Tough Times Made Tougher With Scam Artists Who’ve Got Your Number
Lee Rosenberg, CFP | May 28th, 2009After the Bernie Madoff scandal broke, the real million dollar question was, how could anyone be so gullible to turn over their entire life savings to a man who they knew so little about? Naturally hindsight is 20/20, but the more important question is, in these tough times, how many of us are letting our guard down and setting ourselves up to be victimized, too?
According to the North American Securities Administrations Association, in just the first five months of 2009 alone, there has been a twenty percent jump in the number of investment scams offering outsized investment returns,” said Fred Joseph, president. “With a CD paying 2 percent, just offering 10 percent is enough to get people really excited.”
But it is not only scammers promising better than average returns who are lurking, there has also been a big jump in complaints against companies promising to clean up your credit messes. According to the Better Business Bureau, they are handling almost 20 percent more calls about offers to consolidate debt and negotiating with credit card companies to reduce payments. You end up paying high fees and still having big debts.
Here are other red flags to avoid:
* If you are in jeopardy of losing your home, avoid mortgage rescue or bailout companies who let you stay in the house, but charge high rents and require that you sign over your deed. They claim you can buy the house back when ready, but if you lapse on a payment, you might be evicted and still owe the balance on the mortgage. Talk to your lender first before you turn to outside companies for help.
* Avoid “loss-mitigation specialists.” These companies claim to help struggling homeowners get modified loans through the new federal mortgage assistance program. In truth, they charge thousands in upfront fees and don’t deliver. Better to get free counseling from a nonprofit agency approved by the Department of Housing and Urban Development. www.hud.gov or call 1-800-569-4287.
* Watch out for “phishing” scams when banks merge. E-mails suddenly appear asking customers to click on a link to update their personal information to insure the new data base is correct. In truth, these emails are designed to hijack your most private financial information. Also watch for e-mails from companies handling mortgages, debt consolidation and credit counseling. Never provide social security, bank account, credit card numbers or personal security codes if you don’t recognize the name of the institution. Also, never click on their links because your information could be automatically retrieved.
* Older Americans who want “work at home” jobs are also being warned. They fill out job applications on line and then discover that their identities and bank account information were stolen. Ditto for companies that claim to need their credit card information because they’re investigating fraud. Never give out your personal financial information on the phone or on line unless you have proof that the representative is from your bank or institution.
If you feel that you’ve been scammed on the Internet, report your complaint to the FBI at www.ic3.gov/complaint. Forward deceptive spam by e-mail to www.spam@uce.gov.
It’s tough enough out there today without falling prey to ruthless companies that are lurking with new and sophisticated scams. As always, if it sounds too good to be true, it is, and that’s something you can bank on.
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Tags: bernie madoff, house mitigation scam, lee rosenberg, nigerian bank scam, phising scam, scam artists, scams
About the Author: Lee Rosenberg is the Co-founder of ARS Financial Services, Inc. As a Certified Financial Planner with more than 34 years of solid financial expertise. Lee is a registered representative of Cadaret, Grant & Co., Inc. He was also named one of the top 25 Independent Financial Advisers in the US by Rep magazine.
