sites and fake email scams.

The Federal Trade Commission (FTC) as well as the Better Business Bureau (BBB) have recently posted advisories warning consumers about advertisements from companies and websites that promise easy access to government money. The ads promise big money, as much as $12,000 in some case, or offer to sell consumers information that is readily available for free. The scammers use the collected information to commit identity theft often times draining the consumer's bank account.

Shop Dell Small Business"The bottom line on this is, these are scams," says Eileen Harrington, acting director of the FTC's Bureau of Consumer Protection. "The stimulus is not passing out checks to individual consumers."

In several phishing attacks consumers have reported e-mail messages asking for bank account information so that stimulus check deposits can be made directly to the consumers bank account. Instead, the scammers drain consumers' accounts of money and disappear. Or the bogus e-mails may appear to be from government agencies and ask for information to "verify" that you qualify for a payment. The scammers use that information to commit identity theft.

The FTC warns that some of the e-mail scams don't ask for information, but provide links to find out how to qualify for funds. By clicking on the links, consumers have downloaded malicious software or spyware that can be used to steal more information from the unsuspecting victims.

"Web sites may advertise that they can help you get money from the stimulus fund. Many use deceptive names or images of President Obama and Vice President Biden to suggest they are legitimate. They're not," says Eileen Harrington, Acting Director of the FTC's Bureau of Consumer Protection. "Don't fall for it. If you do, you'll get scammed."

Some sites suggest that for a small sum of money - as little as $1.99 in some cases - consumers can get a list of economic stimulus grants they can apply for. But two things can happen: the number of the credit card the consumer uses to pay the fee can fall into the hands of scam artists, or the $1.99 can be the down payment on a "negative option" agreement that may cost hundreds or thousands of dollars if the consumer does not cancel.

Dell Small BusinessPCWorld found two such sites, and, both of which have been removed at this time. The two sites promised to provide consumers with information on how to get thousands of dollars in free stimulus money if they paid about $2 to sign up. Users that failed to cancel the service were then hit with hefty monthly fees, as much as $99 a month if consumers didn't cancel within seven days. Both sites, and others like them, buried the terms in long user agreements, and the sites required consumers to go through a "detailed and complex" cancellation process

"Consumers who may already have fallen for these scams should carefully check their credit card bills for unauthorized charges and report the scam to the FTC," Harrington said.

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