Information from a Better Business Bureau of Canada Press Release: This year, the Top Ten Scams focuses in on dubious practices of online commerce, asking consumers to read the fine print BEFORE you click “yes.” Complaints in 2009 run the gamut from teeth whiteners to premium text messages to government grants, but all tie back to consumers unwittingly consenting to sign up for the service or product.
1. Health Claim Scams
Bogus products that make “breakthrough” health claims on the Internet or promise cures for illnesses, such as cancer, target the most vulnerable consumers. Be wary of on-line swine flu remedies not authorized by Health Canada that are making unsubstantiated health claims that they kill or ward off the virus. Consult your health care practitioner before trying any new treatment. Don’t be influenced by “miraculous” testimonials discussed on websites and blogs. Think twice before buying a product that claims it can “do it all.”
2. Not So “Free” Trials
You may want to try out a new diet product, an acne cream or teeth whitener, but be careful about signing up for ‘free’ trial offers. Many websites offering a free trial for products do not disclose the billing terms and conditions or do not have such details prominently displayed on their website. Before providing any credit or debit card information, review the website fully to avoid in repeated billing. Remember that money transfers and direct debit are two of the main methods by which scam artists seek to obtain your money.
QUICK TIP: When considering trial offers, be sure to first determine whether you are enrolling in a membership, subscription or service contract that allows the company to charge fees to credit cards. To file a complaint, go to bbb.org
3. ID Theft
Often people find out that they are victims of identity theft after they are contacted by a collections’ agency for an account they never set up or because their credit has taken a hit. ID theft is when someone uses your information to obtain loans, goods, or services and does not pay the bills. Increasingly, people are being lured online into revealing personal information.
QUICK TIP: Do not fall for requests for information, or other scare tactics. Online scammers send emails that look legitimate, requesting that your “account information needs to be updated.” Another new tactic called “scareware” has a pop-up message showing that your computer is infected with a virus and that you need to visit a website to purchase and download anti-virus software that would fix the problem. These are all phishing tactics, ways to get you to reveal personal or financial information. If you receive these messages just delete them and do not click on any links. Doing so may compromise your computer’s security. If you are a victim of ID Theft call your financial institutions to request that your current cards be cancelled and that new cards be issued. You should also contact your local police and credit reporting agencies.
4. Home Repair Rip-Offs
Imagine hearing that your furnace is leaking dangerous carbon monoxide into your home. Many times homeowners are told that they need to do an immediate replacement due to a crack in their heat exchanger or because the contractor has a gas-sniffer device which shows high carbon monoxide levels. This high pressure safety situation often ends up in unnecessary and costly repairs.
QUICK TIP: Do not make a decision to repair right away. Start with the Better Business Bureau and search for a company reliability report at bbb.org.
5. Small Business Loan and Supply Scams
Looking for credit to keep your business afloat can be tough, and that is why you need to be careful of ‘no credit’ or ‘bad credit’ loan offers. What looks like quick and easy credit can often end up resulting in huge financial loss and possibly ID theft. Other companies call and pretend to be a regular supplier looking to confirm your address in a directory or to ship office supplies. Once bills arrive for unwanted advertising or overpriced supplies, aggressive “collection” agents call with threats of legal action.
QUICK TIP: If you receive an unsolicited phone call, email, or letter from a lender, be suspicious. Avoid dealing with a person who guarantees a loan without checking your credit or reviewing your business plan. Also, beware of lenders who:
• cater to applicants with bad credit;
• pressure you to make a decision on the spot;
• request payment using a wire transfer service such as MoneyGram or Western Union.
6. Free Government Money Schemes
Do you think you are entitled to free money from the government? Be suspicious of companies offering “free” advice on obtaining government grants. Often social networking sites and online ads will point to blogs that appear to be written by everyday people who are sharing the secret of how they received thousands of dollars in grants from the government to pay off their debt. In reality, this is a mass marketing scheme that does not provide an easy way for you to get a government grant. Rather, it costs you money to participate.
QUICK TIP: While it’s true that the Federal government does give out grant money every year, most grants are given to specific target groups, such as post-secondary researchers, or to specific industries. There is no reason to pay for software or guides when applying for government grants.
7. Business Opportunities
Your friend or a family member may have invited you to attend a presentation involving an investment opportunity. You don’t know anything about the company, and are desperate to hear that it is legit. These investments appear lucrative, but often involve more hype than substance. The promoter convinces investors that they can be part owners of an exciting investment portfolio, provided that they enlist new recruits. The promoter may even offer promising commissions in cash and bullion.
QUICK TIP: In reality, this could be an illegal pyramid scheme. The new capital brought on by new investors is keeping this imaginary investment afloat. Get the facts. If you attend an information session, be sure to collect business cards and promotional materials. You should also ask the promoters questions. For example:
• Who are the principals of the company?
• What are the average earnings of a “typical” participant – with half of the participants earning more than this amount and half of participants earning less?
• How much are the start-up costs?
Gather as much information as possible, before agreeing to anything.
8. Cashback Fraud
Cashback fraud usually begins when you advertise something for sale, such as a car. A buyer agrees to pay your asking price, but sends you a cheque or banker’s draft for a larger sum. The person asks you to bank his cheque and send him a money transfer for the difference. Sure enough, his or her cheque bounces a few days after your money transfer has left your account. You’re now out of pocket and looking for a bogus buyer who’s out-of-reach.
QUICK TIP: Criminal cashback works because cheques take longer to clear than electronic bank transfers. Do not ever wire money to a stranger. Do not allow greed to be your guide – be careful of offers higher than the asking price. If you believe that you are a victim of cashback fraud contact phonebusters.com.
9. Hidden Cell Phone Charges
If you own a cell phone and see new and unexplained charges on your bill each month, it may be due to premium text message services. People complain that they did not realize they were signing up for this service when they agreed to play an online game or to take an IQ test. In the end they receive monthly billings which do not come from their cell phone service providers, but through other third-party companies.
QUICK TIP: Premium subscription services require customers to confirm their subscription twice to insure they are aware of the cost per message, the frequency of messages and the opt-out information. Read all the terms and conditions when signing up for a game and think twice if you are required to provide your cell phone number.
10. Mystery Jobs Scams
The scenario sounds too good to be true, and it is. You have been led to believe that you will be paid to mystery shop via a wire-transfer service. You receive a cheque, which you are told to deposit, keeping a small percentage of the money as your wage. You are then asked to send the back difference via a wire transfer and to complete a survey on the service you encounter. In the end, the cheque bounces and you lose all your money.
QUICK TIP: Be skeptical of mystery shopper ads in newspapers or online. In most cases these are bogus services requiring you to pay money upfront. Avoid companies that promise guaranteed jobs, and that sell directories of companies that provide mystery shoppers.
For more information, go to MBC.BBB.org.
*********
This column is provided for general information purposes only. Please check with your local law enforcement agency and legal professional for information specific to you and your jurisdiction.
The information in this article is provided “as is”, with all faults, expressed or implied. The author and/or publisher and/or copyright holder makes no guarantee regarding the accuracy or completeness of the information. In no event shall the author and/or publisher and/or copyright holder be liable for any incidental or consequential damages, punitive damages, lost profits, and/or any indirect damages.
