No recession for con artists
THE ECONOMIC BUST has been a boon for scammers and cons. We are faced with a new wave of
“recession scams”—scams born out of economic
These scams target people who can’t make their
mortgage payments, cannot meet their healthcare
needs or are desperate for employment. The equation is tragic: the more desperation, the more opportunity for scammers to act.
Here are three cons to look out for.
• The job-hunting scam. These scammers prey
on eager candidates hoping to get a head start on
applying for a specific job or to gain access to jobs
others may not know about. This scam comes in the
form of a fee-based service that offers prospective
employees an “exclusive” job listing page, or a
monthly membership in a job-listing site that advertises jobs “unavailable to the public,” for a monthly,
upfront subscription fee. The truth is, most of the
jobs listed are dead ends, duplicates or jobs that can
easily be found on sites such as Careerbuilder.com,
Monster.com or Craigslist.org. This scam only takes
money from job seekers’ pockets and offers no
advantage whatsoever for finding a job.
• The healthcare hustle. In this scam, a company appears to offer affordable healthcare, though it
really offers nothing more than a healthcare “
discount card.” In fact, people who fall for this hustle are
often stuck with hefty healthcare bills and no insurance to cover them. Ironically, the card doesn’t offer
any discount at all. I recommend not only reading
the fine print, but, when it comes to an investment
such as healthcare insurance, where a long-term
commitment is required, researching the company
before handing over a single cent. This scam has
caught the attention of the Federal Trade
Commission, which has promised to crack down
hard on these companies.
• The foreclosure con. We have all seen the
advertisements: “We can save your house,” or “Allow
us to refinance your mortgage.” These companies,
often unregulated by any government body, have
sprung out of the mortgage crisis, and, contrary to
their guarantees, they cannot save your house, refinance your mortgage or get you out of your terrible
housing dilemma. Instead, for a hefty upfront fee,
they coerce customers into doing such things as refinancing at a terrible rate or, worst of all, signing over
the title of their home to the company, only to be
forced to rent it back for a large sum of money at a
I BOUGHT A three-year-old
2007 Ford Edge with 75,000
miles on it. As I was driving
to a wedding, all of a sudden
my car came to an abrupt
stop, and smoke began to
billow into the cab and all
around the exterior of the car.
I took it to a mechanic, who
claimed it had a leak that
would cost $7, 100 to fix. This
is nearly as much as I paid
for the car. What can I do?
The first warning sign with most of these
scams is the phrase “upfront fees.” Often, companies that force you to pay fees in advance will take
the money and run, or get you so financially
invested that you feel you have no choice but to
continue with the service.
Second, these companies are typically in a rush
to get you to sign along the dotted line. Therefore,
stop, think about it, do the research and make a
smart, educated decision. No wise decision is ever
made out of desperation.
Third, beware of a company asking for the ability to sign for you. Some scammers pose as brokers
and will try to get you to sign over important documents, such as financial statements and bank
records, in order to approve them as co-signers.
This is a sure sign that you are being scammed, and
this is difficult to reverse, because once you have
granted a person or company signing
permission, it is extremely difficult
to take that right away from them.
Stay smart and savvy, even if
you are feeling financial pressure.
Always research a company or a
lone operator before doing any
business with them. Guard
your documents and do not
expose yourself to any form
of identity theft or financial
fraud. Finally, even though
these are desperate times,
do not take any desperate
measures that may end up
costing you more and
doing serious damage to
you and your financial
status in the long run.
For more information on how to spot or
thwart these cons, visit
I suggested that, instead of
Stay ahead of the scammers
haggling with the mechanic,
Adam call Ford in Detroit and
speak directly to the depart-
ment responsible for fixing
these types of issues. He
should simply explain what
happened and they would
direct him to a person who
could identify the
problem and walk
him through what
needs to be done.
Update: Adam did
just that, and wrote
to me afterwards,
Ford had properly
resolved the situa-
tion. Ford was able
to narrow down the
flaw to a leak in the
power takeoff unit, and
the car was fixed for a
fraction of the original
estimated cost; Ford even
paid for the repair, as the
vehicle was still under
warranty. Ford was also
glad that the customer had
informed them of this defect
in the vehicle. C
What can you do to avoid these scams or spot
them before it’s too late?
© 2011 FIGHT BACK! INC. ALL RIGHTS RESERVED.
David Horowitz is a leading consumer advocate (
He is a frequent guest on radio and television stations. Consult your
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