What a year it’s been for you and your nest egg: Falling home prices and bank interest rates. High unemployment. A stock market bringing on roller-coaster nausea with daily drops and rises of hundreds of points
See also: Holiday Hoaxes
Tough times make easy pickings for scammers who cheat investors out of some $40 billion a year, with seniors the most common targets. So as we head into a new year, take a cue about the most common investment scams of 2011 as reported by the North American Securities Administrators Association (NASAA).
- Chimney sweeping. These scams usually start with telephone calls and mailed advertisements offering to clean a chimney for a bargain price, often $69 or less. But when the chimney sweep arrives, the clean-out is focused on your wallet. An "inspection" reveals any number of expensive problems — such as a supposed leak of carbon monoxide, structural damage or a worn-out chimney liner. Act immediately, you're told.
What to know: A legitimate chimney cleaning usually costs $150 to $200 and is recommended every year for people who use a fireplace at least weekly, or if soot rains down when the damper is opened. Get referrals from your local fire department or the Chimney Safety Institute of America.
Carbon monoxide leakage in chimneys is rare — and if you're told it exists, you should insist on seeing confirmation with a CO2 detector.
If your chimney is actually crumbling, expect to see pieces of brick, stone or mortar in your fireplace or outside the house. Good-quality chimney liners need to be well fitted, and the odds are small that the chimney sweep company will "just happen to have" the correct-size model on the truck. They can cost several thousand dollars, depending on your chimney.
Photo by Martin Rogers/Getty Images
- Furnace and ductwork cleaning. Your furnace should be cleaned and inspected for the winter. Given that your windows are shut tight in cold weather, cleaning heating ducts may seem like a smart move. And once again, there's no shortage of advertised bargains for these jobs.
What to know: Expect to pay about $100 for a furnace inspection and cleaning, which should take at least 90 minutes. Your best service firm — or source for referral — may be the company that installed your current unit.
"Be suspicious of anyone who immediately red-tags your furnace and says you need a new one," warns Sue McConnell of the Cleveland Better Business Bureau. "They'll tell you your heat is about to give out or you're in danger of carbon monoxide poisoning, but you should always get a second opinion or a carbon monoxide detector."
Think twice about paying for duct cleaning unless there's visible mold or clogging debris in your air ducts — unscrew the vent covers to look. Despite any claims by servicemen that routine cleaning is good for the health of the people in the house, the Environmental Protection Agency does not recommend that the air ducts be cleaned routinely (pdf - 367kb) — only as needed.
If you do get your ducts cleaned, expect to pay $450 to $1,000 for a quality job, which should take two technicians with specialized tools at least eight hours to complete, says Consumer Reports.
Those $100 jobs frequently advertised in mailed fliers are likely to be useless "blow and go" work by a second-rate handyman with a wet/dry vac or bait for an upsell of a cleaning for more money. Get referrals from the company that services your furnace or the National Air Duct Cleaners Association and check reputations with the Better Business Bureau.
Next: Snow shovelers that never show up. >>
- Snow removal. You may have issues with the quality of work by the neighbor's kid, but that preteen entrepreneur usually doesn't collect until the job is done. And that helps avoid the most common snow-related scam: paying in advance, only to learn — after a snowfall — that the company has disappeared or doesn't deliver on its promises.
What to know: A seasonal snow removal contract makes sense for many homeowners, but try to negotiate to pay after the work is complete or month by month. And before agreeing to any seasonal arrangement, do your homework: Many snow removal services are sidelines for construction or other contractors, so check their reps with the BBB and your state's contractor licensing board or similar agency to avoid companies that have unresolved complaints.
Contracts should specify, in writing, at least the following: The beginning and ending dates for snow removal services, details of a back-up plan should a plow truck break down or be otherwise occupied, how the company will handle any lawn damage that its cleanup causes, and penalties for failing to remove snow as promised — as well as the provider's proof of insurance and license numbers.
You may also like: Learn how to get free ID theft protection.
Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.