Recessions always bring out the vultures, and these days they are a step ahead of technological trends, as scam haven San Diego is learning once again. Con artists claim they can fix your credit, rescue you from foreclosure, make your mortgage easier to handle, and provide you with debt relief. “Loan modification programs can be legal, but these people can’t take up-front money to do loan modification,” says Steve Robinson, deputy district attorney. “These people are going out and about, saying they will modify your loan, they will deal with the mortgage company, but the crooks take the money and run.”
So give the boot to one offering to deal with your mortgage company if you are supposed to pay a fee in advance or sign for a so-called rescue loan. There are legitimate nonprofit organizations that help people rearrange their debts, but the for-profit outfits often smell. So-called credit repair is an old scam: the Federal Trade Commission says it has never found a reputable company that can erase problems on a credit report. Indeed, many of the credit repair outfits are multilevel marketing (also called network marketing) organizations that are essentially pyramid schemes.
Computer hackers are getting important information from people seeking employment. The bandits hack their way into a company’s job-application site and swipe email addresses and Social Security numbers. You could be the victim of identity theft. It’s best not to give your Social Security number on a job application. Bandits are also posting phony job listings on craigslist in attempts to “phish” (trying to get critical personal information via the internet) that could set you up for someone stealing your identity and draining your bank account.
When unemployment soars, people are more likely to get suckered into employment-opportunity scams. Many are the so-called work-at-home schemes — stuffing envelopes, etc. Normally, these involve some kind of an up-front payment (say, to buy a kit) and should be avoided. Then there are the letters from Nigeria — and almost everywhere else — promising you quick money. All are scams.
San Diego’s Edward Bevilacqua touted a classic business-opportunity scam. He was convicted this year on multiple counts of securities fraud and is now in prison serving a seven-year term. Operating out of such places as Fallbrook and Escondido, he ran companies with the names Bikini Vending and 360 Wireless. In tandem with a character in Orange County, who was also sentenced to prison, Bevilacqua told people that they could make a fortune by owning freestanding internet kiosks that housed a computer and a mechanism to accept payments. Presumably, the kiosks would allow the public to access the internet for a fee from convenience stores, hotels, bowling alleys, and the like.
More than 450 consumers bit. They were promised that they would own a kiosk, from which they would get substantial monthly income. But, said the Federal Trade Commission and the San Diego district attorney’s office, it was a Ponzi scheme. Those monthly payments supposedly generated by the kiosks “were in fact monies received from new investors,” said deputy district attorney Steve Davis, who recently retired. After the Federal Trade Commission stopped the scam and got a multimillion-dollar judgment, the district attorney took up the case and won a criminal conviction.
Every time there is a technological advance that should benefit consumers, the scamsters seem to streak ahead of the curve. According to security firm Webroot, 30 percent of social networking users have experienced an attack, such as a phishing scam or a virus. CSO Online says that celebrity news, such as Michael Jackson’s death, springs the malefactors into action. Facebook and Twitter messages will promise secret information. Those who bite end up with malware (malicious software) on their computer. Such a ploy could be a phishing expedition. Or, says CSO, a user might get a message: “Did you see this picture?” with a link included. Click the link, and you will be entering log-in credentials on a fake screen.
Watch out for other scams. “Skimmers” install an overlay device on a gas pump or ATM. It swipes your name, account number, and expiration date off the magnetic stripe on the back of the card. There are variations on phishing, says the Credit Union National Association. “Smishing” targets cell phone users who use text messaging. You might get a message thanking you for signing up for a dating service and saying you will be charged $2 a day unless you cancel your order. When you try to cancel, you’re sent to a phishing hole. “Vishing” is a variation on an old theme: you get a phone call from an automated random dialer saying your credit card has been used illegally; you’re told to call a special number where you will be asked to give out critical account information.
Today’s best advice: when in doubt, don’t click.
In a recession, crooks are hungrier. Therefore, scams against the elderly pick up. Shaun McGrady, lead attorney for Senior Shield, a new program of Elder Law & Advocacy of San Diego, says home workmen will take advantage of frail elders. He cites the case of a contractor who did work for a woman with Alzheimer’s disease. “She said she didn’t have cash, so he went out and had loan documents prepared to pay for repairs that did not need to be done. She hadn’t driven in 25 years, and he convinced her to have the garage redone. He charged seven times the going rate for replacing the air conditioner.” The district attorney’s office is looking into it, says McGrady.
Furniture companies convince older people that they can get adjustable beds paid for by Medicare. But those companies may be in no position to make such a statement, says McGrady.
Sue Macomber of Utility Consumers’ Action Network (UCAN) says that there are Medicare scams. “The Medicare drug discount card is available to people enrolled in Medicare, but not everyone on Medicare is eligible,” says Macomber. Approved cards may be offered by private companies but should display the “Medicare Rx Approved” symbol. “If these cards are pitched door-to-door, by email, or come in the mail, start performing the needed due diligence,” she recommends.