Top 5 "financial meltdown" Themed scams to avoid.

Kiplinger's has an article that lists a few "financial meltdown" themed scams that are out there taking advantage of people lately.

With the economy in shambles and growing number of unemployed workers I thought it would be a good idea to share this information with other Ats'ers, although I'm sure that most here would see a scam coming a mile away some might not. I have not personally been victim to any type of scam or anything of the like but I don't think I would have to look far to find some one who has(unfortunatly) so lets get started.

Foreign Currency Scams — These scammers offer outrageous returns on investments in foreign currency — taking advantage of the volatility of the dollar to trick consumers into believing their lies. Kiplinger's says:

For example, in May 2008 the SEC charged Las Vegas-based Gold-Quest International with running a Ponzi scheme that raised more than $27 million from 2,100 investors by promising profits of 87.5% from trading foreign currency. Ouch.

Seems that these scammers are attempting to use American's diminishing trust in the dollar to profit. No foreign currency for me thanks.

Energy Scams — Cold callers have been pitching complicated oil and gas scams and soaring energy prices made consumers greedy.

I'm not reall sure what this one all entails but I'll look int it further.

Debt Negotiation Scams — The financial meltdown has left millions behind on their bills — and scammers are ready to offer them a helping hand... Kiplinger's says:

For example, the Federal Trade Commission last fall censured four companies that falsely claimed they could reduce clients' debts by up to 60%. The companies had also advised clients to stop paying their bills without telling them they could be sued by creditors. And the four falsely told clients they could help repair credit reports.

I have local raido stations ads trying to shove this one down the throat's of the public, everyone knows that you have to pay more then the minimum amount due on your credit card(s) bill you don't need to pay someone to tell you that, also if you call your credit card company they will often times work with you to lower your monthly payment.

Bank Phishing — Bank consolidation has put a new twist on the same old bank phishing scams. Kiplinger's says:

Popular phishing schemes — e-mails designed to get you to relinquish private security information, including your Social Security number — falsely tell you your bank has been acquired. The FTC gives this example: "We recently purchased ABC Bank. Due to concerns for the safety and integrity of our new online-banking customers, we have issued this warning message ... Please follow the link below to renew your account information."

Believe it or not this one's a popular scam as many people trust others claiming to represent their bank, sepecially the elderly, Never Never believe anything that a caller or E-mailer tells you if their claiming to be form your bank.Chances are your bank or financial instittution will never solicit personal account information from you They already have it!!

Reverse Mortgages — Reverse mortgages aren't a scam — but some scammers try to tack on other products as a condition of the mortgage. Kiplinger's says:

A more common problem: obliging reverse-mortgage applicants to buy additional products or services as part of the loan agreement. Lanier, the Florida official, says some reverse-mortgage providers push clients to buy deferred annuities. These insurance products can come with high fees and tie up cash that the borrower may need immediately. New rules from HUD prohibit lenders from linking reverse mortgages with other products.

Lets just say only obtain the services you want and nothing more, I would atribute this on to the beliefe that all comsumers are ignorant and thus these perpetraitors would stand to profit from them, I believe this one would include alot of fine print so check all paperwork with a fine tooth comb before signing( I know, I know your saying " thats obvious what do ya think were stupid?") but many people get overwhelmed with the process of signing contracts and sales people are very profficiant in getting you through the process very quickly so be carefull.

www.kiplinger.com...?kipad_id=1
www.reversemortgageguides.org...
Edit to add link to free reverse mortgage information site.

To report scams contact your states BBB.
[edit on 13-12-2008 by alyosha1981]

[edit on 13-12-2008 by alyosha1981]

What? This is ATS? And theres a thread on something we actually need to know? Let's ignore it.

Quite an entertaining article but fundamentally ... a scam is a scam regardless of the medium.

Anyone who sends their money to some stranger/unknown company who's merely made promises of big profits needs to rethink their decision making.

For the sake of the matter, why aren't they mentioning the mutual fund scam then ? When most people's 401K's are going up in smoke through supposedly legit companies such as Fidelity or JP Morgan ? Where I've accounts.
What about Bear Stearns, Lehman, MerrilLynch and others who've vaporized people's retirement accounts?

Foreign Currency actually is a legit means of exchange and is a necessity in international trade. It is how all the foreign products that we purchase are paid for in the producer's native currency. The rest of the world doesnt use Dollars for their purchases.

That Sony flat screen TV you bought here in the USA goes to Sony's bank account at Bank of America in California where it is converted on the Foreign Currency exchange (FOREX) to Japanese Yen from the US Dollars you paid allowing them to pay their employees at Sony in Japan.

But with all investing...as they say, if it sounds too good to be true...then it most likely is.