Better Business Bureau's Top Ten Scams of 2011

The BBB’s top 10 scams are ranked based on specific inquiries made by consumers to provide insight on illegal and 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 and 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 said, “Being aware these scams exist is the most important way to avoid becoming a victim and losing money.” 

The complete list of Top 10 Scams in 2011 from the BBB includes:

1) Work-at-home schemes. There are legitimate telecommuting jobs, but many work-from-home opportunities are scams. Promising convenient work always attracts attention. 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.

2) Credit repair services with advance fees. Consumers with bad credit ratings are 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. But 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. 

4) 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. 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, then 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 provides 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 and 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.” 

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

Written by Tom Joyce, member of The Better Business Bureau of Chicago and Northern Illinois.

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