Your Weekly ScamWatch

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

New rules for debt relief -- New federal laws will make it more difficult for debt-relief companies to victimize consumers, a Better Business Bureau spokeswoman said. The new laws, which take effect Oct. 27, prohibit these companies from charging consumers until they’ve helped them reduce or change the terms of at least one debt. Since December 2007, the Better Business Bureau has received more than 6,000 complaints from consumers about debt-relief companies, said Alison Southwick, a BBB spokeswoman. Typical complaints were that the companies charged fees to consumers burdened with debt but failed to reduce or eliminate debts.

Beware of tax scam -- Taxpayers should beware of scammers who are attempting to fraudulently coerce people into paying past-due taxes that they do not know they owe, the California State Board of Equalization said. The Internal Revenue Service and California tax collectors do not send e-mail to notify taxpayers of overdue taxes, the board said in a news release. Taxpayers should discard such e-mails and not follow any of the links, the agency cautioned.

Mortgage fraud -- Federal prosecutors in New York have charged four people with 27 felonies for making false statements to obtain more than $2.8 million in mortgage loans from 2003 to 2005. The four defendants obtained home equity lines of credit on properties that did not exist, the U.S. attorney’s office in Manhattan alleged.

Debt collector fined -- One of the largest U.S. debt-collection firms has agreed to pay $1.75 million to settle civil charges, brought by the Federal Trade Commission, that it had made repeated telephone calls to collect overdue debts from the wrong person or that it sought to collect the wrong amount. Between 2006 and at least 2008, Allied Interstate Inc. continued collection efforts even after consumers told the company they did not owe the debt, without verifying the accuracy of the disputed information, the FTC alleged. Allied is a Minnesota corporation that works out of offices in the United States, Canada, India and the Philippines.

-- Stuart Pfeifer