Wherever financial misery exists, expect scam artists to follow close behind, ready to take advantage of it. Too often these days, when the phone rings, it is some helpful person who claims to have a way to rid you of your financial problems. But in reality, what they often really want to rid you of is your money.
Various government agencies have recently posted examples of financial scams that are prevalent these days. So, when a phone conversation starts in any of the following directions, don't waste your time and certainly don't waste your money. Just hang up.
"I can get you into our credit counseling with just one upfront fee." The Federal Reserve advises consumers not to work with any credit counselor who requires a fee before providing services. Also, if you do some searching, you should be able to find free sources of credit counseling.
"Let us eliminate your monthly housing costs with a reverse mortgage." The Consumer Financial Protection Bureau reminds people that reverse mortgages do not completely eliminate housing costs -- you will still have to make your insurance and property tax payments.
"This is an important notice about qualifying for a lower rate on your current credit card account." If your credit card company wanted to lower your rate, they would just do it. At best, this call is someone trying to sell you a new credit card. At worst, it is someone fishing for information on your credit card accounts.
"We guarantee we will keep your home out of foreclosure." The Federal Reserve cautions that no legitimate counselor would make this kind of guarantee.
"I'm from the IRS, and you must pay the money you owe immediately to avoid penalties." The IRS warns that recent months have seen a surge in callers pretending to be tax officials. Contact the IRS directly to verify any demands that are made of you.
"In return for a legal fee, you can join our class action suit against your lender." You might love the idea of suing your lender, but if someone demands a fee for you to join a class action, they are trying to rip you off worse than your lender did.
"Put your money offshore to shelter it from taxes." Be very wary of moving money beyond the protection of U.S. laws. Also note that the IRS has been successfully cracking down on offshore tax evasion schemes.
"We will consolidate your debt and make the payments for you." Giving up control in this way means you don't know whether sufficient payments are being made on your behalf, or how big a cut the middleman is taking.
If you are on the fence, ask the caller to send you some information in writing, or at least for a phone number so you can call back. That will give you time to do some research into their organization. More often than not, that simple request will get the caller to do what is in your best interests -- end the conversation.