Consumer Alert
Business opportunities and trainings that claim you’ll make big money are often scams
By
Cristina Miranda
Consumer Education Specialist, FTC
November 16, 2022
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Dreaming about making extra cash with an online business or by trading cryptocurrency? Are you ready to ditch the 9 to 5 life to be your own boss? You might see business opportunities and training programs marketed to (supposedly) help make that happen. But big promises of big money are one sign that you’ve run into a scam.
Take DK Automation, LLC., for example. According to a complaint by the FTC, the company and its creators, Kevin David Hulse and David Arnett, promised huge returns to trick people into buying business opportunities and training programs. The claim? They could teach you how to build, open, and run massively profitable stores on Amazon. But, says the FTC, those claims were deceptive or flat-out false. Most people who bought DK Automation’s programs never earned, and even lost money.
DK Automation also offered investment “training” that promised to show people how to secure cryptocurrency riches. For fees of $20,000-$85,000, the company offered a trading bot to invest in crypto and (supposedly) make lots of money. But the FTC says that this claim also turned out to be a bust.
If you’re looking for a business opportunity or training in investments or business development:
- Do your research. Search online for information about the company with words like “scam” and “complaint.”
- Steer clear of companies that use high-pressure sales tactics. It’s a red flag if someone says you must act immediately or discourages you from taking time to do some research.
- Question claims about future riches. Promises that you’ll beat the stock market, make over-the-top-profits, be able to quit your job, and live a life of luxury are strong indications of a scam.
- Don’t trust anyone who says you can quickly and easily make money in the cryptocurrency markets.Only scammers will guarantee profits or big returns. And all investments come with risks.
Spot a business opportunity, training, or investment scam? Tell the FTC at ReportFraud.ftc.gov.
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Money-Making Opportunities and Investments
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Consumer Alert
Imposter scams targeting veterans and servicemembers
By
Gema de las Heras
Consumer Education Specialist, FTC
November 16, 2022
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As we continue to honor and celebrate veterans, scammers increase efforts around holidays — like Veteran’s Day — to try to take advantage. Right now, a banking scam is tricking veterans (and current servicemembers) into sharing sensitive personal or financial information. Find out how.
Imposters are contacting veterans, servicemembers, and their families. They pretend to be representatives of USAA Bank, Navy Federal Credit Union, and other banks. They’re asking for information — like your Social Security, bank account, or credit or debit card number, or your password. They’re saying that your debit card has been blocked, they’ve detected fraudulent activity, or some other urgent excuse. (These, by the way, are all lies.)
You may get one of these unexpected calls or voicemails from your bank, or even a surprise text or email with a link that includes an official-looking logo (also all fake). These are from scammers who want your information to get into your accounts or steal your identity. And if you click on the fake link, they could install malware on your phone or computer, which could give them complete access to your device and information.
Here’s how to protect yourself:
- Don’t trust caller ID. Scammers fake the number they call from. Never call back phone numbers from your caller ID or those left in voicemails.
- Never give personal information to anyone who contacts you out of the blue. Financial institutions won’t ask you for personal information or passcodes. If you think it could be legit, contact the company using a website or phone number you know is real.
- Don’t click links in unexpected texts or emails. Those are often phishing scams. If you’ve clicked a link by mistake, update your phone’s and computer’s security software.
Suspect a scam? Report it at ReportFraud.ftc.gov and visit MilitaryConsumer.gov for more resources. Also, read more about the FTC’s rulemaking proposal to combat impersonation scams.
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Scams
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Business Blog
Compliance deadline for certain revised FTC Safeguards Rule provisions extended to June 2023
By
Lesley Fair
November 15, 2022
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If you’ve been working on implementing the revised Safeguards Rule at your business by the upcoming deadline, that’s good news for your company and your customers. Just know that for certain provisions of the updated Rule, the FTC has extended the compliance deadline by six months – to June 9, 2023 – in response to reports of personnel shortages and supply chain issues.
Some regulations may have cryptic titles, but you can’t count the FTC Safeguards Rule on that list. Its clear purpose is to strengthen the data security safeguards that covered companies must put in place to protect customers’ personal information. Last year the FTC announced updates to the Safeguards Rule and later issued a to-the-point publication to help streamline your compliance efforts, FTC Safeguards Rule: What Your Business Needs to Know.
Now to answer two questions that may be on your mind.
What provisions are included in the six-month extension? Consult the Federal Register Notice for details, but the extension applies to provisions in the revised Rule that require covered companies to:
- designate a qualified person to oversee their information security program,
- develop a written risk assessment,
- limit and monitor who can access sensitive customer information,
- encrypt all sensitive information,
- train security personnel,
- develop an incident response plan,
- periodically assess the security practices of service providers, and
- implement multi-factor authentication or another method with equivalent protection for anyone accessing customer information.
Who’s covered by the Safeguards Rule? The Rule applies to financial institutions within the FTC’s jurisdiction and that aren’t subject to the enforcement authority of another regulator under section 505 of the Gramm-Leach-Bliley Act. You’ll want to read the Rule for the specifics, but here’s the important takeaway point. In this context, the definition of a “financial institution” isn’t a hushed hall with tellers, deposit slips, and ballpoint pens on chains. Rather, the FTC Safeguards Rule covers businesses like mortgage lenders, mortgage brokers, motor vehicle dealers, payday lenders, finance companies, account servicers, check cashing companies, wire transferors, collection agencies, credit counselors and other financial advisors, tax preparation firms, non-federally insured credit unions, and investment advisors that aren’t required to register with the SEC. That’s not an exhaustive list, so if you aren’t sure if you’re covered, now’s the time to nail that down.
The FTC has more resources for your business on the Safeguards Rule in particular and Data Security in general.
Tags:
- Consumer Protection
- Bureau of Consumer Protection
- Finance
- Privacy and Security
- Data Security
- Gramm-Leach-Bliley Act
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Consumer Alert
How to steer clear of a flood-damaged car
By
Colleen Tressler
Division of Consumer and Business Education, FTC
November 15, 2022
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Shopping for a car? With new car prices averaging more than $48,000, you may be thinking about buying used. But in the wake of disasters like Hurricane Ian, tread lightly: after a hurricane or flood, storm-damaged cars are sometimes cleaned up and taken out of state for sale. You may not know a car is damaged until you look at it closely.
If you’re shopping for a used car:
- Check for signs and smells of flood damage. Is there mud or sand under the seats or dashboard? Is there rust around the doors? Is the carpet loose, stained, or mismatched? Do you smell mold or decay — or an odor of strong cleaning products — in the car or trunk?
- Check for a history of flood damage. The National Insurance Crime Bureau’s (NCIB) free database will show if a car was flood-damaged, stolen but not recovered, or otherwise declared as salvaged — but only if the car was insured when it was damaged.
- Get a vehicle history report. Start at vehiclehistory.gov to get free information about a vehicle’s title, most recent odometer reading, and condition. For a fee, you can get other reports with additional information, like accident and repair history. The FTC doesn’t endorse any specific services. Learn more at ftc.gov/usedcars.
- Get help from an independent mechanic. A mechanic can inspect the car for water damage that can slowly destroy mechanical and electrical systems and cause rust and corrosion.
- Report fraud. If you suspect a dealer is knowingly selling a storm-damaged car or a salvaged vehicle as a good-condition used car, contact the NICB. Also tell the FTC at ReportFraud.ftc.gov, and tell your state attorney general.
Topics
Scams
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For Release
FTC Returns More Than $9.8 Million To Consumers Harmed by Napleton Auto’s Junk Fees and Discriminatory Practices
November 14, 2022
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- Consumer Protection
- Bureau of Consumer Protection
- Cars
- deceptive/misleading conduct
- Automobiles
- Credit and Finance
- Credit and Loans
- Payments and Billing
The Federal Trade Commission is sending payments totaling more than $9.8 million to consumers who were harmed by Illinois-based Napleton Automotive Group’s junk fees and discriminatory practices.
The agency is sending 66,355 checks, averaging $147 each. Recipients should cash checks within 90 days. Consumers who have questions about their refund should call the refund administrator, Epiq, at 1-888-691-6050. The Commission never requires people to pay money or provide account information to get a refund.
The FTC and the State of Illinois sued Napleton Automotive Group in March 2022, alleging that Napleton employees were sneaking illegal junk fees for unwanted “add-ons” onto vehicle purchases and discriminating against Black consumers. According to the joint complaint, eight of the company’s dealership illegally tacked on junk fees for unwanted “add-on” products such as payment insurance and paint protection, costing consumers hundreds or even thousands of dollars. The complaint also alleged that Napleton discriminated against Black consumers by charging them more for add-ons and financing.
The Commission’s interactive dashboards for refund data
provide a state-by-state breakdown of refunds in FTC cases. In 2021, Commission actions led to more than $472 million in refunds to consumers across the country, but these refunds were the result of cases resolved before the U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court. Because of that ruling, the Commission no longer has its strongest tool to return money to consumers, and it will become harder to provide refunds to consumers harmed by deceptive and unfair conduct. The Commission has urged Congress to restore its ability to get money back for consumers.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
Press Release Reference
Contact Information
Contact for Consumers
Epiq
Refund Administrator
Media Contact
Office of Public Affairs
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