Spring 2004

 
News Briefs
 
Reminder: Beware of Fraudulent E-Mail Requests
The FDIC continues to warn consumers about fake Web sites and e-mails that
attempt to trick consumers into divulging valuable personal information,
such as bank account and credit card numbers, Social Security numbers,
passwords and personal identification numbers (PINs).
 
In the typical scam, which law enforcement officials call "phishing"
schemes, consumers receive an e-mail purportedly from a company or financial
institution they may do business with or from a government agency. The
thieves ask for personal information that, if provided, can be used to make
unauthorized withdrawals from your bank account, pay for online purchases
using your credit card, or even sell your personal information to other
thieves. Even the FDIC's name has been used fraudulently in these scams.
For more information about how to protect against these types of frauds, see
"When Internet Scam Artists Go 'Phishing,' Don't Take the Bait," in the
Winter 2003/2004 issue of FDIC Consumer News, online at
 
Federal Agencies Publish Brochure on Predatory Lending
Ten federal agencies, including the FDIC, have jointly published English and
Spanish versions of a brochure that alerts consumers to the potential
pitfalls of using their home as security for a loan, including a high-cost
"predatory" loan.
 
The brochure, "Putting Your Home on the Loan Line Is Risky Business," warns
that borrowing from an unscrupulous lender, especially one that offers a
high-cost loan using your home as collateral, could result in the loss of
your home as well as your money. The brochure also provides tips for getting
the best possible deal and includes information about federal consumer
protection laws.
 
To read or copy the brochure online, go to the FDIC's web site at
www.fdic.gov/consumers/consumer/index.html. Single copies in English or
Spanish also are available free of charge from the FDIC's Public Information
Center.
 
Warning Issued About Some Credit Counseling Firms
Although credit counseling organizations can provide valuable assistance to
people facing serious debt troubles, some firms may be using their
non-profit or tax-exempt status to mislead consumers into paying large fees
for questionable services. That's the warning from the Federal Trade
Commission (FTC) and the Internal Revenue Service (IRS) in recent consumer
alerts and in congressional testimony March 24 before an investigations
subcommittee of the Senate Governmental Affairs Committee.
 
Some of the alleged abuses involve hidden or extra fees in connection with
"debt management plans," under which the consumer sends money each month to
a credit counseling organization for it to distribute to creditors according
to a negotiated schedule.
 
Among the FTC and IRS suggestions: Closely review the fees, services and the
terms of any offer. Consider using an organization that provides credit
counseling and education instead of simply enrolling all clients in debt
management plans. And, check with your state Attorney General, local
consumer protection agency and the Better Business Bureau about any
complaints against a credit counseling agency.
 
For more guidance, start with the FTC pamphlet "Fiscal Fitness: Choosing a
Credit Counselor," which is available online at
toll-free at 877-382-4357.
 
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  Last Updated 06/01/2004 communications@fdic.gov