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Better Business Bureau's Top 10 scams of 2012

Make sure you don't fall prey to these situations

Published: Wednesday, Jan. 23, 2013 11:23 a.m. CST

CHICAGO — Topping the list of scam activity for 2012 is work-at-home schemes, accounting for over 33 percent of scam inquiries to the Better Business Bureau serving Chicago and Northern Illinois (BBB). This scam is especially tempting to people who are out of work or in need of additional income.

Coming in a close second, with 30 percent of scam inquires is advance fee brokers. Advance fee brokers are usually, if not always, empty promises of a personal or business loan requiring payment of a fee in advance. This scam attracts vulnerable consumers that need cash urgently.

The BBB’s Top 10 scams are ranked based on number of specific inquiries made by consumers to provide insight on the deceptive and sometimes illegal business practices in 2012.

“In 2012, many consumers were still working on improving their financial situations in these challenging economic times,” said Steve J. Bernas, president/CEO of the BBB. “Scammers were ready to capitalize on this vulnerability and take advantage of consumers.

The complete list of Top 10 scams in 2012 from the BBB includes:

Work-at-home schemes

There are certainly legitimate telecommuting jobs, but many work-from-home opportunities are scams. Promising convenient work always attracts attention; however, when the requirement is to send money for materials first, consumers should always be on guard. Do not purchase services or products from a firm that’s reluctant to answer your questions and be cautious of any company that offers an exceptionally high salary requiring few skills and little work. Check offers out thoroughly for free with the BBB at www.bbb.org

Advance fee brokers

Often these appear to be very professional operations with attractive websites and advertisements. However, it is illegal for a business to charge a fee prior to providing a loan. Typically, after wiring money to the scammer, the victim never receives the loan. These “lenders” will use fake physical addresses or the addresses of real companies that are victims of identity theft.

Credit repair services with advance fees

Consumers with bad credit ratings are particularly vulnerable to this scam. Everything a credit-repair operation offers an individual can do personally at little or no cost. Credit repair operations cannot ask for money in advance, and they cannot automatically remove legitimate negative reports from your credit history.

Foreign lotteries

Any lottery from a foreign country is illegal in the United States. Stating a person can win, or is a winner already provides a strong incentive; however, people should never send money to obtain lottery money. Scammers using fictitious addresses will request you send “fees and taxes” to them through a wire service, they take the cash and never provide any winnings because there are no winners.

Prize promotions

There are several variations of this scam, but most include some aspect that requires people who are identified as “winners” to provide money or some type of personal information, such as a credit card or Social Security number, to verify being a winner. In the end, no prize is awarded, and the personal information is then used to withdraw a victim’s money from accounts or for identity theft.

Office supplies - sale by deceptive telemarketing

This scam features fake invoices for office supplies being sent to a business, often for only a couple of hundred dollars. This relatively low amount makes it easier for company personnel to quickly sign off and feel it is not worth their time to check the invoice’s validity, which would be done if it was for a larger amount.

Pyramid companies

Pyramid schemes within companies are fraudulent because returns to investors are paid from personal money or the money paid by the newest investors, rather than from any actual profit earned by an individual or organization running the operation. These scams collapse because payouts exceed investments, or because the legal authorities prosecute the organizers for sale of unregistered securities. Often the organizers simply disappear with funds sent to them.

Debt relief services

(non-compliant with FTC rule)

The Federal Trade Commission has established rules for debt relief services (for profit businesses that represent that they renegotiate, settle or alter the terms of payment for an unsecured debt). The FTC rule governs disclosures and representations that debt relief services can make and does not allow advance fees. There are legitimate debt relief companies that comply with the FTC rule and the Better Business Bureau is identifying only the non-compliant companies as scams.

Paving, painting, home improvement by

“traveling” workers

Never pay upfront to a “traveling” contractor who just happens to be in the neighborhood, is doing work nearby, or has extra materials. The technique to get your money often requires you to pay for added materials. Once you pay the contractor, he disappears with the money and no work is ever done. Having access to your property also provide an opportunity for these people to check what valuables you may have for a future burglary or ID theft.

Sweepstakes

If you don’t remember entering a sweepstakes, be very suspicious about being declared a winner. If the prize provider wants you to send money or give your Social Security number to receive your prize, take no action. If you send money you will likely never receive a prize, or you will get a prize of lesser value than the money you’ve sent.

“Remember, before giving any company credit or debit card information, the BBB recommends reviewing the business fully to avoid potential billing nightmares,” said Bernas. “As always, if an offer seems too good to be true, it probably is.”

For more information on these Top 10 scams, visit www.bbb.org

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