Few challenges prove more difficult than fending off a predator when you're vulnerable.
And these days consumers, weakened by the slumping economy, face some of the hardest financial challenges in recent times as we strive to pay the bills with our shrinking available funds. • It all led the Pinellas County Department of Justice and Consumer Services and the Federal Deposit Insurance Corporation recently to issue a warning about falling victim to scams. • "During these hard economic times, it is even more important to be careful how you spend your money," the agencies warned in a statement. • And it's no wonder. Scams abound, in particular in this sour economy, when con artists prey on those struggling to make it from one paycheck to the next. • On a regular basis, readers contact the Consumer's Edge about questionable offers. • Here are some of the latest, though often all-to-familiar, ploys to get your money:
Advance fee scam
A person or company offers to improve your credit score or arrange a loan if you give money in advance. "It probably is a scam," warns Deborah Berry, of the Pinellas consumer protection agency. "Florida has a loan brokering law, prohibiting an upfront fee unless the entity is a financial institution." These schemes target consumers who may be under financial duress and may be seeking quick and easy loan approval and money. The scam typically involves the lender making false promises to arrange a loan in return for fees paid upfront by the loan applicant.
'Work from home' scam
Snopes.com took on this scam, which continues to proliferate over the Internet. The scheme promises job applicants great riches after they pay a $2 charge for a kit that offers step-by-step instructions on how to begin working from home. The $2 turns into an $80-a-month charge discovered too late by the consumer. "While the promise of vast riches to be gained through working from home is held out to those seeking an answer to their financial problems … those who sign up for such kits will not soon find themselves on Easy Street; instead, they will find their bank accounts tapped to the tune of approximately $80 a month," Snopes wrote.
The lottery scam
Anne Placona of Brooksville was sent a notice saying she would receive a $1.9 million sweepstakes cash prize. She first had to send $19.99 and then she was asked to send more payments of $31.99 and $29.99. "I did not send in the $29.99, but was foolish enough to send in the $19.99 and $31.99," Placona said in a letter to the St. Petersburg Times. Often referred to as the Nigerian lottery scam for a ploy used by some Nigerian scam artists, the scheme seeks advance money payments for a promise of a reward. Real lotteries and sweepstakes do not require payments. They pay you.
Free gift offers
This scam promises to deliver a free gift to you after you pay shipping and handling. Although, free gift offers might require a shipping and handling fee, reading the fine print is critical. "It may be some miracle cream free trial," Berry said. "The fine print will say you have to pay for shipping and it will bill you monthly for this product or service."
Here's the Edge
• Avoid advance fees for loans or jobs. Unless the loan is coming from a financial institution, it is probably a scam or illegal transaction.
• Use a credit card when possible. "The safest way to pay is by credit card," Berry said. "If you don't receive the product or service, you can dispute the charge. If you use a debit card, that money will be taken out of their checking account and will be unavailable to them until after the matter is investigated."
• Complain to your local consumer agency. If the company does not deliver or your identity is stolen, contact law enforcement. You might not be able to get your money back, but at least you can possibly prevent the scam from continuing.
• Do your research. Before engaging any person or company, make sure the offer is legitimate by checking with local and state consumer agencies. See the "Related Links" above for a list of agencies.
Ivan Penn can be reached at email@example.com or (727) 892-2332.