Three Financial Scams to Watch Out for in the New Year

New Years Eve is almost here, will maintaining better financial security be a resolution for you in 2013? (AP photo)

Many of us will mark the passage from one year to the next by making New Year’s resolutions, an opportunity for a fresh start and self-improvement. It’s an ideal time to plan ways to increase savings, retire debts, or exercise more.

Name just about any resolution, and chances are criminals are keenly aware of it. Armed with that information, they’re resolved to achieve their own goal for the New Year: defraud unsuspecting consumers.

Take charge of your financial security in 2013 and watch out for these three ways fraudsters may try to sabotage your New Year’s resolutions:

Unscrupulous free trials to help you shed pounds

The Internet is chock full of dietary supplements that promise to help you lose weight and teeth whiteners that will produce a dazzling smile. Fraudsters have been known to operate sites that come with offers of a free trial or sample. In this scam, consumers who accept such an offer are required to provide their payment card information to cover the nominal cost of shipping. But consumers may not look at the pre-checked box at the bottom of the page, authorizing future charges. For some free trials, a company takes a consumer’s failure to cancel as permission to continue billing. Making matters worse, cancelling can also be complicated by merchants with poor customer service, slow response times, and untimely refunds.

Visa monitors its payment network to identify merchants with excessive levels of cardholder disputes which may indicate the use of deceptive marketing practices like this, but there are steps consumers also should take to avoid falling into this trap:

• Read and understand all terms and conditions before you buy.
• Pay particular attention to the fine print and any pre-checked boxes before submitting payment information for an order. Failure to un-check boxes may bind you to those terms and conditions.
• Always review card statements on a regular basis for any unauthorized charges. Notify the card issuer promptly of any unusual activity or unauthorized charges.
• If you see any charges for what you thought was a “free” trial, call the merchant first to try and resolve the situation. If unsuccessful, contact your card issuer immediately to dispute the charge.

Phony debt relief counseling

Paying off debt is a common resolution, especially with bills from holiday gift-giving serving as a reminder. Scam artists may try to take advantage of this New Years’ resolution by calling and posing as a debt settlement firm. What typically happens is the scammer will request a consumer’s banking and payment card information by phone to cover a service fee and/or to gather the necessary information to begin re-negotiating your debt on your behalf. In reality the fraudster never contacts the consumer’s creditors and, instead, begins making unauthorized charges to the consumer’s account or withdrawing money directly from the consumer’s bank account.

Help avoid getting stung by debt-relief scams by remembering the following:

• Carefully screen any debt relief offers that come to you through email, phone or mail.
• Don’t be bullied into providing your sensitive information. If the firm urges you to “act quickly” and/or tries to pressure you into provide your payment information on the spot, the best thing to do is hang up or not respond. These pressure tactics should raise a big red flag.
• Research the company thoroughly before sharing your information. The Better Business Bureau is a good resource to help screen companies. The FTC also provides screening tips and additional information on how to find a legitimate credit counselor in your area: https://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm

Fraudulent tax prep help

Few among us haven’t procrastinated on preparing tax returns at one point or another. We start receiving end-of-year forms right about the time we compose our resolutions, so it’s natural to want to get a jump on filing tax returns. It’s also the time of year that fraudsters don their phony tax preparer’s hat. Entrusted with your sensitive information, they can steal your money and potentially your identity, too. Criminals may do this by impersonating the Internal Revenue Service (IRS) though official-looking e-mail messages and phishing sites.

For happier returns, heed these words of caution:

• Make sure your tax preparer has the proper credentials. He or she must be an attorney, certified public accountant or enrolled agent certified by the IRS.
• Carefully review and sign your return before it is filed.
• Don’t click on e-mails from the IRS. The IRS doesn’t send unsolicited e-mails to taxpayers to request personal or financial information.
• As always, be cautious of tax preparers who promise to get you the highest possible return.

Making and sticking to New Year’s resolutions is a time-honored tradition meant to better our lives. Resolving to protect your sensitive information is a good way to ensure a happier New Year.