Press Release

For Immediate Release: September 14, 2011

New Jersey Division of Consumer Affairs Warns of “Financial Recovery Awards” Scam Reaching Flood Victims

NEWARK – The New Jersey Division of Consumer Affairs is warning consumers about a “Financial Recovery Awards” scam mailing sent to homeowners in flood-affected areas.

Homeowners in Little Falls received a mailed letter that begins, “STATEMENT OF YOUR BENEFITS,” and states, “The Payment Security Administration (PSA) has determined that you shall receive entitlements and a Financial Recovery Award of up to $27,500.00.”

The letter asks recipients to mail a “Benefit Consent Form” to a post office box in Canada, along with a “Processing Fee” of $29.97 paid by check, money order, or credit card authorization.

The fine print on the back page includes language about sweepstakes rules. State and federal law, however, are clear that that no sweepstakes can require consumers to make a payment in order to receive a prize.

“Consumers should be extremely cautious with any request that they send money to an unknown person or business,” Thomas R. Calcagni, Director of the Division of Consumer Affairs, said. “By sending a check, you are giving the recipient your bank account information and the bank’s routing number. With this information, or with an authorization to charge your credit card, you expose yourself to unauthorized withdrawals of your hard-earned money.”

Calcagni noted that consumers should beware of any mailer or advertisement that, like the “Payment Security Administration” mailer, has any of these signs of a possible scam:

Offering huge prizes in exchange for small, up-front payments;

The use of an official-sounding but unverifiable name; for example, if an Internet search reveals that an agency by that name may not actually exist;

Fine print that includes unclear or confusing language; or

The request that payments be sent outside the United States.

“Anyone who receives this mailer should immediately contact the Division of Consumer Affairs,” Calcagni continued. “The residents of New Jersey’s flood-affected areas have experienced enough stress and suffering, without the additional insult of being scammed.”

This scam alert follows the Division of Consumer Affairs’ earlier warning that consumers watch out for post-hurricane home repair scams and charity scams (see the press release athttp://www.njconsumeraffairs.gov/press/8302011.htm). The Division continues to investigate reports of alleged price gouging during the State of Emergency (see the press release athttp://www.njconsumeraffairs.gov/press/8272011.htm).

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website,www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

Follow the Division of Consumer Affairs on Facebook, at http://www.facebook.com/pages/NJ-Division-of-Consumer-Affairs/112957465445651 ; and check our online calendar of upcoming Consumer Outreach events, at http://www.NJConsumerAffairs.gov/outreach/.

View Example: “Scam Mailer

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