Amid the many scams that hit consumers in 2008, it’s nice to know that getting quick cash through payday loans from Personal Money Store is straightforward. People who take out payday loans know exactly what they are getting and how much it will cost.
Not the same can be said for other organizations in 2008. Scams involving mortgages, loans and even stimulus checks left already cash-strapped consumers dealing with fraud. Other companies didn’t engage in such shady practices, but they did tack on extra fees for fuel costs.
In hopes of making 2009 a better year for the average consumer and a worse year for fraudsters, let’s take a look at some of the shady practices that characterized the past year.
Mortgage crisis spawns scams
According to Smartmoney.com, some mortgage holders in 2008 fell prey to a practice called equity stripping. Con artists posed as mortgage brokers and offered homeowners fearing foreclosure an easy fix.
Con artists asked homeowners to temporarily sign over the deeds to their homes. They said people could buy back their homes in a year and rent their property in the meantime. Meanwhile, fraudsters borrowed against the value of the home and often didn’t keep up with mortgage payments. The homeowners seeking quick cash to keep them out of foreclosure ended up there anyway, or ended up with a hope that was completely stripped of equity.
Loan modification the sleazy way
There are several legitimate companies that offer loan modification to lower the amount people have to pay. However, fraudulent copycats figured out a way to capitalize on Americans’ financial woes.
So-called mortgage counselors charged an upfront fee, $500 to $1,000, then took the cash and ran. Victims were left with the same loans, unaltered, and a big dent in what little money the did have. Tip for 2009: Loan modification services do not charge fees upfront.
Stimulus checks plus identity theft
Before the Senate even approved tax rebates, identity thieves started making phone calls. They posed as people from the IRS and told taxpayers to tell them their social security and bank account numbers. Similar scams were run by e-mail. The defrauders cleaned out victims’ bank accounts and took out loans under the stolen names.
The truth is, the IRS already has your personal information, and it only contacts taxpayers by mail. You can get payday loans online or over the phone, much quicker and easier than you can contact the IRS.
Regular, unleaded or too-high premium
When gas prices skyrocketed in the first half of 2008, airlines, cruise ships and delivery services tacked on extra fees to cover gas. Funny thing is, when gas prices fell (now 77 percent lower than the July peak) the extra fees didn’t disappear.
Some companies stopped calling the fees a gas charge, but they tacked them onto their regular prices.
Not-so-free credit reports
We’ve all seen the commercials for FreeCreditReport.com. Most of us have had some version of the company’s jingle stuck in our heads for days. (I know I have.)
But people who have actually used the service know that their “free” credit report comes with a $14.95-per-month service fee unless they cancel their membership. According to Smartmoney, users are required to sign up for a membership and provide a credit card number to receive the credit report. After a seven-day trial period, if the account isn’t canceled, the card is automatically billed the $14.95 service fee.
Looking ahead
Now that these deceptive practices have been publicized, we can only hope that consumers will be more savvy in 2009.
But savvy won’t prevent rising prices on some services. Many internet service providers are drawing up plans to switch from flat fees to per-minute usage fees. Others are thinking of imposing usage caps and charging for extra time on top of monthly fees. So buyer beware: Know what your internet provider is charging you before you watch your favorite show online at NBC.com.
Help in hard times
The economy is continuing its downward spiral. Payday loans will no doubt provide consumers with quick cash for years to come — barring any radical changes in legislation — and at personalmoneystore.com they will remain scam-free.
Isn’t it something how so many continue berating the Patday loan industry when all the big scams and failures of the last year involved conventional trusted financial services with their skyscrapers and big names.
There really aren’t too many, if any at all miracle cures for things like your personal finances – and the rubric is that if it is too good to be true, then it probably is. The problem is that when people are desperate, they’ll resort to about anything, which is exactly what theses scam artists’ are after – they only want to prey on people. There ought to be stiffer penalties for doing these kinds of things to people.
Very good advice for those weary consumers that only trust certain agencies and now they can’t even do that unless it is through the mail. I can’t believe the lengths that scammers will go to when trying to get someone else’s money. They could spend that time just as easily working and gaining the same amount of money.
Words from a Very Outspoken and Opinionated California Litigation Attorney
Here in California, our Department of Real Estate website (dub dub dub dot dre dot gov) lists the companies that have DRE “permission” to modify loans… add to this list any licensed California attorney, and that is where you should begin your due diligence search when you seek help in California. Other states probably have similar laws, so check with your own state DRE and state bar.
My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors… DON’T BE A VICTIM TWICE! What’s that they say, “Fool me once, shame on you, but fool me twice, and I’ll sue your butt!”
Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call “home.” Scammers are popping up like dandelions on a freshly mowed lawn in April. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere, not to mention spamming your email box with those third-world widows needing someone to receive three million dollars for them. Make no mistake, in many cases, these “loan modification experts” are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications.
In California, with very few exceptions (and attorneys are one exception… no coincidence there… attorneys make the laws), it is against the law for anyone to take money up front for helping a homeowner who is in default. Don’t trust a company that begins its relationship with you by breaking the law.
HERE’S THE BOTTOM LINE!
Hire an attorney – and not just any attorney either – one with experience in mortgage law, not just one with real estate law experience but one with experience in both FEDERAL and STATE litigation against mortgage companies, one who doesn’t also do family law, criminal law, admiralty law, and immigration law as well, one who limits the practice to mortgage law (or at least a great majority of it), one who has the experienced staff, training, and know how to take on the big lenders and their top notch lawyers (lenders have attorneys – and darn good ones – check out their counsel on the web – big names top schools, shouldn’t you have a lawyer too?).
We are not talking about a refund on your broken television here, we are talking about hundreds of thousands of dollars and your HOME – if you don’t think this is the time to hire a highly educated and experienced professional instead of a weekend schooled, almost out of work, broker slash loan officer slash “expensive water in a wine bottle with alleged magical curative powers” salesperson, I don’t know what would make you take things seriously.
Of course, this is one obnoxious lawyer’s totally biased opinion, but one based on many many distressing calls to my office every day. And, yes, my firm loves taking cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm.
- Paul J. Molinaro, Esq.