Everyone has probably heard the saying before: “If it sounds too good to be true, it probably is.” Unfortunately, scammers have mastered the craft of making their product, service, and/or initiative sound like it will give you the world without expecting a single thing in return.
The Better Business Bureau, a non-profit organization specializing in advancing marketplace trust, has compiled a list of the top 10 scams of 2012. The Number 1 business received over 33 percent of scam inquiries. The 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.
Can you guess which one made Number 1? View the results below:
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.
9. 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.
8. 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.
7. 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.
6. 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.
5. 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.
4. 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.
3. 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.
2. 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.
1. 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.