Recession-related scams still hot; phony checks top the list of recent report

Scams targeting those who can least afford to be ripped off continue to be among the most prevalent frauds committed, according to the National Consumer League's just released 2009 Fraud Center report.

Topping the list are phony check scams, which now make up more than 42 percent of all complaints. Scammers send worthless checks to the victim as a payment -- typically for some sort of business opportunity, sweepstakes winnings or a good being sold -- under the premise that the victim send part of the expected proceeds back to them (before they figure out the check is going to bounce, of course). When the bank later determines the check is no good, the person who cashed it ends up being on the hook.

"Consumers are looking for ways to supplement their income or learn new skills," NCL Executive Director Sally Greenberg said in a statement accompanying the report. "Unfortunately, fraudsters know this all too well and they target vulnerable consumers with business opportunity or scholarship-related scams."
Fake check scams have been the top reported fraud for years, but it appears to be occurring even more frequently in the down economy. Also climbing in 2009 were scams involving business opportunities, scholarships and educational grants, which all entered the top 10 frauds committed during the year. Most of the scams involve people paying money in anticipation of receiving something of value -- a prize, a job, a trip or some other windfall.

Crooks understand the opportunity created by a down economy. People desperate to find new sources of money suspend some of their skepticism. What might be an obvious scam to one person is temptation to another -- and that's what the scammers count on.

"It is especially heinous that scammers would seek to capitalize on the weak job market to make a buck off economically vulnerable consumers," NCL vice president John Breyault said. "Scammers offering bogus scholarships prey on people's efforts to improve their education level or skills, efforts aimed at making themselves more marketable in a tough economy. With state and local consumer protection budgets cut to the bone by the recession, it's even more important for consumers to stay vigilant to avoid falling victims to these frauds."

As a general rule, don't pay any money upfront to someone you don't personally know or to a company that doesn't have a well-established track record. You can find more information about where to report scams in the Consumer Ally's Guide for Consumers. You can always email us, too.

Here are the top 10 scams recorded by the National Consumers League in 2009:
  1. Fake Checks 42.01%
  2. Internet: General Merchandise 24.87%
  3. Prizes/Sweepstakes/Free Gifts 9.57%
  4. Phishing/Spoofing 7.17%
  5. Nigerian Money Offers (not prizes) 2.88%
  6. Business Opportunities 2.02%
  7. Franchises/Distributorships 2.02%
  8. Advance Fee Loans, Credit Arrangers 1.82%
  9. Internet: Auctions 1.17%
  10. Friendship & Sweetheart Swindles 1.00%
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