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According to the National Fraud Information Center, a project of the National Consumers League, the top five fraud complaints are:
Sweepstakes / Contests
To enter sweepstakes or contests, no purchase is necessary; however, the offers lead you to believe that you have a better chance to win if you purchase their products. If you want to enter their sweepstakes or contest, go ahead but don't make unwanted purchases to do so.
Magazines / Publication Offers
You are offered all kinds of "merchandise" to order different magazines and when you order them, the "merchandise" you receive is worthless.
Beware of the promise of hundreds of dollars for addressing mail, etc. You are usually required to purchase costly supplies and do not make the promised income.
Investment scams are characterized by representations of high earnings with little risk. They capitalize on consumers' financial needs, naiveté, and optimism. These scams are most common in economically depressed areas. The type of investment varies from gems and rare coins to FCC licenses and oil and gas leases. What consumers should remember is that the level of risk is usually proportional to the size of the return. Therefore, high earnings with little or no risk is false and misleading. Before you do business with a company, check it out with the Better Business Bureau.
Advance Fee Loans / Credit Offers
Most credit scams and specifically, advance-fee scams, "guarantee" or represent a "high likelihood of success" that the caller will be able to get or arrange a loan or other form of credit for a consumer, regardless of the consumer's credit history. These scams differ from legitimate, guaranteed offers of credit in one critical way: they require payments up front, before the lender is identified and the application is completed. Companies that do business by phone can't ask you to pay for credit before you get it.
Phony Prize Scams
Consumers are told they have won a valuable prize, but that they must buy expensive merchandise or pay hundreds of dollars in handling fees or taxes to receive the prize.
Overseas Pager Scams
Consumers return a pager message at a telephone number with an unfamiliar area code, unaware that they are calling a foreign number connected to high-priced phone services that provide useless information or adult-oriented material.
Companies promise, for a fee, to clean up a credit report so a consumer can get a car loan, a home mortgage, or even a job. The truth is that they can't deliver. No one can legally remove accurate and timely negative information from a credit report.
Employment Service Scams
Consumers are generally promised jobs that pay well yet demand few skills or little training. Legitimate job placement firms that work to fill specific positions cannot charge an upfront fee.
Fraudulent Real Estate Deals
These scams take generally two forms: fraudulent brokers who represent that they can sell consumers' property for a high return and fraudulent sellers who want to sell bogus property to unsuspecting consumers. Fraudulent brokers misrepresent the market and the size of their lists of sales agents and potential buyers for the property. They have upfront "listing" or "brokerage" fees. You should never pay any fees until property is sold and don't buy property based on pictures or representations.
Fraudulent Scholarship Services
Some scholarship search services misrepresent their services, guaranteeing that they can obtain scholarships or actually award scholarships to students for an advance fee. Usually all the consumer receives is a list of scholarships or grants for which they can apply. Other fraudulent companies provide nothing for the student's advance fee.
Travel and Vacation Scams
These scams usually are characterized by free or exclusive offers or unrealistically low prices. Often these scams are linked to prize promotions or sweepstakes offers. They fail to disclose that certain fees, conditions, and restrictions apply and they misrepresent the nature or quality of the travel and hotel accommodations. You might have to spend one of the two free days in Florida attending a timeshare presentation or else pay for your hotel. A cruise to the Bahamas may turn out to be a short "ferry" ride. Consumers routinely lose hundreds of dollars in these scams.
Recovery Room Operators
contacting people who have lost money to a previous telemarketing scam and promising that they will recover lost money or the product or prize you never received in exchange for a fee or donation to a specified charity.
Consumer advocates have urged potential fraud victims to "just hang up" when telephone marketers offer "too good to be true" luxury prizes and surefire "double your money" investments, etc. While many legitimate telephone markets operate in this country, consumers need to know that they don't need to be taken in by slick con men. People who use illegal telemarketing tactics to dupe consumers out of their money are not salesmen or saleswomen, they are crooks and criminals. They do with sweet-sounding sincerity on the telephone what muggers do in person: they steal your money.
Telephone Privacy List has been established for Indiana citizens to help reduce unwanted telemarketing calls .
Thanks to the passage of a telephone privacy law by the Indiana General Assembly in 2001, Indiana residents can register their home phone numbers on a list that telemarketers must use. With a few exceptions (charitable organizations who use volunteers or employees to make the calls, newspapers who use employees to make the calls, insurance agents and realtors), telemarketers are prohibited from calling any number on the list.
This program is administered by the Indiana Attorney General's Office. Within days of the legislation being passed, the Attorney General's Office had established a 24-hour, toll-free phone number for Hoosiers to call and place their phone numbers on the Telephone Privacy List. More than 200,000 Hoosiers have taken advantage of this service, with the first list scheduled to take effect in January, 2002.
If you want to reduce unsolicited telemarketing calls after January 1, 2002, join your friends and neighbors in registering for the Telephone Privacy List today!
National Fraud Information Center (NFIC)
Consumer Assistance Service
The NFIC provides:
The Federal Trade Commission (FTC) is making it easier and cheaper for consumers to report a fraud to the law enforcement agency through a toll-free Consumer Help Line, 1-877-FTC-HELP (1-877-382-4357). The line is staffed by counselors from 9 a.m. to 8 p.m., Eastern Time, Monday through Friday. Through the toll-free Help Line, consumers can get helpful information on the spot. The FTC can't intervene in individual disputes, but consumer complaint information is crucial to the enforcement of consumer protection laws. Go to the FTC web site or go to the online complaint form, or you can write to FTC, Consumer Response Center, Washington DC 20580-0001.