Subscribe to this BlogFive scams on the rise
Tough economic times make fertile breeding ground for scammers and this recession is no different. I was at the Consumer Federation of America conference in Washington, DC last week, where several state consumer protection regulators spoke about the sharp increase in financial and consumer scams. Here are five scams on the rise and how you can avoid falling for them:
- Stimulus grant scams. Since the $787 billion stimulus bill became law in February, dozens of websites have popped up offering advice for a fee on how to get government grants on everything from small business initiatives to paying off student loan debt. The BBB has received hundreds of complaints about sites like federalgrantsolutions.com, which billed consumers $70 a month on their credit cards for info they thought was free. First, know that the government doesn't hand out grants for paying off personal debt and grants are usually given to non-profits. If you want to know how to apply for a government grant for a non-profit or small business initiative, that info is readily available for free at grants.gov and sba.gov.
- Mortgage foreclosure consultants. Foreclosure rescue scams are proliferating as the number of home foreclosures rises. The FTC has filed lawsuits or shut down a number of foreclosure rescue companies but scammers keep popping up. While some scammers trick you into signing over the title of your home, others promise to negotiate with your lender for an upfront fee, then pocket the money and disappear. Beware of cold-callers or anyone showing up at your doorstep offering to help stop a foreclosure. Only work with a HUD-certified housing counselor if you run into trouble paying your mortgage.
- Auto repair fraud. According to the Maryland Office of Consumer Protection, auto repair fraud is sharply rising at dealerships around the U.S. Since car dealerships aren’t selling many cars these days, some less than reputable dealers are trying to bill customers who go in for routine maintenance for repairs that in many cases are just unnecessary. Get a written estimate of any proposed repairs and a second opinion before any work is done.
- Property tax reassessment fraud. Though home prices are still falling in many parts of the country, cash strapped cities and towns are much slower to decrease property taxes. Homeowners around the U.S. are being inundated with offers from companies promising to get property taxes lowered in exchange for a steep fee or cut of whatever is recovered. You don't need to pay a lawyer or third-party to fight your assessment. Homeowners can file an appeal on property taxes at no cost themselves.
- Retail closeout scams. As the number of retailers going out of business rises, complaints about retail fraud are growing. In addition to phony sale prices and low quality merchandise found in “going out of business” sales, some retailers on shaky financial ground are taking consumer deposits on big ticket items like furniture, shutting down and then reopening a few days later or weeks later for business under another name, all without returning a consumer’s deposit.
If you or someone you know gets tangled up in a scam, file a complaint with your state consumer protection bureau. Unlike the FTC, a state or county agency can investigate individual complaints and advocate on your behalf. And if enough people complain, they'll get law enforcement to fine or shut down the scammers. For other tips on outsmarting scammers, check out the Consumer Action Handbook.
- Donna Rosato
The "Property tax reassessment fraud" is more on the ad people send out. They deliberately make the ad look officially from the county, and make it sound like it can't be done by the home owners themselves. It's fraud against the "uninformed" people. Come on, with the high unemployment rate, who doesn't have time to DIY.
At my last company a Property Tax Abatement company wanted $5K to fill out ONE FORM, a form I fill out every year in about two hours. Five thousand dollars for two hours work is ridiculous. I saved the company the $5K fee and $22K in taxes. You don't need an expert.
does the state expect to collect taxes from houses to be foreclosed? how does the state go against these houses, banks and homeowners? why no news about this?
I own an auto repair shop and there is no scamming here. The facts are when the economy fails the customer fails to do what is routine to maintain their vehicle. The longer a problem is not corrected the more money it will cost for the repair. Squeaky brakes may only need pads today however consumers are waiting and that small repair may now damage the rotors requiring additional money for parts and labor. I own a transmission shop and in 2007 only 40% of the vehicles were towed in with no movement; that percentage has changed to 90% towed in with no movement. Automotive problems do not suddenly appear and avoiding the problems will cost more. I find it laughable that as an educated woman running a large small business it seems as though automotive is always under a microscope. I am honest and always will be; however when your vehicle breaks you will pay for the repair, it will be less expensive today than tomorrow.
Property tax abatement is NOT a fraud. I do property tax abatement in FLorida and charge about 25% of the property tax savings on commercial and residential properties. I own a Real Esatte Company in Miami Beach and also operate in Fort MYers, Florida. Most Home owners apear before the Magistrate ( like a court hearing) with no substantial evidence to lower their taxes. An expert is needed for this. Anyone can file a lawsuit without an attorney as well as many other services. We provide a servive and by the we, I do not get pais till the property owner receives their tax credit back from the county. No upfront fee other than a $15 application fee to the county. http://www.dkinternational.net All the best, Daniel Bajaroff Miami Beach
lets not forget about the proliferation of "tax preperation" scams we see around this time every year! You do not need to pay someone to file your taxes! Stop the scammers!
I think I have made my point. This article is a scam. Just because you CAN do something yourself does not mean paying for professional help is a scam!
property tax appeals are not a fraud, though you claim they are b/c homeowners can do themselves. what about value of time, expertise, system knowledge? using your flawed logic, lawn care and nail services are fraudulent as people can do themselves. ridiculous!!
You all try to make these banks look like the good guys when they won't help out people falling behind on their mortgages. There are companys out there are helping homeowners get out of trouble and get lower payments they can now afford. When new companys come up that are helping the underdog going against the financial institutions you ridicule them and call them scams. Learn what you are talking about. When the last time a bank called you and said they will help you out? Never and never will happen.! I wish we the tax payer had a say in where our money goes. They banks are set up on nothing but greed and it's coming back to bite them. Anyone who thinks this bailout is a good idea is a fool. Everyone in congress is pulling the blinders on us and giving out our money. Why not they don't pay taxes. When companys fail from poor management new company rise up and benefit us the people. Henry Paulson you will have your judgment day. It's to bad we don't hang scum like that. Good job Paulson give money to failing comrades. YOU WANT TO TALK ABOUT SCAMS. Learn what you are talking about. There maybe a few bad apples out there just like any other industry. I don't know why we let people talk when they have no idea what they are talking about. Let me guess your not going to post this because it's radical just like helping people receive beneficial loan modification when their lenders try to stick it to them. I would love to have a chat with you. I've saved over 300 families from losing their homes and I'll give you references !
I went to a well-known car dealership for an oil and filter change. I asked them to check my tire pressure as I have with every oil change every 3 months. They checked off that they checked the tire pressure. I bought a tire guage and all the tires were dangerously low ie 18 in back and 22 for the other 3 tires (suppose to be 32 in front and 34 in back). They also offered to change my air filter for $95 and said my battery was 1/4 low and they could replace it for $105. I bought an air filter for $13 and did it myself (super easy). I checked the price of a battery $57. I am so disappointed being that I took it to a well-known dealership. If I can't trust them to do the job requested and then lie about it, how awful is that? Fraud and poor work ethics is unfortuately alive and well.
The Property Tax Reassessment is definitely NOT a fraud. While consumers CAN file this themselves (I did so myself 2 years ago), many times they do not know what to do. So, instead of taking the time to run the proper comps and taking time off from work, they let someone else do the leg work. This is a SERVICE rendered for a fee. If it is valuable to you, pay for it. If it is not valuable to you, do it yourself. It is no different than going to a car wash. Sure I CAN do it myself, I just choose to pay someone else to do it for me.
These people proliferate like maggots in rotten meat.
I wish there was a way to let people know about scammers like this before they end up learning the hard way.
You know the funny but sad part? I saw one of the Stimulus grant scams advertised on CNNMoney.com below an article about Madoff. Way to go CNNMoney!
The third point is very valid. I had an oil change done and the guy asked me to get something else repaired and billed me $700. The next time I was there for an oil change after 3 months, he asked me to get more or less the same repairs for another $700. I refused and went to my trusted car dealership and all those things checked out ok and I didn't pay a dollar. Be careful!
Article is spot on. I am inundated with phony offers all the time. Fortunately my e-mail sends them straight to "Junk" and I delete them from there without even opening them.
People, people, people, give the writer a break. She's not saying all companies or individuals offering these services are scammers. She is just saying that if you aren't careful enough and let yourself get tricked by a scammer then you may as well do it yourself or get a second opinion before going through the process. The only people who should be mad or upset in any way are those who ARE scammers. All you honest business owners need to chill, she's actually telling people to seek you out or do it themselves; they might have a friend who can do this stuff for cheaper or for free or a friend who knows someone who can. If you think you might lose business then, hey, that's life….its hard times anyway so people will try to do stuff themselves or find cheaper alternatives. If you trust your skills and integrity then you'll get customers.
For the stimulus grant scams, she pretty much called out every private business but, she's only helping people find this information for free; if the government offers this information for free then what better place to go than a government website? After all, they're the ones who made the stimulus package.
And I just hate it when retailers lie about "going out of business" sales. One guy in Columbus, OH had a sign up for more than a year about his big going out of business sale. I know this because I bought stuff from his place when I first moved here in 2006 and last year his "going out of business" sale was still going on. His establishment actually still has some of the signs but he isn't there any more. He NEVER planned to move those signs. That's just the lowest of lows.