Scam artists flourish in the recession

Most scam artists use the Internet to implement their schemes.


Tess Vigeland: It's probably not fair to call payday lenders scam artists. After all, you know upfront that the loan is going to cost big bucks. With true scams, it's all about pulling the wool over your eyes. And in this Great Recession it is easier than ever for desperate folks to fall for them. With us to talk scams, scammers, and the people they scam is Sheryl Harris. She writes about consumer finance for the Cleveland Plain Dealer. Nice to see you again.

Sheryl Harris: Well, it's nice to be back, thanks.

Vigeland: I hope this doesn't sound unduly harsh but it is 2010. How are we still falling for these things?

Harris: Well, the fact is there are some really low-hanging kind of scams that are obvious scams.

Vigeland: The Nigerian banker.

Harris: The Nigerian banker, we've all heard of the Nigerian banker, but the fact is the way these scams work, the way they're packaged, can be much more sophisticated.

Vigeland: Can you give us an example of that?

Harris: This is from one of my readers. She had a house and she was letting out a room. She heard from a woman who said she was in London. She said, "Oh, I'm coming to school in Cleveland. This room sounds perfect for me." There was a lot of back-and-forth emails. And the girl sent a deposit check for the deposit and the first few months of rent. And shortly after that, the girl contacted her back and said, "My father has been in a terrible accident. I can't come to school anymore. I need that money back to help take care of him. Please keep the deposit. Please send me back my rent money." Well, what kind of human can hear a plea like that? And not do it?

Vigeland: Of course.

Harris: And lo and behold the check turned out to be fake. All of these scams have in common that you get a check and you're asked to deposit it. Any ordinary person thinks, when that money shows up in your bank account the check has cleared. That is not the case. What happens is, the bank is responsible to get you your money within a certain amount of time. Money for your checks you deposit. It meant, they're coming up against their deadlines so they're making that money available to you. When they find out that check is counterfeit, they take the money back out of your account.

Vigeland: What kind of time frame are we talking about then? I mean how long should you wait before finding out that that check actually did clear and was a valid check?

Harris: Wait three weeks, wait four weeks. Wait a month. Sit on it. You have to make sure that you're going to be OK at the end of this.

Vigeland: I understand that also this is not just a cautionary tale for individuals, but corporations can get caught up in these kinds of scams.

Harris: Yes, they can and there are hundreds of law firms across the country.

Vigeland: Law firms?

Harris: You get an e-mail from Asia and it says, "We're a big company here, we do a lot of business with companies in the United States and some of them are not paying us. So we would like to hire your firm to represent our interests there, collect our money." That's a very typical scenario for a lot of different law firms. But, they'll contact the law firm again and say, "You know, one of the companies has actually agreed to go ahead and issue us a check, and since you're handling our interests there anyway, we're going to have them send it to you. You deduct your retainer, just wire us the rest at this bank." And I'm not talking a little money either, I'm talking about $200,000, $300,000, half-a-million dollars. These are huge scams.

Vigeland: But it is the exact same scam as the woman with the sick father?

Harris: It's exactly. It's got the same markers. It's the e-mail, it's from overseas. It's got a check attached, it's got this request that you wire the money back. Those four elements are the same in all of these.

Vigeland: I want to ask you real quickly about another common scam that happens, the work-at-home schemes. You'll see fliers on telephone poles, you'll see it advertised on the internet and you think, "You know what, it sounds easy, I need some money right now so I'm going to go ahead and do it." What are those?

Harris: A lot of those are accounts processing scams.

Vigeland: What does that mean?

Harris: It means the old check scam that we just talked about. It's the, they're being asked to become an agent of this overseas company in the United States, set up the bank account, receive checks from all over, deposit those and then wire the proceeds over after they deduct the pay.

Vigeland: It sounds like like I can't trust anybody.

Harris: You certainly have to be cautious about who you trust.

Vigeland: Sheryl Harris is the consumer columnist for the Cleveland Plain Dealer. Thanks so much for coming in.

Harris: Sure thing, thank you so much.

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Making homes affordable Chase Scam:
Making Home Affordable is a government program that, if approved by the government, a homeowner can then apply to their mortgage holder to have the monthly payments of their mortgage lowered to 31% of their income. The homeowner still owes the same amount, but the amount paid back per month is income sensitive.
But I suspect folks over at Chase have been reading a lot of Kafka lately and they’ve been inspired to new heights of brilliance in order to escape ever having to actually grant an MHA modification. They simply construct ways to lose paperwork. It’s so elegant in its simplicity yet its baffled and then destroyed thousands of people’s lives who were diligently trying to provide the required papers.
These people are caught in a terrible loop of Chase "losing Documentation" and making people continually re-send in forms. FOR YEARS. We even had a mortgage specialist at a Chase bank branch check all of our paperwork and fax them to the appropriate place only to have them claim they didn't receive all the required information.
One gorgeous example of the devious cleverness of Chase is a scam based on their own bank statement paperwork. Please admire its Kafka-esque brilliance.
On Chase bank statements the last page always reads "left intentionally blank" but they do not number this last page. For example, a Chase account may have 6 pages and all the pages say, i.e., 1 of 6, 2 of 6, et cetera, but page 6, the blank one, is not numbered 6 of 6. We have been continually turned down for an MHA because we are not sending them, Chase- holder of our mortgage and the bank where we have our accounts- complete bank statements even though we do send them that 6th page. Since it doesn't say 6 of 6 they claim our application isn't complete and make us start all over from the very beginning. We’re only going on Month 7 in the Chase Paper chase. Evidently that's nothing, most people who have tried have been trying for twice this long. Many, many people have already lost their homes because of this scam.
There are some websites devoted to this issue with Chase bank. Speculation is that they string people along who believe they might actually receive a modification so that they continue to pay a little longer before the inevitable foreclosure.
the websight Propublica is doing a great job tracking this issue.

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