Still Plenty of Low-Tech Fraud

While Internet fraud is getting more attention from authorities, old-fashioned scams continue to separate millions of dollars a year from unsuspecting victims.

Even though some of the schemes have been around for decades, victims continue to hand over money to crooks promising “free” Hawaii vacations, lucrative work-from-home opportunities and “sure-thing” investments.

The details have changed with time, officials say, but the basic scam remains the same.

“Consumers need to do their homework,” said Paula David, spokeswoman at the California Department of Consumer Affairs.

And if you’re still uncertain?

“Just say no,” she said.

Here is a rundown, provided by the department, of some of the most common scams:

The Work-at-Home Scheme

Be cautious about work-at-home advertisements, especially those that promise large profits within a short time. Home employment schemes are among the oldest and most widespread. Often consumers are asked to spend their own money, pay membership fees or to make regular payments for continued instruction or materials; and just as often the same consumers are not paid for their work.

The Auto/Home Repair Scheme

Vagabond thieves frequently do auto body repair work. They will drive around town looking for dented vehicles and, after locating one and its owner, inform the owner that they can make the repairs cheaply. After the work is done, the thieves may then say the job was complicated and charge an exorbitant fee. Vagabond thieves also use various introductory statements to induce homeowners to allow them to repair or tar roofs, or resurface driveways.

The Pyramid Scheme

Thousands of people have lost millions of dollars participating in pyramid schemes, which are also known as endless chains. Many losses are suffered by victims who thought they were paying start-up costs for a small business of their own. Pyramid schemes are illegal scams in which large numbers of people pay money to a few people. Each new participant pays for the chance to advance and profit from payments of others who might join later. Pyramid schemes try to hide their true nature to fool potential participants and evade law enforcers. To join, a potential participant will have to pay money. The only way to advance is to recruit others who also pay money. If enough new participants continue to join, the pyramid scheme continues to operate. In order for everyone in a pyramid scheme to profit, there would have to be a never-ending supply of new participants. Often the new recruits are a participant’s friends and family members. In reality, each new level of participants has less chance of recruiting others and a greater chance of losing money. The pyramid may collapse at any time. This places the participant in the position of victimizing friends and family.

The Examiner Scheme

If a stranger tells you that he or she is an examiner or investigator and asks you to help catch a dishonest employee, beware. If you seem interested, the con artist will promise to redeposit your money in such a way that the “dishonest” teller will be caught red-handed. The phony examiner will pick up your money and give you a fake receipt, never to be seen or heard from again, along with your money. A simple preventive measure would be to call and check with your financial institution before doing anything. Banks never involve their account holders in investigations.

The Pigeon-Drop Scheme

If a stranger or strangers tell you they have found some money and try to convince you that it was ill-gotten by the loser (maybe a gambler) and can be kept, beware. You will be told you may share the find if you withdraw money from your savings to show “good faith” and responsibility. You may think you have your money in view, but the envelope or bag will be quickly switched. Only on going back to redeposit your money do you discover you have only pieces of blank paper.

The Sweepstakes Scheme

Sometimes, scam artists pose as organizers of a sweepstakes. They call victims at random, telling them they’ve won a trip to Hawaii or an automobile. The catch: You must purchase some type of product or make a “prize registration” payment. The thieves take the money but never provide the “prize.”