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Tough economic times make fertile breeding ground for scammers and this recession is no different. I was at the Consumer Federation of America conference in Washington, DC last week, where several state consumer protection regulators spoke about the sharp increase in financial and consumer scams. Here are five scams on the rise and how you can avoid falling for them:

- Stimulus grant scams. Since the $787 billion stimulus bill became law in February, dozens of websites have popped up offering advice for a fee on how to get government grants on everything from small business initiatives to paying off student loan debt. The BBB has received hundreds of complaints about sites like, which billed consumers $70 a month on their credit cards for info they thought was free. First, know that the government doesn't hand out grants for paying off personal debt and grants are usually given to non-profits. If you want to know how to apply for a government grant for a non-profit or small business initiative, that info is readily available for free at and

- Mortgage foreclosure consultants. Foreclosure rescue scams are proliferating as the number of home foreclosures rises. The FTC has filed lawsuits or shut down a number of foreclosure rescue companies but scammers keep popping up. While some scammers trick you into signing over the title of your home, others promise to negotiate with your lender for an upfront fee, then pocket the money and disappear. Beware of cold-callers or anyone showing up at your doorstep offering to help stop a foreclosure. Only work with a HUD-certified housing counselor if you run into trouble paying your mortgage.

- Auto repair fraud. According to the Maryland Office of Consumer Protection, auto repair fraud is sharply rising at dealerships around the U.S. Since car dealerships aren’t selling many cars these days, some less than reputable dealers are trying to bill customers who go in for routine maintenance for repairs that in many cases are just unnecessary. Get a written estimate of any proposed repairs and a second opinion before any work is done.

- Property tax reassessment fraud. Though home prices are still falling in many parts of the country, cash strapped cities and towns are much slower to decrease property taxes. Homeowners around the U.S. are being inundated with offers from companies promising to get property taxes lowered in exchange for a steep fee or cut of whatever is recovered. You don't need to pay a lawyer or third-party to fight your assessment. Homeowners can file an appeal on property taxes at no cost themselves.

- Retail closeout scams. As the number of retailers going out of business rises, complaints about retail fraud are growing. In addition to phony sale prices and low quality merchandise found in “going out of business” sales, some retailers on shaky financial ground are taking consumer deposits on big ticket items like furniture, shutting down and then reopening a few days later or weeks later for business under another name, all without returning a consumer’s deposit.

If you or someone you know gets tangled up in a scam, file a complaint with your state consumer protection bureau. Unlike the FTC, a state or county agency can investigate individual complaints and advocate on your behalf. And if enough people complain, they'll get law enforcement to fine or shut down the scammers. For other tips on outsmarting scammers, check out the Consumer Action Handbook.

- Donna Rosato