The year’s top scams: news you can’t trust
It’s time for the top 10 scams of 2007.
From cruel foreclosure frauds to Nigerian puppies -- in other words, from the tragic to near comical -- this was a banner year for consumer scams. Much like many other years.
The Internet continued to provide a worldwide platform for fraudsters. New scams popped up and some old-fashioned schemes came back.
So, without further ado, here’s a countdown of infamous notables for the year.
Hold your applause, and your wallet.
10. The hands-down, scummiest scam of the year was fake Red Cross phone calls to spouses of soldiers in Iraq.
The caller, saying he was from the agency, delivered the news that the soldier had been injured and airlifted to a hospital. Before treatment could begin, the caller needed the soldier’s Social Security number, date of birth and other personal information.
Luckily, the soldier actually was fine. The call was an attempt to get information needed for identity theft.
The American Red Cross put out a warning, saying it would never call a spouse to say a service person was injured.
9. “Natural” Viagra turned out to be not so natural in some cases.
Some over-the-counter supplements, with names as unsubtle as 4Everon, claimed to remedy erectile dysfunction as effectively as the prescription drug.
The Food and Drug Administration found that they indeed did their job well. But that was because the active ingredient in the concoctions was the same as in real Viagra.
The scam could have serious consequences because the “supplements” posed health problems if mixed with drugs taken for diabetes and other conditions.
The FDA forced 4Everon off the market.
8. It looked like good news from the Internal Revenue Service: People across the country got e-mails saying they were owed an unexpected tax refund.
The bad news was that the e-mails, which asked for information such as bank account numbers, were frauds. They were yet another attempt to get the personal data needed for identity theft.
The IRS said it would never send e-mails requesting financial information.
7. As if people who fell behind on mortgage payments didn’t have enough troubles, an increasing number became victims of foreclosure rescue frauds.
According to real estate experts, the scams take different forms: Owners unknowingly sign over properties; loan restructure “experts” collect fees and do nothing; fake refinance brokers inflate property values for personal gain.
In some cases, the scams resulted in homeowners losing whatever equity they did have. Or they lost a home that might have been saved with a legitimate refinancing.
6. Counterfeiters produced electronic gadgets that were incredibly sophisticated -- but in looks only.
High-end earphones, remote controls and other digital products were copied down to company logos and multilingual instructions.
Not only did these products -- sold at deep discounts online -- cheat legitimate manufacturers, but they also tended to underperform for buyers.
To update an old saying, if an Internet bargain looks too good to be true, it probably is.
5. Check washing -- a scam popular among fraudsters several decades ago -- made a comeback.
Stolen, uncashed checks could be placed in chemical solutions to wash away the ink writing on the payee and amount lines.
Then the scammer could write in his or her own name and a new amount, and it was off to the bank.
4. Modern fake check schemes are a growth industry on the Internet.
They take numerous forms, but basically involve you (if you’re the target) being sent a “certified” check -- usually from outside the country -- that is an overpayment of some kind.
Maybe it’s for something you sold online, a deposit on a rental apartment or even the winnings for a sweepstakes you never entered. A recent variation offers you a portion of the money as a commission just for processing the check.
In each case, the fraudster directs you to deposit the check and then return the excess by wire as soon as your bank makes the funds available.
The key to this fraud is that many people don’t realize that just because funds are available, it doesn’t mean a check has cleared.
Several days later, when the bank determines the check is fraudulent, it will come after you for the entire amount.
The U.S. Postal Inspection Service has seized more than $2 billion worth of fake checks this year, but it’s likely that many others got through.
3. “Lose weight without diet or exercise!”
Every year, products arrive that promise to take off the excess lard. All you have to do is take a pill, sip a drink or apply a patch.
But these products are all frauds, according to the Federal Trade Commission. This year the FTC collected $25 million in settlements from several companies that the agency charged with making false weight-loss claims.
2. Natural disasters have long brought out fraudsters impersonating contractors or insurance settlers.
But a new scam cropped up in the wake of wildfires in October. Con artists claiming to be Southern California Edison workers visited homes in fire areas offering to restore power or prevent the power from being shut off -- for pay.
The utility warned customers to verify the employment status of anyone who said he was with the company and needed to collect a fee.
1. What would a modern, top-10 scam list be without something from Nigeria, the West African country that has developed a reputation (backed by evidence from law enforcement agencies) as a center for online fraud?
Indeed, many of the aforementioned fake-check scams originated there.
But perhaps the most original scheme from Nigeria this year involved puppies.
In e-mails and classified ads, pictures of incredibly cute English bulldogs appeared accompanied by sob stories. The puppy could no longer be cared for or was simply being offered to a good home, usually for free.
The messages tugged at the heartstrings -- and the purse strings. That’s because these bulldog puppies could be worth more than $3,000 apiece.
There was always just a small hitch: The buyer needed to pay for shipping the animal from Africa, which could run several hundred dollars. Then, if that was paid, there would be additional money needed for customs.
And shots.
And airport kennels.
And whatever else the fraudsters could collect before the buyers -- some of whom paid $1,500 or more -- realized they had been had.
The only good thing about this fraud is that no puppies were harmed in the making of it. That’s because there were no puppies to begin with; the pictures were lifted from Internet sites.
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Scam-proofing
The consumer scams of 2007 will probably live on into 2008. Here are some ways to fend off fraudsters.
10. The American Red Cross says it doesn’t convey news about people in the military. In any regard, never give out personal financial information, such as Social Security numbers, over the phone or online unless you can confirm that the need and the person asking for the information are legitimate.
9. View the entire Food and Drug Administration warning about erectile dysfunction “dietary supplements” at www.fda.gov/bbs /topics/NEWS/2006/NEW01409.html.
8. The Internal Revenue Service doesn’t send e-mails requesting financial data.
7. Information about avoiding foreclosure scams is at dca.lacounty.gov/TSForeclosure.html. To speak to a Los Angeles Country Department of Consumer Affairs counselor, call (800) 973-3370.
6. To greatly increase the odds that a brand-name gadget is the real thing, buy it only from an authorized dealer. Often those dealers are listed on manufacturers’ websites.
5. Don’t use a residential mailbox for outgoing mail unless it can be locked. Also, gel pens are available with ink that’s highly resistant to check washing.
4. To avoid getting ensnarled in a fake-check scheme, never accept a payment that requires you to return a portion of the money by wire. And by the way, you can never win a sweepstakes you haven’t entered. Honest.
3. The only thing you lose is money if you buy a weight-loss
product that promises results without diet or exercise, according
to the Federal Trade Commission. See www.ftc.gov/bcp/edu/pubs /consumer/health/hea03.shtm.
2. If you get an unexpected visit from workers claiming to be from a utility company, don’t give them money or let them in the house without calling the utility to confirm their identity.
1. Paying someone you’ve never met to have a puppy shipped to you from Nigeria? Are you nuts?
-- David Colker
