Pyramid Scheme A type of financial fraud in which people pay to join an organization in exchange for the right to sell memberships to other people Ponzi Scheme Closely related to a pyramid scheme but the promoter generally has ID: 1028246
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1. Scams and Schemes
2. ScamFraudulent or deceptive schemes
3. Pyramid SchemeA type of financial fraud in which people pay to join an organization in exchange for the right to sell memberships to other people.
4. Ponzi SchemeClosely related to a pyramid scheme but the promoter generally has no product to sell and pays no commission to investors who recruit new members.
5. Affinity FraudA name for a type of scam that targets members of a specific demographic. Perpetrators may attempt to relate to or exploit characteristics common to the demographic. Targeted groups can include the elderly, ethnic groups, and religions.
6. OverviewCharacteristics and warning signs of predatory lending.The key targets of predatory lending.Common abuses and scams.Nonprofit organizations that can help consumers plagued by predatory lending.6Predatory Lending
7. Sell properties for much more than they are worth, using false appraisals.Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.Knowingly lend more money than a borrower can afford to repay.And many other scams.7In communities across America, people are losing their homes and their investments because of predatory lenders, corrupt appraisers, mortgage brokers, and home improvement contractors who:Predatory Lending
8. Packaging a loan with single-premium credit insurance productsRepeatedly refinancing a loan in a short period of timeCharging excessive rates and fees to a borrower who qualifies for lower rates and fees8Predatory lending is not defined by federal law except to the extent that a loan is a high-cost loan and contains one of a fixed list of terms or conditions. Predatory or abusive lending practices can include:Identifying Predatory Lending
9. Unreasonably high interest ratesMultiple refinancingUnnecessary debt consolidationBalloon paymentNegative amortizationDoor-to-door solicitationBack-dating of documentsLarge loan broker feesKickbacks between lender and brokerSingle-premium credit life insurance9Ten Warning Signs
10. Advance fee schemesThe prize that will cost youOnline auctionsFraud jobsMoneymaking schemesBogus charitiesScam schools10Common Scams
11. HOW DO THIEVES WORK?SkimmingDumpster DivingComputer SpywareAccount RedirectionPhishingPharmingWireless HackingStealingShoulder Surfing
12. Don’t become a victim.Investigate strangers who have deals too good to be true.Always stay in charge of your money.Don’t be fooled by appearances.Watch out for salespeople who prey on fears.Monitor your investments.Report fraud or abuse.Do your homework.Be wary of door-to-door solicitations.12Top Strategies to Avoid Scams
13. Additional ResourcesDepartment of Housing and Urban Development (HUD) — Office of Consumer and Regulatory Affairs, Interstate Land Sales/RESPA Division. (202) 708-4560; www.hud.gov/complaints/landsales.cfm.Federal Deposit Insurance Corporation (FDIC) — Consumer Affairs Division. (877) ASK-FDIC (925-4618); www.fdic.gov.Federal Trade Commission (For federal lending violations involving mortgage and consumer finance companies.) (877) FTC-HELP (382-4357); TTY (202) 326-2502; www.ftc.gov.Federal Reserve Board of Governors of the Federal Reserve System — Division of Consumer Affairs. (202) 452-3693; www.federalreserve.gov/pubs/complaints.13