Blog Post

Extreme Couponing to Extreme Fraud


Laura Harris
ACFE Research Specialist

Anyone waiting in line at the grocery store knows that when the person in front of them pulls out coupons — especially a binder full — they’re going to be there for a while. That ominous binder can only mean one thing: an extreme couponer.

One Virginia Beach couple’s extreme couponing fun turned out to be extreme couponing fraud. Over the course of three years, Lori Ann Talens perpetrated the largest coupon fraud scheme ever discovered in the U.S. According to the Department of Justice, Talens’ $31 million counterfeiting operation harmed not only consumers, retailers and manufacturers, but the economy at large.

Extreme couponing has grown in popularity over the years. Reality shows, blogs and books all offer to teach savvy consumers secret ways to save money. TLC’s hit show Extreme Couponing debuted in December 2010 and introduced the mainstream world to the activity of accumulating the largest amount of groceries and supplies while spending the least — or in some cases, walking away with extra — money.

According to a report from Valassis, approximately 92% of consumers use coupons to some degree. The average savingsista and couponisseur save here and there, but might not understand the extent to which coupons can be profitable. While savings can be organized and planned through deliberate research and efforts, Talens simply circumvented the system altogether.

Not only did Talens use fraudulent coupons, she also sold them by creating a large subscriber group through various social media channels. She used an encrypted app to communicate with her customers and required that new members be vouched for by existing members. “MasterChef,” as she called herself online, accepted Bitcoin and PayPal, and even bartered coupons for stolen rolls of special store paper reserved for printing coupons. From 2017 to 2020, subscribers bought nearly $400,000 worth of fraudulent savings.

One “coupon enthusiast” grew suspicious and reached out to the Coupon Information Corporation (CIC), a not-for-profit association of consumer product manufacturers dedicated to fighting coupon misredemption and fraud. Once they purchased and received coupons from Talens, the CIC confirmed they were counterfeit, and contacted the U.S. Postal Inspection Service for further investigation. 

Federal agents seized $1 million worth of physical counterfeit coupons from the Talens residence in a raid. Self-taught in marketing, graphic design and printing, Talens designed and printed her own Frankensteinian coupons. With the 13,000 designs discovered on her computer, she was able to create a coupon for virtually any product at any redemption value. The CIC reviewed the distinct designs, compared them to the known counterfeit coupons in circulation, and concluded that coupon redemptions had caused approximately $31,817,997 in losses to retailers and manufacturers.

However, one fraud scheme is never enough. Talens had been defrauding Medicaid and the Supplemental Nutritional Assistance Program (SNAP) for even longer. From 2015 to 2020, Talens applied for and received benefits from both programs while neglecting to disclose her husband’s legitimate employment income, or, obviously, their illegitimate income from the coupon conspiracy. Such disclosures would have made the couple ineligible for the help and resulted in an approximate $43,000 loss for the programs.

Talens pleaded guilty to mail fraud, wire fraud and health care fraud and was sentenced to 12 years in prison, three years supervised release and was ordered to pay more than $31 million in restitution. Her husband, Pacifico Talens, Jr., who was aware of the scheme and helped with shipping and administrative tasks, also pleaded guilty to mail fraud and was sentenced to 87 months in prison with three years supervised release.

The average consumer might not even be aware that counterfeit coupons and coupon fraud are a legitimate concern. According to the CIC, “Coupon fraud occurs whenever someone intentionally uses a coupon for a product that he/she has NOT purchased or otherwise fails to satisfy the terms and conditions for redemption; when a retailer submits coupons for products they have not sold or that were not properly redeemed by a consumer in connection with a retail purchase; or when coupons are altered/counterfeited. These activities are almost always in violation of federal, state, or local laws. Coupon fraud costs consumer product manufacturers hundreds of millions of dollars every year.”

Further, CIC Executive Director Bud Miller said, “Consumers can easily protect themselves by simply never paying money for coupons. Coupons that are offered for sale are often counterfeits or stolen. Coupon purchasers should be aware that they are providing their personal information to individuals or organizations that are likely criminal enterprises and may open themselves to other criminal schemes.”

The signs of a coupon scam include:

  • The deal being too good to be true

  • Pressure to commit immediately

  • Claims to make extraordinary amounts of money in a short amount of time

  • Vague or hostile answers to questions asked of coupon provider

  • Claims of no risks being involved

  • Upfront fees to participate

  • Involving the sale or purchase of manufacturers’ cents-off coupons

  • Identical or old endorsements

Consumers can report counterfeit coupons to the CIC and check their website for counterfeit alerts and public service announcements. Also, the CIC’s app, CIC® Suspect Coupon Checker, is available free to retailers, law enforcement and CIC members. Using the app, counterfeit coupons known to the CIC can be identified in a few seconds and suspect coupons can be reported for review.

Using the app, counterfeit coupons known to the CIC can be identified in a few seconds and suspect coupons can be reported for review. Membership is verified and the CIC does not receive money for this service. Register here.

SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners

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