Fla. CFO Tells Consumers to Beware of Financial Scams During Holidays

This is the time of year when families come together to share the warmth and joy of the holiday season. It is also the time when financial fraud often strikes. Florida’s Chief Financial Officer Tom Gallagher is urging consumers to be extra cautious with their money to avoid financial scams.

“Take steps to protect your personal and financial information this holiday season, especially if you are making purchases online or over the phone,” Gallagher said. “Identity theft can be prevented.”

Consumers who give out personal or financial information online or over the phone risk having their identities stolen. Consumers should also shred junk mail credit card offers, review all bank and credit card records and check credit reports at least once a year. The Department of Financial Services has created an online resource on identity theft with links to more tips and information on avoiding this growing scam. Consumers can log on to www.fldfs.com and click the “ID Theft” banner to visit the site.

Gallagher said consumers have also reported not being able to find physical addresses or phone numbers for online businesses. One such Floridian reportedly enrolled in a health insurance plan online and gave her credit card number to pay for the monthly premiums. Months after purchasing the coverage, she and her husband were hospitalized, and their claims were denied. After the denial, the credit card company would not stop the charges, saying they had to receive the request from the insurer.

When making these kinds of purchases, consumers are advised to deal with reputable companies and make sure they have physical addresses and phone numbers to call with questions. “Remember, a company based outside the country is outside of our laws,” Gallagher said.

Other types of scams that often find victims this time of year are phony charitable organizations and bogus income tax scams. An individual posing as a local charity may solicit consumers over the phone. Potential donors should ask questions, including what the organization plans to do with the gift, and be wary of appeals that are long on emotion and short on details. A reputable organization will never demand cash, and all checks should be made payable to the organization, never to an individual. Florida law also requires that charitable organizations provide a copy of their annual financial report upon request.

Moreover, Gallagher warned not to fall victim to an income tax avoidance scheme this holiday season. Resist the urge to file for nonexistent refunds, such as social security advances and slavery reparations. Attempting to collect on an illegal claim can result in a $500 federal penalty. Decline to talk with anyone offering to file a claim on your behalf for an upfront “fee.” These individuals will cash one’s check and move on to the next victim.

Gallagher also provided some advice that’s good year-round. He advised consumers who are purchasing homes, automobiles, investments or insurance to take the time necessary to read each document or contract carefully and verify that they are dealing with a licensed company. He urged consumers to talk with their agents or brokers about their rights and responsibilities under the law before signing any agreement.

Hundreds of Floridians have reportedly purchased low-cost health insurance and other types of coverage, only to discover that the company was unable or unwilling to pay claims, and that no consumer protections were afforded since the company was unlicensed.

For more than two years, the department has conducted a public education campaign urging consumers to “Verify Before You Buy.” Since February 2001, the department has ordered some 200 entities, insurance agents, marketers and affiliates to stop unauthorized insurance transactions.