Top Ten 2010 Scams

January 4, 2011 6:00:48 AM PST
Scammers in 2010 continued to prey on people's difficult economic conditions and concerns about the general economy as well as follow the financial misfortunes of individuals, according to the Better Business Bureau's summary of dishonest business dealings for the past year.

This listing is based on the number of times people requested information and inquiries through personal phone calls or the BBB website, as well as complaints. These instances of service by the Better Business Bureau serving Chicago and Northern Illinois, including inquiries and complaints about specific businesses.

"Scammers continue to follow the money trail and target the desperate emotions of people," said Steve J. Bernas, president and CEO of the Better Business Bureau serving Chicago and Northern Illinois. "This year the Top 3 scams were again related to personal finances."

The list of the Top 10 most common scams in 2010 include:
1. Work-At-Home and Fraudulent Employment Opportunities
2. Credit Repair and Debt Negotiations/Settlement Services
3. Advance Fee Lenders
4. Mortgage Foreclosure Rescue/Loan Modification Scams
5. Timeshare Resellers
6. Mystery/Secret Shoppers
7. Grant and Government Job Finding Entities
8. Not so "Free" Trials
9. Phishing, Smishing, and Vishing
10. Check Scams

"We believe the reason we hear more about these Top 3 scams is because people lose money and then complain, rather than being tempted by deals and checking them out before sending money," explained Bernas. "This usually ends badly for people, who never get their money back."

Explanations of these scams are:

1. Work-at-Home and Fraudulent Employment Opportunities - These scams offer big dollars for little work or effort. However, when an interested consumer "applies," they almost always ask for money up-front to pay for materials, training kits, or investment money. After sending payment, most consumers either have their checks deposited and never hear anything again, or obtain something that is completely useless. Internet employment opportunities looking for "shipping", "billing managers" or "payment processors" frequently turn out to be fraudulent listings that are looking for victims to commit money laundering by accepting and forwarding payments.

2. Credit Repair and Debt Negotiation/Settlement Services - Due to the continuing economic situation, many consumers seek credit repair or debt negotiation/settlement companies. However, everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. Here are the important facts:

- These services can not ask for money in advance, automatically get legitimate negative reports off your credit report or guarantee to cut your debt by a specific percentage.

- Be extremely cautious about a service that recommends you not pay creditors so it can negotiate. This could negatively affect your credit report.

3. Advance Fee Lenders - The victims are often contacted by phone or e-mail or respond to fake newspaper or online ads. They are offered quick and immediate loans despite past credit history and with little or no background check. The one requirement is the payment of advance fees. It is illegal for any business to request any fees to be paid up front prior to disbursing a loan. After the victim wires the money, he never sees his loan funds or advance fee payment again.

4. Mortgage Foreclosure Rescue/Loan Modification Scams - Because foreclosure information is publicly available, many scammer contact desperate homeowners and promise to save their homes while loan modification companies promise to renegotiate your loan and reduce your payments. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract.

5. Timeshare Resellers - Consumers are generally contacted by phone or mail and told that their timeshare is in a "hot" market or they have a buyer willing to purchase their timeshare, but first they need to pay a hefty fee in advance or enter into contracts that same day. In a standard real estate transaction, fees are paid from the proceeds of the sale. In a timeshare scam, victims do not end up selling their timeshare and they generally do not hear from the company again.

6. Mystery/Secret Shoppers - Websites or newspaper ads often asks that you "register" and pay a fee in order to receive information about a certification program, a directory of mystery shopping companies, or baseless guarantees of obtaining mystery shopping positions. Most don't exist, have already expired, or have nothing to do with legitimate secret shopping offers.

7. Grant & Government Job Finding Entities - Offers of "free" government grants or assistance with research, grant applications, or government employment should all be regarded with caution. The majority of these entities charge for services, applications, or information that can be easily obtained for free by doing online searches or visiting school financial aid offices.

8. Not so "Free" Trials - Online offers often do not disclose the billing terms and conditions or do not have such details prominently displayed online. Consumers often end up being repeatedly billed for products and services they didn't want.

9. Phishing, Smishing, and Vishing - "Phishing" is a crime that uses spam e-mails to deceive consumers into disclosing their personal or financial information.

"Smishing" is the practice of sending a phishing message to steal credit card or identity information via cell phone text messaging.

The latest form of identity theft is "vishing" which uses Voice over Internet Protocol (VoIP) to gain access to private and personal financial information. Recipients hear automated recordings that alert them to fraudulent or suspicious activity on their credit card or bank accounts which instructs them to call and input their personal information.

10. Check Scams - Consumers receive a check in the mail, allegedly for winning a sweepstake, lottery or promotion. They are urged to deposit the check, and then write another from their own account to cover alleged taxes or fees. The check that was deposited turns out to be worthless while the check sent by the consumer is good, and that money ends up being unrecoverable.

"Remember, before giving any company credit or debit card information, the BBB recommends reviewing the website fully to avoid potential billing nightmares," said Bernas. "These scams and others are preventable with the right resources."

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

As a private, non-profit organization, the purpose of the Better Business Bureau is to promote an ethical marketplace. BBBs help resolve buyer/seller complaints by means of conciliation, mediation and arbitration. BBBs also review advertising claims, online business practices and charitable organizations. BBBs develop and issue reviews on businesses and nonprofit organizations and encourage people to check out a company or charity before making a purchase or donation.


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