Consumer IQ

Consumer Scams to Watch Out for During a Rebound Economy

Economy and market recovery

The holiday season continues to carry on and so far, all signs seem to indicate that the world probably isn’t going to end in 2012, Mayan prophesies notwithstanding.

To the contrary, our economy looks as if it’s pulling out of the disastrous tailspin it’s been in ever since I started writing for Mint.com. (Coincidence? Uh, moving along…)

We’ve spent a lot of time talking about the scammers that kick consumers when they’re down, offering fraudulent loan modifications or jobs scams. And even though these won’t go away, they will take a backseat to the shady deals offered during a healthy economy.

What awaits you? Here’s a handy checklist:

Investment scams.

When an economy recovers, consumers have disposable income to invest. But they don’t always invest it in a safe place. They put their hard-earned money into everything from art to rare coins to precious metals, which can be iffy.

Investment schemes run the gamut, from oil and gas lottery application services to telecommunications auctions, to pyramid schemes and penny stocks.

How can you tell if it’s a scam? Among the telltale signs are pitchmen telling you that you have to “act now” and who promise ridiculously good returns.

The long answer: consult a professional investment advisor.

Charity scams.

Having a little disposable income can also attract charities, including some fraudulent causes. Remember, just because the word “veteran” or “firefighter” is in the name of the charity doesn’t make it legit.

That’s especially true for law-enforcement related charities; consumers tend to automatically trust anyone who says he’s a cop. But the Federal Trade Commission says you shouldn’t, and I agree.

Check out the FTC’s useful microsite about charity scams, and remember, just like investment scams, these criminals will lie to you and apply high-pressure tactics to get you to donate. Don’t do it.

Job scams.

In a resurging economy, who isn’t looking for a better job? That’s exactly what the scam artists assume, and their assumption is largely correct.

Job scams come in lots of flavors, from the “secret shopper” scam to the work-from-home scheme. Bogus employment offers in exchange for cash top the list.

I’ve personally seen it work. A friend handed over a considerable amount of money to a scam operating out of a Southern California office park, and he didn’t realize he’d been ripped off until weeks later.

The BBB offers a few tips on how to spot a job scam.

My favorite telltale sign? Bad grammar and punctuation. Lucky for us, it seems lots of scammers just didn’t pay attention in English class.

You don’t have to get ensnared by these scams during the coming recovery. Most of them are easily discovered with a little due diligence and common sense.

If you feel you don’t have one or the other — and didn’t Aristotle say it best when he said, “Know thyself”? — then hand your checkbook and credit cards to someone who does.