Jonathan Kraut | Fed Fraud on Fraud Prevention
By Signal Contributor
Tuesday, July 17th, 2018

substantial portion of our work at my investigations firm is dedicated to aiding in the prosecution and recovery of funds lost due to fraud and financial crimes. We do this because government agencies typically do little. My friends at the FBI tell me not to file complaints with the FBI unless the fraud is at least in the millions of dollars.

Some fraudulent claims include false notices that one has a winning lottery ticket (that was never purchased), unauthorized solicitation and use of credit card and personal information, and phone and internet scams falsely representing that a bank, utility, immigration, or the IRS needs money wire transferred right away.

Most of these scams are perpetrated from other countries and the U.S. government has no jurisdiction, power, or interest related to offshore attacks.

President Trump last week announced a great new federal task force. The Consumer Financial Protection Bureau he proclaimed was formed to go after criminals and better protect citizens from fraud.

Of course, I was exceedingly overjoyed that finally one of the greatest ravages of our internet society — fraud and scams — was addressed.  CNBC reported that it estimates Americans last year were bilked, tricked, or defrauded out of about $16 billion.

Trump, already having de-fanged most federal enforcement and regulatory agencies, recently seemed to make a full reversal of his penchant for protecting businesses over consumers.

I was hopeful that even the delusional Donald Trump had finally done something right. Especially for our most vulnerable, scams have hit us hard and affect everyone in some way in the end.

After further review, however, this “New Task Force” is in fact not new but simply putting a shiny new label on a long-existing and grossly ineffective agency.

The Consumer Financial Protection Bureau basically sends out cease and desist letters upon consumer complaints. If these complaints are due to illegal activities overseas, these letters cannot be delivered or are completely ignored. If fraudulent activities originate in the U.S., it is possible that some monies might be collected, but these funds in the end are kept by the feds and consumers get nothing to recover their losses.

Last week, the Fair Trade Commission won a $5.2 million ruling against the Credit Bureau Center, which defrauded millions of consumers who unknowingly subscribed to automatic credit monitoring monthly payments of $24.95. This scam collected tens of millions if not hundreds of millions of dollars pretending to be a legitimate credit reporting agency.

Michael Brown, owner and sole employee of the Credit Bureau Center, has not faced charges and will probably not be charged with any crime. His firm simply has been asked to pay a very small percentage of what he took. Michael Brown, caught red handed, gets to keep most of the tens of millions he swindled, will face no criminal charges, and is free to run the same scam again, albeit from some other country.

On the CFPB website under “Enforcement” is stated, “A central part of the CFPB’s mission is to stand up for consumers and make sure they are treated fairly in the financial marketplace. One way we do this is by enforcing federal consumer financial laws and holding financial service providers accountable for their actions.”

One thing the Consumer Financial Protection Bureau does not tell you is that they have reduced potential penalties corporations face due to engaging in fraud and misrepresentation.

This not-new “enforcement agency” now diverts power from the already weakened FTC to an even less potent body that has no power to prosecute in criminal court and can only attempt to go after fraudsters with letters and possibly using civil court.

When researching for firms listed as under investigation at the CFPB, instead of typing in a company name, as on the old FTC site, I got an Excel spreadsheet with 1,045,576 entries and had to search by hand for any possible listings of misconduct.

Despite the public relations announcement pretending to consumers that the reformation of the CFPB is something good, this agency actually lessens penalties for scammers, removes protections on the behalf of consumers, better conceals misconduct, and makes it harder to initiate criminal prosecution.

Designed to trick consumers into thinking that we are safer than before, the Trump decision continues to allow illegal activity to stream in unabated and without consequence for the foreseeable future.

In other words, the promises and proclamations made by Trump and his administration when it comes to preventing and prosecuting fraud, itself is a scam.

Jonathan Kraut directs a private investigations firm, is the CFO of a private security firm, is the COO of at an acting conservatory, is a published author, and Democratic Party activist. His column reflects his own views and not necessarily those of The Signal or of other organizations.         

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Signal Contributor

Signal Contributor

Jonathan Kraut | Fed Fraud on Fraud Prevention

substantial portion of our work at my investigations firm is dedicated to aiding in the prosecution and recovery of funds lost due to fraud and financial crimes. We do this because government agencies typically do little. My friends at the FBI tell me not to file complaints with the FBI unless the fraud is at least in the millions of dollars.

Some fraudulent claims include false notices that one has a winning lottery ticket (that was never purchased), unauthorized solicitation and use of credit card and personal information, and phone and internet scams falsely representing that a bank, utility, immigration, or the IRS needs money wire transferred right away.

Most of these scams are perpetrated from other countries and the U.S. government has no jurisdiction, power, or interest related to offshore attacks.

President Trump last week announced a great new federal task force. The Consumer Financial Protection Bureau he proclaimed was formed to go after criminals and better protect citizens from fraud.

Of course, I was exceedingly overjoyed that finally one of the greatest ravages of our internet society — fraud and scams — was addressed.  CNBC reported that it estimates Americans last year were bilked, tricked, or defrauded out of about $16 billion.

Trump, already having de-fanged most federal enforcement and regulatory agencies, recently seemed to make a full reversal of his penchant for protecting businesses over consumers.

I was hopeful that even the delusional Donald Trump had finally done something right. Especially for our most vulnerable, scams have hit us hard and affect everyone in some way in the end.

After further review, however, this “New Task Force” is in fact not new but simply putting a shiny new label on a long-existing and grossly ineffective agency.

The Consumer Financial Protection Bureau basically sends out cease and desist letters upon consumer complaints. If these complaints are due to illegal activities overseas, these letters cannot be delivered or are completely ignored. If fraudulent activities originate in the U.S., it is possible that some monies might be collected, but these funds in the end are kept by the feds and consumers get nothing to recover their losses.

Last week, the Fair Trade Commission won a $5.2 million ruling against the Credit Bureau Center, which defrauded millions of consumers who unknowingly subscribed to automatic credit monitoring monthly payments of $24.95. This scam collected tens of millions if not hundreds of millions of dollars pretending to be a legitimate credit reporting agency.

Michael Brown, owner and sole employee of the Credit Bureau Center, has not faced charges and will probably not be charged with any crime. His firm simply has been asked to pay a very small percentage of what he took. Michael Brown, caught red handed, gets to keep most of the tens of millions he swindled, will face no criminal charges, and is free to run the same scam again, albeit from some other country.

On the CFPB website under “Enforcement” is stated, “A central part of the CFPB’s mission is to stand up for consumers and make sure they are treated fairly in the financial marketplace. One way we do this is by enforcing federal consumer financial laws and holding financial service providers accountable for their actions.”

One thing the Consumer Financial Protection Bureau does not tell you is that they have reduced potential penalties corporations face due to engaging in fraud and misrepresentation.

This not-new “enforcement agency” now diverts power from the already weakened FTC to an even less potent body that has no power to prosecute in criminal court and can only attempt to go after fraudsters with letters and possibly using civil court.

When researching for firms listed as under investigation at the CFPB, instead of typing in a company name, as on the old FTC site, I got an Excel spreadsheet with 1,045,576 entries and had to search by hand for any possible listings of misconduct.

Despite the public relations announcement pretending to consumers that the reformation of the CFPB is something good, this agency actually lessens penalties for scammers, removes protections on the behalf of consumers, better conceals misconduct, and makes it harder to initiate criminal prosecution.

Designed to trick consumers into thinking that we are safer than before, the Trump decision continues to allow illegal activity to stream in unabated and without consequence for the foreseeable future.

In other words, the promises and proclamations made by Trump and his administration when it comes to preventing and prosecuting fraud, itself is a scam.

Jonathan Kraut directs a private investigations firm, is the CFO of a private security firm, is the COO of at an acting conservatory, is a published author, and Democratic Party activist. His column reflects his own views and not necessarily those of The Signal or of other organizations.