BBB's Top Ten Scams of 2011

January 4, 2012 9:55:41 AM PST
Topping the list of scam activity is work-at-home schemes that account for over 45-percent of scam inquiries in the Better Business Bureau serving Chicago and northern Illinois' region.

This scam is especially tempting for those out of work or needing additional income. Coming in second with 22-percent of scam inquires is credit repair services. This scam attracts individuals with bad personal credit ratings.

The BBB's top ten scams are ranked based on number of specific inquiries made by consumers to provide insight on the trending illegal and certainly deceptive business practices in 2011.

"In 2011, some consumers were trying to improve their financial situations in these challenging economic times," said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. "That opened the door to scammers who were ready to capitalize on this vulnerability."

Bernas explained, "Being aware these scams exist is the most important way to avoid becoming a victim and losing money." he complete list of Top 10 Scams in 2011 from the BBB includes:

1. 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 with the BBB at www.bbb.org

2. 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.

3. Advance Fee Lenders. Often these appear to be very professional operations with attractive websites and advertisements. However, it is illegal http://www.ftc.gov/bcp/edu/pubs/consumer/telemarketing/tel16.shtm 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.

4. Foreign Lotteries. Any lottery from a foreign country is illegal http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt022.shtm 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.

5. Ponzi/Pyramid Schemes. Both Ponzi and pyramid schemes are frauds because they pay returns to investors from their own money or the money paid by the newest investors, rather than from any actual profit earned by the 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. Online Drug & Prescription Services from Unapproved Foreign Locations. Buying any type of drug or product from a foreign location bypasses the protections that are part of the drug delivery system used by the medical community in the United States. You may risk your health and your life by using unapproved drugs from out-of-the-country locations.

"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."

###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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