Cue the theme music to “Jaws.” As if on cue, scammers intent on conning consumers are busy trolling for your piece of the government’s economic-stimulus payment — commonly known as the “government rebate.”
The first electronic payments of $300 to $600 per person went out Monday — a week early — nearly guaranteeing that criminals will be working overtime on new and compelling pitches to lure consumers into their traps.
The first paper checks are due to go out May 9.
“Rebate Credit!” announces one postcard. “Official Notification” trumpets another, professing a gimmicky “home mortgage provision” with the government’s program.
Yet another is an official-looking e-mail ploy with the Internal Revenue Service logo seeking your Social Security and bank-account numbers to complete the processing of the rebate payment.
“These are all criminal efforts to obtain your personal information, and it’s best to ignore it,” said Jean Carl, spokeswoman for the IRS in Denver. “The IRS does not contact you by e-mail. We already know what we need to know.”
Meanwhile, thousands of Americans started getting the real-deal payments Monday, the first of an anticipated 800,000 daily direct deposits the government is to make this week. Another 5 million deposits will be made Friday.
In all, 130 million Americans are expected to receive a payment, the distribution date of which is determined by Social Security number.
Rebates range from $600 for an individual to $1,200 for a couple; families with kids can get $300 per child.
So what to do with the newfound cash? Advice varies, though most people say they will either save the money or pay down debt they already have rather than splurge, which is what the government hoped would happen.
“The most prudent thing is to avoid the urge to splurge,” said Kim McGrigg, spokeswoman for Consumer Credit Counseling Services in Denver. “Take a minute, have patience, and decide the best use of the money. Don’t treat it as found money.”
That can be tough for consumers to do, especially when retail outlets are enticing shoppers to spend.
Kroger Co., which owns King Soopers and City Market supermarkets, and Sears Holdings Corp., which owns Sears and Kmart, want customers to convert rebate checks into gift cards.
To sweeten the offer, the companies will add $30 for every $300 that’s turned into a gift card.
“Grocery bills represent a significant expenditure for the average American family,” King Soopers president Russ Dispense said Monday. “This program allows our customers to stretch their grocery dollars further.”
Other retailers will be launching ad campaigns to suggest ways for consumers to spend their rebate money. Home Depot wants people to buy items that will cut energy bills, while Staples is focusing on small businesses with discount offers.
But McGrigg warns of impulse buying: “Certainly there are those who will stimulate the national economy, but we encourage consumers to consider their personal economy.”
Many are. Several consumer polls have found that up to 60 percent of Americans plan to use the money to pay utility, credit-card and other bills.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
Pay for what you already bought
Using the rebate to pay down credit-card debt can have a significant effect on personal finances:
•Assume a card has an $8,000 balance, the average family card balance, with an average interest rate of 14 percent and minimum monthly payments of at least $200, or 2.5 percent of the balance. It would take 23 years to pay off the card, including $6,800 in interest.
•A couple applying its $1,200 stimulus payment to the card balance but continuing to pay $200 a month with no additional charges would pay down the card in three years.
•Interest paid on the card would drop by $4,900.
Source:
When to expect your payment
Rebate payments under the economic-stimulus plan will be paid based on the last two digits of the recipient’s Social Security number. The dates represent the latest a payment will be sent:
Electronic deposits
No. Date
00-20 May 2
21-75 May 9
76-99 May 16
Checks
No. Mailing
00-09 May 16
10-18 May 23
19-25 May 30
26-38 June 6
39-51 June 13
52-63 June 20
64-75 June 27
76-87 July 4
89-99 July 11
Check to track your payment under “Where’s My Rebate?”
Source: IRS
Spotting a scam
How to avoid scammers working overtime to separate you from your economic-stimulus payment or worse:
•Ignore supposed IRS e-mails seeking information. The agency does not seek personal details via e-mail. Delete them, and open no attachments. They might contain a computer virus.
•Communications seeking bank information are likely efforts at getting personal data. Rebate payments are automatic.
•Phone calls regarding rebate payments, especially from someone claiming to be from the IRS, are scams. Hang up.
•Watch for bogus checks that appear to be from the IRS. Rebate payments are from the U.S. Treasury.
Source: IRS
