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Consumer Economics
Credit scams and schemes notes
Home | overview | final exam review | Unit 1 Economic Thinking | Unit 2 Investments | Unit 3 personal finance | Unit 4 Demand/Supply

Credit Scams and Schemes

 

Product Misrepresentation:  Gems, Real Estate, Cars

 

Identity Theft:        Scam artists get your name and ss# or other piece of personal information and use it to open new credit card accounts.

 

Loan Scam:        Fraudulent company offers personal debt consolidation loan, collects an up front fee and never provides the loan

 

 

Credit Repair Scheme

Fraudulent company offers to erase a bad credit history or remove bankruptcy info from credit records.  It collects an up front fee.

 

Financial Aid Scam

Fraudulent company offers to find student scholarships.  It collects an up front fee and fails to provide scholarships

 

Pyramid Scam        Fraudulent company which the first participants receive payment for recruiting additional members

 

Payday Loan        Legal loan that allows a person to get cash until payday with no credit background check.  The APR is extremely high.

 

Rent to Own        Legal scheme offered by some businesses where consumer pays a lot more money for appliances, furniture, and electronics because of first renting the item and then buying it.

 

Ways to avoid getting caught in scams and schemes

 

1.   Keep your greed in check

2.   Buyer Beware

3.   Be careful and skeptical

4.   If sounds too good to be true it usually is, ask questions

5.   Hang up on telemarketers offering chance of lifetime

6.   Walk away from salesperson on campus offering free trips to Cancun in exchange for your credit card or debit number

7.   Live within or below your means

Shred documents that have personal information

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