published Friday, January 21st, 2011

Learn when scams come your way

Jim Winsett

Q. Fraud and scams come in many forms today. What general advice do you have for recognizing these activities?

A. Great question. Mass marketing fraud comes in a variety of forms, and is a significant source of income for international crime rings.

These scam artists ignore geographic boundaries to reach out to potential victims by phone, e-mail, postal mail, through the Internet, and then trick them into sending money or giving out personal information. Last year, according to the Federal Trade Commission, Americans reported losses of more than a billion dollars to these fraudulent activities.

The Better Business Bureau and the FTC advise consumers to continually be alert and knowledgeable about fraud and scam activity. The following are 10 things consumers can do to recognize and stop fraud or a scam:

1 Keep in mind that wiring money is like sending cash: the sender has no protection against loss.

Con artists often insist that people wire money, especially overseas, because it is nearly impossible to reverse the transaction or trace the money. Do not wire money to strangers, or to sellers who insist on wire transfers for payment. Another growing scam is someone who claims to be a relative in an emergency and needs money sent to an address unknown by you.

2 Do not send money to someone you do not know. That includes an online merchant with whom you are not familiar. It is best to do business with sites you know and trust.

If you buy items through an online auction, consider a payment option like a credit card that provides protection. Do not send cash or use a wire transfer service.

3 Do not respond to messages that ask for your personal or financial information, whether the message comes as an e-mail, a phone call, a text message or an ad. Do not click on links in an e-mail message, or call phone numbers left on your answering machine.

The crooks behind these messages are trying to trick you into giving out personal information. If you get a message and are concerned about the status of a financial account, call the number on your credit or debit card, or your financial statement and check it out.

4 Do not play a foreign lottery. First, it is easy to be tempted by messages that boast enticing odds in a foreign lottery, or a message that claims you have already won.

Inevitably, you will be asked to pay "taxes," "fees" or "customs duties" to collect your prize. If you send money, you will not get it back, regardless of the promises. Secondly and most importantly, it is illegal to play foreign lotteries.

5 No matter how convincing the story, do not agree to deposit a check from someone you do not know and then wire money back.

By law, banks must make funds from deposited checks available within days, but uncovering a fake check can take weeks. You are responsible for the checks you deposit: When a check turns out to be a fake; you will be responsible for paying back the bank.

6 Read your bills and monthly statements regularly, paper and online. Scammers steal account information and then run up charges or commit crimes in your name.

Dishonest merchants sometimes bill you for monthly "membership fees" and other goods or services you did not authorize. If you see charges you do not recognize or did not approve, contact your bank, card issuer or other creditor immediately.

7 There are many natural disasters in the world. This initiates the opportunity and establishment of charities that pop up almost overnight.

Be aware that a start-up charity probably does not have the infrastructure to get help to the affected areas or people. They could be collecting the money to finance illegal activity.

8 Talk to your doctor before buying health products or signing up for medical treatments. Ask about research that supports a product's claims and what possible risks or side effects may exist.

Buy prescription drugs only from licensed U.S. pharmacies. Otherwise, you could end up with products that are expired, mislabeled or fake drugs. This could be very dangerous for you or a family member.

9 Always remember there is no such thing as a sure thing. If someone contacts you promoting low-risk, high-return investment opportunities, stay away.

When you hear pitches that insist you act now, guarantees of big profits, promises of little or no financial risk, or demands that you send cash immediately, report them to the FTC or your BBB.

10 In all activities, know where an offer comes from and who you are dealing with.

Try to find a seller's physical address (not just a P.O. Box) and phone number. With VoIP and other web-based technologies, it is difficult to tell from where someone is calling. Do an Internet search for the company name and website and look for negative reviews. Check them out with the Better Business Bureau at www.bbb.org .

Get answers to your questions each Friday from Jim Winsett, president and CEO of the Better Business Bureau Inc., which serves Southeast Tennessee and Northwest Georgia. Submit questions to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at jvass@timesfreepress.com.

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ulfwolf said...

When it comes to protecting yourself against online auctions scams: the best way I know to guard against being ripped off by online sales or auctions of any kind, Craigslist and eBay included—and whether seller or buyer—is to use a bona fide online escrow company. Especially for pricier items like antiques, jewelry and autos. Although it does add some cost, it takes the uncertainty out of the transaction, and that’s a small price to pay for peace of mind.

For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably Escrow.com (http://escrow.com). In fact, it’s the only one that eBay recommends, and is the only online escrow company that is licensed to provide escrow services all across the United States.

PS. For more information about avoiding online scams and frauds, go to Online Escrow at Wordpress.com (http://onlineescrow.wordpress.com/)

January 21, 2011 at 2:15 p.m.
chuckhumprey said...

Being smart about this stuffs will always serve as a good back up for anyone especially in the booming of technology and as various merchant services providers emerges in the world wide web..

May 10, 2011 at 5:59 a.m.
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