A Consumer Action News Alert • December 2019
SCAM GRAM is Consumer Action's monthly e-newsletter alerting you to the dirtiest players in the world of tech fraud, credit card scams, ID theft and general con-artistry. Don't be fooled by liars, cheats and crooks; wise up with SCAM GRAM!
  We're not making this up  
  Netflix's new docuseries Broken exposes how low-quality products like fake makeup can lead to worse outcomes than clownish eyebrows and bad blending jobs. In its first episode, the program provides full coverage of the counterfeit makeup crisis, fueled by rapid straight-to-social media "beauty influencer"-driven sales. While there are benefits to an "all access" online culture (greater awareness that foundation should come in colors other than "ivory"), the cons can be illustrated by a young woman who purchased what she believed was a hard-to-snag, less costly name-brand lip kit on eBay, only to find upon applying it in her home that her now burning lips were stuck together. "I was trying not to have a full-on panic attack," she recounts. "I had...acetone nail polish remover. I just kept rubbing that into my lips...that kind of worked, but it also hurt. So I got butter from the fridge and that eventually loosened it." The shaken consumer turned to Google to discover that her bogus beauty buy had actually been concocted in a Chinese lab where superglue was added to the formula to make it "sticky." Talk about cutting corners! The documentarians consulted a dermatologist, who confirmed the worst fears of every bargain hunter: Horrific makeup-induced skin incidents (skincidents?)--including cellulitis, boils and pink eye--have risen over the last five years as consumers have been fooled into buying increasingly authentic-looking knockoffs of brands from Urban Decay to Too Faced. The fake makeup (fakeup?) has tested positive for staph and other bacteria, arsenic, lead, urine and (you probably guessed it)...poop! Makeup mavens: Buy through a brand's website or from a trusted retailer (e.g., Sephora, ULTA Beauty, etc.); it's worth waiting for a sale!  
  Fear factor  
  Digital content creator Quartz broke the story about outrageous Facebook ads warning that the "Deep State" is out to take your retirement savings, so you should invest it in precious metals--otherwise "merry liberals" will seize it. (You laugh, but never underestimate gullibility.) Quartz details how 71-year-old Cheryl's curiosity led to a friendly phone conversation with a man who "talked about how Donald Trump's policies would devalue the dollar" (perhaps) and the government would "confiscate" all of her money (not gonna happen). The caller recommended that Cheryl convert her savings into silver coins via Chase Metals--coincidentally, the outfit he was pitching for--and plunk them into a new Individual Savings Account he urged Cheryl to create. Predictably, after Cheryl sunk $83,000 into the company, she learned the metals were...not so precious. Cheryl lost $25,000 in the transaction and, like some unfortunate leprechaun, found herself sitting on tens of thousands in overpriced coins. It's taken the government a while to catch on to Chase Metals, parent company TMTE, and an affiliated website, Metal(dot)com, but a handful of state regulators are beginning to take action against Chase and its utterly ridiculous skydiving CEO for shilling fraudulent, unregistered investment advice. Unfortunately, the company has sunk millions into targeting the Cheryls of the world (older, self-professed conservatives) through social media and fear campaigns. If you know a Cheryl, let them know: All that glitters is not gold (or silver).  
  Kick 'em when they're down  
Pain in the... If you're having trouble moving your limbs due to joint or muscle pain, know that not all supplement suppliers are here to offer a helping hand. Since there's no requirement that they follow the Food and Drug Administration's good manufacturing practices, snake oil salesmen are taking advantage of the lack of regulations and making their trade hawking trash. But supplement makers still aren't allowed to engage in false advertising, which is what recently got Synovia and NatureCity, LLC in trouble with the Federal Trade Commission (FTC)--the former for claiming its oral capsules would "provide the same joint pain relief as an injected medication" (un-huh) and the latter for pointing to nonexistent "data" on how its aloe vera products could cure a plethora of serious and painful conditions. If this were the case, Big Pharma would have found a way to patent and sell it.

Ill-gotten gains. For many patients who get sick or injured, the fun is just getting started! After Elizabeth Rosenthal's husband suffered a biking accident and landed in the ER, the physician-writer went public with the hospital's outrageous billing practices, which she described as legal fraud. Rosenthal outlined line items in her spouse's medical bill for "things that simply didn't happen, or only kind-of, sort-of happened, or were mislabeled as things they were not." This included, for instance, a $483 "surgical" charge for cutting a plastic splint off his finger, in addition to an office visit and "facility" charge! Unfortunately, Rosenthal's experience is hardly unique (read the comments section if you want to be simultaneously outraged and depressed). What to do if you find yourself hit with an unexpected medical bill? Aside from throwing the whole healthcare system out and starting over, question the charges and negotiate them down. You can also check to see if your state has "surprise billing" laws on the books for out-of-network charges, and learn about federal initiatives to protect consumers.
It's all about who you (don't) know. In the largest FTC settlement obtained against a for-profit school, University of Phoenix is being forced to cancel nearly $141 million in student debt held by those who "graced" its not-so-hallowed halls based on false advertising. The mainly online school claimed in its recruitment materials that it partnered with companies like Twitter, Microsoft and AT&T to hook students up with real-world jobs. It did not. But it did target servicemembers and veterans, going so far as to carry out its deception on military bases in an effort to nab prospective students eligible to use taxpayer-funded GI Bill education benefits to attend. The group Veterans Education Success sent a statement out in response to the news, detailing how the University of Phoenix "dwarfs all other colleges in the amount of GI Bill funds it receives each year, but spends only about 15% of tuition on the students' education--a fraction of what most colleges spend on instruction." This is one phoenix that shouldn't rise from the ashes!

Too smart for their own good. Smart TVs and smart toys are leaving us dumbstruck by the opportunities they provide hackers to gain access to the most intimate details of our lives. The FBI has outlined how a TV hacker can, for instance, "change channels, play with the volume, and show your kids inappropriate videos"--and that's in the best-case scenario. "In a worst-case scenario, intruders can turn on your TV, camera and microphone and silently cyberstalk you." And if they can do all this, bad actors can also threaten to reveal your weird quirks to the world--unless, of course, you pay up. And let's not even go into the problems introduced by children's toys with cameras, microphones and unfettered access to the internet. Chances are, you already own a smart TV, and may be thinking of buying a smart toy as a gift this holiday season. It's never too late to learn how to outsmart your machines, however (here and here, respectively). At the very least, disable the mics and cameras, change the default settings, and set up a "guest account" for your Wi-Fi network (and link the TV to it instead of to the one you use).
Tragic Kingdom. Fans looking to get their fix received a whole lot more than a meme-able Baby Yoda when they added Disney+ to their selection of streaming services. In a case of "this is why we can't have nice things," mere hours after its launch, Disney+ was hacked by villains who froze users out of their accounts quicker than Elsa creates an ice castle! Many of the hackers changed login credentials and sold them on the dark web for 3-to-11 bucks a pop, while some simply posted usernames and passwords for all to see and use. If you bought Disney+ and haven't already done so, it's worth changing your password.
Six of one, half a dozen of the other. You know that pyramid schemes are illegal scams, but as comedian Samantha Bee of Full Frontal with Samantha Bee points out, we often give a pass to what we deem multilevel marketing (MLM). One of the hallmarks of a pyramid scheme is members making money not from sales of actual merchandise (if they make money at all), but from recruitment. In this regard, most MLMs fit the bill: 99% of MLM members lose money, many after purchasing thousands of dollars in worthless merchandise that no one wants--least of all, the friends they pester on social media. And the 1% who do manage to earn? They're the ones who recruit and hoodwink more members. As Bee points out, the success rate of working for an MLM is actually so low that you've got better odds gambling. "MLMs are the most despicable brand of corporate feminism. They use their 'you go, girl' branding to trap capable, ambitious women in a worsening cycle of debt," Bee explains in a serious moment amid a seriously funny segment.  
Who can it be now? The IRS is headed for a mess. In an effort to collect unpaid taxes, the public agency has employed private collectors to call individuals on its behalf. The problem? Doing so makes it even easier for con artists to (believably) impersonate a party authorized by the government to seek back taxes, as if the criminals running tax scams aren't already successful enough! The IRS says it plans to send those who owe two letters: Notice CP40, and a publication entitled "What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency." The missives will contain a "Taxpayer Authentication Number" that any legit caller should be able to verify. But the agency hasn't done enough to drop this knowledge bomb on the public. Hey, IRS: Taxes are due in four months; it seems like a good time for a massive public education campaign.