FTC: Identity Theft is Still Up to its Old Tricks

Identity theft is on top again. The Federal Trade Commission (FTC) recently released its top 10 consumer fraud complaints of 2011 -- and for the 12th year in a row, identity theft was the number one consumer complaint. Out of the more than 1.8 million complaints filed in 2011, roughly 279,000 or 15% were concerning identity theft complaints.

The most-common form of identity theft involves fraud related to government documents or benefits. Uncle Sam would not be pleased as the majority of government fraud is tax or wage-related fraud, which has doubled since 2009.

The entire not-so top 10 includes:

1.         Identity theft

2.         Debt collection

3.         Prizes, sweepstakes, lotteries

4.         Shop-at-home, catalog sales

5.         Banks and lenders

6.         Internet services

7.         Auto-related complaints

8.         Impostor scams

9.         Telephone and mobile services

10.       Advance-fee loans and credit protection/repair

Gallop’s Take: As e-filing tax returns with the IRS has never been easier, there has been a significant increase in fraudsters stealing personal information and using it to fraudulently file a tax return to claim a refund.  Many taxpayers have no clue their identity has even been stolen until they attempt to submit their tax refund and receive a rejection notice from the IRS. And you thought tax day couldn't get any worse.

Fortunately, the IRS is aware of the problem and has procedures in place to recover stolen tax refunds. Much of this information has been made available to consumers at the IRS website. See IRS: Identify Theft

It is also no surprise that the runner-up on the list is debt collection complaints. Unbeknownst to many debtors, however, there is a powerful tool to protect them known as the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from calling repeatedly or at inconvenient hours, using obscene or abusive language, misrepresenting the amount owed, threatening lawsuits without justification and a number of other abusive practices.

If a collector violates any provision of the FDCPA, they can be liable for actual damages sustained as a result of the violation, punitive damages of up to $1000 per claim, and costs incurred in filing the suit along with attorneys’ fees. An easy-to-read consumer guide is available on the FTC’s website at: Debt Collection FAQs: A Guide for Consumers

This list serves as a good reminder that not only is it worthwhile to report scams and voice your complaints, but it is also as important as ever to protect your personal information. Hopefully with increased awareness of the newest scams consumers will be able to knock identity theft down a few pegs in the upcoming year.

Not Your Father's FBI

The Federal Bureau of Investigation (FBI) announced today that it is going social and transparent in a big way.  Celebrating “Sunshine Week”--promoting open government and freedom of information—the FBI’s revealed its new website (www.FBI.gov) contains user friendly features and navigation tools, replete with RSS news feeds and Facebook, YouTube, and Twitter links. 

This is a whole new world of search ability on crime statistics, child ID apps, podcasts, email and text message alerts, Spanish language translations, and many other new features.  “The Vault” link opens the door to publicly released files going back to the origins of the FBI.  This resource will be valuable for lawyers and historians alike, covering a wide range of topical categories, including: civil rights, counterterrorism, foreign counterintelligence, fugitives, gangs, the gangster era, organized crime, public corruption, and violent crime. There is also a “Widgets” feature to incorporate FBI content on your own website or blog.

Buying some art? You can now check the national stolen art file to find out if it is hot.  Suspicious about a practice that might be a scam? Check the “Scams & Safety” link. Does that new neighbor on Wisteria Lane look suspicious?  Check them against photos of wanted fugitives or sex offender lists.

Gallop’s Take:  Assuming visitors to the site are not immediately investigated, we applaud the FBI for making accessible in new and convenient ways important information on its activities and history.  Of course, there are no leads on open investigations for obvious reasons, but enabling interested parties to use the web viewer to review important information can only contribute to the administration of justice, crime prevention, and advancement of knowledge.  This should expand the 50 million hits the FBI reported its website received in 2011.

Gallop Alert: Collaboration or Collusion? Oil and Gas Drillers Agree to Pay $550,000 to Settle Historic Federal Antitrust Lawsuit

Two oil and gas companies accused of illegally working together in auctions of four natural gas leases on federal land in Colorado have agreed to pay $275,000 each to settle the claim.  The case settled in mid-February is the first federal challenge to an anti-competitive bidding agreement for mineral rights, according to the U.S. Department of Justice (DOJ).

The complaint alleged that the two companies -- Gunnison Energy Corporation (GEC), with headquarters in Denver, and Texas-based SG Interests VII Ltd. (SGI) -- were separately developing natural gas resources in Western Colorado. In 2005, the companies entered into a written agreement under which they agreed that only one company would bid at the auctions yet would then assign an interest in acquired leases to the other company.

SGI bid at U.S. Bureau of Land Management auctions and won leases with an average price of $25 an acre, in one instance paying $2 an acre. According to the DOJ, the United States received less revenue from the sale of the four leases than it would have received had the companies competed against each other at the auctions. As a result, the DOJ determined that the agreement was not part of any “pro-competitive” or “efficiency-enhancing collaboration.” The settlement brings the average price to $175 an acre, as reported by the Denver Post.

The United States’ investigation resulted from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. Those provisions allow for private parties to sue on behalf of the United States and, if successful, to receive a portion of any recovered damages.

Gallop’s Take: The Sherman Act, and state antitrust laws, explicitly prohibit agreements in restraint of trade. This includes agreements that tend to create a monopoly, artificially maintain prices, reduce output, or otherwise eliminate or stifle competition.

While GEC and SGI may have thought they were forming a legitimate joint venture, it is important to remember that any agreements that result in a reduction in the number of bidders can raise antitrust "red-flags."

Legitimate “joint bidding” is permissible and even encouraged to promote competition.  The DOJ and the FTC have published the “Competitor Collaboration Guidelines” which offer guidance on the enforcers’ analysis of joint ventures, including bid or teaming arrangements.  See DOJ Competitor Collaboration Guidelines.

Joint bidding occurs when bidders pool their resources in order to bid on property that they would be unable to afford or work they would be unable to perform individually. “Bid rigging,” on the other hand, takes place where the companies have the resources to bid separately, but instead cooperate in order to artificially lower the price of the property.  Illegal bid rigging between actual or potential competitors may take many forms, including rotation bids, last look bids, protective pricing bids and the like.

Accordingly, before entering in a joint venture to bid on property or participating in contract work let on a bid basis, it is important to consider its competitive or anticompetitive effects on the market. Avoidance of bid irregularities is particularly important for federal and state projects.  Seek legal advice as to whether an agreement could raise antitrust concerns if you have any doubts.