Tips to Avoid the Top 10 Scams

With the country facing economic woes, many Americans are looking for ways to make extra loot. But are those lucrative offers to work from home and get-rich-quick ads legitimate, or scams designed to swindle consumers?

Along with attorney Steve Weisman, author of The Truth about Avoiding Scams, Dr. Phil examines last year's 10 most common frauds that have duped Americans out of millions.

1) Bogus Checks in the Mail

If you receive free money in the mail, think twice before cashing that check. "You won a lottery you never entered or some promotion. It sounds legitimate, perhaps, but the bell's got to go off," Steve explains. The company sending the check may ask you to deposit it in your bank and send them processing fees. "The check bounces, yet the money you sent is good."

2) Advance-fee Loans

This scam is on the rise as people try to save their homes and avoid foreclosure. "You're desperate to find a place where you can get a loan. These people are making great promises," Steven says. "You have to pay a lot of fees ahead of time. But they don't do that in legitimate loans." Prevention is key. If it sounds too good to be true, it probably is.

3) Mortgage Foreclosure Rescues

In this fraud, a company may ask you to pay up-front fees, and in return, they will modify, fix or save your house for you. "To get the help, you have to consult with this person, so you've got to give them your personal information," Dr. Phil says. "They get your scoop, and sometimes [unwitting consumers] actually have signed papers that are deeding their house over to somebody."

4) Credit Repair/Debt Negotiation

If your credit is less than stellar, or you face a mountain of bills, beware of companies that promise to help get you back in the black. "There are good people that can help, the Consumer Credit Counseling service," Steve says. "But there are scammers who take your money, get you into loans that you pay them, take the money that's supposed to be going to creditors or lie to you and tell you they can fix your credit immediately. It can't be done."  

5) Work-at-Home Opportunities

This rip-off often targets stay-at-home moms, students and retirees, promising a good salary for a few hours of work. Don't fall for it, Steve warns. You may receive a chain letter or envelope-stuffing opportunity that asks you to send cash up front before you receive promotional materials in the mail. 

6) Phishing

Phishing is a scam that attempts to acquire passwords, usernames or credit card information from consumers by masquerading as an established company. Often, a bogus company will copy the logo from a legitimate organization to appear authentic.

Dr. Phil lists some common phishing red flags: The e-mail is not addressed to a particular person or is riddled with misspelled words. The links in the e-mail may go directly to the company, but one link may lead to a fraudulent site and ask for personal information. 

7) Mystery/Secret Shoppers

These companies promise to pay you to go shopping. They will often send a bogus cashier's check to deposit it in your bank account and ask you to evaluate a particular company as you purchase a few items from it. Be suspicious of free money arriving in the mail. "If you see the ad, it's not legitimate," Steve says. "There are companies that do mystery shopping, but they don't do ads." Your bank may provide you with provisional credit when you deposit the check, but it may take weeks for them to realize that the check is counterfeit.

8) Directory/Yellow pages

Be aware of any company claiming to be the Yellow Pages and sending out invoices for services that you haven't ordered. When in doubt, contact the Federal Trade Commission.

9) Government Job Finders

You never have to pay for information about employment opportunities with the U.S. government or U.S. Postal Service, according to the FTC. But some con artists try to sell information about lucrative positions. When in doubt, check with the Postal Service to see if there are positions available. 
 

10) Weight-loss Products

Obesity is on the rise, and so are weight-loss schemes that take your money. According to the FTC, if a company claims that it will cause weight loss of two pounds or more a week for a month, or more without dieting or exercise, cause substantial weight loss no matter what or how much you eat, or block the absorption of fat or calories to enable you to lose substantial weight, the ad is almost certainly false.

Be on the lookout for these other scams as well:

• H1N1 flu product scams: Watch out for products that claim to protect you from the swine flu. The Food and Drug Administration identified 140 products that were bogus. Consult with your doctor before taking any product.
• Puppy scam: People pose as breeders and scam innocent people out of thousands on designer dogs.
• Fake IRS e-mail: Someone sends an e-mail posing as the IRS, asking for personal information. The IRS does not do that!
• Internet auctions: Consumers receive items less valuable than they were promised.
• Internet access services: You sign up for service and get trapped in a long contract you were unaware of.
• Travel and vacation scams: You see that great deal online, but when you get to your destination, the accommodations are low quality.
• Health care products: Products claiming to be the miracle treatment. 
   

If you believe that you have been the victim of a scam, file a complaint by visiting www.ftc.gov.