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BBB Scam Alert: Beware of False Promises as Moratorium on Evictions Comes to an End

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The moratorium on evictions has been extended until October 3, but that doesn’t mean the crooks have postponed their tricks. Scammers often take advantage of the confusion and stress that surrounds important events. With more than 450,000 Texans behind on rent, the end of the moratorium is a perfect hook.

How the scam works

As the moratorium on evictions draws to a close, beware of scammers offering loans, selling credit repair services, or promoting government programs. These inconveniences are a way to trick desperate people with money they don’t have.

For example, during the COVID-19 pandemic, BBB Scam Tracker saw numerous reports of bogus ‘pandemic relief’ grants or government programs that would provide funding to those affected by the pandemic. Once you are “eligible for the grant,” the scammer will ask you to pay a handling or delivery fee to receive your funds. Of course, the grant does not exist, and if you pay up front, you just gave the crooks money.

Advance loan scams, debt relief, and credit repair scams work the same way. They promise a loan – or to repair your credit – for an upfront fee. No matter how much money you might need, don’t be tempted by “secured loans” or impossible services, like removing late payments or bankruptcy, from your credit report.

This recent BBB Scam Tracker report describes a situation that more people are likely to encounter as the eviction moratorium approaches. “I had been in dire financial straits for a few weeks now, so I was looking for loans and was turned down left and right,” the victim of the scam told BBB. The victim received a call from a loan provider, saying that her loan application had finally been accepted. There was only one problem: Before the business could release the money, the borrower had to increase their credit rating. Fortunately, this company had a way to help. “The way they would do it is they would send money to my account and then all I would have to do is send it back and that would increase my score.” Of course, the crooks never actually transferred the money. When the victim “returned” the funds, she transferred $ 1,000 into the hands of crooks and caused her account to be overdrafted.

Protect yourself from this scam:

Check any government program before signing up. If an organization offers you a grant or relief funds, get to know them before you agree to anything. Take a look at their website and read the reviews. If you think you are dealing with an impostor, find the official contact details and call the company to verify that the offer is legitimate.

Beware of unexpected calls, emails, or texts claiming to be from the government. In general, the government will not contact you using these methods unless you have given your permission.

Do you think something looks suspicious? Contact the agency directly. If you doubt a government official is legitimate, hang up the phone or stop sending emails. Then report any suspicious calls or messages. Make sure the agency is real. Scammers often make up names of agencies or grants.

Do not pay money for a “free” government grant or program. It is not free if there is a charge. A real government agency will not charge an early processing fee. Instead, find out if the grant is legitimate by visiting Grants.gov.

Upfront fees are a concern. Not all companies that promise to help you fix bad credit aren’t scams, but if you’re asked to pay up front, that’s a big red flag. In the United States and Canada, credit repair and debt relief companies can only collect their fees after performing the promised services.

Avoid guarantees and unusual payment methods. Genuine lenders never guarantee a loan in advance. They will check your credit score and other documents before providing an interest rate or loan amount and will not ask you to pay any upfront fees. Fees are never paid through gift cards, CashApp, or prepaid debit cards. Unusual payment methods and payments to an individual are a big tip.

Get more information by reading BBB’s advice on loan and credit repair services at BBB.org and learn more about scams by government impostors during COVID-19.

If you’ve spotted a scam (whether or not you’ve lost money), report it to BBB.org/ScamTracker. Your report can help others avoid falling victim to scams.


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