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Fight Fraud
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Top 10 scams of 2010
Article By: Elizabeth Rogers
- Jan 17, 2011

Crooks are getting more creative with schemes and new methods. Be on the look out for last year's top scams in 2011! 
These days keeping your cash out of the hands of criminals can be more challenging than balancing your budget. There’s always a new twist on an old con or a new scam ready to catch people who are vulnerable and caught unaware.
However, one of the best ways to avoid a trap is to know how to spot it. To keep people in the know, many organizations like Scambusters, the Better Business Bureau and Canadian Anti-Fraud Call Center track the most commonly reported scams facing consumers. While everyone’s list is a little different depending on demographics and how schemes are classified, it’s not hard to spot the common tactics and perennial problems.
Want to stay ahead of the crooks? Watch out for these common scams that targeted North Americans last year.

Top Scams of 2010

Fraudulent services. The most commonly-reported scam in Canada, they can include any misleading offer or promotion of services, from medical supplies and insurance to extended warranties and long distance phone plans. It could be a contractor who requests a large down payment and never completes the work, an energy contract that’s too good to be true or an offer to lower your interest rate. High pressure tactics keep you from looking too closely at the deal.

Prize/lottery scams. You know the drill: You receive notice that you’ve won a prize — but there’s a catch. First you have to send cash in order to claim your money, free trip or fabulous prize. Alternatively, you could be asked to pay the taxes on the prize or make a purchase. Either way, the winnings never arrive.
These scams aren’t new, but they are branching out. Many sweepstakes scams start with an entry box at the mall or an entry form in the mail. Not only do scammers have your personal information, they’ve also got more credibility when they call you up.

Sales or merchandise scams. Buyer and seller beware: If fake e-commerce sites and online auction scams weren’t enough to contend with, scammers are happy to play both sides of this equation. As a buyer, you could end up paying for less than you bargained… that is, if you receive an item at all. As a seller, you could face fraud and theft — or be lured by a predator through a classified ad. The latest versions of these scams offer the latest tech toys and sought-after items, so it pays to avoid the “too good to be true” offers.

Phishing and identity theft. Your personal and financial information is a valuable asset — and it’s easy to use against you. To dodge this crime, you’ll have to do more than get out the paper shredder, keep tabs on your financial statements and avoid phishing emails. Scammers could catch you with a survey or online quiz, or collect your details through a fraudulent sweepstakes at a trade show or convention. Soon, your information will be shared and sold to other crooks, and you’ll be on the receiving end of spam and unsolicited calls.

Emergency or Grandparent Scam. Stranded, in jail or in the hospital — the stories change, but the crime is the same. Crooks call pretending to be a grandchild or relative who is in trouble abroad and needs money wired to them right away. This scam is once again gaining in popularity in North America and usually targets seniors. (One Ontario woman even lost 3000 to this scam, according to an article from Goldhawk Fights Back.) Scammers can even mine social media sites and blogs for details to add credibility to their story.

Fake cheque or over-payment scams. Oops! Your interested buyer or potential tenant mistakenly wrote you a cheque for too much money — and they want you to deposit it and wire them the difference. Unfortunately, your money will be long gone by the time you realize the cheque is a fake. These scams have topped the list for a couple of years now, and will continue to hit business owners, landlords and people wanting to rent out rooms for extra income. (Read more about suspicious cheques.)

Employment scams. In today’s tough market, find
ing a new job isn’t as easy as it used to be — especially for people who don’t have a lot of skills or experience. Phony job offers, questionable business opportunities and work-at-home scams continued to be popular in 2010. They can take many forms, from application fees to equipment or training costs “required” for the position. Cash isn’t the only thing at stake: many job hunters have been asked to submit confidential financial information like a credit report or social insurance number during the process.

Economy-related scams. Not surprisingly, the newest scams target people who were hurt by the recession. Phony debt-relief services, unscrupulous collection agencies, advanced fee loans and credit arrangers are among the many crooks pretending to help people in financial distress. However, they’re really helping themselves to people’s cash as victims paid for help they never received. Experts warn to research companies carefully before buying into their services — or falling for their threats, in the case of collection agencies.

Free trial offers. While technically not illegal, many free trial offers end up costing consumers thanks to tight deadlines and unclear terms and conditions. In fact, these offers have become such a problem in the U.S. that both the Better Business Bureau and Federal Trade Commission have issued warnings. Before you try that teeth whitening, anti-aging or acai berry product, make sure you know what you’re getting in to. Once you’ve given out your payment information, these deals can be notoriously tricky to cancel and have cost consumers hundreds of dollars.

Advanced fee scams. Often called the Nigerian Scam or 4-1-9 Scam (thanks to the country of origin), many people still fall for this questionable offer. You’ve likely seen the emails — you’ve been singled out by some foreign employee trying to get millions of dollars out of the country. You’re promised a hefty percentage of the funds for helping, but instead you’ll end up paying for supposed fees or taxes to keep the venture going.
While the scam may seem obvious, experts warn it’s constantly evolving. Scammers can now fake government contacts and related documents to make the scheme seem like a legitimate venture — and some victims have even been lured to Nigeria to take part, according to Scambusters. Experts warn this scam can be physically and financially dangerous, so it’s best to ignore it. (Scambusters has a good example of this scheme here.)
While this list includes the most common scams of 2010, the list of culprits is far longer. Investment scams and vacation scams are also increasingly popular, not to mention mortgage scams, “sweetheart” scams, business listings scams and social media scams.

What’s next?

So what’s ahead for 2011? Don’t expect things to be better, experts warn. Despite the attempts of law enforcement to stop fraudsters, crooks are getting more creative and finding new ways to exploit technology — and vulnerable people.
Ultimately, the best way to avoid scams is to be aware of the tricks and cons. Experts advise the best thing you can do is to say no and dodge those “too good to be true” offers, no matter how high the pressure. Avoid giving money to anyone you don’t know no matter how they approach you — at least until you’ve done your research first.