Protect Yourself Protect Your Future michigan.gov/seniorbrigade Attorney General Bill Schuette

Protect Yourself
Protect Your Future
michigan.gov/seniorbrigade
Attorney General Bill Schuette
State of Michigan
Department of Attorney General
Bill Schuette
Attorney General
Dear Michigan Senior,
As your Attorney General, I have heard countless stories of financial abuse against members of our senior
population, ranging from sweepstakes scams to shady offers of home medical equipment and everything in
between. Fast-talking telemarketers, phony charities, fly-by-night home repair contractors, and unscrupulous
investment “advisors” are but a few examples of the many varieties of criminal predators who target seniors.
My policy is to prosecute companies and individuals that commit fraud against seniors, and many charges have
been brought. But in order to prevent criminals from getting away with fraud, I need your help. Knowledge of how
scams operate and vigilance in scrutinizing requests for money or personal information are the keys to stopping
criminals before they make off with someone’s savings or commit a fraud in someone else’s name.
This Guide highlights many of the most common scams aimed at seniors. While criminals pitch their scams in
many different forms, this Guide will help you to spot the common warning signs and empower you to protect
yourself and your loved ones. This booklet also provides a variety of other information I hope you will find of
value. This includes tips on protecting your personal information and reducing your exposure to identity theft,
including directions for getting your name off unwanted telemarketing and junk mail lists and for exercising
your right to receive free annual credit reports. The Guide also gives you advice on reviewing offers for living
trusts, burial and funeral contracts, home improvements, investment products, and travel services.
The information and advice in this Guide is supplemented by other free publications of interest to consumers.
You can view our consumer alerts online by visiting our website, www.michigan.gov/ag or by calling my
Consumer Protection Division, toll-free, at 1-877-765-8388.
I urge you to read this Guide carefully - and to contact my office if you suspect a scam. Your report to my
office may help put a crook behind bars.
Sincerely,
Bill Schuette
Attorney General
Table of Contents
Consumer Scams – Aware and Avoid!
1. General Consumer Scams
•AFewCommonScams
•Sweepstakes
•HomeImprovementScams
•TravelScams
2. Financial and Investment Scams
•CommonInvestmentScams
•InvestmentFraud
•FinancialExploitation
•HomeEquityFraud
•PredatoryLending
3. Health Scams
•HomeMedicalEquipmentScams
•MiracleCures
4. Wise Charitable Giving
5. Estate Planning
•Pre-NeedBurialandFuneralContracts
•LivingTrusts
6. Identity Theft
•IDTheft-TipstoReduceYourRisk
•HowtoReduceUnwantedTelemarketingCallsandJunkMail
•FreeAnnualCreditReports–OrderYoursToday
7. Michigan’s New Scanner Law
•The2011ShoppingReformandModernizationAct
Appendix A – Helpful Resources
www.michigan.gov/seniorbrigade
1
CONSUMER SCAMS – AWARE AND AVOID!
1. General Consumer Scams
A Few Common Scams
Florence got a phone call from a man
claiming to be an officer of her bank. He said
he needed to verify her account information
in order to install new security measures.
Florence got her checkbook and read her
account number to him. A few days later,
when she was unable to withdraw money
from her account, she discovered that all
the money had been withdrawn. The caller
had no connection to her bank at all, and her
bank told her it never calls customers asking
for “verification” of personal or financial
information.
work-at-homescamsrequireastiffup-frontfee
–potentiallyhundredsofdollars–forsupplies,
software,oran“instructionalkit”thatwillleadthe
waytoacomfortableincome.Buttheinformation
orsuppliesyoureceive(ifany)areworthless,and
your“investment”isdownthedrain.Ifyouhave
anyluckreachingthecompany,you’retold“it’s
yourownfault”ifyoudidn’tmakeanymoney.
Florencefellforoneoftheoldestscamsaround.
Conartistshavesneakywaysoftryingtopart
youfromyourmoney,butmostoftheseare
variationsof“successful”scamsthathavebeen
usedbefore.Herearejustafewexamplesof
prevalentscamsyoumayencounter:
Youcanprotectyourselfagainstbogusbusiness
opportunities.Michiganlawrequiressellers
ofbusinessopportunitiestoregisterwiththe
AttorneyGeneral’soffice.Therearealsofederal
rulesgoverningthetypesofdisclosuresthatmust
The Bank “Investigation”:
beprovidedtoconsumersthinkingaboutbuying
Inthisscam,acallerposesasabankexaminer, abusinessopportunity.TheAttorneyGeneral
FBIagent,orpolicedetectiveandrequestsyour urgesconsumerstoresearchanypotential
helpinaninvestigation.Thecallerasksyoutogo business“opportunities”thoroughlybefore
investing.Startbycheckingtoseeifthecompany
tothebankandwithdrawsomemoneyandgive
peddlingthebusinessopportunityisregisteredin
ittothephonyofficialtouseinsettingatrapfor
MichiganbycallingtheAttorneyGeneral’soffice
acriminal,assuringyouthatthemoneywillbe
redepositedintoyouraccount.Butthescammer at1-877-765-8388.Formoreinformationon
businessopportunitiesandwork-at-homescams,
andyourmoneyarenevertobeseenagain.
visittheFederalTradeCommission’swebsiteat
www.ftc.gov.
Work-at-Home Offers:
Companiesadvertiseopportunitiesforyouto
makehundreds,ifnotthousands,ofdollarsa
weekworkingathome.The“work”couldbe
justaboutanything–cashingchecks,stuffing
envelopesforadvertisers,preparingmailinglists,
makingcraftprojects,orsendingoutmedical
bills.Inthecheckcashingscenario,youmay
unwittinglybecashingchecksyoudidn’tknow
werebogus–untiloneofyourchecksisreturned
for“insufficientfunds”inyouraccount.Most
www.michigan.gov/seniorbrigade
Credit Card “Fraud Protection” Scams:
Atelephonecallerpretendingtorepresentyour
creditcardcompanyadvisesyoutoenrollina
creditcardfraudprotectionprogram.Thecaller
tellsyouthatcomputerhackerscouldaccess
yourcreditcardnumberandrunupthousands
ofdollarsinboguschargesinyourname–and
warnsyouthatyouwouldbeliableforallcharges.
Thisisalie.Underfederallaw,consumerswho
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promptly reportunauthorizedchargesontheir
creditcardsarenotliableformorethan$50.Ifyou
agreedtoenrollinthe“protection”program,your
enrollmentfeeandperhapsaccountinformation
havelandedwithascammer.
Advance-Fee Loan and Credit Card Scams:
Ane-mail,telemarketer,newspaperad,orTV
commercial“guarantees”thatconsumerscan
getaloanoracreditcard“nomatterhowbad”
theircredithistorymaybe.Butconsumerswho
respondareadvisedtheymustpayaheftyfee
upfront–perhapsasmuchas$500–onlytofind
outlaterthatdespitetheguarantee,youdidn’t
qualifyfortheloanorcreditcardafterall.Youare
unabletogetintouchwiththecompanyandare
outthemoneyyoupaid.
International Lottery Scams:
Youreceiveane-mail,letter,orphonecallfrom
abusinessofferingtobuyticketsforyouina
foreignlottery,perhapsinSpain,Canada,or
Australia.Theseoffersarealways scams.Itis
againstU.S.lawtobuyorsellticketstoforeign
lotteriesbyphoneormail.Consumerswhofall
forthesescamssometimesget“suckered”two
orthreetimes.Ifyouagreetosendmoneytobuy
tickets,youmaygetacalllatersayingthatyou
havewonalargejackpot,andneedtosendmore
moneytopaytaxesonyourwinningsortopaya
smallfeeforcurrencyconversion.Ofcourse,the
lotteryticketswereneverevenpurchased,and
thereisnojackpot.
Foreign Dignitary Schemes:
Alsoreferredtoinnewsreportsasthe“Nigerian
LetterScam,”thisfraudstartswithaletter,fax,
ore-mailfromsomeonewhoclaimstobea
foreigngovernmentexecutive,prince,diplomat,
ordoctor.Thispersonsaysheneedstotransfer
alargeamountofmoney,perhapsmillionsof
dollars,totheUnitedStatesinordertoprotect
themoneyfrominsurgentsorcorruptgovernment
officials.Theletterofferstopayyouapercentage
commissionifyoupermitthepersontotransfer
themoneyintoyouraccount.Careful!Youareat
riskoflosingall themoneyinyourbankaccount
ifyougivetheconartistyouraccountinformation.
IfyoureceivesuchanofferthroughtheU.S.
mail,reportittothepostalinspector.E-mailoffers
shouldsimplybedeleted.
Phishing:
Youreceiveane-mailmessagethatappears
tobefromafamiliarentity(i.e.,yourbank,
governmentagency,creditcardcompany)asking
youtoprovidepersonalinformationsuchasyour
SocialSecuritynumber(SSN),bankaccount
number,passwordand/orpersonalidentification
number(PIN),orcreditcardnumber.Thisonline
formofidentitytheftisknownasphishingand,
likeotherformsofIDtheft,canleadtosubstantial
financialloss,ruinedcredit,preventionofaccount
access,andthecreationofbogusaccounts
inyourname.Topreventthisfromhappening
toyou,deletethee-mailwithoutopeningany
attachmentsorclickingonanylinksinthe
message,andmakesuretoreadthe“Identity
Theft”chapterofthisguide.
What do these diverse examples have in
common?Theyallcarrywarningsignsthata
fraudmaybeintheworks.Keepyourguardup
whenyouencounterthesethreekeysignsofa
potentialfraud:
• Youarecontactedbyastranger;
• Youareoffereda“great”deal;
• Youmustactrightaway;and
• Youareaskedtopaymoneyordisclose
sensitivepersonalorfinancialinformation
beforereceivinganybenefit.
Whenyouarecontactedunderthese
circumstances,justsay“NO.”Andremember
–NEVERprovidepersonalinformationto
ANYONEwhocallsyouonthephoneorsends
anunsolicitede-mailrequest.
www.michigan.gov/seniorbrigade
3
Sweepstakes
Soon after Irvin sent in a sweepstakes entry,
he began to receive many other sweepstakes
mailings that implied he was close to being
a grand prize winner. Thinking he could
increase his odds of winning, he began
buying books, magazines, and other products
through these sweepstakes. He spent $1,500
but never won anything.
• Don’tbepressuredintobuyinganythingthrough
asweepstakes.Asweepstakesmusttellyou
that“Nopurchaseisnecessary.”Bylaw,you
canenterandhaveanequalchanceofwinning
withoutbuyinganything.
• Beskepticalifacallorlettertellsyouthat
youarealmost“surelythewinner”orthatyou
are“veryclosetowinning.”Thetruthisthat
thousandsofpeoplearegettingthesame
phonecallandmail.Yourchancesofwinning
areverysmall.
Beforeyourespondtoasweepstakesmailingor
telephonecallthatsaysyouaretheir“guaranteed
winner,”ask:What’sinitforthem?
• Neversendmoneytopayfor“taxes,”“shipping
costs,”or“processingfees.”Prizewinnerspay
Thetruthis,sweepstakesarenottryingtogive
taxestotheInternalRevenueService,notto
youmoney-they’retryingtoget yourmoney.
sweepstakespromoters.
Theonlyaimoftheirmailingsandtelephone
callsistogetyoutobuyproducts.Fraudulent
• Beawarethatarequesttosendmoneyby
prizepromotionswanttotrickyouintopayingfor
courierorovernightdeliveryisasignofascam.
a“processingfee”ortopaybycallinga“900”
number.Toooften,seniorsonfixedincomes
areluredbythehopeofwinningasweepstakes • Bewaryofsweepstakesthathaveaname
similarto,butnotquitethesame,asawellintobuyingproductstheydon’tneedorpaying
knownnationalcharity.
excessivefees.Somepeopleevenlosetheir
lifesavingsbecausetheybecomeaddictedto
enteringsweepstakes,orderingmerchandise
inthemistakenbeliefthatitwillincreasetheir
chancesofwinning.Theycan’tstopbecause
theydon’twanttolosewhatthey’ve“invested.”
Theycontinuetoreceivemailingsandphone
callsthatsuggesttheyareclosetowinning.In
reality,theirchancesofwinning
alegitimatesweepstakesare
verysmall,andtherearemany
fraudulentsweepstakesthat
eitherdon’tawardanyprizes,
oroffergiftsthatturnouttobe
almostworthless.
www.michigan.gov/seniorbrigade
4
Home Improvement Scams
• Getreferencestoseeiftheworkwasdone
properly,onschedule,andattheagreedprice.
Aretha noticed a leak in her living room ceiling
and called a plumber. The plumber told her that
all her bathroom pipes were broken and needed
to be replaced, at a cost of $1,500. He said she
risked an electrical fire if she didn’t have the
work done. She sought a second opinion. The
other plumber found that the problem was only
some failed caulking around the bathtub.
• Insistonadetailedcontract.Thecontract
shouldinclude:aspecificdescriptionofthework
tobedone,materials,laborcost,timetable,
paymentschedule,start/endingdates,names
ofsubcontractors,warrantyagreements,and
cleanupandfinancingarrangements.
Anotherscaminvolvesstrangerswhoknockon
yourdoorandoffertodoafreeinspectionofyour
furnace,chimney,ordrinkingwater.Onceinside,
theypretendtofindaserioushealthorsafety
problemrequiringexpensiverepairs.Evenworse,
theymayonlybetryingtogetinsideyourhome
tostealmoneyorvaluablesfromyou.
ConsumersmayvisittheBureauofCommercial
Services’websitetoverifycurrentlicensestatus
andcheckforpriordisciplinaryaction.Ifpossible,
usethebuilder’slicensenumberaswellasthe
nameofthebuilderandthebusinessname.
• Checktoseeifthecontractorhasbeen
disciplinedorifthelicensehasbeensuspended
Homerepairfraudisoftenaimedatsenior
orrevoked.Buildersandcontractorsare
citizens.Unscrupulousrepairpersonssometimes
licensedbytheLicensingDivisionoftheBureau
usescaretacticstopressurepeopletohave
ofCommercialServices,MichiganDepartment
unnecessary,expensiverepairsmade.They
ofLicensing&RegulatoryAffairs.Youmay
overchargeforshoddywork,ortakemoneyand
visittheLicensingDivision’swebsite,at
thennevershowuptodothework.
www.michigan.gov/lara, andclickonthelinks
for“BureauofCommercialServices”andthen
Oneofthemostcommonkindsofhomerepair
“LicensingServices.”Youcanalsoreachthe
fraudinvolvesoffersfromtransientworkcrews.
LicensingDivisionat1-517-373-8376.
Strangersknockonyourdoorandsaythey’ve
beenworkinginyourneighborhoodandhave
TheBureau’shomepageforResidentialBuilders,
someextramaterialleft.Theyoffertosealyour
MaintenanceandAlterationContractorsprovides
drivewayorfixyourroofforadiscount,butthey
generalinformationonissuesrelatingtobuilders’
takeyourmoneyandthendisappear.
licenses,includingadditionaltipsforconsumers.
Becautiouswhentheydemandcashpaymentor
indicatetheofferisonlygoodforthatday.Don’t
letyourselfbepressured.
It’sbesttosaynothankstotheseunsolicited
offers,andtonotopenyourdoortostrangers.
Instead,getrecommendationsforhome
improvementcompaniesfromsatisfiedfriends
and neighbors.
• Shoparoundforacontractor,gettingprice
estimatesfromseveral.Whenrequestingan
estimate,askifthereisacharge.Asmart
shopperwouldalsogettwoormorereferences
oneachcontractor.
Decisionsissuedinresponsetoformal
complaintsarealsoaccessibleonline.
Ifyouwouldliketofileacomplaintagainstabuilder,
orchecktoseeiftherearecomplaintsabouta
specificbuilder,youmayalsocalltheLicensing
ServicesDivisionat1-517-373-8376orwriteto:
Bureau of Commercial Services
P.O. Box 30018
Lansing, MI 48909
Remember:Alwayscheckahomeimprovement
contractor’slicenseandcomplainthistoryby
callingtheAttorneyGeneral’sConsumerProtection
Division,at1-877-765-8388,andtheBureauof
CommercialServices,at1-517-373-8376.
www.michigan.gov/seniorbrigade
5
Travel Scams
Hector and Sonia signed up to win a “free
trip” at a local fair. A short time later, they
received a phone call saying they had won
the trip. To claim it, they had to attend
a presentation about a travel club. The
salesman said the club would let them
stay at nice resorts year after year at
very little cost, after they paid the initial
membership fee. After a long, highpressure sales talk, they agreed to join
and wrote a check for $2,500. They quickly
regretted it. Their free trip was a weekend
stay at a run-down hotel in Las Vegas.
They tried to use their membership to
arrange a stay in Mexico, but the club never
had availability there. A few months later, the
club went out of business, taking
all their money with it.
“Free trip”offersareoneofthemostcommon
consumerscams.Thefreetripisusuallyjust
abaittogetconsumerstobuymemberships
inexpensivetimesharesortravelclubsorthe
tripisn’treallyfreeatall–youhavetopayalot
offeesandextracosts.Ifyoureceiveaphone
callorpostcardsayingyou’vewonavacation,
beware.You’llprobablyhavetoattendasales
presentationortouracampgroundortimeshare
facilitytoreceiveyourfreetrip.Thesalespeople
willusehigh-pressuresalestacticstogetyouto
purchaseamembershiportimeshare.Youmay
alsoreceiveoffersfrom“cardmill”companies.
Theytellconsumersthatthecardswillhelpthem
gainaccesstofreeorreducedtravel.
Manyconsumerswhosigncontractsatthese
presentationslaterregrettheirdecision.Theyfind
outtoolatethattheclubismoreexpensivethanthey
thoughtbecauseofaddedfees,dues,andcosts.
Someconsumerscan’tgetthedatesorlocations
theyrequested.Othersfindtheaccommodations
tobeofpoorquality.Worstofall,someofthese
companiesgooutofbusiness,takingalltheir
customers’pre-paidmembershipmoneywiththem.
www.michigan.gov/seniorbrigade
• Beskepticalof“freetrip”offers.Gotoasales
presentationonlyifyouareinterestedinwhat
thecompanyisselling.
• Nevermakeadecisiononthespot.Insist
ontakingthecontracthometostudy.Ifthe
businesswon’tallowthis,leave.
• Understandallthecosts.Whatisandisn’t
included?Arethereextrafeesformaintenance,
processing,dues,peakseason,upgrades,
hotels,airlines,porttaxes,andmeals?
• Knowyourcancellationrights.Under
Michiganlaw,ifaconsumerisofferedaprize
ormerchandisevaluedatmorethan$25in
exchangeforattendingasalespromotionfor
goods,services,ormemberships–suchas
atravelclubmembership–thathaveavalue
of$500ormore,theconsumermustbegiven
writtennoticethattheyhavethreebusinessdays
aftersigningtocancelthepurchaseagreement
orcontract.However,usingyourrighttocancel
isn’talwayseasy,sodon’tsignacontractunless
you’resureaboutyourdecision.
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creditcardnumbertoholdareservation.Later,
youfindoutthatinordertotakethevacation
youhavetopayalotmoreforallsortsoffees,
upgrades,hoteltaxes,andservicecharges.In
fact,thewholepackagebecomessoexpensive
thatyoudon’twanttoeventakethetrip.Ifyou
do,the“deluxe”accommodationsturnouttobe
Asageneralrule,researchanytravelserviceto
makesurethecompanyisestablishedandreliable, aprettyordinarymotel.
beforepayinganycostsorsigningdocuments.
Beforeyouagreetopayanymoneyforabargain
travelpackage,asktohavewrittenmaterialthat
Incredible Prices That Aren’t
describesallthetermsandconditionssentto
Adifferentkindoftravelscamoffersyouan
you.Iftheywon’tsendit,turnitdown.
“unbelievable”priceonavacation.Totake
advantageoftheoffer,youhavetogiveyour
• Alwaysthinktwicebeforepayingalotof
moneyinadvanceforafuturebenefit.Whatif
youinvestthousandsofdollarsandthetravel
clubgoesoutofbusiness?It’shappenedto
manyMichiganseniors.
www.seniorbrigade.com
www.michigan.gov/seniorbrigade
7
2. Financial & Investment Scams
Common Investment Scams
Here is a list of popular investment scams:
1. “Free lunch” seminars. Oftenthepeople
gettingricharethoserunningtheseminar,
makingmoneyfromthehighcommission
productstheyselltoattendees.Theseseminars
aremarketedthroughnewspaper,radioandTV
ads,mass-mailedinvitations,andmasse-mails.
There’sacertainconsistencytotheinvitationsfor
theseevents:afreegourmetmeal,tipsonhow
toearnexcellentreturnsonyourinvestments,
eliminatemarketrisks,growyourretirement
funds,andspousesareencouragedtoattend.
2. Unlicensed individuals, suchaslife
insuranceagents,sellingsecurities. Toverify
thatapersonislicensedorregisteredtosell
securities,calltheOfficeofFinancialand
InsuranceRegulationat1-877-999-6442.Ifthe
personisnotregistered,don’tinvest.
3. Affinity group fraud. Manyscammersuse
theirvictim’sreligiousorethnicidentitytogain
theirtrust–knowingthatit’shumannatureto
trustpeoplewhoarelikeyou–andthensteal
theirlifesavings.Bewary–nocommunityseems
tobewithoutconartistswhoseektoexploit
othersforfinancialgain.
4. Ponzi/pyramid schemes. Alwaysinstyle,
theseswindlerspromisehighreturnstoinvestors,
Thebaitformanyoftheseseminarsisthat
buttheonlypeoplewhoconsistentlymake
“income”willbe“guaranteed”andsubstantially
moneyarethepromoterswhosettheminmotion,
higherthanthereturnssomeoneonafixed
usingmoneyfromnewinvestorstopayprevious
incomecanexpecttogetfromcertificates
investors.Inevitably,theschemescollapse.
ofdeposit,moneymarketinvestments,or
They’recalledpyramidschemesbecausethe
othertraditionalfinancialproducts.Oftenthe
peopleontopneedtorecruitanimpossible
speakersattheseeventsuseimpressivenumberofpeopleonthebottomtocontinually
soundingbutsometimeshighlymisleadingtitles
generateprofitsforeveryone.Thus,onlythe
andprofessionaldesignations.Manyofthese
toppeopleprofit,whiletheremainingpyramid
designationsimplythatwhoeverbearsthetitle
hasaspecialexpertiseinaddressingthefinancial populationlosemoney.Ponzischemesarethe
needsofseniors.Oftenpromoterspushunsuitable legacyofItalianimmigrantCharlesPonzi.Inthe
productsbasedonhighcommissionstheyreceive early1900s,hetookinvestorsfor$10million
fromsellingtheseproducts.Forexample,variable bypromising40percentreturnsfromarbitrage
andequityindexedannuitiesareoftenunsuitable profitsonInternationalPostalReplyCoupons.
Rememberthatallinvestmentscomewithsome
forseniorcitizensbecausethoseproductsare
risk.Nolegitimateinvestmentcanguarantee an
generallylong-terminvestmentsthatlimitaccess
outrageouslylargereturninashortamountof
toinvestedfunds.Butsalesagentsstandtoearn
time.Theoldadageringstruewithrespectto
highcommissionsontheseinvestmentproducts
Ponzischemes–ifitsoundstoogoodtobetrue,
sotheydon’talwaysadheretothesuitability
especiallyinthiseconomy,itprobablyis.
standards–withdireconsequencesforseniors.
Remember:Makesureyourinvestmentsmatchup
withyourage,yourneedforaccesstomoney,and 5. Cash gifting schemes. Cashgiftingschemes
arethequintessentialexampleofapyramid
yourrisktolerance.
scheme,describedabove.Generally,these
gifting“circles,”“clubs,”or“groups”encourage
participantstopayasubstantialentryfee(which
canrangeanywherefrom$500to$5,000
ormore).Thisentryfeewillguaranteethe
participantsaplaceonachartofmembers.
www.michigan.gov/seniorbrigade
8
Theparticipantswillmoveonthecharteverytime
theyrecruitmorepeopleintothe“circle”or“club.”
Andoncetheparticipantmovesenoughonthe
chart,theyare“guaranteed”alargepayout.Gifting
schemesoperateunderavarietyofnames,as
conartiststhatstarttheseschemesareendlessly
creativeintheirquesttoconalotofpeopleout
ofalotofmoney.Conartistsalsopromisethat
payoutsfromtheseschemesarenon-taxable
“gifts.”TheIRSdisagrees–anypayoutreceived
fromacashgiftingschemeistaxableincome.In
addition,participationin
acashgiftingorother
pyramidschemeisillegal
intheStateofMichigan.
Ifyouareapproached
toparticipateinacash
giftingscheme,notifyyour
localpolicedepartmentor
countysheriff’soffice.
6. Promissory notes
areshort-termdebt
instrumentsissuedby
little-knownorsometimes
non-existentcompanies
thatpromisehighreturns
-upwardsof15percent
monthly-withlittleor
norisk.Thesenotesare
oftensoldtoinvestors
byindependentlife
insuranceagents.
7. Internet fraud. Scammersusethewidereach
andsupposedanonymityoftheInternettosell
thinlytradedstocks,bogusoffshore“primebank”
investments,andpyramidschemes.Investors
shouldignoreanonymousfinancialadviceonthe
Internetandinchatrooms.
8. Payphone and ATM sales. Investorsleased
payphonesforbetween$5,000and$7,000
andwerepromisedannualreturnsofupto
15percent.Thelargestoftheseinvestments
appearedtobenothingbutPonzischemes.
9. “Callable” CDs. Thesehigher-yielding
certificatesofdepositwon’tmaturefor10to20
years,unlessthebank,nottheinvestor,“calls,”
orredeems,them.RedeemingtheCDearlymay
resultinlargelosses–upwardof25percentof
theoriginalinvestment.Regulatorssaysellersof
callableCDsoftendon’tadequatelydisclosethe
risksandrestrictions.
10. Viatical settlements. Originatedasawayto
helpthegravelyillpaytheirbills,theseinterests
inthedeathbenefitsof
terminallyillpatients
arealwaysriskyand
sometimesfraudulent.In
alegitimateinvestment,
theinsuredispaid
apercentageofthe
deathbenefitincashin
exchangefortheinvestor
gettingashareofthe
deathbenefitwhenthe
insureddies.Becauseof
uncertaintiespredicting
whensomeonewilldie,
theseinvestmentsare
extremelyspeculative.
Inamorerecenttwist,
“seniorsettlements”–
interestsinthedeath
benefitsofhealthyolder
people–arenowbeing
offeredtoinvestors.
11. Prime bank schemes. Scammerspromise
investorstriple-digitreturnsthroughaccessto
theinvestmentportfoliosoftheworld’selite
banks.Purveyorsoftheseschemesoftentarget
conspiracytheorists,promisingaccesstothe
“secret”investmentsusedbytheRothschildsor
Saudiroyalty.Theinvestmentmaysoundgood
whentheytellyouit’sguaranteedtoreaplarge
financialrewards.However,besuspiciouswhen
theofferissaidtobelimitedtoonlyafewpeople
andisonlygoodforanimmediateresponse.
www.michigan.gov/seniorbrigade
9
Investment Fraud
Take your time - don’t be rushed into
investment decisions.Salespersonswhouse
high-pressuretacticstoforceaninvestorintoan
Hassan’s insurance agent told him about a
immediatedecisionarealmostalwayspitching
unique investment opportunity – nine-month
promissory notes that would yield an 18 percent frauds.Theydon’twant youtothinktoocarefully
annual rate of return. The notes were supposed orfindouttoomuchbecauseyoumayfigureout
thatit’sascam.
to be secured by automobile titles. Hassan
agreed to invest $20,000. When it was time for
the note to mature, Hassan found out that all
• Askhow,andbywhom,theinvestment
the money was gone. The agent had used the
advisorisbeingpaidinconnectionwiththe
money for his personal expenses and to pay
servicesorproductsbeingoffered.
back other investors. It turned out that the agent
was not even registered to sell securities.
• Insistonreceivingaprospectusorprinted
Seniorsaretheprimarytargetofinvestment
conartists.Afast-talking“financialadvisor”can
swindleanunsuspectinginvestoroutofhisorher
lifesavingsinafewminutes.
Beware of strangers touting strange deals.
Trustingstrangersisamistakeanyonecan
makewhenitcomestotheirpersonalfinances.
Almostanyonecansoundniceorhoneston
thetelephone.Say“no”toanyinvestment
professionalwhopressesyoutomakean
immediatedecision,givingyounoopportunity
tocheckoutthesalesperson,orfirm,and
theinvestmentopportunityitself.Bewareof
anyonewhosuggestsinvestingyourmoneyinto
somethingyoudon’tunderstandorwhourges
thatyouleaveeverythinginhisorherhands.
Do not feel indebted to someone who gives
you “unsolicited” financial advice. Thisperson
maybetryingtogainyourtrustsoheorshecan
earnfeesandcommissionsbyinvestingyour
money,sometimesinunsuitableinvestments.
Ifaninvestmentsounds“toogoodtobetrue,”it
probablyis.Someunscrupulouscompaniestry
toenticeinvestorswithpromisesofreturnsas
highas25%,50%,oreven500%.Suchclaims
areusuallyfraudulent.Allinvestmentsinvolve
risk.Conartistsknowthatyouworryabouteither
outlivingyoursavingsorseeingallofyourfinancial
resourcesvanishovernightastheresultofa
catastrophicevent,suchascostlyhospitalization.
www.michigan.gov/seniorbrigade
offeringmaterials.READTHEM.Any
investmentworthmakingwillstillbeavailable
afteryouhavehadtimetoreadaboutit.
• Don’tbelievetheage-oldliethatyouwilllose
moneyifyoudon’tgetinrightaway.Thetruth
aboutsuchclaimsalmostalwaysturnsoutto
bethatyouwilllosemoneyifyoudo getin.
• Ifyouhavequestions,askyourattorney,
accountant,andfinancialadvisertoexplain
theinvestment.
• Thedeathorhospitalizationofaspousehas
manysadconsequences-financialfraud
shouldn’tbeoneofthem.Ifyoufindyourself
suddenlyinchargeofyourownfinances,get
thefactsbeforeyoumakeanydecisions.
Don’t throw good money after bad.Beware
of“reload”scams.Conartistsknowthepanic
peoplefeelafterasuddenfinancialloss.
Theyknowthatit’sthebesttimetopromiseto
recovertheoriginalfundsinanother“surething”
scheme.Don’tfallforthesame(orasimilar)
schemetwice.
Check out your broker or adviser.Confirmthat
yourbrokerandfinancialadviserisregistered
andingoodstanding.ContacttheOfficeof
FinancialandInsuranceRegulation,at1-877999-6442,tocheckoutyourbrokeroradvisor.
10
Keep tabs on your investments.
• Bewarywhenafinancialplannersays
“leaveeverythingtome,”or“theplanistoo
complicatedtotellyou.”Everythingshouldbe
clearandexplainabletoyou.
• Monitortheactivityonyouraccount.Insiston
receivingregularstatements.
• Neverbeembarrassedorapologeticabout
askingquestionsfortradingactivitythatlooks
excessiveorunauthorized.It’syourmoney,
notyourbroker’s.
• Keepallofyourrecordsrelatingtoyour
investments,includingnotesofconversations
youhavewithbrokers,salespeople,financial
advisers,andthelike.
• Don’tcompoundthemistakeoftrustingan
unscrupulousinvestmentprofessionalby
failingtokeepaneyeontheprogressofyour
investment.Insistonregularwrittenreports.
Lookforsignsofexcessiveorunauthorized
tradingofyourfunds.
Ifyoususpectthatsomethingiswrongandthe
explanationsyoureceivearenotsatisfactory,call
theOfficeofFinancialandInsuranceRegulation
at1-877-999-6442andfileacomplaint.Don’tlet
embarrassmentorfearkeepyoufromreporting
investmentfraudorabuse.
Don’t agree to invest with someone just
because you share the same religious,
cultural or ethnic background. Unfortunately,
conartistswilluseanymeanstogainavictim’s
trust.Thisincludesexploitingacommon
background.Manyinvestorsthinkthatbecause
theymetapotentialadvisorinachurchor
temple,orataculturalorganization,theadvisor
mustbetrustworthyandhavetheirbestinterests
inmind.Conartiststhenusethistrusttosteal
theirclients’money.Don’ttrustsomeonewith
yourmoneyjustbecauseyouhaveasimilar
background.Askthesamequestionsand
demandthesameinformationthatyouwould
fromanyotheradvisor.
Don’t be afraid to complain.
Ifyourbrokeroradvisorstalls
orhesitateswhenyouwant
allorpartoftheprincipal
of,orprofitsfrom,your
investment,askthereason
fortheholdup.Youmay
haveuncovereda
questionablepractice.
www.seniorbrigade.com
www.michigan.gov/seniorbrigade
11
Financial Exploitation
Jasmine, who was becoming frail, allowed a
woman to move into a room in her home in
exchange for some help with light errands.
Several months later, Jasmin’s daughter
discovered that the woman had stolen
thousands of dollars from Jasmin’s bank
account using her ATM card. The woman
had also had taken Jasmin to a lawyer and
obtained “power of attorney” for herself.
Financialexploitationisthemisuseofsomeone
else’smoney,withouttheirconsent.Manypeople
areswindledbypeopletheyknow–caregivers,
neighbors,evenrelatives.
Examplesoffinancialexploitationinclude:
threateningsomeoneintogivingawaymoney;
trickingapersonwithamemoryprobleminto
turningovermoney;forgingsignaturesonchecksor
withdrawalslips;makingunauthorizedwithdrawals
frombankaccounts;chargingexcessivefeesfor
rentorcaregiverservices;andcommittingpersonto-person,mail,ortelephonefraudscams.
What you can do to protect your money:
• Putallfinancialinstructionsinwriting.This
protectsyouandreducesthelikelihood
ofmisunderstandings.Keeprecordsofall
transactions.
• Understandanylifelongcareagreementsyou
areenteringinto.Documenttheagreement
andspecifythecompensation,ifthereisany,
tobepaidtothecaregiver.
• Asksomeonetoreviewyourfinancial
agreements.Yourattorney,accountant,ora
bankemployeecandetectchangesinyour
financialactivitythatmaysignalaproblem.
Youcanalsoaskatrustedfriendorrelative
toreviewyourmonthlystatements.
• Becautiousofjointaccounts.Bothparties
areequalownersoftheaccountandboth
haveequalaccesstothemoney.
www.michigan.gov/seniorbrigade
• Beforeyouassignapowerofattorney,be
sureyouunderstandtheauthorityyouare
givingtoyouragent.Knowthepersonto
whomyouaregivingthisauthority.Writein
theagreementwhethertheagentwillbepaid
ornot,andifso,howmuch.
• Askabankemployee,atrustedfamily
member,orasocialworkerorother
professionalforhelpwhenyouareunsure
aboutfinancialmatters.
• Stayconnectedtoyourcommunity.Social
isolationincreasesyourriskofbecominga
victimofabuse.Findoutaboutcommunity
programsorsocialactivitiesinyour
neighborhood.
Other tips to help you protect your money:
• Useadirectdepositserviceforyourchecks.
• Don’tsignblankchecksallowinganother
persontofillintheamount.
• Don’tleavemoneyorvaluablesinplainview.
• Don’tsignanythingyoudon’tunderstand.
• CancelyourATMcardifyoudon’tuseit.
• Don’tgiveanyoneyourATMPIN.
• Checkyourfinancialstatementspromptlyand
carefullyforunauthorizedwithdrawals.
• Buildgoodrelationshipswiththeprofessionals
whohandleyourmoney.
• Don’tgiveanyaccountnumbertoastranger.
12
Home Equity Fraud
Aaliyah received a call from a lender who
asked if she’d like to refinance her mortgage
and get extra money to pay off debts, travel,
or buy a new car. Aaliyah agreed. The lender
called again a few months later and persuaded
her to refinance again. This happened three
times. Soon, almost all of Aaliyah’s equity was
gone, and she was having trouble keeping up
with the monthly payments.
Seniorsoftenhavelimitedincomesbuthave
builtupsubstantialequityintheirhomes.That
canmakethematargetofunscrupuloushome
equitylenders.Someoftheselenderspromise
torefinanceyourmortgageorgiveyouahome
equityloanwithoutdisclosinghiddenfeesand
terms.Ifyoucan’tkeepupwiththepayments,
youcouldloseyourhome.
Some of the fraudulent lending practices to
look out for are:
Repeated refinancing. Alendercallsandsays
it’stimeyourhomeequitystartedworkingfor
you.Hesaysyoucangetextramoneytopayoff
debtsortakeavacation.Youagreetorefinance.
Somemonthslater,thelendercallsagainand
offersyouanotherrefinancingdeal.Thelender
chargesyouhighpointsandfeeseachtime
yourefinance.Witheachrefinancing,you’ve
increasedyourdebt.
Signing over your deed. Ifyouarehaving
troublepayingyourmortgageandthelenderhas
threatenedforeclosure,youmayfeeldesperate.
Another“lender”maycontactyouwithanoffer
tohelpyoufindnewfinancing.Beforehecan
helpyou,heasksyoutodeedyourpropertyto
him,claimingit’satemporarymeasuretoprevent
foreclosure.Oncethelenderhasthedeedto
yourproperty,hemayborrowagainstit,sellitto
someoneelseorevictyou.
• Don’tsignanydocumentyouhaven’tread
orthathasblankspacestobefilledinafter
yousign.
• Readoveryourdocumentscarefullyandlook
foranyhiddencharges,orchargesthatyou
knowshouldnotbeincluded.Ifyouseea
chargeforsomethingyouknowshouldnot
beincluded,askthatitberemoved.Ifthe
companyrefusestoremovethecharge,don’t
signthedocuments.
• Don’tdeedyourpropertytoanyonewithout
firstconsultinganattorney,aknowledgeable
familymember,orsomeoneelseyoutrust.
• Alwaysreadcontractscarefully.Talkthem
overwithsomeoneyoutrust,suchasa
knowledgeablefamilymemberoranattorney.
Formoreinformationabouthomeequityloans
andhomeequityfraud,seetheAmerican
Hidden loan terms, such as a balloon
payment. Thenewloanmayrequirepayments AssociationofRetiredPerson’swebsiteat
thatonlypaytheinteresteachmonth.Attheend www.aarp.org.
oftheloanterm,theentireprincipalisduein
onelumpsum(aballoonpayment).Ifyoucan’t Remember: Makemonthlymortgagepayments
onlytoyourlenderorservicer.Nomatterhow
makethatpayment,youfaceforeclosure.
gooditsounds,don’tletanotherpersonmake
Credit insurance or other charges “packed”
mortgagepaymentsforyou.
into the mortgage. Atclosing,thelendermay
trytoincludeachargeforcreditinsuranceor
CalltheOfficeofFinancialandInsurance
other“benefits”youdidnotaskforanddon’t
Regulationat1-877-999-6442tocheckifaloan
need,andhopeyouwon’tnoticewhenyousign companyisalicensedfinanciallenderorifyou
thepapers.
thinkyouareavictimofhomeequityfraud.
www.michigan.gov/seniorbrigade
13
Predatory Lending
Predatory lenders look for people with
financial problems who are looking to buy a
home, refinance a mortgage, obtain a home
equity loan, or save a home from being
foreclosed. They blame their outrageous
interest and fees on the consumer’s shaky
credit and take advantage of the consumer’s
lack of financial knowledge.
• Thelenderpressurestheconsumertotake
outaloanformorethanthepropertyvalue.
Thissortofloanputsboththeconsumerand
hisorherfinancialrecordatgreatrisk.
• Thereisalargepenaltyforpayingoffloans
early.Thispre-paymentpenaltymakesit
difficultfortheconsumertorefinancetoa
lowerandbetterinterestrate.
Steps you can take to protect yourself:
• Revieweverydocumentcarefully.Donot
feelshytoaskfordocumentsinadvanceto
ensureplentyofreadingtime.Neversign
mortgagedocumentswithblankspaces
remaining.Mosttermssuchasinterestrate,
choiceoffixedorvariableinterest,loanlength,
andpre-paymentpenaltiesarenegotiable.
Some red flags to look out for:
• Thelendertriestohidehighclosingcostsand
feessuchasloanorigination,underwriting
fees,brokerfees,andtransaction/closing
costs.Theinterestrateshouldnotbewell
abovethemarketaverage.
• Monthlypaymentsaresmall,butalargesum
isscheduledattheend.Thisisacommon
wayforlenderstoensuretheconsumerwill
havetoapplyforanotherhighinterestloan.
www.michigan.gov/seniorbrigade
• Shoparoundandcompareloanoffers.
Remember,donotfocusjustonmonthly
paymentsbutonalltermssuchascontract
lengthandhowmuchyou’reborrowing.
Remember: CalltheOfficeofFinancialand
InsuranceRegulationat1-877-999-6442
tocheckifaloancompanyisalicensed
financiallenderortocomplainabout
predatorylending.
14
3. Health Scams
Home Medical Equipment Scams
Jose was having problems climbing the
stairs in his house, so he called a company
that advertised it sold stairlifts. A salesman
came to his house and promised to install the
stairlift within two weeks, and took a payment
of $2,000 from Jose. However, months passed
and the company didn’t deliver the stairlift,
but kept coming up with excuses. Jose finally
sued and got some of his money back.
Therearemanyreputableandreliablehome
medicalequipmentsuppliers,butunfortunately
therearealsothosethatchargeforequipment
theyneverdeliverorsellseniorsexpensive
equipmenttheydon’treallyneed.They
sometimesimplyorpromisethatMedicarewill
payfortheequipmentwhenthatmaynotbetrue,
andtheseniorisstuckwithexpensivebills.Some
examplesoftacticsthesalespeopleuseare
stayinginyourhomeforalengthyperiodoftime,
preventingyoufromaskingothers’advice,and
settingupequipmentthatishardtomove.
Before buying home medical equipment:
• Getadvicefromyourdoctor,hospital
dischargeplanner,orphysicaltherapist,
NOTfromasalesperson.Theyknowwhat
yourneedsarebetterthanasalesperson,and
theycanlikelydirectyoutohonest,reputable
sellersofhomeequipment.
• Bewareofcompaniesthatpromote
themselvesasrepresentativesofMedicare,
orsendliteraturehavingMedicareemblems,
leadingyoutobelieveMedicareendorses
theirproductorservice.Medicaredoesnot
solicitbytelephoneormailanddoesnot
authorizeanyonetodoso.Medicaredoes
notsupplyequipment,recommendspecific
suppliers,orprovidebeneficiarynamesto
suppliers.
• Ifthemedicalequipmentissomethingthat
needstobeinstalledinthehome,callthe
BureauofCommercialServicesat1-517373-8376,toseeifthecompanyislicensed.
The Michigan Wheelchair Law
Ifyoubuyorleaseawheelchair,youare
protectedbytheMichiganWheelchairLaw,MCL
445.1081.Thislawrequiresthemanufacturerof
awheelchairtogivetheconsumeranexpress
warranty,coveringeverythingexceptthe
wheelchair’stiresandbatteries(ifapplicable)
foratleastoneyearfornewwheelchairsor60
daysforused,refurbished,orreconditioned
wheelchairs.Ifyoureportaproblemwiththe
wheelchairwithinthatyear,themanufacturermust
paytofixtheproblem,replacethewheelchair,or
giveyouarefund.
• Checkthecompany’sreputationwithyour
healthcarespecialist.CalltheAttorney
General’sConsumerProtectionDivisionat
1-877-765-8388toseeifcomplaintshave
beenfiledagainstthecompany.
• Besuspiciousifthecompanydoesnothavea
store,showroom,orofficeyoucanvisit.
• Consultyourpropermedicalauthorities
toverifywhenequipmentislaudedasa
“breakthrough”answertoacommonailment.
www.michigan.gov/seniorbrigade
15
Miracle Cures
Several Michigan
consumers who had
life-threatening illnesses bought a
product that was marketed as a “miracle
cure” in radio commercials and on the
Internet. The treatments cost thousands of
dollars and did not appear to help anyone.
AccordingtotheFederalTradeCommission,
consumerswastebillionsofdollarsonunproven,
sometimesuselesshealthcaretreatments.Asa
group,olderpeoplehavemorechronicillnesses
thanyoungerpeopleandtheyaremoreoften
targetsforfraud.Unfortunately,the“cure”isoften
useless.Thevictimswhofallpreytothescam
wastetheirmoney,endurepainfultreatments,
andmayevenforgotraditionalmedicinethat
mightbeabletohelpthem.Theycanalsohinder
seniorcitizensfrompursuingvalidandneeded
medicaltreatmentsinatimelyfashion.
Be skeptical if a product is advertised with
these kinds of claims:
• It’sa“scientificbreakthrough”orhasanew,
secretingredientthatcancureawiderange
ofailments;
• Thepromoterclaimsthemedical
establishmentorthegovernmenthasa
conspiracytosuppresstheproduct;
Ifyouhaveaseriousillnessorcondition,thebest
adviceistoalwaysseeadoctor.Discussany
productsyouareconsideringtakingwithyour
doctor.Besuspiciousoftakinghealthadvicefrom
anadvertisementorstranger.
For more information:
Becausethereisnocureforarthritis,thereare
manyfalsearthritiscuresandremedies.The
ArthritisFoundationsaysthatarthritisshould
bemonitoredbyadoctorbecausethecondition
canworsenifitisnotproperlytreated.Fora
freebrochureaboutunprovenremedies,callthe
ArthritisFoundationtoll-freeat1-800-283-7800.
Inaddition,theFederalTradeCommission(FTC)
• Thepromoteruses“testimonials”frompeople hascreatedawebsitewhichprovideshelpful
whosaytheyexperiencedamazingresults
informationonhealthcareproductsandservices.
usingtheproduct;
Thewebsitealsoincludesinformationabout
commonhealthcare-relatedscams,including
MedicareandMedicarePartDScams,miracle
• “Natural”or“herbal”doesnotequal“safe.”
cures,andprescriptionassistanceprograms.
Manyherbalingredientsaretoxicincertain
doses,causeallergicreactions,orreactwith Formoreinformation,pleasevisittheFTC’s“Who
prescriptionorover-the-countermedications. Cares?”website,at www.ftc.gov/whocares.
www.michigan.gov/seniorbrigade
16
4. Wise Charitable Giving
Esther received a phone call from a charity
that had a name similar to a national cystic
fibrosis organization. Touched by the thought
of helping children, she agreed to make a
donation. Later, she saw a news report that
the organization was not the charity she
thought it was, but a scam operation.
RemembertoBEWAREwhenyouareaskedto
donatetoacharityandencounteranyofthese
warningsigns:
Billsorinvoicessenttoyoueven
thoughyouneverpledgedmoneyto
theorganization.
Thegenerosityofseniorsmakesthemafavorite
targetofcharityscams.Tomakethebestuseofyour
charitabledollars,alwaysfollowtheserules:
• Neveragreetogivemoneyoverthephone.
Nevergivecreditcardorotherpersonal
informationtoatelephonesolicitor.Ifthe
charityisunfamiliar,askthecallertosend
writteninformationaboutthecharityandits
work,andreaditbeforemakingyourdecision.
Ifsomeoneaskingforyourdonationwon’t
agreegiveyouinformationuntilafteryouhave
contributed,don’tcontribute-youshould
neverhavetomakeapledgetohavemore
informationsenttoyou.
• CalltheMichiganAttorneyGeneral’sOffice,
CharitableTrustSectionat1-517-373-1152,or
visittheAttorneyGeneral’swebsiteat
www.michigan.gov/agcharitiestofind
outifthecharityisregisteredinMichigan,
asrequired.Becausenotallcharitiesare
requiredtoberegistered,callourofficeifthe
organizationisnotlisted.
• TheAttorneyGeneral’sCharitableTrust
Sectioncantellyouwhatpercentageof
yourdonationisusedfortheorganization’s
charitablemission.Whilemostcharities
payoutsidecompaniestosolicitdonations
overthephone,inperson,orbymail,afew
charitiespermitprofessionalfund-raisersto
keepasubstantialportionofdonors’money–
asmuchas90%ofdonations–astheirfee.
Investigatebeforeyougive!
Evasive,vague,orunresponsive
answerstospecificquestionsabout
thecharityandhowmoneyisused.
B
E
W
A
R
E
Wordsmakingupacharity’sname
thatcloselyresembleamorewellknowncharity.
Allowingnotimetoreconsideryour
pledge;theyinsistoncollectingyour
donationimmediately.
Refusaltoanswerquestionsabout
whereyourmoneywill
go,refusaltosend
informationabout
thecharity,or
refusaltoprovide
areceipt.
Emotional
appeals
andhighpressure
tacticstoget
youtomakea
quickdecisionor
feelguiltyaboutnot
contributing.
www.michigan.gov/seniorbrigade
17
5. Estate Planning
Pre-Need Burial
and Funeral Contracts
Jamal told his daughter that he had prepaid for his funeral and his burial and the
contracts would take care of everything.
When he died, however, his daughter found
out that neither contract paid for interment,
which cost an additional $795 for the grave
site alone.
Manypeopletodaychoosetoplanaheadfor
funeralsandotherfinalarrangements,making
informeddecisionsinadvanceaboutburialand
cremationandmemorials.Manyalsoputaside
thefundstopayforthesearrangementsina
varietyoffiscalinstruments-trusts,insurance,
andotheraccounts.
ButmoreandmoreMichiganconsumers,
especiallytheelderly,arereceivingdirectmail
andtelemarketingcallsfromsellersofpre-need
funeralgoods-cemeterylots,urns,andcaskets-
andarepressedtopayinadvanceforgoodsand
servicestheymaynotneedoruseinthefuture.
pre-needcontractisguaranteed,revocable,
refundable,transferable,andportable.
TheAttorneyGeneral’sOffice,theFederalTrade
Commission,AARP,ABCNewsandConsumer
Reports haveeachdonerecentinvestigations
Michigan’s Prepaid Funeral Contract Funding intothesaleoffuneralgoodsandservices.
Act permitsanyonetosellfuneralgoodsand
Consumersareentitledtogoodinformation
servicesonapre-arrangedbasis,aslongasthey uponwhichtobasesensibledecisionsabout
registerasasellerwiththeStateofMichigan.
funeralsbeforeorwhen theneedarises.But
Theprovidersofthesegoodsandservicesare
theyshouldnotbepressuredtopayinadvance
notallthesame.Forinstance,funeraldirectors
formerchandiseorservicestheymaynotneed.
inMichiganaretested,regulated,andinspected
Norshouldtheybetargetedforhigh-pressure
bythestate.Pre-needsellersdonothavetobe
similarlylicensed.Ifyoudecideyouwouldliketo marketingandsalesschemes.TheFederalTrade
Commission’spublication“Funerals: A Consumer
payinadvanceforfuneralgoodsandservices,
Guide”detailstherequirementsoffederallaw
makesureyourmoneyissafeandwillbethere
andprovidesamorecomprehensiveoverview.
whentheneedarises.Lawssafeguardingyour
ThepublicationisavailablefromtheFTCby
moneymayvarybaseduponthefuneralgoods
orservicesbeingsold.
calling1-877-382-4357;TDD:1-202-326-2502or
onlineat:www.ftc.gov.
ConsumersareencouragedbytheAttorney
General’sofficetoobtainawrittenexplanation
Beforesigninganypre-needcontractorpaying
ofexactlyhowtheirmoneyisprotectedin
foranythinginadvance,consumersshould
eachtransaction,andimportantly,whetherthe
considerthefollowingquestions:
www.michigan.gov/seniorbrigade
18
• Whatareyouarepayingfor?Areyoubuying
onlymerchandise,likeacasketandvault,or
areyoupurchasingfuneralservicesaswell?
Whowilleventuallyprovidetheservicesand
merchandiseyouarepurchasing?
• Whoareyoudealingwith?Alicensed
funeraldirector?Acemeterysalesperson?
Acommissionedpre-needseller?Who
ownsthefirm?Howlonghavetheybeen
inbusiness?
• Arethesearrangementsportable,
transferable,andrefundablewithoutpenalty?
• Haveyouconsultedyourfamily,yourreligious,
spiritual,andfinancialadvisors?
• Areyoufeeling“pressured”
orhurriedtomakethese
arrangementsorbuy
somethingbeforeyoureally
needit?Ifso,bywhom?
• Whathappenstothemoneyyou’ve
prepaid?
• Whathappenstotheinterestincomeon
moneythatisprepaidandputintoatrust
account?
• Areyouprotectedifthefirmyoudealt
withgoesoutofbusiness?
• Canyoucancelthecontractand
getafullrefundifyouchange
yourmind?
• Whathappensifyoumovetoa
differentareaordiewhileaway
fromhome?Someprepaidfuneral
planscanbetransferred,butoftenatan
addedcost.
Another resource you may wish to
contact includes:
AARPFulfillment
601EStreet,NW
Washington,DC20049
1-800-424-3410
www.aarp.org
AARPisanonprofit,nonpartisanorganizationdedicatedtohelpingolderAmericans
achievelivesofindependence,dignityandpurpose.Itspublication,“PreplanningYour
FuneralArrangements,”isavailablefreeonlineorbycontactingAARP.
www.michigan.gov/seniorbrigade
19
Living Trusts
Victoria went to a seminar on living trusts.
The speaker said a living trust was a way to
avoid the high cost of probate, which he said
would eat up a third of her estate. She paid
$1,500 for a living trust package. However,
she did not understand that she had to
personally transfer all of her property to the
trust. She missed doing the paperwork on
some items, so when she died her estate had
to go through probate anyway. As it turned
out, the probate fee was only $500.
Inrecentyears,for-profitcompanieshave
aggressivelypromotedthesaleoflivingtrusts
toseniors.Theyplayonpeople’sfearsand
misconceptionsaboutprobateandestatetaxes,
andpromotelivingtrustsasasuitableestateplanningtoolforeveryone.Probateisalegal
processthatoverseesthetransferofpropertyfrom
adeceasedperson’sestatetothebeneficiaries.
However,alivingtrustisNOTsuitablefor
everyone’ssituationandlivingtrustpackages
marketedatseminars,bypostcard,andonthe
Internetareusuallyawasteofmoney.Alivingtrust
letsyoudirecthowpropertyyouplaceinthetrust
willbedistributedafteryourdeath.Itallowsyour
trustpropertytopasstoyourbeneficiarieswithout
goingthroughtheprobateprocess.Livingtrusts
canbeusefulifapersonownsrealestateinmore
thanonestate,anticipatesthathisorherwillmight
becontested,orwantstohavesomeoneelse
managehisorhercurrentassets.However,living
trustsarenotthebestestateplanningchoicefor
mostpeopleinmostcircumstances.
Also,livingtrustsmarketedbysalespeoplemay
usepre-packagedformsthatarenottailored
totheconsumer’sindividualcircumstances,
andmaynotcomplywithMichiganlawsand
regulations.Thesesalespeopleoften:
• Greatlyexaggeratethecostanddelayof
probatingawill.Infact,Michigan’sprobate
processisrelativelyuncomplicated.Michigan
hasastreamlinedprocedureforsmallestates,
andpermitsalessburdensomeprobate
administrationwhenthebeneficiariesconsist
onlyofthedecedent’sspouse,children,ora
personalrepresentative.
• Falselyclaimthatalivingtrustwillcostlessthan
probate.InMichigan,probatefeesaremodest.
• Selltrustdocumentsthatarenotdraftedby
attorneysorarewrittenbyattorneyswhoare
notlicensedintheconsumer’sstate.
• Donottellconsumersthattheymusttransfer
alloftheirassetstothetrust,ortheestatewill
havetogothroughprobateanyway.
Thebottomline?Asubjectasimportantasestate
planningshouldbediscussedwithprofessional
counsel,notwithasalesperson.Don’tbuya
livingtrustpackagethatmaynotbevalidand
maybejustawasteofmoney.Todetermineif
alivingtrustisrightforyou,consultanattorney
whoisadmittedtopracticelawinMichiganand
whospecializesinestatesandtrusts.
For more information:
TheAmericanAssociationofRetiredPersons
(AARP)offersthepublication,“A Consumer’s
Guide to Living Trusts and Wills.”SeetheAARP
websiteatwww.aarp.org.
TheLegalHotlineforMichiganSeniorsprovides
freelegaladvicetoanyMichiganresidentage60
orolder.ToreachtheLegalHotlineforMichigan
Seniors,call1-800-347-5297.
www.michigan.gov/seniorbrigade
20
6. Identity Theft
ID Theft –
Tips to Reduce Your Risk
Ichiro received a phone call from an auto
finance company that said it was going
to repossess his truck. Ichiro did not
own a truck. He found out that
someone using his name and Social
Security number had applied for a car loan and
had never made the payments. He also found
out this same stranger had opened up two
credit accounts in Ichiro’s name and charged
thousands of dollars.
Whensomeoneelseusesyourname,Social
Securitynumber,bankaccountnumber,credit
cardnumber,oranyotherpersonalidentifying
informationtocommitfraud,it’scalledidentity
theft.Theimpostermayopencreditaccounts,get
adriver’slicense,orrentanapartmentinyour
name,andwreakhavocwithyourfinances.An
identitythiefmayevenrackupcriminalcharges
ordeclarebankruptcyinyourname.
Youshouldsuspectidentitytheftif:youreceive
aletterfromabankorcreditorconfirmingyour
recentchangeofaddress–andyouhaven’t
moved;youreceiveacallorletterstatingthat
youhavebeenapprovedordeniedcreditfor
whichyouneverapplied;oracollectionagency
saysitistryingtocollectonanaccountthatyou
didn’topen.
To reduce your vulnerability of becoming a
victim of identity theft:
• Don’tgivepersonalinformationoverthe
phone,throughthemail,orontheInternet
unlessyou’veinitiatedthecontact.Thieves
lietotrickyouintodisclosinginformation.
Don’thesitatetoendthecommunication
andifnecessaryfollow-upatanumberor
addressyouknowtobeaccurate(i.e.,the
numberyoufindinthephonebookoron
yourbillingstatement).
• Treatyourmailandtrashcarefully.Place
outgoingmailinasecurecollectionboxand
promptlyremovemailfromyourmailbox.
• Tearorshredprivaterecordsincludingcharge
receipts,creditapplications,insuranceforms,
physicianstatements,checksandbank
statements,expiredchargecardsthatyou’re
discarding,andcreditoffers.Alsoshred
anythingthathasyourSocialSecuritynumber
oranaccountnumber.
• Stopmailcreditoffersbycallingtoll-free
1-888-567-8688orvisiting
www.optoutprescreen.com. Youwillbe
askedtoprovideyourSocialSecuritynumber
sotheconsumerreportingcompaniescan
matchyourrequestwithyourfile.These
systemsareautomated,soyouwon’tbeable
tospeaktoanoperatorwhenyoucall.
• Carefullyandpromptlyreviewstatementsand
billsforunauthorizedchargesorfraudulent
use.Makeawrittenreportofanyproblems.
• Don’tcarryyourSocialSecuritycardor
number;insteadleaveitinasecureplace.
• Don’tleavepersonalinformationwhereothers
canseeit,particularlyifyouhaveroommates,
employoutsidehelp,orarehavingworkdone
inyourhome.
• Ifyouneedtoordercheckrefills,insteadof
havingyourchecksmailedtoyou,pickthem
upatyourbankorcreditunion.
• Limittheinformationonpersonalchecks.Your
middlename,phonenumber,SocialSecurity
numberanddriver’slicensenumberdonot
havetobeonyourchecks.
www.michigan.gov/seniorbrigade
21
• Keepasecuremasterlistorphotocopiesofall Commission’spublication,“Take Charge: Fighting
importantidentificationandaccountnumbers Back Against Identity Theft”availableat
–driver’slicense,SocialSecuritycard,credit
www.ftc.gov/idtheft.
cards,bankandutilityaccountnumbers,
expirationdates,andthephonenumbersof
thecustomerservicefrauddepartmentsof
yourcardissuers.Keepinasafeplace – but
not yourpurse,wallet,oracar–sothatyou
can respondquicklyincaseyouridentification
is lostorstolen.
• Checkyourcreditreportseveryfourmonths.
UsetheformattachedatAppendixAifyou
wishtodosobymail.Youmayalsoorder
reportsbyphoneat1-877-322-8228,oronline
at www.annualcreditreport.com. Youare
entitledtoonefreereportfromeachofthe
threecreditreportingagencieseachyear.
Remembertorequestthatonlythelastfour
digitsofyourSocialSecuritynumberappear
onyourreport.
• Ifyoudonotthinkyouwillneedtoapplyfor
creditinthenearfuture,youmayalsowish
toconsideraddinga“securityfreeze”toyour
creditreports.A“securityfreeze”essentially
locks,orfreezes,yourcreditreports–that
meansthatpotentialcreditorsandother
thirdpartieswillnotbeabletogetaccessto
yourcreditreportunlessyoutemporarilylift
thefreeze.Formoreinformationonhowto
placesecurityfreezesonyourcreditreports,
pleaseseetheAttorneyGeneral’sconsumer
alertentitled“Security Freeze Information for
Michigan Consumers,”availableat
www.michigan.gov/ag.
Ifyoudiscoverthatsomeoneisusingyour
identityfraudulently,immediatelyreportittoone
oftheconsumerreportingcompanies:Equifax:
1-800-846-5279;Experian1-888-397-3742;or
TransUnion:1-800-680-7289.Thecompany
youcallisrequiredtocontacttheothertwo
companies.Alsoclosetheaccountsthathave
beentamperedwithoropenedfraudulently,and
fileareportwithyourlocalpolice.Theseand
otherstepsaredetailedintheFederalTrade
www.michigan.gov/seniorbrigade
How to Reduce Telemarketing
Calls and Junk Mail
Tired of annoying telemarketing calls and
junk mail filling your mailbox? Take the
following steps to reduce your interruptions.
To reduce telemarketing calls:
• TheFederalTradeCommission(FTC)
hasmadeiteasierforconsumerstoblock
telemarketerswiththeNationalDoNotCall
Registry.Thisprogramallowsconsumers
toregistertheirphonenumbersandbe
placedonanationallistofnumbersthat
telemarketingcompaniesarenotallowed
tocall.Toregisterbyphone,call1-888382-1222,oronlineatwww.donotcall.gov.
ConsumersDONOTneedtoreregistertheir
phonenumbers–registrationswillnotexpire.
Ifacompanytriestocontactyouafterthe
initial31dayregistrationperiod,consumers
mayfileacomplaintat1-888-382-1222.
22
• Whenyougetatelemarketingcall,simplysay
“Putmeonyour‘donotcall’list.”Thefederal
TelephoneConsumerProtectionActof1991
requirescompaniestokeepthislist.Your
requestmustbehonoredforfiveyears.
• Getanunlistednumber.
To reduce junk mail:
• RegisterwiththeDirectMarketing
Association’sMailPreferenceServiceto
getoffmanynationalmailinglists.Register
online (www.dmachoice.org) orcomplete
theforminAppendixAandsenditalong
with$1checkormoneyorderpayabletothe
DMA(instructionsincludedonform).Your
registrationisgoodforthreeyears.
• Tellthecreditreportingagenciesthatyou
don’twanttoreceivepre-approvedoffersof
credit.Thosecreditcardoffersthatcomeinthe
mailarefromcompanieswhogetyourname
andaddressfromoneofthecreditreporting
agencies.Calltoll-free:1-888-567-8688.You
mayalsovisit www.optoutprescreen.com.
Youmaychoosetooptoutforfiveyears,
orpermanently.Youcanalsocallthesame
numberorvisitthesamewebsitetooptbackin.
• Tellmagazinestowhichyousubscribe,and
charitiestowhichyoudonate,thatyoudon’t
wantthemtoshareyournamewithother
businessesorcharities.Requestthesame
frommailordercompanies.
• Readtheprivacypoliciesofyourcreditcard
companiesandbanks.Thepoliciesmust
giveyouan“opt-out”option,bywhichyou
cantellthebanknottoshareyourpersonal
informationwithothercompanies.Thebank
maystillbeallowedtoshareyourinformation
withits“affiliate”companies.
• Don’tentersweepstakesanddrawings.The
mainpurposeofmanycontestsistocompile
mailinglists.Ifyouenteronecontest,youare
likelytoreceivemailingsfromothercontests.
More Help
Getmoreideasonhowtostopjunkmailand
telemarketingbyvisitingwww.michigan.gov/ag
Readmoreaboutyourrightsunderthe
TelephoneCustomerProtectionActatthe
FederalCommunicationsCommissionwebsite,
www.fcc.gov/cib/.
Formoreinformationonhowtoavoid
telemarketingfraudvisittheFederalTrade
Commissionwebsite,www.ftc.gov.
TheFTC’sTelemarketingSalesRulehelps
protectyoufromabusiveanddeceptive
telephonesalespractices.Therulerestricts
callingtimestothehoursbetween8a.m.and
9p.m.,andputsotherlimitsontelemarketers,
too.Forexample:
• Telemarketersmusttellyouit’sasalescall,
thenameoftheseller,andwhatthey’reselling
beforetheymaketheirpitch.
• It’sillegalfortelemarketerstolieabout
theirgoodsorservices,earningspotential,
profitability,riskorliquidityofaninvestment,
orthenatureofaprizeinaprize-promotion
scheme.
• Beforeyoupay,telemarketersmusttellyou
thetotalcostofthegoodsthey’reselling,
anyrestrictionsonreceivingorusingthem,
andifasaleisfinalornon-refundable.Ina
prizepromotion,theymusttellyoutheodds
ofwinning,thatnopurchaseorpaymentis
necessarytowin,andanyrestrictionsor
conditionsonreceivingtheprize.
• It’sillegalforatelemarketertowithdraw
moneyfromyourcheckingaccountwithout
yourexpressed,verifiableauthorization.
• It’sillegalforatelemarketertocallyouifyou
haveaskednottobecalled.
www.michigan.gov/seniorbrigade
23
7. Michigan’s New Scanner Law
The 2011 Shopping Reform
and Modernization Act
After putting the groceries in the trunk of her
car, Marianna sat down in the driver’s seat to
take a closer look at the sales receipt. She
noticed that she paid 89 cents each for two
cans of corn instead of the sale price of 69
cents. She distinctly recalls seeing the shelf
tag that displayed 69 cents. Marianna went
back into the store and at the service desk
received a refund of 20 cents on each can of
corn, AND she got an additional amount of ten
times the difference on one can of corn. The
total she received was $2.40.
EffectiveSeptember1,2011,Michigan’sItem
PricingActwasreplacedbytheShoppingReform
andModernizationAct(“ScannerLaw”).While
thenewScannerLawretainsmanyprovisions
oftheformerPricingandAdvertisingof
ConsumerItemsAct(“ItemPricingAct”),themost
fundamentalchangeisthatretailersarerequired
todisplaythepriceofitemsofferedforsaleinthe
storeattheplacewheretheitemislocated,but
arenolongerrequiredtoindividuallymarkthe
priceontheitemitself.
Mandatory item pricing has been replaced
by some form of price display. Itemsonstore
shelvesarenolongerrequiredtohaveindividual
pricetagsonthem. Instead,pricesofitemsin
astoremustbe“displayed”,whichcanbebya
shelfsign,electronicreader,individualpricetag,
oranyothermethodthat:
(1)clearly and reasonablyshowstheprice
oftheitemontheshelftoconsumers
wheninthestore;
(2)at the place where the item is located.
Thesamesmalllistofitemsthatwereexemptfrom
itempricingundertheoldlawarestillexemptfrom
thenewpricedisplayrequirement(itemssoldin
vendingmachines,liveplants,unpackagedfood,
motorvehicleparts,animals,andothers).
What is a clear and reasonable price display?
Thenewlawdoesnotdefineorstatehowaprice
mustbedisplayedtosatisfytherequirementthatit
“clearlyandreasonably”conveyspriceinformation.
Theonlyexpressmandateinthenewlawrelatesto
placement:thepricemustbeclearlyconveyedtoa
consumerinthestoreattheplacewheretheitem
islocated.Acommonsensemeaningof“clearly
andreasonably”wouldrequirethepricetobe
displayedinsuchsize,color,contrast,andlocation
thatareasonablepersonwouldreadilynoticeand
understand.Reportastore’sfailuretoproperly
displaythepriceofanitembycontacting:
TheDepartmentofAgriculture
andRuralDevelopment
Weights&MeasuresSection
940VentureLane
Williamston,MI48895
Phone:1-517-655-8202
Ifthepriceofanitemontheshelfisnotapparent
toyou,itprobablyisn’tapparenttoother
shopperseither.
www.michigan.gov/seniorbrigade
24
receivingyournotice,thesellermaychooseto
refundyouthedifferencebetweentheamount
chargedandthepricedisplayedplusa“bonus”of
tentimesthedifference,withaminimumof$1.00
andamaximumof$5.00.Ifthesellerrefusesto
giveyouboththerefundandthebonus,youmay
bringalawsuittorecoveryouractualdamagesor
$250.00,whicheverisgreater,plusreasonable
attorneyfeesupto$300.00.Ifyoupurchase
severalidenticalitemsatonceandwere
overchargedoneach,youmaycollectthebonus
onlyonce,butyouareentitledtotherefundofthe
Thenewlawprovidesforpenaltiesinthesame
mannerastheoldlaw.If an automatic checkout differenceforeachidenticalitem.
system (scanner) charges you more than the
displayed price of an item, and:
Additional information regarding the law is
available in the Attorney General’s consumer
1)thetransactionhasbeencompleted,and
alert “Michigan’s New Scanner Law, the 2011
2)youhaveareceiptindicatingtheitem
Shopping Reform and Modernization Act.”
purchasedandthepricechargedforit.
The alert and a wallet size “Scanner Error Bill
of Rights” card are available on the Attorney
Then:
General’s website (www.michigan.gov/ag)
Youmustnotifythesellerthatyouwere
or by calling the Consumer Protection Division,
overcharged,within30daysofthetransaction,
eitherinpersonorinwriting.Withintwodaysof 1-877-765-8388.
TheDepartmentofAgricultureandRural
Developmentisresponsibleforinvestigating
whetherthestorehasviolatedthelawby
failingtoproperlydisplayprices.Violations
ofthelawarepunishablebyafineofnot
morethan$1,000forthefirstviolation,and
$5,000forthesecondandanysubsequent
violation.TheAttorneyGeneralhas
enforcementauthoritytofilealawsuitagainst
asellerforviolationsofthelaw.
www.michigan.gov/seniorbrigade
25
Helpful Resources
Consumer Protection Division, Michigan Attorney General’s Office
website:www.michigan.gov/ag
General consumer complaints:
Tofileacomplaintagainstabusinessortocheckabusiness’scomplainthistory
• 8:30a.m.to4:30p.m.,Monday-Friday
• 1-517-373-1140
• Toll-free:1-877-765-8388
• Fax:1-517-241-3771
Other Locations:
Franchise Section, Consumer Protection Division, Michigan Attorney General’s Office
Toinquireintosellersoffranchises,businessopportunities,ormulti-levelmarketingprograms.
• 1-517-373-7117
• Toll-free:1-877-765-8388
Charitable Trust Section, Consumer Protection Division, Michigan Attorney General’s Office
Toinquireintoacharitableorganization’sregistrationinMichigan.
• 1-517-373-1152
• Toll-free:1-877-765-8388
Office of Financial and Insurance Regulation, Department of Licensing and Regulatory Affairs
Toinquireintolendersandsellersofsecurities,orforquestionsaboutmortgagesandmortgagelenders.
• 1-517-373-0220
• Toll-free:1-877-999-6442
• www.michigan.gov/ofir
Legal Hotline for Michigan Seniors
Togetlegaladviceoverthephone,forMichiganconsumersovertheageof60.
• Toll-free:1-800-347-5297
www.michigan.gov/seniorbrigade
26
Free Annual Credit Reports – Order Yours Today
Youhavetherighttogetafreecopyofyourcreditfiledisclosure,commonlycalled
acreditreport,onceevery12months,fromeachofthenationwideconsumercredit
reportingcompanies–Equifax,Experian,andTransUnion.Tomaximizeyourprotection
againstfraudulentactivity,orderonereportfromadifferentcreditreportingcompany
everyfourthmonth.
Orderyourfreecreditreportanyoneofthreeways:
• ByMail
CompletetheAnnualCreditReportRequestFormavailableonlineat
theonlytrulyfreecreditreportwebsite:
https://www.annualcreditreport.com/cra/requestformfinal.pdf.
• ByTelephone
Call1-877-322-8228(tollfree).
• Online
www.annualcreditreport.com
Caution:Misspellingthissiteorusinganothersitewithsimilarwordswilltakeyou toasitethatwilltryandsellyousomethingorcollectyourpersonalinformation.
Thesearetheonlywaystogetfreecreditreportswithoutanystringsattached.
The“free”creditreportsadvertisedbyothersourcesarenotreallyfree!
Werecommendthatwhenyouorderyourequestthatnomorethanthelastfourdigitsof
yourSocialSecuritynumberappearoncopiesofyourcreditreport.
Ifyouareavictimofidentitytheft,youareentitledtoplaceafraudalertonyourfileand
toreceivecopiesofyourcreditreportfromeachofthethreecreditreportingcompanies
freeofcharge,regardlesswhetheryouhavepreviouslyorderedyourfreeannualreports.
www.michigan.gov/seniorbrigade
Annual Credit Report Request Form
PLEASE DO NOT SEND THIS FORM TO THE ATTORNEY GENERAL'S OFFICE
AppendixA
Direct Marketing Association Mail Preference Form
PLEASE DO NOT SEND THIS FORM TO THE ATTORNEY GENERAL'S OFFICE
AppendixA
Notes and Other Important Information
Cost of printing 15,000 copies: $13,562.09 or $.90 each.