GREEN BAY, Wis. -- Enrollment for a national health-insurance program doesn't begin for two more weeks, but authorities in many parts of the nation already are bracing for what some fear could be the biggest wave of Internet and telephone fraud attempts in years.
Criminals are using the Affordable Care Act, known as Obamacare, to pressure consumers into divulging personal information and to market fake insurance plans by phone, fax, e-mail and especially fake websites, the National Consumers League says on its website. The Federal Trade Commission received 1,100 complaints in May about telephone scammers claiming to represent the Medicare program and demanding personal information; many cited the health reform law as the reason for making the call.
"We know it's coming our way," said Susan Bach, Appleton, Wis.-based northeastern regional director for the Better Business Bureau of Wisconsin. "It's only a matter of time."
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Americans can sign up for health insurance programs beginning Oct. 1 as part of the Affordable Care Act, a heavily debated program the Obama administration and other supporters of health care reform say will improve health insurance coverage, reduce its cost and increase the number of Americans with insurance. Coverage is set to begin on Jan. 1 for those who sign up by Dec. 15.
Experts say the combination of a limited enrollment period and the fact that it's the first time many Americans have enrolled in a national health program creates juicy targets for unscrupulous people with realistic-looking websites and believable stories. And targeting already has begun.
Bach's staff, though not aware of any specific scams targeting residents in her region, issued a warning in August about telephone fraudsters demanding Social Security and bank account numbers from consumers in order to be issued new insurance cards.
On Thursday, an item from the Wisconsin Office of the Commissioner of Insurance warned of "sham navigators" - people pretending to have government approval to help people choose insurance plans.
"There are definitely some potential issues," said J.P. Wieske, a spokesman for the Office of the Commissioner of Insurance in Madison, Wis.
Legitimate insurers expect a wave of confusion.
"It's to the point where people are wondering how they can be sure that they're on the (federal government's) legitimate website," said Chris Hanson, president of Appleton-based Hanson Benefits Inc. "People have caught the wave of hysteria."
Fraud attempts could pose huge problems for the government, businesses and people trying to use the system. Government could see trust eroded as fraud and theft complaints consume police resources. Legitimate providers could suffer lost business, at least at first, as consumers discover that "coverage" arranged through crooked websites doesn't exist.
Victims could lose money. Or, in cases where their personal information is used to obtain credit cards or create false identities, their damaged credit could harm their borrowing ability.
Marian Kerr, 83, worked for years as a hospital nursing administrator before retiring in the 1990s. She knows what information she should and shouldn't give out to strangers, and has a telephone equipped with caller ID. Still, she got tricked into giving her bank account number in August to a caller claiming to work for the federal government.
"They told me they were calling from Washington, D.C., and they had my name, address and phone number," said Kerr, of Hastings, Neb. "I was distracted; they told me we could be done in three minutes. When they said, 'Is your bank account number such-and-such,' I said no and gave them the number."
When she later checked caller ID, she learned that the call originated in Nevada. She became worried that she had been conned so she contacted her bank and local police.
Police couldn't do much with the complaint. Nor could the Better Business Bureau. When Kerr repeatedly called the number, it rang busy or rolled to voicemail.
The bureau has added Kerr's story to a list of complaints that is "numerous" and growing, said Jim Hegarty, president and chief executive of the chapter serving Nebraska, South Dakota and parts of Iowa and Kansas. He said many complaints are similar to Kerr's.
Callers have looked up a person's phone number, name and address. Then they try to trick the person into divulging bank account numbers and other information that will make them money.
'I generally trust'
Identity thieves are building increasingly realistic websites and concocting ever-convincing stories to lure more people to part with personal information that they can sell, use to apply for credit cards or use to empty victims' bank accounts.
"Fake websites 10 years ago were not as sophisticated as they are today," said Gaurav Bansal, an assistant professor of management information systems at the University of Wisconsin-Green Bay. "Whether you are young or old, it's very easy to get fooled."
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An estimated 20% of existing websites qualify as fake, he said.
Bogus sites set up as Obamacare scams, like much Internet-based fraud, typically follow one of two approaches, Bansal explained. "Concocted" sites use a made-up business or agency name to get victims to enter personal information into an online form. "Spoofed" sites copy an actual website.
Many will try to attract people by using spam-type e-mails claiming to be from the government.
Bansal, who studies trust, privacy and security concerns, predicts the ACA will drive a feeding frenzy of scam attempts. Plus, there is a high reward for stolen health data. While a Social Security number alone might sell for $1, Bansal said, the information needed to complete a health insurance application could bring $50.
Kerr eventually learned that her bank account hadn't been touched - authorities speculate that a scammer sold the number, but hadn't had time to use it. Still the experience left her shaken.
"You know, I generally trust everybody," she said. "I'm a trusting person - until this."
Don't get scammed
• Get your homework done: Study up on the Affordable Care Act program and how it affects you by using sites such as HealthCare.gov. The more you know, the more easily you can spot a scam.
• Conduct business in person, with people you trust. A good starting point is your existing insurance or benefits adviser. Even if he or she can't help you directly, they probably can refer you to a legitimate, certified provider.
• Use ".gov" websites as sources of links to other sites. They're less likely than ".biz," ".info," or ".us" sites to be fakes.
• Verify that an agent or navigator is legitimate.
• Question your caller ID. Some scammers have devices that can "spoof" caller ID to display false identification.
• Report fraud and attempts to proper authorities: If someone tries to scam you, notify agencies such as the Federal Trade Commission or Fraud.org that can do something about it. If you get scammed, notify your bank, credit card companies and major credit bureaus.
• Pay someone claiming to be a "navigator." Persons and agencies serving as navigators -- members of social service organizations or advocacy groups who help people use the health insurance exchanges created by the law to choose among insurance plans -- must be certified and aren't allowed to charge for their services.
• Share personal information via telephone: The government, and legitimate businesses, won't call you out of the blue and ask about your bank account and Social Security numbers, or your birth date.
• Bite on phishing scams: Crooks might create websites that "spoof" the real ones. Check the address of the site you're on before entering personal information or clicking links. Run your mouse pointer over the link; does the address that pops up match the one you were given? Numbers and dashes in a site's address - especially when there are several - often indicate a site that's not legitimate.
• Believe that the person calling on the telephone works for the government. Federal and state agencies rarely conduct financial transactions on the phone.
• Fall prey to a caller threatening you with jail time: Some scammers have claimed that consumers will go to jail if they don't buy insurance cards. The individual mandate portion of ACA does not provide for jail sentences.
Sources: Wisconsin Better Business Bureau, Fraud.org, Credit.com, Hanson Benefits Inc.