Most Common Financial Scams (continued)
Credit Card Debt Termination Scam
Here, people are asked to send in money to find out how they can legally get out of paying their credit card debt. In return, they get a pamphlet claiming people aren't legally required to pay their debts. This scam is similar to the one promoted by people who want you to believe that the IRS doesn't have the right to collect taxes and advise you to stop paying your income taxes. They will tell you that there is a legal loophole in federal law or the constitution wherein you can fill out a few documents and legally erase all of your debts without filing bankruptcy. For a fee, they will send you the forms to fill out to magically erase all of your debt, but this is just another scam to separate you from your money.
Although most coupon websites are completely legitimate, there are some out there that will offer you dollars-off coupon, but request you provide your personal information to get the coupon. However, after submitting your personal information, you will be told that you must make a minimum purchase, friend their company on Facebook, or take some other action to receive the coupon. Another variant of this scam are bogus websites offering you coupons for deeply discounted products and services you want for a price; however, research has shown that these coupons are worthless and not validly issued by the manufacturer. A list of fake coupon websites is available at couponinformationcenter.com. Always check this website for fake coupon websites before visiting a new site.
Tax Relief Scam
Tax relief companies claim they can settle your tax debt with the IRS and state taxing authorities for a fraction of the amount you owe; however, most require you to pay a big up-front fee and don't tell you that few people will qualify to participate in the IRS programs for offers in compromise. Several companies have been shut down recently by the FTC for providing little or no help to their clients. Even if a company is legitimate, there is no reason to pay them to settle your tax debt when you can contact the IRS and state authorities yourself and work out a repayment plan. If you really need help doing this, hire a CPA or local attorney to help you.
VIN Cloning Scam
Watch out if you plan to buy a used car, particularly in a private sale. Thieves are now stealing cars and then roaming parking lots looking for a car that is the same make and model of the car they stole. They copy the VIN number from that car and make counterfeit dashboard plates, Mylar stickers and registration documents for the stolen vehicle so that they can sell it. Don't buy cars that are being sold for way less than their Blue Book value and when the seller demands cash. If you do buy a stolen car, it is only a matter of time before you are caught since no two cars can have the same VIN number. Either the DMV or a car insurance company is going to discover that your car is stolen and it will be repossessed by the police. If you do want to buy a used car from an individual, get the VIN number and check it at vehiclehistory.gov for free. The VIN number on the dash, under the hood near the radiator, side door, glove box and trunk should all match.
A skimmer is a device thieves install in gas pumps that record your credit card or debit card information when you swipe your card to buy gas. Thieves install the skimmers in gas pumps because almost all gas pumps use a universal key that can be purchased online. While their accomplices shield the view of the gas station clerk, thieves install the skimmer. They are stealing tens of millions of dollars each year. Some gas station owners are fighting back by installing more cameras and locks on their gas pumps. You can lower your chances of becoming a victim if you do the following when buying gas: (1) pay in cash inside the store; (2) use a gas pump near the front of the store in clear view of the clerk since thieves are less likely to install skimmers at these pumps; (3) avoid the gas pumps that are farthest from the clerk or more hidden from view; (4) only use gas pumps that have a padlock on the outside of them; and (5) keep track of your gas purchases so you will know if a charge isn't yours. Thieves also can install skimmers on ATM machines, so never use an ATM that isn't associated with a bank or located in a well-traveled area.