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Top 10 scams of 2010

Foreclosure rescue scams, noncharitable charities and phony debt collectors top the list.

By Karen Datko Dec 27, 2010 4:45PM

This post comes from Mark Huffman at partner site ConsumerAffairs.com.

 

This year was marked by a continued slow recovery from a devastating recession, a still-sinking housing market, skyrocketing gold prices and a proliferation of charities that were less than charitable.

 

It all plays into our annual list of the top 10 scams of 2010.

 

Foreclosure rescue scams. For millions of struggling homeowners, 2010 was a year of desperation as they tried to hang on to their homes against the threat of foreclosure. Many who turned to so-called foreclosure rescue companies, which promised to save their homes for an upfront fee, ended up in worse trouble.

Throughout the year, various states stepped up the pressure on individuals and companies in the foreclosure rescue business. In August, California Attorney General Jerry Brown won a $1.1 million judgment against a Los Angeles attorney who Brown said promised foreclosure relief through aggressive litigation, "but the frivolous and phony lawsuits he filed instead left 2,000 desperate homeowners in even greater debt."

 

As of early December, Indiana Attorney General Greg Zoeller had filed 34 lawsuits this year against foreclosure rescuers.

 

Those promising to help modify loans apparently didn't confine themselves to home mortgages. In Florida, Attorney General Bill McCollum filed a lawsuit against a company, accusing it of deceptive and unfair trade practices related to automobile loan modifications.

 

Uncharitable charities. With a stubborn recession, more people need the assistance provided by legitimate charities. But there also seems to have been an increase in scams masquerading as worthy causes, seeking to exploit people willing and able to help others.

By midyear, a number of states were cracking down on sophisticated telemarketing fundraisers, some of which gave a small portion of the collected funds to charity and others that pocketed the entire amount.

 

Phony debt collector. At midyear, ConsumerAffairs.com began to receive a growing number of complaints from people who had been contacted by a man claiming to be a debt collector on behalf of a payday loan company. In nearly every case, the consumers said they had never had a payday loan.

 

The caller, who was abusive and threatened to have the consumers arrested, had personal information about them, such as Social Security numbers and bank account information. In some cases, the consumers said they had begun an online loan application process and entered sensitive information before deciding not to complete the application.

 

Investigations continue, but it isn't clear how the scammers are getting the information or choosing their victims. However, the scam is spreading and has been reported in many areas of the country.

 

Work-at-home scams. The work-at-home scam is simply the latest "get rich quick" scheme. It was more prevalent in 2010 because so many people are out of work or working part time and need extra income. The lure of easy work from home making big bucks resonates right now. It shouldn't.

 

In February the Federal Trade Commission issued a warning to consumers not to fall for these scams, which are often advertised among legitimate job listings.

 

"Whenever you're asked to pay for the chance at a job, or information about work-from-home jobs, it's a scam," Nebraska Attorney General Jon Bruning says.

 

Facebook scams. It seems everyone was on Facebook in 2010, including scammers who were capitalizing on the social-networking site's popularity to spread computer malware and steal identities.

 

For instance, in August spammers sent out millions of e-mails touting a Facebook "dislike button." Of course, there is no such thing, but many people clicked on the link to download the button and instead downloaded malware that gave hackers control of their Facebook accounts.

 

The same month many Facebook users began seeing messages telling them to go to a website where they could sign up to "test" Apple iPads. There was no such offer, and people who went to the site were asked to submit personal information.

 

Gold scams. The price of gold hit record highs in 2010, prompting many consumers to try to cash in by selling Aunt Martha's old broach. Many jewelry stores advertised they would "buy your gold jewelry." In many cases, this was a case of "seller beware."

 

In July, the New Jersey Office of Weights and Measures cited 49 gold and jewelry buying businesses for alleged violations of state statutes. After a statewide inspection sweep, officials said they found inaccurate scales that misweighed items and resulted in consumers' receiving less money.

 

Even without a rigged scale, consumers often risked receiving less than the market price of gold when they sold their jewelry. A survey conducted over the summer by the Massachusetts Attorney General's Office found a wide range of prices offered for the same piece of gold jewelry.

 

"It takes a little legwork and a little time for consumers to make sure they are getting best price for their gold. A few hours of work can mean hundreds of extra dollars," said Barbara Anthony of Massachusetts' Office of Consumer Affairs and Business Regulation.

 

Debt settlement scams. Companies promising to help consumers settle their credit card and other debt for less than the amount owed have done very well during the recession, but increasingly consumers complained that these companies did nothing to help.

 

In the second half of the year, the FTC adopted new rules prohibiting these companies from collecting money from consumers until they had delivered on their promises. The rules were aimed at weeding out the scammers, who collected a hefty fee from the distressed consumer, then disappeared.

 

At the end of the year, however, many debt settlement companies were still advertising on radio and television.

 

Ponzi schemes. After Bernie Madoff was arrested two years ago, you would think people would be wiser about Ponzi schemes, in which an investment is guaranteed to pay unbelievably high dividends. Either people are desperate to find a lucrative investment in this environment or authorities are more diligent in rooting out these schemes, but 2010 saw more arrests, prosecutions and convictions.

 

Unauthorized-charge scams. The unauthorized-charge scam is a perennial on our annual list and occurs when consumers discover that a company has placed a charge on their credit card or phone bill without their informed consent. Over the years many companies have used fine print and outright trickery to make sales in which the consumer is unaware that a sale is taking place.

 

An investigation by the Attorney General's Office in New York found that when consumers completed online purchases from familiar retailers, they were often presented with a cash-back or discount offer from a marketer. Information about accepting the offer and its ramifications -- including the fact that the consumer was agreeing to transfer his or her credit or debit card account information -- was buried in fine print and cluttered text.

 

Since consumers were not required to provide their financial information as part of the enrollment process, they often accepted the offer without knowing they were joining a fee-based program. Once enrolled, recurring charges began to appear on consumers' credit or debit card from unfamiliar companies. Due to their low dollar amount or the nonspecific club names on consumers' account statements, the charges often went unnoticed.

 

Time-share sales scams. True, not everyone owns a time-share, but many who do would love to unload them. Unfortunately, in this market that's easier said than done. That's why so many time-share owners were taken in when they received an unsolicited call from a "broker" who claimed to have a client interested in buying their time-share.

 

If the owners rise to the bait, the scammer tells them they must pay a refundable security deposit or fee to ensure that the sale goes through, and instructs them to wire money to an out-of-state bank account. In most cases, by the time the owners realizes they've been defrauded, the con artists have closed out their bank account, disconnected their phones and disappeared.

 

Dishonorable mention

There were plenty of other scams during the year that cost consumers money and heartache. Making our dishonorable mention list this year are the many scams related to the BP oil spill, this year's one-time $250 payment to Medicare Part D participants, and the growing number of cyberscams. In that last category, "tabnabbing" could be one to keep an eye on in the new year.

 

It goes without saying, as we do each year, that consumers must remain vigilant against those who use deception and trickery to part them from their money. Important financial decisions should never be rushed, and consulting a trusted friend of adviser is always a good idea.

 

As always, if it sounds too good to be true, it probably is.

 

More from ConsumerAffairs.com and MSN Money:

9Comments
Jan 5, 2011 5:07AM
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Do not forget biggest rip off ongoing scandal;that caused american business's to leave United States the medical insurance companies ,doctors and hospitals over charging, over billing double billing. Dont forget Insurance fraud as well your employer taking money out of your pay-check for non existing health insurance. (note) make sure your health insurance card is actually active Ive been scammed by employers several times saying i was covered when i was not.

second of all more of us need to write complaints to our attorney generals, fcc,ftc for unfair billing practices from att uverse as well as comcast cable companies. im sure there are more that do it as well.

remember we allow this to go on by not pushing these issues with our elected officials. 


why did we give bail out bonuses to the banks and stock market brokers for stealing our retirement savings,our houses ,home equities, even Obama is involved as he said to banks including bank of america dont stop foreclosing lets finish stealing everyones homes by foreclosures (was on National News) not hear say.
Jan 5, 2011 2:37PM
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Bank of America's Loan Modification Program should be at the top of that list as the largest scam of the century! DIE, Bank of America, DIE!
Jan 5, 2011 12:55PM
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Barry bama, not only a scam, a fraud.

Homeland Security, not only a scam ,a joke.

TSA, not only a scam, a child porn ring.

Congress, can't read, but can sign.

The wars in Iraq, Afghanistan, Yemen, Pakistan, Africa, Mexican border, on drugs, all the wars we're in are scams.

Jan 5, 2011 10:12AM
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I am amazed that on one hand the article preceding the scams are called Fees (airlines and banks) and the lower brow thievery is called Scams.  When it is an organized american business bilking the people, it is of course innovative business practice (you go, free enterprise).   But everything else outside the corporate world is deemed a scam.  Don't get me wrong both are wrong and should all be classified as scams, thus regulated.  The banks are not hurting to levy such exhorbitant fees and  airlines are inefficient to know the difference.  Yet no government regulation is required here.
Jan 5, 2011 5:19AM
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we need to stand up for our rights people , we are not (sheep-al) if we protest the conspiracies against the american people,

also this open privacy on all people created by freedom of information act is a violation as all info on any one is available to any person who wishes to pay on people search platforms, beware, if you dont believe me type your or anyones name into search engine , it will show stalkers anyone in fact anything they wish to find on you. do search on self and you will be in shock thats available on you.
Jan 5, 2011 4:57AM
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Apartment owners rip off tenants while the state holds the gun to the tenant's head.  Application fees that are non-refundable, background fees, concession fees (?), late fees, discretionary fees (the ones that they just make up), gate access card fees, keeping interest earned on security deposits (they must be making a bundle), utility fees that extend beyond the tenant's personal use, water bills based on the water usage in each of the tenant's bedrooms (the more bedrooms, the higher the bill), carpet shampoo fees, money order fees to pay rent.  The whole tenants' rights su****ect is one big joke!

Jan 2, 2011 7:27PM
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top 5 ripoffs :   1. the house and  congress(basically a tie due to being federal government and their ideas of fair taxation)     3. state government (also their ideas of fair taxation)    4. county government (you've got the idea by now)   5. city goverenment (who is the worst overall in florence ky ((eveyone making over 50k pays the same city tax)). it is is a progressive tax(ie: 10k-20k x amount, 20k to 30k x amount, all the way up to %50k and above pays the same. now alll i can say is i am sure the $700 or $800 tax does not hurt the guy in triple crown making a few mil a year as badly as it does that guy who is eeking out 50k. our dear mayor said see everyone must love the direction florence is going i got reelected (easy to say when you run unopposed).

Dec 28, 2010 5:19PM
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1. Health Care!
2. Lame Duck Congress!


Jan 5, 2011 5:30AM
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we need to re-install regulations  President Roosevelt put in place

president daddy bush deregulated.
 these regulations kept insurance companies, stock market corruption, banks from stealing from the american people, this is biggest conspiracy Bush family created this current mess we are in and was carefully planned.

pres. Roosevelt  was aware of these people selling false stocks and corruption that caused depression  back in the 1930's .we were protected from this   until President Bush deregulated them so it would happen again.. i know many of you slept during government and history classes in high school . so Wake up and smell the coffee as i have just reminded you of the facts


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