Common Scams

Here are some of the most common types of fraud and scams. Learn what to watch for and what steps to take to keep yourself, your loved ones, and your money safe.

Advance Fee Fraud

Advance fee fraud often targets people with poor credit histories turned down by local banks and credit unions for loans. These schemes also target consumers who need cash beyond what can be provided by personal loans ($1,000-$4,000) and who lack collateral (e.g., homes, stocks/bonds, paid-off vehicles, etc.) to pledge as security.

In advance fee fraud scams, a con artist offers a consumer a loan in exchange for an up-front payment. Although the scammer may assure the victim that the company is located in the United States, the money sent by the victim is often directed out of the country. In addition to causing financial damage, advance fee scammers often ask for personal information which can be used to steal a consumer’s identity.

Requesting advance payments in exchange for consumer loans is illegal in both the U.S. and Canada. If you receive any offer of credit and are asked to pay a fee in advance, you are being scammed. If you believe you are a victim of advance fee fraud, file complaints with the Bureau and the Federal Trade Commission (FTC) (Trusted Partner Link). If you wired funds, also report the scam to the money transmitter (e.g., Western Union, Moneygram, GreenDot). In most cases there is little that can be done to recover money lost to advance fee fraud scams. Filing a complaint may help prevent others from becoming victims.

Debt Relief Scams

Many households struggle with excessive debt, including high credit card balances with excessive interest rates. Debt management service providers (“DMSPs”) can provide safe credit counseling options for debtors. They may be able to help obtain debt settlement offers or rate reductions from creditors.

To operate in Maine, DMSPs must register with the Bureau of Consumer Credit Protection. Unregistered, fraudulent DMSPs target consumers who are behind on loan payments and demand up-front fees in exchange for the promise of lower interest rates on credit cards, vehicle loans or personal loan accounts without actually providing a service. Victims often report sending a few hundred to several thousand dollars to unregistered debt management service providers before reporting the scam.

If a company is not registered and bonded, state regulators will have a difficult time getting your money back. CLICK HERE to search for registered Maine DMSPs. If the company contacting you isn’t on the list, hang up! If an unregistered debt management service provider contacts you, call the Bureau.

Imposter Scams

Impostor scams are simple, yet devious. A consumer (usually elderly) will receive a call, text or other message from a con artist who claims to be a friend or relative (often a child or grandchild). The scammer asks for money, claiming to be in some kind of trouble. Occasionally other scammers impersonating authority figures such as lawyers, police officers or judges are involved, “validating” the first scammer’s story.

Scammers can pull off imposter scams with little or no research. Many of these calls begin with something like “Guess who this is.” Any response gives the scammer an instant identity without having to do any work. The scammers often ask questions during these calls, tricking victims into revealing personal information.

If you’re contacted by someone claiming to be a friend or family member who needs a large sum of money, don’t give away any information. Ask their name. If they give a generic answer (e.g., “it’s me” or “your grandson/granddaughter”), give them a name that no one in your family has. “Bill,” for example. If they confirm they’re “Bill,” it’s a scam. Also consider asking questions only the person claiming to be on the phone could know, such as “what’s your mother’s maiden name?” or “what’s the name of your pet?” If they’re unable to answer correctly, hang up.

If you’ve fallen victim to or been contacted by someone perpetrating an imposter scam, file complaints with the Maine Office of the Attorney General and the FTC (Trusted Partner Link) or the Internet Crime Complaint Center (Trusted Partner Link). If you provided financial information, contact your financial institution immediately to close your account.

Foreclosure Rescue Scams

Foreclosure rescue scams hit consumers when they’re already down. If your home is going into foreclosure, scammers may offer to help save your property, for a price. They guarantee they can obtain a loan modification or stop the foreclosure process.

Most foreclosure rescue scammers tell the consumer they must make up-front payments or let the company deposit their money into a (nonexistent) trust account. Know your rights. Debt management providers cannot charge clients until they have obtained a written offer of relief from the creditor, and the client has accepted the offer. The company must also provide disclose how the loan will change if the client accepts the offer, and tell the client how much they will be charged for the company’s services.

If your home is in danger of foreclosure, call Maine’s foreclosure prevention hotline at 1-888-NO-4-CLŌZ (1-888-664-2569) for referral to a free, Maine-based HUD-certified housing counselor.

IRS Scams

IRS scammers claim to be Internal Revenue Service agents who need immediate access to a consumer’s bank account(s) due to fraud or tax issues. The rattled consumers give the information to the “agent,” who debits money from victim’s account.

The IRS makes initial contact with consumers by mail, will not ask for untraceable or unstoppable payment methods, and will not involve police or other agencies in tax issues. If you think the IRS is trying to contact you, call them at 1-800-829-1040.

If you believe you’ve fallen victim to an IRS scam, contact the U.S. Treasury Inspector General for Tax Administration (Trusted Partner Link) (1-800-366-4484) and file a complaint with the Federal Trade Commission. In your complaint be sure to note that it is an IRS scam. If you were contacted via e-mail, forward the message to phishing@irs.gov. If you provided personal information, or if the caller knew personal details such as your Social Security number, CLICK HERE for information about identity theft resources.

Lottery and Sweepstakes Scams

Lottery scams are a type of advance fee fraud. In lottery scams, a consumer receives an unexpected call, e-mail or letter informing them they have won a large sum of money in a foreign lottery. The scammer asks the victim to send money for “processing fees” or other charges before they release the winnings. It’s not possible to win a lottery without purchasing a ticket! If you haven’t purchased a ticket, you can’t have won.

There are many variations on this con. Lottery scams can be fronts for aggressive sales pitches. The scammer may claim the consumer has won a free prize (such as a night at a hotel), before pressuring the victim to spend more than the value of what they’ve “won” on extra goods or services. Sometimes scammers claim the victim won a drawing which didn’t require a ticket. Occasionally scammers offer to buy foreign lottery tickets for the victim.

If someone has contact you about entering or winning a foreign lottery, file complaints with the Maine Office of the Attorney General and the FTC (Trusted Partner Link). If you provided your bank account number or other financial data, contact your financial institution immediately to close your account.