|HUD 'Tracer' Business? Watch Out!|
If you are approached by a firm offering opportunities to make big money collecting fees as a Third Party or HUD Tracer, or by someone offering to "help" you get money the government owes you -- Watch Out.
Typical ads to watch for will include claims like, "Now you can make from $600 to $1000 a week or more helping the government find people who they owe money," and will offer, for a fee, to set you up in business as a HUD Tracer.
These firms offer to set people up as HUD Tracers by selling them lists of persons who are due insurance premium refunds from HUD-insured mortgages. The tracer then tries to contact people on the list and charge them a percentage of the refund to help them get the money. The contact lists or "tracer kits"
Sounds good, but ask yourself this: If tracing is such a good business, why are these firms so anxious to "share" the opportunity? Why don't they just make all the contacts and collect all the fees themselves?
In reality, HUD Tracers find it very hard to make any money and can end up in legal trouble by trying to do so. Why?
- Thousands of tracers compete with each other using the same lists of names.
- Data on the contact lists are only as current as of the date the FHA insurance was terminated. Since the information is outdated, finding people on the list can be time consuming and costly.
- The Internet has made it easy for people to find this information themselves. HUD offers a Web site where anyone can find out if they are due a refund.
- Many people contacted by tracers call or email HUD/FHA to inquire and end up getting their full refund without the tracer,
- HUD will only pay a refund to the legal recipient - not to the tracer. This means tracers must attempt to collect their "fees" AFTER the recipient has received the money from HUD.
While third party tracing is technically legal, tracers often commit two fraudulent acts in dealing with the persons they contact:
- Claiming that the recipient must pay a fee to get the refund. (Recipients who contact HUD/FHA themselves get their entire refund without paying any fees or charges.)
- Claiming that the tracer is part of, or authorized to act on behalf of the Federal Government. (Clearly, both claims are false.)
Any claim by an individual or firm that they are authorized by HUD, contracted with HUD or acting on HUD's behalf to do so is fraudulent. HUD has no "Refund Tracer Program."
If you are approached by an individual or firm about funds that may be due to you from the government, HUD provides an easy to use Web site where you can check for yourself.