What Are Some of the Red Flags of a Scam?


Quick Answer

A red flag for an Internal Revenue Service phone scam is a caller who identifies himself as representing the IRS and makes aggressive attempts for payment, notes the IRS. Red flags of a mortgage rescue scam are demands for payment upfront, claims that mortgage modifications are guaranteed, and hard sales, according to the Consumer Financial Protection Bureau.

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The IRS does not make initial contact with taxpayers over the phone, but rather does so through the mail, states the agency. It also never asks for credit or debit card information over the phone, does not demand a specific payment method, and does not take enforcement action immediately following phone contact. Scam artists who make calls pretending to be the IRS demand payments and make angry threats regarding enforcement.

Scam artists offering foreclosure relief to consumers who may lose their homes often demand payment before loan modifications are offered, notes the Consumer Financial Protection Bureau. Only licensed lawyers can ask for payment first, and even then must do so under strict circumstances. It is also a red flag for a scam if someone claims that he can guarantee a loan modification, as only a mortgage company can make guarantees. People should never make immediate payments to mortgage modification services after being pushed to do so, and without investigating the companies, as this is another red flag for mortgage relief scams.

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