Straight Talk: Don’t fall for foreclosure rescue scams

By Better Business Bureau
Posted Aug 9, 2020 at 11:00 AM

Are you facing the threat of losing your home? Be wary of individuals and companies offering to “help” you out of your difficult financial situation. Consumer advocates report an increase in complaints about foreclosure “rescue” scams. These scams specifically target homeowners who are in financial distress. Scam operators may advertise over the Internet and in local publications, plaster posters on telephone poles and at bus stops, stick flyers in people’s front doors or contact people whose homes are listed in public foreclosure notices. Sometimes they direct their appeals to specific religious or ethnic groups.

 HOW THE SCAM WORKS
In one scenario, the scam operator offers to “buy” the homeowner’s property by paying off the amount that is overdue on the loan. The scammer convinces the homeowner to deed the property over to a third party. The homeowner is given the option of renting the property with the option to buy it back later. The rent payment on the home is often higher than the homeowner can afford. Frequently, the original homeowner cannot make the rent payment and is evicted from their home. Or, if the homeowner expresses a desire to buy back the property, the scam operator usually sets the price of the home higher than the homeowner can afford.


Hapless homeowners can lose their equity and their homes. Sometimes, the homeowner’s troubles go even deeper. In many cases, the initial mortgage has not been paid off and the deed was never transferred, as promised. Not only is the homeowner faced with eviction from the home, but the scam victim may still owe for the original loan amount.


In other versions of the scam, the homeowner receives a call, text, or email with the promise of lowering the mortgage payment and avoiding foreclosure. The scammer sometimes asks for payment for their services in the form of personal checks or gift cards. A recent victim in Ohio reported to BBB Scam Tracker that she sent $3000 in Walmart gift cards to a scammer asking for payment to help lower her interest rate.


The Better Business Bureau advises consumers who are tempted by such offers to recognize that they are at real risk of losing money, equity, their home or all three.
 

Tips to help if your mortgage is in arrears or you are facing foreclosure:
‒ Talk to your lender. Ask how to restructure your loan payment or how to refinance. Some foreclosure “rescuers” will offer to “negotiate” with your lender or lawyer. Know that such an offer is likely to involve a significant fee. If you are hesitant to talk to your lender yourself, engage the assistance of a trusted family member.
‒ Try selling the house on your own to pay off the lender. Signing over a deed in no way releases you from your mortgage responsibilities!
‒ Don’t allow anyone to complete paperwork for you, or ask you to sign a stack of documents, supposedly to secure a new mortgage. Victims have later learned that they signed a quit-claim deed to their home.
‒ Beware the personal approach. Some less-than-ethical businesses will stuff a handwritten note in your front door or mailbox that implies that “help” is available from someone you know or who has your best interests in mind. Foreclosure scam artists know exactly what neighborhoods to blanket with their offers.
‒ If a foreclosure “rescuer” instructs you not to contact your mortgage company or your attorney, beware. Your mortgage company is the very business that you should be in touch with! Furthermore, why would you agree to cease contact with your attorney when dealing with complicated financial matters that involve perhaps your biggest investment, your home?
‒ You should never sign a contract under pressure and never sign away ownership of your property when you don’t intend to sell it. Ask a trusted family member, your attorney or a financial professional to review any paperwork you may be asked to sign.
‒ Never pay with gift cards. A reputable company will not ask for payment via a gift card.
‒ Before signing any deals with a potential buyer, contact BBB to request a report on the company and check with your state Attorney General and local government department of consumer affairs.
‒ Seek foreclosure prevention information. Try calling the HOPE hotline, 888-995-HOPE, for free foreclosure prevention information, or visit their website at 995hope.org. According to the National Conference of State Legislatures website, the HOPE hotline is operated by the Homeownership Preservation Foundation, a nonprofit “dedicated to preserving homeownership and preventing foreclosure.”
 

FOR MORE INFORMATION Read more about housing scams in BBB’s Scam Alert on Home Title Fraud. This can be found at www.bbb.org/article/news-releases/22679-bbb-alert-home-title-fraud. If you encounter a scam, we ask that you report it to BBB.org/ScamTracker to help warn others.

The background: As I told you in May, the plaintiff firm Z Law filed a class action in 2019 on behalf of millions of Chegg customers whose personal information was allegedly compromised in a 2018 data breach. Chegg’s lawyers at Orrick Herrington & Sutcliffe moved to compel arbitration, citing a mandatory arbitration provision in the user agreement its customers are required to accept. In April 2020, U.S. District Judge Richard Bennett of Baltimore granted Chegg’s motion.
Z Law then filed more than 15,000 individual demands at the American Arbitration Association, asserting a claim of $25,000 for each Chegg customer. Z Law principal Cory Zajdel told me at the time that he sent six boxes of filings, containing individual demands by all of his 15,000 clients, to Chegg, hoping to foreclose arguments that his clients were not Chegg customers or did not exist.

In June, according to a July 1 letter from Zajdel to the AAA, the arbitration service instructed Chegg to pay about $7.5 million in fees to launch the arbitrations. (Chegg’s arbitration clause requires the company to pay the initial fees.)

I should say here that Chegg counsel Douglas Meal did not respond to my detailed email request for comment, so this account is based on Zajdel’s letter to the AAA.

Instead of paying the requisite fees and beginning the process of arbitrating with its customers, Chegg said those customers had breached their user agreements by asserting frivolous or improper demands for arbitration. Chegg unilaterally purported to terminate the agreements. The company then informed AAA that it was under no obligation to arbitrate with those customers, or, for that matter, to pay any fees associated with their arbitration demands.

FAQs on Stimulus Payments
By National Consumer Law Center
Updated April 15, 2020

Need legal help? Find a civil legal-aid office (income eligible) in your state or see the website of the National Association of Consumer Advocates to find an attorney in your state (search by subject area and licensed to practice). 

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) authorizes stimulus payments (also called “recovery rebates” or “Economic Impact Payments”) to certain individuals.  See § 2201 (pp. 55-60). Official information on these payments is at https://www.irs.gov/coronavirus  (click on “What you need to know about payments”), which is being regularly updated.   Other lists of FAQs are available at the New York Times.

The FAQs below are our best attempt to answer questions we are getting but please check the IRS website, which is updated regularly, for official information.  Notify us of any errors at consumerlaw[at]nclc.org. More information about responses to the economic crisis are on NCLC’s COVID-19 & Consumer Protections page.

THE QUESTIONS: (Answers at https://docs.google.com/document/d/1qDSnSg_AXvzOCyegmJoX6h3_ljN-In9S/preview)

1. When will the payments go out?
2. Who is eligible for payments?
3. How much am I entitled to?
4. I haven’t gotten a payment yet. How can I get my money quickly?  
5. I accidentally used the non-filer portal but I’ve discovered I need to file a tax return. What should I do?
6. I don’t have to file a tax return. How will I get my money? 
7. Can debt collectors, banks, or the federal government take my payment to cover back debts?  What can I do to prevent my payment from being garnished?
8. The account that I got my 2018 tax refund in is closed. What will happen to the money?
9. I receive Social Security, SSDI, SSI, or Railroad retirement and have dependents.  How can I get the extra $500 for my dependents?
10. I received my 2018 or 2019 tax refund through a tax preparer prepaid card or through a tax refund anticipation check (RAC) or tax refund anticipation loan (RAL). How will I get my stimulus payment?
11. I want to open a bank account for direct deposit but I have a negative history with an account screening agency. What can I do so that I don’t have to wait for a paper check?
12. I changed my address or bank account since my 2018 or 2019 tax return. How do I notify the IRS of the change?
13. I don’t have a bank account. Can I use a prepaid card, mobile debit card account ,or digital wallet? 
14. Will the IRS use the Direct Express card or another prepaid card? 
15. What do I do if I didn’t get my money?  
16. Will the payments affect asset limits used for eligibility for public assistance?
17. I am in bankruptcy. Are the payments considered income or can my creditors grab the payment?
    
    

State issues grace period order for insurance deadlines

Salem – The Oregon Department of Consumer and Business Services issued a temporary emergency order today in response to the COVID-19 outbreak. It requires all insurance companies to extend grace periods for premium payments, postpone policy cancellations and nonrenewals, and extend deadlines for reporting claims.

The COVID-19 outbreak has caused widespread business closures, job losses, and social distancing measures. This severe disruption to business in the state includes some Oregonians’ ability to make insurance premium payments, report claims, and communicate with their insurance companies.

“During this crisis, we must all do our best to help Oregonians focus on staying healthy, care for their families, and prevent the spread of the coronavirus,” said Andrew Stolfi, insurance commissioner. “Many of our insurers have already stepped up and done the right thing. This order will ensure every Oregonian who needs it has relief from these insurance policy terms, giving them a measure of security and stability.”

Insurance companies must take steps immediately to do the following until the order is no longer in effect:

• Institute a grace period for premium payments on all insurance policies issued in the state
• Suspend all cancellations and nonrenewals for active insurance policies
• Extend all deadlines for consumers to report claims and communicate about claims
• Provide consumers the ability to make premium payments and report claims while maintaining safe social distancing standards

The order is effective immediately, and will be in force through at least April 23. If necessary, the department may extend the duration of this temporary order.

If Oregonians have questions or concerns about their insurance company or agent, they can contact the department’s advocacy team at 888-877-4894 (toll free) or visit dfr.oregon.gov for more information or to file a complaint.

For insurance and financial services information related to COVID-19, visit the department’s website:
https://dfr.oregon.gov/insure/health/understand/Pages/coronavirus.aspx. 

Don't get catfished by your Valentine

Valentine’s Day is almost here, love is in the air, and the Oregon Division of Financial Regulation warns, don’t get catfished.

Recently, an 80-year-old widower was catfished out of $200,000. The unidentified fraudster stole a Florida woman’s identity to befriend the Oregonian through an online dating service and persuaded him to send money for a business opportunity.

Over several months, the con artist convinced the elderly man that they were in a long-distance romantic relationship, and proposed an opportunity to support an art gallery in Florida.

The scammer pretended to seek investors to cover $5 million in transportation costs to ship a 500-ton marble lion sculpture from China. The con artist promised that investments would be returned plus a percentage of the profits from the sale of the sculpture.

The widower even received fabricated documents detailing the contract with the museum and bank statements. Relying on the documents and his romantic relationship, the victim made a series of payments over five months to various individuals and overseas bank accounts totaling more than $200,000.

The widower lost his entire investment and investigators have been unable to locate the scammer.

“Romance scams typically target older individuals, gain their trust, then ask for money through social media and dating websites,” said Andrew Stolfi, division administrator. “Unfortunately, victims often wire funds overseas or to third-party transfer agents, making it difficult to track the money and identify the con artist.”

The division encourages consumers to do their homework before making any investment. Protect yourself from getting catfished or falling for an investment scam by following these tips:

• Do not send money to anyone you have not met in person, and be cautious about sharing personal or financial information.
• Do not transfer money to unknown people or intermediaries. If you need to use a third party to send money, use a licensed money transmitter.
• Keep copies of all communications with scammers and report them to the division, the online dating site, the local police, the Federal Bureau of Investigation, and the Federal Trade Commission.

For more information and tips about investing, visit dfr.oregon.gov/financial/investments.
Consumers can also contact the division’s advocates at 888-877-4894 (toll-free) to ask questions, file complaints, or check the license of a company or advisor.

It’s no secret why employers and corporations love arbitration: The process is a raw deal for the little guy. The arbitrators who preside over these cases may not be bound by substantive law, meaning victims can’t get the damages they’d get in actual court. Nor are arbitrators constrained by the procedural safeguards of the judicial system. The company accused of wrongdoing generally gets to choose the venue, which may be far away from the victim’s home. Victims must pay their own way, not just for travel but for legal representation. Arbitration outcomes are frequently confidential, but all available data suggests that victims fare poorly.

Recognizing that the deck is stacked against them, countless victims do not even attempt to arbitrate when they’ve been swindled. This choice, sadly, might be a rational one. Individually, employees’ injuries may not amount to much—a few hundred dollars, say, in a typical case of wage theft, when an employee claims an employer failed to pay them money they were owed. A class-action lawsuit would be the most logical way to recoup that money, in light of how small the individual claims are.Who would spend thousands of dollars in legal fees to recover hundreds of dollars in backpay? And that, of course, is the point. Companies know that if you can’t sue collectively, you probably won’t file claims at all.

The original sin here is a law called the Federal Arbitration Act or, more accurately, the Supreme Court’s misinterpretation of the FAA. Congress initially intended this measure, which was passed in 1925, to help speed up commercial disputes between businesses. Scholars have persuasively demonstrated that the law was never meant to apply to employment or consumer contracts, or to curb states’ ability to regulate these contracts.

But beginning in the 1980s, corporate attorneys began to persuade courts that the law was, in fact, a loaded gun aimed at class-action litigation and access to the courts. A young lawyer named John Roberts spearheaded this effort, so it is no surprise that, as chief justice of the United States, he has helped enshrine this warped conception of the FAA into law. In an early case, 1984’s Southland Corp. v. Keating, the court began to reinvigorate the FAA; it threw out a class-action lawsuit brought by 7-Eleven franchisees against their parent company for fraud, ruling that the FAA supplants state law. The court built upon that flawed decision in 2001’s Circuit City v. Adams, allowing Circuit City to force its workers into arbitration if they tried to sue. . . .

Stories and stats from Oregon’s Prescription Drug Price Transparency Program

Salem – The Oregon Department of Consumer and Business Services released its first report to the Legislature on prescription drug prices in Oregon. The program is the first in the United States to gather and publicly disclose comprehensive data about prescription drugs.

Before the report was finalized, a public hearing was held in November where Oregonians shared stories of how the cost of drugs affects their lives.

One story came from a nurse who helps patients with diabetes:

“I often found my patients would simply go without their diabetes medications because they could not afford them. We had a pharmacy at our safety net clinic that could provide lower cost medications, but even with our lower prices, many patients could not afford insulin and other diabetes medications.”

Another was from an Oregonian who cannot retire because of the cost of prescriptions:

“My spouse needs to take Eliquis, 5 milligrams, twice-a-day. A 90-day supply costs $1,343. Again, why so much? My spouse has nine different prescriptions that have to be taken. Another costs $400 for a 30-day supply. My spouse is retired, and Social Security is only $1,200 a month. I continue to work to receive insurance benefits to cover those drug costs. I cannot retire until my spouse dies; I can’t afford to.”

“The stories we received were heartbreaking, emotional, and insightful,” said Andrew Stolfi, Oregon insurance commissioner. “The data taught us a lot, and the consumer stories confirmed exactly why this program matters for all Oregonians.”

The report reveals several findings and provides recommendations for legislative changes to reduce the effect of rising prescription drug costs.

Findings include:

• U.S. prices are typically five times more than the highest price globally for prescription drugs reported to the program. For example, the median price for cardiovascular drugs reported to the program was $580, while the majority of prices in other countries ranged from $5 to $164.

• Most of the annual price increases reported to the program range from the reporting minimum of 10 percent to approximately 20 percent. Manufacturers attribute these increases to rebates, the use of co-pay assistance programs, obligations to shareholders, research and development costs, and other related factors.

Recommendations include:

• Patient assistance reporting for new prescription drug reports – New drug reports currently do not include any patient assistance information, despite several new drugs coming to market with patient assistance.
• Transparency across the pharmaceutical supply chain – The price of a prescription drug is influenced by several factors, including the interactions and financial negotiations between pharmaceutical supply chain entities. These entities can influence the price paid at the pharmacy counter, the cost of health insurance premiums, and how prescription drugs contribute to overall health care costs.

The program will continue to build upon the information received in the first year to improve the program for the future and to continue to understand the effect of drug prices and costs. As more information is received, the program will engage in analyses to inform policies to reduce the cost of prescription drugs to Oregonians.
All Oregonians can access the report and view the public hearing by visiting the program’s website.

All Oregonians are encouraged to report an increase in the cost of their prescription drugs or share their story one of four ways:

• Email [email protected]
• Call 833-210-4560 (toll-free)
• Online consumer price increase report
• Share your prescription drug price increase story

For more information, visit dfr.oregon.gov/drugtransparency.

COPY, PASTE, LEGISLATE

Used car dealers didn’t want to fix deadly defects, so they wrote a law to avoid it
By Rui Kaneya with Pratheek Rebala, Center for Public Integrity

Carlos Solis never knew he was driving with a “shrapnel bomb” inside his steering wheel.

The 35-year-old father of two was waiting to make a left turn on a suburban road outside Houston when another car struck the front end of his Honda Accord, triggering its airbags.
Instead of protecting Solis, the defective airbags shot a piece of metal into his neck and severed his carotid artery, killing him within minutes.

Solis knew nothing about the danger: A used-car dealer sold him the car without fixing the airbags or warning him that Honda had recalled the vehicle three years earlier, according to a lawsuit filed by his family.

By the time Solis was killed in 2015, similar accidents were piling up nationwide amid an unprecedented series of recalls for an array of dangerous defects – from shrapnel-flinging airbags to ignition switches that shut off engines.

For auto dealers, the string of accidents was a warning sign of what was to come: a barrage of lawsuits filed against them for selling recalled used cars without fixing them first.

Auto dealers came up with a plan to preempt the problem.

They crafted what’s known as “model legislation” that would allow them to continue selling recalled used cars, so long as they disclosed open recalls to customers somewhere in a stack of sales documents. They then turned to their army of lobbyists – more than 600 on call in 43 states – to help get the measure passed, one state at a time.

The effort is paying off.  (read the rest here)

The success of auto dealers’ effort is a case study in how special interest groups with deep pockets go from state to state with model legislation – copy-and-paste measures that can be handed to friendly lawmakers in any state – to get the policies they want, often with little public scrutiny and sometimes with tragic consequences.

During a two-year investigation, the Center for Public Integrity, USA TODAY and the Arizona Republic found thousands of similar pieces of legislation and retraced a number of them to their root. Many were written by corporations or special interest groups that stood to benefit directly. Some are pitched as public-service measures.

SIDEBAR: This story was produced as part of a collaboration between USA TODAY, the Arizona Republic and the Center for Public Integrity. More than 30 reporters across the country were involved in the two-year investigation, which identified copycat bills in every state. The team used a unique data-analysis engine built on hundreds of cloud computers to compare millions of words of legislation provided by LegiScan.In the past five years, versions of auto dealers’ copycat bill have been introduced in at least 11 states – California, Illinois, Maryland, Massachusetts, Missouri, New Jersey, New York, Oregon, Pennsylvania, Tennessee and Virginia. So far only Tennessee and Pennsylvania have adopted them, but Massachusetts, Missouri, New Jersey and New York still have measures under consideration.