disb

Department of Insurance, Securities and Banking
 

DC Agency Top Menu


-A +A
Bookmark and Share

Top 10 Common Financial Schemes

Friday, March 17, 2017

(WASHINGTON, DC) – The District of Columbia Department of Insurance, Securities and Banking (DISB) is advising residents of the top 10 financial schemes to watch out for as well as informing them of resources and services available to them to help protect against potential fraud.

“As the financial regulator for the District of Columbia, it is our goal to ensure residents are protected from unfair and unscrupulous financial activity. In the unfortunate event that fraud occurs, we will advocate for the consumer to ensure justice is served,” said DISB Commissioner Stephen C. Taylor.

Ten common scams residents should watch out for are:

IRS Imposter: Aggressive phone calls from individuals claiming to be representatives of the Internal Revenue Service demanding payment for back taxes via a pre-loaded debit card or wire transfer. DISB reminds residents that the IRS does not demand payment using a specific payment method and would first mail a bill if they owed taxes. For more information, go to irs.gov.

Inurance Frauds: When an insurance company, agent, adjuster or consumer commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling or underwriting insurance. Fake insurance companies and dishonest insurance agents can defraud consumers by collecting premiums for bogus policies with no intention of paying claims. Phony home, health, life and auto policies typically are offered at rates that are significantly lower than the traditional market price in order to lure consumers who are looking to save money. If you are unsure about the insurance company or agent you are dealing with, stop before signing any paperwork or writing a check; call DISB on 202-727-8000 or visit disb.dc.gov; and confirm the company or agent offering insurance is legitimate and licensed in the District of Columbia.

Affinity Fraud: An investment scam (examples are Ponzi and pyramid schemes) that preys upon members of identifiable groups, which can include social, ethnic, religious, political or professional associations. Victims typically let down their guards when offered an investment opportunity by a fellow member of a church or social club or someone they know. DISB advises residents to be skeptical of investments that are not fully documented in writing; don’t fall for a promise of “guaranteed” returns; and don’t be pressured to invest before you have had a chance to research and investigate.

Identity Theft: Someone obtains and uses your personally identifiable information (date of birth, Social Security number, etc.) fraudulently, often for financial gain. DISB advises residents to always know what’s in your wallet and avoid carrying your Social Security number in your wallet or purse. Shred documents instead of tossing in the trash. Open and read all mail even items that appear to be junk mail. Regularly monitor your credit score and check your credit for free once a year at annualcreditreport.com

Lottery Scams: You receive a phone call from someone who congratulates you for winning the lottery and they tell you they need your credit card number in order for you to pay the taxes and shipping fee. Once you provide the information, they give you a tracking number and continue to call you advising that you need to pay another fee. This continues until you realize that something is wrong. But it is too late. Never share personal information with someone you don’t know. Always stop, check and verify.  

Grandparents Scam: An elderly person receives a phone call from someone claiming to be their grandchild, who says they’ve been arrested and need money to get out of jail. You send the money and call the child’s parents only to learn that he or she is actually at home with them. Before sending money, call your loved ones first.

Check Scams: Someone contacts you (by phone, email, etc.) asks you to cash their check because they do not have a bank account, and offers you a portion of the proceeds as long as you immediately send them the remainder of the money. When your bank later determines that the check was fraudulent, they charge your account the full amount of the cashed check plus a bounced check fee.  

Debt Collector Schemes: You are contacted by someone who demands you immediately repay them for a debt you owe, otherwise they threaten to take away your home or other property.

Home Improvement Scams: Someone claiming to be a contractor goes around your neighborhood knocking on homeowners’ doors and advising them that their houses are in need of repair or tree service. The contractor has the owner sign a bogus contract and he collects the total money due upfront. The contractor may do some shoddy work or leaves without doing any of the agreed upon work and he never returns. The homeowner subsequently discovers that the name of the contractor and his company are fictitious and that they are not licensed. The homeowner has lost all the money he paid the contractor.

Discounted Prescription Drug Scam: Someone contacts you claiming to be a representative of a drug company. They ask you whether you take prescription medications and if so, which drugs in particular. They advise you that they can get you the same medications at a much lower price than you currently pay. You purchase the medications from them and when they arrive, you discover that they are filled with unknown substances.      

Additionally, DISB advises residents to always check and verify before completing a financial transaction. Residents can check the licenses of a financial services professional on DISB’s website at www.disb.dc.gov.

Residents can also file a complaint with DISB in the unfortunate event that they believe they might be a victim of fraud. DISB will investigate the complaint to see if any District laws and procedures have been violated. If the complaint involves an entity that DISB does not regulate, DISB will refer complaints to the appropriate regulator and work with our contacts to help resolve the problem. To file a complaint, contact the agency at 202-727-8000, [email protected] or access the complaint form here.