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Foul Play!
8 all-star cons, scams and rip-offs
Online
and off, you're being targeted by today's most devious con
artists. Here's what you need to know to come out on the winning
end of the oldest (and newest) games in town.
By
Eva Marer
It's easier
than you think to find yourself in the middle of a sting.
Con men and women are, after all, professionals, and they
use the same means as legitimate businesspeople to target
you.
"The scams
themselves have not changed in 20 years," says Elizabeth Owen,
executive director of the nonprofit National Association of
Consumer Agency Administrators (NACAA),
whose mission is to ensure a safe and honest marketplace.
What has changed, she says, is the proliferation of methods,
such as 1-900 numbers, faxes, email and the Internet. As a
result of these new technologies, consumer complaints have
nearly doubled since 1997.
Check
out these common rip-offs and learn what you can do to protect
yourself.
#1
Scam: The Drive-By Dodge
In this classic rip-off, traveling repairmen cruise neighborhoods
in search of "repair work" they can sell unsuspecting homeowners.
They may knock on your door and offer to blacktop your driveway.
Then you'll discover after the first rain that the tar contained
no sealant and washed away. Or they may disappear without
ever finishing a project.
The Fix:
- Ask
the contractor for an original blank receipt (not a photocopy)
that lists his or her company's name, address, phone number
and license number. Then check with your local Better Business
Bureau (www.bbb.org) and
Home Builders Association (find it through the National
Association of Home Builders at www.nahb.org)
to see if the company has had any complaints filed against
it.
- Never
pay for the entire job up front. A deposit of one-third
of the total price is standard procedure, according to the
Federal Trade Commission (FTC). Pay the remainder -- by
check or credit card, never with cash -- only when the job
has been completed to your satisfaction.
#2
Scam: Chasing the Tornado
Areas hit by natural disasters -- flash floods,
forest fires, hurricanes or tornadoes -- are a breeding ground
for double-dealing. "Roving repairmen know that many of the
licensed, insured contractors will be booked for months and
that homeowners and landlords are anxious to get their properties
back in shape," says Sheila Adkins of the Council of Better
Business Bureaus. "They'll offer to remove debris or cut down
trees, convincing you that they need money up front for materials,
and then never show up for the job."
The Fix:
- Contact
the office of your secretary of state to determine that
the contractor is registered to do business in your state
and is licensed and/or bonded to perform the specific type
of work.
- Also
contact your local Better Business Bureau to find out if
any complaints have been registered against any companies
offering to repair your home.
#3
Scam: Gone Phishing
In a new twist on prying financial information from unsuspecting
victims, Internet con artists send out an email impersonating
your bank or other financial institution. The email says that
your account may be shut down unless you report to the website
indicated and re-enter your financial information. "These
guys have gotten good at mocking up corporate Internet sites
and emails that look very authentic," says Steve Salter of
BBBOnLine (www.bbbonline.org),
an arm of the Council of Better Business Bureaus that deals
with websites and Internet security.
The Fix:
- Legitimate
businesses do not solicit personal information via email.
- If
you're at all suspicious, contact the company cited in the
email using a telephone number or website address you know
to be genuine.
- Report
suspicious emails to the FTC. Forward the actual spam to
spam@uce.gov. If you believe
you've been scammed, file your complaint at www.ftc.gov.
#4
Scam: The Gifting Club
Your own friends and family may unwittingly lure you into
a pyramid scheme by inviting you to join a "gifting club."
New club members give cash "gifts" to the highest-ranking
members, who are called captains. The promise: If you bring
additional members into the club, you too will become a captain
and make far more money than you initially paid to join. Aside
from the scam artists at the top, most members never receive
the financial gifts they expected and lose their initial investments
in the club.
The Fix:
- Gifting
clubs, like all pyramid schemes, are illegal. If you've
been victimized, call your state's attorney general, your
local consumer-protection agency and the Better Business
Bureau.
- Consider
hitting "Reply All" to the email and informing those on
the list that the gifting club is a scam and is illegal.
#5
Scam: The Nigerian Swindle
This double-cross has been around for more than 40 years and
has many variations. It used to arrive in a letter postmarked
from Nigeria; these days it makes its rounds on the Internet.
The sender claims to be a wealthy foreigner who has millions
of dollars "trapped" in Nigeria (or another foreign country)
by corrupt government officials. The sender needs a kind person
in the United States to let him use their bank account to
recover the money. In exchange, you are promised a percentage
of the millions once the money is transferred. Instead, your
bank account is emptied.
The Fix:
- Contact
your bank immediately if you have revealed important account
information.
- Contact
the U.S. Secret Service. Find your local office online at
www.secretservice.gov.
#6
Scam: The Under-the-Hood Hoodwink
Beware if you drop your car off at an auto shop and, when
you pick it up, the mechanic says he's done you "a favor"
by, for example, replacing what he says was a worn-out fan
belt-even though you weren't aware of the problem. "What these
scams have in common is that the repair wasn't authorized
by the consumer and could have been done later," Adkins says.
The Fix:
- Ask
car-savvy friends for referrals of reputable mechanics.
- Be
clear that you want to be notified before any major work
is begun.
- Make
sure the shop gives you a repair order that describes the
work done, including a list of all parts supplied and their
cost, labor charges and the vehicle's odometer reading,
both before the work was done and after.
- Familiarize
yourself with your car's maintenance schedule so you know
what repairs to expect and when.
#7
Scam: The Customs Con
The phone call you get sounds like great news: "We're holding
a package for you at Canadian customs that contains a check
in your name for several thousand dollars from a contest you
won. We can forward it to you immediately, but first we need
you to pay the taxes and fees that are owed on the prize.
You can wire them to us at … ." This rip-off is easy to fall
for if you tend to enter-and then forget about-lots of contests
and sweepstakes.
The Fix:
- If
you're telephoned and asked to pay for a prize, hang up.
Aside from any income tax you may have to pay on it, a prize
is always free.
- Never
send money -- whether by cash, check or money order -- to
anyone who insists on immediate payment.
- Report
the call to the FTC and the US Customs Service.
#8
Scam: Auction Infractions
On popular Internet auction sites such as eBay, fraudulent
sellers may offer an expensive item online and then lure the
winning bidder -- usually a novice buyer -- to wire the money
to Western Union. Once they've picked up the money, bunko
artists disappear and the buyer never receives the merchandise.
The Fix:
- The
best way to pay online is by credit card -- never by Western
Union -- because provisions in the law stipulate that customers
are liable for no more than $50 on a fraudulent purchase.
- Know
who you're buying from. Internet auctioneer eBay has set
up online rating and customer-feedback systems to gauge
seller reliability.
- Make
sure you are paying on a secure screen. The best way to
do that is to check that the "http" in the web address turns
to "https" when you enter the secure area of the site. The
page usually also will display a "lock" icon somewhere on
the screen.
Choosing
a safe password
'Tis
the season to shop online for holiday gifts, but don't give
thieves easy access to your accounts by using easy-to-guess
passwords on banking and shopping sites. Outsmart hackers
with these tips from Razorpoint Security Technologies, Inc.
- Make
sure your password is at least 6 characters long.
- Use
a password with mixed-case letters, numeric characters and
punctuation (where supported by the operating system). Do
not simply capitalize the first letter or add a number at
the end.
- Use
a password that can be typed quickly, without having to
look at the keyboard. This makes it harder for someone to
steal your password by looking at your keyboard -- a.k.a.
shoulder surfing.
- Do
not use common names of people or places as a password or
keys in a sequence, such as "QWERTY" or "1234" or "abcabc."
- Change
passwords at least every six months. For more info, See
Razorpoint Security's white paper on "Password
Best Practices."
The
MetLife Advantage
The Fraud Fighters Insurance companies are also a favorite
target of con artists, a fact that keeps John Sargent, manager
of MetLife Auto & Home's Special Investigation Unit, and his
75 investigators on their toes. One common con is the "swoop-and-squat."
In this, a con artist maneuvers a car in front of an unsuspecting
driver -- it could be you -- and slams on the brakes, forcing
a rear-end collision. The con artist then tries to collect
on fake medical injuries.
"An 'advocate'
may wander onto the scene and direct a victim to a medical
clinic that MetLife Auto & Home knows to be fraudulent, a
mill where you won't get proper medical treatment," Sargent
says. "We will notify our customers about that and see that
our customers get the treatment they deserve. It's our duty
to aggressively pursue those cons and clinics and to protect
consumers."
By heightening
fraud awareness and conducting comprehensive investigations,
MetLife Auto & Home's anti-fraud unit plans to take a bite
out of fraud, which represents up to $100 billion in losses
nationwide and directly relates to increasing insurance premiums
for everyone. If you suspect another person of insurance fraud,
call MetLife Auto & Home's toll-free hotline at 1-800-922-FRAUD.
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