Criminals and scammers continue to take advantage of the tough economic times.  They’ve come up with another mean spirited scam that sounds superficially legitimate because the criminals invoke the “Federal government” as their cover.

What’s the scam?  Using phone calls, ads, websites, text messages and even in person “sales reps”, the scammers are telling people that the Federal Government is offering to pay people’s various bills — whether it’s for utilities, or cell phones, or mortgages, or student loans or just about any bill someone might have.

How does the scam work?  In exchange for certain personal and/or financial information (e.g., credit or debit card number, or an SSN or other personal information) plus a fee, the individual will then be given instructions.  The instructions tell the individual how to use a provided bank account and routing number either to pay bills online or to print out checks to pay bills in person or by mail.  The scammers use language making it sound as if this is a legitimate benefits program being run by the Federal Government.

People become victims several times over.  First, they lose their private financial and/or personal information, the fee and could become identity theft victims.  Then they still have to pay the original bills and could face fines and other charges.  Why?  Because they tried accessing a bank account that’s not their own or unknowingly tried to pass a bad check.

The Federal Trade Commission (FTC)  and the Federal Reserve Bank of Atlanta have issued a very helpful alert about this.  For more details, go to the FTC’s website (www.ftc.gov) and look for the article titled, “FTC Alert: Federal Government Not Offering “Free” Money to Pay Your Bills.” That site also has a link to an excellent joint FTC/Federal Reserve Bank alert titled, “”Free Money” from the Government:Variations on a Scheme” — or you can access that second article directly by going to: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt020.shtm.

There are legitimate Federal government benefits programs that assist people in various ways.  That’s why it’s very possible people could believe this is another one of those programs.  It’s likely you wouldn’t believe the scammers but you could know people who might be less suspecting. I want to alert you in case someone you know asks you about it or has already been a victim.   The FTC/Federal Reserve document cited above provides more details about the scam as well as what to do if someone has already fallen prey to it.