In tough times, people often get a bit desperate. Unfortunately, desperation often plays into the hands of scam artists, making people more susceptible to being cheated.
John McGlamery, senior deputy attorney general with the Bureau of Consumer Protection, says it's no surprise the biggest scam running in Nevada right now is centered on the mortgage crisis. Unscrupulous operators are promising they can save your home and help you recover from huge debts - for a fee, of course.
But he said there are a number of other scams trying to separate innocents from their money, most of which are very familiar to him and his investigators even though they may have new twists to them.
McGlamery said the list for Nevada is similar to a list put out by consumeraffairs.com.
Unscrupulous operators claim they can save you from foreclosure but often just take the money and do nothing.
McGlamery said lawmakers changed the rules to require those claiming to specialize in mortgage repair to get a license. But he said they created a problem with another change in law.
"It used to be they couldn't charge until the work was done, but the Legislature changed the law and now they can charge up front," he said. "Some of them take the money and disappear."
These cheats put a small monthly charge on your credit card or phone bill and hope you don't notice, according to con
sumeraffairs.com. McGlamery said the most common is billing customers on their phone bill for services they never ordered such as voice mail or e-mail.
He said people often pay $20-$30 a month for months before realizing they're being charged. He said the charges normally show up on the last page of the phone bill.
McGlamery said those third-party billings are often by just four or five company names: USBI, ESBI, ZPDI, ILD and Payment 1.
Work from home
Consumeraffairs.com says these scams resulted in more than 100 law enforcement actions in 2008. McGlamery said one of its mainstays is the "secret shopper" scam in which consumers are recruited to visit a retail business and report back. The consumer has to pay up-front fees and winds up with no money or merchandise.
Another version has shoppers wire large amounts of money to test the effectiveness of the service. They get a check first to cover the funds, but the check bounces.
One version McGlamery is less sympathetic about is the people hired to pick up checks from a drop box and forward them, or people who agree to have checks deposited in their account and forward them for a cut. Those people are just helping scammers cover their tracks, he said.
Sweepstakes or lotteries
A caller or letter states you've won a sweepstakes or lottery prize and all you have to do to claim it is send them some money to cover the taxes and fees.
"There's no such thing as winning a sweepstakes you didn't enter," McGlamery said.
Phony government official
A caller poses as someone from a government agency, often saying the consumer has broken a law and must send in a large fine to settle the violation.
McGlamery said a common version of this scam will soon reappear with the tax season - someone saying they are from the Internal Revenue Service and the consumer is entitled to a refund, all they have to do is confirm their identity by giving the caller their Social Security number.
A related scam involves a call from someone claiming to be the consumer's banker, saying there is a problem with his account. All they need to confirm your identity and fix the problem is the three digit security code on the back of the credit card. Once they have that, they can bill that card for anything.
"IRS and banks do not contact you by e-mail. And if a bank phones you, they instruct you to call the number on the back of your credit card," he said.
Federal and stimulus grants
One phony scam being used against small businesses promises they can get your business a federal or private grant.
"They charge people $600 to get these grants that don't exist," said McGlamery.
He said the Small Business Administration is where money for small business comes from and normally in the form of a loan, not a grant.
Consumeraffairs.com reports an increase of telemarketers collecting funds for charities.
Just this past week, the Reno Fire Department and consumer officials were warning of a scam in the Reno area seeking contributions to help cover the cost of firefighting. Fire officials say they don't solicit for operational costs and have nothing to do with that telemarketing scheme.
McGlamery said those who want to cheat people are always trying to come up with a new way to do it, so beware of giving anyone any personal or financial information unless you are certain who you're dealing with.