Clean-up at Cleo
The Federal Trade Commission (FTC) has announced that the online cash advance company Cleo AI agreed to pay $17 million to settle FTC allegations that it deceived consumers about how much money they could get and how quickly, and made it difficult to cancel subscriptions. The FTC complaint charges that Cleo’s ads promised consumers access to hundreds of dollars in cash advances, but almost no one received anything close to the advertised amounts. The ads also promised consumers access to same-day or instant advances, but, in reality, only if subscribers paid an additional fee. Even after paying the fee, consumers could still have to wait until the next day for their money. The FTC complaint cited an impacted consumer as saying, "I just subscribed and paid for IMMEDIATE 35 dollars. Now I go on here and it says up to 24 hrs. I have my son today and he needs food and I need gas to go get it. I can’t wait 24 hours, or I wouldn’t have bothered.” The proposed settlement would prohibit Cleo from misleading advance customers about the available amount, fees and terms. It would also require disclosure of subscription terms; express, informed consent before charging for a subscription; and a simple way for consumers to cancel. Good to know before you owe.
Wicked scams of the North
You might have watched our recent webinar, sponsored by Amazon, that looked at how organizations of every stripe—including law enforcement agencies—can collaborate to protect consumers against fraud. In keeping with this same theme, Amazon recently shared with us an example of how their collaboration with law enforcement north of the border helped to combat a fake job scam that U.S. consumers would also want to be keen to. During a recorded media briefing, police in Edmonton, the capital city of Alberta, explained that Amazon impersonators offered remote jobs that required scam victims to complete a series of "Amazon tasks" on a fake platform in order to "earn commissions." The catch was that, in order to collect commission payments, victims also had to "invest" money in the platform. Initially, victims actually received commission payments, but eventually the scammers demanded money from them for the commissions to continue flowing. Victims lost millions in invested funds, and whatever payouts they did get came from money paid in by new victims. Investigators found that perpetrators were tied to Chinese organized crime, and many of the victims were new immigrants unfamiliar with their rights. Edmonton police recommended that consumers watch out for the red flags for this type of scam, such as offers to earn thousands of dollars for just "20 minutes of work"; not being able to communicate with employers directly—only through WhatsApp, Telegram, etc.; guaranteed returns on investments; and more. Heed these warnings, U.S. consumers, and watch the full—and informative—interview with police here.
FBI looks out for consumers
Room for improvement. Warmer weather brings a renewed FBI warning about home improvement scams, reports the Chicago-area NBC 5 News team. The story includes a warning from the FBI's Lucas Rothaar, assistant special agent in charge, about home improvement scammers showing up door-to-door and using high pressure tactics. Rothaar explained that fraudsters catch consumers off guard and try to get them to commit to improvements they would not agree to if they had more time to consider the proposition. He added that consumers lose thousands upon thousands of dollars for work that didn't need to be done, such as for supposed holes in the roof or drains needing repair. The fraudsters also require immediate payment. NBC 5 noted that home improvement scams are so lucrative that they've attracted international fraud rings, and mentions a local police alert about "Irish Travelers." Rothaar also explained that perpetrators don't come from just one specific country, but "from all corners of the earth." Certainly, we'd say, a good reminder to always be on guard. Check out NBC 5's tips for spotting and avoiding fraud, including to never trust unsolicited contractors, here.
FBI's a-callin'. If you get a call from someone who says they want to help you, and they claim to be with the FBI, you may be tempted to quickly hang up, suspecting it's a scam. But, guess what: In some cases it really might be the federal intelligence agency calling. Baltimore's ABC 2 News reported that the FBI is proactively reaching out to potential fraud victims as part of an initiative ("Operation Leval Up") to stop consumers from sending more money to scammers. FBI Special Agent David Paniwozik told ABC 2 that the agency is using sophisticated cyber techniques to identify people being victimized. Agents first send an email and then follow up with phone calls, ABC 2 explained. Paniwozik said that, from January 2024 to February 2025, the FBI contacted over 5,000 victims, and estimates saving victims $318 million in additional funds they intended to send scammers. The news story recommends that consumers who receive a call from someone claiming to be the FBI or law enforcement call a local FBI field office or law enforcement directly to verify the caller's identity. Also, as ABC 2 notes, no law enforcement agency will ever ask you for money. ABC 2 didn't include information about how the FBI knows who to call, but in a recent article citing FBI Deputy Assistant Director James Barnacle, PC Mag explained that, in general, the FBI partners with social media companies and blockchain-monitoring firms to pinpoint where fraud proceeds are going. And then, according to Barnacle, they "kind of work it backward and identify victims that way.”
Tips
Recipe for recovery. Mashable ran a story earlier this month with a valuable set of tips for consumers recovering emotionally after experiencing a scam. The article spotlights the work of Debbie Deem, an advocate who spent decades helping crime victims and who currently focuses on "transnational fraud victim assistance." Deem prefers the term "transnational fraud" over "scam," Mashable explains, "because she believes it more accurately describes how organized international criminal networks and gangs use sophisticated methods in order to steal money and valuable data from their targets." Deem told Mashable that, increasingly, there is a recognition that anyone can be defrauded by networks using various psychological tactics. Deem also said that "In addition to feeling intense emotions like embarrassment, despair, and betrayal, the added isolation of judgement often only worsens a victim's mental health." The article offers lots of advice and resources for recovering emotionally from a scam in four key ways: 1) figuring out what you need in terms of practical and emotional support; 2) not blaming yourself for becoming a victim of fraud; 3) reframing negative thoughts about your aptitude or character; and 4) seeking peer and professional support.
Spot the trick, get the treat. In a recent consumer alert, the Federal Trade Commission's Bureau of Consumer Protection staff reminded us that it’s not necessarily only the adults in a household who receive scam text messages—tweens and teens can get them, too. The alert offers parents a "game plan" to help younger folks understand the "why" that underlies the advice to delete and never respond to unexpected texts. The FTC suggests parents turn the process of educating kids about this topic into a bit of a game. Kids can show parents the suspicious messages they receive and explain to their parents how they knew the message was a scam. The alert gives parents an "answer key" they can use to give kids one point each time they correctly spot a scam. "Once your kid earns enough points, come up with a special treat to celebrate," says the FTC. Great motivation! (We'd love to play for the treats, too.)
Cover(age) story. With auto insurance rates on the rise, many consumers may be looking for ways to save a few bucks on their policy. A recent story posted on the Insurance Business website serves as a good reminder to be wary of too-good-to-be-true bargains when it comes to insurance. According to the article, Utah insurance regulators warned residents about a surge in fraudulent auto insurance policies being sold to the Hispanic community on WhatsApp at unusually low prices. Citing the Cache Valley Daily, Insurance Business explains that victims who bought fake insurance received counterfeit insurance certificates. The story also explains that the fake certificates might include the name of an insurance agent who is not connected to the scam but who, instead, is also an identity theft victim whose name is being used without their knowledge. One key tip for consumers is to verify the legitimacy of any insurance purchase by contacting the insurer directly—a good way to avoid the trouble you'd face on the road if you were left without coverage.
Bait and switch. Local law enforcement agencies are warning about heartstring-pulling Facebook posts by scammers who aim to get the posts shared as widely as possible before swapping in fraudulent, less share-worthy posts, like fake rental listings or fraudulent ads. According to a WBAY 2 News report, police in Green Bay, Wisconsin, warned about a fake Facebook post regarding a missing police officer, urging people to share it. As WBAY explains, several red flags indicated the post was fake, including that it was posted in a “buy and sell” section of Facebook instead of the police department’s Facebook page; it refers to the issuance of a Silver Alert, yet describes the officer as a 28-year-old; and it provides no information about where to call if you see the officer. A separate warning from the Sedgwick County Sheriff in Wichita, Kansas, warned about a fake Facebook post purportedly alerting the Sedgwick community about a man and woman on the run after "killing 3 female police officers yesterday." The sheriff's office urged the public to "verify before you share" these types of messages, and reminded community members that legitimate alerts about missing persons, community warnings, or emergencies will come directly from law enforcement—not from buy/sell/trade Facebook groups.
Low blow. The community agencies in our network who serve reentry or incarcerated individuals and their loved ones will find the following scam particularly tasteless. The Federal Bureau of Prisons (FBOP) issued an alert about scam calls that are impacting incarcerated individuals and their families. Callers are identifying themselves as FBOP employees and attempting to secure money for community placement services. The FBOP, however, states that it does not contact individuals to request personal information or money. The FBOP also warned about additional scams in which callers identify themselves as "Federal Bureau of Prisons Reentry Division Services" to gain personal information or money for "early release and/or community placement services." The FBOP recommends that individuals contacted by persons purporting to be employees of the FBOP and requesting money and/or compensation report these calls to the Federal Trade Commission online, at ReportFraud.FTC.gov, or by phone, at 877-382-4357. Pass it on!
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