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Warning: Gov't dependence opens doors to scammers

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An empty promise of "free" money from the government was enough for thousands of people to divulge personal identifying information to identity thieves. The scam has been dubbed the “Obama utility bill scam,” and it's spreading.

How does it work?

In recent weeks, punishing heat waves have sent utilities skyrocketing and customers clamoring for a way to pay the bills. Scammers have been using the opportunity and desperation to travel from state to state, convincing residents that a special federal government assistance program from the Obama administration will help pay their utility bills. Victims are given bank account and routing numbers to use in paying their bills online, but must first "register" using their Social Security numbers and other personal information.

The continued spread of the “Obama utility bill scam,” as some have dubbed it, means it’s likely coming to a neighborhood near you. Scammers find victims through all the usual digital channels -- emails, bogus tweets, even Facebook messages. But in an unusual twist, the scam also has a real-world element. Agents for the criminals are going block by block, knocking on doors and handing out leaflets, encouraging people to pay their bills with the bogus account information.

One reason the scam is spreading: It seems to work. Before the local utility company gets wise to the bogus account numbers being used, the payments are processed and initially credited to victims, who receive payment confirmation notices. The victims often share their success stories with family and friends, who also fall for the scam. Only later are the payments rescinded.

Why is it working?

According to MSNBC, 2,000 people were tricked by the scam in Tampa last week alone, 10,000 in New Jersey and countless others across North Carolina, Pennsylvania, Indiana and New England. Utility companies in Utah and California also reported similar incidents earlier this year.

So why is this bogus scam catching on so quickly?  Because we as a society have apparently reached a point where the promise of "Obama money" is enough to throw all conventional logic out the window:

Caroline Morales of Bethlehem, Penn., told the Allentown Morning Call that she had been tempted by the scam.

"My neighbor comes running with a paper that had a routing and account number," she told the paper. "She said Obama was helping people pay their utility bills, mortgage and any bills you had." While Morales had her doubts, she said her mom told her, "It's probably true since he is looking for votes."

Eagerness for and willingness to receive a handout has emboldened scammers and blinded the public -- so much so, that they must be reminded to use their brains:  "We see scams once or twice a year, and a handful of people fall for them. But this is crazy," said Sylvia Wood, TECO spokeswoman. "Customers should never pay their bills with information that is not their own. We're encouraging them to use common sense."

In related news, the government overpaid unemployment benefits last year by $14 billion.

Oh, and 80% of the funding in the so-called Farm Bill is actually just expanded welfare:

FarmBill_infographic

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