Scams Add Peril to Hard Times

The sagging economy has inspired a number of scams -- from mortgage schemes to work-at-home ploys to tax and stimulus frauds.

Over the past five years, the FBI's mortgage-fraud caseload has jumped by nearly 400 percent, to more than 2,100. The general rule still applies: If it sounds too good to be true, it is. If, for example, you receive a call from a firm that guarantees to stop a foreclosure but asks you not to contact your lender, it's a scam: Your lender is the only route to modifying your mortgage or preventing foreclosure.

If you're looking for quick cash, be on the alert for job-related scams, such as an ad that promises you can earn money at home by stuffing envelopes -- it's likely to be a pyramid scheme. You pay a fee upfront, and to make money you place ads and wait for people to respond and pay you a fee. Before you participate, ask the company to spell out, in writing, exactly what the job entails and whether you'll be on salary or commission. Also run the company's name by the Better Business Bureau and call the firm to make sure it's soliciting workers.

Another sneaky ploy involves bogus mystery-shopping firms that promise to pay shoppers to check out local stores. Scam operators may send out a letter with the company logo of an actual mystery-shopping service plus BBB certification, along with a check for several thousand dollars. The letter tells recipients to deposit the check, evaluate a money-wiring service, and then wire part of the money back to the firm to test the service -- often within seven days. The check bounces after you've wired the money back.

Now that credit is harder to get, the Federal Deposit Insurance Corp. has reported an increase in "advance-fee loan" scams. Someone calls and says that if you pay a fee of $500 or $1,000 upfront, you'll be guaranteed a loan. But you never get the money.

Finally, watch out for "phishing" scams. You get a phony e-mail from a trusted institution that asks for your Social Security number or other information that could be used to tap into your financial accounts. One prevalent scheme is an e-mail promising a tax refund -- but the Internal Revenue Service never e-mails taxpayers. Phony Bank of America and Citibank messages also are common.