'A Con Artist's Gold Rush'

July 1, 2009 -- Beverly Steward remembers the classified job listing as almost too good to be true: Pay $89 for a special "credential" and get a guaranteed job as a cleaner or maintenance worker.

Steward, a single mother of two desperate for work, completed an online application in January and paid the fee. But no job followed.

"That's when I knew I'd been taken," Steward told a crowd at the Federal Trade Commission, where officials today announced a crackdown on recession-related scams.

"I know $89 isn't much, but it's all I had left," she said.

Steward's case is one of a growing number in which bogus companies ask consumers to pay a small fee up front in exchange for a job or payout later, according to the FTC.

"They promise jobs, access to free government grant money or the chance to make a living by working at home," said David Vladeck, director of the FTC's Consumer Protection Division. "But these promises deliver nothing. They raise people's hopes and then drive them deeper into a hole."

More than 600,000 people have been duped out of $300 million since late last year, according to the agency.

Dubbed "Operation Short Change," the law enforcement sweep announced today included dozens of legal cases across 13 states and the District of Columbia.

"For a con artist, a bad economy is like a gold rush," said North Carolina Attorney General Roy Cooper, whose state is participating in the operation.

"We need all hands on deck to fight fraud and protect consumers."

Cooper said North Carolina has seen a 27 percent increase in consumer fraud complaints compared with a year ago. The FTC has seen a similar trend but did not provide a specific figure.

Government crackdowns are necessary and "absolutely work," said Sally Greenberg, the executive director of the National Consumer League, a nonprofit advocacy group.

Greenberg says the league has received an influx in consumer complaints since the start of the recession. Many involve fake check scams and phony work-from-home schemes.

"When the federal government uses its bully pulpit and calls attention to [scams], awareness is raised and people don't fall for them," she said.

In one legal case brought by the FTC, the group "Grants for You Now" allegedly promised people free government grants to pay personal expenses.

"It lied, plain and simple," said Vladeck. "I assure you: There is no free government grant money to pay down debts or remodel your home."

Vladeck urged consumers to file a complaint if they suspect being a victim of a business opportunity fraud.

But many consumers may not know who to call.

Steward said she contacted her local police, the Better Business Bureau, the Federal Bureau of Investigation and the U.S. attorney's office -- all of which were unable to help her. She finally reached the FTC and successfully filed a complaint.

Vladeck acknowledged that the agency needs to do more to educate consumers about the FTC and how to report alleged scams.

He said another priority is working to create a comprehensive national database of consumer complaints from individual states.

The best way to avoid being a victim?

"Don't pay any money up front to anybody that claims they can solve your financial problems," said Cooper.