Why the Risk of Consumer Fraud is greater than ever

Why the risk of consumer fraud is greater than ever

As the new century draws closer, consumers may worry about the safety of their money. After all, for months we've heard about possible computer problems tied to Year 2000 that could cause systems to malfunction, disrupting and even shutting down the operations of financial institutions and other businesses that aren't prepared.

Though the financial industry is working to ensure that won’t happen here, many con artists are taking advantage of consumer fears by developing scams that lure unsuspecting individuals into making bad decisions about their money.

We want you to be aware of Year 2000 fraud, so you enter the new millennium confident that your money is safe.

How Year 2000 fraud works

The first thing con artists often do is persuade consumers that Year 2000 computer problems will create havoc on our economy. They may describe frightening scenarios of banks shutting down, leaving account owners empty handed and unable to recover funds from their accounts or investments in IRAs and Certificates of Deposit.

Con artists may also warn about problems affecting other sources of income such as government assistance or investments in the stock market. Fearing the elimination of social security, Medicare, or their hard-earned retirement dollars, the elderly are most vulnerable to fraudulent schemes-not surprising, considering the unpleasant memories many still have of the 1929 economic crisis.

Common schemes con artists use to swindle money:

Convincing consumers that the dire predictions regarding loss of financial security due to Year 2000 problems are true

Persuading consumers to invest in "special" or "secret" products, companies, or accounts that will generate tremendous profits

Advising individuals to withdraw their money out of banks, credit unions, or other financial institutions and turn it over to them for "safekeeping"

Selling books or subscriptions to magazines that supposedly contain information on "surviving" the "crisis"

Tips and warning signs to guard against fraud

NEVER give out account information or credit card numbers to someone unless you're certain they're trustworthy. Thieves can appear very sincere and friendly. And, they can be very persuasive. All they need is your account number to empty all the money out of your account.

Don't enter into a deal if you're being pressured to act immediately. Reputable businesses will give you time to make decisions and consider an offer.

Be wary of people posing as bank officials, police officers, or other government agents who ask you to assist them in an investigation or audit of your financial institution. You may be asked to withthdraw cash or give out your account informa tion. No legitimate official would ask a consumer to participate in this type of investigation.

Ask questions and don't commit to anything until you receive the information you request. Reputable businesses will provide information about their products and services.

If something doesn't seem right, consider it a warning signal. Trust your instincts-even if the signs of dishonesty are subtle and you're not able to pinpoint what's bothering you.

Arm yourself with the facts about your financial institution

If you're concerned about the security of your funds, you should know that the nations financial institutions are on the forefront of those preparing for Year 2000. In fact, our Year 2000 planning is well underway. With guidance from our regulator s, we are taking rigorous steps to address any problems and test our systems long before the new century arrives.

If, despite all of our preparation our systems experience problems, the most important thing to remember is that your insured accounts will continue to be covered against any and all losses up to the limits provided by the coverage. We're requi red to keep back-up records for account transactions in case of an emergency. These records could be used to identify and correct the error should a problem occur as a result of Year 2000.

We encourage you to think carefully before making the decision to remove any funds on deposit. While it may seem like a good idea to consider other options, including keeping your hard-earned dollars "safe" at home, thieves and con artists are everywh ere with their eyes open for opportunities to target the unsuspecting.

The more you understand about the safety of your financial accounts, the less likely you are to fall victim to consumer fraud.