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posted: 1/25/2013 5:20 AM

Fiscal cliff deal gives new life to old scam

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It didn't take long for scamsters to restart a scheme that promises to pay homeowners' utility bills but then steal their identification.

Q. I received an email last week, stating that the deal to keep the U.S. from falling off the "fiscal cliff" includes a provision that makes all homeowners and renters eligible to receive up to $1,000 from the federal government to pay their utility bills. The email has the logo of the U.S. Treasury on it and looks official, but it asks for my Social Security number and some other private information that I don't feel comfortable to provide. Is this offer legitimate, or is it a scam?

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A. It's a year-old scam that, sadly, tens of thousands of homeowners and tenants across the nation continue to fall for each month.

There is no such federal reimbursement or rebate program to help homeowners or renters pay their utility bills. But the countless number of people who were snared by the scheme made it one of the "Top 10" cons in 2012, the Better Business Bureau says, and it likely will keep getting stronger in the months ahead as terms like "fiscal cliff" and "economic stimulus" increasingly become part of our everyday conversations.

The typical scam begins with an official-looking email or letter suggesting that the federal government will pay up to $1,000 for those who have been hard-hit by rising utility bills. But sometimes, the scamsters have the nerve to call owners on the phone or even show up at their door in official-looking uniforms.

The owner is then asked to provide his or her Social Security number, and often the number of a credit-card or utility-service account. That's enough information for a con artist to easily steal a homeowner's or renter's personal identification, then proceed to get new credit cards or loans that the victim will be expected to repay.

Avoiding such scams is simple, the BBB says: Never provide your Social Security number or other personal financial information on the Internet, through the mail, or over the phone unless you initiated the contact. If you get a phone call from someone claiming to be from a local utility, hang up and call the customer-service number on your monthly bill to verify the legitimacy of the call -- and never, ever let someone who claims to be from the company into your home unless you have scheduled an appointment.

Q. I rented out my home last year instead of selling it. I know that I have to claim the $1,050 per month that the tenant pays me as income on my upcoming tax return, but do I also have to declare the $800 she paid for her security deposit?

A. No, you don't have to declare the tenant's $800 security deposit as "income" -- at least, not yet. But rules published by the Internal Revenue Service say you will have to pay taxes on the deposit you received if the tenant later defaults on the lease and you use the money to cover the lost rental income.

Q. We bought our home six years ago. It's probably worth about $25,000 less than we paid for it, but the homeowner's insurance policy we had to purchase to get our loan has an "automatic escalator" clause that raises our annual premium by about $75 per year to pay for rising construction costs. Can we cancel this escalator because our home is worth less than we paid?

A. You probably can, but you should talk to your insurance representative and your lender first.

Your annual insurance premiums are largely based on how much it would cost to repair your home if it was damaged, or how much it would take to rebuild if it was destroyed.

Though property values in your neighborhood are flat or dropping, the cost of labor and materials keeps going up. So, even if your house has dropped 10 percent in value, it easily could cost more than 10 percent of the original purchase price more to make repairs or replace it.

Your insurance agent can check your current coverage and determine whether it's enough to cover your expenses if you must eventually make a claim. Don't make a change to the policy until you talk to both your insurance representative and your lender to ensure you are fully covered and stay within the bounds of your bank's mortgage contract.

Real estate trivia: If all the gold that has ever been mined was melted down into a cube, a mathematician says, it could create a solid-gold, four-story house that's 150 feet long and 150 feet wide.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers, P.O. Box 4405, Culver City, CA 90231-4405.

2012, Cowles Syndicate Inc.

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