Protect Yourself from New Year's Scams

I'm trying to pay off my holiday bills and am tempted by the e-mails I’ve been getting about great credit-card deals and programs to get rid of debt. Are they legit?

Why We Fall for Scams

Happy New Year! Now is the perfect time to get your finances in order, tackle your debt … and fend off scam artists. Crooks take advantage of the calendar when planning their schemes to take your money, and they're using your attempts to make a fresh financial start as their peg right now. You need to be particularly careful before signing up for any of these e-mail credit-card deals or debt-relief programs, and be suspicious of a few other seasonal scams, too. Here's what to watch out for and how to protect yourself.

Credit-card scams. Just as you start the year resolving to pay off your bills, scam artists step up their efforts to steal your money. Posing as bank employees, they call or e-mail with offers to let you lower your interest rate by transferring your balance to a cheaper card. Once you give them your information, they use it to steal your identity or to make charges on your current card. Some low-rate offers are legitimate (see Using Balance-Transfer Cards to Pay Holiday Bills), but legitimate offers typically come through the mail, not by e-mail or phone call. Ignore all but the mail offers, and vet the one you want to pursue by looking up the bank's customer-service number on your own and calling to find out if the offer is real. Also be alert to a scam in which thieves impersonate an employee of your bank's fraud department. The scammers claim they've found suspicious charges on your card and need extra information (such as your Social Security number or the security code on the back of your credit card) to protect you. Actually, they're using the information to steal your identity. Bank fraud departments really have been stepping up efforts to spot fraudulent charges, but if you get a suspicious call that asks for personal information, call the customer-service number on the back of your credit card.

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Debt-relief scams. A balance transfer may not be enough to get you out of debt -- and January is a natural time to tackle your debt problems. Scam artists take advantage of this timing, too. Some debt-relief programs beef up their advertising (or spamming) to attract people who are trying to pay off holiday bills and charge them high up-front fees to negotiate with lenders; others charge high up-front fees and then disappear. If you need help getting out of debt, contact a credit-counseling agency. These organizations can provide budgeting help for free and generally charge a small fee if you decide to sign up for a debt-management program. You can find a credit-counseling agency through the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. See Escape the Debt Trap for more information and resources to help you get out of debt. And always check out any company with the Better Business Bureau, which keeps track of any complaints.

Job-search scams. Now that the holiday season is over, it's not unusual for people to start (or resume) a job search. That's exactly why job-search scams become more prevalent at this time of year. Some offer work-at-home opportunities that ask for a big up-front fee to get you started. Others gather information from resumes posted online and call and pose as a prospective employer, asking for your Social Security number and other personal information so they can do a background check. Instead, they use this information to steal your identity. Research the company and the contact before giving out any information, and see Guard Against Job-Search Scams for steps to protect yourself. Monster.com's Security Center also has helpful tips for avoiding job-search scams.

Tax scams. January is also the month when you start to gather your tax documents for filing. Scam artists take advantage of that, too. Some set up shop as tax preparers, either online or in person, aiming for access to the personal information that can help them commit identity theft. To find a legitimate tax preparer, see How to Find a Good Tax Adviser. After you file, you may get e-mails from crooks claiming to be from the IRS and asking for your bank account details so they can direct-deposit your refund. The real plan is to steal your money. Or they may ask for more information about your return in an e-mail with an attachment that carries a virus, infecting your computer (another way to get access to your personal information).The IRS never sends e-mails about your tax return. And if you get a letter or call that appears to be legitimate, still verify the information by contacting the IRS yourself (see the IRS's phishing page for details about whom to contact). See 5 Ways to Avoid Tax Scams for more information about protecting yourself.

For more information and resources to help you avoid scams, the Federal Trade Commission's ID Theft page, the government's OnGuardOnline.gov page, and the FBI's Be Crime Smart page, especially its New E-Scams and Warnings alerts.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.