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Beware of these Scams!
1. Criminal cashback
This clever trick relies on
the fact that it usually takes five days or more before
cheques deposited in UK bank accounts are 'bounced' - that
is, rejected, dishonoured or returned unpaid.
Let's say that you decide to
sell something (for example, a car), so you place an
advertisement online or in your local newspaper. Someone who
appears to be a genuine buyer then sends you a cheque or
banker's draft for a sum which is considerably more than
your asking price. The phoney buyer asks you to bank this
cheque and then send him/her the excess by money transfer.
The catch is that your money transfer takes effect
immediately and is irreversible, but the fake cheque might
take weeks to bounce. Thus, you end up seriously out of
pocket with nowhere to turn to.
For more advice on criminal
cashback, read this
Fraud Alert from the Metropolitan Police.
2. Home-working scams
One universal feature of
home-working scams is that they all promise a high income
for very little effort, usually by running a business from
home. Although there are legitimate multi-level or
networking marketing businesses (such as utilities company
Utility Warehouse and cleaning-products firms Amway and
Kleeneze), the vast majority of these home-working
'opportunities' promise a great deal more than they deliver.
Some are outright frauds and deliver absolutely nothing -
you send off your joining fee and never hear from them
again. Others promise high wages for menial work such as
stuffing envelopes, but fail to pay out anything like the
amounts pledged, if anything at all.
If you're thinking about
starting your own business, read this
Fraud Alert from the Metropolitan Police.
3. Fake invoices and
data-protection services
These scams are usually aimed
at businesses and corporations, but we should all keep an
eye out for them. With the 'fake invoice' trick, a scammer
sends out thousands of bogus invoices for modest amounts,
say, £50 for print supplies. Although most accountants and
book-keepers will recognise these bogus invoices for what
they are, a few will slip through the net and be paid.
Another variant on this theme
is the dodgy data-protection or company-registration
swindle. This attempts to rip-off businesses by demanding
money for allegedly 'compulsory' registration under 'new'
data-protection laws, or by inviting businesses to advertise
in bogus company directories. As the owner of a small
business, I've had a few of these letters in my time along
with bogus demands for very high fees to re-register
internet domain names implying that they will be 'lost' if a
remittance is not sent immediately. These should also be
ignored.
4. Premium-rate telephone
rip-offs
Personally, I have a real
aversion to calling non-geographic numbers, so I stick to
calling freephone numbers (0800 and 0808) and UK numbers
which start with '01' or '02'. Nevertheless, premium-rate
numbers flourish, offering everything from horoscopes to
adult entertainment to big prizes - at a cost of up to £1.50
a minute for 090 numbers.
If I were running the country,
I would move quickly to ban those awful competitions and
scratchcards which charge upwards of £1 as an entry fee.
Recently, the news has been full of revelations about the
shady (and downright fraudulent) practices of those
production companies which make TV quiz shows and run
phone-in voting lines. Frankly, your chance of winning is
miniscule, but you could lose a fortune if you get hooked on
these services. Avoid at all costs!
5. Advance-fee frauds and fake
lotteries
Advance-fee fraud
(also known as the Nigerian or 419 scam) works like this:
you are promised a massive pay-off, usually millions of
pounds, in return for a modest one-off fee or the use of
your bank account. Usually, the conmen explain that this fee
will be used to bribe corrupt officials, or to meet bogus
customs duties or taxes.
Of course, what really happens
is, at the first available opportunity, fraudsters will
steal your life savings or empty your bank account. All the
while, they will dangle the promise of a fortune there for
the taking. Another variation on this theme is the fake
lottery. Ask yourself, how can you possibly win a foreign
lottery for which you've never even bought a ticket?
6. Boiler rooms
Watch out for calls from
convincing salespeople urging you to invest in little-known
stocks and shares. On almost every occasion, these calls
come from
boiler rooms which dump worthless or fictional shares on
unsuspecting victims. That hot stock promising huge returns
is sure to wipe out your savings, so don't take the bait -
hang up immediately.
By the many several investors
have been cold-called recently with offers to buy their
small-company shares at vastly inflated prices. The catch is
that they have to pay a fee to access this 'exclusive
buyout', so this is simply another variant of advance-fee
fraud.
Only firms regulated by the
Financial Services Authority can offer investment services
to the British public. You can check a firm's registration
here.
7. Phishing emails and calls
Watch out for emails which
appear to have been sent to you by a financial firm of which
you are a customer. The same goes for callers who claim to
represent your bank or credit-card company. In most cases,
these 'phishing' attempts are aimed at grabbing personal or
financial details in order to defraud you. So, don't click
on links in these emails; instead, delete them straight
away. Also, if you're not sure about inward calls from your
bank, call it back on the usual number. For more advice,
visit the
Bank Safe Online website.
8. Ponzi (pyramid or matrix)
schemes
In 1920, a large number of
Americans were conned by a now-infamous trickster called
Charles Ponzi. Ponzi raked in millions from investors who
were taken in by his promise to turn $100 into $150 in 45
days by trading in hoax 'postal coupons'. In reality, Ponzi
used contributions from new investors to fund the fake
returns to previous investors.
Although they have been
outlawed, Brits are still being duped by similar pyramid
schemes which promise large rewards for recruiting more
suckers. Ignore the hype and avoid all proposals which rely
solely on recruitment or promote recruitment as the primary
method (above selling a product or service) to generate
returns.
9. Sham charities
Some areas are particular
targets for charity collectors, both genuine and fake.
Although I dislike the 'chuggers' (charity muggers) which
confront me in the high street, I absolutely detest
for-profit businesses which pose as registered charities. If
a leaflet comes through your door asking for unwanted goods,
check to see if the firm is a registered charity. If it
isn't, then most - if not all - of your money will end up
lining some rogue's pockets, instead of benefiting good
causes. For more advice on this scam, read this warning from
the
Charity Commission.
Finally, these signs will help
you to watch out for scams which prey on greed and
ignorance:
1. They arrive via unsolicited
emails, faxes, letters or telephone calls.
2. They ask you for money
before you can claim your windfall/prize/inheritance.
3. They boast of guaranteed
returns well in excess of 6% a year (the interest rate paid
by a top savings account).
4. They don't explain
precisely how these fantastic returns are created.
5. They rely on sucking in
progressively more people in order to pay out and keep
going.
6. They claim secret 'insider'
knowledge (this is always the case for gambling and
boiler-room scams).
7. They promise huge rewards
in a short time with little effort (particularly
home-working scams).
So, remember: guarantees of
easy money are nothing but empty promises, and are sure to
be phoney. Keep your wits about you at all times!
This information provided by
The Motley Fool |
