14 financial horror stories

• Leslie McFadden
• On Wednesday October 29, 2008, 6:00 am EDT

In the spirit of Halloween, we dug up the spookiest reader stories to creep into our editor's inbox here at Bankrate. From Nigerian scams to evil customer service tricks, the tales that follow happened before and will happen again.

Take a lesson from these dreadful experiences. Promptly file a complaint with any company that has mistreated you, and report the business to a regulatory authority if necessary afterwards.

Company names have been changed in case angry business entities with lawyers haunt this article.

14 hair-raising financial horror stories

1. Tax refund rip-off
2. Eerie employment offer
3. Web of worthless checks
4. Insane logic
5. Frightfully sweet justice
6. Rotten recording trick
7. Phantom puppy
8. Lifeless interest rate
9. Taken for a magic carpet ride
10. Undead debt collector
11. Wallet weight loss
12. Fake sports memorabilia
13. The company that vanished
14. Grave mortgage lending

1. Tax refund rip-off
Within the last three weeks, I received an e-mail stating I had an IRS refund of $XXX.03. The e-mail directed me to click on a link whereby I should complete the form sending them my Social Security number, debit card number and the security code on the back of the debit card.

I knew immediately it was a scam. First, if the IRS owed me money, they would mail me a check. But most of all, we do not deal in change on the tax returns.

After reading the e-mail, you were directed to click and go to the form. That next page was in the format of the real IRS Web site. They had various links you could press to go to other segments of the site, just like the genuine IRS site.

I forget just how it read but I clicked on something that would take me to local IRS offices -- just had to put in my zip code and a selection of addresses in my county of Pinellas came up. This list included phone numbers. After selecting one of the numbers and dialing it, I got an automated voice telling me to put in my Social Security number.

I know how to override this to speak to an operator so I proceeded to do this. Then again an automated voice told me that I could not speak to a 'live' person at that phone number. I then hung up, logged in to the official IRS Web site -- www.irs.gov -- and on the entry page there is a story about the recent scam that I experienced.

2. Eerie employment offer
I received this e-mail soliciting someone in the USA to collect money for a company and all I would need to do when the checks and money orders came was to deposit them in my account, keep 10 percent and forward the rest of the money minus the wire transfer to someone overseas.

But my bank placed a hold on the money orders for 12 days. Then the bank let me know they weren't good. I turned everything over to the post office to handle the situation since the bank wouldn't do anything. Lucky me I waited to see if they were good.

3. Web of worthless checks
On two separate occasions, I have received checks, in good faith, from popular banks, each with a letter encouraging me to cash the check and forward money. Then I would get additional funds.

The first one I received, I took to the bank printed on the check and asked if it was [real] -- the whole situation was very suspicious. I ripped up both checks, knowing too well it was too good to be true. I also remembered some articles whereby something similar happened and a lady was taken for thousands of dollars and was not suspicious. It pays to advertise these scams. It certainly helped me.

4. Insane logic
In the past year I have received several dozen of what have to be considered scam e-mails from the UK and Nigeria. These are anything from the usual... I am stuck in a hospital dying and have to find somebody to "help" me get $50 million out of the country; will you help me? They or it never asks for money upfront and offers me 20 percent to "help."

5. Frightfully sweet justice
Not long ago, I was ripped off by two employees of Macabre Department Store. I charged a $5.37 purchase to my account and three weeks later my Macabre bill totaled $704.

Only the Macabre sales clerk and I had access to my Macabre card. Three weeks later, my Macabre bill arrived and the total was for $704 at four separate Macabre stores. I immediately called Macabre, closed my account and reported the theft to the Houston Police Department.

I later learned that the two sales clerks were stealing customers' account numbers and were running the scam because no other Macabre sales clerks had any reason to question them. Four police officers and the manager of the Macabre store where I visited marched into the store and arrested the sales clerks. The sales clerks were tried, convicted and sent to the Texas State Penitentiary, Women's Unit, in Huntsville, Texas.

6. Rotten recording trick
A while back, Goblins or Ghouls reps called us. They said they were checking to see if we were satisfied with their service. (Goblins was the long distance; Ghouls was the local at the time). They asked many questions, some of which I said yes to.

Later in the year, I found on my phone bill that I had signed up for something I did not ask for. When I called them about it, they replayed the recording of my saying yes. That was all I said. It had been cut.

I know that I did not sign up for this, as I had been scammed before and am very careful, but this was a company I had dealt with for years. I was not leery -- but now I am of anyone.

I practice never saying yes to anything on the phone. When they say, "Is this Sharon?" I repeat back to them not yes, but "This is Sharon." You can be taken so easily without knowing what is happening -- even with groups you have trusted for years. They are only hiring outside groups that get paid for everyone they recruit to their product.

7. Phantom puppy
I was online trying to buy my autistic son an English bulldog. He loves them. Two scammers tried to get me to send them $150 for the dogs to Nigeria and Cameroon. I talked them down to $100. Luckily my boyfriend said he saw that online scams came from those areas and we picked up on it before it was too late. Now my son is brokenhearted.

I'm a single parent of four so $100 was good for me. I will not look or buy a dog online again -- it broke our hearts. Someone needs to stop them now!

8. Lifeless interest rate
It didn't curdle my blood but it curled my toes ...

On Feb. 2, 2007, I had a little over $2,100 (I'm glad that was all) on deposit in a Werewolf Bank Online Money Market Plus account with an APR of 4.5 percent. Shortly thereafter Vampire Bank acquired Werewolf Bank and on Feb. 12 I checked online to see what new benefits accrued to depositors with this financial giant at the helm.

I found that my new High Performance Money Market account now paid the whopping APR of 0.04 percent, less than one-hundredth of the previous yield -- and with no notice of the change, of course. Boo! Their representative said they were sorry to lose me as a customer.

(Of course it wasn't technically a scam, since money market accounts are subject to rate changes without notice, but it was rather sleazy. Thank goodness for Bankrate.com.)

9. Taken for a magic carpet ride
In Massachusetts, when we were building a house, we gave a rug company, whom we had done business with before and was a reputable business, a check deposit of $2,000 for carpet for our entire house.

The owner proceeded to call me for a couple of weeks asking for more money up front as the carpet manufacturer was requesting more money. A red flag went up after about the third call. We refused to give him any more money before the carpet was delivered and installed. Much to our surprise, we never got our carpet.

While we were waiting for the carpet, we picked up the local newspaper one morning to discover that the owner had overdosed on drugs and died. There went our $2,000 deposit, and luckily we had not given him more, despite his attempts.

In addition, we had stored at his place of business an oriental rug that had been in the family for years. Luckily, we found our oriental rug still in storage. That in itself was a miracle, as he had liquidated most of his carpets and the ones in storage also. But we were still out our $2,000 deposit.
10. Undead debt collector
I don't know if you would consider it a scam or not. I had a tobacco shop in Selbyville, Del. I had to close Feb. 12, 2007. I called Haunted Home Security to stop service. I paid my bill for January, February and March of 2007. Now they are telling me I owe for April, May and June.

I was not there. Also they do not have a contract with my name on it. I have been taking care of the store for two years. By the way, they have got a collection agent after me. I wrote him and told him exactly what I told you and he still continues.

11. Wallet weight loss
Prior to the mass hysteria caused by many elaborate scams today, about 15 years ago or so I practically lived in the weight room of the gym. One day, a bogus vitamin company called me and said that I qualified for a discount of mega vitamins and it was basically free. The cost was $29.99 and I had to mail them $685 for shipping and handling for a two-month supply. Fortunately, I saw right through this scam, but I could have been a victim under different circumstances since vitamins and supplements aimed toward body building can be costly.

12. Fake sports memorabilia
A few years ago my son and I went to a fund-raiser for cats here in Stamford. They had silent auctions of sports memorabilia. My son took the two baseballs purchased to a local store and he said he did not believe that they were authentic.

I wrote a letter at the time to the organization and they forwarded it to the seller. His response was that they were real yet he never provided the certificate of authenticity and was quite insulted that we questioned his integrity.

Then a year or so ago I purchased a basketball signed by Michael Jordon and Magic Johnson, through Shadowy Auctions. It was a gift for my son so months later I gave it to him and he said this does not look authentic, you should get your money back.

So I write an e-mail to Shadowy Auctions-- this is the second bad dealing with them -- and they say that they will contact the seller. The seller contacts me and said she bought them at a flea market and the certificate was sent, and refused to refund my money. I forwarded the e-mails to Shadowy Auctions and their response was nothing they can do.

So yesterday the sports shop had an authentication service come to the store to authenticate items for a fee, and I paid $250 to be told that all of them are frauds. What is worse I have no recourse to get my money back and what is even more sad is that the fund-raiser was a sports memorabilia company.

You can not trust anyone today and that is a very sad testament to this society.

13. The company that vanished
Someone has ripped me off. Last year when I was not working and needed to get some money together, I took my large doll collection (all mint in boxes) as well as some other valuable collectables -- all in perfect condition -- to an outfit that sells them for you on eBay. I didn't have Internet service -- couldn't afford it. Guess what?

Apparently they closed up. Never bothered to notify me -- and they took my property. I called the Hillsborough County Sheriff here in Florida to make a police report and was told they couldn't make a report because I had a contract with that business. Is this a great country or what? If I had a police report, I guess I could put this loss down on my tax return. Sheez!

14. Grave mortgage lending
Zombie Bank approved a $430,000 loan for my wife with an income of $110 a week. She only worked for a retail store for eight months and had no previous work history.

The lender, Blood-sucking Mortgage in Fairfax, Va., did not check her employment and made up fake documents stating she worked for a grocery store as a manager and made up a bogus income to get the loan for her. She worked there for only six or seven months in the past five years. She never worked as a manager and she barely speaks English.

Blood-sucking Mortgage did not tell her about the 2 percent penalty if the loan transferred to another lender within three years. She only realized it when she was at the settlement table in Florida with a Budget truck loaded outside the settlement office.

My wife and I did not even know what types of loan we are getting. At that point, we had no choice but to finish the deal and unload the truck. The settlement agent did not know anything about the other terms and conditions. She suggested we should get more detail from Blood-sucking Mortgage.

When we went for a walk-through, the agent and owner was sitting in a black SUV 200 yards away outside the house. She handed us the keys on the curbside like she was giving us something free. We had no idea how to operate the pool, the garage doors, community entrance and much more.

When I received the second mortgage statement from Zombie Bank, I noticed the original loan amount went up. I immediately called Zombie Bank. They told me it is an index loan and it depends on the market, blah, blah, blah and kept explaining how index loans are calculated in Wall Street each month and other factors.

We were making a $2,300 payment, but $500 was adding each month to the original loan amount because I was not making the full interest payment. The $2,300 was just a minimum payment. In March 2006, I placed the house for sale and it was in the market until February 2007. In February the original loan amount went up by $6,000. We became so divested financially that I have to stay in my job in Virginia and visit my kids only once a month.

Finally, in March 2007 we decided to pay the 2 percent penalty and refinance the loan. The banks were not able to refinance the loan for my wife because she had no job and I was working in Virginia. At last, I found a lender who suggested that the entire loan should be transferred to my name in order to refinance and we agreed.

In July 2007, my family moved back to the same townhouse and we rented the Florida house. I am working two full-time jobs and my wife went back working as a deli clerk in order to cover the two mortgages. I had $33,000 in savings and $7,000 from 401(K). They have all vanished to cover the mortgages.