Published: January 16, 2007 05:42 pm            

BBB's Top 5 List of 2006 Schemes

1. Work at Home Schemes: This scam has topped the BBB’s List of Schemes for several years! Ads making unrealistic claims about earning thousands of dollars for stuffing envelopes, assembling crafts or jewelry, doing medical billing, being a secret shopper etc. are found on the Internet, in your mailbox, in newspaper classifieds and in email messages. Your BBB participated on a Task Force with the U.S. Postal Inspection Service to investigate many of these work at home offers and to combat this fraud. BBBs around the U.S. and in Canada shopped 112 offers and found that 111 of those offers required up-front payments from you, supposedly for supplies or instructions on how to participate – even though you are supposed to be the one EARNING money!



BBBs found that the 111 offers that required payment to participate were bogus and despite claims that money would be refunded for supplies (such as envelopes or jewelry kits), it didn’t happen. In fact, in the case of envelope stuffing, either the company took the money and sent nothing in return or they sent instructions on how to set up your own work-at-home business by placing ads similar to the one that you responded to in other papers, asking others to pay you to stuff envelopes. It is illegal for you to do this and you could find yourself being prosecuted if you followed the instructions.



Bottom line… if you see an opportunity to work from home and it requires you to spend money in order to earn money…you need to keep looking!



2. The Government Grant Scam: Many North Alabama consumers received phone calls during 2006 from people purporting to be with a government agency and offering a free grant – yet none of those calling us to check this out recall ever applying for grant. They also reported that they were required to give their bank account or credit card number if they wanted the grant, which was necessary for an information package.



If you receive this type of call, please keep in mind that the Federal Government is not going to offer free grants on a random basis and especially not through phone calls. While some government agencies do offer grants, you must go through a tedious application process and typically there will be many applicants vying for the same small number of grants available, so your odds of being selected are not high. Remember, if you do receive this type of phone call and are asked to pay a fee in order to cover shipping costs of a grant you allegedly “won,” it is time to say “no thank you” and hang up the phone!



3. The Foreign Lottery Scam: Similar to the Government Grant scam, consumers report receiving an email or letter in the mail stating that they have been selected as a winner in a lottery from another country, yet in most cases they don’t remember submitting an entry for it. Eventually the scammer will ask for a bank account to allow them to deposit winnings. If this happens to you – Don’t Do It!! This will give the con artist access to your bank account to withdraw your money instead. Or even worse… beware of checks that come accompanying a letter announcing you as a winner, with instructions on cashing the check. Read #3 below to find out why!



4. The Fake Check Scam: As noted above, many times these counterfeit checks are tied with a foreign lottery or even a sweepstakes promotion, but they have also popped up during transactions where you are selling an item on the web, applying for a job via the Internet or even placing an ad in the newspaper (typically one that is viewable on the web).



Here’s how it works with the foreign lottery scams—You receive a letter saying you’ve been selected as a winner and will be receiving thousands, if not millions of dollars. Along with the letter is a check that has been written for an amount typically ranging between $1,000 and $5,000, but possibly more. These checks are usually sent from foreign countries and even Canada, but bearing the names of well known US banks and companies. You are instructed to cash the check, then wire (Western Union) money back to a specific person. You are told that this money will pay for the taxes on our winnings and once received, your big winnings will be released to you. The checks are counterfeit, but can look very convincing. Even bank employees have been fooled.



It could take 2 to 3 weeks before the check gets back to the originating bank and is found to be counterfeit--probably long after you have already wired the funds back to the prize promoter. Please understand that you are responsible for the checks that you deposit at your bank and your bank will expect you to return the money to them. If you haven’t verified that the sender is trustworthy, you are taking a risk that you will be a victim of a financial crime. This is one of the fastest growing scams in the country. Don’t fall for it!



5. The Phishing Scam: This scam occurs when you receive an email from an imposter attempting to appear as a well-known national company. Through the email, they try to convince you to reveal personal information, such as your credit or debit account numbers, checking account information, social security number, passwords, etc. The reasons provided can range from merely needing to update account information to making it appear that your account may have been “hacked” into and you need to visit their site to protect your information. To add authenticity to their message, these fraudsters steer you through a live link over to a website which looks amazingly like the one belonging to the real national company.



These messages are being sent to thousands or millions of email addresses at once, with the hopes that they will “hook” someone who does have an account with the national company – thus the “phishing” (fishing) name. Newer versions may even involve a government agency such as the IRS, with claims that you have a refund owed to you that can be redeemed online.



Keep the following in mind, should you receive this type of email:





• Understand that most companies will not use email to ask you to update an account – specifically to protect you from this type of scheme.

• Never click on a live link over to a site if the sender is unknown. If you want to check out their website, key the web address in yourself and then still take steps to verify that the site is an authentic one..

• Treat unsolicited email requests for financial information or other personal data with suspicion.

• If you have an account with the company named, contact them to verify if it is genuine.

• Update anti-virus software and security patches to system software regularly.

• Forward any suspicious emails to the Federal Trade Commission. You can also forward unsolicited emails claiming to be from Visa or your Visa card issuer to phishing@visa.com.



This information represents the most common scams that targeted our North Alabama community and others this year…unfortunately many more exist. Whenever you are contacted about something that sounds too good to be true, keep in mind that it probably is, and contact your BBB to check it out at 256-775-2917 or 800-239-1642. You can also visit the BBB’s website at www.northalabama.bbb.org for tips articles on many topics!!

        

• Click to discuss this story with other readers on our forums.