It's a new year, but the same old scams

Herb Weisbaum • Profile • E-mail

I don’t have a crystal ball, but I can predict with a great deal of confidence what will be some of the top scams in 2009.

Many will target people hurt by the recession. But there will be plenty of old scams in the New Year, too.

Here’s a roundup of what to look out for over the next 12 months:

Credit counseling and debt relief
A growing number of companies promise to help people drowning in debt. They “guarantee” to lower your monthly credit card payments and get collection agencies off your back. Phony debt relief outfits take your money and do nothing. In some cases, they make the situation worse. You’ll owe just as much as when you started, plus have additional late fees and other penalties to pay.

• ConsumerMan tip: Don’t respond to the first ad you see or hear. Shop around. Take the time to find a reputable credit counselor; someone who will design a debt relief plan specifically for you. The National Foundation for Credit Counseling is a good place to start.
• More info: Debt relief deals prey on consumer’s trust

Advance fee loans and credit scams
You need money and you need it now. So the promise of a loan or credit card – regardless of your credit history – is mighty appealing. But there’s a catch: you need to pay some money first.

Legitimate lenders do not “guarantee” you will get a loan before you apply, especially if you have bad credit or no credit. They may charge fees, but those are normally paid after the loan is approved.

• ConsumerMan tip: Don’t pay to apply for money or credit. Beware of all ads that guarantee loans or credit to everyone.
• More info: FTC: Easy cash offers teach hard lessons

Work at home schemes
If you believe the ads – and you shouldn’t – you can stuff envelopes, process insurance claims or run an online business from your home and make thousands of dollars a month. To start your work-at-home business you’ll need to pay for instructions or a list of contacts. If you get anything at all, it’s often useless or outdated information.

• ConsumerMan tip: No one has the “secret” formula for success. It is possible to start a home-based business. But it takes a lot of work and a bit of luck.
• More info: FTC: Work-at-home-schemes

Overpayment scams
Overpayment scams are frequently used to rip-off people selling things online or via newspaper ads. The fraudster agrees to pay the asking price but he always wants to send a check for thousands of dollars more than that amount. And he’ll have some reason for you to wire transfer the difference to someone. For example, with a car purchase you could be told the extra money is for a shipping company that will pick up the vehicle. It’s a lie!

The check looks real, but it’s bogus. The bank may cash it or accept the deposit, but once the check bounces (and that could take weeks) you’ll be stuck paying back the bank.

Scammers love wire transfers because they are quick and virtually irreversible. They also make it hard for law enforcement to track them down.

• ConsumerMan tip: Any time you are selling something and receive a check for more than the asking price, no matter what the reason, it’s a scam. Run away from this deal as quickly as you can.
• More info: FTC: Give the bounce to counterfeit check scams

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