The Survive and Thrive Boomer Guide

As Valentine’s Day approaches and throughout the year, watch out for romance scams

Romance scams are different from other scams. Fraudsters prey on lonely people looking to connect with someone, and the scam can often take months to develop to the point where money changes hands. The emotional harm to the victim can be even more painful than the money lost. 

The use of online dating sites and apps has made romance fraud easier. Victims in the United States and Canada report losing nearly $1 billion over the last three years, and the Better Business Bureau estimates there may be more than a million victims in the U.S. Because most people don’t file complaints about romance scams with the BBB or law enforcement, this may a small number of those affected.

The BBB’s study, “Online Romance Scams: How Scammers Use Impersonation, Blackmail, and Trickery to Steal from Unsuspecting Daters,” looks at how romance scams work, who the scammers are, and what’s being done to combat them.

Top 14 consumer stories of 2018

All in all, it’s been another bad year for consumers. President Trump and his administration’s generate so much chaos that they get all the media attention. Meanwhile in the background, federal agencies are moving forward on the administration’s conservative regulatory priorities, which are harmful to consumers. One bright spot is the Democrats taking control of the U.S. House of Representatives. That will help curb President Trump's excesses.

Here are the top 14 consumer stories for 2018:

1. The Trump administration continues decimated consumer protections.

President Trump appointed Mick Mulvaney, his budget director, as head of the Consumer Financial Protection Bureau. Under Mulvaney's leadership, the bureau reversed prior actions and programs of the agency. It has delayed rules to protect consumers from payday lenders, dropped lawsuits, stripped enforcements of fair-lending protections, and reduced the number of fines issued.

Trump’s government shutdown is disrupting agencies that protect consumers, workers, health, and safety

Consumer, worker, health, and safety protection agencies throughout the federal government are being disrupted by federal worker furloughs coming from the partial government shutdown, according to a report Public Citizen released Wednesday.

“As long as the shutdown continues, essential consumer, worker, health and safety protections carried out by these agencies are on hold,” said Robert Weissman, president of Public Citizen. “Corporate lawbreakers are going unpunished, safety inspections are being postponed, discrimination charges are going uninvestigated, polluters are not being held in check, financial fraudsters are not being policed, consumer complaints are not being received and accident investigations have ceased.”

Many agencies are falling behind, and it could take many weeks for them to catch up, according to furloughed workers quoted in the report. More than 75 percent of workers have been furloughed at seven agencies dedicated to protecting consumers and workers, according to federal agency memos, and nearly 50,000 employees have been sent home without pay at the following agencies:

New York sues Exxon Mobile for misleading investors on climate change costs

 

Photo: Ben P L

Exxon Mobile Corp. is being sued by the state of New York for allegedly misleading investors on the risk that climate change regulations posed to its finances.

For years, Exxon told investors that it was accounting for the likelihood of stronger regulation by applying an increasing cost of emissions to its business planning and investment decisions, according to the lawsuit. However, Exxon did less than it claimed, deceiving investors on the company’s true financial exposure to climate change regulations.

Exxon marketed the company as a secure long-term investment and sought long-term investors such as life insurance companies and pension funds.

Attorneys generals intervene in lawsuit to protect retirees from dishonest financial advisors

Three attorneys general have filed a motion to intervene in Chamber of Commerce of the USA, et al. v. U.S. Department of Labor, et al. to defend regulations that require retirement investment advisors to put the interests of their clients above their own financial gain.

The regulations, known as the Fiduciary Rule, were proposed under the Obama administration and put into federal law standards for professionals who give investment advice to people saving for retirement. The New York, California, and Oregon attorneys general are intervening in the case to ensure that the rule is carried out.

“It’s common sense: financial advisors should act in their client’s best interest, not their own,” said New York Attorney General Eric Schneiderman. “The Fiduciary Rule is vital to protecting families in New York and across the country who are saving for their retirement.”

Barclays agrees to pay $2 billion to settle fraud charges related to the sale of mortgage securities prior to the Great Recession

Photo: Secretlondon

Barclays Capital Inc. and several of its affiliates agreed Thursday to settle charges of fraudulent conduct related to Barclays’ issuance of residential mortgage-backed securities between 2005 and 2007, according to the U.S. Department of Justice. Barclays, a huge British bank, will pay $2 billion in civil penalties in exchange for dismissal of the lawsuit.

The settlement is about $3 billion less than what the department originally asked for, according to a Consumer Affairs article. Barclays refused to pay $5 billion, causing the department to file a lawsuit in 2016. From the beginning, Barclays said it would refuse to pay more than $2 billion.

The department’s lawsuit alleged that Barclays caused billions of dollars in losses to investors by engaging in a fraudulent scheme to sell 36 RMBS deals, and that it misled investors about the quality of the mortgage loans backing those deals.

SEC settlement strips CEO Elizabeth Holmes of her control of blood-testing startup Theranos

Photo: Max Morse for TechCrunch

Silicon Valley-based Theranos Inc., its founder and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani are being charged with raising more than $700 million from investors through an elaborate, years-long fraud in which they made false statements about the company’s technology, business, and financial performance.

Theranos and Holmes have agreed to resolve the charges against them, the Securities and Exchange Commission said Wednesday. In addition to a $500,000 penalty, Holmes has agreed to give up majority voting control over the company, as well as to a reduction of her shares which, combined with shares she previously returned, reduces her stake in the company.

The lawsuits allege that Theranos, Holmes, and Balwani made false and misleading statements in investor presentations, product demonstrations, and media articles in which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry.

Three European banks to pay $46.6 million for ‘spoofing’ and manipulation

© Raimond Spekking/CC BY-SA 4.0 via Wikimedia Commons

Three banks and eight former traders, some of whom worked for the banks, are being charged following an investigation of manipulating precious metals futures market trading.

In addition, eight people who allegedly took part in precious metals market manipulation were charged with federal crimes, according to the U.S. Department of Justice. Five of the traders worked for global financial companies, two worked for commodities trading firms, and one owned a technology consulting firm.

Conspiracy, wire fraud, commodities fraud, and spoofing were included in the charges.

Feds sue Barclays Bank, two former executives for fraud in the sale of residential mortgage-backed securities

 

Photo: Secretlondon

Barclays Bank and several of its U.S. affiliates are being charged with taking part in a fraudulent scheme to sell residential mortgage-backed securities supported by defective and misrepresented mortgage loans.

From 2005 to 2007, Barclays employees misrepresented the loans backing securities they sold to investors throughout the world, who incurred billions of dollars in losses as a result of the fraudulent scheme, according to a U.S. Justice Department lawsuit filed Thursday.

Also defendants in the lawsuit are two former Barclays executives: Paul K. Menefee, who served as Barclays’ head banker on its subprime RMBS securities, and John T. Carroll, who served as Barclays’ head trader for subprime loan acquisitions.

What to do about the changing retirement

As we all know, retirement is changing for people of all ages.

In Consumer Reports latest look at the topic, “The New Retirement,” it discusses new approaches and reaffirms the need to start early to plan for the future.

The new reality of retirement shows that 401(k) plans are getting better, retirement advice is getting more reliable, savers can essentially design their own pension through an immediate annuity that guarantees cash flow, and those applying for Social Security can get far bigger payments by claiming their benefits the right way, according to Consumer Reports.