Economic Crimes / Consumer Frauds
Investigator, Jos Van Hout
To report any type of fraud contact the District Attorney's toll free hotline at:
1 (866) DA Fraud
1 (866) 323-7283
Or fill out and submit the online Fraud Reporting Form above
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|The 2008 Identity Theft and Fraud Symposium is now gone and again the reviews were positive. With the current condition of our State Budget, numerous agencies canceled their registrations due to training budget cuts. Even with those cuts around 65 Law Enforcement Officers, Investigators, Attorneys and associated personnel attended the Symposium. The 2008 Symposium also included a new "Consumer Fraud Day" held the day before the Symposium specifically for the public. Around 75 citizens attended the Consumer Fraud Day and 10 local and state businesses were available for the consumers to demonstrate their products and services. United States Attorney McGregor Scott addressed the attendees and discussed the federal aspect of fraud.|
The 2007 Identity Theft and Fraud Symposium was a great success.
Over 90 Law Enforcement and Attorneys attended the symposium. Television personality David Horowitz, Consumer Advocate for over 34 years addressed the attendees about his experiences with consumer frauds and the current fraud trends.
Click here to check out a local article on the Symposium.
Butte County District Attorney Mike Ramsey and his Economic Crime
Investigator Jos Van Hout, supporting Congressman Wally Herger's
North State three day Fraud training seminars
in August 2006
There are numerous crimes that fall under the category of Economic Crime or Consumer Crime. These types of crimes are generally more difficult to investigate due to the expertise required in several different areas and because of the amount of documents that are usually involved. Economic crimes are becoming more prevalent every day. These cases can take longer to investigate because of these issues.
Our office is now working together with the local Indian Gaming Casinos to combat these types of crimes. Funding received from these casinos has enabled us to dedicate an Economic Crime Investigator to investigate and conduct training to both Law Enforcement officials as well as the general public on these types of crimes.
For a schedule of upcoming events check our calendar of events page or to request a speaker on this topic for your organization or group email your request to firstname.lastname@example.org or call (530) 538-2046
Types of Economic Crimes and Consumer Frauds
Credit Card Fraud
Computer Hacking or Cyber crime
Counterfeiting or Forgery
Extortion & Bribery
Health Care Fraud
|Intellectual Property Theft
Securities & Investment Fraud
Prize Promotions/Sweepstakes Offers
Telephone Billing Scams
Credit Repair/Debt Consolidation
Prize Promotions/Sweepstakes Offers. These scams represent the majority of all fraudulent telemarketing calls, accounting for over one half of all complaints. Usually, they are initiated with a brochure or postcard sent to the victim to inform them that they have been selected to win a fabulous prize, such as a car, jewelry, cash, or a vacation package. Victims are told to call an 800 or 900 number, possibly subjecting themselves to the long distance charges.
Victims who call the number are often told that in order to receive their prize, they must send the company a check to cover shipping, insurance, storage costs, etc. Some victims are told that they have won a merchandise certificate (which is worthless, if the victim receives it), and that for a fee, they will be entered into a tie-breaker contest for the grand prize. Victims do not ever receive anything of value from the company.
Investment Scams. Investment scams generally involve larger amounts of money compared to other scams. Seniors often sink their entire life savings into the investment offer, only to lose it all. Telemarketers may sell gemstones, rare coins, FCC licenses, oil wells, and stocks. The promise of high returns within a short period of time is used to entice the victims. Follow-up calls are made to investors in an attempt to get them to send more money. Once the consumer receives their purchase, if it is a tangible item, he discovers that it is either worthless, or worth far less than the cost of the purchase. Investors discover that it is difficult to determine the status of their investment. Those who do receive an accounting of their investment find it is impossible to decipher.
Fake Charities, Telemarketers running charity scams fall generally into one of two classes: those who do not work for a charity at all, and those who work for a charity but keep a high percentage of the money that they collect. Sometimes, as little as five percent of the money collected goes to the charity.
Victims may be contacted by phone by telemarketers asking for money, or they may receive a mailing falsely informing them that they have given to the charity previously, or have pledged a certain amount of money over the phone. Many assume that what is stated in the mailing is true and send money, even though they have never given to the charity.
Telephone Billing Scams. There are two primary variations of the telephone billing scam: cramming and slamming. Cramming involves billing customers for optional phone services that they did not order. Slamming is the switching of a consumer's telephone carrier phone service without the consumer's knowledge or consent.
The difficulty with these scams is that consumers may not pay enough attention to their phone bill to notice the fraud. Even if they do notice, this does not happen until they get a bill, meaning that an entire month of charges may have accrued.
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Lotteries. Lottery scams involve offering consumers the opportunity to participate in a lottery club and to purchase tickets in state and foreign lotteries. Upon sending money, victims are either told that they did not win the lottery, or that their winnings have been reinvested for them. Victims are occasionally given small amounts of money as winnings to induce them to continue sending money.
Lottery rooms that contact U.S. residents concerning the purchase of foreign lottery tickets violate federal law, and those who bring foreign lottery tickets into the U.S. for the purpose of selling them are committing a felony. It is also illegal to mail lottery tickets or letters or circulars offering prizes dependent on lotteries.
Credit Repair/Debt Consolidation. Varying types of scams exist that require victims to pay an up-front fee, usually to procure a loan or to receive credit repair assistance, or employment. The type of up-front fee varies with the scam, as follows:
Credit Repair and Managing Debt Fraudulent credit repair companies guarantee to improve or fix a person's credit history, get a family out of debt, or help them obtain major credit cards, usually at a substantial fee. Advertising or postcard promotions are generally the method used to initiate contact with potential victims. The ads promise to fix credit problems regardless of credit history. Following this initial offer, a number of different scams can evolve.
* One Shot Credit Cards
Consumers may be told that they will be given a VISA or MasterCard upon receipt of a fee — usually $35 – $50. The credit card will help the consumer establish good credit. The actual card received is nothing more than a one-shot credit authorization with a limited line of credit at a single retail outlet or catalogue sales outlet. The outlet may offer nothing of interest to the consumer, and thus the card is useless.
* Secured Credit Cards
In exchange for the payment of a sizeable "processing fee," consumers are promised a credit card. After paying the fee, consumers are told that in order to obtain the card, they must keep a certain amount of money, equal to the credit line of the card, in an escrow account. This scheme is not fraudulent per se, but becomes so if the consumer is not informed of the secured nature of the card prior to paying the processing fee.
* Low-Interest Credit Cards
In this scam, victims are told that for a fee they can exchange their current, high-interest credit cards for a low-interest card. The telemarketer obtains the number of the victim's current credit card, and charges the fee to that card. Victims who complain about the fee are told that they will save much more than the amount of the fee in the first year due to reduced interest. Upon payment of the fee, victims are not given a new credit card, but are simply mailed a packet of sample application forms from banks which offer low-interest credit cards. The victim thus receives a packet of free forms for their fee.
* Advanced Fee Loans
For an advance "processing" or "registration fee," companies promise consumers that they will be able to obtain a loan or extension of credit to assist them in obtaining financing for debt consolidation, automobiles, or mortgages. The fee can range anywhere from one to several hundred dollars.
After sending the company the fee, consumers are told that none of the financial institutions where their application was sent agreed to extend credit. The consumer is never told where their applications were sent and loses the money paid for the brokering service.
* College Loans
These scams begin with a newspaper ad that announces, "College loans available." Consumers are prompted by the ad to send a processing fee to the company, which in turn will be used to procure a loan for the consumer to use on a college education. Once the consumer sends money to the company pursuant to the ad, they may never hear from the company again. If the company does respond, consumers are told that the institutions that received their applications turned them down, and that the venture was unsuccessful.
Employment Scams. As with the college loan scam, above, this scam begins with a newspaper advertisement from a company touting their ability to find employment across the country in any field. Consumers are prompted to contact the company. Once a consumer responds to the ad, they are informed that they are guaranteed to find a job in any area of the country that they choose, if they mail the company a fee. This fee is usually hundreds of dollars.
Once the consumer sends the money to the "headhunter" company, they generally do not hear of any employment opportunities. If they manage to contact the fraudulent company again, they are told that the company was unable to secure their employment and that their fee is nonrefundable.
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Travel Scams. Generally, these scams are initiated with a postcard or other mailing telling the consumers that they have won a free or heavily discounted trip. Consumers who call to find out about the trip are told that they must purchase a travel package before being given their prize. Upon purchasing the travel package, consumers find that there are so many restrictions on the vacation that it is impossible to take. Typical restrictions include a required stay at an expensive hotel, service fees, or taxes, or a requirement that the consumer travel only on certain days from certain airports.
Consumers may also be forced to pay for a membership in a travel club or to purchase companion tickets in order to claim their "free" ticket. The cost of these fees and companion tickets destroys the worth of the free ticket.
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