Scams
Tips on Protecting Yourself from Scams
Try the Office of Fair Trading's Scambusters Quiz
Fraudsters can range from the "bare-faced" to the highly inventive. Here are some examples - click on the title for an explanation -
1 Foreign Lottery Scams
2 Premium rate telephone number scams
3 Investment Related Scams
4 Nigerian advance fee frauds
5 Matrix Schemes
6 Credit scams
7 Get rich property schemes
8 Work at Home and Business Opportunity Scams
9 "Phishing" - emails - bogus finance websites
10 Counterfeit Bank Draft Cheques
11 Fake Lottery Cheques
12 Escrow services
13 'Mystery Shopper' scam
14 Parcel Scam
15 Fake Travellers' Cheques Scam
1. Foreign Lottery scams
These include the Canadian Lottery and the El Gordo Spanish Lottery. Victims receive an unsolicited phone call or letter congratulating them on winning the 'big prize' in a National Lottery such as the Canadian, Australian or Spanish. The excited victim is told that before they can claim the prize they must send money to pay for taxes and processing fees. There is, of course, no prize. Do not part with money.
The Spanish national lottery – El Gordo – is one of the richest and best-known international lotteries. However, criminal gangs of various nationalities are now using the renown and prestige of El Gordo to de-fraud people worldwide. They do this via mobile phones and false addresses (including the real addresses of official Spanish organisations). To add credibility, they mention ficticious names that sound like prestigious institutions (such as the European Lottery Commission).
There are also a number of organisations that offer to purchase foreign lottery tickets on a consumer's behalf, or offer entry into lottery syndicates. Entrants are invited to buy a number of lines in a variety of reputable national lotteries, including the German State Lottery, the El Gordo Spanish Lottery and the Canadian 6/49 Lottery. Lines can cost between £29 and £149 and are said to increase the purchaser's chance of winning. Deceptive organisations offer increased chances of winning or sharing in a large win due to the 'mathematical system' or because they have access to 'experts' with a track record of 'scientifically' picking winning numbers. They exaggerate the chances of winning and will offer consumers an 'exclusive membership' to syndicates. However, the chances of winning any lottery are low, and there are no systems that can increase chances of winning.
2. Premium rate telephone number scams
Swindlers may use 090 numbers to carry out many scams, including phony prize and holiday offers. This often begins when you get a 'notification' by post, claiming that you have won something and asking you to phone a number. If you call the number you'll probably hear a long recorded sales message. You might even be directed to a second premium rate number for 'additional information' or to order a product or service. You might be promised a product, but what you actually receive is usually disappointing and worth much less than the cost of the phone call. If you are asked to call a phone number because you are the winner of a sweepstake, what you will get is a large phone bill –sometimes £15 for a single call.
STATEMENT BY ICSTIS (Independent Committee for the Supervision of Standards of Telephone Information Services) -
" £20 PER MINUTE AND £50 PER MINUTE TELEPHONE 'SCAMS' - URBAN MYTHS
ICSTIS has received dozens of enquiries about the above 'scams', which are being widely publicised by e-mail. To help us put an end to the current spate of enquiries, please pass this information on to all contacts.
In the first case, the apparent 'deception' takes place when people receive a recorded message informing them that they have won an all-expenses paid holiday and are asked to press 9 to hear further details. It is then claimed that callers are connected to a £20.00 per minute premium rate line that will still charge them for a minimum of five minutes even if they disconnect immediately. It is also claimed that, if callers stay connected, the entire message costs £260.00.
In the second case, the apparent 'deception' takes place when people receive a missed call from a number beginning 0709. It is then claimed that, if callers dial this number, they are connected to a £50.00 per minute premium rate line.
Please note that these stories are NOT true.
£20.00 per minute and £50.00 per minute premium rate tariffs do not exist - the highest premium rate tariff available is £1.50 per minute. Despite the dozens of enquiries received by ICSTIS about these 'scams' (and most people appear to have heard about them second or third-hand), not one person who claims that it has actually happened to them has been able to produce a phone bill to support their story.
ICSTIS urges any individual or organisation that receives an e-mail about these 'scams' to delete it immediately. Please do NOT forward it to others. "
3. Investment Related Scams
A call may come out-of-the-blue from somebody inviting you to invest in shares, fine wines, gemstones, works of art or other 'soon-to-be-rare' commodities. These investments often carry very high risk and may be worth a lot less than you pay. The shares will not be quoted on any stock exchange and you will not be able to sell them easily afterwards. ‘Solid’ valuable investments, such as gem stones are often said to be stored in secretive Swiss bank vaults, so you can never see your investment (if it ever existed).
Once you agree to buy shares or invest in a supposedly valuable commodity, you will be asked to send money in exchange for share certificates or a certificate of ownership. Usually, the shares are almost worthless and you will not be able to contact the sellers, who have suddenly disappeared.
4. Nigerian advance fee frauds
Sometimes called Nigerian 419 frauds (so called after the section of Nigerian legislation which they breach) these schemes ask for your assistance in exchange for a share of a huge sum of money. It works when a victim receives a letter, fax or email which seems to come from someone with access to a huge sum of money, usually £10 – 20 million and almost always obtained corruptly. Typically, the writer claims to be a senior government official, an accountant with a state owned corporation, or perhaps a relative of a deposed politician. But apparently the writer has a problem. For a variety of reasons, he needs to transfer his loot to a bank in your country. Let him use your bank account as a temporary home for his ill-gotten gains and you can keep a big slice for yourself – usually 25 or 30 per cent. If you reply and give your banking and personal details, you will be showered with fake bank statements and similar documents, all intended to show that the money exists and is heading your way. Once they have convinced you, they will then ask for an up-front fee for 'administration' of up to £10,000 - peanuts compared to the promised pay-out of a couple of million or so. They may say that this is to bribe officials, or to buy airline tickets so they can come and meet you for the big share-out. Either way, they will take your money and run. And yes, people have fallen for it and lost £thousands.
5. Matrix Schemes
Websites offering the latest expensive hi-tech gadgets as a 'free gift' in return for buying a low-value product are the subject of an OFT warning to consumers. The 'matrix' schemes, which are being promoted by a growing number of websites, promise people the chance of getting a valuable 'free gift', such as a mobile phone, ipod, or palm pilot, by spending £20 on a low-value product such as a mobile phone signal booster, or a CD ROM containing ring-tones and games.
Consumers who buy the product become members of a waiting list to receive their chosen 'free gift'. The matrix works by sending the person at the top of the list their 'free gift' only after a prescribed number of new recruits has signed up – the prescribed number varies according to the choice of 'free gift' but can be as great as 100. Once the 'free gift' has been sent, the remaining members each move up one place on the waiting list. The person who has moved to the top then has to wait until the prescribed number of new recruits has signed up again in order to receive their 'free gift'. Although it is not compulsory for members to sign up new recruits, they are encouraged to do so in order to move themselves up the waiting list faster. This has led to some members placing misleading adverts on internet auction sites offering the 'opportunity to buy a mobile phone for £20', in order to seek new recruits.
6. Credit scams
UK consumers seeking credit are being stung for thousands of pounds by a new advance fee scam originating in Canada. Advertisements have appeared in local newspapers offering 'fast loans' regardless of credit history. The adverts, which have a freephone number to call, are usually placed in the classified sections of free or local newspapers. Consumers who respond to these adverts are told that their loan has been agreed, but before they can have the money they will need to pay a fee to cover insurance of the loan. The consumers are asked to pay this advance fee by money order via Western Union or Money Gram. Once this advance fee is paid the consumer never hears from the company again and the loan is never received. The OFT is aware of victims who have lost up to £4,000.
7. Get rich property schemes
A number of seminars currently in operation offer the chance to learn "how to become a property millionaire". Typically, investors attend a free presentation and are told they can learn how to deal in property starting with little or no capital. Those who sign up typically pay thousands of pounds for the course. Schemes vary, but may involve the opportunity to buy blocks of properties as buy-to-let investments, or buying development properties at a discount, which have yet to be built. The companies may also offer no deposit finance deals to get the investor started. While a few people may have made a million, the vast majority are losing thousands of pounds.
Another variation is the buy-to-let property scheme, where companies offer to source, renovate and manage properties, claiming healthy returns will be made from rental income. In reality, the properties are often derelict and worth a fraction of the money paid for them, and the promised tenants are non-existent. Few investors see the returns they are led to expect.
8. Work at Home and Business Opportunity Scams
These offers apparently give you the freedom to work from home, but they ask you to send money up-front to invest in materials. These types of job adverts appear to offer paid work for 'stuffing envelopes', but are often a front for phoney get-rich-quick schemes. You reply to the advert and usually receive a request for money, after which you're sent a 'plan'. It instructs you to place a similar advertisement, photocopy the 'plan' and mail it out to other unsuspecting victims. The only person who makes any money is the promoter who placed the original advert. He or she then moves on.
Some home working scams offer to pay victims to assemble goods or craft items (for example, lamp shades). Of course, these promoters will reject everything you send them by telling you that your finished products do not meet their 'high standards'.
Spotting fraudulent business opportunities is no easy task, but there are certain clues: Promotions for fraudulent business opportunities often appear in the classified pages of daily and weekly newspapers and magazines, and online. The ads use similar bait: Good pay (say, £50,000) in a short period (weeks or months) for little effort. They describe an ideal work situation - the ability to set your own hours, be your own boss, and work from home. What the ads don't say is that the people behind these so-called business opportunities aren't really interested in helping you run a successful business: They're interested only in getting your money. To get you to buy-in, they may mislead you about the business opportunity's earnings potential and promote a "phantom" opportunity that has little chance of succeeding - for example, a business with little or no market. They may doom your chances of success by providing cheap, low-quality or out-dated merchandise; poor quality equipment and out of the way locations
9. "Phishing" - E-mails - bogus finance websites
There are numerous reports of suspicious e-mails, some disguised as being from well-known banks or finance companies. This is known as "phishing". The message usually spins a story about your details having been lost due to a computer problem. You may then be asked to click on a link and enter your account details in order to "re-activate" your account. The link might appear as a genuine webpage, but the target address is NOT at your bank. Fraudsters are attempting to gain access to your account. DO NOT DISCLOSE DETAILS OF YOUR ACCOUNT, especially PIN or other code numbers, even to genuine bank employees. Genuine banks and finance companies do not operate in this fashion.
10. Counterfeit Bank Draft Cheques
Typically, if you're advertising something expensive for sale, such as a car, you may get a call from an interested party offering to send you a cheque for much more than you are asking. It seems strange, but there's usually a plausable explanation, along the following lines -
The customer is abroad and wants to buy your car and have it uplifted by his selected shipping company. He proposes to send you the total amount including the shipping charge by bank draft and you then write a cheque to pay the shipping company.
Well, have you figured it out? Yes, the bank draft cheque is fake, you have given a genuine cheque to a shipping company for a four-figure sum , and (surprise, surprise) the shipping company is actually the customer in disguise.
This is another counterfeit cheque scam, this time in the guise of the 'Australian Lottery Corporation'. The scam uses counterfeit cheques to try and convince people that they have won a large lottery prize.
A letter from the 'Australian Lottery Corporation' states that you have won $750,000 in a lottery, but first you must pay charges for "taxes and insurance". A cheque for $4,880 is enclosed, made payable to you and drawn on a reputable American bank. This is supposed to be a portion of your winnings equivalent to the taxes and insurance, which is being advanced to you so that you can, in turn, use it to pay the charges to them. The cheque is, of course, counterfeit, but sometimes it’s sufficiently convincing to make its way through the banking system without question until it reaches the originating bank, who will then realise that it’s a fake. However, that can take several weeks. At that point, if your own bank has allowed you to draw on the cheque, those funds will be reclaimed from your account. Meantime, you have followed the instructions by repaying the $4,880 from your own funds (usually by Western Union or Moneygram cash transfer - the scammers favourite methods) to the fraudsters, who have now collected the cash and disappeared.
Remember,
-·you can't win a lottery unless you have entered.
-·legitimate lotteries don't ask you to pay taxes, customs fees, insurance, shipping or any other fee before receiving your winnings.
Our advice is straightforward: You have not won a lottery prize. Do not respond.
12. Escrow services
‘Escrow’ is a system of controlling a transaction between parties, by using a neutral third party to hold funds temporarily. This is especially useful where transactions take place at a distance, such as via the internet. A simple scenario would be that an escrow company would hold a buyer’s money in trust, and only pass it on to the seller once the goods have been delivered in good condition to the buyer, thereby ensuring that both parties honour their obligations.
However, there has been a report of an international fraud involving escrow. A seller nominated a shipping company to deliver a car to a buyer and to provide an escrow service. But in fact the seller was a fraudster who was also posing as the shipping company behind a cloned version of a genuine website. He received a five-figure sum from the buyer, then disappeared without supplying the goods. Information suggests that many other buyers have also been defrauded.
It would have been difficult to foresee those problems. However, if you have to buy or sell high-value items at a distance, try to use an independent escrow provider, perhaps a solicitor.
Tips to Recognise Scams
Scammers . . .
1. . . . are usually well-organised. They use well-crafted telephone scripts and professional marketing materials to appear legitimate. But remember, glossy brochures and a professional image does not mean they are genuine.
2. . . . are only after your money. They will claim that in order to obtain a prize or lottery win you have to pay an ‘administration fee’‘, buy a product, or call a premium rate telephone number before you can collect the prize. There is no prize.
3. . . . may seem very friendly. On the phone or at the door they'll usually seem approachable and genuine, taking an interest in you and your family. They will be more excited than you about your ‘good luck’ and use psychological tricks to part you from your money.
4. . . . will not tell you their true identity. The approach letter or telephone call will often come from overseas. You will be asked to send money to a PO Box or by money transfer system. Often they will ask you to keep your ‘win’, or ’deal’ secret.
3. . . . have a plausable answer to all of your questions. The scammer is a practiced con-man or woman. They know that most people are sceptical, but they will have an answer to all of your objections.
4. . . . will try to rush you into a quick decision. They'll want an immediate answer. They don't want to give you time to think, because once you think about it you'll know it's a con.. They will give you a deadline and tell you that you will lose out if you don’t respond straight away.
5. . . . will try to gain your trust. They will pretend to be anyone - officials from the government, the police, a bank or a genuine company, so that you will trust them.
6. . . . will steal your personal information. They will ask for your bank or credit card details or copies of your passport or identity documents. They say they are needed to ensure that the prize is paid to the right person, but in fact they will use your details for fraud.
7. . . . target everyone. Don’t think you can't be conned – no one is immune.
8. . . . offer you something that is ‘too good to be true’. Their offer seems to be a great opportunity that should not be missed. Do yourself a favour - give it a miss.
Tips to Protect Yourself from Scams
1. Are you the only one to receive this letter, call or email? Check with someone you know and trust, like a friend, relative or neighbour. The 'unique opportunity' has probably been sent to thousands.
2. Check out the business. Ask for written information or a number to call back. Check on the internet or with your local Trading Standards office if you’re not sure.
3. NEVER disclose your bank account or credit card details to someone you don’t know.
4. NEVER disclose PIN numbers - not even if the person who is calling says they are from your bank. They're lying - your bank would not ask you that.
5. Don’t be pressured into signing anything or sending any money.
6. If it’s a genuine offer they'll have nothing to hide, and the offer will still be there tomorrow.
7. It’s not always easy to spot scams as new ones are invented every day. If you suspect you have been a target of a scam don’t keep quiet – report it to your local Police or Trading Standards service.
8. If you have been taken in, don’t be embarassed into silence. Report it. It is professional and manipulative conmen that have broken the law.
9. Look out for friends or relatives who may have been targeted. Do they have lots of prize draw letters lying around? Do they get unusual telephone calls from overseas? Is their house full of unwanted cheap trinkets or jewellery? If so, encourage them to talk.
10. Trust your instincts - if it sounds too good to be true, it probably is.
The OFT is warning consumers not to respond to a new employment opportunity scam currently targeting the UK.
The mailing from a business called 'Paid Surveys' states that it is a customer employment firm using 'mystery shopping' to assist companies in improving customer service. Recipients are told that they have been chosen as a secret shopper and will be paid £350 for their first assignment. This is said to involve posing as a potential customer at a number of retailers and evaluating their service. Recipients are asked to contact an agent for detailed instructions.
The mailing includes a cheque made out to the recipient and allegedly backed by a reputable bank, to cover pay and other expenses. The victim is instructed to cash the cheque and then to immediately complete one of their assignments by posing as a customer of a money transfer agency and wiring 1,500 to a fake 'relative' at an address in Canada. However, the cheque is counterfeit and the money wired to Canada is collected by the scammer. Victims could be liable for any funds they spend while waiting for the cheque to pass through the banking system, and end up losing over 1,500.
Consumers throughout the UK are being targeted by this scam, which appears to have originated from Canada.
Consumers can avoid falling victim to 'secret shopper' scams by following these easy steps:
- ·never send money to a stranger using a money transfer service
- ·do not trust a cheque on face value just because it looks genuine, and
- ·do not be pressurised into sending cash, or money from your own bank account, in any 'mystery shopping' exercise.
Anyone who receives a similar mailing and suspects it may be a scam can call Consumer Direct for clear, practical advice on 08454 04 05 06 before sending off any money, or visit the Consumer Direct website. Consumers who believe they have been a victim of this scam can contact one of the OFT Scambusters team on 08457 22 44 99.
We have had a postal scam reported to us. This one works as follows. You get a card through your letterbox which appears to be from a parcel delivery business advising that it has not been possible to deliver a parcel. You are invited to call an 090 telephone number to arrange for delivery of the parcel. The phone number is actually a premium rate number and is very expensive to call and, of course, there is no parcel.
We are again reminding the public to be aware of scams which ask you to return cash via a money-transfer service, such as Western Union. Recently, a Staffordshire resident replied to a job advert on the internet. She received a reply saying she had been successful and could expect to receive $2,000 worth of American Express traveller's cheques. She was asked to process the cheques, and return part of the cash back to the sender using Western Union. After contacting Trading Standards, it was confirmed that the traveller’s cheques were fakes. The scammers intention was, of course, to use the woman to unwittingly pass-off counterfeit cheques. A man was later arrested in the South of England and over $100,000 in fake traveller’s cheques were found. However, it is suspected that the scam is probably part of a larger operation based in Nigeria and South Africa. Western Union is, of course, a legitimate business which provides a useful service and is used properly by many people. However, this type of cash wiring system is popular with scammers because no cheques or bank transfers are involved. If you are asked to return money by Western Union, or a similar method, be suspicious.
