"Free trial" scams
Deceptive "free trial" offers topped the list of consumer trust abuses in 2009, and according to the Better Business Bureau,
companies that peddle diet pills, teeth whitening strips, wrinkle creams, "free" government grant reports, anti-aging miracles and other purported something-for-nothings show no sign of slowing down. A recent campaign by the Federal Trade Commission to dampen such efforts has led some online marketers to make more visible the actual terms and charges hidden in such offers. The poster product of this genre of scams could likely be the much-hyped Acai berry.
Vishing and SMiShing
The Nigerian prince besieging you for years to pay upfront fees or divulge sensitive information in exchange for some kind of windfall or another is being ousted from his throne by a new generation of high tech fraudsters. The latest phishing trends take advantage of Voice over Internet Protocol (VoIP) and SMS messages, in which scam operatives pose as financial institutions. In the voicemail and text messages they leave, they claim that one's credit card or bank information has been compromised, depleted or closed. Consumers are given a callback number where they can obtain details about this alleged compromise; when they oblige, they're asked to dial in their credit card number, bank account number, PIN, or social security number. Once this information is surrendered, callers may or may not be connected to speak to a "representative." Regardless of what happens after that point, the damage is already done. Scammers often use toll-free numbers for this purpose and may even set up the name of a legitimate bank to show on the caller ID. The main thing to remember is to never call the number listed on potential vishing or SMiShing scam calls; instead, find the phone number for the bank account or credit card you're concerned about and call that number directly.
Health insurance scams
In the midst of a lingering economic slowdown and in the wake of the new national healthcare reform bill, healthcare-related scams are surging. Even before the new legislation was approved, an October 2009 survey conducted by the Coalition Against Insurance Fraud found that 57% of state fraud bureaus reported a higher incidence of health insurance fraud that year. The U.S. Department of Health and Human Services is warning consumers to be particularly wary of health insurance offers claiming to be part of new federal regulations. Some companies that have recently come under fire and gotten poor marks from the BBB include Health Care One, Consolidated Workers Association and Smart Data Solutions, which allegedly peddled worthless coverage or discount medical plans -- not actual insurance -- to thousands of consumers.
Mortgage loan audit scams
The FTC calls it the latest twist in foreclosure prevention scams: phony forensic auditors backed by attorneys who claim they can find laws your mortgage lender violated to get you off the hook. Aiming to exploit financially strapped homeowners, in exchange for an upfront fee of several hundred dollars, these "experts" offer to review your loan documents to find out whether their issuer complied with state and federal mortgage lending laws. Telltale signs that you may be the target of a phony audit scam include guarantees to stop the foreclosure process, no matter what your circumstances are; recommendations that you make your mortgage payments directly to the "auditor" rather than your lender, and instructions not to contact your lender, lawyer, or credit counselor.
Online car-buying scams
Increasing consumer self-reliance for finding the best deals out there has encouraged cyber-criminals to propel into existence yet another Internet scam: online car buying. One car-buying venue people are consistently turning to is classified sites such as Craigslist. While the advantage to using such sites is mainly the opportunity to bypass dealership middlemen, the pitfalls are real too. Some common variants of the online car-buying scam include escrow scams, in which the buyer is asked to deposit money in a fake Pay Pal-type escrow service, and the "price too good to be true" scam. In the latter, a prospective buyer sees a car (often a classic or exotic one) for a price well below market value. When contact with the seller is made, the buyer learns that the car is outside of the country and special arrangements must be made for shipment, upon payment. A demand for a wire transfer or bank-to-bank transfer is virtually a guarantee that the transaction will end when the money is transferred and collected.
Loan modification scams
Stubbornly-high foreclosure rates continue to support the endeavors of scammers promising desperate homeowners ways and remedies to avoid eviction. Families struggling to free themselves from debt and save their homes have paid thousands of dollars in upfront fees for assistance they needed but never received. In a bid to put scammers out of business once and for all, the Loan Modification Scam Prevention Network, led by Fannie Mae, Freddie Mac, the Lawyers' Committee for Civil Rights Under Law and NeighborWorks America, has rallied resources and launched a consumer-friendly website. NeighborWorks America also launched a similar resource-filled website recently.
Vacation and travel scams
Summer is around the corner and who doesn't like a good deal when it comes to travel? Unfortunately, in the world of online travel arrangements, there's a thin line between a bargain and a scam. Whether involving phony airline tickets, bogus travel insurance, advance payment to guarantee future discounts, or "card mills" that claim they will make you easy money by letting you sell travel from your home, sweet-talking "operators" will try to ensnare you with promises of cheaper travel arrangements of one sort or another next time you take a vacation. The National Consumers League, America's oldest consumer organization, recently released a consumer advisory highlighting some of the newest types of travel scams: vacation rentals, timeshare purchase scams, fraudulent timeshares, fraudulent vacation packages, and discounted airfare scams.
Financial aid con artists often promote the idea that "millions of dollars in private scholarship money goes unused every year." The truth is, private scholarships are often reserved for very specific individuals, such as students with a particular career choice or from a certain background, church or organization. The institutions that have created these funds want to give them to qualified individuals, so they don't have a stake in keeping the money a secret. According to the FTC, if you hear these words from a scholarship service, you may be getting duped: "The scholarship is guaranteed or your money back," "You can't get this information anywhere else," "We'll do all the work," "You've been selected by a national foundation" or "You're a finalist," "The scholarship will cost money," and, perhaps most telling of all, "I just need your credit card or bank account number to hold this scholarship." A rarer, but just as devious form of scholarships scams comes in the likeness of financial aid consultants, who sometimes offer to help you comb through complicated financial aid forms and provide tricks for getting through the system. This isn't complicated: remember that no matter how "skilled" such a consultant may be in navigating the system, it is financial aid officers who make funding decisions based on a school's award criteria and funds available -- and no independent service is likely to influence that.
Despite a relative uptick in the economy, schemes targeting consumers affected by the economic downturn still hold a central spot in the world of online trickery. Among those, job scams and foreclosure rescue scams are the chief vehicles used to cart away your money.
Phony employment ads and fake recruiters are trawling the web for desperate job seekers. While some of these firms may be legitimate and helpful, many misrepresent their services, promote outdated or fictitious job openings, or charge high advance fees for services that may not lead to a job. According to Staffcentrix, a firm that screens online job offers, for every 58 "work from home" ads you find on the Internet, 57 will be either outright scams or downright suspicious. That's less than 2% of genuine job offers. Luckily, the red flags that a job offer may be a scam are usually too big to miss. For one, reject any offer that promises to get you a job. Stay away from high-pressure sales pitches that require you to pay now or lose out on an opportunity. Be skeptical of any employment-service firm that charges first, even if it guarantees refunds. Similarly, be wary of firms that promote "previsously undisclosed" government jobs. All federal jobs are announced to the public on www.usajobs.gov. The sneakiest scammers that are most likely to get you are listing services and "consultants" who write their ads to sound like they are jobs when they're really only selling general information about getting a job.
Independent women (and men, too) may like the sound of this: "be your own boss," make extra money," or "work from home" -- but beware the motivation behind such encouragements. Work-from-home "opportunities" -- another type of job scams -- have been around for too long for anyone to continue to fall prey to them (stuffing envelopes, anyone?). Ask yourself: if this were true, wouldn't many more of us be working from home, watching the cash roll in? More likely than not, such offers are thinly veiled schemes requiring you to make upfront payments with little to no recourse for grievance if the transaction turns sour. The newer twist is that now they are setting their traps on bona fide news sites and social networks, where users generally feel more trusting of the content they see. One foolproof rule to help you spot such trickery is "Work from home" in the ad title. "Work from home" is not a job description, and if it appears in a flashing banner ad or in the subject line of an email, there's a good chance it's a come-on by scammers fishing for desperate people. When in doubt, it's always good to remember that operating a home-based business is just like any other business -- it requires dedication and hard work, skills, good product, and time to make a profit.