Consumer Protection

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SACRAMENTO – Attorney General Kamala D. Harris and United States Attorney for the Eastern District of California Benjamin B. Wagner today announced that Alan Tikal, the principal operator of a large-scale mortgage fraud scheme, was sentenced to 24 years in prison.

“Alan Tikal’s actions were illegal and will not be tolerated in California.  He and his partners defrauded hundreds of hard-working Californians who were fighting to keep their homes during our state’s foreclosure crisis,” Attorney General Harris said. “This predatory scheme robbed families of their life savings and in many cases, their homes. I thank our California Mortgage Fraud Strike Force and the U.S. Department of Justice for their work to bring these individuals to justice.”

“The financial crisis that hit our communities so hard made it very difficult for a lot of people to make ends meet,“ said U.S. Attorney Wagner. “Alan Tikal cynically took advantage of the desperation those people felt for his own profit, stealing payments meant to preserve family homes. Although we cannot undo the harm Tikal inflicted, today’s sentence provides a measure of justice.”  

In September 2014, Alan David Tikal, 46, was convicted of 11 counts of mail fraud and one count of money laundering by United States District Judge Troy L. Nunley. The case was jointly prosecuted by the United States Attorney’s Office for the Eastern District of California and the California Attorney General’s Office.

Between January 7, 2010 and August 20, 2013, Tikal operated a business under the name KATN, which targeted vulnerable and non-English speaking homeowners looking for mortgage assistance in the wake of the financial meltdown. According to evidence presented at trial, Tikal and his associates promised these homeowners that their outstanding mortgage debt would be reduced by 75%.  Tikal falsely claimed that he was a registered private banker with access to an enormous line of credit and was able to pay off homeowners’ debt in full. In exchange for various fees and payments, the homeowners existing mortgages would be satisfied and replaced with new loans to Tikal at 25% of the original loan obligation.

There were no instances in which the homeowner’s mortgage was paid, forgiven, or extinguished. Instead Tikal pocketed the victim’s money and spent it on chartered airline travel, a $5,000 suit, new cars, and other extravagant living expenses. Tikal and his associates convinced more than 1,000 homeowners in California and other states to participate in this fraudulent scam. Homeowners collectively paid more than $5,800,000 in fees and monthly payments to Tikal and his associates. The results were catastrophic for many families, the scam drained the victims’ bank accounts and ultimately led to the loss of their homes.

In February, co-defendant Ray Kornfeld was sentenced to 5 years for his role in the scheme and ordered to pay over $3 million in restitution to the victims. Co-defendant Tamara Tikal previously entered a guilty plea and will be sentenced on April 23, 2015.  

Tikal’s arrest arose from an investigation by Special Inspector General for the Trouble Asset Relief Program (SIGTARP) and Attorney General Harris’ Mortgage Fraud Strike Force with assistance from the Stanislaus and Alameda County District Attorney’s Offices.

The Mortgage Fraud Strike Force was formed in May 2011 to comprehensively investigate and prosecute misconduct in the mortgage industry.  The Attorney General's efforts include securing approximately $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

As part of National Consumer Protection Week, Attorney General Kamala D. Harris is alerting Californians to the threat of tax-related identity theft and issuing tips on how consumers can protect themselves during the tax filing process.

Tax-related identity theft commonly occurs when thieves send phishing emails that appear to be from the Internal Revenue Service (IRS) or the Franchise Tax Board (FTB), asking for personal information or including links to official-looking web sites.  Thieves may also use stolen personal information to file tax returns in someone else’s name in order to obtain a refund.

Tax Season Safety Tips

• Beware of unsolicited phone calls, emails or texts from anyone claiming to be from the IRS or the California Franchise Tax Board. If in doubt, contact the agency using the contact information in the Resources section below.  
• Never open an email or a text message that says it is from the IRS or the Franchise Tax Board; they are always fraudulent. State and federal tax agencies never initiate contact with taxpayers by email, text message or social media to request personal or financial information or to send notice regarding audits or refunds.
• If you think you have a tax identity theft problem or receive a letter from the IRS or the FTB stating that someone has already filed using your information, contact the agency. See the contact information in the Resources section below.
• When preparing your tax return for electronic filing, be sure to use a unique strong password on your online filing accounts. A strong password is eight or more characters, including letters, numbers and symbols. Use a unique password for each of your tax filing accounts.
• Think beyond the password. For greater security, you can get an Identity Protection PIN (IP PIN) for your e-filing account with the IRS. A new PIN is provided each year by the IRS. See the Resources section for more information.
• Check on the availability of two-step authentication to protect your tax filing accounts (and other online accounts containing sensitive information, such as your email and social media accounts). Two-step authentication offers stronger protection than just a password and username. The process (also called login approval or multi-factor authentication) adds a second factor, such as a one-time use code that is sent to you by email, phone or text. You enter that code, along with your username and password, to get access to your account. For more on two-step authentication, see the Resources section below.

Resources

Internal Revenue Service

Identity theft:  www.irs.gov/Individuals/Identity-Protection, www.irs.gov/Individuals/Indications-your-identity-may-have-been-stolen-and-how-to-report-it-to-us. 1-800-908-4490

Tax scams: www.irs.gov/uac/Tax-Scams-Consumer-Alerts 

Identity Protection PIN: www.irs.gov/Individuals/Get-An-Identity-Protection-PIN

California Franchise Tax Board

Identity theft: www.ftb.ca.gov/individuals/id_theft.shtml  

ID Theft Resolution Coordinator Web information: 916-845-3669

California Attorney General

Identity Theft Protection and First Aid: www.oag.ca.gov/idtheft  

Two-Step Authentication 

www.stopthinkconnect.org/campaigns/details/?id=460

SAN FRANCISCO – Attorney General Kamala D. Harris today issued a consumer alert in response to the reported Anthem Inc. data breach, which has impacted up to 80 million people.

The Attorney General’s Breach Help: Tips for Consumers has simple instructions for consumers who have been affected by a breach and includes what to do in response to a Social Security number breach. Breach Help is also available in Spanish.

Steps for Responding to Social Security Number Breach: 

1. PLACE A FRAUD ALERT.

Contact the three major credit bureaus and place a 90 day “fraud alert.” This helps protect you against the possibility of an identity thief opening new credit accounts in your name. When a merchant checks the credit history of someone applying for credit, the merchant gets an “alert” that there may be fraud on the account.

Experian       1-888-397-3742

Equifax         1-800-525-6285

TransUnion  1-800-680-7289

You will reach an automated telephone system. You will also be sent instructions on how to get a free copy of your report from each of the credit bureaus. Order the reports.  

2. REVIEW YOUR CREDIT REPORTS.

Look through each one carefully. Look for accounts you do not recognize, especially accounts opened since December 2014, when the Anthem breach occurred. Follow the instructions in the report for disputing any questionable information.

3. CONSIDER A SECURITY FREEZE.

Placing a security freeze on your credit files offers longer term protection. For information on how to do this, see “How to Freeze Your Credit Files” at www.oag.ca.gov/privacy/info-sheets.

4. BE WARY OF PHISHING ATTEMPTS.

If you get an email or call from someone claiming to be from Anthem and asking for your personal information, do not provide it. Scammers often take advantage of breaches by offering to help and actually seeking to steal your information. Check with Anthem through the phone number you usually use or one from the phone book, if you want to confirm that such a contact is legitimate.

More consumer information from the Attorney General:

Breach Help: Tips for Consumers

www.oag.ca.gov/sites/all/files/agweb/pdfs/privacy/cis-17-breach-help.pdf

En Español:  Ayuda en caso de robo de datos confidenciales

www.oag.ca.gov/sites/all/files/agweb/pdfs/privacy/sp-cis-17-breach-help.pdf?

How to Order Your Free Credit Reports

www.oag.ca.gov/sites/all/files/agweb/pdfs/idtheft/cis_11_free_annual_doj...

En Español:  Cómo encargar sus informes de crédito gratuitos

www.oag.ca.gov/sites/all/files/agweb/pdfs/idtheft/cis11spanish.pdf?

How to "Freeze" Your Credit Files

www.oag.ca.gov/sites/all/files/agweb/pdfs/idtheft/cis_10_credit_freeze_d...? 

Identity Theft Victim Checklist

http://oag.ca.gov/sites/all/files/agweb/pdfs/privacy/CIS_3_victim_checkl...?

En Español: Lo que deben hacer las víctimas de robo de identidad

www.oag.ca.gov/sites/all/files/agweb/pdfs/idtheft/sp_cis_3_vtm_checklist...?

Top 10 Tips for Identity Theft Protection

www.oag.ca.gov/sites/all/files/agweb/pdfs/idtheft/cis_1_top_10tips_doj.pdf?

En Español:  Los 10 consejos para protegerse contra el robo de identidad www.oag.ca.gov/sites/all/files/agweb/pdfs/idtheft/cis_1_top_10tips_doj_s...?

UPDATE: The breach may pose a risk of medical identity theft, which is the use of someone’s identity to obtain medical services or products or for financial gain. Affected individuals should closely watch the Explanation of Benefits statements they receive from their health insurer. If the statement includes a service or product you did not receive, contact the insurer and ask for details. For more information, see First Aid for Medical identity Theft: Tips for Consumers, https://oag.ca.gov/sites/all/files/agweb/pdfs/privacy/cis_16_med_id_theft.pdf

Anthem has stated that it is not calling members regarding the incident and is not asking for credit card information or social security numbers over the phone. Anthem will contact current and former members via mail delivered by the U.S. Postal Service with specific information on how to enroll in credit monitoring. Affected members will receive free credit monitoring and ID protection services.  For Anthem’s updates on the incident, go to www.anthemfacts.com/faqor call (877) 263-7995

SAN FRANCISCO – Attorney General Kamala D. Harris, along with the U.S. Department of Justice and the attorneys general of eighteen states and the District of Columbia, today announced a settlement with Standard & Poor’s Financial Services LLC (S&P) and its parent company, McGraw-Hill Financial Inc., to resolve federal and state civil claims related to S&P’s conduct in inflating ratings of residential mortgage-backed securities and structured investment vehicle notes.  

Combined with a separate settlement also announced today resolving a lawsuit filed by the California Public Employees’ Retirement System (CalPERS), S&P will pay a total of $1.5 billion to federal and state government entities. The State of California, through Attorney General Harris’ office, will recover $210 million in damages, from which CalPERS and the California State Teachers’ Retirement System (CalSTRS) will receive allocations for their losses on investments of certain S&P-rated securities.  Separately, S&P will also pay CalPERS $125 million to settle CalPERS’ specific lawsuit.  The remainder of the total settlement proceeds will be distributed amongst the U.S. Department of Justice and the other nineteen attorneys general.   

 “S&P profited by misleading investors who trusted its ratings,” Attorney General Harris said. “California’s public pension funds suffered significant losses due to S&P’s failure to honestly and accurately disclose the risk of the very investments that caused an international economic recession.  This settlement holds S&P accountable for financial losses caused by these misrepresentations and compensates our pension funds.”

This settlement is the latest in several resolutions holding responsible the institutions that contributed to the financial crisis.  To date, Attorney General Harris has recovered over $900 million for California’s public pension funds.  In August 2014, Attorney General Harris announced a $300 million settlement with Bank of America over its misrepresentations in residential mortgage-backed securities sold to CalPERS and CalSTRS.  Similar settlements were reached in July 2014 with Citigroup Inc. for nearly $200 million and in November 2013 with J.P. Morgan Chase & Co. for $300 million.

An investigation conducted by Attorney General Harris showed that S&P systematically misrepresented to the public, and to CalPERS and CalSTRS, that its ratings of structured finance securities were based on an objective and reliable analysis and not influenced by S&P’s economic interests.  Investors relied on these ratings to invest in the structured finance securities, the collapse of which led to the financial crisis.  

As part of the settlement, S&P agreed to a statement of facts which indicate that, despite its claims of objectivity and independence, it overruled the recommendations of its ratings experts out of concern that S&P’s business would be harmed if the company did not rate its clients’ securities positively.  The settlement does not absolve S&P or its employees from any possible criminal charges.

The settlement with S&P arises from the investigation into mortgage-backed securities by Attorney General Harris’ Mortgage Fraud Strike Force, which was formed in May 2011 to comprehensively investigate misconduct in the mortgage industry.  The Attorney General's additional efforts to investigate the mortgage crisis include securing approximately $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

For more information on the U.S. Department of Justice settlement, visit: http://www.justice.gov/

SAN FRANCISCO – Attorney General Kamala D. Harris today issued an information bulletin to California law enforcement agencies, higher education administrators and campus security personnel, providing enforcement guidance on new and amended sexual assault and campus safety laws. The bulletin summarizes SB 967 (Senate pro Tempore Kevin de León, D-Los Angeles) and AB 1433 (Assemblymember Mike Gatto, D-Glendale), gives enforcement guidance in the context of existing state and federal statutes, and encourages increased collaboration between law enforcement and campus authorities.

“The threat of sexual assault is real and pervasive,” said Attorney General Harris. “Last year California adopted some of the most aggressive campus sexual assault laws in the country. Today’s bulletin ensures that education leaders and law enforcement understand their responsibilities under these laws, enforce them consistently, and collaborate to protect victims.” 

The two new laws create reporting requirements and standards for campus disciplinary procedures.

SB 967 requires California postsecondary institutions – in order to receive state funds for financial assistance – to adopt comprehensive, victim-centered policies and disciplinary procedures concerning sexual assault, domestic violence, dating violence and stalking. Under the law, an institution’s policy governing its campus disciplinary process must use an affirmative consent standard – defined as an affirmative, conscious and voluntary agreement to engage in sexual activity – to determine whether a sexual assault complainant consented.   

SB 967 requires campuses to use a preponderance of the evidence standard when adjudicating complaints in the campus disciplinary process. This means the evidence must show it is “more likely than not” – i.e., greater than 50 percent likelihood – that the victim did not consent. The law also requires postsecondary institutions to partner with campus and community organizations to refer both victims and perpetrators to health, counseling, advocacy and legal services.

“The laws we pursue in the California legislature set an example for the rest of the country,” Senate pro Tempore de León stated. “With 1 in 5 women on college campuses experiencing sexual assault, it’s our responsibility to secure a safe learning environment for our students.”

AB 1433 specifies that as a condition for participation in the Cal Grant program, campus security authorities are required to immediately – or as soon as practicably possible – disclose to local law enforcement any report of a violent crime, hate crime or sexual assault, whether committed on- or off-campus. Postsecondary governing boards must implement policies and procedures by July 1, 2015, to ensure reports of these crimes are immediately forwarded to the appropriate law enforcement agency.  

“Students at our colleges and universities deserve to learn without living in fear of sexual assault, and they deserve to know that crimes that occur on campus won’t be treated any differently than those that occur elsewhere in our community,” said Assemblymember Mike Gatto.  “I thank Attorney General Harris for her advice and collaboration in these matters.”

AB 1433 builds on existing state and federal requirements for campus and law enforcement collaboration. California law already requires postsecondary institutions to enter into written agreements with local law enforcement agencies. The federal Clery Act also requires campus officials to contact local law enforcement to obtain accurate statistics about crimes reported on or near campus. 

Attorney General Harris has a longstanding commitment to reducing sexual violence and seeking justice for sexual assault victims. In her first year in office, Attorney General Harris eliminated a longstanding backlog of untested rape kits in state-run labs – which included 1,300 DNA cases.  In April 2014, the California Attorney General’s Rapid DNA Service Team received the United States Department of Justice Award for Professional Innovation in Victim Services. Attorney General Harris is currently prosecuting two operators of cyber exploitation websites who, combined, facilitated the posting of over 10,000 sexually explicit photos and extorted victims to remove the illicit content.

 In the coming months, the Attorney General’s Office will release additional guidance suggesting ways in which law enforcement and campus personnel can comply with the new laws and facilitate justice for victims and accountability for perpetrators. 

To view the information bulletin click here: http://bit.ly/1CcwfB1

SAN FRANCISCO – California Attorney General Kamala D. Harris today issued a consumer alert on location services used by mobile applications (apps).

With a tap on your smartphone or tablet, you can get a list of nearby restaurants, directions to a friend’s home or a local weather forecast.  Location services on your device make a variety of convenient apps work. Location services take your geographic information from satellites (GPS), WiFi and cell-tower networks. What you may not realize is that some apps can access your location all the time, even when you’re not using them. Your location might be “always on.”  

Broadcasting your location can sometimes expose you and your family to risk of theft or physical harm. For instance, you may be unknowingly revealing your location if your phone is “geo-tagging” your photos. When you take a photo, the location where it was taken may be inserted into the image file, along with the date/time stamp. If you post the photo online, you are revealing your location at a point in time. Sharing a “selfie” without disabling geo-tagging can be dangerous,  especially for victims of stalking or domestic abuse.

How mobile location services work may be technical, but you do not have to be an engineer to have more control. By adjusting the settings on your mobile device, you can control location services to  protect your  privacy on today’s “always on” frontier.

Android Phones and Devices

• Go to Settings, then Location and uncheck the boxes. When an app asks for access to your location, you can chose to grant it or not.
• To disable geo-tagging of photos, open the camera and then click on the gear icon and set location to “No.” You may have to click the gear icon on several screen layers.
• You can also choose how accurate you want your location reporting to be, whether it is determined based on GPS plus WiFi and cellular networks or just one or the other. The higher degree of accuracy uses more of your battery, so protecting your privacy will protect your battery life too. 

iPhones and iPads (iOS 6 and later)

• Go to Settings, then Privacy, then Location Services. You can turn it off. Or you can choose which functions and apps to give access to your location.
• To disable geo-tagging of photos, deny location access to the camera, in Location Services.
• You may get notifications from apps asking to use your location in the background. For privacy, select “Don’t Allow.”

For more mobile privacy tips, including how to control location information on other mobile platforms, see the California Department of Justice’s information sheets Getting Smart About Smartphones: Tips for Consumers and Getting Smart About Smartphones: Tips for Parents. For tips on safe social networking, see Staying Private in Public: How to Limit Your Exposure on Social Network Sites. All are available online at www.oag.ca.gov/privacy/info-sheets. 

En Español

SAN FRANCISCO – Attorney General Kamala D. Harris today issued a consumer alert to Californians about possible scams targeting immigrants and their families. 

Under a new California law, Assembly Bill 60 (AB 60), California residents will be eligible to get a driver license regardless of their immigration status.  This law takes effect on January 1, 2015.  In preparation for AB 60, the Department of Motor Vehicles (DMV) has hired additional employees, held department-wide training, and is opening new, temporary offices to handle extra driver license appointments.

Individuals applying for a driver license under AB 60 must show satisfactory proof of identity, proof of California residency, and meet all other qualifications for getting a driver license, including passing a knowledge test, vision test, and behind-the-wheel driving test, which will be taken after getting a temporary driver permit.

When major changes to laws affecting immigrants are passed, con artists often emerge to prey on vulnerable consumers.  This consumer alert will give you tips on how to avoid and report driver license scams.

Do not pay anyone to complete your driver license application:

The Attorney General recommends that you complete your driver license application alone or with the help of trusted family or friends.  The process is simple and the DMV provides free resources to guide you.  You should not pay anyone to help you complete driver license documents!

Beginning January 1, 2015, it will be illegal for anyone to accept money solely for completing a driver license application for another person.  Be wary of anyone who says they have “connections” with the DMV.  They are likely lying; no one can speed up the process of getting a driver license for you! 

Driver license examinations are available in many languages and can be given orally by a DMV employee on request.  If you need an interpreter, call 1-800-777-0133 and indicate that foreign language assistance is needed.  Do not pay anyone who offers to translate documents for you;  the DMV offers free translation services!

The cost for completing the application for a Class C (most cars) or Class M (motorcycles and scooters) license is $33.  A driver license under AB 60 is the same price as other licenses.  Only pay this fee to the DMV directly; any payment to someone else is likely a scam.

HELPFUL RESOURCES:

To learn more about getting your driver license, visit http://apps.dmv.ca.gov/ab60/ (English) or https://apps.dmv.ca.gov/ab60/index_es.html (Español). 

For a list of accepted proofs of identify, visit https://apps.dmv.ca.gov/ab60/doc_req_matrix.pdf (English) or http://apps.dmv.ca.gov/ab60/docreqmatrix_span.pdf (Español). 

For a sample driver license application, visit: https://apps.dmv.ca.gov/teenweb/permit_btn1/dl44sample.pdf.  However, your application (Form DL 44) must be completed at the DMV. 

California Driver Handbooks and sample driver license examinations are available in English, Spanish, Arabic, Armenian, Chinese, Farsi, Korean, Punjabi, Russian Tagalog, and Vietnamese.  For a copy of the California Driver Handbook and sample driver license examinations in any of these languages, visit:  http://apps.dmv.ca.gov/ab60/#handbooks. 

To schedule a visit to the DMV, visit  https://www.dmv.ca.gov/foa/clear.do?goTo=officeVisit.

WHAT TO DO IF YOU ARE THE VICTIM OF A SCAM:

The California Department of Justice, in its role as the state’s enforcer of consumer protection, collects complaints on scams in order to detect patterns of wrongdoing. By submitting a complaint, you are contributing to California’s ability to investigate and prosecute known offenders and stop scammers from victimizing others. To file a complaint with our office, use one of the following complaint forms:

English: http://oag.ca.gov/contact/consumer-complaint-against-business-or-company

En Español:  http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_sp.pdf

中文:  http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_chin.pdf

Tiếng Việt:  http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_viet.pdf

SAN FRANCISCO – Attorney General Kamala D. Harris today issued tips on how Californians can protect themselves from identity theft and make the most of their charitable giving on Giving Tuesday and throughout this holiday season.

Tips for safe shopping:

• Review your bank and credit card statements frequently for unusual and unfamiliar transactions.
• In the event of a security breach involving your credit card, monitor your account and contact your bank promptly if you see any suspicious transactions.
• If the security breach involves your debit card, the best way to protect yourself is to cancel the card immediately and get a replacement with a different number.
• Try to avoid making purchases in free Wi-Fi hotspots, such as a coffee shop, which can put your passwords and other information at risk.
• Shop on secure websites. One indicator of a secure website is the presence of a yellow padlock icon in the browser bar. Another indicator is ‘https’ in the web address.
• Never send sensitive personal or financial information, such as a social security or bank account number, through e-mail. Legitimate companies will not ask you to do so because it is not a secure way to transfer sensitive information.
• If you are receiving text messages on your cell phone saying you have won a prize or gift card, do not click on the link in the message – it is most likely a scam and may install a virus on your phone.
• Know the return policies of the retailers you shop with before you leave the store or conclude an online transaction. Many retailers will give you a refund if you have a receipt and your return is prompt, but some may only give store credit. Ask a clerk if the policy is not posted at the register.

Tips for donating wisely:

• The best way for many donors to select worthwhile charities is to work with a local charity as a volunteer. This helps provide first-hand knowledge about programs that benefit your community.
• Do your research before giving. Charities operating in California are required to register with the Attorney General’s Registry of Charitable Trusts.  You can review the charity’s purpose and financial records at www.oag.ca.gov/charities.
• Don’t assume that charity recommendations on Facebook, blogs, or other social media have been vetted. Research the charity yourself.
• If you are contacted by a solicitor on behalf of a charity, ask if he/she works for a commercial fundraiser and what percentage of donations goes directly to the charity. You may prefer to contact the charity directly to make a donation.
• Don’t fall for pressure tactics and ask questions before donating. You have the right to reject the appeal and if you feel pressured or threatened, just hang up.
• If you receive an email or text message asking for a donation to a charity, contact the charity directly and confirm that the request is legitimate.
• Make charitable contributions directly on a charity's website. If donating by check, use the full name of the charity rather than initials or an abbreviation. Do not give your credit card number to a telephone solicitor or in response to any unsolicited phone call you receive.
• Protect your identity.  Never give your social security number or other personal information in response to a charitable solicitation.  Never give out credit card information to an organization unfamiliar to you. Look at the charity’s privacy policy and learn who the charity might share your information with before you provide it.

Additional consumer tips, information, and lists of resources are available at:

• The California Attorney General’s consumer tips on identity theft and other privacy issues, https://oag.ca.gov/privacy/info-sheets
• The California Attorney General’s tips on making charitable donations, http://oag.ca.gov/donations
• www.ftc.gov, or toll free nationwide at (877) 382-4357
• www.give.org, for additional information about a specific charity