Tempted by an offer that seems too good to be true? Chances are it is. Don’t be fooled by these modern-day con jobs.
1. Mystery shoppers
A company promises you’ll earn thousands a week by shopping—and later filling out forms.
The scam: The company mails you what looks like a real check for $2,000 to $3,000 with instructions: Deposit it and use the money to buy something at a store. You keep part of the remainder as payment and wire the rest back within 48 hours. Sounds great…until, a week later, your bank says the check is counterfeit. Only the cash wired from your account to the mysterious company was real.
Smarter strategy: Legitimate mystery-shopper companies never ask you to return funds. Instead, after you’ve completed the assignment, they pay you on average $10
to $15 per store. Visit mysteryshop.org and volition.com (which features a directory that contains more than 150 companies), as
well as forums where you can learn which businesses are to be trusted.
Risk factor: Up to $3000
2. Student loan debt relief
A company claims it can broker deals to lower your payments or pull you out of default.
The scam: Many debt-relief companies are simply providing consumers—who are often prompted to release private information—with the paperwork required to enroll in federal repayment programs. You can sign up for those programs without charge.
Smarter strategy: Borrowers with federal student loans can enroll for free in repayment programs that fit their budget, such as income-based or pay-as-you-earn plans; there are also options to get out of default. Use the U.S. Consumer Financial Protection Bureau’s tool for federal loans, Repay Student Debt. Another good resource is studentloanborrowerassistance.org.
Risk factor: Initial set-up fees can be as high as $1,600, and you might be subject to ongoing monthly costs of $20 to $50.
3. Credit repair company
A business guarantees that it will erase blemishes from your credit history forever.
The scam: When you’re desperate to fix a credit file that’s undermining your ability to get a loan or land a job, it’s tempting to hire a credit repair company that promises it
can remove all the negative information from your records. Don’t be deceived! That’s a lie to lure you in. The company cannot guarantee removal of that lien, judgment, foreclosure or bankruptcy. If, however, there are mistakes in your credit history, you can call the credit reporting agencies yourself and get the errors removed from your report—at no charge.
Smarter Strategy: Because your payment history and debt account for nearly two thirds of the points on your credit score, you have to take care of your debt before you can save your score. For a low fee ($20), or none at all, a nonprofit such as the National Foundation for Credit Counseling can help you establish a customized debt-management plan, through which your creditors are repaid under new terms. Bear in mind, however, that certain items, like late payments and bankruptcy, remain on your report for years.
Risk factor: Up to $3000
4. Investment seminars
You’re invited to a lunch where a so-called expert raves about nontraditional investments.
The scam: You send the “adviser” a check but never get a return on your money.Even if you ask for your cash back, she might say your money is locked in for a certain time or—because no investment is ever guaranteed—the market took an unexpected turn for the worse, depleting your investment entirely.
Smarter strategy: It’s OK to attend educational seminars, but be sure the expert is a registered, licensed adviser or broker at finra
.org/brokercheck and that the investment is registered with the U.S. Securities and Exchange Commission. Use the Financial Industry Regulatory Authority Scam Meter to see if an offering is fraudulent. And invest only what you can afford to lose.
Risk factor: The sky's the limit, depending on how much you're willing to turn over.