Foreclosure Scams: Don’t Get Your House Stolen

foreclosure scams

Foreclosure scams can literally rob you of house and home, as well as ruin your credit, and destroy your finances. If you are a homeowner with fears of not being able to keep up with mortgage payments, or are otherwise desperate to sell your home, you are a prime target for foreclosure scams.

This form of fraud is perpetrated by con artists, who promise to help you save your home or get bankruptcy protection, while actually stealing your money and/or home, and doing nothing to prevent your eviction.

What are some of the signs that can help you recognize foreclosure scams? They are the same for most schemes to con you out of your money:

1. The “solution” is complicated and difficult to understand.

However, you are pressured to trust in the expertise and honorable intentions of your “rescuer,” and go along with it anyway. Unscrupulous individuals will often claim affiliation with government mortgage modification programs in order to gain your confidence.

Here’s a tip-off: Legitimate government programs do not a charge fee for your participation.

2. You are asked to sign blank documents or documents with incomplete or false information.

This includes asking you to sign fake foreclosure rescue documents. Being advised to lie or otherwise falsify information is another major red flag. Never sign any document that you have not thoroughly reviewed and do not completely understand, especially if it is provided by anyone other than your mortgage lender.

And never give in to pressure to sign immediately. Insist on taking ample time to not only read the documents, but to review them with your mortgage lender, a real estate attorney, a trusted and knowledgeable family memberbut not anyone recommended by or affiliated with your “rescuer.”

3. Your “rescuer” plays on your feelings of victimization and desperation.

They will often harp on the unfairness of your situation. Scammers also even appeal to you based on racial solidarity (they’re just trying to help “our people”) or religious grounds (for example, they want to be “a blessing” to their fellow Christians).

4. The “rescue” is unsolicited.

It could come by mail, email, a phone call, or a direct approach from a stranger. In other words, you didn’t reach out to them; they found you. While dishonest individuals and companies may advertise their “services” online and in local publications, they will often find you by simply checking foreclosure notices, or targeting  you by religious or ethnic affiliation.

5. They graciously offer to negotiate on your behalf.

This may feel as if a major burden could be lifted from your shoulders, but you are actually being set up to have the rug pulled out from under you.

Alarms should go off in your head whenever an individual or company offers to negotiate with your lender, help you file for bankruptcy to stave off foreclosure, acts as an intermediary between you and your mortgage lender to refinance the loan, or advises you to temporarily sign over title of your house to them as they resolve your issues.

6. Deal only—and directly—with your mortgage lender.

The biggest mistake struggling homeowners make is ducking the lender, as opposed to informing them of potential problems immediately as they arise, to try to work out a solution that will help them keep their homes and maintain their mortgage commitment.

Once again, if it sounds too good to be true (miraculous, even), it nearly always is. The first people you should contact when you think you are in danger of defaulting on your mortgage is your lender.

For more on foreclosure scams and other types of housing fraud, check out Housing Scams at usa.gov. If you need to report a foreclosure scam, you may file a complaint by contacting the Federal Trade Commission (FTC). If the scam involves bankruptcy, contact a local U.S. Trustee office.

 

 

 


Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert, personal growth/relationships coach, and co-founder of Grown Zone, a multimedia initiative focused on personal growth and healthy decision-making. This blog is dedicated to his thoughts about money, entrepreneurship, leadership and mentorship. Follow him on Twitter at @AlfredEdmondJr.

Looking For A Financial Adviser? Watch For These Red Flags

Financial Advisor

You’re looking for a financial adviser, and you’ve just been introduced to a truly impressive candidate. Charming. Articulate. Well-educated. Classy dresser. Hair is on point! Even God-fearing.

Is she perfectly qualified to help you manage your money? Or the next Bernie Madoff—only with a fierce weave and a great mani-pedi? If you see these signs when looking for a financial adviser, keep a tight grip on your money. And run.

 

Promises to Double or Triple Market Rates of Return

 

When looking for a financial adviser, bypass those who promise unrealistic, above-market rates of return. For example, if the S&P 500 is delivering 8% returns, be suspicious if she claims she can deliver 15%.

 

Describing Any Investment as Absolutely Safe 

 

Saying or leading you to believe that an investment is guaranteed, risk-free and/or can’t result in a loss for the investor is another major red flag. There is no such thing as an investment in which you can’t lose your money.

 

Recommending Investments You Don’t Understand and Can’t Explain

 

Suggestions that an investment they recommend is too complex for you to understand, and requires you to put all of your trust in her as a financial professional. Never put money into investments you don’t understand for yourself, including knowing the risks. If you can’t explain your investment to a disinterested third party in a way that they can understand, either you don’t really get it or it just doesn’t make sense.

 

Wants Blanket Authority to Make Decisions with Your Money

 

Hold on to your money if he offers an opportunity with an unclear, vague, or unstated purpose, such as a blind pool for investing in the stock market—at his discretion, with no chance for you to approve it in advance. Never surrender authority over your own money, and always have a clear understanding of where it is going.

 

Offers a Unique, Secret, Never-Before-Heard-Of Investment Opportunity

 

When looking for a financial adviser, avoid those who offer exotic investment opportunities, such as top-secret, proprietary technology or inside information from Wall Street sources. These too often turn out to be excessively risky, deceptive, and even illegal.

 

You Must Invest NOW—or Lose Out

 

Watch out if he pressures you to invest quickly, in order to not miss a so-called once-in-a-lifetime opportunity. A good financial adviser will never pressure you to invest, and should always work to help you understand what you’re investing in, including the risks involved, and will always give you the final say on what happens with your money.

 

 

 


Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert, personal growth/relationships coach, and co-founder of Grown Zone, a multimedia initiative focused on personal growth and healthy decision-making. This blog is dedicated to his thoughts about money, entrepreneurship, leadership and mentorship. Follow him on Twitter at @AlfredEdmondJr.

Before You Invest, 5 Questions To Ask

before you invest

Is it too good to be true? Ask questions before you invest.

Protecting your finances is often a matter of what you do before you invest in anything. Avoiding financial fraud is nearly always about what you allow to happen before money ever exchanges hands.

I’m a big fan of true-crime reality shows. These include in-love-today-murdered-tomorrow shows like Fatal Attraction and Snapped, as well as financial crime series such as CNBC’s American Greed. The latter focuses largely on investment scams, including affinity fraud, relationship scams and other schemes designed to con people out of their money. Many times the victims are people of modest means, education, and financial sophistication. But more often than you might think, the victims are people you’d think would know better. Famous athletes and entertainers, prominent public figures, religious leaders and even wealthy entrepreneurs are not immune to being conned, often out of millions of dollars.

However, regardless of the particular type of scam, or the demographic of its victims, they all have one thing in common: Their finances, reputations, and peace of mind could have been protected by just asking a few questions, and independently verifying the answers, before they invested.

Investment scammers count on being able to control the story. To succeed, they must have the last word on what information you receive, and whom you choose to trust (them) or distrust (your friends, family, advisers, regulators, legal authorities, etc.). Nothing repels scam artists like you asking the right questions and getting the answers from people other than them or partners colluding with them. Here are five questions to ask before you invest in anything.

What is the name of your banker, so I can verify your statements?

May I have your brokers/business license number?

What state/federal agencies are you registered with?

Do you mind if I call the state banking commission/department?

Do you mind if I review this opportunity with my banker/attorney/financial adviser?

If a person is legit, she will immediately provide the information you seek. She will allow you to thoroughly and independently vet her credentials and history. She will also allow you plenty of time to investigate the proposed investment opportunity before you invest. However, back away and hold on tightly to your money if:

She refuses to answer. She may even act hurt, angry or offended that you would even ask, in order to discourage you from pressing the issue. She will likely also insist that the authorities need to be kept in the dark about this opportunity and/or are not to be trusted. Finally, she may try to convince you that involving others may hurt your reputation, undermine your relationships, cost you financially and even put you in physical danger.

He lies or provides false, misleading, or outdated information. Again, don’t just take his word for it. Verify everything independently with the proper authorities before you invest anything.

She distracts and delays with excuses. In the meantime, she may pressure you to move forward as an act of good faith, stressing how foolish or stupid you’ll feel if you let the opportunity slip by. Refuse to provide even a token investment.

If they do any of these three things, refuse to do business with them—forever—no matter who they are. At best, they are unqualified, unreliable, and unprofessional; at worst, they are cold-hearted criminals. Never forget that con artists come in every form you can imagine, from church deacon or three-piece-suited M.B.A., to sorority sister or hottest babe at the club. They can even be (and often are) a long-time co-worker, romantic interest, a college classmate, neighbor, or family member.

Scammers succeed by identifying your biggest desires, obsessions, goals, fears and needs. These may not be about money at all, and can range from fear of being alone, to a need to feel closer to God. A con artist will then focus on convincing you that she is the perfect person to get you what you desperately desire or protect you from what you don’t want. That means, to protect yourself, you must control your emotional responses, as well as access to your finances.

To further educate and protect yourself against investment fraud and financial scams, check out the following resources:

Fraud Aid.com

U.S. Securities and Exchange Commission (SEC)

Financial Industry Regulatory Authority (FINRA)

Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert,  personal growth/relationships coach, and co-founder of Grown Zone, a multimedia initiative focused on personal growth and healthy decision-making. This blog is dedicated to his thoughts about money, entrepreneurship, leadership and mentorship. Follow him on Twitter at @AlfredEdmondJr.

Credit Card Fraud: What Minority Small Businesses Need to Know Before Oct. 1

U.S. minority-owned firms as reported by the Minority Business Development Agency generate $1 trillion to the U.S. economy and add roughly 5.8 million jobs on a yearly basis. Top industry sectors represented include agriculture, utilities, manufacturing, wholesale, information, finance and  insurance, accommodation and food services, healthcare, social assistance, and more.

[RELATED: Small Businesses Unaware of Credit Card Liability Changes]

However, minority-owned firms, which play an integral part in the country’s economic growth, could be among the vast majority of owners not aware of the approaching EMV liability shift and its implications. EMV is short for Europay, Mastercard and Visa standards, which is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.

According to FirstData.com, over 70% of data security breaches are targeted at small businesses, and it’s rare that the affected business discovers the breach. These fraudulent activities are typically detected by a third party (banks or card associations) or law enforcement agencies. What follows after the breach of payment data are a string of costly and inescapable actions which can permanently cripple a business.

Wells Fargo/Gallup conducted a survey that revealed that small business owners are generally not ready for the EMV card conversion. The survey also contains important, need-to-know items for small business owners to help them avoid credit card fraud.

As of October 1, credit card companies will no longer be liable for credit and debit card fraud on card-present transactions. The card issuer or merchant, who does not support EMV, will assume liability for counterfeit card transactions that occur. This can have a huge impact, as reported by First Data.com, on the bottom line and reputation of a small business, and leads to lost time and money disputing fraudulent claims.

A majority of small business owners are simply unaware of the EMV card conversion. Less than half, or 48%, who accept point-of-sale payment (POS) know about the impending liability shift, and just 29% say they plan to upgrade their POS credit card terminals to accept EMV chip cards before the October 1 deadline.

How do you protect your small business from a costly risk involving both debit and credit cards? Attend webinars and presentations to industry groups and associations on EMV and EMV-related fraud topics, and read communications to business owners, including EMV newsletter articles.

Check out Wells Fargo’s website, which features educational articles, videos, and infographics that offer useful tips on the process and benefits of accepting EMV chip card payments, and the importance of EMV chip cards in reducing fraud. More importantly, contact your financial institutions. Banks are already issuing EMV chip-enabled credit and debit cards to prepare for the shift.

Research Shows Women Are Less Aware of Cyber Threats

(Image: File)

According to a recent survey conducted by Kasperky Lab, an international software security group, and market research company B2B International, women are less aware than men of cyberthreats.

Survey findings show only 19% of women believe they may fall victim to cyber-criminals, compared with 25% of men. Also, women know less about cyberthreats than men, with 27% of men and 38% of women being unaware of ransomware; 23% of men and 34% of women knowing little about mobile malware; 21% of men and 34% of women have a limited idea of the concept of an exploit.

Experts say that if consumers aren’t aware of cyberthreats they pay less attention to protecting themselves against them.

Survey results also found that when allowing other people, such as children, friends, or colleagues to use their main device, 36% of women do nothing to protect their data because they “see no risk,” compared with 28% of men. 13% of women have no security solutions on their devices, compared with 10% of men.

Also, over a 12-month period, more women than men faced malware incidents (73%, compared with 65%), and 22% of men were likely to suffer financial consequences (versus 9% of women).

Consumer Tip: Watch out for Phantom Lenders

(Image: Thinkstock)

Recently the Federal Trade Commission shut down a business that was accused of using deceptive tactics to collect on phantom payday loans (a fake debt that a consumer is led to believe he or she owes). Here are three tips from the FTC for avoiding this type of scam:

1) If someone calls to collect on a debt you don’t recognize, request the caller’s name, company, street address, and telephone number. Refuse to discuss the debt until you receive a “validation notice,” which includes the amount of the debt, the name of the creditor you owe, and your rights under the federal Fair Debt Collection Practices Act. Send a letter requesting the caller to cease contact.

2) Don’t provide the caller with personal financial or other sensitive information.

3) Tell your creditor about the suspicious calls and find out who (or if) the creditor has authorized someone to collect the debt.

4) Alert the FTC and your state Attorney General’s office about the suspicious call.

Consumer Tip: Watch out for Phantom Lenders

(Image: Thinkstock)

Recently the Federal Trade Commission shut down a business that was accused of using deceptive tactics to collect on phantom payday loans (a fake debt that a consumer is led to believe he or she owes). Here are three tips from the FTC for avoiding this type of scam:

1) If someone calls to collect on a debt you don’t recognize, request the caller’s name, company, street address, and telephone number. Refuse to discuss the debt until you receive a “validation notice,” which includes the amount of the debt, the name of the creditor you owe, and your rights under the federal Fair Debt Collection Practices Act. Send a letter requesting the caller to cease contact.

2) Don’t provide the caller with personal financial or other sensitive information.

3) Tell your creditor about the suspicious calls and find out who (or if) the creditor has authorized someone to collect the debt.

4) Alert the FTC and your state Attorney General’s office about the suspicious call.

Avoid Getting Hacked During the Holidays

You’re likely using your credit card to make purchases for last-minute Christmas gifts. However, it’s important to be on high alert so that you don’t get taken for a ride. Fraudsters are everywhere, waiting to steal your personal information so that they can complete their holiday shopping on your dime.

“With the immense number of data breaches that occurred at retailers in 2014, and a grim forecast for 2015, it’s essential to arm consumers with tips they need to protect themselves,” said Credit Union National Association President and CEO Jim Nussle in a statement. “Knowing how to protect yourself from hackers, and what to do if you get hacked, can help you keep your hard-earned money and give you piece of mind.”

The CUNA offers the following tips to help you keep your information away from scammers.

  • Don’t respond to email, text or telephone calls asking for personal or financial information.
  • Frequently review account activity and immediately report unauthorized transactions.
  • Place an initial fraud alert with credit bureaus if fraud has occurred.
  • Enroll in and opt-in for transaction monitoring.
  • Use card on/off switches (if available).
  • Enroll in Verified by VISA / MasterCard Secure Code.

Visit stopthedatabreaches for more tips.

CFPB Sues Company Over Misleading Credit Card

Credit Cards

Image: File

The Consumer Financial Protection Bureau is suing Texas-based company Union Workers Credit Services for allegedly tricking consumers into paying fees to sign up for a bogus credit card.

It is alleged that Union Workers Credit Services engaged in false advertisement by advertising what appears to be a general-use credit card. However, in reality the card can only be used to purchase products from the company. In addition the company is alleged to have implied an affiliation with unions by using pictures of nurses, firefighters, and other public servants in its advertising. The CFPB is asking for victims to be compensated and that a civil penalty and injunction be made against the company.

“The business model for Union Workers Credit Services is built on duping consumers into signing up for a sham credit card,” said CFPB Director Richard Cordray in a statement. “Hundreds of thousands of people, including a great many union members who were specially targeted, have been tricked into spending millions of dollars for a so-called credit card that can really only be used to buy the company’s own products. From the misleading photos of nurses and firemen on its website to its bogus credit card, Union Workers Credit Services is illegally deceiving consumers.”

Read the full CFPB report here.

CFPB Sues Company Over Misleading Credit Card

Credit Cards

Image: File

The Consumer Financial Protection Bureau is suing Texas-based company Union Workers Credit Services for allegedly tricking consumers into paying fees to sign up for a bogus credit card.

It is alleged that Union Workers Credit Services engaged in false advertisement by advertising what appears to be a general-use credit card. However, in reality the card can only be used to purchase products from the company. In addition the company is alleged to have implied an affiliation with unions by using pictures of nurses, firefighters, and other public servants in its advertising. The CFPB is asking for victims to be compensated and that a civil penalty and injunction be made against the company.

“The business model for Union Workers Credit Services is built on duping consumers into signing up for a sham credit card,” said CFPB Director Richard Cordray in a statement. “Hundreds of thousands of people, including a great many union members who were specially targeted, have been tricked into spending millions of dollars for a so-called credit card that can really only be used to buy the company’s own products. From the misleading photos of nurses and firemen on its website to its bogus credit card, Union Workers Credit Services is illegally deceiving consumers.”

Read the full CFPB report here.