In a tough economy everyone watches their pennies a bit more closely. Unfortunately it also has con artists looking for opportunities to defraud some of the most unsuspecting people out of their savings. Here are some of the most common and egregious ways that scammers target people who are already struggling.
Scam artists are taking advantage of the upswing in used car purchases by selling off stolen cars through something called VIN cloning. VINs – vehicle identification numbers – are unique to each car. They're used by law enforcement officials to track down stolen cars. VIN cloning involves assigning a "clean" VIN to a stolen car so that the car can be resold to an unsuspecting buyer. It's done by producing authentic-looking phony documents with improper VINs or actually physically replacing the VIN in the car's dash. If the police retrieve the stolen car the buyer will lose both the money paid for the vehicle and the vehicle itself (which will be given back to the owner). To avoid becoming a victim of VIN cloning the Better Business Bureau recommends:
- Checking a car's VIN in three places – the dashboard, inside the door and under the car's hood – to make sure they all match one another as well as the car title or other documentation the seller provides
- Being suspicious of someone selling a car for significantly less than its Kelly Blue Book value
- Purchasing your own car history report with the given VIN through sites like Edmunds.com or Carfax.com.
Foreclosure Rescue and Loan Modification Scams
With the collapse of the housing market, a record number of Americans have lost their homes – or are at risk for losing their homes – to foreclosure. Sadly, fraudulent companies are popping up and posing as foreclosure prevention or assistance organizations offering desperate homeowners seemingly legitimate options to avoid losing their homes. In reality, entering into an agreement with the scammers will only make things worse. Some of the most common scamming scenarios include:
- Lease-Back Scams
In a lease-back scam, the company will promise to help forestall a foreclosure and repair credit in return for a homeowner agreeing to "temporarily" sign over the deed to the home to a third-party investor. The homeowner will then lease the home from the investor until he or she is able to recover enough to repurchase the home. The only problem is that the company has no obligation to sell the home back to the original owner and may, in fact, either sell the home or take out a new mortgage on it for more than the homeowner will be able to afford to pay.
- Partial Interest Bankruptcy Scams
In a partial interest bankruptcy scam, the con artist will convince a homeowner to sign a portion of his or her home ownership over to numerous parties and then make mortgage payments to them instead of the bank or mortgage servicer. Each party will then file for bankruptcy, keep the mortgage payment from the homeowner, and delay the foreclosure process while leaving the owner in debt and no farther from the risk of foreclosure.
- Refinance Scams
In a refinance scam, someone posing as a legitimate mortgage broker or lender will convince a homeowner to sign documents to refinance a loan but, in actuality, the papers state that the owner will surrender the property and transfer ownership to the con artist. The loan is never refinanced, and the homeowner is not likely to be evicted from the home before even realizing it is now owned by someone else. (Don't get duped into a fraudulent or unnecessary refinance. Read 6 Questions To Ask Before You Refinance.)
- Phantom Help Scams
In a phantom help scam, someone poses as a lender or nonprofit organization worker who can help the homeowner refinance or modify a home loan in return for hefty fees. The work is never done and the fees are never returned, leaving the homeowner further behind. (For information on a legitimate avenue of loan modification, read Things To Know About The Home Loan Modification Plan.)
- Identity Theft Scams
In an identity theft scam, a fraudulent lender approaches a homeowner by phone or online with an offer to refinance a loan into one featuring a lower interest rate. The homeowner provides personal identification information (i.e. name, birth date, Social Security number, etc.) to process the loan and begins making payments to the new "lender", while the phony firm keeps the funds and uses the stolen identity information to rack up new debt. (For more on scams and how to avoid them, read Avoiding Foreclosure Scams.)
To avoid becoming a victim of foreclosure assistance scamming the FDIC recommends that you:
- Always make your mortgage payments directly to your lender or servicer. Do not make checks payable to an individual or firm that promises to make the payment on your behalf, even if they're claiming to do it as part of something as official sounding as a "debt repayment plan."
- Never sign over your deed or loan documents to another person or company.
- If you require foreclosure assistance, work only with HUD-approved homeowner counseling agencies
Federal Job Placement Fraud
People who are out of work long enough may jump at the possibility of finding a job, especially one that offers the benefits and security of a government job. That's just what con artists who sell otherwise free information about federal jobs are counting on. They advertise in newspapers that they can help job seekers find a job - for a fee. If they do provide information it's information that is freely and easily accessible and if they say they've secured a job offer, well, they're simply lying. Government agencies do not charge application fees or require payment for placement examination prep materials. To avoid becoming a victim of federal job placement fraud the Federal Trade Commission (FTC) and the U.S. Office of Personnel Management recommend that job seekers avoid people offering:
- "Guaranteed job placement" with a government agency
- Information on "hidden" or unadvertised government jobs
- A toll-free number for unlisted jobs, entrance exam preparation materials or tips for a fee
If the recession is causing you to hold your pocket book more closely than ever, do the same with all personal financial information. Desperation often compels people to believe otherwise incredible claims from fraudsters, so the best way to avoid being scammed to is make sure that any potential fraudsters are left with little to work with in pursuing you. It would be great if there were such a thing as an easy out of our financial problems, but in almost all cases, this simply doesn't exist. Keep this in mind when a stranger offers to help.
InsuranceExamine the five biggest automobile insurance companies operating in the state of Texas, ranked based on market share in the state.
InsuranceRead about the top personal auto insurers operating in New Jersey, and learn about recent trends in market share among these companies.
Investing NewsOn September 1, 2015, Statistics Canada reported that the economy has contracted by 0.5% in Q2 2015, after falling 0.8% in previous quarter.
EconomicsIn the space of a week, the VIX Index, a measure of market volatility, spiked from 13, suggesting extreme complacency, to over 50, evidencing total panic.
EconomicsConsumers incur switching costs when they receive a monetary or other type of penalty for changing a supplier, brand or product.
InvestingEven as job growth has surged and gasoline prices have plunged, U.S. consumers are proving slow to respond and repair their overextended balance sheets.
EconomicsMarket penetration is the measure of how much a good or service is being used within a total potential market.
EconomicsThe marginal rate of substitution determines how much of one good a consumer will give up to obtain extra units of another good.
EconomicsInvestigate the muddy fiscal policy, tax problems, and inability to institute austerity that created the Greek crises in 2010 and 2015.
Home & AutoLearn which cars will save you money in 2015, whether you are looking for a compact, mid-size or full-size car, or even a pickup truck.
Money earned through any illegal activity controlled by country ...
Goods that international travelers can purchase without paying ...
A series of domestic programs designed to help the United States ...
The unauthorized copying of all the information contained in ...
A type of fraud in which a stolen credit card or debit card is ...
A website dedicated to the sharing of stolen credit card numbers. ...
In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
In 2012, the Royal Bank of Canada (RBC) was accused of a complex wash trading scheme to profit from a Canadian tax provision, ... Read Full Answer >>
There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
There is increased risk when investing in the industrial sector compared to the broader market due to high debt loads and ... Read Full Answer >>
An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the ... Read Full Answer >>