Scammers prey on the pain and loss of ordinary people looking for an honest way out of their trouble. Don’t be fooled by the scammers. Anyone asking for you to pay before you get a loan is after your money. As the global finance situation brings more hurt, dishonest people wait on the sidelines for the unsuspecting. But don’t panic, needing a small loan is not a crime, it’s a normal part of life.

How these loan scams work

Basically, people pose as lenders and ask you to pay a fee to secure the loan by forwarding money to them first. Afterwards, you’ll never see your loan money, or hear from them again. There is nothing new in scams on the internet. If money is being requested from you, up front, and there is no valid contact records then you are wise to steer clear. People usually get caught when they are in dire need, and emotionally vulnerable. Short term, installment, and payday loans can be a perfect way to help out in emergencies.

How can you protect yourself?

First and foremost, if you are in need of a short term loan or any other type of loan, don’t make an emotionally charged decision out of desperation. If they ask you for any money to be sent to them before the loan can be released, you can be certain it’s a scam. Think logically and you will have no trouble. Don’t be afraid to ask questions about the loan process. Loans for smaller amounts are easy to get for people who are employed or have regular income. Be sure you can repay within the terms and don’t borrow any more than is really needed.

Be secure knowing you are making the right choice

Short term loans can be a perfect answer to get you back on track or fix up emergency payments. They can help rebuild your credit rating and give you confidence in yourself and your decision making. Scammers will do the opposite. People often blame themselves for never being able to make ends meet, but often it isn’t their fault. Many situations crop up suddenly, then it’s tricky to get back on track, and we feel inadequate. There is no shame in making a mistake. It’s how you deal with it that counts. Use short term loans to rebuild your rating, give you extra funds when you need them, and put you back on an even financial keel again.

What to do if you’ve been scammed

Learn from it. Basically, if you’ve been deceived online there seems to be very little you can do. Learn from it and spread the word, so others don’t get caught. It’s sad to think that people can be so heartless as to prey on decent folk looking for an answer to their current money woes. Unfortunately, for every type of personal pain, there will always be someone waiting to exploit them. If you are employed, even with a bad credit rating, you can apply for a short term loan, payday, or installment loan.

The FBI and the general public are aware of several mortgage aid scams that con artists tried to conduct during the beginning of the housing crisis. The White House posts warnings against many of these at makinghomeaffordable.gov, the federal Foreclosure Prevention Plan Web site.

But, of course, the scams are taking new forms every day as con artists try to adapt. Here are some warning signs to watch for.

Yes, you should talk to your lawyer

If a company or individual advises you to not talk to your lawyer or your lender, they are likely trying to swindle you. This might sound like common sense, but these scammers can be pretty crafty when coming up with explanations and excuses for why you shouldn’t talk to your lawyer or lender. The more people you involve, the less likely the scammer is to get away with a scheme.

Unfounded guarantees

As you will learn if you visit makinghomeaffordable.gov, there is absolutely no way to guarantee that you won’t lose your home. The government doesn’t guarantee it, your bank doesn’t guarantee it and your  mortgage aid company shouldn’t either. If someone tells you he or she can guarantee a stop to a foreclosure procedure, that person is lying.

Always pay the bank

If an alleged mortgage aid specialist says you should start making the checks out to him instead of to your bank, he is a fraud. If you get your home refinanced or your loan modified, it does not change who you owe money to. Also, if a person will only accept payment by wire transfer cashier’s check, that is the sign of a defrauder.

Review

Previous scams I’ve covered on the money blog have warned against paying a fee for mortgage aid up front. You should also never let someone else fill out your loan modification paperwork for you or pressure you into signing papers that you haven’t read. Also, do not accept an offer to let you rent or lease your house and buy it back later. Never hand over the deed to your home.

We bought ours back in the early 80’s when we still had some money and the price of a week at a fancy holiday resort on the Sea of Galilee was really cheap. We then waited a couple of years for it to be built and then we started using our investment. And we enjoyed it.

Over the years we found a quiet nook at the pool where the noise level of the children was low and where few guests feared to tread. We went armed with a stack of the latest books which we bought with Quick Payday Loans the day before we travelled. We kept our shirts, hats and sunglasses on in the strong sunshine and we simply rested. No phones, no radios, no newspapers (except the crossword page) and no TV news. It’s called pigging out.

The days

We lunched up in our apartment, and took an hour’s nap. Then we would walk, explore the different surroundings, do a little shopping and then look for afternoon tea or coffee. A rest before dinner and then the search was on for a good restaurant. What a rough day. And we did it year in and year out.

We aged

After 25 years of this once a year enforced holiday that we loved we decided that maybe it was time to sell the time-share and then we discovered that all is not as we thought. Perhaps it is possible to sell a time share but it is probably very complicated and the only evidence of “sales” that we ever saw were “for sale” notices in the papers. We never met anyone who had sold their timeshare.

One day we received a phone call asking if we were interested in selling our week at the resort. I said yes and tried to ask what the caller was offering. She was evasive and invited us to an evening in the city. I went unwillingly. There must have been almost 20 couples there that evening.

The hard sell

These are hard-selling salespeople using high-pressure tactics. I thought that they lied too and were completely immoral. The main salesman of the evening was an Englishman from Yorkshire with an accent and speed of speech that made him difficult to understand. He didn’t let up on his pitch for a second and stormed around the room slapping table tops and stamping his feet. A full-scale heat merchant – and an outright liar to boot.

In the end it turns out that they were not offering money for your timeshare unit. What they offer is membership in a holiday club in exchange for ‘taking your unsalable’ timeshare week off your hands for you. What you gain is that “the subscription to the holiday club is vastly reduced”!

My lost work time

I am self-employed and I only earn when I am sitting in front of my computer. This won’t take long, they said at the reception when we arrived. “The sales presentation will only last about 90 minutes.” I lost something like 6 hours working time what with traffic, parking and watching the super salesman answering and stretching out stupid questions. They know that the longer the pitch lasts, the more likely you are to break down and open up your checkbook.

Stay away from these people.

Beware, the "one" in those buy one get one free deals may cost more than two vehicles.

I have been intrigued and astounded by some of the car commercials I’ve seen lately. Buy one get one free? I couldn’t believe auto dealers would just hand out free cars.

Well, it turns out I shouldn’t believe it.

Here’s the “deal”

Most of these deals are advertised as such: If you buy a big SUV or large truck, you can get a small, inexpensive car for free. However, in truth the deals are much more specific. The “deal” only applies to a few models, or maybe only one. They ask for several thousand dollars more than the price on an already very expensive SUV, in exchange for another car (of their choice) for “free.”

No, they don’t think you’re an idiot

After you get to talking with the salesman, it becomes clear that you could easily buy two different vehicles for less money. The people who work at these dealerships know that you’ll be able to do the math. They really don’t expect to end up giving anyone a “free” car. They just wanted to get you into the dealership and convince you to take out a personal loan for a vehicle you actually want.

Scam or just manipulation?

These offers are meant to easily fall to pieces when people start to read the fine — or large — print. That way, the salesman gets to be in a position of talking you out of a bad idea, which gains customers’ trust. Then, the salesman is in a position to make offers that will cost less, looking like he is much more concerned about the customer’s needs than about his commission.

Homework time

The best idea if you want to get the best deal on a vehicle (or two) is to do the legwork yourself. Walk into a dealership knowing what you’re talking about — that is how you will get the best deal.

You can start your homework by reading up on these cars for less than $18,000 recommended by CNN Money. Here are the top three.

1. Nissan Versa

This one starts out at just more than $9,000. It gets about 31 mpg on the highway and 26 in the city. CNN describes it  as “roomy inside despite its tiny size.” CNN points out that nowadays you can get all the bells and whistles — like Bluetooth connections and satellite radio — for a lot less, if anything at all.

2. Scion xB

Scion xB

The Scion xB is a top pick because of its safety features. It retails for $15,750, give or take, and gets 28 mpg on the highway. CNN calls it a “crossover SUV, minus the extra ground clearance and all-wheel-drive.” This next generation xB is quieter and more powerful than its boxy first edition. It’s also more roomy inside.

3. Honda Fit

The Honda Fit is also a top safety pick. It costs $14,750 – to $16,260. It gets 33 mpg on the highway. CNN calls it “the real entry-level Honda,” which I interpret to mean the least expensive Honda. The report admits that the Fit is noisier inside than the Civic, but it has ”flexible” interior space.

Don't get hit by a scam.

It’s cruel, but true: Scam artists view struggling homeowners facing foreclosure as money-making opportunities.

There are lots of organizations out there right now trying to help modify loans for people who can’t keep up with their mortgage payments. Unfortunately, there are con artists out there imitating these helpful sources, and they don’t care if you end up homeless.

Don’t get eaten

I think Angie Moreschi of the Consumer Warning Network sums it up well:

“You’ve got that $75 billion out there in housing aid, and that’s going to bring the scam artists out of the woodwork. They are going to be like piranha circling the kill.”

So beware, and watch out for these scams:

1. Phantom help

The FBI has identified three basic types of scams, and this is the first. In this scenario, fake mortgage rescuers promise help, charge a fee and run off with the cash. Usually the scammer is never heard from again, and the mortgage, of course, remains unchanged.

2. Bailout scam

In a couple of scam scenarios, the con artists could end up owning your house. In a bailout scam, scammers will ask you to surrender your house title to them. The con artist says the homeowners can rent the house until the mortgage is “fixed” and then repurchase it.

3. Bait and switch

No one likes reading through mounds of paperwork, but if your house is on the line, it’s time to buckle down. In a bait and switch scam, the con artist dupes homeowners into signing away the deed to their house by telling them they are signing mortgage modification papers.

What to avoid

Make sure you have a trusted, qualified source review your paperwork.

If a mortgage relief agent asks for fees up front, this is a huge red flag. Don’t pay until the work is done. Don’t hand the deed to your house over to someone. Always have an attorney or other verifiable, legitimate counsel read over your documents. Hiring a lawyer may be expensive, but it’s not as expensive as losing your house.

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.

Last week, I wrote about some financial scams of 2008. Today I came across an article that summarizes some scams we are likely to see in 2009. The best weapon in the war against poverty is knowledge, so here’s some ammunition for you.

Don’t get duped by phony debt counselors

Many Americans will be trying to get out of debt this year. In response, many scammers will  be posing as people who can help. In 2008, con artists posed as debt counselors who charged an up-front fee, then took the money and ran. This trend is expected to continue if consumers don’t get wise.

One money expert recommends checking with the The National Foundation for Credit Counseling to check the legitimacy of any operation. Also, don’t respond to the first ad you see. Shop around and make sure you find a reputable, trustworthy credit counselor. In my words:

If you need someone to help you manage your debt, make sure you find them; they don’t find you.

Don’t pay for promises

Some scams involve charging money upfront and promise a loan, line of credit or credit card. Legitimate lenders do not ever “guarantee” a loan. Fees are only assessed after a loan is approved. For instance, if you apply for  payday loans, you’re told upfront how much you’ll be charged, but not until after you are approved. And you don’t have to pay the fees until you pay back the loan.

If a lender tries to charge you fees before you are approved for a loan, walk away. Chances are this “lender” is a fraud.

Too good to be true

We’ve all seen the ads. “Work from home and earn $1,500 a week!” Most of us know that if it sounds too good to be true, it likely is.

The way these scammers make money: They tell you you must pay for instructions or a contact list to begin your “sure-to-be-a-success” at-home business. When is the last time you started out a job by paying for it? If you want a legitimate job, make sure the money is flowing in the right direction from the start.

Don’t do online buyer’s dirty work

Are you trying to sell something online? If so, beware. There are con artists out there who will agree to pay the asking price, but insist that they must write the check for a larger amount, usually thousands of dollars more.

They’ll offer some reason, such as needing to pay a shipping company, and ask you to wire transfer the overpayment amount. I think we all know where this is going. Your money will disappear, the check will bounce and you’ll end up paying the fees and footing the bill. If someone offers to buy something online from  you and asks you to move some money around for them, respond with an adamant “DO IT YOURSELF!”

Check out Part II

So those are a few scams to be wary of this year. But I’ve got more! Check back later today for “Payday Loans Can Help | Scams Will Hurt| Part II.”

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.

Avoid becoming a victim by recognizing how the scam works

These days, it’s a chore to determine between the trustworthy and the fraudulent because there are scam artists lurking in the corners of every industry—ticket sales, quick payday loans, internet auctions, charitable giving, you name it. These scam artists tarnish the reputations of many legitimate business establishments. In a world of trickery and deceit you have to be cautious.

Texas Tech Tickets

On November 1, 2008, the undefeated Texas Tech football team took on the #1 ranked Texas Longhorns. In one of the most exciting and memorable games of the 2008 college football season, Texas Tech quarterback Graham Harrell completed a 28-yard touchdown pass to Michael Crabtree in the waning seconds of the 4th quarter to give Tech the lead and the upset. For many fans, that game, and that play in particular, will be etched into their memories for years to come.

Unfortunately, not everyone in Lubbock had the opportunity to witness the play of a lifetime. Nearly 500 people looking for last minute tickets to the sold-out game were actually conned into buying counterfeit tickets. Those fans were denied access to the stadium because their tickets showed seats that had already been sold. At least we have the last play on video:

How to Avoid a Scam

Some scams are difficult to avoid; we wouldn’t call them scam artists if their art wasn’t scamming. However, there are a few simple things you can do to prevent getting suckered into a scam:

-NEVER give your credit card number over the telephone unless you make the call.

-NEVER give your credit card number over e-mail.

-If something seems too good to be true, it probably is.

-Know who you are dealing with. If you have not heard of a person or company that you intend to do business with, learn more about them.

Protect Your Money

The biggest concern about scams is that somehow you will lose money: some Texas Tech fans forked over $200 for their counterfeit tickets! It’s important to be wary of who you are dealing with, especially because we’re talking about your hard-earned money.

Lenders are another group of businesses with which you need to be cautious. If you’re in need of quick payday loans, be aware that there are many predatory lenders that take advantage of their customers and charge them ridiculous interest rates. However, there are also many lenders who care about your financial well-being and want to help you achieve success. If you’re ever in need of safe quick payday loans, you can rest assured that places like personalmoneystore.com will protect you and your money.