Beware: Recovery Board's Scams Update

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[Economic Recovery News]

April 1----Recovery Act Frauds and Scams: Recent Examples.

As in every case where there are large amounts of cash available, scams and frauds are to be expected. The Recovery Act is not only historic in its national impact, but also in its degree of transparency in government spending. It is our hope that these vigorous transparency requirements will help the general public access and understand the legitimate use of Recovery funding, and teach them to avoid the promise of free and easy money used by fraudsters.

If you come across suspected scams, there are various places for you to file complaints. Among them are the Federal Trade Commission (FTC) and the Internet Crime Complaint Center (IC3), a joint program of the National White Collar Crime Center, Federal Bureau of Investigation (FBI), and Bureau of Justice Assistance. The Internal Revenue Service (IRS) also collects data regarding "phishing" via their e-mail address: "". The Government Accountability Office (GAO) offers "FraudNet," a website where anyone may report allegations of fraud, waste, abuse, or mismanagement of federal funds. GAO then refers those allegations to the Inspector General (IG) of the relevant federal agency.

According to the Federal Trade Commission, scamming methods seen so far include: Scam artists ask you to send a small processing fee, supposedly to get a much larger check in return.

Scammers ask for your bank account number so they can "deposit" your check. Then, they use the information to clean out your account or open new ones using your identifying information.

Some stimulus scams encourage you to click on links, open attached forms, or call phony toll-free numbers. But simply clicking the link or opening the document can install harmful software, like spyware, on your computer. The result could be your personal information ending up in the hands of an identity thief.

Excerpts from Press/Agency Reports: Fraudulent letters: Almost immediately after the Recovery Act was signed, this example came from the Small Business Administration (SBA): Fraudulent letters, printed on what appears to be an SBA letterhead, were sent to small businesses across the country. The letters told recipients they may be eligible for a tax rebate under the Economic Stimulus Act and that the SBA is assessing their eligibility for such a rebate. It then asked them to provide bank account information.

Fraudulent email: One email uses a picture of President Obama and promises a "free stimulus check" of varying amounts, from $613.27 to several thousand dollars. Recipients of the email are directed to another link where they have to "participate in the program" in order to get a check. Participation requires that they complete several "reward offers," such as magazine subscriptions the consumer has to buy or getting a credit card that’s only activated with a purchase. Some legitimate businesses are using the stimulus in marketing that some consumers might find confusing. In a recent mailing to Philadelphia residents, for example, a Lebanon, N.J., mortgage lender listed "Economic Stimulus Act Case Number ICG-4015469" in the space normally occupied by a return address on the envelope. Inside, the letter says, "The Economic Stimulus Act has allowed the Federal Housing Authority (FHA) to temporarily adjust lending policies to soften the crisis for mortgage holders and to promote economic stimulus." A paragraph at the bottom of the page states that the company is "not an agency of the federal government." Still, when people call in to the lender's toll-free number they might be confused. The recorded announcement says, "Thank you for calling the FHA application processing center."

Fake checks: Another scam sends consumers something that appears to be a stimulus check. Instructions tell consumers to call a toll-free number. When they do, they’re told to deposit the check but to wire a certain amount back, either to enter into foreclosure rescue or to get information on how to use stimulus money to buy foreclosed properties in the area.

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