Beware the Field of Schemes |
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A host of hoaxes
Federal and state investigators are currently working to stamp out a number of highly creative operations in what they call a Field of Schemes.
The False Startup: Retirees Paul and Eloise Wood of Akron, Ohio, sought to cash in on the rising stock market with a $15,000 investment in an Internet shopping mall to be based on the model of television's Home Shopping Network. The sophisticated telephone presentation promised earnings of up to 600 percent a year, a glossy brochure supported the claims, and the perpetrators even helped the couple fill out the bogus paperwork. The Federal Trade Commission found the company had no virtual shopping mall technology and reported that the Woods were left with essentially worthless stock certificates.
For more on deceptive business scams, see the FTC's Consumer Alert Web page.
The Bogus Badge: For-profit fund-raisers continue to call consumers falsely representing themselves as police charities seeking donations for bulletproof vests or to assist families of fallen officers. Investigators warn that most of these calls are fraudulent. In many states and locales, police are prohibited by law or department policy from soliciting donations. "Badge-related fraud is a multibillion-dollar illegal enterprise that preys on people's trust in their local police and fire departments," says Massachusetts Attorney General Scott Harshbarger.
The Dial-a-Rip-Off Scam: Many consumers jumped at the chance to win a Hawaiian vacation by simply making a phone call for details about the contest. The problem: A fraudulent telemarketer instructed them to learn the details by calling numbers in Guyana and the Caribbean. The call carried a $30 charge and supplied worthless information -- the only way to apply for the sweepstakes was through the mail.
Net Losses: Computer hackers asked Internet users to download a photo and then gained access to their personal account information. The hackers then disconnected the users' local Internet access link and reconnected it through their own phone lines in the Caribbean. They then raked in money while unsuspecting computer users amassed huge telephone charges.
The Virtual Diploma: A "university" that set up shop on the Internet promised college-level degrees within 27 days by granting credit for life experiences. The virtual school asked prospective students to send in "portfolios" of their life experiences and then used the information to create fake transcripts with fictitious classes and grades. The cost: $1,995 for a B.A., $2,495 for an M.A., or $2,795 for a Ph.D. Authorities in Illinois brought suit charging violation of state consumer and education laws.
The Nigerian Nest Egg: A creative scam operator sent out thousands of letters signed by a bogus "senior government official" in Nigeria who claimed to have stolen millions of dollars from a foreign aid payment. The phony official claimed he was unable to bank the money in Nigeria and asked the recipient to hide the funds in his or her bank account -- in exchange for 10 to 30 percent of the take. Once the con artist convinced the would-be accomplice to pass along his or her bank account number, the victim's account was emptied.
The Pyramid of Jewels: More than 8,000 entrepreneurial types in Florida -- many of them retirees -- bought into a business that offered impressive earnings for assembling necklaces at home. The high expectations soured when their $3,000 initial buy-in fee turned out to be the most common financial transaction. Federal investigators found the operation to be an old-fashioned pyramid scheme, in which participants are expected to recruit others into the operation. The only ones destined to make money in such schemes are the perpetrators and those at the top of the pyramid.
The Montreal Express: Posing as U.S. Customs agents, scammers in Montreal called U.S. residents, particularly along the northeast seaboard, telling them they won a commercial raffle or lottery. They also told them to send a check immediately to pay the "duty" or taxes. The swindlers asked that the checks be sent by Federal Express or Air Express, thereby avoiding violation of U.S. or Canadian postal regulations. U.S. Customs agents managed to intercept some checks at Air Express and returned them to the owners. Then came the twist: The same scammers called the victims back, claiming to be lawyers suing the original scamming organization and asking that the check be sent again to claim the money.
U.S. Customs Service Special Agent Ray Connally said one Chicago area resident lost $150,000 in the scheme. But quick customs reaction on both sides of the border forced the bilkers to shift methods. They now ask that the money be sent to the Bahamas or Grand Caymans -- where a courier for the crooks was arrested last April carrying some of the ill-gotten gains. He's now serving four years in a Cayman prison.
Eight ways to outsmart scam artists: tips from ThirdAge expert Joan Cleveland.
Report-a-scam: online help for consumers.
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