Investment
Scams Awareness Campaign. It is estimated that
around £350m, much of it from people's
life savings, has been lost to scamsters offering
overpriced goods or commodities as 'investment
opportunities'. The DTI, assisted by consumer
champion Alice Beer, have launched an awareness
campaign to help the public recognise such scams.
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"Congratulations, you have won, just send
a processing fee to…"
"You must respond at once to claim your
prize…"
"Simply provide details of your credit
card or bank account…"
"An opportunity to invest in a syndicate
to win a high-stake lottery…. "
"I made thousands of pounds in the first
few months and you can too…"
These are just some examples of approaches
used by the operators of scams. Scams succeed
for two main reasons:
- They look genuine,
creating the impression that they can fulfill
people's needs or desires.
- Scams are manipulative
and designed to produce automatic responses
(e.g. sending an unsolicited "gift"
to create a sense of obligation, or sending
a hard luck story to prey on people's sympathy).
Scams are assisted by
the common belief that all companies or businesses
must be legitimate because they are subject
to vetting by government agencies. Unfortunately
this is not the case. The Office of Fair Trading
and local Trading Standards Departments are
always looking out for bogus schemes but they
can usually only take action once scams are
reported to them. (Tip them off)
Another common belief is that there are shortcuts
to making large amounts of money which only
a few "experts" know about. Once again,
this is not the case.
The operators of scams are ingenious, persuasive,
persistent and even aggressive in pursuit of
easy opportunities to take people's money. They
are also mobile. It's not unusual for a scam
operation to be closed down in one country and
reappear, perhaps under a new name, in another.
Scams take a wide variety of forms and they
may target consumers or businesses. Although
there are some generic forms of scam, new variations
appear regularly to evade enforcement or exploit
new opportunities.
There is extensive legislation in the UK, often
supported by codes of practice, to protect consumers
in areas such as the sale of goods and services,
shopping by mail order, advertising, unsolicited
goods and financial services.
Moreover, all schemes where money changes hands
are likely to be subject to the general criminal
law on fraud, theft, and deceit.
However, many operators of scams are ingenious
enough to operate within the boundaries of the
law. Even if they don't, effective enforcement
may put a stop to their operation but frequently
does not mean that their victims can recover
their money
Legislation and effective enforcement can only
provide part of the defence against scams. The
best defence is a high level of awareness and
scepticism on the part of the public. Awareness
of the risks and warning signs will reduce the
chances of being taken in. And every refusal
to be taken in deprives a scam operator of money
they don't deserve.
The guidance which follows is intended to help
consumers be prepared and so reduce the possibility
of them becoming scam victims.
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