A Bad Economy Is Good for Scammers — Watch Out for These Super-Sneaky Cons…

Bottom Line/Personal interview on bad economy scams with Dr. Audri Lanford: Internet ScamBusters #308

Today we have another Special Issue for you — this time on bad economy scams.

Audri was recently interviewed again by Bottom Line on how the scammers and con artists really come out of the woodwork during times of financial difficulties. The article appeared in their November 2008 issue called “A Bad Economy is Good for Scammers — Watch Out for These Super-Sneaky Cons…”

Bottom Line/Personal is a very good fee-based newsletter that interviews experts on various topics and passes on that information to their subscribers (we’ve been fans and subscribers for a long time).

We asked for and received permission to share the interview with all of you. Happy reading!

However, we think you’ll like visiting this week’s issue of Scamlines — What’s New in Scams?

And before we begin, we encourage you to take a look at this week’s most popular articles from our other sites:

Answers to 7 of the Biggest Questions About International Travel Photography: An Interview With Scott Stulberg, Part II: Photographer Scott Stulberg continues to share the ins and the outs of international travel photography in this second part of his podcast.

Do It Yourself Furnace Checkup: Money Saving or Safety Mistake? Get the facts on whether you should do a furnace checkup with or without a professional’s help.

Bridge Loans: Are They A Good Way To Get From One Loan To Another? Learn the ins and outs of bridge loans and whether you should take advantage of them.

Why Photo Sharing is Simple Even in the Beginning: Easy ways to make the transition from traditional family albums to photo sharing on the Internet.

Let’s get started…


A Bad Economy is Good for Scammers — Watch Out for These Super-Sneaky Cons…


(Note: we split some of the paragraphs to make this article easier to read. However, we have not changed the content at all.)

Rising unemployment rates, sky-high fuel prices, a plunging stock market and falling home values have landed many Americans in difficult financial straits. This makes people psychologically predisposed to jump at a potential solution — without stopping to consider whether this solution is truly as appealing as it seems.

Scams designed to take advantage of America’s current economic problems…

Unpaid Fuel Bill

Someone claiming to be a representative from your heating-fuel company phones you on one of the coldest days of winter. He/she says that you didn’t pay your last bill, so the company has no choice but to turn off your gas (or suspend your oil deliveries) immediately.

He would like to be lenient, but high fuel prices have made your unpaid bill so large that company policy requires immediate action.

You protest that you paid your bill, but the representative insists that the payment was not received. The only way you can avoid a disruption in service is to make the payment immediately by supplying a credit or debit card number.

The representative warns you that if you do not do this, it will be weeks before the company can send out a technician to restart your service.

The caller is a con man, not a heating-fuel company employee. This is true even if caller ID says that the call is coming from the fuel supplier. Sophisticated scammers can make caller ID say whatever they want it to.

If you supply your credit card number, it will be used to make unauthorized purchases. Heating companies are heavily regulated by state governments and usually cannot suspend customers’ service until they have sent several written warnings.

What to do: Hang up, then phone your heating-fuel provider to confirm that your account is paid in full.

Technicians at your Home

Two technicians from your oil, gas or electric company unexpectedly arrive on your doorstep.

They say they have reason to believe there is a minor problem with your furnace (or gas line or some other component of your heating or electrical system) that is causing it to burn fuel faster than it should or causing you to be billed for more fuel than you are using.

These technicians really are thieves. If you let them into your house, one will distract you while the other steals from you.

Home owners normally are careful about whom they allow into their homes, but anxiety over high fuel prices makes the promise of lower heating bills too appealing for many to pass up.

What to do: If utility company technicians visit your home when you have not arranged a service call, ask them to wait outside (keep your door locked) while you phone the company to double-check their story.

Do not back down even if they claim that they do not have time to wait. While you’re making the call, the scammers most likely will disappear, but if not, call the police.

Work-at-Home Scam

A help-wanted email says that you can earn hundreds of dollars per week from home in your spare time by filling out online surveys… sorting emails for a large company… or performing some other simple task.

Work-at-home opportunities are attractive to the millions of Americans who have lost their jobs and to those in need of extra cash to keep up with the rising cost of living.

Unfortunately, almost all work-at-home help-wanted emails are scams.

If you respond, the scammers might try to…

* Convince you to buy a list of companies in search of work-at-home employees. The list is worthless.

* Sell you a list of online survey companies that pay participants. Even online surveys that do compensate participants pay so little that it is generally not worth your time or trouble.

* Ask you to pay an “application fee.” The scammer pockets your fee. There is no job.

* Get you to reveal your Social Security number or other personal information so they can run a background check before hiring you. They steal your identity.

* Sell your contact information to other con men and Internet scammers, who will try to take advantage of you.

What to do: Delete work-at-home emails. They almost always are scams.

Gas Saver

An ad on the Internet or elsewhere claims that your car could be getting better mileage. All you need to do is add special drops or tablets to the gas tank… or attach a special device to the exhaust pipe or elsewhere.

A huge number of supposedly mileage-boosting technologies have appeared in response to high gas prices. They usually are worthless or worse — some actually can damage your car.

What to do: Ignore ads and emails that promise better mileage. If there were a truly effective fuel-saving gas additive, it would be huge news, not something promoted in Internet popup ads and spam.

Mortgage Scams

Scammers find that people having trouble paying their mortgages are particularly desperate and thus easy prey…

Foreclosure “Rescue”

A finance company representative claims that his firm can help you save your home from foreclosure. He explains that if you sign your home’s title over to his company, it will pay the money that you owe and let you live in the home as a renter until your finances improve and you can buy it back.

This company has no intention of helping you save your home. Once you sign over the title, the company will kick you out and sell the home.

Self-defense: Never sign your home over to anyone in an attempt to save it from foreclosure.

Bait-and-Switch

This is a version of the scam above. A financial professional claims that he can help you refinance your mortgage with affordable terms, rescuing your home from foreclosure. He might say that there is a special government refinancing program designed for home owners just like you.

This person will produce a stack of complex legal documents for you to sign and will warn you that you have to act fast because this special mortgage refinancing program is about to end.

The complex legal documents you sign will not solve your mortgage problem. Most likely, they will transfer ownership of your house to the scammer, yet leave you responsible for paying the mortgage.

Self-defense: Never sign legal documents related to your home without first having them reviewed by an attorney familiar with housing issues (ask friends and colleagues for recommendations).

Be extremely wary when someone says that you must act immediately to take advantage of a financial program.

Phantom Mortgage

A financial consultant offers to help you save your home from foreclosure by negotiating with your lender. All it will cost you is the consultant’s fee, which could be hundreds or thousands of dollars.

The consultant pockets your fee, then sends you complicated looking paperwork and encouraging updates from time to time to make it appear that he is working on your behalf. He will not actually do anything to help you save your home.

Self-defense: Do not trust anyone who calls out of the blue to offer you help with a mortgage problem. It often is a scam.

Bottom Line/Personal interviewed Audri Lanford, PhD, cofounder and coeditor of ScamBusters.org, a Web site devoted to informing the public about scams and cons, based in Boone, North Carolina. For a free subscription to the ScamBusters E-letter, go to www.scambusters.org.

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Bottom Line/Personal
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Time to conclude for today — have a great week!