Scams are numerous
and varied. Fraudsters operate from within and outside
the UK. Anyone can be a potential victim. Always be
on your guard and remember, if it sounds too good
to be true it probably is!
How to protect yourself
against scams
Scams can take the
form of unsolicited prize draws, miracle lotions,
pyramid selling or numerous other examples. Further
details are below. You can reduce your chances of
being a scam victim by following this simple advice.
- Read letters, circulars,
brochures and e-mail and text messages carefully
and seek professional help (e.g. an accountant or
a solicitor) if significant money, time or responsibilities
are involved.
- Don‘t provide any
financial or other personal information before you
establish whether the company or individual is legitimate.
- Don‘t judge the
credibility of a company or sales person by how
“professional” they or their promotional material
or web site seems.
- Don‘t fall for high-pressure
sales tactics or put yourself in a situation which
might make you vulnerable.
Unsolicited prize
draws, lotteries and windfalls
Many common scams take
the form of prize draws or lotteries and may originate
from within or outside the UK. More often than not,
there is no prize or reward on offer, or else the
prize is worth less than the requested fee.
If you're unsure about
any mailing you have received you can check if the
company is a member of the Direct Marketing Association.
Their members have to comply with a strict code of
practice.
If you decide that
the mailing is suspect, throw it away or send it to
the Office of Fair Trading who are investigating such
scams. The address is:
The European Enforcement
Team
Office of Fair Trading
Fleetbank House
2 - 6 Salisbury Square
London
EC4Y 8JX
Or you could inform
your local Trading Standards Department.
If you prefer, you
can submit your complaint online to your local Trading
Standards Department via the Consumer Complaints website
or the Ripofftipoff website, which allows you to anonymously
report a trader you think may be 'ripping off' the
public.
Clairvoyant or Psychic
scams
These imply that you
can receive good luck by paying for advice or some
form of charm. They may also offer a gift in return
for a prompt reply. Anonymous "endorsements"
from people whose lives are claimed to have been changed
may be included.
In some cases, these
scams adopt a more aggressive tone, suggesting that
you will actually experience some misfortune if you
do not send the money requested.
Miracle lotions
Beware of any exaggerated
claims such as “instant cures for arthritis”, “lose
weight without effort”, “grow hair overnight”, or
“look years younger.”
These pills, lotions
and creams are sold by professional fraudsters with
no medical training. Sales gimmicks include fake testimonials
from “satisfied customers”, emotional sales pitches,
and outright lies about the effectiveness of the product.
If you have any doubts
about a product that someone is trying to sell you,
discuss it first with your doctor or other informed
health professional.
Out of Africa scams
The 'West African'
scam is also known as the '419' advance fee fraud.
The scam is based on the premise that some major event,
such as the overthrow of a government, has resulted
in large sums of money being held in a country by
a person or persons who are seeking help in transferring
the money overseas. A proportion of the money is offered
for help to arrange the transfer.
Victims may be approached
by letter or e-mail. Anyone who responds receives
another letter asking for money for a last minute
bribe. Inevitably, having parted with their money,
they never hear from their African contact again.
Premium rate telephone
numbers
Fraudsters use high
cost of premium rate telephone numbers for many different
scams, including bogus competitions, prize and holiday
offers, and deceptive credit card promotions.
The scams may begin
with notification that you have won something or have
qualified for a credit card. You are likely to
have to listen to a long recorded sales message or
answer a long list of questions whilst being charged
at a premium rate for the call.
If you have a complaint
against a company you can ask ICSTIS (the Independent
Committee for the Supervision of Standards of Telephone
Information Services) to investigate. It has the power
to fine companies and bar access to services.
Telephone and text
message scams
The widespread use
of mobile phones and text messaging has provided another
opportunity for scam operators.
You may be offered
a prize of a holiday, but calling the quoted phone
number will mean paying for a lengthy premium
rate telephone call. Any holiday on offer, if there
is one, is likely to be subject to terms and conditions
which make it worthless to the vast majority of people.
Telemarketing scams
Some scam artists tell
consumers that according to a new law, people are
now liable for all unauthorised charges on their credit
card account. This is not true. If you did not make
the authorised charge, do not pay it. Follow your
credit card issuer's procedures for disputing charges
you have not authorised.
The ''advance fee''
credit is another type of scam. Advertisements suggest
that a loan will be granted, regardless of your credit
history, but you have to pay a fee first. Despite
paying a fee the scam artist takes off with your money
and the loan never materialises.
Legitimate guaranteed
offers of credit do not require payments up front.
It is illegal for companies doing business by phone
to promise you a loan and ask you to pay for it before
they deliver.
Unsolicited gifts
Some companies send
"gifts" such as ballpoint pens, key chains,
books, recipe cards, through the mail without them
being ordered.
It is a criminal offence
to demand payment for unsolicited goods from a consumer.
Any goods delivered can be kept, without charge, by
the consumer.
Trading schemes
Trading schemes (also
known as direct selling schemes, network marketing,
multi-level marketing and other names) are a legitimate
form of business activity. They offer individuals
the opportunity to earn money by selling the scheme's
goods or services from home.
In some schemes, members
may earn additional commission by recruiting others
to the scheme and from sales by their recruits. However,
there are legal requirements that the schemes must
comply with.
Trading schemes become
illegal when they claim to trade in goods or services
but their real purpose is to generate money by recruiting
new participants. This is often referred to as "pyramid
selling" (but not all "pyramid" schemes
are "pyramid selling").
It is worth checking
whether the operator of a trading scheme is a member
of the Direct Selling Association (DSA), which is
a trade association for the direct selling sector.
The DTI's guidance booklet "The Trading Scheme
Guide" outlines the current legislation in the
UK and offers advice to potential participants.
Pyramid schemes
and chain letters
Pyramid schemes may
not claim to trade in goods or services but require
members to pay to join and then recruit others, who
also pay. If enough new members join, the pyramid
will grow enabling some participants to make money.
But, since the number of new participants is finite,
each new participant has less chance of recruiting
others and a greater chance of losing their money.
Pyramid schemes may
take the form of, or operate in the same way as chain
letters. Some chain letters may be illegal under the
Lotteries and Amusements Act 1976. The law in this
area is complex and only a court can say authoritatively
whether a particular scheme is unlawful.
Home employment
opportunities
Beware of advertisements
that make extravagant claims about job opportunities
or potential earnings. Some promotions stress that
“no experience is necessary”, while others indicate
that “no investment is required'. Be suspicious if
you have to pay a fee to receive more information
about working from home.
If you are looking
for work to do at home you should consider writing
to or approaching local companies who may be able
to offer this type of work. Genuine employers will
not ask for money in advance before providing you
with work.
Invention promotion
firms
Advertisements for
invention promotion firms target independent inventors
with offers of free information on how to patent and
market their inventions and so earn income from royalties.
Some unscrupulous promotion
firms charge thousands of pounds to evaluate, develop,
patent, market and license inventions to manufacturers,
subject to a fee of several thousand pounds in advance.
Once you have paid up they then do little or nothing
for you.
If you are approached
by an invention promotion firm, you should be very
wary and question claims and assurances that your
invention will make money. No-one can guarantee your
invention's success.
Contracting for the
services of one of these companies is no different
to any other major financial transaction. Make sure
your contract contains all the terms you agreed to
and be sure to take independent legal and financial
advice.
Vanity publishers
Advertisements for
what are commonly known as ''vanity publishers'' target
authors with offers to turn their manuscripts into
successful published books.
Due to the costs involved
in editing, publishing, advertising and marketing,
a reputable publisher will be quite honest when assessing
the commercial viability of a manuscript from an unknown
author.
However, some publishers
offer to publish and market manuscripts for a fee
in advance. Unfortunately, the authors may get little
or nothing in return. The reality is likely to be
publication of a relatively small number of copies
of the manuscript and no real effort at marketing
the published book.
Contracting for the
services of one of these companies is no different
to any other major financial transaction. Make sure
your contract contains all the terms you agreed to
and be sure to take independent legal and financial
advice.
