Top Ten Scams To Watch Out For

1. Internet Fraud
The Internet continues to be the hottest medium for almost every scam. It provides opportunities for legitimate businesses and consumers, but it also hosts fraud artists running investment scams, fake business opportunities and fraudulent auctions, among others. The Internet has spawned online scams and jargon to describe them as well: “phishing” and “spoofing” for example. “Phishing” is a term coined by computer hackers, who use email to fish the Internet hoping to hook you into giving them your logins, passwords and/or credit card information. The phisher sends an email impersonating a legitimate company (called “spoofing”) such as your own Internet service provider or financial institution. The email then directs you to a bogus site to update your account information.

Spyware is another Internet threat: software that covertly gathers user information, such as passwords and credit card numbers, through the user’s Internet connection without his or her knowledge. Check out web businesses just as carefully as you would any other business. Always check out the security and privacy policies of websites and above all, treat all unsolicited email as bogus and delete it. Increasingly, companies are using third party security “seals” such as the BBBOnLine Reliability Seal to reassure consumers of their online security. Be sure to click on the seal to confirm that it is valid and that the company is officially subscribed rather than having just cut and pasted an unauthorized logo onto their website.

2. Identity Theft
Identity theft is the fastest growing type of fraud in North America; consumers and businesses lose billions annually. ID thieves can, and do, use all sorts of tactics to take your personal information: looking through your garbage or recycling box, pretending you need to provide such information in order to claim a prize or lottery winning, stealing your mail, placing bogus newspaper ads for jobs locally and internationally, sending unsolicited e-mails posing as your financial institution, etc.

3. Bogus Business and Franchise Opportunities
These fake business opportunities offer a pre-packaged business like selling anti-aging devices or pre-fabricated homes. Victims buy into the opportunity, but the promised product never shows up, or if it does, it doesn't work. The locations are either non-existent or not exclusive, and if there is income, it is nowhere near what was promised. If you are considering purchasing a franchise, ask to see a Uniform Franchise Offering Circular (UFOC) and review it carefully. This prospectus-like document lists current franchisees, those who have left or quit and gives financial statements of the business.

4. Nigerian Frauds/Overpayment Scam
A classic "get rich quick" ploy, this scheme has been perpetrated worldwide and frequently targets small businesses, churches, and other non-profit organizations. It starts with a letter, fax or e-mail from Nigeria marked "urgent" or "confidential." The sender claims to be an official of a company or government ministry who is trying to transfer millions of dollars out of the country. The letter writer proposes depositing the money in a trustworthy bank account - yours - in exchange for 30 per cent or more of the transferred funds. To get in on the action, the business, consumer, or organization must provide its bank account number and other company information. When that information is provided, the business or individual is then pressured to start sending large sums of money to cover the transfer of funds, the payment of taxes or the bribing of Nigerian officials. Of course, the millions of dollars claimed to be in Nigeria do not exist, and victims eventually end up with nothing but loss. In a new twist, called the Overpayment Scam, the consumer who is selling goods online is cheated. This occurs when the consumer (the seller) receives a counterfeit cashier’s check from the “purchaser”. The amount of the check is in excess of what is owed: the seller is then asked to deposit the check and wire the balance of excess funds immediately back to the sender/purchaser. The deposited cashier’s check is subsequently returned as counterfeit and charged back to the seller’s account.

5. Bogus Health and Wellness Products
Snake oil, cure-alls and similar fraudulent health treatments are thriving in the marketplace. Beware of advertisements that feature exotic potions and pills, special curative diets, or "newly discovered" treatments, like a home test kit for AIDS. Genuine medical products from reputable suppliers don't refer to "miracle" treatments. These scams not only steal your money, but also can damage your health or delay proper medical treatment. Always consult your doctor, pharmacist, or other healthcare professional about any treatment or medication. Any product that has weight-loss properties must have a Drug Identification Number. Next Page

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:: Dave Pettie - SFI 2008