Schemes and scams take on various forms but they all share common traits. The best defense is knowledge; knowing the danger signs and how to protect yourself can save you time and money. The following list is developed jointly by the BBB, Business Practices and Consumer Protection Authority of BC, Competition Bureau of Canada, BC Crime Prevention Association and BC Securities Commission. In no specific order, here are the Top Ten Scams for 2008.
1. Economic Downturn Scams
Tough economic times often bring out the bad guys. During a credit crunch, you may turn to new sources to help with your finances. While it may not be called a “loan” in the marketing, there are small business cash advances which offer thousands of dollars for business ventures despite your credit rating. These types of opportunities often come with up-front fees, and excessive interest charges. In some cases, it may even be attempts to gain information for identity theft. Before you jump up and send in that processing fee or security deposit, be warned that this is likely a scam. You should never have to pay cash in advance for a loan.
QUICK TIP: Never pay money to get money. If it is a legitimate loan or lender, the fee will be added to the total amount owed on the loan as required by BC consumer protection laws. For information about disclosure requirements when you are applying for a personal loan in BC, contact Business Practices and Consumer Protection Authority (BPCPA) of BC toll free at 1.888.564.9963 or visit www.bpcpa.ca.
2. Home Repair Rip-Offs
Home improvements may be on your agenda, but finding a contractor with reasonable costs and availability may be a challenge. During the spring thaw, unscrupulous and unqualified people often show up to homes with offers to do everything from landscaping to roofing. Some may offer to pave your driveway with leftover materials, or even remodel your home for a low price. These fly-by-night operators come into communities for a short time and do shoddy work that often results in having the work to be redone.
QUICK TIP: Get the name and address of the company the vendor claims to represent and check it with the Better Business Bureau and the city-licensing office. Get all the details of the work put in writing and make sure that you understand everything in the document. Verify the individual is licensed, bonded, insured and has registered with WorkSafeBC (Workers’ Compensation Board). If you are entering into a contract with a contractor who came to your door to sell their services, find out about your cancellation rights. Contact the Business Practices and Consumer Protection Authority (BPCPA) toll free at 1.888.564.9963 or visit www.bpcpa.ca to find out more about consumer contracts. Remember, price is not everything because in the end it may cost you more than you planned.
3. Business Opportunities
Your good friend or family member may have invited you to attend a presentation involving an investment opportunity. You don’t know anything about the company, and are desperate to hear that it is legit. These investments appear lucrative, but often are more hype than substance. The promoter convinces investors that they can be part owners of investment portfolios if they enlist new recruits, maybe promising commissions in cash and bullion.
QUICK TIP: In reality, this is most likely a pyramid scheme. The new capital brought on by new investors is keeping this imaginary investment afloat. Get the facts. If you do go to an information session, collect business cards, promotional materials, and ask questions such as, who are the principals of the company? When did the company get started? How much is the start-up cost? Gather as much information as possible before agreeing to anything. To report misleading advertising and deceptive marketing practices contact the Competition Bureau at: www.competitionbureau.gc.ca or 1.800.642.3844. Go to the BC Securities Commission’s Investright.org website for information on how to select an advisor and what to look out for when choosing to invest.
4. Bogus Online Ads
Online classifieds can be an effective way to hunt for shopping bargains and find those hard-to-get concert tickets. While those classified websites offer free access to hundreds of ads, beware that those listings are rarely vetted prior to posting. The seller may not be legitimate, and there may not be concert tickets coming to you in the end.
QUICK TIP: DO NOT wire money to complete an order you have purchased from a stranger. This money will be impossible to recover if the product you purchased does not arrive. If you are meeting the person, try to meet in a neutral location. Avoid purchasing things like gift certificates and gift cards from online classifieds. If the person offers the gift card for less than the value, the card may be either stolen or fake.
5. Cure-All Health Products
Fraudulent “cure-all” health products promise quick cures and easy solutions to a variety of problems, from obesity to diabetes and cancer. Any product that claims to be a miracle cure may be a fraud that could cheat you of time, money and most importantly, your health.
QUICK TIP: Beware of ads that promise too much. Think twice before buying a product that claims it can do it all. Steer clear of a product that claims to be a “scientific breakthrough.” If the first or only place you learn about a new treatment is through an advertisement on the Internet, be suspicious. Consult your health care practitioner before trying any new treatment. For further information on health fraud, go to the Competition Bureau’s website: www.competitionbureau.gc.ca/healthfraud
6. Guaranteed Vehicle Brokers
After listing your used vehicle for sale in the classifieds, you receive a phone call from a company advising you that they have a purchaser for your vehicle. The caller asks for a fee guaranteeing that the purchaser will pay more than the vehicle is advertised for. They promise that if you list your vehicle on their classified site and the vehicle is not sold within 90 days, you will get your money back. Unfortunately, your vehicle is not sold, the guarantee is not honoured, you can’t reach the company and you are out of pocket the funds you have given this company.
QUICK TIP: The BBB advises consumers to be wary of brokers who “guarantee” auto sales with prearranged buyers. Ask detailed questions such as: is the buyer specifically interested in your vehicle, rather than a range of similar vehicles? Always understand telemarketing offers and ask for additional documentation. Certain telemarketers must be licensed in BC. You can check to see if the telemarketing company is licensed through Business Practices and Consumer Protection Authority of BC at www.bpcpa.ca or 1.888.564.9963.
7. Prize Offers: You Don’t Have to Pay To Play
You may have attended a trade show and entered a draw for a free trip, and several days later you get a call you have won. Or, you received a letter that states that you have won an international lottery or fabulous prize. The common trait to both these ‘winnings’ is that thing is that you must send them money, be available for a home delivery or a special presentation, or provide them with some very personal information such as your bank account or credit card number.
QUICK TIP: If there’s a catch or condition, you haven’t won. If it sounds too good to be true, or you’re not sure, check the offer out further. Contact your BBB at 604.682.2711 or 1.888.803.1222. If you think it's fraud, call the Canadian Anti-Fraud Call Centre, PhoneBusters, at 1.888.495.8501. To be removed from telemarketing calling lists contact the Canadian Do Not Call List: 1.866.580.DNCL or go to: www.lnnte-dncl.gc.ca.
8. Bogus Cheques & Overpayment Schemes
In this scam, fraudsters typically target people selling a product through classified ads, online bulletin boards or people looking for work on employment postings. The scammer sends a cheque for the listed product or service that is more than the negotiated price. The original cheque is usually stolen or is a fake, and by the time the victim has cashed and returned the excess funds, the scammer has disappeared with the money and the product.
Another cheque overpayment scheme can be under the guise of working as a mystery shopper. The victim believes that they will be paid to mystery shop a wire transfer service. They are sent a cheque, told to deposit it, keep a small percentage of the money as their wage, wire the rest, and then complete the survey on the service they encounter. The address turns out to be bogus, the money wire transferred to another unknown location and the victim is out the money transferred.
QUICK TIP: Never accept payment for more than your selling price. Never agree to refund the excess to a buyer or wire-transfer money to another location. A legitimate buyer or employer would never ask you to do so. Consider using an independent online payment service. Speak to your credit card service provider to determine what avenues it has to guarantee payment processing.
9. Eco Cons – Are you buying it?
There are a number of products on supermarket shelves that are “green”, “eco-friendly”, “all natural” or “environmentally safe.” A study by TerraChoice Environmental Marketing, found evidence of Greenwashing -- making false or misleading green marketing claims – in 99% of products checked.
Quick Tip: Look for EcoLogo or Green Seal symbols that show third party testing of products. Be skeptical of marketing promotions that offer to support environmental processes without proof the processes are subscribed to and are effective. Canada has guidelines for green advertising that can be visited at the Competition Bureau website: www.competitionbureau.gc.ca
10. Spoofing Attacks
You may receive an email that looks like it is from an organization you know, or visit a webpage that looks like it is from your bank. When a one person or program successfully masquerades as another by falsifying data, this is spoofing. Spoofing attacks have grown and become more sophisticated and have illegally used organizations like the Better Business Bureau and the Canada Revenue Agency to trick consumers into sharing their information. The key common tactic is to get you to either fill in personal information or download malicious software on to your computer to compromise your security and put your identity and money at risk.
QUICK TIP: If you receive an email from a person or organization that instructs you to complete an online form, or download a program, stop. Organizations do not usually correspond only by email, especially without prior contact. Call to check the legitimacy of the email. Do not click the link or respond to the email to play along, because you may expose your computer and your identity at risk. Delete the email. If you fear your computer has been compromised, contact a computer technician to examine your system. Make sure to check your credit report annually with Equifax (1.800.465.7166 or www.equifax.ca) and Trans Union Canada (1.866.525.0262 or www.tuc.ca.) For more information about identity theft, go to the BC Crime Prevention Association website: www.bccpa.org.
For more information, please contact:
Lynda Pasacreta, President and CEO
Better Business Bureau of Mainland BC
For interviews with Lynda Pasacreta contact:
Mark Fernandes, Communications Specialist
Tel: 604-488-8701
Email: mark@mbc.bbb.org
Tom Aquiline, Director of Industry Relations
Business Practices & Consumer Protection Authority
Tel: (604) 296-2855
Email: Tom.Aquiline@bpcpa.ca
Valerie MacLean, Executive Director
BC Crime Prevention Association
Tel: 604-291-9959 (ext. 226)
Email: v.maclean@bccpa.org
Victor Hammill, Assistant Deputy Commissioner of Competition
Competition Bureau of Canada – Pacific Region
Tel: 604-666-2208
Email: hammill.victor@cb-bc.gc.ca
Andrew Poon, Media Relations & Government Affairs
BC Securities Commission
Tel: 604-899-6880
Email: apoon@bcsc.bc.ca
