Caring Currents

Tough Financial Times Bring Out the Scams

Last updated: Oct 24, 2008

Bigstockphoto poor grandma with russian mone 2755062.jpg

Scammers are finding more ways to take advantage of the current financial crisis -- and consumer advocates are warning people to be careful of new schemes designed to exploit people's fears about the economy.

According to a recent story in US News, "The economic uncertainty plaguing many Americans gives salespeople a new pitch to persuade consumers to hand over personal information and buy financial products that may not be in their best interest."

The new scams pegged to recent financial fears include:

  • Phishing schemes: These usually involve e-mails appearing to be from a legitmate company or bank, requesting the recipient to click on a link or give up personal information like bank and credit card numbers, passwords, or Social Security numbers. According to US News, the new phishing scams involve e-mails appearing to come from a bank that has recently been acquired, asking the recipient to confirm personal information. As the article points out, legitimate banks will never ask for personal information in an e-mail.
  • Sweepstakes: Whether through online pop-up ads or paper mailings, sweepstake scams tend to crop up around times of financial uncertainty. Although the prizes may be appealing, the chances of actually ever winning through these offers is close to zero. Plus, many offers require purchasing something or paying a processing fee to enter, which should be a red flag for anyone at the computer who's considering whether to click on the ubiquitious offer for a free laptop or iPod.
  • Free lunch seminars: These lunch offers usually come packaged as free investment seminars or retirement money management seminars but are actually elaborate sales pitches for one specific product. Seniors may sign up for a seminar thinking they'll get some savvy investment tips or strategies for managing retirement accounts in a down market (along with a complete buffet lunch), but usually the seminars consist of nothing but sales presentations with frequently misleading claims.
  • Unsolicited sales pitches: Shady investment salespeople may try to convince seniors that they're peddling a sure thing, but as anyone whose been watching the news lately knows: There are no guarantees when it comes to most investments. Seniors are often specifically targeted with pitches for annuity investment products that are touted as a sure thing, according to the AARP, which fields complaints about the schemes.
  • Bailout scams: People in several states have filed complaints about automated calls purporting to be from the Better Business Bureau (BBB) offering credit cards with low-rates tied to the recent financial bailout. The calls aren't affiliated with the BBB, according to the finance site, which says that the callers may be trying to get personal information.

Remember that there are a few easy ways to protect seniors (and yourself) from falling prey to these schemes: Never give out personal information via the computer or the phone in response to unsolicited offers; don't invest in an unknown financial product or company without running the offer by a certified financial planner or an attorney; and sign up with a credit monitoring service that will alert you to any changes in your credit file or potential identity theft.

Image by