Watch Out for Government Look-alike Scams
Updated Sept. 9, 2015
When you get your mail, nothing catches your eye quite like an official-looking document, especially letters that look like government notices, bills, or time-sensitive warnings.
But beware of official-looking documents, as they may be traps to get you to buy phony services, or give up your personal information. These fake letters are popular ways for dishonest companies to profit at your expense. Some shady businesses go a step further and direct consumers to government look-alike websites.
Here are some common deceptive letters you might find in your mailbox. The County of Los Angeles Department of Consumer and Business Affairs warns you to be extra careful when considering these misleading offers:
The swindle: “Affordable Housing Programs”
The pitch: "Need low-income housing? We got you covered. Just fill in your personal information and we’ll move you up the waiting list."
This scam can become quite elaborate, with look-alike websites and even telephone call centers. These sites promise low-income families looking for affordable housing they can get on a Section 8 wait list. The websites look like ones from legitimate housing authorities, but they request more from consumers, including Social Security numbers and upfront application fees to get priority.
- If you’re in Los Angeles County and are looking for affordable housing, go directly to the Housing Authority of the County of Los Angeles. Do not follow links in an unexpected email or go to any other websites listed in a letter or phone call.
- Legitimate housing services will not unexpectedly ask for your personal information or upfront fees.
- Report any suspected fraud to the Department of Consumer and Business Affairs.
The swindle: Phony Property Tax Reassessments
The pitch: "Pay us. We'll reassess your property value and lower your taxes."
This widespread scam targets homeowners who are concerned that they are overpaying property taxes due to declining property values. Companies send you letters – which look very similar to a tax bill – offering to lower your property taxes by getting your home reassessed. The companies charge you hundreds of dollars for their service, and even impose costly late fees if you don’t respond by their fake deadlines.
- You don’t have to pay to get your home reassessed. Your County Assessor’s Office provides this service for free. If you believe your home is worth less than its assessed value, contact the Assessor’s Office for help: www.assessor.lacounty.gov, (888) 807-2111.
- It is illegal for companies to charge you up-front fees for this service. Investigations conducted by DCBA have shut down some bad companies, but others keep popping up all the time. File a complaint with DCBA if you paid for this service or received a solicitation.
The swindle: Real Property Title Compliance
The pitch: "You must buy 'official' copies of your home grant deed."
Many homeowners are receiving official-looking letters urging them to request an “official” copy of their Grant Deed in order to prevent foreclosure, prove that they own their home, and to be in “compliance.” The catch: You have to pay as much as $200 for the copies.
- You should already have a copy of your Grant Deed because the County Registrar-Recorder’s Office mails you a copy when it is originally recorded. And if you need a copy, you can get a copy from your County Registrar-Recorder’s Office for about the price of a DVD.
- A copy of your Grant Deed does not stop a foreclosure if you fall behind on your mortgage payments. For free help with a foreclosure or loan modification, contact DCBA at 800-973-3370.
The swindle: Mortgage “Protection Plans”
The pitch: "Get one now or you will be at high risk of losing your home."
You just bought your new home so you are extra careful with correspondence from your lender to avoid missing any important notices. So when you receive a “warning” or “last notice” that looks like it is from your lender, you open it right away. The notice urges you to protect your investment by getting a mortgage “protection plan.” Believing the notice is from your lender, you fill out the forms and send them back with the mandatory check. Your heart sinks when you later find out that your check went to pay for an expensive life insurance policy that is of little or no value to you.
- These so called “mortgage protection plans” are nothing but expensive life insurance policies sold by companies that have nothing to do with your lender. With these plans, you pay to insure that your mortgage will be paid off in case you die.
- You should not buy these life insurance policies before you do your own research, as you may already have enough life insurance coverage. If you decide that you do need a life insurance policy, you should be able to buy a comparable policy for less money than the offer in the “urgent notice” you just got in the mail.
- The California Department of Insurance licenses and regulates companies that sell insurance policies in California. You can contact them for information, complaint histories, and advise at www.insurance.ca.gov, 800-927-4357.
The swindle: Labor Law Signs
The pitch: "Post them or you can go to jail or risk great financial liability."
You are a small business owner. You receive an official-looking notice that looks like it is from the government warning you that you must update your labor law signs (minimum wage, discrimination, harassment in the workplace). Failure to do so, the notice warns you, may land you in jail, or cause you to lose all your hard earned savings. So you are asked to arrange for immediate delivery of new signs so you “comply” with the law. The new signs, however, will set you back hundreds of dollars that you can’t afford to spare in this shaky economy.
- Don’t be fooled. While it is important that your signs be up to date, your current signs may be just fine. If you in fact need new signs, you can get them directly from the government at little or no cost. You can get information and signs on Federal labor laws from the U.S. Department of Labor: www.dol.gov. For California State information go to the California Department of Industrial Relations: www.dir.ca.gov.
- Be a wise consumer. Look closely for red alerts that will help you avoid scams. Safeguard your money and personal information. Research companies before you do business with them. And if you still are not sure, contact DCBA at (800) 593-8222. We can provide you with information and counseling, tell you if other consumers have complained about a particular company, and investigate your complaint.
The swindle: Income and Property Tax Information Phishing
The pitch: "Click here to verify the personal information on your tax returns."
You receive an email message that claims to be from the IRS or the Assessor's office. It says they cannot accept your tax payment unless you verify your personal information. It looks real. It sounds real. You want to make sure you pay your taxes. You click the link and give your personal information.
- This is a classic phishing scam, where thieves try to trick you into visiting a different website. There, scammers will steal the information they get from those who are not careful with their personal identifying information. Never click a link from a government agency or your bank unless you're expecting it or can confirm that it's real.
- You can pay your federal taxes online through the IRS's Electronic Federal Tax Payment System (EFTPS). However, the real EFTPS will never contact you by email for your personal information. Go to eftps.gov for more information. Also, the County Assessor will never contact you by email for your personal information.