Better Business Bureau (BBB) investigates thousands of scams every year from information gathered through sources such as consumers and federal agencies. Some of these scams have been around as long as BBB – 100 years – and some take advantage of brand new technologies. Even as consumers become savvier, scams seem to be more prevalent and to help build awareness, BBB names the “Top 10 Scams of 2012” and shares two new websites created to help consumers make informed marketplace decisions in 2013.
To help consumers identify legitimate offers from fraudulent scams, BBB launched two websites last year: BBB Smart Investing and BBB Scam Stopper.
BBB Smart Investing (www.bbb.org/smartinvesting), developed in partnership with the Financial Industry Regulatory Authority, Inc. (FINRA) Investor Education Foundation, informs consumers about investment fraud, Ponzi schemes and risky investments. The site also helps consumers assess risk, check out brokers, and avoid being taken.
BBB Scam Stopper (www.bbb.org/scamstopper), developed in partnership with Western Union, educates consumers on major scams and provides information on how to avoid and report them.
“Because many go unreported, it is difficult to indicate which scams are the ‘biggest’ in terms of the number of people affected or the amount of money stolen,” said Matthew Fehling, President/CEO of BBB. “However, BBB’s list is composed of scams that seem the most audacious - the most egregious.”
BBB names the top 10 scams of 2012:
1. Top Overpayment/Fake Check Scam: Car Ads
The typical online ad says, “Get Paid Just for Driving Around” – naming a prominent company that offers $400+ per week to drive around with their logo all over your car. The scammers send a check to be deposited, requiring that part of the money be wired as payment for the graphic designer who will customize the ad for your vehicle. A week later, the check bounces, the graphic designer is nowhere to be found, and you are out the money wired. The Internet Complaint Center (www.ic3.gov) saw this scam frequently in 2012.
2. Top Emergency Scam: Grandparent Scam
The “Grandparent Scam” has been around a while, but it’s still prevalent.
Grandchild/niece/nephew/friend is traveling abroad and calls/texts/emails to say he or she has been mugged/arrested/hurt and needs money right away (“…and please don’t tell mom and dad!”). You send money only to find out the real person is safe at home. The FBI says that thanks to social media, it’s becoming easier for scammers to tell a more plausible story, as they use real facts from the supposed victim’s life shared on social media (“Remember that great camera I got for Christmas?” “I’m in France to visit my old college roommate.”). Rule of thumb: before you wire money in an emergency, check with the supposed victim or their family to make sure they are really traveling. Odds are they are safe at home.
3. Top Employment Scam: Mystery Shopping
For those who love to shop, working as a secret shopper may sound like an ideal way to supplement income. Taking advantage of its popularity, scammers offer secret shopper jobs that are nothing more than a variation on the Overpayment/Fake Check Scam (above). Sometimes, they even include the evaluation of the wire service company as part of the job, telling consumers to send back part of the money. The Mystery Shopping Providers Association says it’s not the practice of their members to pre-pay shoppers, but if you have your heart set on this type of job, you can find legitimate offers at www.mysteryshop.org.
4. Top Advance Fee/Prepayment Scam: Nonexistent Loans
Loan scams continued to fester in 2012. Most scams advertise online and promise things like “no credit check” or “easy repayment terms.” The hook: you have to make the first payment upfront, buy an “insurance policy,” or pay a fee to “secure” the loan. A new aggressive twist on loan scams involves consumers being threatened with lawsuits and law enforcement action if they don’t “pay back” loans they have never taken out in the first place. Some receive calls at their place of work, even to relatives. The embarrassment of being thought of as a delinquent causes some victims to pay even when they don’t owe the money.
5. Top Phishing Scam: President Obama Will Pay Your Utility Bills
Of all the politically related scams, the scam stating President Obama would pay consumers’ utility bills seemed to be the most prevalent. At the peak of summer with utility costs soaring, consumers received emails, letters and even door-to-door solicitations about a “new government program” to pay their utility bills. Victims “registered” at an official-looking website and provided enough personal and financial information for scammers to steal their identities.
6. Top Sweepstakes/Lottery Scam: Jamaican Phone Lottery
In this scam, the calls come from area code 876 in Jamaica, but the person claims to represent BBB, the FBI, or another trusted agency. The caller says you have won a terrific prize, which typically is 2 million dollars and a Mercedes Benz. The catch? You have to pay a fee in order to collect your winnings. There are many variations of this scam, sometimes offering a government grant. Consumers are encouraged to hang up and file a phone fraud report with the appropriate government agency (see below).
7. Top Identity Theft Scam: Fake Facebook Tweets
Two top social media sites were exploited in one of this year’s top scams. You get a Direct Message from a friend on Twitter with something about a video of you on Facebook (“What RU doing in this FB vid?” is a typical tweet). In a panic, you click on the link to see what the embarrassing video could possibly be, but you get an error message that states you need to update Flash or another video player. However, the file isn’t a new version of Flash; it’s a virus or malware that can steal confidential information from your computer or smartphone. Twitter recommends reporting such spam, resetting your password and revoking connections to third-party applications.
8. Top Home Improvement Scam: Sandy “Storm Chasers”
BBB spends a lot of time investigating and reporting home improvement scams, but this year saw an unusual amount of “storm chaser” activity following Superstorm Sandy. Some legitimate contractors came from other areas to supplement the volume of work available, while others were unlicensed, uninsured and ill prepared for the work; some, even out-and-out scam artists who took money and never did any work. In an emergency, it’s tempting to skip reference checking, but that’s when it might be needed the most. BBB reminds consumers tens of thousands of Accredited Businesses in the home contracting field are available and committed to upholding our Standards for Trust. Next time you need home repairs, find a contractor at www.searchbbb.org.
9. Top Sales Scam: Real Stars, Fake Goods
Sports memorabilia and phony tickets always make the list of top counterfeit goods. From the Super Bowl to the World Series, counterfeiters manage to keep their hands in your pockets all year long. With the London Olympics added to the mix, it appears 2012 was a good year for sports fakes. Some scammers sold cheap knock-offs in front of stadiums; others set up websites and stole money never having any goods to begin with. Counterfeit goods are not only a rip-off because the merchandise is usually shoddy, but are also a rip-off for the teams, athletes, designers and artists who create, license and sell the real items. Buy directly from team stores, websites and legitimate retailers. You’ll pay a little more, but it will be the real deal. Remember, if a deal sounds too good to be true, it probably is.
10. Scam of the Year: Newtown Charity Scams
Within hours of the horrific shooting at Sandy Hook Elementary School in Newtown, Connecticut, social media pages dedicated to the victims began cropping up…and some of them were scams asking for money. The FBI arrested one woman for posing as the aunt of one of the children killed, and state and federal agencies are investigating other possible fraudulent and misleading solicitations. In response to these reports, BBB Wise Giving Alliance offers tips for donors to understand how and when to best support those dealing with such a tragic crisis. Although the number of people defrauded and the total dollars stolen are most likely low, the cynicism and sheer audacity of these scams merits listing in the “Top 10 Scams of 2012.”
Resources for consumers:
● Visit BBB Scam Stopper for more information on these and other scams. Sign up for our Scam Alerts and learn about new scams as soon as we do.
● Visit BBB.org to search for businesses in the U.S. and Canada, or to find your local BBB.
● For information on charities, visit BBB’s Wise Giving Alliance at Give.org.
● For information on U.S. government services, go to USA.gov.
About BBB Serving Central, Northern & Western Arizona
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Incorporated locally in 1938, today your BBB serves communities in Central, Northern and Western Arizona, supported by over 10,000 BBB Accredited Businesses. BBB provides objective advice, free business BBB Business ReviewsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust.