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Consumer Update: April 2021

A newsletter from the Office of Consumer Affairs and Business Regulation. Read the letter from the Undersecretary, Consumer Briefs, and other agency features.

Table of Contents

Consumer Update

Letter from the Undersecretary

Dear Massachusetts Consumer, 

Financial literacy is the foundation of sound fiscal decision-making and budget planning. These are things that come to mind for all of us during tax season. So, it seems only fitting that April is Financial Literacy Month. Our own Division of Banks regularly offers webinars and other resources for consumers that address financial literacy. In this issue of our newsletter you will hear how to avoid bitcoin scams, and how to evaluate whether a reverse mortgage is right for you.

Also learn about upcoming virtual events hosted by the Office of Consumer Affairs and Business Regulation and our partners. These virtual consumer forums are free and open to the public, and aim to help you stay vigilant against phishing, telemarketing and other scams. We truly believe that an informed consumer is the best type of consumer which is why we continue to provide resources, programs, and tips on how to avoid falling for scams and other deceptions.

In other news, the Baker-Polito Administration last week announced a new program with the Federal Emergency Management Agency (FEMA) to make an additional 6,000 COVID vaccines available per day and allow for mobile and pop-up clinics to better support disproportionately impacted communities. Beginning this week, over 200 bilingual community volunteers will begin canvassing the 20 hardest hit cities to help schedule COVID vaccines in those areas. And later this month all residents of the Commonwealth 16 years of age and older will be eligible for the vaccine.

Until next time, please stay healthy and safe!

Sincerely, 
Edward A. Palleschi
Undersecretary, Office of Consumer Affairs and Business Regulation

Consumer Protection Panel will Address Ways to Protect Against Scams

The Easthampton Mayor’s Office will join the  Office of Consumer Affairs and Business Regulation (OCABR) and the Easthampton Police Department for a virtual forum designed to inform and empower consumers on the latest scam tactics and how best to avoid them. Mayor Nicole LaChapelle and Undersecretary Edward A. Palleschi host this event and give an overview of programs and services available from their respective government offices.

The panel will include: Easthampton Police Detectives Eric Alexander, Andrew Beaulieu and Mark Popielarczk as well as OCABR Community Outreach Manager Robin Putnam. This one-hour webinar will feature experts from each of the partner organizations as they discuss a range of scams related to the COVID-19 pandemic and the upcoming tax season. Attendees will leave with a more robust understanding of how fraudsters operate, and the relevant tools to combat them. This virtual event will be held on Thursday, 4/8/21, at 12pm. It is free and open to all. Register here.

“A lot of people, especially seniors, have felt isolated during the past year due to the pandemic making them vulnerable to scammers. It’s important to remember that government agencies will not call or email to ask for your social security or bank account number,” said Easthampton Mayor Nicole LaChapelle. “We want to make consumers aware of resources that are in place to protect them from those who seek to do them harm or otherwise take advantage of them.”

During the forum, attendees will be able to ask questions of the experts and receive real-time responses. The webinar will cover things like COVID-19 related scams, tax scams, and identity theft as well as inform consumers about resources that each agency offers from hotline phone numbers to how to check the reputation of a vendor. Participants will learn to recognize signs of common scams, empowering them to be better able to avoid falling prey to fraudsters.

According to the Federal Trade Commission (FTC), imposter scams - where the perpetrator pretends to be someone else in order to get consumers to give them money - are the most common type of scams. Last year, the FTC logged nearly 500,000 complaints about this type of scam totaling $1.2 billion dollars in loss to consumers. Victims on average lost about $850. 

“The Easthampton Police Department frequently receives calls from residents concerned about suspicious telephone calls and scams. These fraudulent activities are not unique to our community, and unfortunately have become quite common,” said Easthampton Police Detective Eric Alexander. “We feel that by identifying the most common types of scams directed at consumers and how to avoid them, we are offering a layer of protection to assist in minimizing exposure to their personal and/or financial information.”

Robocalls are another way that consumers are defrauded. Americans received just under 46 billion robocalls in 2020. This was a decline of almost 22% from 58.5 billion calls recorded in 2019. Scammers can spoof the phone number they are calling from to make it look like one you know so when they ask you for money they seem legitimate. Consumers reported losing more than $3.3 billion to fraud in 2020.

“Criminals are creative and have found ways to stay active during the pandemic. Fraudulent activity reported to my office includes sales of fake COVID-19 test kits, scams that offer early access to the vaccine for a fee, phony COVID-19 vaccine websites made to look like they belong to drug manufacturers, and stimulus check scams in which consumers are asked to share bank and other personal information in order to have quicker access to these funds,said Edward A. Palleschi, Undersecretary of Consumer Affairs and Business Regulation. “OCABR seeks to inform and empower Massachusetts consumers and in doing so protect them from scams.”

Fraud Alert: Bitcoin Scams

The use of cryptocurrency is now more mainstream, becoming integrated into the stock market and many large corporations. Bitcoin is one of the most rapidly emerging forms of digital currency and is accepted as a payment method by nearly 36% of small businesses across the nation, but may open consumers up to an increased risk of cyber-attacks and fraud due to its intangible nature.

Below are five of the most common Bitcoin scams, and information on how to identify and avoid them.

1. Phishing emails

Scammers send their targets an unsolicited email that, in this case, may claim to be from a crypto-exchange or wallet provider. Do not click on any links in emails from an unverified sender. These bitcoin scammers will send fraudulent links to what may appear to be a legitimate cryptocurrency wallet, but once you enter your account details to log in, they have all the details they need to access your account and take control.

2. Unsolicited phone calls

The state and federal government do not currently accept any form of cryptocurrency. If someone calls claiming to be an agent from the Internal Revenue Service (IRS) or other government entity requesting payment in bitcoin, this is a scam—hang up.

3. Bitcoin blackmail

Fear is often used by fraudsters to manipulate their victims into making an impulsive decision to provide personal information. A frequent method scammers use to generate that action is by pretending to be a hacker threatening to share incriminating photos or videos with your school, employer, or contact list. They will often claim to have this evidence through a hacked webcam or laptop and distribute these images unless you pay ransom of a certain amount in Bitcoin. These emails may also include instructions on how to purchase or transfer cryptocurrency. These are all phony claims—do not pay or transfer cryptocurrency, and report the blackmail attempt immediately.

4. Celebrity impersonation scams

It’s common for social media influencers and famous individuals to host “giveaways” with their followers as a thank you for their support. Fraudsters may hack a celebrity social media account or create a fake account impersonating someone, and then post announcements claiming that they are giving away a large sum of cryptocurrency as long as they are sent a certain amount in return. This type of scam has popped up on Twitter, YouTube, and Instagram. Blue check marks, or verified accounts, do not always guarantee that it’s a real account – scammers can take over verified accounts and simply change their name. Bots are also able to generate a large number of likes, comments, and shares on a post, so do not assume that if people have commented, you’re in the clear.

5. Ponzi and Pyramid schemes

A Ponzi scheme is when a promoter convinces consumers to invest, and in turn sends investors a return. This return is actually just money from other deposits made by new investors, creating a false image that the investment is legitimate. This cycle continues until the promoter either runs off with all the money or the pool of investors runs dry. This type of scam is common with cryptocurrency projects.

If you believe you have been a victim of a cryptocurrency scam, report it to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov or to the FBI at IC3.gov.

Is a Reverse Mortgage Right for You?

If you are a homeowner who is 62 or older and have significant equity in your home, you may be eligible for a reverse mortgage. This is a loan in which you borrow against accumulated home equity to receive funds in a lump sum, fixed monthly payments or line of credit.

Unlike a traditional home equity or second mortgage loan, no repayment is required until the borrower(s) moves, sells, dies, or is out of the home for more than 12 consecutive months. Reverse mortgage interest is calculated as compound interest. This type of loan is intended for seniors who have seen a growth in their home equity, encountered distressed economic circumstances, or would like to “age in place” but have limited resources.

The Massachusetts Division of Banks (DOB) has released a DOB connects public service announcement on reverse mortgages. This informational presentation is a helpful resource for those who are interested in learning more about reverse mortgages as a supplemental income and/or housing option.

This DOB informational video on reverse mortgages and accompanying helpful resources and references can be accessed on the DOB connects website here under the “Recently Added” section. As with any financial product, anyone interested in a reverse mortgage should obtain independent legal and financial advice prior to signing loan documents, retain their own legal representation at the closing of the loan, and discuss all particulars with trusted family members.

Give your Auto Insurance Policy a Spring Tune-up

Warmer weather is just around the corner, and as Massachusetts residents begin planning vacations and road trips, the Division of Insurance is again reminding consumers to proactively review their automobile insurance policies to ensure that they have the coverage they need.

“As a general rule, consumers should review their insurance policies at least once per year, and especially following any significant changes,” said Jackie Horigan, Director of Consumer Services at the Division. “By taking just a few minutes to review existing coverages and determine whether any changes are needed, consumers can help ensure that they have the right level of protection if a loss should happen.”

Get your auto policy road ready by doing the following:

  • Check your coverage and limits. Over the last year, many consumers made adjustments to their auto insurance policies to align their coverage with any reductions in driving.  While everyone must carry compulsory liability coverage in case you harm others or their property - at the level required by law - you may have had but dropped higher limits or optional coverages, such as comprehensive and collision coverage on your own vehicle to save money. It’s a good time to look at your coverage and consider optional coverages that you may not have previously purchased, such as substitute transportation or coverage for towing.
  • If your car is financed, double check that you have all the coverages that the lienholder may require you to have. Because many coverages are optional, if you purchase insurance online or without an agent, you may not realize you don’t have certain coverages until an accident occurs. If you’re buying a new vehicle, it would also be a good time to discuss “gap insurance” to cover the difference between the amount you still owe the lender and the amount of money your insurance company will pay if the vehicle is a total loss.
  • Review your declaration page. Be sure all household members who are of driving age are listed on the policy as operators or as excluded drivers and that the address where the vehicle is garaged is correct. The insurance company may deny claims if you omitted or misrepresented any information.  Double check that the contact information that the company has on file for you is accurate as well.
  • Ask for all of the discounts that might be available to you. While some discounts are required by law, such as discounts for passive restraint systems or other safety features, and discounts for drivers who are 65 years or older, different insurance companies offer many other discounts based on low annual mileage, coverage of multiple cars, or drivers who are good students.
  • Shop around. You can shop around for a different automobile policy at any time and should obtain cost estimates from multiple insurers to find the best rate for your specific coverage needs. If you find a better price or a company that offers additional coverages or discounts, you can cancel your old policy and seek a refund of your unused premium. Insurance companies are required to have proof of new insurance or that the vehicle’s registration has been cancelled before canceling an existing policy, but cannot refuse to cancel a policy for any other reason. Insurance companies are also prohibited from requiring only a specific form, known as a 2A form, in order to process the transfer of insurance.

Consumers with questions or concerns about their insurance coverage are encouraged to contact the Division’s Consumer Services Unit at 617-521-7794 or visit the Division’s website at www.mass.gov/doi for valuable information regarding all lines of insurance.

Economic Forum for Consumers

Monday, 5/3/21 from 11:00am-12:00pm
A forum hosted by the Treasurer’s Office of Economic Empowerment, the Massachusetts Councils on Aging, and the Office of Consumer Affairs and Business Regulation will address financial literacy, recognizing and avoiding consumer scams, and available consumer resources. This virtual event is free and open to the public; however, advance registration is required. Register here.

Date published: April 7, 2021
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