Top 10 Scams of 2008

Some Lists Never Go out of Style

You don’t have to lose $50 billion in a Ponzi scheme to get scammed. ConsumerAffairs.com has announced the top scams of 2008. New ones have joined the classics, but if you’re not careful, they all lead to the same place — a lighter wallet.

1.  Foreclosure rescue scam.
Record numbers of distressed homeowners paved the way to the #1 spot for this particular scam, a retread of 2007’s #6 scam, “We’ll Buy Your Home.” In this new version, homeowners make payments to a “rescuer” and sign over the deed to the house.  This is supposed to stop foreclosure, but instead it aggravates the problem — the homeowner has signed over his home to the scammer, losing all equity, yet still owes the full mortgage balance to the lender.

2.  Unauthorized charges.
Ever sign up for a “free trial”? Often free trial offers are extended after making a credit card transaction with another merchant. If you don’t cancel the trial, you’ll be charged monthly for the product or service. In more devious cases, scammers place a small charge on your credit card or phone bill and hope it goes unnoticed. A nickel can add up to big profits for the perpetrators, and that’s why this fraud is up from the #8 spot last year.

3.  Work-at-home scams.
These scams came in at #2 last year, and they remain common. This year “secret shopping” is the most prevalent scam, promising income and free merchandise but resulting in small losses when upfront fees are paid or big damages when victims wire large sums of money to “test” money-wiring services.

4.  Phony “government official” scam.
Fraudsters masquerading as government officials captured the #7 spot last year, with IRS scams the most common. Now the Food and Drug Administration says consumers have been offered discounted prescription drugs from scammers pretending to be with the agency. Victims are asked to wire funds to the Dominican Republic, but after sending the money, the fake FDA warns the consumer that they’ve violated the law and must wire money to pay the fine or face legal action. Other common frauds impersonate the Federal Trade Commission and tell consumers they’ve won a lottery or sweepstakes.

5.  Financial meltdown scams.
The financial crisis has led to an increase in credit counseling scams, payday loans, phony job offers and investment scams. Phishers have also milked the crisis by promising to offer advice but instead merely collect personal information about you that they sell to other crooks, or they promise to provide you with quicker access to economic stimulus checks.

6.  Campaign 2008 scams.
Last year’s election generated a lot of excitement — which scammers were quick to exploit. Spammers sent emails with links to President Barack Obama’s acceptance speech. To watch, consumers had to download a program. But instead of playing the video, the “keylogger” recorded user IDs and passwords. Other fraudsters claiming to be from the voter registration
board called people advising them of a “problem” with their registration and tried to collect their Social Security numbers.

7.  Fake lottery scam.
Deposed King Abdul Abacha (and his urgent request to help transfer funds out of Nigeria) is said to be the ruler of email scams. But when it comes to snail mail, nothing beats fake lotteries. How it works: Victims receive a letter and a check saying they won the lottery. They are told to cash the check and send part of it back to cover taxes and fees. Naturally, the check is bad, and the victim is out the cash sent to the scammers.

8.  Charity telemarketing scam.
Telephone fraud has been around nearly as long as the telephone, and you’d think that the Do Not Call List would help to prevent fraud. But charities are exempt from the list, clearing the way for fake charities to continue calling you. They collect money, but little, if any, goes to support those they purport to help.

9.  EPPICard scam.
As many states have moved to debit-like EPPICards to administer payments and benefits, a new scam has made the list. To take advantage of the people using them, scammers have been sending fraudulent text, voice and email messages warning of a problem with the victim’s EPPICard and threatening to close the account. When the victims contact the fraudsters, their personal information is stolen and their account is drained.

10.  Kevin Trudeau’s “Weight-Loss Cures ‘They’ Don’t Want You To Know About.”
This book promises an “easy” recipe for slimming down, but when consumers purchase the book, the FTC has charged, they find that it describes a complex, grueling plan that requires severe dieting, daily injections of prescription drugs that consumers cannot easily obtain and lifelong dietary restrictions. Trudeau was ordered to pay back more than $5 million in profits and he is banned from promoting the book in infomercials. Other too-good-to-be-true  weight loss scams abound.  Trudeau’s latest book and infomercial purportedly reveals how to get rid of debt/credit problems.