25 September 2014
Alert Number I-092514-PSA

The Internet Crime Complaint Center (IC3) has received reports related to a telephone scam in which the caller purports to be an Internal Revenue Service (IRS) representative. Using intimidation tactics, the caller tries to take control of the situation from the beginning. The caller advises the recipient of the call that the IRS has charges against them and threatens legal action and arrest. If the recipient questions the caller in any way, the caller becomes more aggressive.

The caller continues to intimidate by threatening to confiscate the recipient’s property, freeze bank accounts, and have the recipient arrested and placed in jail. The reported alleged charges include defrauding the government, money owed for back taxes, law suits pending against the recipient, and nonpayment of taxes.

The recipients are advised that it will cost thousands of dollars in fees/court costs to resolve this matter. The caller creates a sense of urgency by saying that being arrested can be avoided and fees reduced if the recipient purchases moneypak cards to cover the fees within an hour.

Sometimes the caller provides specific instructions on where to purchase the moneypak cards and the amount to put on each card. The caller tells the recipient not to tell anyone about the issue and to remain on the telephone until the moneypak cards are purchased and the moneypak codes are provided to the caller. The caller states that if the call is disconnected for any reason, the recipient would be arrested. Some recipients reported once the caller obtained the moneypak codes, they were advised that the transaction took too long and additional fees were required.

Call recipients, who are primarily immigrants, reported that the caller spoke with broken English or stated the caller had an Indian accent.

If you receive a call similar to this follow these tips:

• Resist the pressure to act quickly
• Report the contact to TIGTA at http://www.treasury.gov/tigta by clicking on the red button, “IRS Impersonation Scam Reporting.”
• Use caution when asked to use a specific payment method. The IRS would not require a specific payment method such as a moneypak card or wire transfer
• If you feel threatened, contact your local police department
• File a complaint at www.IC3.gov

CONSUMER ALERT AG Ferguson to consumers: Hang-up on “tech support” phone scammers!

FOR IMMEDIATE RELEASE
September 17, 2014

SEATTLE — Attorney General Bob Ferguson is warning consumers that phone scammers posing as legitimate computer technicians are on the prowl in Washington and other states across the country.

“These scammers claim to be calling to help resolve problems that have been detected on the consumer’s personal computer, such as harmful viruses or malware,” warned Ferguson. “What they really want is access to your computer and, ultimately, your money.”

The phone scammers hunt for victims by “cold-calling” numbers they find in telephone directories and other public resources. The Consumer Protection Division of the Attorney General’s Office has received numerous complaints in recent months from consumers who have received these calls.

How the scam works

The “tech support” scam exploits consumer concerns about computer and online security.

The callers attempt to gain your trust with a fake identity and a barrage of technical language, saying that a problem has been detected on your computer.

They may ask you to perform a series of tasks that cause you to unknowingly allow the cyber criminals remote access to your PC and the personal data stored on it. You may also be tricked into installing malware that could steal your personal information.

The callers then claim to have identified the problem and demand payment to fix it with software updates, warranty extensions and other solutions. They offer to accept credit card payments over the phone, and may request payments via Western Union or Money Gram or direct the victims to fraudulent websites set up to collect personal and financial information.

“As with all scams, prevention is the best protection for consumers,” Ferguson said. “Don’t ever give any caller access to your computer, no matter who they say they are. Instead, hang-up!”

How to avoid the scam

The Attorney General’s Office offers tips on how to avoid this and other scams:

• Never give control of your computer to someone who calls you;
• Be vigilant in safeguarding personal information;
• Never give out passwords;
• Protect personal computers with legitimate and updated security software;
• Do not provide SSNs, banking, or credit card or other financial information to anyone who calls, no matter who they say they are; and
• Hang-up!

Consumers who suspect they may have been victimized should:

• Have a reputable computer technician remove any software that may have been added by the scammers;
• Change passwords;
• Contact your financial institution; and
• Monitor bank and credit card account activity.

The Attorney General’s Office also encourages anyone who receives such a call to file a complaint with the Federal Trade Commission (FTC).

AG Ferguson first to enforce federal law protecting online shoppers

FOR IMMEDIATE RELEASE
September 22, 2014

SEATTLE — In the first enforcement action of its kind, Attorney General Bob Ferguson is suing a Philadelphia-based online company for violations of the federal Restore Online Shopper’s Confidence Act (ROSCA) and the state’s Consumer Protection Act.

The Attorney General’s action was filed today in the United States District Court for the Western District of Washington against Internet Order LLC and its CEO, Daniel Roitman, doing business as Stroll. The company is accused of using deceptive marketing tactics to lure millions of customers nationwide, including more than 38,000 in Washington.

The company markets and sells foreign language audio courses online, mostly via the website www.pimsleurapproach.com. The courses are widely marketed under the brand name Pimsleur Approach with advertisements featuring their basic language program. The website and marketing promote the “Quick and Simple Course” with a low price “introductory offer” on a set of self-instruction CDs for “only $9.95.”

According to the lawsuit, consumers who purchased the introductory set for $9.95 were unknowingly and automatically enrolled in a “negative option” purchase plan, which obligated them to receive up to four advanced-level additional courses at a cost of $256 each.

In order to avoid charges, consumers were required to ship the advanced-level courses back to the company at their own expense within 30 days. If they failed to do so, they would be automatically charged $256 on the card they used to purchase the introductory “Quick and Simple Course.” The consumers’ total obligation under the negative option “Rapid Fluency Program” could amount to as much as $1,024.

“The company hid the terms of the negative option program in its advertising, and misled consumers into thinking they’d only ordered the inexpensive introductory course for $9.95,” said Ferguson. “Consumers were shocked to find significant charges appearing on their credit card statements for products they hadn’t ordered, and then angered when the company refused to cancel those charges.”

Although each program included a “100% money back guarantee” and a “risk free” 30-day trial, Ferguson alleges the company’s unfair policies made it unreasonably difficult for customers to cancel their enrollments or return items they hadn’t ordered.

Consumers were required to obtain special authorization from the company before they could ship back unordered products, were charged $64 “restocking” fees in some instances, and were subjected to high pressure sales tactics even after stating that they hadn’t ordered anything beyond the introductory course.

“To make matters worse, consumers who refused to pay were hounded with dunning letters and threatened with collection agency action,” Ferguson said.

The company is accused of:

• failing to clearly disclose the terms of its negative option sales program;
• failing to obtain agreement from consumers to sign up for the program;
• failing to provide simple mechanisms to cancel the program as required by law;
• making misrepresentations in the context of its advertising; and
• using unfair methods in its collection practices.

Washington is the first state to bring an action under ROSCA, which went into effect in December 2010. Senior Counsel Paula Selis is leading the case for Washington. The Pennsylvania Attorney General has also filed a lawsuit against the same company for violations of its state consumer protection laws.