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Top Financial Scams of 2012

Living in the age of information and technology comes with many conveniences, but it also means we need to pay extra attention to potential scams. Here are five of the biggest financial scams of 2012 and how we can protect ourselves.

Timeshare Scams

If you own a timeshare, beware of fraudsters posing as real estate agents or investors encouraging you to buy or sell your property. This past spring, police busted a group in New Jersey that defrauded over 200 timeshare owners of more than $2.4 million. Security experts say contact is typically made by phone or email and you’ll often be asked to transfer large sums of money quickly.



“Beware of anybody that wants you to act fast or pay a fee in advance,” says Deborah Marrone, assistant regional director for the Federal Trade Commission’s Northeast Regional Office. “Another red flag is if they don’t want to send you information through the mail. You should always make a decision after obtaining information outside of the transaction.”

You want to also verify the company reaching out to you through your local Better Business Bureau or State Attorney General’s office. Also check with your state’s real estate commission to make sure the agent calling you is, in fact, licensed.

Payday Loan Scams

Payday loan scams have led to some 4,000 complaints over the last two years. Borrowers of these high-interest, short-term loans might get a threatening phone call saying they have to make repayments immediately, hundreds of dollars in some case, or risk getting their wages garnished or even be arrested.  

Marrone says that individuals who take out payday loans are particularly vulnerable. “They have very limited financial resources, so they’re likely to panic when they get one of these calls,” she says. “Some advice we give to consumers is don’t ever give out your personal or financial information over the phone. If you have a payday loan out and you’re unsure if the debt collector is legitimate or not, contact your lender to find out. Tell them to send you information in writing. Don’t respond to anything over the phone.” Marrone also says don’t hesitate to hang up and block the number if the debt collector persists.

If you discover that this caller is not legitimate but somehow still got ahold of your banking information, you want to call your bank immediately and ask them to issue you new cards and begin monitoring your account.

Hotel Wi-Fi Cyber Crime

Next time you’re traveling, be cautious when connecting to your hotel’s Wi-Fi. Cyber criminals have been caught infecting travelers’ laptops with malicious software through pop-up windows. Don’t click on any requests for downloads, and make sure each website you visit is fully encrypted with its URL starting with “https” instead of just “http.”
 
Bank Imposters

Speaking of internet-related scams, look out for shady emails from fraudsters posing as your bank, the FDIC or the Federal Reserve. The email might say that there’s a problem with your bank account or a recent transaction. It will usually include a link to supposedly help you resolve the issue, but click on it and you may accidentally download a virus that infects your computer and steals your bank account information.

“If the bank is actually trying to reach you, they’ll do that with the phone number that they have on file for you. They’re not going to send an email,” says Marrone. “But if you’re concerned, call your bank’s main number. Don’t ever respond to one of those emails.”

Free-Trial Scams

Finally, who doesn’t love a free deal? Well, you know those free-trial ads you see on the Internet for weight loss plans, teeth whiteners and supplements? Some have been found to be 100% fraudulent, and they will charge your credit card or bank account each month.

In a recent case, the FTC cracked down on one company that was charging consumers $80 a month for products and services they thought they were getting for free.

To protect yourself, use a credit, not debit card, when shopping online since your bank can more easily reverse the charge if there’s a dispute. And it’s a good habit to check your bank statements regularly – every day, in fact – to ensure transactions are correct.

What are some other top financial scams of 2012? Connect with me on Twitter @Farnoosh and use the hashtag #finfit.

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