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7 Steps to Avoid the Subscription Trap  By Keith

What to do when you can’t cancel a subscription: Internet Scambusters #895

If you haven’t fallen victim to an online subscription scam, you’re either lucky or you know how to steer clear of the crooks behind them.

In this week’s issue, we’ll tell you how a member of the Scambusters team was caught out and what he had to do to escape the tricksters’ clutches.

We also have a warning from the IRS about a new tax threat they’re calling “ghost preparers.”

Let’s get started…

Have you ever fallen into a subscription trap? You’re tricked into signing up for a publication or product, then find yourself paying a recurring bank or credit card charge that you can’t escape.

There are many variations.

In one recent incident, a member of the Scambusters team signed up for a “free trial” of an online magazine subscription service. As often happens with this type of scam, he had to provide his credit card details upfront. The basis of the deal was a one-week free trial, after which he would automatically start monthly payments, unless he cancelled.

Plenty of legitimate product offers also start out this way too. What’s important is the ability to cancel at any time. The Scambusters researcher actually felt he would probably take up the monthly subscription as it seemed to offer something that interested him.

He was mistaken. The online service was only pushing out old copies of digital magazines, not current issues. So he tried to cancel. No reply. He sent a message to customer support. No reply.

Worse still, he had suffered problems when he originally tried to sign up and had to make three attempts. So when his first, unwanted withdrawal was made on his credit card, the scammers actually took out three payments of $10 each.

What ensued was a long story in which there was absolutely no reply, ever, to his complaints — just those monthly deductions of $30.

He complained to his credit card company who, on production of proof that he had tried to cancel the subscription, refunded all the sums the scam company had deducted. But — and this is hardly believable — the card company continued to allow the scammer to take out those 30 bucks, and then continued to refund it to the Scambusters guy.

This could have gone on forever. In the end, the card company said the only solution was to cancel the entire card account and open a new one, with a new number, which they duly did.

That meant a lot of hassle altering all other automatic deductions and changing online accounts for which the old card had been used.

Amazingly, the scammers then emailed our man saying their latest attempts to deduct $30 had failed because the card was no longer active. They tried this three times before they gave up and said they were cancelling his subscription.

vThey never, at any time, replied to his emails, other than to send out an automated acknowledgment each time he wrote.

But, thanks to the card company, he did not end up out of pocket, just smarting from the painful lesson he, as a scams researcher, had learnt.

More Schemes

Does this chime with an experience you had? Or maybe you were one of those victims who fell for a newspaper or magazine subscription renewal “invoice” which came from a trickster rather than the publishers.

This was a nationwide scheme that recently came to light. The alleged perpetrators were said to have sent out subscription renewal notices at random, with inflated prices, knowing that some would fall into the hands of people who did have subscriptions and believed it was time to renew.

Most people who signed up did actually get the publications, but they heavily overpaid for them. The alleged scammer took a profit from the difference between what they charged and what the publication charged.

This incident is still unraveling as we write.

Then, of course, there is the scam in which people sign up for some kind of free trial or offer, providing their card details to pay for “shipping and handling.” Usually, buried somewhere in the small print is a statement saying the payer is actually signing up for a recurring charge. The victim usually doesn’t spot that.

Then the whole torment of trying to cancel the subscription starts, often with the same frustrating result our researcher had.

It’s reminiscent of that line in the song “Hotel California”: You can check out any time you want, but you can never leave!

How to Avoid the Subscription Trap

There are many more varieties of the subscription trap, some of them operating just inside the limits of the law and others blatant scams.

It’s impossible to avoid some of these crooks if you’re the type of person who is willing to hand over card account details because you trust whoever is offering the deal, as our researcher did after checking them out online.

However, here are 7 important things you can do to limit the risk of falling victim:

Always read the small print in any offer you are signing up for and for which you’re providing your card details.

Check out the reputation of the service/product provider. In the case of our researcher, the company seemed legit and there were no bad reviews. But the subscription process was convoluted, using three different websites and products. That should have raised the alarm.

Preferably, don’t sign up for deals that require you to provide your card details upfront. Or, if you do, use your credit card, ideally one that you don’t use much, so it will be easier to close your account and get your money back from the card company.

Use a one-off credit card number or one for which you can specify the number or amount of payments. Several card operators offer the service. Check if yours does.

Before signing up, send an email asking for a contact number and address in case you have a query. Then test it out. If you can’t get this information, don’t take the offer. And keep a copy of every communication, including cancellation requests.

If you receive a subscription renewal invoice, check who sent it. If it’s not from the publisher, treat it with suspicion and check directly with the publisher. Bear this in mind: most subscriptions significantly undercut the regular cover price of a publication. So should your renewal invoice. If it’s charging more than you paid last time, query it.

Act fast. At the first sign that your cancellation request is being ignored, contact your card company.

For further help, check out this new article from Consumer Reports: How to Avoid Newspaper and Magazine Subscription Fraud.

Alert of the Week

As tax filing time approaches, the IRS has issued a new warning about what they call “ghost preparers.”

These are individuals who pose as tax return professionals but won’t submit your return for you. Instead, they give the completed return to you to submit.

That way, the IRS will think your return is self-prepared and won’t know (and therefore check out) the preparer, who will often charge an inflated fee.

If you’re using a new preparer, ask them for their Preparer Tax Identification Number (PTIN). If they don’t have one, don’t have them!

Learn more in this article from the Consumer Affairs website: IRS Warns Consumers About the Scourge of ‘Ghost’ Tax Preparers.

 

How to avoid or respond to tax identity theft: Internet Scambusters #896

The IRS and the US Federal Trade Commission have declared war on tax identity theft scammers.

But it’s an ongoing battle and you could still fall victim to this crime.

Find Out if You’re a Tax Identity Theft Victim

Every year, about this time, there’s a surge in identity theft — by the crooks who are trying to get their hands on our tax refunds.

We’ve written many times separately about tax scams and, most recently, Tools and Tips for Your Identity Theft Protection, but the two come together in a scary partnership of crime as we close in on the mid-April tax return deadline.

In an effort to spike the scammers’ guns, the US Federal Trade Commission (FTC) recently launched a new tax identity theft awareness campaign earlier this month.

The agency explains: “Tax identity theft happens when someone uses your Social Security number (SSN) to file a phony tax return and collect your refund. You may not find out about it until you try to file your tax return and the IRS rejects it as a duplicate filing.

“While the IRS investigates, your tax refund can be delayed. The misuse of your SSN means you also may be at risk of other types of identity theft.”

As part of the campaign, there are a series of webinars and other events aimed to help taxpayers spot the tell-tale signs of tax ID theft.

You might have missed it though. Unfortunately, as we reported a few weeks ago, identity theft has become such an everyday thing. And many of us just don’t notice everyday things!

Five Key Actions

Avoiding the scammers is actually a year-round activity because you need to continuously take steps to prevent your personal information from falling into the wrong hands. As regards tax identity theft, the FTC recommends five key actions:

Never give out your Social Security number unless there’s a good reason and you’re sure of who you’re giving it to. Some people, like health practitioners, may need it for billing, but in the main, genuine organizations only request the final four numbers.

File your tax return as early as you can. You may be waiting for W2s, 1099s and so on, but these should have been issued by now. So, don’t wait any longer.

If you plan to file your return electronically, don’t use a public Internet connection. If you don’t have access to a private network, get a form from the Post Office and file it the old-fashioned way — by mail.

If you’re using a tax preparer, make sure they’re trustworthy. If you’ve worked with them previously, they’re probably okay. But if you’re starting anew, seek recommendations from friends or family, or do intensive online research. The IRS provides guidance on finding a preparer in their article: Need someone to prepare your tax return?

Check your credit report at least once a year for free at annualcreditreport.com. Make sure no one has opened a new account in your name.

Are You A Tax ID Theft Victim?

Usually, you don’t find out that you’re a victim of this crime until you either get a letter from the IRS saying they’ve received a suspicious return, or, when you try to e-file your return, it’s rejected as being a duplicate.

Other times, you might receive a “tax transcript” in the mail. If you didn’t order it, then someone else has been using your identity. Or, you might receive a notification that an IRS account has been opened in your name, your account has recently been accessed or disabled, or you owe additional tax based on a return that has been filed.

If you get a genuine IRS alert, it will provide instructions on the steps you need to take to straighten things out. But beware! If the letter contains Internet links you’re supposed to follow (other than irs.gov or another government website), it’s probably a scam.

Scammers are cunning enough to send out this type of fake letter, making it appear genuine and hoping to trick you into revealing confidential financial information.

Likewise, the IRS doesn’t use email or text messages to notify victims of suspicious activity. It always comes by snail mail, so if you get another type of message, you can be pretty sure it’s scam. Nor does the agency make threatening phone calls to people. That’s a scam too.

What To Do If You’re a Victim

The IRS has a Taxpayer Protection Program (TPP) to help victims. When you get your letter or if you know you’re a victim, you’ll need to phone in. A letter may include a toll-free number, but if it doesn’t or you’re suspicious of the one in the letter, the main IRS inquiry number for individuals is 800-829-1040.

If you didn’t get a letter but suspect you’re a victim, you’ll need to download and fill out and file an Identity Theft Affidavit.

Once you get a letter or file your affidavit, a complex process follows. It can take up to six months for the issue to be resolved. You’ll find details of the precise process here: IRS Identity Theft Victim Assistance: How It Works.

The important points to follow are:

The need for speed. As soon as you suspect tax id fraud or receive a letter from the IRS, act immediately.

Remain constantly on your guard. Don’t click or follow links in messages that seem to come from the IRS.

The FTC has also posted a brief and informative video on tax identity theft: IRS Imposter Scams.

Alert of the Week

You might know that the Windows 7 operating system is no longer being supported by Microsoft.

That means it isn’t being updated, which could leave you dangerously exposed to hackers.

However, don’t fall for emails saying your license has expired and you need to “renew” (and pay for) your Windows license for this or any other reasons.

You can stick with Windows 7 for as long as you like (though we don’t recommend it) without paying. Or you can upgrade to Windows 10 for free (as of this writing) and perfectly legally. See How to Upgrade From Windows 7 to Windows 10 for Free for more information.