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VOL. 36 | NO. 31 | Friday, August 3, 2012

State gets aggressive in fighting scams

By Joe Morris

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Most people don’t even skim past the subject line before deleting an email from a Nigerian prince who’s ready and willing to fork over some cash in exchange for a wee bit of banking information.

Ditto the European lottery notification.

But plenty of others fall for these and other scams, so the state of Tennessee is stepping up its efforts to warn people about fraud, Internet and otherwise.

The Tennessee Attorney General’s Office and the Division of Consumer Affairs have begun to promote a joint Facebook page, facebook.com/tennesseeconsumerhelp, which has updates on current online, mail and other scams and frauds, as well as some general awareness pointers.

It also can point victims in the right direction, as many don’t realize that the state can help them regain stolen money, says Gary Cordell, director of Consumer Affairs for Tennessee.

“We are making a big push now because our research shows that most of the common scams are prevalent at this time of year,” Cordell says.

The department’s website, tn.gov/consumer, offers the print calendar in a downloadable version. Both highlight a common scam each month, which is important given the repetitive nature of some tried and true ones.

“In January, there are a lot of health care-related scams pushing weight loss or metabolism boosting pills because people are looking to take off holiday weight,” Cordell says.

“That’s why we are trying to not only get people aware of the scams that are out there, but also to be more alert in general. Social media is how people are gathering information now, so we felt it was important to make sure that we had a presence there.

“We also have placed QR codes on our business cards and printed material so people can use their smartphones to download our information.”

Consumers who have been defrauded often are reluctant to come forward, but Cordell encourages anyone who’s lost money to visit the department’s website and fill out the complaint form. That will not only swing the Consumer Affairs staff into action, but also loop in the Tennessee Attorney General’s Office, which works in tandem with the Division of Consumer Affairs to combat fraud.

“In most states our division would be under the attorney general’s office, but here, we are under the Division of Commerce and Insurance,” Cordell explains. “That’s why we handle investigation and awareness and then link up with them, as well as local sheriffs, districts’ attorneys, the postal service, FBI and many other agencies, to handle the prosecutory measures.”

The attorney general’s office also has a significant presence in social media, including, Facebook and Twitter, for getting out fraud alerts and updates. Staff from both offices meet or speak daily so ongoing cases can handled and trends can be identified and acted upon.

Cordell says Tennessee consumers are no more or less savvy than those in other states but often are more reluctant to report a problem and so can hold up legal and other preventative actions.

“People are embarrassed, they don’t want to let anybody know they got taken,” he says. “Once we get a complaint, it’s usually the tip of the iceberg. As we investigate, we usually find a lot more people who have been taken advantage of.”

Cordell also wants Tennesseans to know the state recovery rate is good – and climbing.

“If you realize you’ve been had, or what you’ve purchased is less than what you were led to believe, contact us,” he says. “Last year we returned more than $3.5 million to consumers, and this year we are on target to return $5 million to them.”

Liberating that money from the individuals and businesses who have taken it falls to Jeff Hill, senior counsel with the state attorney general’s Consumer Advocate and Protection Division, who along with other attorneys works to remedy fraud before, and after, it happens.

“With some scams, we can never track down the person because it was over the Internet,” Hill says. “But we can get the word out, and prevent more of the same. And we want to make sure that people file complaints regardless, so that we have a file. Sometimes we can investigate something well after it has happened.”

The division often begins with a complaint letter to a person or company accused of a scam, followed by a mediation process. Often that occurs after multiple complaints, or just a few that allege particularly egregious action by the firm.

Working with the Consumer Affairs staff, the division also contacts other states to see if any of these issues are popping up in other jurisdictions, and how they are being handled there.

“It really can vary,” Hill says. “Sometimes we settle, sometimes we sue. Recently we settled with Sketchers, the shoe company, over substantiation of claims they made in their advertising. We didn’t get a lot of complaints about that, but we brought the investigation and got the settlement.

“We also had a similar case with Dannon yogurt, where they could not back up a claim they made about how their product improved your digestive system.”

Other successes include cases against Abbott Laboratories for marketing the drug Depakote for unapproved uses, as well as a settlement with QuinStreet, which was promoting for-profit schools for soldiers and veterans. In that case, the domain name gibill.com was surrendered to the federal government.

The state also took part in the nationwide mortgage settlement with major banks a few months ago, helping establish a single point of contact for Tennesseans looking to modify their mortgages and avoid foreclosure.

In many cases, attorneys are able to resolve cases without going to court. And if a case is litigated, the results can be found at tn.gov/attorneygeneral under the consumer-protection area.

“We are trying to get the word out about the websites we have, but also reach out through social media,” Hill says. “There is a lot of good information out there, and there are more ways to get to it now than ever before. We want to make sure our consumers are as informed as possible.”

Even so, there’s still no substitution for plain old common sense, notes Cordell.

“The best advice is old advice,” Cordell says. “If it sounds too good to be true, it is. Do your own homework. Read anything in an email very carefully. Fine print wouldn’t be fine print if there weren’t something in there to be cautious of. And if someone wants you to wire them money, run for the hills.”

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