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)

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