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Consumers More Vulnerable to Scams in Bad Economy

A struggling economy brings with it even more than the ordinary money problems. It also brings a slew of new or enhanced consumer scams that people are falling victim to. When money is tight, consumers are often easier to con into scams.

How can that be when people should be watching their nickels and dimes even closer than ever before? Often it’s because people are so far in debt or feeling so hopeless that they’re willing to give a shot at anything that might solve their money problems.

Some of the most successful consumer scams of late involve investment schemes, work-at-home scams and credit repair frauds. Home foreclosure and mortgage refinancing frauds are flourishing as well, as more people lose their jobs or otherwise fall behind on their obligations.

Be wary of anyone offering an “opportunity” to quickly make money “while working from home.” Most of these things are simply ways to get money from you, rather than opportunities for you to actually profit. Even if the concept sounds good, don’t necessarily believe that a “business” like this will be your way to extra money or financial freedom. Opportunities like multi-level marketing companies have astronomically high failure rates, and almost everyone who gets involved with them loses money.

Also be on the lookout for stimulus scams. Yes, our government is handing out plenty of taxpayer money to various groups. No, it’s not as easy as you may think to get a piece of this “free” money. Scammers are proclaiming that they’ve gotten thousands of dollars as their “share” of the stimulus package. Don’t believe them.

They’re making their money by scamming you out of your hard earned dollars by selling you “guides” to help you get government payouts. Some of them are even offering their guides for “free,” with you paying several dollars for shipping. Consumers are later finding out that they guides are junk, or even worse, that they’ve unknowingly signed up for some sort of subscription service that charges their credit card every month.

Be extra cautious of any gimmick that finds its way to your mailbox, television set, or email inbox. Now is not the time to be giving away your money, even if the “investment” seems insignificant. If you think you’ve found something legitimate and want to get involved, make sure you do plenty of research on the internet before signing anything or sending any money.

Tracy Coenenis an On The Money contributor, fraud investigator and forensic accountant, and is the author of Essentials of Corporate Fraud. You can read her corporate blog here.