10 Recession Era Scams


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Business/Scholarship Opportunity Schemes
Promises of up-front money for business opportunities or college scholarships are often too good to be true.
Promises of up-front money for business opportunities or college scholarships are often too good to be true.
Jupiterimages/Pixland/Thinkstock

In its annual "Top Ten Scams" report, The National Consumers League noted a sharp rise in business/scholarship opportunity schemes in 2009. These scams are also perpetrated via the vaunted upfront fee [source: NCL press release].

In a typical business-opportunity scam, a victim shells out large upfront fees -- masked as "investments," usually in some sort of Internet-based business -- in return for "can't miss" profits that are never realized. By the time the victim gets hip to the scam, his business partner is long gone.

Similarly, scholarship scams guarantee that they can help students land money for school, so long as the student pays for the service up front. According to the Better Business Bureau, the assistance provided is usually worth little or nothing. "Fraudulent scholarship search services will promise to help you maximize your eligibility for financial aid at a cost of several hundred to several thousand dollars. Some services take your money and never look for anything on your behalf; others provide a list of scholarships for which your child is not eligible [source: BBB]."

For more on scams and related topics, take a look at the links below.

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More Great Links

Sources

  • Better Business Bureau. "FTC - 'Net Based Business Opportunities: Are Some Flop-portunities?" June 1, 2002. (Oct. 24, 2011) http://www.bbb.org/us/article/ftc---net-based-business-opportunities-are-some-flop-portunities-4578
  • Better Business Bureau. "Scholarship Services - Are they all Scams? May 19, 2003. (Oct. 24, 2011) http://www.bbb.org/us/article/scholarship-services---are-they-all-scams-314
  • Better Business Bureau. "Warning: Stay Away From Work-At-Home Scams." March 31, 2010. (Oct. 24, 2011) http://www.bbb.org/us/post/warning-stay-away-from-work-at-home-scams---search-profit-system-money-mastery--2142
  • Federal Reserve Bank of New York. " New York Fed Q3 Report on Household Debt and Credit Shows Continued Decline in Consumer Debt." Nov. 8, 2010. (Oct. 24, 2011) http://www.newyorkfed.org/newsevents/news/regional_outreach/2010/an101108.html
  • Federal Trade Commission. "At FTC's Request, Court Stops Deceptive Telemarketing Calls Pitching Credit Card Interest Rate Reduction." May 20, 2010. (Oct. 24, 2011) http://www.ftc.gov/opa/2010/05/ams.shtm
  • Federal Trade Commission. "Avoid Charity Fraud." Sept. 21, 2010. (Oct. 24, 2011) http://www.ftc.gov/charityfraud
  • Federal Trade Commission. "Charities and Fundraising Fraud." (Oct. 24, 2011) http://www.ftc.gov/bcp/edu/microsites/phonefraud/publicsafety.shtml
  • Federal Trade Commission. "FTC Cracks Down on Con Artists Who Target Jobless Americans." Feb. 17, 2010. (Oct. 24, 2011) http://ftc.gov/opa/2010/02/bottomdollar.shtm
  • Federal Trade Commission. "FTC Obtains Court Order Requiring Credit Repair Operation To Stop False Claims; Family-Run Scam Surrenders Cars, Houses and Real Estate in Florida and South America." Sept. 1, 2010. (Oct. 24, 2011) http://www.ftc.gov/opa/2010/09/cleancredit.shtm
  • Federal Trade Commission. "Job-Hunting/Job Scams." (Oct. 24, 2011) http://ftc.gov/jobscams
  • Federal Trade Commission. "Sweepstakes & Lotteries Scams." (Oct. 24, 2011) http://www.ftc.gov/bcp/edu/microsites/phonefraud/sweepstakes.shtml
  • Federal Trade Commission. "Tips on Avoiding Employment Scams." (Oct. 24, 2011) http://www.ftc.gov/bcp/edu/pubs/articles/naps40.pdf
  • National Association of State Charity Officials. "U.S. Charity Offices." (Oct. 24, 2011) http://www.nasconet.org/documents/u-s-charity-offices/
  • PR Newswire. "Pre-Paid Legal Announces 2010 Third Quarter Results." Oct. 25, 2010. (Oct. 24, 2011) http://www.prnewswire.com/news-releases/pre-paid-legal-announces-2010-third-quarter-results-105668333.html
  • National Consumers League. " NCL's Fraud Center: recession-linked scams on the rise in 2009." Feb. 16, 2010. (Oct. 24, 2011) http://www.nclnet.org/newsroom/press-releases/363-ncls-fraud-center-recession-linked-scams-on-the-rise-in-2009
  • Southwick, Alison. Better Business Bureau Media Relations Manager. Personal interview. Nov. 1, 2010.
  • U.S. Bureau of Labor Statistics. "Employment Situation Summary." Oct. 7, 2011. (Oct. 24, 2011) http://www.bls.gov

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