These include the ‘Canadian Lottery Scam’ and the ‘El Gordo Spanish Lottery Scam’. People respond to an unsolicited mailing or phone call telling them they are being entered into a prize draw. Their names are then added to a target or 'sucker' list which is made available to numerous direct-marketing and telemarketing operators.
Victims then receive a phone call from the lottery congratulating them on winning the 'big prize'. The victim is told that before they can claim the prize, they must send money to pay for taxes and processing fees.
The Spanish national lottery – El Gordo – is one of the richest and best-known international lotteries. However, criminal gangs of various nationalities are now using the renown and prestige of El Gordo to de-fraud thousands from people worldwide. They do this using mobile phones, provisional and false addresses (including the real addresses of official Spanish organisations), as well as names that bring to mind prestigious institutions (e.g. European Lottery Commission).
Many typical scams take the form of prize draws, lotteries or ‘government payouts’ designed to trick the unwary. Schemes are usually based outside the UK although they may use UK PO boxes.
Most appear to be a notification or the prize in an overseas draw or lottery, in return for an 'administration' or 'registration' fee. Some require a purchase of some kind or suggest that there are government funds available to be claimed by individuals. More often than not, there is no prize or reward on offer. Anything that is 'won' is usually sub-standard, overpriced or misleadingly described.
One type of mailing purports to notify the recipient that they have been the lucky 'winner' of one of five prizes: usually a car, a cash sum, a TV, HiFi or other luxury electrical item, an expensively described piece of jewellery or a dream holiday.
To claim the prize the 'winner' only has to send an administration fee. The prize is invariably either a piece of cheap, shoddy jewellery, which is worth a fraction of the administration fee or vouchers for a holiday. However, the 'free' holiday is loaded with supplements and restrictions. It will not include flights, transfers or food.
There are also a number of organisations that offer to purchase foreign lottery tickets on a consumer's behalf or offer entry into lottery syndicates. Entrants are invited to buy a number of lines in a variety of reputable national lotteries, including the German State Lottery, the El Gordo Spanish Lottery and the Canadian 6/49 Lottery.
Lines can cost between £29 and £149 and are said to increase the purchaser's chance of winning. Deceptive organisations offer increased chances of winning or sharing in a large win due to the 'mathematical system' or because they have access to 'experts' with a track record of 'scientifically' picking winning numbers.
They exaggerate the chances of winning and will offer consumers an exclusive membership to syndicates. However, the chances of winning any lottery are low, and there are no systems that can increase chances of winning.
Swindlers can use 090 numbers to carry out many scams. They include phony prize and holiday offers. They often begin when the swindler sends you notification by post, claiming that you have won something. You might be promised a product or service, but what you actually receive is often quite disappointing.
If you are told to call because you are the winner of a sweepstake you will receive nothing at all, except an astronomical phone bill –sometimes £15 for a single call. You might call the number and be required to listen to a long recorded sales message. Remember, the longer you stay on the phone, the higher the charge for the call. You might even be directed to a second premium rate number for additional information or to order your product or service.
0870 / 0871 numbers. An increasingly worrying trend is the now widely accepted practice of using these numbers by companies and organisations to replace their geographic numbers. Although not regarded as premium numbers they should be. Many companies use such numbers for customer enquiries, support lines and even sales lines taking a profit from your call and dipping their hands by stealth into your wallet.
It is often a misconception that these lines are charged at the national rate but that is not the case, the charge for calls can be as much as £1 per minuite and there is no legal obligation to state what you are being charged making these numbers more of a hazard than the 090 numbers. Whilst Ofcom have ruled that these numbers should be controlled in the same fashion as 090 numbers they fall short of dealing with the scam properly and it will take at least 2 years before any of the proposed legal requirements will be put into force.
For now It is recommeded that you take note of companies using this unethical behaviour by checking their contact phone numbers before you buy from them, choosing to support those that don't use these numbers in preference. Secondly use the following website :
SayNoTo0870.com
They hold a database of alternative geographical numbers for many companies which will allows you to look up alternative numbers. You can also read the Ofcom proposals here.
There are several things to be careful of when bargain-shopping online. Anyone can research an item quickly and discover its worth online. If you find an item priced far too low, it may be a scam -- a fake item, a stolen item, an item in really bad condition or something you will pay for and never receive. This is especially important in online auctions, where the pressure may be high as the bidding reaches the closing time.
Never agree to pay by cash or money order -- these methods of payment are untraceable and offer you no protection. You may also want to be wary of escrow companies because they are easily faked. In the best scenario, an escrow company takes your payment and holds it until the seller sends you the item. However, auction scammers have set up Web sites for fake escrow companies. This means you send the escrow company the money and you never get anything in return.
When paying for an item in an online auction, you should pay with a credit card if possible or using Paypal which at least offers some protection especially where the seller has a good enough reputation to allow up to £500 guarantee via Paypal.
Particularly you should avoid anyone that insists in payment through Western Union or Moneybrokers, these are also un-traceable and a sure sign that you are dealing with someone who likes that fact. One common persuasive technique a seller might use to assure you is to tell you to send the payment under a different name (ie. a member of your family), until he sends the goods, then you can change the payee to the correct name once you are satisfied. This might sound reassuring however, he will stil need you to tell him the transaction number and name so that he can check the payment is there but what he will actually do is to fake an ID in the name and collect the money anyway. Do not use this method of payment ever it's simply not safe.
And no matter how great a bargain it may seem to be, never buy anything online from someone who approaches you through instant messaging or e-mail. Often, what happens is the contact person will tell you they have the item you are bidding on and will sell it to you for less. They may even lead you to fake Web sites they set up. By registering on the site, you provide them with all the information they need to steal your identity -- and of course, you never receive the items you paid for at their site.
See matrix schemes for more auction scams
Schemes offering to share a huge sum of money, which will be placed in your bank account. Details of the account into which it should be paid must be given together with a fee for 'administration' of up to £10,000 paid up front.
It works when a victim receives a letter, fax or email which purports to come from someone with access to a huge sum of money, usually US$20 – 30 million and almost always obtained corruptly.
Typically, the writer claims to be a senior government official, an accountant with a state owned corporation, or perhaps a relative of a deposed (and deceased) politician. But the writer has a problem. For a variety of reasons, he needs to transfer his loot to a bank in your country. Let him use your bank account as a temporary home for his ill gotten gains and you can keep a big slice for yourself – usually 25 or 30 per cent. If you reply and give your banking and personal details, you will be showered with fake bank statements and similar documents, all intended to prove that the money exists and is heading your way. It doesn't, and it isn't.
They will convince you that they need cash up front. Maybe this is to bribe a bank official to put the transfer through, or it could be for airline tickets so they can come to meet you for the big share-out. Either way, they will take you for your savings, your kids' savings, and maybe your home as well.
While a pyramid scheme may come in many different forms, it will always have the following characteristics: it will promise a financial return based on the number of people you are able to recruit to enter the scheme whatever money you make will depend primarily on the continued introduction of new members to the scheme and not the sale of a particular product or service.
The reason for this is simple: consumers are too often misled by claims about the likely financial returns. Because it is only possible to earn money by recruiting other into the scheme, those near the bottom of the pyramid always find that it is not possible to make the advertised return on their investment.
There are simply not enough people to support a pyramid scheme indefinitely. As a result, it is usually only those people who set up the scheme who are able to make any money.
Pyramid schemes are frauds that are based on recruiting an ever-increasing number of investors. The initial promoters (those at the peak of the pyramid) recruit investors who are expected to bring in more investors, who may or may not sell products or distributorships. Recruiting newcomers is more important than selling products.
No new money is created in pyramid schemes. Investors who get in early take their profits from investors who join later. At some point, no new investors can be found and as a result the last investors, who are at the bottom of the pyramid, lose their money.
Websites or auctions offering the latest expensive hi-tech gadgets as a 'free gift' in return for buying a low-value product are the subject of an OFT warning to consumers.
The 'matrix' schemes, which are being promoted by a growing number of websites, promise people the chance of getting a valuable 'free gift', such as a mobile phone, ipod, or palm pilot, by spending £20 on a low-value product such as a mobile phone signal booster, or a CD ROM containing ring-tones and games.
Consumers who buy the product become members of a waiting list to receive their chosen 'free gift'. The matrix works by sending the person at the top of the list their 'free gift' only after a prescribed number of new recruits has signed up – the prescribed number varies according to the choice of 'free gift' but can be as great as 100.
Once the 'free gift' has been sent, the remaining members each move up one place on the waiting list. The person who has moved to the top then has to wait until the prescribed number of new recruits has signed up again in order to receive their 'free gift'.
Although it is not compulsory for members to sign up new recruits, they are encouraged to do so in order to move themselves up the waiting list faster. This has led to some members placing misleading adverts on internet auction sites offering the 'opportunity to buy a mobile phone for £20', in order to seek new recruits.
UK consumers seeking credit are being stung for thousands of pounds by a new advance fee scam originating in Canada.
Advertisements have appeared in local newspapers offering fast loans regardless of credit history. The adverts, which have a freephone number to call, are usually placed in the classified sections of free or local newspapers. Consumers who respond to these adverts are told that their loan has been agreed but before they can have the money they will need to pay a fee to cover insurance of the loan.
The consumers are asked to pay this advance fee by money order via Western Union or Money Gram. Once this advance fee is paid the consumer never hears from the company again and the loan is never received. The OFT is aware of victims who have lost up to £4,000.
Schemes A number of seminars currently in operation offer the chance to learn "how to become a property millionaire". Typically, investors attend a free presentation and are told they can learn how to deal in property starting with little or no capital.
Those who sign up typically pay thousands of pounds for the course. Schemes vary, but may involve the opportunity to buy blocks of properties as buy-to-let investments, or buying development properties at a discount, which have yet to be built. The companies may also offer no deposit finance deals to get the investor started. While a few people may have made a million, the vast majority are losing thousands of pounds.
Another variation is the buy-to-let property scheme, where companies offer to source, renovate and manage properties, claiming healthy returns will be made from rental income. In reality, the properties are often derelict and worth a fraction of the money paid for them, and the promised tenants are non-existent. Few investors see the returns they are led to expect.
Offers to give you the freedom to work from home but need you to send money up front to invest in materials.
These types of job adverts appear to offer paid work for 'stuffing envelopes', but are often a front for phoney get rich-quick schemes. You reply to the advert and usually receive a request for money, after which you're sent a 'plan'. It informs you to place a similar advertisement, photocopy the 'plan' and mail it out to other unsuspecting victims. The only person who makes any money is the promoter who placed the original advert and he or she then moves on.
Also some home working scams work by asking victims to make goods or craft items. Of course, these promoters will reject everything you send them by telling you that your finished products do not meet their 'high standards'. You are left to sell the items on your own, if you can.
Spotting fraudulent business opportunities is no easy task, but there are certain clues: Promotions for fraudulent business opportunities often appear in the classified pages of daily and weekly newspapers and magazines, and online.
The ads use similar bait: Good pay (say, £50,000) in a short period (weeks or months) for little effort. They trumpet an ideal work situation - the ability to set your own hours, be your own boss, and work from home.
What the ads don't say is that the people behind these so-called business opportunities aren't really interested in helping you run a successful business: They're interested only in getting your money. To get you to buy in, they may mislead you about the business opportunity's earnings potential and promote a "phantom" opportunity that has little chance of succeeding - for example, a business with little or no market. They may doom your chances of success by providing cheap, low-quality or out-dated merchandise; poor quality equipment and out of the way locations.
Identity theft is not new, but it is on the rise, running rampant over the Web. The thieves need only a few elements to victimize you -- usually, your name and Social Security number will do. Obtaining this information is often intertwined with other crimes -- advance fee scams and bogus job offers among them.
The name for this scam is "phishing" -- as in fishing for your information but with a "ph" as in "phony."
Almost any scam can be sprinkled with a smattering of identity theft -- advance fee scams, fraud jobs and online auctions included. All it takes to become a victim of identity theft is a leak of your personal information. Your garbage may be targeted. (That's why you should shred anything that has your account numbers, Social Security number or that says you are "pre-approved" for credit -- before you throw it away.)
Telemarketers and e-mail spammers may attack you under the guise of protecting your accounts, auction transactions and credit cards. Some even pretend to be law enforcement or government agents.
If anyone from any company you do business with or that claims to be a representative of a government agency (like the police or FDIC) demands your personal information or an immediate payment for any reason, ask for a number and tell them you will call them back. Then get the number from a different source (bank statements, credit card statements or the phone book) and ask if the call was for real. Four bazillion dollars says it wasn't.
If this bet is wrong and there is some particularly friendly company making these sorts of calls, it won't mind if you say you need to call back.
Remember that clever phishing con artists are always looking for a new angle -- they may say they are from various different companies or agencies. Don't get caught off guard.
Products that are too
Office of Fair Trading (Scams)
Latest archives of Spoof Emails
Consumer Direct Scams
A good Scams Link Page
Visit UKOrbit's Consumer & Advice Centre for further help and information.
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