In “Payday Loans Can Help | Scams Will Hurt | Part I,” I covered some scams that are expected to continue in 2009, according to MSNBC.com. These scams are nothing new, but with the economy going the way it is, people in debt and cash-strapped consumers may be more susceptible to these scams.
In Part I, I covered debt-relief fraud, advance loan fee schemes, work-at-home cons and overpayment scams. Here are a few more shady practices to watch out for in 2009.
Congratulations! You’ve been had!
Have you ever gotten a letter saying you won a contest you didn’t enter? That should be warning flag No. 1. If a contest or sweepstakes ever asks you to pay fees of any type, whether it’s shipping and handling, insurance or taxes, it’s a fake.
Taxes are always paid directly to the IRS. Legitimate sweepstakes do not charge you anything in order for you to receive your money. If there is a “check” included to pay the fees, and the letter asks you to cash the check and wire the funds in order to claim your prize — you guessed it: Fake.
With payday loans, you don’t pay any fees until after you have received the services and funds promised. This is a good example of legitimate business practice.
Oh, it’s fixed all right
Another way for scammers to take your money and run is to charge you for home repairs upfront. Fake contractors have conned homeowners into paying for home repairs in advance and then never showed up for work. If you need repair work done on your house, shop around. Get lots of estimates and check with the Better Business Bureau. Never hire someone who just shows up at your door.
Most importantly, do not pay for all of the work upfront. ConsumerMan from MSNBC recommends you don’t pay for more than a third. And find out where your money is going; get details about materials and labor so you know the real cost of the work.
A Web of deception
With the age of the Internet comes the age of Internet scams. As online auctions become more popular, con artists are finding new, creative ways to get something for nothing.
Before using any online auction service, check out the site’s fraud protection policy. Don’t wire money; use a credit card or well-known escrow service. And beware of sending money orders or cashier’s checks.
Stay smart
In the midst of this recession, everyone must be very careful about where their money is going. Any time you are spending money on something intangible, make sure you know the company or person who is taking your money. Remember that the phrase “you have to spend money to make money” only applies to people investing in the stock market or starting a business.
When you apply for payday loans, you don’t have to pay any fees until you pay back your loan. Now that’s a recipe for a sure thing.
Wow even contractors are getting in the scam world now. I say do everything yourself, Home Depot and Lowes don’t teach home improvement classes for nothing, the same goes for repairing your credit yourself. You can find amazing FREE information all over the net, but beware there are lots of scammers in this industry too.