BBB Warns of Tax-Refund Fraud

Burnsville, MN – January 14, 2016 – With another tax season coming up quickly, Better Business Bureau of Minnesota and North Dakota ® (BBB) warns taxpayers about tax-related identity theft, which occurs when someone uses your stolen Social Security number (SSN) to file a fraudulent tax return and claim your refund. Though this type of fraud is tough to prevent against – beyond taking steps to safeguard your personal information – BBB offers some tips to help consumers recognize when it’s occurred and steps they can take to mitigate the situation from there.

According to CNBC, tax-refund fraud is expected to total $21 billion in 2016. This type of fraud often occurs without the victim knowing it, until they file their tax return and discover that a return has already been filed using their Social Security number. Another way people learn they’ve been victimized is when the IRS sends them a letter saying they have identified a suspicious return using their SSN.

BBB seeks to make people aware that this is a growing problem and one they need to be prepared for. Some ways to decrease your risk of becoming a victim of tax-related identity theft include: safeguarding your Social Security number and other sensitive personal information, and filing your tax return as promptly as possible. This year, the IRS has announced they will begin accepting tax returns on January 19. The filing deadline to submit 2015 tax returns is Monday, April 18, 2016, rather than the traditional April 15 date.

The IRS offers some additional identity protection tips for taxpayers:

• Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and will automatically update. Encrypt sensitive files such as tax records you store on your computer. Use strong passwords.
• Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card provider or even the IRS. Do not click on links or download attachments from unknown or suspicious emails.
• Guard your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure. Treat your personal information like you do your cash; don’t leave it lying around.

Be alert to possible tax-related identity theft if you are contacted by the IRS or your tax professional/provider about:

o    More than one tax return being filed using your SSN.

o    Owing additional tax; your refund being offset; or if you’ve had collection actions taken against you for a year you did not file a tax return.

o    IRS records indicate you received wages or other income from an employer for whom you did not work.

If your SSN has been compromised or you know – or suspect – that you are a victim of tax-related identity theft, the IRS recommends that you:

• Respond immediately to any IRS notice; call the number provided or, if instructed to do so, visit IDVerify.irs.gov.  
• Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return is rejected because of a duplicate filing under your SSN or if you are instructed to do so. Use a fillable form at IRS.gov, print, then attach the form to your return and mail according to instructions.
• Continue to pay your taxes and file your tax return, even if you must do so by paper.

Visit bbb.org or click here for BBB tips on how to find a qualified tax preparer.

APRIL IS NATIONAL FINANCIAL LITERACY MONTH

ST. PAUL - (April 2, 2013) – April is National Financial Literacy month and a great time to remind consumers of the importance of taking charge of their personal financial well-being. Among the important aspects Minnesota consumers should know is what to do if contacted by a debt collector about a delinquent or defaulted account.

“While no one really wants to get a call or letter telling them they owe money, consumers need to know they are not alone,” Minnesota Association of Collectors President Tom Gavinski said. “Each year, for many very legitimate and often unavoidable reasons, millions of consumers fall behind on payments and are contacted by a debt collector.”

The Minnesota Association of Collectors offers helpful tips for Minnesota consumers to help effectively manage contact from third-party debt collector should the need arise. A third-party debt collector is unique in that they are service provider hired by the owner of the debt (i.e., a creditor or debt buyer) to recover a rightfully owed debt on their behalf.

Know Your Rights. Consumers have important rights under federal and state law, and deserve to be treated respectfully. By law, consumers cannot be harassed, threatened or be subjected to profanity and vulgar language.

For more information about consumer rights in debt collection or to ask questions, visit http://www.askdoctordebt.org.

Communicate. If you hear from a debt collector, avoiding a letter or call won’t make the debt disappear. The reason for the contact cannot be resolved without the ability to communicate; whether it's to pay an owed debt, verify an alleged debt or confirm that the debt collector has reached the wrong person.

Ask for Identification. Debt collectors cannot call anonymously nor present themselves as being a representative of a government entity. When contacted, collectors must identify themselves and the name of the collection agency they represent.

Notify the Collection Agency if you Dispute the Validity of the Debt. By law, the collector must inform you of your right to dispute the debt and provide written verification if you dispute it in writing. All collection activity stops until this verification is provided.

Seek to Work Out Complaints with the Collection Agency. Third-party debt collectors sincerely want to work with consumers to resolve complaints. According to the Council of Better Business Bureaus, in 2012 collection agencies resolved 86 percent of the consumer complaints received.

Protect Your Identity. Do not confirm or provide sensitive personal information (e.g., Social Security number, credit card numbers, and bank accounts) until certain of the authenticity of the debt and the person seeking to collect. Check out whether the collector is a legitimate agency by using the Internet to search the company name or visit http://www.acainternational.org to see if they are a member. Monitor accounts and immediately report any suspicious or unauthorized purchases to your bank or credit card provider. Importantly, consumers should also monitor their credit report. If you believe your identity has been stolen, contact your local police department and visit http://www.ftc.gov/idtheft for information on what you should do.

The Minnesota Association of Collectors is a State Unit of ACA International (http://www.acainternational.org), the comprehensive, knowledge-based resource for the credit and collection industry. Founded in 1939, ACA brings together 5,000 members in the United States and abroad, and their more than 300,000 employees, representing third-party collection agencies, asset buyers, attorneys, creditors and vendor affiliates. ACA supports members through state and federal advocacy, training and resources.

BBB advice on what to do if a company closes suddenly

Burnsville, Minnesota – May 25, 2012 – As a result of challenging economic conditions in recent years, the number of retailers closing their doors – often without notice – has increased, leaving customers confused and wondering what will happen to purchases they’ve paid for but haven’t received. The same applies in situations where warranties or unused gift cards are involved. The Better Business Bureau of Minnesota and North Dakota (BBB) provides advice for consumers regarding steps they can take if a retailer goes out of business but doesn’t officially file bankruptcy, as well as what their options are when companies do file Chapter 7 or Chapter 11 bankruptcies.

If a Company Closes, But Hasn’t Officially Filed Bankruptcy

First, send the company a letter because their mail may still be forwarded. Physically go to their locati on to see if they left a message on the door for customers. Ask neighboring businesses if they have any information. Try to reach the owner. If you have merchandise in the store, contact the landlord to see if you can be given access to the company’s facility. As a last resort, contact law enforcement.

Warranties

The validity of any outstanding warranties varies depending on the facts. If a retailer goes out of business, the consumer may be able to rely on the manufacturer’s warranty. If a manufacturer goes out of business, the consumer may be able to rely on a retailer warranty. Many extended warranties and service plans are provided and administered by third parties and are typically not affected by a retailer or manufacturer closing its doors.

Chapter 7 Bankruptcies

Under Chapter 7 bankruptcy law, the money gained from selling the company’s assets goes first to back taxes, secured creditors and employees. That usually depletes available assets. If any assets are left over, they are divided among unsecured creditors, including customers who didn’t receive services or goods already paid for.

Customers who paid with credit cards may be able to dispute the charge with their credit card company to get their money back. Others who paid by debit, check or cash, will need to file a claim with the bankruptcy court administering the process. A creditor must file a proof of claim within 90 days after the first date set for the meeting of creditors. Visit www.uscourts.gov for more information.

Chapter 11 Bankruptcie s

A Chapter 11 bankruptcy allows the company to continue operations while it reorganizes for future stability. If a company files for Chapter 11 protection, they will often still redeem gift cards, fulfill services and deliver on goods. Unfortunately, some Chapter 11 bankruptcies are unsuccessful and convert into Chapter 7, which leads to closure and complete liquidation. At that point, the chances for the consumer to receive any compensation are greatly diminished.

Unused Gift Cards

Under Chapter 7 bankruptcy law, the gift card holder must file a claim through the courts. Under Chapter 11 bankruptcy law, courts will decide if the business must honor gift cards. To avoid problems, the BBB advises that consumers redeem gift cards as soon as possible.

Customers in these situations can also file complaints with the BBB (www.bbb.org) and/or the FTC at www.ftc.gov. Depending upon the amount of the claim, small claims court is also an option.

The mission of the Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222. Visit our Centennial website at bbbis100.org.

BBB tips for National Financial Literacy Month

Burnsville, Minnesota – April 16, 2012 – The Financial Industry Regulatory Authority (FINRA) recently released their National Financial Capability Study, which looked at the spending and saving habits of Americans. It revealed some startling information:

Most Americans lack emergency savings or “rainy day” funds. Only 49% of survey respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency.

The majority of Americans have not planned for retirement. Only 42% of the FINRA survey respondents who weren’t retired said they had taken the time to calculate what they would need.

Less than half of Americans have saved money for college. Only 41% of those with financially dependent children have set money aside for college education.

Based on this information, the Better Business Bureau of Minnesota and North Dakota (BBB) offers the following recommendations:

Start calculating now. You’re never too young to start planning for retirement. Decisions about how much to save in order to afford a comfortable retirement require collecting information about several important variables, (including Social Security and retirement plan benefits) and even some rudimentary projections will help to give you an idea of what will be required.

Budget appropriately when it comes time to pay for a child’s education. Over the past decade, tuition and fees at four-year public colleges and universities have increased more rapidly than they did during the 1980s or 1990s, rising by an average of nearly 5 percent each year (adjusted for inflation). With this trend unlikely to abate, an average American family with children can expect to dedicate a sizable share of their resources to pay for college tuition.

Manage your debt. One of the best ways to ensure a brighter financial future is to manage and eliminate costly debt. The BBB offers “Managing Credit – Made Simpler,” an online learning tool for consumers and small business owners.

Avoid “get rich quick” schemes. The BBB exposes scams and frauds every day. Sadly, many of these are aimed at investors who have done the right thing by saving some money, but are susceptible to making a mistake when it comes to investing. The BBB also recently partnered with the FINRA Financial Education Foundation to promote smart investing and to help consumers avoid investment scams.

For more information on businesses, charities and investments you can trust, always visit www.bbb.org.