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BETTER BUSINESS BUREAU®
ScamWatch
www.chicago.bbb.org |
THE TOP TEN FOR 2007
1. Check scams- Would be victims receive a check in the mail, allegedly for winning a sweepstakes, lottery, or promotion. The official looking letters often have a “FINAL NOTIFICATION” notation to give it a sense of urgency. The recipients are told that they are major winners of either a large prize or a lot of money, and the check enclosed is allegedly for taxes and fees; they are then instructed to deposit it into their personal account and then wire transfer a certain amount of money to a third party, the scammer, in order to cover the alleged fees. The catch is the check is no good and the money sent will come from his or her account or if the account is over drawn they will be responsible for making restitution to the bank.
2. Advance fee lenders- Frequently contact individuals by phone after they’ve filled out an online loan application or have found an advertisement in a local newspaper. Scammers often have professional-looking websites and contracts, and offer quick and immediate loans, usually “to be wired within 24-48 hours” to a victim’s account. The catch: the applicant is requested to pay advance fees before they receive the loan. The scammer will claim this fee to be for insurance, collateral, or premium, and will ask the consumer to wire the money via Western Union or Money Gram, almost always to a location in Canada. After the victims wire the money, they never see the loan funds or advance fee payments again. Advance fee lenders almost always use fake physical addresses or use a real company’s address unbeknownst to that company. The names on contracts are generic and most likely fabricated, and the phone numbers to contact the scammers are usually 800 or 866 area code.
3. Fraudulent online employment offers and misleading “hiring for managers” positions – Offers that look for “shipping” or “billing managers”, “payment processors”, or anything with a financial sounding name very frequently turn out to be fraudulent listings that are in actuality looking for victims to commit money laundering. An offer found on a legitimate looking website might state that it is a developing company in a foreign country, and is looking for US employees to accept, process, and forward payments on behalf of the company’s clients. The description might sound innocent enough and require little skill or education, but it is actually a very serious crime which the victim might unknowingly participate in. There are also many employment ads that lead the consumer to believe they are applying for an office manager position, but upon being hired by the company the position itself may wind up to be something completely different than expected. Many candidates find out there are upfront fees or they in actuality have to do commission-based door to door sales, allegedly this being necessary prior to becoming eligible for the manager position. Consumers should seek a very clear understanding on what the position that they’re applying for is and what will be expected of them – these two things might be very different than what the initial advertisement alludes to. Lastly, consumers should be wary of any employer that asks them to pay an upfront fee for a background check. Many consumers report to have paid advance fees for “background checks”, only to hear nothing from the prospective employer again- good or bad. For more information on what an employer can or cannot do, the BBB suggests consumer contact the Illinois Department of Labor at www.state.il.us/agency/idol.
4. Lottery/Sweepstakes notification letters - While epidemic in proportion the fake lottery/sweepstakes letters scam operation very much like the fake check scams. Individuals are notified that they have won a lottery or sweepstakes and instructed to forward money via wire transfer to cover processing or S&H charges. They are generally asked to send anywhere from $15.00-$30.00 to pay “taxes” or fees”, but then never hear from the sending or about the offer again.
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5. Overpayment scams – Very common though easy to spot, overpayment scams are usually found in forms of online ads and typically in places such as Craigslist or other classified forums on the internet. A potential “buyer” will contact the seller of an item listed on the internet, be it an animal, a car, or virtually anything else, and will claim that he or she wants to buy the item. The buyer will then send a check to the seller, but when it arrives, it turns out the amount of the check is higher than the price agreed upon. The buyer will claim this to be an accident, and will ask that the seller deposit the check and just send them another check for the remainder of the purchase price. The scam is that the original check is a bad one with no funds behind it, and the seller will be sending their own money to a con man. Reversely, on some occasions it will be the seller of the item that is conducting a fraudulent transaction, and will ask a potential buyer to wire money upfront for “fees” or “taxes”. Consumers should be on high alert for anybody who requires advance fees to be wired, and should either end the transaction altogether or suggest that the buyer and seller use a mutually acceptable escrow service to hold the funds until the item is received.
6. Mortgage Foreclosure Rescue scams – With the ongoing foreclosure crisis in the U.S., many scam artists have begun to prey on those in need and those desperate to save their homes. Due to foreclosure information being publically available, many scammers will contact the residents of the home and offer them a desperate plan that is affordable and allow them to keep the home. Perhaps they claim to know of investors, or perhaps they know a “loop-hole” that they will use to help consumers save their property. Unfortunately, victims of this scam will be asked to pay upfront funds or provide sensitive personal information, and will do so out of desperation to save their home. On many occasions the mortgage foreclosure scams will rob unknowing homeowners of their money and do nothing for them in return, and in other cases they may end up even worse off or unknowingly sign away their property to the scam artist entirely, on pretense that “they’ll be able to buy it back later”. The BBB strongly advises anyone going through foreclosure to thoroughly research their situation and any businesses they deal with in the process. It would be a good idea to contact the Department of Consumer Services to get more information on who to go for help.
7. Marketing and Investment scams – Individuals are solicited by mail or email and told they can make thousands of dollars working from home, simply by purchasing a special kit, book or tape collection, or confidential documents to the secrets of online investments and marketing moves. The scams almost always lure people in with elaborate websites, making promises and guarantees of huge returns, with lots of money being made quickly and effortlessly. The catch in order to participate individuals must pay fees, ranging from $30.00 to as high as $400.00, in order to get access to the information and/or products.
8. Inheritance scam – Emails or letters are sent to individuals from someone who will claim to somehow be related to them, or from somebody that claims to know that the individuals distant relative is either very sick or has died and left inheritance money. They are told that since he or she is the last known descendent of the recently passed, they are entitled to the money. The scammer then requests bank account and personal information, allegedly to wire the inherited funds, but the real intent it to rob the individual and possibly commit identity theft.
9. Phishing scams – Very problematic and dangerous with regards to the risk of identity theft. Generally emails are sent from what looks like a legitimate bank or financial institution, asking for confirmation of account numbers and personal information. The email might state that there has been a security threat and that’s why the information must be verified. The link provided in the email routes the consumer to the scammer’s website, which may look similar to a site of a legitimate institution, and the victim winds up sending their personal information and bank account to a thief. In addition to financial institutions companies like Ebay and PayPal are also used to lure potential victims.
10. Nigerian scam – This scam is now decades old. Emails or letters are sent from someone claiming to be an official or agent from a foreign country, who informs the recipient that he or she is seeking a reputable foreign company or individual into whose account they can deposit funds ranging up to millions of dollars left over from government funds a business bank transaction or a confiscated family inheritance. The money allegedly needs to be deposited into a trustworthy US bank account, the aim here being to get access to the individuals account and personal information and in some cases scam them out of thousands of dollars which the con artists says is needed to pay-off corrupt officials.