Thieves continue to use the Internet, mail system and phone service to steal millions from unsuspecting victims across the nation.
The Consumer Fraud Task Force urges consumers to recognize the most common tactics used by crooks to scam money. Most of the thieves masquerade as legitimate businesses and ask consumers to send money via such hard-to-trace methods as Western Union, MoneyGram or Green Dot MoneyPaks. Other times, a consumer may be asked to mail money directly to a scammer in another country or to an associate within the United States.
“The message should be loud and clear: Never, ever send money to somebody you don’t know or somebody you recently met online, regardless of the reason they give you,” the Task Force warns. “And never give your bank account information or a Green Dot MoneyPak access number to anyone unless you are absolutely sure you know exactly who you are dealing with and it’s for a legitimate transaction.”
Many of the most notorious scams have operated for years. Among the most common:
- Advance Fee Loan Scam. Typically, this scheme targets a consumer with poor credit who either applies online for a loan or receives a phone call offering a loan. The scam company may have a professional-looking website and a contract that looks legitimate. It may even use the name or address of a real company. But after the consumer sends an advance fee (usually for “insurance” or a “processing” fee), no loan is forthcoming. The scam company usually vanishes within a few days or weeks and then re-starts under a new name. Dozens of consumers recently lost between $500 and several thousand dollars each to advance fee loan thieves claiming to have offices in the St. Louis area.
- Sweepstakes Scam. In this scheme, the thief mails an official-looking, but phony, announcement proclaiming that the recipient has won a lottery or sweepstakes. The letter says the money or prizes will be delivered as soon as the winner pays taxes or other fees – again, often through Western Union, MoneyGram or a Green Dot MoneyPak. Typical is a recent mailing to a St. Charles man informing him that he had just won $450,000 in the “US Mega” sweepstakes. The notice included what appeared to be a legitimate check for $4,600 that the letter said would help him pay taxes of $3,800 on the winnings. The scammer is counting on the recipient to deposit the fake check into his or her bank account and then send out the $3,800 in real money. Too often, the “winner” discovers too late that he or she has been duped and there is no sweepstakes.
- Secret Shopping or Work at Home Scam. In this scam, a business that appears legitimate offers a job seeker a chance to earn money as a secret shopper, shopping various stores and services and reporting the findings back to the company. In most cases, the company mails a legitimate looking check, instructing the recipient to keep a portion of the money and use the rest to “shop” businesses such as Walgreen’s or Wal-Mart. Almost always, instructions also call for the recipient to use most of the cash to “shop” MoneyGram or Western Union by sending a large portion of the check through one of those businesses to an out-of-town recipient. A man from O’Fallon, Mo., recently alerted the BBB to a secret shopping scam that had stolen the name of a legitimate business in Lancaster, N.Y.
- Craigslist Scam. Although these can take several forms, the most common involves a scammer who responds to a consumer’s offer on Craigslist to sell an item or service. The thief typically sends payment in the form of a phony check, claiming that a family member or associate accidentally has overpaid and then requests a partial refund by MoneyGram or Western Union. It is only after sending the refund that the consumer realizes he or she has been scammed.
- Romance Scam. Avoid sending money in any form to someone you have spoken with only online. If an email “friend” asks you for money – for any reason – it is probably a scam.
The Task Force, which marks its 10th anniversary in October, is a coalition of local, state and federal government agencies and nonprofit business and consumer groups in Missouri and Illinois that work together to protect consumer and donor rights and guard against fraud. Previous Task Force releases have focused on payday loans, tax scams, timeshare resellers, home remodelers, work-at-home scams, online auctions, credit repair scams, debt management advice, foreclosure scams, extended auto service contracts, sweetheart scams and fire and police organizations.