Mortgage and Personal Loans Perfect for Con Artist’s Tricks
The recession created desperate consumers
Mortgage and personal loans are perfect breeding grounds for con artist’s tactics. The recession created problems for consumers nationwide. Foreclosure rates soared, unemployment was at an all-time high and debt was unmanageable. Consumers everywhere felt the crunch of the economic downturn and frantically looked to find aid for the difficult times. There was a lot of help from the government and non-profit agencies that stepped in to save consumers from disaster. Unfortunately, there also were a lot of scam artists entering the market. They preyed on people’s desperation and made matters even worse for the consumer.
The Better Business Bureau
According to the Better Business Bureau, 2009 was a premiere year for scams. Particularly it was the jobless who were targeted by job offers requiring upfront fees. For example, some consumers looking for jobs were told that they needed to pay an upfront $39.99 fee for a pre-employment credit check. When the applicants paid the fee, they unknowingly were signed up by a credit-monitoring service to be charged monthly.
It is scams like this and others that caused the BBB to introduce a Top Ten list of the more prevalent fraudulent activities in 2009. Here are the biggest:
- Acai Supplements. There are many ads out there that offer free trials, but it turns out they aren’t really free. According to the BBB, consumers should be wary of any “free trial” that asks for a credit card number to pay for “shipping only.”
- Government Grants. This scam has been around for a while. It comes from “experts” who say they can help anyone tap into the “millions of dollars” in grant money the government is holding onto. They charge anywhere from $6.99 to $99.99 for special CDs with interactive information.
- Robocalls. These are the automated calls that plagued people across the country offering special deals on auto warranties, debt consolidation, help getting personal loans or lowering interest rates. The FTC eventually stepped in due to the prevalence of the scam and increased restrictions on the practice.
- Lottery Scams. These scams take the form of the Publisher’s Clearing House or Reader’s Digest sweepstakes. These are fraudulent letters that claim the recipient has won millions. Of course to get the money, the winner has to send in money to cover taxes.
- Job Hunter Scams. These are the scams that involve charging applicants for credit checks and then enrolling them in monthly credit monitoring services.
- Google. This was a big one in 2009. Websites claimed that anyone could make thousands of dollars using Google or Twitter. People were required to send in a fee, of course, for the information and then the company did the same thing as job hunter scams. They were enrolled in a monthly service whose details were hidden in the fine print.
- Mortgage Rescue. The huge numbers of foreclosures opened the door for scammers to step in and take advantage of stressed homeowners. They claimed that with an upfront fee they would be able to negotiate with mortgage companies to save companies. The fee was anywhere from a few hundred to thousands of dollars.
- Mystery Shoppers. There are some verified mystery shopping positions, but the one consumers see normally are scams. Shoppers are asked to wire money to the scammer in exchange for a fraudulent check.
- Over-payment Scams. These are scams where the thief sends the applicant a check that is for more than requested. Then the applicant is supposed to cash the check and send the overage back to the check issuer. Of course, the check is a fraud and the applicant is out of hundreds, sometimes thousands of dollars.
- Phishing Emails. These come in the form of emails requesting personal information. The scammers then use the information to gain access to bank accounts and drain funds from the unsuspecting victim.
Scams in 2009
In 2009 the Better Business Bureau noted a huge growth in scams. Personal loans, mortgage loans, phishing and free-trials were all used to steal millions of dollars from unsuspecting consumers. In 2010, consumers have to be smarter and be aware of the huge number of fraudulent activities in the market.