A report this week from the Government Accountability Office – Congress’ investigative arm – found that such schemes are up substantially since a 2010 GAO report on the issue. The data show an increase from 2009 to 2011, followed by a decrease in 2012; so far in 2013, the number of complaints suggest the year will see another increase, the GAO said.
The schemes are ways rip-off artists try to separate in-trouble homeowners from their money with promises of helping them prevent a foreclosure. In the words of the GAO:
Agency officials and representatives of nonprofits told GAO that the schemes had become increasingly complex, creating challenges for law enforcement. For example, schemes involving attorneys—which tend to involve greater losses—had become more common in recent years following a regulation that bans upfront fees, but provides an exception for attorneys. These schemes present unique challenges because attorneys typically collect fees upfront and enforcement officials have difficulty trying to determine whether attorneys are providing legitimate services. Furthermore, officials and representatives of nonprofits also noted that some populations, including minorities and the elderly, continued to be targeted.
The report relied in part on data from the Federal Trade Commission’s Consumer Sentinel Network, an online database of millions of consumer complaints. While the data itself is available only to law enforcement to assist in monitoring and prosecuting crime, the network’s annual reports are available for all to see. Among the many startling conclusions from 2012 complaints alone:
Over 1 million were fraud-related. Consumers reported paying over $1.4 billion in those fraud complaints; the median amount paid was $535.