New & Improved Scams To Watch Out For In 2008

SmartMoney has come up with five new spins on classic scams to watch out for in 2008: “The financial woes and natural disasters of 2007 have armed scammers with plenty of new tricks—or resourceful spins on old ones—aimed at separating you from your cash.”

  • 1. Fake foreclosure rescue — The most common foreclosure rescue scam entails approaching homeowners in default… with an offer to help them avoid foreclosure by negotiating with their lender. Some even offer to lend them the money needed to become current on the mortgage. The problem: They charge hefty upfront fees, do nothing in return and the property is foreclosed anyway.
  • 2. Foreclosure rental scams — The scammers approach you with an offer to buy your house for the total amount you owe, plus a small amount of cash. You can then continue to rent the home, with the idea of buying it back later when your financial circumstances improve. The problem is, as soon as you sign over the deed to the house the new “owner” stops making the payments and collects your rent until the house is foreclosed.
  • 3. Disaster-related schemes — Scams proliferate whenever and wherever a disaster hits. Residents in the affected zones should be particularly wary of offers for cheap home repair and clean-up. To protect yourself, be sure to check up on your contractor: They must be registered with the state’s department of labor and carry liability insurance coverage.

    Even more treacherous are scammers who prey on people’s goodwill, soliciting donations for charitable organizations that don’t exist — or aren’t really charitable. To make sure your money is going to the right place, check that your solicitor is from a registered 501(c)(3) tax-exempt organization. A good place to verify that a nonprofit is legitimate is GuideStar.org.

  • 4. Aggressive car warranty pitches — Senior citizens are often targeted by scammers and the extended car warranty scam is one of their latest tricks. It typically starts with the victim receiving a letter, postcard or prerecorded phone call informing them that their car warranty has expired and they have to purchase a new one. After an aggressive sales pitch, the victim agrees to buy an expensive extended warranty that they don’t really need.
  • 5. “Red Cross” military scams — How it works: Someone claiming to be with the American Red Cross calls a military spouse to inform her that her husband has been hurt while on duty in Iraq and has been transported to a hospital in Germany. To complete the necessary paperwork and proceed with treatment, the caller asks for verification of the husband’s Social Security number and date of birth. The information is then used by identity thieves to obtain credit in the victim’s name. In a statement issued earlier this year, the Red Cross said its representatives do not contact military members or dependents directly, but rather do that through a commander or first sergeant.

“New Year, New Consumer Scams” [SmartMoney]
(Photo: Getty)

Comments

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  1. Synaptic Reload says:

    #5 is just plain low.

  2. bombaxstar says:

    @Snapjak: agreed…that’s disgusting.

  3. ceejeemcbeegee is not here says:

    #5 = 20 shades of wrong!

  4. LatherRinseRepeat says:

    Ugh, #5 is horrible. These scammers have no soul. But I’d like to think that military spouses know the proper procedures and would know that the Red Cross wouldn’t contact them if something happened.

    I think a lot of the scams in 2008 will be related to real estate. Another item to add to the list is: a home owner facing final notice on a foreclosure, rents out their property to an individual. Asks the tenant to pay a deposit, and the first and last month’s rent up front. The tenant moves in and a few weeks later, the bank shows up at the property with the police to evict anyone inside. Meanwhile, the homeowner has your money and is no where to be found. So be aware of rental ads that say “no credit check needed” and “no income verification required”. If it sounds too good to be true, then it probably is.

  5. amaduli says:

    I am shocked and amazed at #5. Don’t underestimate the vulnerability of mourning families. Makes me want to actively pursue these people. stabbings seem in order.

  6. shan6 says:

    Being in the USMC I have seen #5 happen, and it is seriously sad. We try to educate the families of our service members, but there is only so much we can do, and unfortunately some people get tricked into things like that. I wish I could meet these scammers face to face.

  7. azgirl says:

    If we can find the perps for #5, is it wrong for us to form a gang and beat the crap out of them? …In other news..the consumerist gang has once again brought justice to scammers…

  8. IphtashuFitz says:

    Anybody caught attempting #5 should be turned over to the military personnel involved so that they can meet out whatever justice they feel is appropriate. I’d love to see one of these scammers try to survive a few rounds with a pissed off soldier.

  9. LadyCarolineLamb says:

    We just bought a new house in Sept., so, of course, we are still getting the barrage of mortgage scams that appear to be coming from our legitimate bank, but are from these loan sharks still in business. My favorite, though, has to be then “certified deed” letter which made it look like my real deed was not valid, and I need to send $60 and my personal info to the only company that can get me the “certified deed”. I feel sorry for people that fall prey to this stuff!

  10. nutrigm says:

    #5 proves once again that there is no morality left in America (or anywhere else for that matter!)

  11. m.ravian says:

    @LatherRinseRepeat:
    i don’t think that lack of a credit check necessary means a scammer…about half or so of the apartments i’ve rented haven’t required it.

  12. MrEvil says:

    Those car warranty guys are a big bunch of scumbags. When I bought my ex-police car back in October it wasn’t a week after I paid licence and registration and title transfer that I got a letter in the mail from those douchebags. Their warranties are more than $2000 in most cases.

    Now why would I buy a warranty that cost more than the stupid car? Not only that, the police seem to get by just fine with Crown Vics well past what the douchebag’s warranty would last.

  13. theblackdog says:

    @lookatmissohio: I think LatherRinseRepeat is referring more to people who rent out their houses than to an apartment complex.

  14. SacraBos says:

    @azgirl: I think we should have them classified as “Terrorists”, since they are (in a fashion) attacking our military. Then send on an all expenses trip to the tropical paradise Club Gitmo.

  15. meeroom says:

    I just bought a house too, (mortgage through Countrywide), and I can’t believe the amount of junk mail we get now from companies wanting us to pay them twice a month and then they in turn will pay our mortgage once a month. It’s got to be a scam. Thank goodness we have a fireplace, all that paper makes good firestarting.

  16. youbastid says:

    In regards to everyone commenting on how bad #5 is…you expected more from identity thieves?

  17. Nemesis_Enforcer says:

    #5 really pisses me off. When my mother in law died while I was in Germany, our 1st Sgt. actually met me at he Armory where I was getting my duty weapon to tell my wife and I. He said the Red Cross contacted the Unit to tell me.

    #4 I seem to get at least once a week. Best part is I bought my Hyundai in 06 and it has a 10 year warranty, yet I started getting the cards about 2 weeks after I got my registration. If there was a car with a 60 day warranty I don’t think I would buy it.

  18. frankieman70 says:

    I work in real estate here in Los Angeles and I actually have had douche bags try to pull off #2 on some of my clients, if you list homes on craigslist believe me you will get some a-hole try to do this.

  19. Trai_Dep says:

    We should form a brigade out of the #5 scammers, and ship them off to Iraq.

  20. rioja951 - Why, oh why must I be assigned to the vehicle maintenance when my specialty is demolitions? says:

    @Nemesis_Enforcer: From one that was in uniform once, #5 makes me wish I coul send those bstrds walking into a target bunker, and then just pressing the little red button to blow the place to Hell.