Snippets issue: Line of credit, duct cleaning and latest ID theft scams: Internet Scambusters #764
A line of credit is supposed to be a low-cost way of drawing on the equity tied up in your home.
But the cost will be anything but low if you fall for the scam we outline in this week's Snippets issue.
We'll also explain other ways your home and your identity may be an attractive target to scammers.
Let's get started...
Line of Credit Applicants Fall Victim to Scams
With home values on the rise as the property market continues its recovery, more people are tapping into the equity they own by taking out a line of credit.
That makes them a potential target for scammers who love to trick people into paying for non-existent loans or giving away confidential financial information.
A line of credit is usually a low-interest, withdrawal-on-demand loan made by a bank, with the homeowner's property standing as collateral.
Low interest makes these loans attractive to borrowers -- and to scammers, who advertise their fake line of credit services online.
People who respond to their ads, which show up in searches or on perfectly legitimate websites, are usually told either that they must pay an upfront fee for valuation and processing, or they're asked to provide details of their bank accounts for supposed credit vetting.
In either case, there's no loan forthcoming.
There are a number of red flags that signal when this is a scam, most notably when the supposed lender approves the line of credit request almost immediately, without the would-be borrower completing an application form.
If you're in the market for a line of credit, it's always best to deal with your existing bank or an established, reputable financial institution.
Watch out for ads promising interest rates significantly lower than the norm or offering easy loans for those with a poor credit record.
Don't deal with individuals or organizations you haven't thoroughly checked out.
Don't Get Cleaned Out
Even if you don't need a line of credit, one thing most homeowners and renters have to deal with at some time is maintenance -- from simple repairs and cleaning services to remodeling jobs.
Many of these jobs call for specialist contractors, putting customers in the scammers' line of fire.
For instance, a common scam these days involves crooks posing as specialists offering duct cleaning services for heating, air conditioning and clothes driers.
Although the scam may involve the crooks asking for payment upfront and then never showing up, a more usual approach is for unqualified amateurs to offer cut-price duct cleaning for less than $100.
A quality job would normally cost around $250 to $300 -- or maybe more if the house is large -- so if you pay less, you stand the risk of the job not being done properly.
Since ventilation is an important home safety factor, it's not wise to try to scrimp on the cost, putting you and your family at risk.
Sometimes, the scam is made worse when the "contractor" supposedly discovers a problem, such as mold or a blockage, which he then says will cost extra -- often many hundreds of dollars -- to clear.
Once again, beware of cut prices. Check out the reputation and license of the "contractor" online (via the National Air Duct Cleaners Association) or seek recommendations from friends or family.
Your Home as a Staging Post
Here's another way crooks try to use your home for a scam.
They use your address as a cover for using stolen credit cards to buy expensive products.
These are delivered to victims' homes. Then the crook immediately contacts the victim, tells them it's a mistake and that they're arranging for the item to be picked up.
There are a number of variations to this scam.
For instance, sometimes, the delivery goes to the actual home of the individual whose credit card details have been stolen.
Often, it's difficult to convince the original vendor/sender of what's happened. From their point of view, they've been paid and the article is yours.
While you're trying to unravel this, the scammer makes contact and arranges for one of the delivery services like FedEx of UPS to collect the item, supposedly for return but, to be shipped to another address.
This can turn into a complicated mess, especially if you're also the ID theft victim.
If an item you didn't order turns up on your doorstep, contact the vendor and require proof of identity before returning the item. If you suspect a scam, contact the police.
Store Card Scam
Staying with the theme of identity theft, we've recently encountered a new variation based on store credit and loyalty cards.
The scam starts with a spoofed call that appears to come from a well-known mall or big-box retailer.
The calls are made at random until the scammer reaches someone who actually has an account with that retailer.
The crook tells the victim that, because of their good payment record, they're entitled to a rebate under the Fair Credit Reporting Act and then asks for the store card number.
It's easy to see through this trick. If the person was genuinely from that retailer, they would already know your card number.
Furthermore, the law they refer to doesn't provide for rebates of this sort.
Don't ever be tempted to give your store card number in response to an unsolicited call like this.
Generally, you should never have to give your card number to anyone over the phone unless you're making a purchase you initiated.
Alert of the Week
Do you use Thunderbird, the email management program from Mozilla (the organization that makes the Firefox web browser)?
If so, make sure you've updated it to at least version 52.2. Earlier versions were said to be vulnerable to hacking but the company has issued a fix in the past couple of months, which it built into the new version.
That's it for today -- we hope you enjoy your week!