National Consumers League

From the Experts Blog

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Phony Checks Costing Consumers Billions

fakeckeck_logo_nw.jpg blog posted by Sally Greenberg, NCL Executive Director

The National Consumers League is the only consumer group that has a Fraud Center and is actively engaged in battling Internet and telemarketing fraud. This October 3, the Alliance for Consumer Fraud Awareness, of which NCL is a member, launched its “Fakechecks.org” Web site, with press conferences in New York and Washington, D.C.

I spoke at the press conference at the TimesCenter in New York, and the Director of NCL's Fraud Center, Susan Grant, spoke in Washington, DC at the Press Club. The centerpiece of the campaign is a new NCL Web site, www.fakechecks.org. The Alliance warned consumers that while there are many different ways scammers set up the fake check scheme, there is a single common thread running through them that can enable consumers to identify it as fraud: no one who legitimately wants to give you a check or money order for something would ask you to wire money anywhere in return.

NCL also called on banks to warn their customers that just because the funds are available quickly doesn't mean that the check is good.

The Alliance announced a new consumer survey found that 35 percent of adult consumers had been presented with a fake check at some point and that 28 percent of those had actually sent money back. Fake check scams tend to cost consumers between $3,000-4,000 each year. Based on these numbers, NCL estimates that the cost of fake check scams to be between $63 and $84 billion each year.

We’ve spotted 6 general categories of fake check scams: work at home, love losses, rental schemes, foreign business offers, sudden riches, and overpayments. The pitches scammers are coming up with are plausible, and the checks are so convincing – it’s no wonder consumers are falling for this! But we hope www.fakechecks.org will help spread the word about these phony checks.


Sally's Blog: First Week at National Consumers League

NCL Executive Director Sally Greenberg

NCL Executive Director Sally Greenberg

I kicked off my first week on the job as Executive Director at the National Consumers League with testimony on Monday, October 1 before the Interagency Working Group on Import Safety. This group of federal agencies – 12 of them headed by Health and Human Services Secretary Michael Leavitt – came together at the request of President George Bush this summer to assess the government’s response to protecting the public from unsafe imports. (See Leavitt’s blog on the task force.)

NCL touched on three issues: the irony in the history behind American health and safety laws and regulations; the risks of counterfeit drugs; and the relationship between sweatshop-like working conditions in China and the dangers in the products they manufacture.

1) We noted the irony that many American businesses and industries over the years had fought against health and safety laws and regulations but in fact, during the crisis over toy and food safety this past summer, with many consumer products from China and elsewhere proving to be unsafe, “Made in America” has come to mean “made safely and with quality materials that won’t endanger you or your family.”

2) Counterfeit drugs from overseas are a major threat to consumers, and we need all makers of drugs coming into the United States to be made in factories that are FDA-certified. We also recommended that this Working Group encourage consumers to buy only from Internet pharmacies that have undergone third-party certification or something like it, because the risks of buying drugs online are considerable.

3) Citing a report from the NY-based group China Labor Watch, NCL noted that many of the Chinese toy factories are sweatshops that violate Chinese and international labor laws, regularly use child labor, force overtime on their workers, dock workers pay for minor infractions, and in fact resemble sweatshops that existed 100 years ago in the United States. Pictures from those factories also show dirty factories that don’t take precautions to keep workers safe, worker overcrowding, materials piled up on the floors. NCL cited the relationship between factories that make low quality goods and violate safety standards. NCL believes that when factories are forced to open their doors to close inspection and third-party certification for safety, they are likely to improve conditions across the board.

The National Consumers League believes many consumers would be alarmed to know that the toys they buy their children are made under such dismal conditions. NCL encourages “ethical consuming” and will continue to focus on the relationships between the consumer and those who make the products we buy.