What to do if you are Scammed Online

What To Do If Scammed Online Intellectual Property Intellectual Property

What to do if you are Scammed Online

You ordered an item online from an unfamiliar seller and thought nothing of entering your contact information and perhaps your credit card number. Or you responded to what looked like an email from your bank asking for your social security number. But was that really your bank? Wouldn’t they already have your number? While the Internet offers a global marketplace for consumers and businesses, crooks also recognize the potentials of cyberspace. Some sell you things that don’t exist, and then take your money and never ship anything to you. Others are “phishing” for personal information, ready to steal your identity or use your credit card number for fraudulent purposes. What should you do if you get scammed?
Stop the Payment if Possible
Certainly if you paid by personal check, try to cancel the check as soon as you figure out you are not getting the goods you ordered. Unfortunately, it is often too late because cashing your check is the first thing the scammer will do.
If you paid by credit card, you can dispute the charges with your credit card company. Federal law limits your liability to $50 if someone makes unauthorized charges to your account, and most credit card issuers will remove them completely if you report the problem promptly. You may have other issues, however, because now the scammer has your credit card number-so let your credit card company know about the fraudulent transaction immediately and cancel the card.
If you used a U.S. Postal Service money order, let the Post Office know; they take fraud involving U.S.P.S. money orders very seriously.
Report the Crime
Taking money fraudulently is criminal behavior, and although the perpetrator appears to have gotten away with it, there are things you can do to prevent it from happening again. If you are a victim or attempted victim of Internet fraud, it is important to report the scam quickly to law enforcement agencies so they have the opportunity to shut the bogus operation down.
Law Enforcement Authorities
On the national level, report this type of cybercrime to the Federal Bureau of Investigation, (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). On the state level, report the fraud to the office of the Attorney General. For ease of reporting, the Internet Crime Complaint Center (IC3), a partnership including the three federal organizations above serves as a vehicle to receive, develop, and refer criminal complaints regarding cybercrime.
Other Resources
The National Fraud Information Center will direct your complaint to the authorities, and provides information on Internet fraud and how to avoid it.
The National Consumers League provides many articles, research, tips, and other consumer information on cybercrime.
CyberCops supplies some very useful resources. You can file a complaint about your experiences or report suspicious activity on the Net. You can also search the complaint archives, read success stories, and check out a list of reported “suspicious characters.”
The Better Business Bureau (BBB) registers complaints and allows consumers to check out online companies to see if any previous complaints have been filed against them.
How to Avoid Being Scammed in the Future
There are simple things you can do to lessen your chances of being scammed online, from not falling for official looking emails until you call the company and check it out, to using the many online resources outlined above. Scambusters.org is also a very useful consumer website that compiles a list of scams and gets updated often.
Here are some other tips:
Only deal with familiar entities. Check with your state or local consumer protection agency and the Better Business Bureau before doing business with anyone online. Always get a physical address and phone number in case there is a problem later. Call the phone number and make sure it’s real!
Be careful of unsolicited emails. Often they are fraudulent. Never respond to unknown senders. Doing so only confirms for them that yours is a working email address resulting in more unwanted emails. They may also sell email addresses to other scammers. The best approach is to delete the email.
Understand the offer. A legitimate seller will give you all the details about the products or services, the total price, the delivery time, the refund and cancellation policies, and the terms of any warranty. A cybercriminal will be short on details and long on payment procedures.
Guard your personal information. Never provide your credit card or bank account number unless you are actually paying for something from a reputable company. Be wary of companies that ask for your social security number online. Be especially suspicious if someone claiming to be from a company with whom you have an account asks for information they should already have.
Don’t believe promises of easy money. If someone claims that you can earn money with little or no work, get a loan or credit card even if you have bad credit, or make money on an investment with little or no risk, it is likely a scam.
Pay the safest way. Credit cards are the safest way to pay for online purchases because you can dispute the charges if you never get the goods or services or the offer was misrepresented.
Think twice before entering contests operated by unfamiliar companies. Fraudulent marketers sometimes use contest entry forms to identify potential victims.

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Can a creditor ask a debtor to reaffirm the debt?

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Can a creditor ask a debtor to reaffirm the debt?

Yes, this means that the creditor is asking that the debtor pay the debt anyway, even though it is eligible to be discharged in bankruptcy. A debtor may be willing to do this if there is a co-signer or guarantor of the debt (such as a family member, friend or employer) that the debtor does not wish to leave saddled with the debt. Also, a debtor may want to reaffirm a debt in order to avoid having a secured creditor take the collateral securing the debt. A creditor may also ask a debtor to reaffirm the debt before he (the creditor) will agree to do business with the debtor again. This only applies in Chapter 7 consumer bankruptcy. This will not usually happen in a business Chapter 7.

The decision to reaffirm a debt is voluntary; no law requires the debtor to do it. The debtor can also choose to pay a debt that has been discharged in bankruptcy without reaffirming the debt, which means that the lender has no legal rights to collect the debt. Reaffirmation agreements can’t impose an undue burden on you or your dependents and must be in your best interest.

A debt is reaffirmed in an agreement filed with the court within 60 days after the first meeting of the creditors in the bankruptcy case, also called the 341 meeting. Once you sign a reaffirmation agreement you have 60 days or until the judge issues the discharge order in your bankruptcy case to cancel the agreement.

It is important to remember that a reaffirmed debt is not wiped out (discharged) in bankruptcy. Once your bankruptcy order is filed and the debt is reaffirmed, you must pay the debt. If you don’t, the creditor can sue you for the balance owed or repossess the property in a secured debt.

(Reviewed 11.4.08)

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Are statutory penalties or punitive damages for fraud discharged in bankruptcy?

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Are statutory penalties or punitive damages for fraud discharged in bankruptcy?

No. It is not only the actual value of the “money, property, services, or . . . credit” the debtor obtained through fraud that is non-dischargeable in bankruptcy, but also treble “punitive” damages and attorneys fees and costs related to the fraud. This was made clear in a March 25, 1998 decision of the Supreme Court of the United States in Cohen v. de la Cruz.

The case involved a landlord who had overcharged his tenants. The trial court found that the landlord had committed “actual fraud” within the meaning of the Bankruptcy Act and that his conduct amounted to an “unconscionable commercial practice” under New Jersey’s Consumer Fraud Act. As a result, the court awarded the tenants treble damages plus reasonable attorney’s fees and costs. The debtor recognized the approximately $30,000 in improperly charged rent would not be dischargeable, but argued that he should not be stuck having to pay the $100,000 in punitive damages and attorneys’ fees the court awarded. The court decided those extra damages had been awarded as a result of his fraudulent acquisition of “money, property, services, or . . . credit.” All the debtor’s obligations arising out of fraudulent conduct, including both punitive and compensatory damages, are not subject to discharge in bankruptcy.

(Reviewed 11.9.08)

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What is Chapter 11 bankruptcy?

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What is Chapter 11 bankruptcy?

Chapter 11 is typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers since it is far more complex and expensive to pursue. It allows businesses to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts. Typically a business is allowed to continue to operate while it is in Chapter 11, although it does so under the supervision of the Bankruptcy Court and its appointees.

(Reviewed 11.9.08)

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What is Chapter 7 bankruptcy?

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What is Chapter 7 bankruptcy?

Chapter 7 is the bankruptcy provision most frequently used by individuals. It involves the complete liquidation of a debtor’s property to pay creditors and wipes out the remaining debts, giving the debtor what’s known as a “fresh start”. However, the debtor can retain certain property that is specifically “exempt” depending her State’s law, such as tools of one’s trade, limited equity in a car and house, and some personal effects.

If you use Chapter 7 you may lose your home (depending on your state) but it does enable you to get out from under the burden of debt more quickly.

The post-October 17, 2005, Bankruptcy Code made major changes in this chapter, making the process longer and more expensive and undeniably harder for consumers to shed debts than under the old law. Under one of the key changes, a means test determines whether a debtor can use a Chapter 7 filing or be forced to file a Chapter 13 and repay some of their debts over five years.
(Reviewed 11.5.08)

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Are there different types of bankruptcy?

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Are there different types of bankruptcy?

Yes, and they are known by the title of the Chapter of the Federal Bankruptcy Act in which they appear. Each “Chapter” contains a different set of laws and rules.

While there are several different types of bankruptcy procedures, each known by the title of the chapters of the Bankruptcy Code where they appear, the two most commonly used by individual consumers are:
(1) Chapter 7 bankruptcy is the most frequently used by individuals. Under this arrangement, a court-appointed trustee collects your assets, sells them for cash, and makes distributions to creditors. You can keep assets that are exempt either under Federal law or the law of your home state. You cannot repeat this filing for six years.
(2) Chapter 13 bankruptcy is designed for an individual debtor who has a regular income and stable job. Under this procedure, you pay debts off over a three-to-five year period and keep your property. At a confirmation hearing, the court either approves or disapproves the plan. A Chapter 13 can be filed at any time.
Individuals may also use Chapter 11 reogranizations, but this form is generally targeted to businesses. Farmers can use Chapter 12 (see following question).
(Reviewed 11.5.08)

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