10 New Money Rip-Offs

From small change to big bucks, beware these scams.

Stop Identity Theft

It may be true there's a sucker born every minute, but today's cons are more devious than ever. So if you think you've heard it all, beware -- these 10 growing frauds might just surprise you.

For the latest money scam, read our rd.com update on PIN Block Fraud, which was not included in the original March 2006 article.

Child Identity Theft
Seventeen-year-old Randy Waldron, Jr., was shocked when he applied for his first credit card and was denied. He was even more shocked by the reason: He was delinquent in repaying thousands of dollars in debt.

Waldron's identity had been stolen by his estranged father, who left when Randy was a toddler. From 1982 to 1999, Randy Waldron, Sr., used his son's Social Security number to obtain credit from various merchants and lenders, then racked up tens of thousands of dollars in debts. He declared bankruptcy in his son's name, which resulted in default judgments against the younger Waldron. It has taken Randy Jr., now a 24-year-old flight attendant, years to untangle the mess.

Waldron isn't alone. Identity theft is this country's fastest-growing crime -- and, increasingly, ID thieves are targeting children. Their clean credit and absence of criminal histories make them ideal victims.

Linda Foley, co-executive director of the Identity Theft Resource Center in San Diego, estimates that at least 400,000 children had their identities stolen in 2005, more than double the number in 2003. Waldron's case is typical: The resource center estimates that two-thirds of child ID thefts are perpetrated by family members.

Some crooks use children's names and Social Security numbers to ring up massive debts; others use children's identities in place of their own when caught committing other crimes; still others sell identification information on the black market to illegal immigrants, fellow criminals or even terrorists. The ordeal inflicts enormous financial and emotional trauma on its victims, in part because the identity abuse often goes undetected for years.

Dealing with child identity theft after it happens is extremely difficult. Laws in many states are insufficient to handle the crime's complexity, and financial institutions are often less than helpful. Randy Waldron, Jr., has worked tirelessly for eight years to straighten out his credit record, and he continues to deal with the fallout. "It's been a very long and arduous battle," he says. "Recovering my identity was really the absolute hardest part. I think a lot of victims assume the problem will go away."

Keep your children's Social Security and other identification information in a locked file drawer, never in your wallet. If there's evidence that your kids might be the victims of identity theft, order credit reports on them from the three nationwide credit bureaus: Equifax, Experian and Trans-Union. The credit search should come up empty. If it doesn't, contact local law enforcement immediately, and visit the Identity Theft Resource Center's website at idtheftcenter.org.

Protect Your Personal Information

The Latest Work-at-Home Swindle
Posting your résumé on an online job-search site can be a great way to tap job opportunities. Be warned, however, that genuine employers aren't the only people trolling those sites -- they're also favorites of scammers operating work-at-home schemes.

The latest incarnation of this time-tested fraud begins when the crook gets your e-mail address and other personal information from a résumé you've posted online. He sends you a note in which he claims to represent a money-transfer company looking to hire you to test its money-wiring services. His firm will send you a check, he says, which you are to deposit in your bank account before wiring the money back -- keeping a "commission" of 5 to 20 percent for yourself.

"The company's check is counterfeit, of course," explains Susan Grant, director of the National Fraud Information Center. "And you're stuck owing your bank all the money you've wired."

Grant advises job hunters to be wary of any too-good-to-be-true employment offers, especially one that involves wiring money.

Fake Jury Duty Con
Jury duty may be a pain -- but the new fake jury duty scam is worse. The con begins when you receive a phone call, supposedly from your local court. The caller says that a warrant has been issued for your arrest because you've failed to report for jury duty.

Flustered, you protest that you weren't notified -- this must be a mistake! Not to worry, says the helpful caller; I'll just need your Social Security number and date of birth to check our records. You provide that information -- and the scammer has what he needs to steal your identity.

Real courts usually correspond by mail, not the telephone. And they don't need your Social Security number -- just your name and address should suffice.

Medicare Fraud
As many seniors know, the Medicare prescription drug program that took effect on January 1 is nothing if not confusing. It also administers an awful lot of money -- and the confluence of cash and confusion has drawn con artists like flies to you-know-what. Some fraudsters simply bilk seniors by selling phony plans, while others pose as insurers selling Medicare drug benefits in order to pilfer personal information.

No legitimate Medicare prescription drug plan will send salespeople to your door uninvited. Likewise, participating insurers are prohibited from asking for personal information as part of their marketing. Insurers may ask for your Social Security number when you're actually enrolling in their plan -- but they'll only need credit card or bank account numbers if you're signing up for automatic payments.