Gloria Kroske took out a second mortgage on her Dallas, Ore. home in better times. Now, she and her husband are struggling to pay their bills on Social Security. Her husband has found work off and on, but multiple health problems make working difficult and medical bills are piling up.

While the Kroskes are current on their first mortgage, the second mortgage has been neglected and the bank has started the process of foreclosure. In December, they were forced to file bankruptcy in order to keep the home they have owned for 30 years.

Kroske said in a moment of weakness, she called National Auditing, a company based out of Texas that advertises nationally. She paid more than $1,000 for the company’s services, but never got the modification she needed. Once she made the last payment, she said company representatives stopped answering her calls.

“I just needed some help and they said that they did auditing and stuff on these mortgage companies, so I gave them a call,” she said. “It’s called desperate.”

Customers nationwide have turned to Better Business Bureau, state attorneys general and the Federal Trade Commission with similar stories. The FTC has issued multiple warnings about loan modification and forensic audit scams. BBB registered approximately 1,400 complaints against loan modification companies in 2011.

Though Kroske needed a loan modification, which changes the initial terms of the loan to lower payments, National Auditing only provided a forensic audit.

Such an audit reviews the terms of the original loan for errors, and the FTC warned “there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.”

Another consumer, Brian Becker, fell for a different tactic. He lost $2,500 when he hired a Florida company to help him modify his mortgage. He said Summit Legal Group called him and the representative claimed the company secured loan modifications for 100 percent of its clients.

“He assured me that the reason (the fee) was high was they had 100 percent approval rate,” Becker said. “If — for any reason at all — they couldn’t do it, I would get a full refund.”

He said he researched Summit Legal Group online and did not find any negative reviews or hints that there might be trouble. He had researched loan modifications and knew there were restrictions on who could provide such services.

“I thought I was doing my homework here,” he said. “So, I figured OK, I’m doing the right thing going with a law firm.”

He hired Summit Legal Group and paid the $2,500 fee. After not hearing anything for months, a representative from the company called him asking for more money. At that point, he said he knew he (more…)

As the unemployment rate hovers around 10 percent, Better Business Bureau warns that scammers are taking advantage of the opportunity by preying on the unemployed. Identifying the common red flags of a scam is one way for job hunters to protect themselves and their wallet.

According to the Labor Department, new jobless claims in mid-August unexpectedly jumped to 500,000, an increase of 12,000 over the previous week. Not only did jobless claims rise suddenly, but the length of unemployment is bleak for many. According to a July report from the Bureau of Labor Statistics, nearly 45 percent of unemployed Americans had been out of work for more than 6 months.

“The dismal employment rate means that a lot of people are desperate for work and may be grasping for any job which creates a great opportunity for scammers,” Kim States, BBB President. “Not thoroughly researching a job opportunity can make a bad situation even worse and a victim can lose hundreds or even thousands of dollars to any number of job-related scams.”

BBB recommends looking out for the following seven red flags when searching for a job:

Red Flag: The employer offers the opportunity to become rich without leaving home
While many legitimate businesses allow employees to work from home, there are also a lot of scammers trying to take advantage of senior citizens, stay-at-home moms, students and injured or handicapped people looking to make money conveniently at home. Job hunters should use extreme caution when considering a work-at-home offer and always research the company with their BBB first www.tucson.bbb.org.

Red Flag: The employer asks for money upfront
It is rarely advisable for an applicant to pay upfront fees or make a required purchase to get a job. BBB often hears from job hunters who paid a phony employer for supposedly required background checks or training for jobs that didn’t exist. Always research the job thoroughly before opening up your wallet. (more…)

Consumers across the nation have filed complaints with Better Business Bureau about a group of Connecticut-based companies involved in advance fee loan scams – loans that require upfront payment of fees in order to secure credit.

According to complaints filed with Better Business Bureau this spring, victims across the country lost an estimated quarter of a million dollars to phony lenders who took their money and ran, leaving the applicants in an even worse financial situation than they began with.

That is what happened to an East Haven, Connecticut man who wired more than $1,200 as a security deposit to a company calling itself Mont Samson Financial, for a $20,000 loan.

Despite recent improvements in the economy, lending standards remain stringent, leading cash-strapped consumers to turn to fraudulent lenders who promise loans regardless of the applicants’ credit history.

Complaints received by BBB are likely to be only the tip of the iceberg, according to Connecticut Better Business Bureau President, Paulette Scarpetti.

“We know from experience that the victims who file complaints with BBB represent a vocal minority, and that many other consumers across the nation may be falling prey to these schemes,” she said. “The worst part is that people being targeted are already suffering tremendous financial hardship.”

BBB recently received complaints about advance fee loan scammers that create, steal or modify more than 75 different company names for their operations, including Acclaim Equity Group, American Linx Financial, Capital Alliance Financial Group, Hartford Financial Services, Hazelton Financial, Howard and Clark Financial, Mont Samson Financial, Transgroup Services and Trillium Investment Lending, among others.

Advance fee loan scammers are known to illegally use names or slightly altered versions of names of legitimate companies to lend credibility to their sales pitches.

Most victims stumble upon advance fee lenders online in classified ads on sites such as craigslist.com, or in local Thrifty Nickel publications.  Advance fee loan operators try to stay a step ahead of legal action by putting up Web sites for limited periods, taking them down within a few weeks and replacing them with a new site under a new name and fake business address.

The Web sites look professional and often require the victim to fill out an application form that asks for bank account and Social Security numbers. The applicant eventually is told the loan is approved and required to pay thousands of dollars in upfront fees, supposedly to cover the cost of loan insurance and as collateral.  The victim never receives a loan and may even be tricked into paying the scammers even more money.

BBB advises cash-strapped individuals and small business owners to recognize the red flags of an advance fee loan scam

• The lender has a bad reputation—or none at all.  Research the lender thoroughly online and with your BBB. Most trustworthy lenders have an established track record; be wary if you can’t find much information about the lender online.
• The lender is not registered to do business in the state. Check with state financial or banking regulators.
• The lender asks you to wire money or send a money order before you can receive the loan. If you are instructed to wire money to another country consider this yet another red flag.

If you’ve become a victim of an advance fee loan scam, contact BBB by calling (520)888-5353 or visit, www.tucson.bbb.org, and report the incident to your police department. If you were asked to wire money to Canada, file a complaint with Canadian law enforcement by calling toll free: 1-888-495-8501 or e-mail: info@phonebusters.com.