This past year, the Better Business Bureau launched two Web sites to help consumers figure out which offers are real and which ones are possibly frauds:
BBB Smart Investing (www.bbb.org/smartinvesting), developed in partnership with the FINRA Investor Education Foundation, informs consumers about investment fraud, Ponzi schemes and risky investments, and helps them assess their risk, check out brokers, and avoid getting taken.
BBB Scam Stopper (www.bbb.org/scamstopper), developed in partnership with Western Union, educates consumers about the major types of scams, and provides information on how to avoid them and how to report them.
The annual “Top Ten Scams” list is culled from a variety of sources. BBB gathers information on scams from consumers, federal agencies and from other reliable information sources.
Here are BBB’s Top Ten Scams of 2012:
Top Overpayment/Fake Check Scam: Car Ads
The online ad says something like “Get Paid Just for Driving Around” – a prominent company is offering $400+ per week if you’ll drive around with their logo all over your car. They send a check to you, which you are supposed to deposit in your account and then wire part of the payment to the graphic designer who will customize the ad for your vehicle. A week later, the check bounces, the graphic designer is nowhere to be found, and you are out the money you wired.
Top Emergency Scam: Grandparents Scam
The “Grandparents Scam” has been around a while, but it is still so prevalent we need to mention it again: grandchild/niece/nephew/friend is traveling abroad and calls/texts/e-mails to say he or she has been mugged/arrested/hurt and needs money right away. Plus, thanks to social media, it is getting easier for scammers to tell a more plausible story because they can use real facts from the supposed victim’s life. Before you wire money in an emergency, check with the supposed victim or their family members to make sure they really are traveling.
Top Employment Scam: Mystery Shopping
If you love to shop, working as a secret shopper may sound like an ideal way to supplement your income. Scammers have figured that out, too, and many job offers are nothing more than a variation on the Overpayment/Fake Check Scam. The Mystery Shopping Providers Association says it is not the practice of their members to pre-pay shoppers, but if you have your heart set on this type of job, you can find a legitimate gig through their Web site at www.mysteryshop.org.
Top Advance Fee/Prepayment Scam: Nonexistent Loans
Loan scams continued to fester in 2012. It seems for every legitimate lender out there, there is a scammer waiting to prey on people in desperate situations. Most of the scams advertise online and promise things like no credit check or easy repayment terms. You are then required to make the first payment upfront, or pay some other kind of fee first to secure the loan. In 2012, many consumers were threatened with lawsuits and law enforcement action if they did not “pay back” loans they said they had never even taken out in the first place.
Top Phishing Scam: President Obama Will Pay Your Utility Bills
Of all the politically-related scams, this one seemed to be the most prevalent. At the peak of summer with utility costs soaring, consumers got e-mails, letters and even door-to-door solicitations about a “new government program” to pay your utility bills. Victims “registered” with an official-looking Web site and provided everything scammers needed for identity theft purposes, including bank account information.
Top Sweepstakes/Lottery Scam: Jamaican Phone Lottery
This is an old one that flared up again this year. In this one, the calls come from Jamaica (area code 876) but the person claims to represent BBB. They tell you that you have won a terrific prize, but you have to pay a fee in order to collect your winnings. It is best just to hang up and then file a phone fraud report with the appropriate government agency.
Top Identity Theft Scam: Fake Facebook Tweets
Two top social media sites were exploited in one of this year’s top scams. You get a Direct Message from a friend on Twitter with something about a video of you on Facebook. When you click on the link to see what the embarrassing video could possibly be, you get an error message that says you need to update Flash or other video player. The file is not a new version of Flash, but virus or malware that can steal confidential information from your computer.
Top Home Improvement Scam: Sandy Fly-By-Night Repair Businesses
BBB spends a lot of time investigating and reporting on home improvement scams, but this year we saw an unusual amount of fly-by-night repair business activity following Super Storm Sandy. While some were legitimate contractors who came from other areas for the volume of work available, others were unlicensed, uninsured contractors. Some were even out-and-out scam artists who took the money and never did the work. In an emergency, it is tempting to skip reference checking, but that is never a good idea. BBB has tens of thousands of Accredited Businesses in the home contracting field who are committed to upholding our mission of trust. Next time you need home repairs, find a contractor at www.bbb.org.
Top Sales/Rental Scam: Real Stars, Fake Goods
With the London Olympics, Super Bowl and World Series in 2012, it appears that last year was a good year for sports fakes. While some scammers were selling cheap knock-offs in front of stadiums, others set up Web sites that stole your money and never had any goods to begin with. Counterfeit goods are not only a rip-off for you because the merchandise is usually shoddy, but they are also a rip-off for the teams, athletes, designers and artists who create, license and sell the real thing.
Scam of the Year: Newtown Charity Scams
Within hours of the horrific shooting at Sandy Hook Elementary School in Newtown, Connecticut, social media pages dedicated to the child victims began cropping up and some of them were scams asking for money. The FBI has already arrested one woman for posing as the aunt of one of the children killed, and state and federal agencies are investigating other possible fraudulent and misleading solicitations. In response to these reports, BBB Wise Giving Alliance offered tips for donors to understand how and when to best support those dealing with such a tragic crisis.