Scams about foreclosures, jobs, IRS feed on desperation
— -- Last September, Esmeralda Carmona only had enough money to pay a fraction of her mortgage. Her husband, laid off nearly a year earlier, had not worked in nine months. Debt was mounting, and the mother of four was prepared to give up.
But while driving to her job as a health care clinic coordinator in Chicago, Carmona heard a radio advertisement promising protection from foreclosure. She breathed a sigh of relief.
She scraped together $1,500 to pay Centurion Loss Mitigation upfront for its help but found out four months later her house had been foreclosed upon. She says she considers herself a victim, like hundreds of thousands of others, whose tough times have been made worse by too-good-to-be-true quick fixes.
So many pitches seem so enticing: "I paid $2.99 and got $12,000. Claim yours!""Would you like to earn an extra $200, $900 or even $5,000 everyday! For just 45 minutes work!" "New mortgage with low payments!"
Local, state and federal authorities are trying keep up with consumer complaints, but aside from going after fraudsters, officials say one of the best ways to protect yourself is education.
In Carmona's case, the Illinois Attorney General's office filed a complaint against Centurion in early April. A temporary restraining order restricts the company from accepting any upfront fees, and a court date is set for next month. Centurion officials declined to comment for this story.
Here are three areas that have been exploited during the recession:
Foreclosures
According to the Treasury Department's Financial Crimes Enforcement Network, financial institutions filed an estimated 65,049 suspicious activity reports from 2007 through 2008, a 30% jump from 2006.
While the government continues to look for ways to assist distressed homeowners, many like Carmona have turned to what seem like good and easy options.
After eight months of working with her bank to modify her monthly payments, Carmona received a reduction of $50. Then she heard the radio ad. For $1,500 in cash, company officials assured her, they would work with her bank on a loan modification. But she says she ultimately lost her house, without warning, to foreclosure. She had to complain loudly to get her $1,500 back from Centurion.
