Scams During Tough Economic Times

This post is part of our scam category. With scams the best defense is often to discuss them and let people who haven’t run into them know how they work. Unfortunately, talking about scams can seem like a “how to” for scam artists, which IS NOT my intention here. I always love reading about scams and cons, in part to protect myself, and in part out of amazement at how devious people can be when they’re trying to part us from our cash.

During tough economic times, you might hope that scammers would lay low.  Since people are having hard times, they might have a more suspicious attitude (and scammers would do something worthwhile with their time).  Sadly, the scam artists are hurting just like the rest of us and hustling to take advantage of the desperation of others.

Advance Fee Fraud

One scam that is popular during tough times is the advance fee fraud (which we’ve touched on before).  After trying to get a loan, maybe you have the “good fortune” to run into someone who has the inside track on getting all the cash you might need (and at a very attractive interest rate no less).  The details can be whatever convoluted story the scammer dreams up, but the end result is that the loan is yours if you just pay a small “application fee” or “service charge”.  This small fee is all the scammer is after, and once he’s got it, he’s gone (along with the imaginary  loan).

The famous Nigerian Bank Scam is a variant on this. Instead of a loan, a portion of a fortune is yours for the taking, just say that you’ll accept!  Without fail, a string of “roadblocks” will crop up, each requiring you to send a “relatively minor” sum of money.  They will string you along as far as possible, bleeding you dry (and trying to get you to embezzle money “temporarily” from any other sources of funds you have access to).

It’s definitely not something you want to try at home, but Silicon.com and 419 Eater have hilarious records of exchanges where they respond to Nigerian scammers and mess with them (the ULTIMATE is when they convince the scammer to send embarrassing pictures, or to send the “victim” money first, an advance fee for the advance fee if you will).

I loved a blogger’s reaction piece (unfortunately I’ve lost the link) when a scammer called him up offering him free grant money from the government.  He just had to pay them a $50 processing fee.  He tried the obvious and said, “Ok, take the $50 out of my free money” and the woman said they couldn’t do that.  He said he wasn’t interested then, and she kept pestering him why he “didn’t want free money?”  He had to tell her forcefully that it’s not free money if he has to pay for it.  There are a large number of posts detailing that there is no free money for the taking (not even stimulus money) and the books and CDs promising to tell you how to quickly and easily get it are scams.

Employment Scams

Also related to advance fee fraud, an employment scam preys on someone’s desperation to find work.  The service posts in a variety of places (newspaper classifieds, on-line job boards, etc) that they’ll help you find a job, guaranteed or your money back!!!  You go for a meeting, and the “recruiter” spends his time chatting you up and convincing you to write him a big check for the services he’s about to provide.  You’ll be told that there’s no effort on your part, just pay the money, they’ll do all the work, and you’ll have a high paying new career in the near future.  Nothing happens (of course), and they keep stalling you.  Eventually you get angry and their tune changes (NOW they say all that they offered was resume advice and career coaching, and it’s far too late to take advantage of their money back guarantee).

I actually encountered this years ago.  I was job hunting, came across a job that looked like a fit and had an appointment scheduled.  The day of the interview, I was reading up on the company ahead of time, and almost immediate found a string of complaints that had been posted that they don’t actually offer jobs, just try to talk you into paying them money for worthless services.  I called to cancel the interview, and when the woman asked why, I told her I’d done a Google search on their company and after reading about them I didn’t want to have anything to do with them.  She started saying that I couldn’t believe everything I read on the Internet, at which point I politely got off the phone with her.

A host of similar scams prey on job hunter anxiety, like resume services.  They offer a free “proof reading” of your resume, which will result in their identifying “major problems”, and selling you a brand new resume (that they’ve just plugged your information into their standard template, something that will be obvious to the hiring manager or HR department).

At the end of the day, as rough as it is job hunting, you have to do the legwork yourself.  There’s no “hidden job market” you can buy your way into.  While it’s certainly worth getting help with your resume, talking to friends who are good writers, reading resume advice online, going to an Ontario Employment Center, or going to a university’s career services (often they’re happy to help non-students) would be far more effective (in addition to being free).

Have you encountered any scams recently trying to take advantage of people’s desperation in the current economy?