BBB’s TOP 10 SCAMS OF 2011:
Protect Yourself From Becoming a Victim in 2012
VICTORIA, BC – Each year the Better Business Bureau of Vancouver Island compiles a list of the scams and complaints that have most significantly impacted consumers in our region. To highlight the BBB’s 100th Anniversary internationally and 50th Anniversary locally, the theme of this year’s Top 10 Scams list is “What’s Old is New Again.”
“When it comes to scams, we really haven’t seen anything all that new, in many, many years,” says Rosalind Scott, Executive Director of BBB Vancouver Island. “While many scams of today are cloaked in modern technology, the basic elements or principles of every scam have been the same for the past 50 to 100 years. Scammers make a living taking advantage of peoples’ desire for fame or fortune, using false pretenses, posing as credible businesses and organizations, and luring people into giving out private, personal and financial information.”
The following is a brief summary of the top scams (in no specific order) from the past calendar year and simple tips to help you avoid becoming a victim of fraud in 2012.
3) Computer Virus Fixing Scam
In this scam a person fraudulently claiming to be a representative of a reputable business such as Microsoft, Windows or Online PC Care contacts homeowners via phone. The aggressive caller claims the home computer has been infected with a virus and that if the problem is not solved the computer will become unusable. In order to “fix” the problem, the victim is directed to a website, asked to provide their credit card information as payment, and told to download an anti-virus program. The catch: there isn’t anything wrong with the computer, the caller is a fraud, and the victim has downloaded damaging malware and spyware to their computer, as well as given out their credit card information.
CONSUMER TIP: Treat all unsolicited phone calls with skepticism. Check with the organization directly that the caller is claiming to be from, using the contact numbers found on their website. Do not provide any personal information to avoid identity theft. Never provide credit or debit card information for payment. Report any fraudulent activity to the Canadian Anti-Fraud Centre at 1 (888) 495-8501 or www.antifraudcentre.ca.
4) Power Saving Claims
The switch to Smart Meters in B.C. fostered a rise in false claims and deceptive ads by some scammers selling energy conservation devices. Consumers reported purchasing a number of power saving devices they claim did not work and that did not meet electrical safety standards.
CONSUMER TIP: BBB was created 100 years ago to put a stop to deceptive claims and unethical advertising. The BBB Ad Review program seeks to help consumers and businesses identify untrue, deceptive, fraudulent and insincere statements. Protect yourself from deceptive advertising by doing your research before making a purchase. Always checking out a company's BBB Business Review first (visit bbb.org) and report deceptive advertising and business claims to your local BBB. If it sounds too good to be true, remember that it probably is.
5) Door-to-Door Sales
Each year a variety of unscrupulous door-to-door salespeople use high-pressure sales tactics to frighten people into purchasing expensive, substandard - often unneeded products and services. On Vancouver Island in the 1960’s the high-pressure sales tactics of subscription salesmen was a significant concern. Today there are aggressive sales people selling everything from alarm systems to vacuums and air purifiers, as well as roofing, paving, window washing, painting, plumbing, heating, repair and landscaping services.
CONSUMER TIP: Don’t give in to high-pressure sales tactics. If you feel threatened by an aggressive salesperson ask them to leave your property. If they refuse, call the police. Before making any purchases take the time to do your due diligence. Get the name and location of the company and ensure all details and verbal promises are included in your contract. Suspicious door-to-door sales should be reported to Consumer Protection BC at 1 (888) 564-9963 or www.consumerprotectionbc.ca
6) Financial Elder Abuse
Financial elder abuse occurs when seniors' pocketbooks are exploited by scammers who take advantage of a person’s vulnerabilities associated with age - like hearing loss, loneliness, physical limitations and impaired mental capacity. Common financial elder abuse frauds include tricking seniors into giving out private banking information; encouraging unnecessary home repair work; telemarketing and mail fraud; and swindles by family or friends that result in seniors giving up money, property, personal information and decision making capacity.
CONSUMER TIP: Most elder abuse happens to a senior by someone they know, such as a family member, friend or caregiver. Many victims do not even realize they have been taken advantage of. Signs a senior is being financially abused include: missing belongings, unusual activity in bank accounts, suspicious stories; sudden changes in Power of Attorney or Wills; bounced cheques and numerous unpaid bills. Report all incidents of financial elder abuse to your local police.
7) Group Coupon Buying
The popularity of online group coupon buying dramatically increased in 2011. Most sites offer anywhere from 50-90% in product and service discounts. While most of the group coupon buying sites themselves are legitimate, customers reported a number of scams and problems such as: the inability to order a product or book a service purchased in a timely fashion; poor quality products and services; businesses unable to manage an increase in demand; unclear coupon terms; businesses unable to honour coupons; raised prices for coupon holders; counterfeit products and misleading and aggressive salespeople.
CONSUMER TIP: The concept of group buying clubs has been around for many years. The Internet has simply provided a simple way for many businesses to offer group discounts. As with buying clubs do your research about both the group coupon buying site and the businesses offering deals. Before signing up or making a purchase look up the company’s BBB Business Review (vi.bbb.org). Comparison shop to make sure the deal being offered is actually reasonable. Be wary of requests for personal and financial information. Before purchasing a coupon contact the business in advance to see when you might receive a product or service. Always carefully read the fine print and terms of the coupon. Legitimate coupons will have bar codes and expiration dates.
8) Reverse Mortgages
A reverse mortgage is a special, legal type of loan that allows homeowners to convert the equity in their home into cash, without incurring monthly penalties. There are two common scams related to reverse mortgages (a legitimate loan product) specifically targeting vulnerable, uninformed seniors. In the first scam current and potential reverse mortgage borrowers are duped into paying fees (which are normally free) to fraudsters for information and the submission of documents related to the mortgage/loan product. In the second scam, fraudsters work with an extensive team of con artists to artificially inflate the value of a home, assist a senior in acquiring a reverse mortgage, and dupe them into transferring away the title of the property.
CONSUMER TIP:
Reverse mortgages are not available, nor ideal, for everyone. To acquire a reverse mortgage you must be 62 years of age or older, have a small mortgage balance and the property must be your primary residence. The loan will be repaid, and whatever equity is left paid out when the home is sold or homeowner passes away. To avoid becoming a victim of scams related to reverse mortgages ensure you carefully research and understand how such a loan product works. Seek out your own reverse mortgage specialist and be sure you are speaking to qualified professionals.
9) Toll Fraud
Toll fraud is the unauthorized use of long distance phone services. Toll fraud significantly impacts businesses with multiple phone lines. Scammers essentially hack into a business’ telephone system and quickly rack up thousands of dollars in long distance charges. Businesses are ultimately responsible for all long distance charges incurred on their telephone systems.
CONSUMER TIP:
The installation of passwords, firewalls, system monitoring and regular updating and maintenance of multi-line phone systems are the best methods of protection for your business from toll fraud. Limiting and restricting international long distance phone calls, as well as call forwarding and call transferring features may also reduce you chances of finding your phone system hacked. You should also be sure your company disables all unused phones and voice mailboxes.
10) Credit & Debit Card Fraud
Identity theft related to credit and debit card fraud continues to be an ongoing problem. Consumers continually report discovering unrecognized charges on their credit and debit card accounts that are most often the result of identity theft. Thieves obtain account information through card reading devices, cameras, false PIN pads, card theft, phishing and phone scams.
CONSUMER TIP: Never let your debit or credit card out of sight when conducting a transaction. Keep your PIN information private and protected from prying eyes. Regularly check your monthly statements and account information. Never give credit card or personal information out over the phone or Internet unless you have initiated the transaction and have verified that you are using a reputable merchant. Credit and debit cards with chip technology are more difficult for unauthorized users to copy and access, but your account information can still be stolen through more traditional methods. Report all suspicious transactions on your account to your financial institution immediately.