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Published: Friday, 3/5/2010

Scammers pop up during economic downturns

BY RICHARD EPPSTEIN
BIZ COLUMNIST
Richard Eppstein Richard Eppstein
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Every time the economy tanks, we see some distinctive scams that come out of the woodwork.

I remember in the 1970s decline, my first years with the BBB, we saw the emergence of Glenn Turner and his “Dare to Be Great” pyramid scheme. The Jimmy Carter economic slump saw another giant pyramid scam, the “Airplane.” A few years after that, we had the “dot com” recession and an explosion of Nigerian mail and e-mail rackets that cheated Americans out of millions of dollars.

Each downturn seems to possess its own characteristic frauds.

This current recession has seen plenty of rackets. Consumers get letters that they have won imaginary contests but must send money to claim their prize. Or they get a phone call that they qualify for a “free government grant,” which they never need to pay back — but must send cash first.

But the two distinctive frauds overwhelming us this recession are very clever and nasty. Despite BBB warnings, these two scams extract big money from innocent, gullible, or trusting folks.

First is the “work at home” swindle. Overseas crooks send letters or place “help wanted” ads on craigslist, monster.com, CareerBuilder.com, or other Internet job-search services. They claim to be running a business that needs an agent in our area. They often ask applicants to send a resume, then write back with the good news that they have been hired.

The victim is given instructions to cash checks, then send the money, by Western Union, to the new employer in Canada, England, Africa, or Asia. When the checks bounce, the poor victim in Toledo is forced to pay back his local bank — often thousands of dollars.

Especially clever are the “secret shopper” job offers. Consumers are desperate to find a job they can do for a few hours each week to earn extra money. Promises that they will make $500 or more each week are exactly what the victim wants.

The employer sends them a check for thousands of dollars in advance. The “shopper” is supposed to make a few token purchases at well-known stores (JC Penney, Kohl's, Wal-Mart, and others) and then send the rest of the money to the employer in another country. The offer is completely bogus, and the victim must pay back the bank when he learns the checks he “cashed” were counterfeit.

Hard times seem to bring out the swindlers.



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