some scams to be aware of

[Guest guest]

....about half of them....best regards....alan

Top 10 scams of 2006

As 2006 draws to a close, a review of ConsumerAffairs.com's Scam

Alerts archive shows that scammers have had a busy and -- we suspect

-- lucrative year.

Targeting the most vulnerable citizens and using increasingly

sophisticated tools, most have been able to easily elude law

enforcement as they pick their victims' pockets, sometimes even making

off with their life savings.

Scammers scored at will, generating instant cash using lottery and

fake check scams. They capitalized on news events and pop culture to

catch consumers off guard, and enlisted all kinds of emerging

technology to perfect identity theft.

Here then, chosen from the roughly 50,000 consumer complaints we've

processed in the past year, are the ConsumerAffairs.com Top Ten Scams

of 2006.

1. Fake Lottery Scam

Topping our list for 2006, the fake lottery or sweepstakes scam only

seems to get bigger and more dangerous. Promising victims they have

won thousands of dollars in a Canadian or European lottery, they

target the elderly, who seem to be particular susceptible to these

schemes. ConsumerAffairs.com reported on one case in which an elderly

Kansas man lost over $300,000.

More than 400 New Yorkers fell victim to sweepstakes and lottery scams

in the first seven months of 2006, with losses ranging from a few

hundred dollars to more than $35,000, according to an analysis by the

New York State Consumer Protection Board.

While elderly people lost the most money, lottery scams also tricked

younger people into believing they had won a large cash prize from a

foreign lottery or sweepstakes. In each case, the victims sent money,

usually to Canada, thinking they had to pay insurance or taxes before

they could collect these bogus prizes.

" No legitimate contest makes you pay a fee to collect a prize, " said

CPB Chairperson and Executive Director A. Santiago. " For many

of the elderly victims, the scam artists made multiple demands for

cash, falsely claiming that more money was needed in order to pay for

'taxes' or insurance. "

Sons and daughters have filed complaints after failing to convince

their elderly parent that there was no prize.

" You can't win a contest that you didn't enter. But it's hard to

convince someone that they are the victim of a scam, especially when

the con artists have made numerous phone calls and formed a bond with

the victim, " Santiago said.

2. Phishing-Vishing Scams

This scam, in which identity thieves " phish " for a consumer's personal

information, are getting more prevalent, due in large part to

technological advances. The use of email now makes to increasingly

easy for criminals to trick people into revealing account numbers,

passwords and social security numbers.

Cleverly designed emails appear to be from a bank, credit union, or

online payment service like PayPal, requesting account verification.

If the consumer clicks on a link in the email, they are taken to a

site designed to look like the bank's actual site, where they are

instructed to enter the sensitive information, which is captured and

used for identity theft purposes.

In 2006, " vishing " arrived on the scene. Instead of asking the spam

recipient to click on a link, they are instructed to call a toll-free

customer service number, which seems more the way a financial

institution might do business. When they call, an automated system

instructs the caller to enter account numbers or passwords, which are

then recorded by the scammer.

Secure Computing, which specializes in secure connections over

networks, sent up the red flag over this new method in 2005, though

the first recorded incident didn't take place until May 2006,

involving a Santa Barbara, California, bank. Secure Computing

engineers have been tracking news group sites and open disclosure

discussion groups discussing vishing.

" This is just a natural evolution of phishing itself, " said

Henry, vice president of strategic accounts for Secure Computing.

" Simply put, people are becoming more aware of the fact that an e-mail

containing a URL could be malicious in nature. So hackers are moving

away from the URL and using something victims are more familiar with

like calling a number. "

This " advancement " has forced some financial institutions to consider

additional changes to the way in which they communicate with

customers.

3. Phony Job Scam

Scammers are increasingly responding to job seekers posting their

resumes at online employment sites, such as Careerbuilder.com. The job

offer usually has nothing to do with the job seeker's experience or

qualification. Even so, they are offered a job on the spot, serving as

a " courier. "

They are instructed to receive large checks and deposit them in their

personal accounts. They are then instructed to wire the money to an

account out of the country. The checks, of course, are counterfeit,

but they aren't exposed until after they have been deposited and after

the victim has wired the money -- their own money, it turns out -- to

the scammer.

" Any employment offered online without a formal interview, no matter

where it originates, should be treated with skepticism, " said Arkansas

Attorney General Mike Beebe, who investigated one of these scams in

2006. " Terms that seem too good to be true will prove to be just that

and may cost you in stolen personal information or money lost. "

4. Negative Option Scams

Unlike most scams, which are perpetrated by out-and-out criminals,

negative option schemes are run by otherwise legitimate businesses.

Using pop-up ads on the Internet and extremely fine print on the back

of sales tickets, consumers completing a transaction with their credit

card are offered some free gift or enticement, not realizing their

acceptance enrolls them in a travel discount club or affinity group of

some kind, or commits them to a year's subscription of a magazine they

most likely don't want.

The consumer may think there is no harm in accepting the " free offer, "

because they don't realize there strings are attached. While laws

generally require consumers to make an " informed consent " to purchase,

negative option turns the transaction around. It assumes the consumer

has made the purchase, unless the consumer " opts out " or takes the

" negative option. " The volume of complaints to ConsumerAffairs.com on

this subject suggests consumers are completely unaware of the

transaction.

5. Nigerian 419 Scams

These scams continue to make our list, year after year, because they

continue to ensnare thousands of victims. This is the scam in which

the victim receives an email, allegedly from a wealthy, dying person

in another country who is desperately trying to get their fortune out

of the country. They promise the victim a sizable percentage if they

will help.

The victim either has to send money to cover fees or provide their

bank account information, or both. The scams are mostly run from

Nigeria and get their name because they are covered in section 419 in

the Nigerian penal code.

Most people find these emails a big joke, but seemingly sophisticated

people have fallen hard for them, losing hundreds of thousands of

dollars. While the crime mostly goes unpunished, ConsumerAffairs.com

reported on British prankster Berry's humorous war on these

scams, which actually show as much promise as any countervailing

measure. Called " scambaiting, " Berry actively engages these scammers,

pretending to be a gullible victim, wasting their time and forcing

them to perform all types of ridiculous and time consuming tasks.

6. Pump & Dump Scam

As the stock market finally rebounded in 2006 after years of near

dormancy, scammers stepped up their stock-touting schemes. Sending out

millions of spam emails, they would offer a " hot tip " about an obscure

company whose stock was selling for a few cents a share. Before

sending the email they would buy up millions of shares.

For example, Texhoma Energy was touted in an October spam email,

resulting in a significant increase in the stock's value. According to

the Chicago Tribune, 53,000 shares of Texhoma stock were traded on

October 16. The next day the volume jumped to more than one million.

Two days later it jumped to more than five million, as the spam emails

began to hit inboxes and prompt victims to place orders.

The scammers, of course, sell at the stock's high point and other

investors soon join them as the price begins to fall. Pretty soon the

stock is back to selling at a nickel a share and those who jumped on

the bandwagon have lost significant amounts of money.

At year's end the National Association of Securities Dealers issued an

alert to investors to avoid taking any unsolicited investment advice.

A survey of the huge increase in spam email revealed most of it to be

touting these near-worthless stocks.

7. Bogus Fuel Saving Devices

When gasoline prices surged this year, scammers were quick to try and

cash in. One company claimed its " special pellets, " dropped into the

fuel tank, would improve efficiency. The Federal Trade Commission went

after one company that claimed its " magnetic device " would increase

gas mileage.

" Consumers are looking for ways to increase fuel efficiency and save

money at the pump, " said Lydia Parnes, Director of the FTC's Bureau of

Consumer Protection. " There are some practical ways to do that, like

following the maintenance schedule in your owner's manual, combining

errands, and avoiding jack-rabbit starts. The fact is that many

products that claim to save fuel don't work, and worse yet, may damage

your car and end up costing you more. "

8. Grandparents Scam

This is a particularly vile scam aimed at senior citizens, perhaps the

most vulnerable scam victims. An elderly person is targeted by the

scammer who calls and says something like, " It's me, grandpa. " The

elderly person will respond, thinking it's one of their grandchildren.

The scammer then tells a tale of woe, saying they are in trouble and

need some money, " and please don't tell mom. " The grandparent

obligingly sends a few hundred dollars, thinking they're helping a

grandchild. Investigators say it works more than you might think.

9. Oprah Ticket Scam

This scam makes our list this year because of its potential to become

much more widespread and to victimize vulnerable people. Illinois

Attorney General Madigan recently warned consumers about this

scam, alerting them to emails or letters that told them they had won

tickets to a taping of the talk diva's show in Chicago, or had been

offered a tour package that included a taping of the show. The

communication asked for sensitive personal information, which, if

provided, could allow their identities to be stolen.

In this case, e-mail recipients are asked to submit personal

information and told they will receive tickets to The Oprah Winfrey

Show after verification of certain financial information and/or the

wiring of money to an unknown third party. However, according to Harpo

Productions, Inc., The Oprah Winfrey Show does not sell tickets or

ticket travel packages to fans.

10. craigslist Scam

Though not terribly widespread at the end of 2006, the craigslist scam

makes our top ten list because of its potential to wreak harm in the

years ahead. Starting this year scammers began taking advantage of the

growing popularity of craigslist to victimize people trying to rent

their homes or apartments.

The scheme is basically the fake check scam, with a twist. Darryl, of

San Diego, told ConsumerAffairs.com that he received almost identical

replies when he listed a room for rent on both craigslist and

Roommate.com. The replies claimed to be from " Marie, " who called

herself " a young humanitarian officer. "

" Marie " said her employer would be sending Darryl her expense check,

which would be for several thousand dollars. Darryl was to deposit it

in his account, deduct the rent and deposit, and send the balance back

to her.

Fortunately, Darryl saw through the scam. If he had cashed the phony

check, it would not have been discovered for a few days. By then he

would have sent the scammer a very real check for a $3,000 or more.

" Most people who use craigslist have great stories to tell about their

experiences with buyers, sellers, tenants, landlords and such, but we

also receive occasional reports of scams and fraud, " craigslist warned

on its Web site. " We've found that one of the best ways to avoid this

problem is to keep all transactions local -- whenever possible, don't

do business with anyone who is not in your local area. "

If It Sounds Too Good ...

Scams continued to be big business for criminals in 2006 and

relatively risk-free as law enforcement appeared unable to keep up. As

a result, consumers increasingly were at the mercy of scammers who use

cunning, audacity and emerging technology to stay one step ahead of

both their victims and the law.

The solution? Keep your wits about you, be skeptical and remember --

trite though it may be -- if it sounds too good to be true, it

probably is.

http://www.consumeraffairs.com/news..._ten_scams.html