Three Scams to Avoid in Tough Times

Many people have lost their jobs in the last few months as the economy falters. Scam artists are still fully employed, however, in good times and bad. So be careful.

“If it sounds too good to be true, it usually is,” says Ralph Evangelista, CPA, of East Brunswick. This is a good time to take extra precautions whether you are spending, investing or simply supplying personal information to anyone for any reason. “Know who you are dealing with,” adds Evangelista. “And it is best to obtain references.”

According to the New Jersey Society of Certified Public Accountants (NJSCPA), the overall threat of being defrauded by a con artist increases during a recession. Money becomes tight and thieves work overtime to get their hands on yours. CPAs caution against these scams – and offer advice on how to avoid becoming a victim of three scams that are on the rise.

1. “We Can Repair Your Credit”

During a recession, many people fall behind on their credit card payments and other debts. If you miss enough payments, it can harm your credit rating, which will mean you face higher interest rates or may fail to qualify for a new loan. You may also find yourself sued for payment or harassed by debt collectors.

Con artists take advantage of this situation by creating fake companies that offer to clean up your credit. This can be confusing, because there are legitimate, accredited credit counseling agencies that do advise people on how to improve their debt situation.

Legitimate agencies might, for example, help you create a more manageable payment plan for your debt. No one can quickly erase information from your credit record, or repair it immediately, so be wary of offers to do so. And remember, if there are mistakes on your report, you can resolve this problem yourself by contacting the three national credit bureaus. You should also be very suspicious if a company asks for an up-front payment.

For more information, visit the Federal Trade Commission (FTC) website at and look up the article titled “Credit Repair: How to Help Yourself.” The FTC site also has information about working with credit counseling agencies and other valuable information in its Consumer Protection section.

2. “We’re Your New Bank”

Due to troubles in the banking industry, many financial institutions have been taken over by an entirely different organization. You may find that the institution you’ve banked with for years may suddenly have a new name. Not surprisingly, con artists have figured out a way to take advantage of this situation, according to the FTC.

Scammers send emails to consumers pretending to be an organization that has just bought your bank or your mortgage. The emails demand that you verify or confirm your personal financial information, such as your account or credit card numbers, Social Security number, account passwords or other confidential information that they will then use to access your accounts or steal your identity.

The FTC warns that you should never respond to these phishing emails. Don’t click on the links in the email, open any attachments or call any phone numbers listed in it. Instead, it’s best to contact your bank or lender directly using the phone number listed on your bank or mortgage statements and confirm if it requires information from you.

3. “You Can Work from Home”

Many people make a living working in their homes, but there are also scam companies that claim you can make thousands of dollars immediately by doing so. Once again, the dead giveaway is large up-front payments that many of these scammers demand, usually for materials or equipment that you supposedly will need to do the work. Again, if it seems too good to be true, it almost certainly is.

These are just a few of the consumer scams you may encounter, especially during a recession. If you’re uncertain about any financial decisions, remember that your CPA can give you the advice you need to make the best choices. If you don’t have a CPA, you can easily locate one online using the NJSCPA’s free, online Find-A-CPA service. Just go to, and in a few clicks you can locate a highly qualified professional who can assist you.

For additional information about personal finances and protecting yourself against fraud, visit You can also subscribe to Your Money Matters, the NJSCPA’s award-winning free, monthly email newsletter.

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