Avoid Getting "Tricked" for Your Money on Halloween

October 29, 2013, Written By billh

It’s trick-or-treat time, and the Consumer Financial Protection Bureau is using Halloween to warn consumers about the tricks scammers use to steal their money.

The CFPB reports that 25.6 million adults, or 10.8 percent of the U.S. adult population, were victims of financial fraud in 2011. The fraud ranges from direct marketing and affinity scams to pension poaching and identity theft.

Here are some ways to determine if a financial product or service is a scammer’s trick or a financial treat.

Phantom Riches

Many offers try to lure you with dreams of getting rich quick, enjoying great benefits for a small fee or investment, or a loan with a small rate if you pay a security deposit first. If you send in your deposit, the money disappears with the scammer who made the offer. Be very leery about paying any advisor who offers to help you qualify for a benefit.

Superheroes

Scammers try to convince you that they have superpowers with inflated credentials and experience that can help solve your problems. There are mortgage relief companies that promise to help with mortgage or foreclosure problems for an up-front fee. They not only don’t fix your problem, they leave you worse off than you were. That advance fee is also illegal and you can report them by calling (855) 411-2372.

Zombie Debt

Unpaid debts never die. Debt collectors can begin to contact you today to demand payment for a debt from years ago. Financial institutions sometimes sell old debt to other businesses, which then try to collect on it. Earlier this year, a report by the FTC found that debt buyers may not receive any supporting documents from the debt seller such as account statements or the terms and conditions of the credit. There is no guarantee that the debt information at the time of sale will be accurate. Sellers even have a disclaimer that they are selling debts “as is.” Hence, debt buyers may have inaccurate or insufficient information when they try to collect on debts. This can lead to collectors attempting to collect the wrong amount, or trying to recover from the wrong person. Here are sample letters from the CFPB that you can be used to respond to a debt collector.

Vampires

Fraudsters make victims of the unsuspecting with special deals or a one-time offers that lead consumers into financial booby traps. Limited time offers where you’re pressured into signing up should be a warning sign. Do your thorough research and know what you are signing. You have the power to say no to any offer.



The information contained within this article was accurate as of October 29, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.