To view our Top Ten Scams of 2012 infographic click here.
CHICAGO, IL- January 8, 2013 – Topping the list of scam activity for 2012 is
work-at-home schemes, accounting for over 33-percent of scam inquiries to the Better
Business Bureau serving Chicago and Northern Illinois (BBB). This scam is
especially tempting to people that are out of work or in need of additional
income. Coming in a close second, with
30-percent of scam inquires, is advance fee brokers. Advance fee brokers are
usually, if not always, empty promises of a personal or business loan requiring
payment of a fee in advance. This scam attracts vulnerable consumers that need
cash urgently.
The BBB’s
Top Ten Scams are ranked based on number of specific inquiries made by
consumers to provide insight on the deceptive and sometimes illegal business
practices in 2012.
"In 2012, many consumers
were still working on improving their financial situations in these challenging
economic times,” said Steve J. Bernas, president & CEO of the Better
Business Bureau serving Chicago and Northern Illinois. "Scammers were ready to
capitalize on this vulnerability and take advantage of consumers.
Bernas
explained, “Being aware that these scams exist is extremely important so that
people can avoid becoming a victim and losing money or personal financial
information.”
The
complete list of Top Ten Scams in 2012 from the BBB includes:
- Work-At-Home Schemes. There are certainly
legitimate telecommuting jobs, but many work-from-home opportunities are
scams. Promising convenient work always attracts attention; however, when
the requirement is to send money for materials first, consumers should
always be on guard. Do not purchase services or products from a firm
that’s reluctant to answer your questions and be cautious of any company
that offers an exceptionally high salary requiring few skills and little
work. Check offers out thoroughly for free with the BBB at www.bbb.org
- Advance Fee Brokers. Often these appear to be very
professional operations with attractive websites and advertisements.
However, it is illegal
for a business to charge a fee prior to providing a loan. Typically, after
wiring money to the scammer, the victim never receives the loan. These
“lenders” will use fake physical addresses or the addresses of real
companies that are victims of identity theft.
- Credit Repair Services with Advance Fees. Consumers with bad credit
ratings are particularly vulnerable to this scam. Everything a
credit-repair operation offers an individual can do personally at little
or no cost. Credit repair operations cannot ask for money in advance and
they cannot automatically remove legitimate negative reports from your
credit history.
- Foreign Lotteries. Any lottery from a foreign country is illegal
in the United States.
Stating a person can win, or is a winner already provides a strong
incentive; however, people should never send money to obtain lottery
money. Scammers using fictitious addresses will request you send “fees and
taxes” to them through a wire service, they take the cash and never
provide any winnings because there are no winners.
- Prize Promotions. There are several variations of this scam, but
most include some aspect that requires people who are identified as
“winners” to provide money or some type of personal information, such as a
credit card or social security number, to verify being a winner. In the
end, no prize is awarded and the personal information is then used to
withdraw a victim’s money from accounts or for identity theft.
- Office Supplies - Sale by Deceptive Telemarketing. This scam features fake
invoices for office supplies being sent to a business, often for only a
couple of hundred dollars. This relatively low amount makes it easier for
company personnel to quickly sign off and feel it is not worth their time
to check the invoice’s validity, which would be done if it was for a
larger amount.
- Pyramid Companies. Pyramid schemes within companies are
fraudulent because returns to investors are paid from
personal money or the money paid by the newest investors, rather than from
any actual profit earned by an individual or organization running the
operation. These scams collapse because payouts exceed investments, or
because the legal authorities prosecute the organizers for sale of
unregistered securities. Often the organizers simply disappear with funds
sent to them.
- Debt Relief Services (Non-Compliant with FTC rule). The Federal Trade Commission
has established rules
for debt relief services (for profit businesses that represent that they
renegotiate, settle or alter the terms of payment for an unsecured debt).
The FTC rule governs disclosures and representations that debt relief
services can make and does not allow advance fees. There are legitimate
debt relief companies that comply with the FTC rule and the Better
Business Bureau is identifying only the non-compliant companies as scams.
- Paving, Painting, Home Improvement by “Traveling”
Workers. Never
pay upfront to a “traveling” contractor who just happens to be in the
neighborhood, is doing work nearby, or has extra materials. The technique
to get your money often requires you to pay for added materials. Once you pay
the contractor, he disappears with the money and no work is ever done. Having
access to your property also provide an opportunity for these people to
check what valuables you may have for a future burglary or ID theft.
- Sweepstakes. If you don’t remember entering a sweepstakes, be very
suspicious about being declared a winner. If the prize provider wants you
to send money or give your social security number to receive your prize,
take no action. If you send money you will likely never receive a prize,
or you will get a prize of lesser value than the money you’ve sent.
“Remember, before giving
any company credit or debit card information, the BBB recommends reviewing the business
fully to avoid potential billing nightmares,” said Bernas. “As always, if an
offer seems too good to be true, it probably is.”
For more
information on these top 10 scams, visit www.bbb.org
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As a
private, non-profit organization, the purpose of the Better Business Bureau is
to promote an ethical marketplace. BBBs help resolve buyer/seller complaints by
means of conciliation, mediation and arbitration. BBBs also review advertising
claims, online business practices and charitable organizations. BBBs develop
and issue reviews on businesses and nonprofit organizations and encourage
people to check out a company or charity before making a purchase or donation.
