Become aware of E-mail Scams

In the days before cable modems, scam artists filled rented boiler rooms with telemarketers or took out classified ads in the local rags to locate victims.

Now they simply type out a hyperbolic tagline -- Make $$$$Millions$$$$ While You Sleep -- hit send and wait for the suckers to hit reply. Or they plug brand-spanking-new Beemers or laptops on eBay for dirt cheap, collect the cash, and don't deliver the goods.

All too often, by the time law enforcement officials get a whiff of Internet thieves, they've disappeared and taken their e-mail addresses with them.

"The Internet is a two-edged sword for investigators," said Brian Huseman, a staff attorney for the Federal Trade Commission. "If a website is promoted by e-mail, you can look at the registration and see who the contact is. But spammers can forge their identities; they can send messages through open relays. It can be very hard to track them down."

The FTC announced Tuesday that a multi-agency task force had closed down 19 Internet-based schemes that had bilked consumers out of millions of dollars. Half of the crimes were auction fraud.

Of the cases already settled, the stiffest punishment fell on a young couple from the rural town of Farmington, Missouri (population 13,000), who scored $30,000 hawking nonexistent cars, computers and other electronic gear online.

The pair, Phillip Chapman, 21, and Amanda Warren, 20, first got started in auction fraud when they were mere teens, said Scott Holste, a spokesman for the Missouri Attorney General's office. Each defendant received a 12-year prison sentence -- the longest for auction fraud in the history of the state -- due, in part, to the couple's utter lack of remorse after they were indicted.

"They were Bonnie and Clyde with a modem," he said. "Now they are separated by many miles and many bars."

When investigations lead to a tangled web of fake identities and disappearing webpages, authorities fall back on a timeless investigative maxim: Follow the money.

"If you're going to run a scam, obviously you've got to get people's money," said Steve Baker, the director of the FTC's Midwest operations. "People send checks, so you look at the back of the check and see where it was deposited. If they pay with a credit card, there's an electronic trail. It's far easier than tracking down false e-mails."

Another scheme the FTC task force squelched was an updated version of a decades-old swindle: stuffing envelopes for money. Like the Nigerian scams that bilk Americans out of millions of dollars each year, the old cram-ads-into-envelopes-from-the-comfort-of-home gambit has also metastasized online.

"Picture yourself stuffing 500 envelopes and making $1,000.00," the Google cache of the front door of stuffingforcash.com says. The business worked by prying a "refundable deposit" of $39 from respondents to cover the cost of materials.

People who fell for the scam never saw their money again, no matter how many envelopes they diligently stuffed. Although the postal address for the site -- which ironically warned about "fraudulent and chain letter schemes" -- was in Chicago, the guy running it lived in Miami, officials said.

Baker said stuffingforcash.com made $2 million in one year. That means around 50,000 suckers fell for the scheme. The FTC got a court order to shut the site down and freeze the company's assets.

One advantage the Internet has given authorities is the ability to coordinate multi-agency investigations and create a central dumping ground for consumer complaints and information at Consumer.gov.

The FTC has created a central spam database that currently holds 15 million messages. Investigators can search the database by keyword to find out the extent of each scheme.

"We're probably the only people in the world who want your spam," said Baker. The address is uce@ftc.gov.

  Don't become a victim - New scams with the lure of lottery winnings     (6/22/04)  
  Source: BBC World News
The lottery scam described below is just one of dozens of frauds perpetrated online. Among other common scams to watch out for:
  • 419: The famous "advance fee fraud" offers victims money for help in getting millions of dollars abroad. In fact, the scam demands money upfront and has even resulted in kidnapping for ransom.

 

  • Phishing: Fake e-mails - see above - purporting to come from banks direct victims to websites which are very realistic copies of the real thing - but suck up personal details such as PIN numbers and mothers' maiden names.

 

  • Cheap software: E-mails promise expensive software at knock-down prices. Usually the online store is simply a front for getting personal and bank details.


It could happen to you.

That simple belief drives hundreds of millions of people around the world to buy lottery tickets every week.

So if an e-mail arrives announcing that a "European lottery" has selected you as the lucky winner of half a million euros, it is all too easy to believe.

You never bought a ticket? No matter - your e-mail address was selected randomly.

Does the e-mail - usually purporting to come from Spain or the Netherlands - have a few spelling and grammar errors? Well, they're not native English speakers, are they? Everyone makes mistakes.

All this should be ringing alarm bells.

For the lottery e-mails which have dropped into inboxes by the thousands in recent months - they also sometimes take the form of letters or even phone calls - are part of a widespread scam.

All this should be ringing alarm bells.

For the lottery e-mails which have dropped into inboxes by the thousands in recent months - they also sometimes take the form of letters or even phone calls - are part of a widespread scam.

With 419 now part of the online world's lexicon, its practitioners - often West Africans living in Europe - are coming up with new ways to separate the unwary from their money.

The lottery e-mail is a prime example. The prize fund does not exist. The firm acting as "agent" does not exist. The bank supposedly holding the winnings on the unwary punter's behalf does not exist.

The only funds which actually change hands are the thousands the punter will be asked to pay for handling charges, tax exemptions, anti-money laundering certificates and a list of other demands.

And in the process, victims will have given the crooks enough personal information to steal their identity, spending huge sums in their name and ruining victims' credit ratings.

The old rule applies: if it sounds too good to be true, it usually is. And just about no-one offers money for nothing.

Expensive mistake

Peter, who lives in the Midlands, has found all this out to his cost.

Earlier this year, he received an email purporting to come from the Lucky Day Lottery in Amsterdam, promising him 500,000 euros.

Peter's son has leukaemia, and the thought of what the money could do for his welfare was irresistible.

An initial contact led to a blizzard of official-looking documents and daily phone calls with an "agent" of the lottery.

The caller, "Peters Morrison", claimed to work for Standard Chartered Securities.

(The real Standard Chartered Securities is part of the massive Standard Chartered banking empire. Morrison is misusing their name, and the group is an innocent party.)

Morrison said he was working to release the money which Peter was owed, held in an offshore account at a offshore bank called Ultimate Finance and Investment (Ultimate FI).

There were just a few formalities.

Ultimate FI needed to see identity documents, of course. But it also wanted evidence of payments to the Netherlands' Belastingdienst, or revenue service, as well as high-priced certificates supposedly from the International Monetary Fund.

All in all, the process of clearing the claim cost Peter almost 20,000 euros.

Documenting the fraud

That was the point at which Peter's plight came to the attention of an investigative team at BBC News.

The team proved that all the contact numbers listed for "Standard Chartered" and "Ultimate FI" belonged to mobile phones - and that all the e-mail addresses were from US-based free e-mail providers, not banking institutions.

The real-world addresses were fictitious, including those used for the official-sounding messages apparently from the Belastingdienst and the IMF. Both organisations, needless to say, are innocent of any involvement - as is the real Lucky Day Lottery, run by the Netherlands' national lottery organisation, De Lotto.

And Ultimate FI's impressive-looking website was registered to a man in Amsterdam who had already been connected to other fake banking sites used in online scams.

Moreover, the investigation revealed links between the fraudsters in Amsterdam and others in South Africa, Canada and Spain - where another fake bank website was found to be registered to an internet cafe in Nigeria's commercial capital, Lagos.

Our scammers, it seemed, were part of what seems to be a con artists' "franchise operation".

Face to face

At last, it was time to take the final step.

BBC News arranged for Peter to confront his tormentors in Amsterdam itself.

They were demanding 20,000 euros as final payment to clear his winnings.

For days, BBC staff worked with him to convince the scammers to meet him.

One day, Morrison would agree. The next, he claimed to be heading off on holiday.

Then, supposedly speaking from his vacation in Portugal, where he claimed to be watching the Euro 2004 football tournament, he said he was prepared to arrange a meeting - but blamed the bank's "protocol officer", Jeffrey Parkinson, for demanding the money by post.

At long last, he agreed to a meeting - at Amsterdam's Schiphol Airport.

The last straw

That, the team judged, was unsafe. There was too much risk of interfering with airport security, while the possibility that Peter might be separated from the BBC's own security and camera teams was too high.

Instead, the team arranged a plausible last-minute change of location to a nearby hotel.

The phone call changing the location - as if Peter had simply missed the sign-bearing protocol officer at the airport - went fine.

Barely minutes after the call, with the hidden cameras only just in place, "Parkinson" turned up - and his voice was eerily familiar. In a final, clinching piece of proof, Parkinson and Morrison were the same man.

After a few minutes of talk, he asked Peter to come out to his car to get a banker's draft.

Peter, wisely, refused - at which point Morrison/Parkinson beat a hasty retreat, realising that his cover was blown.

What next?

Unfortunately, Peter's money is still missing.

He may now need to take action to ensure credit agencies and financial institutions check his identity whenever a transaction takes place.

And Morrison/Parkinson is still at large.

The BBC has offered its evidence to law enforcement both in the UK and the Netherlands.


Losing your identity
  • Almost all online scams are designed as much to get victims to reveal personal data as they are to amass money directly.
  • Identity theft is growing at a breakneck pace: US law enforcement agencies recorded almost 216,000 complaints in 2003, up 30% on the year before.
  • Victims can find themselves with emptied bank accounts, huge credit card bills or loans, and ruined credit ratings.
  • Estimates suggest it takes victims up to 300 hours to regain their good name, at huge financial cost.
  • The victim must then be on permanent alert about potential misuse of his or her personal details.
 
     

 

IRS Updates the ‘Dirty Dozen’ for 2004: Agency Warns of New Scams

IR-2004-26, March 1, 2004

WASHINGTON — In an update of an annual consumer alert, the Internal Revenue Service urged taxpayers to avoid falling victim to one of the “Dirty Dozen” tax scams and a variety of other schemes. In the new 2004 ranking, several new scams have reached the top of the consumer watch list, including abusive trusts and the “claim of right” doctrine.

In addition, the IRS has taken a new step this year and issued 10 new pieces of legal guidance involving scams in the “Dirty Dozen” and other tax schemes. The new guidance debunks the schemes and provides new legal details to help tax practitioners and taxpayers.

"At the IRS, we're augmenting our enforcement resources to attack schemes and scams. While we're actively targeting promoters, taxpayers themselves should be wary of anyone who promises to eliminate their taxes," said IRS Commissioner Mark W. Everson. "Don't be fooled by these outrageous claims. There is no secret way to escape paying taxes."

The IRS and other federal agencies are aggressively pursuing and successfully prosecuting promoters of these schemes and many of their clients for fraud and tax evasion. Participation in these schemes can result in imprisonment, fines and repayment of taxes owed with interest and penalties. Even innocent taxpayers involved in these schemes can face a staggering amount of back interest and penalties.

Taxpayers who suspect tax fraud can report it to the IRS at 1-800-829-0433.

The IRS urges people to avoid these common schemes:

  1. Misuse of Trusts. Promoters of abusive tax transactions are increasingly urging taxpayers to transfer assets into trusts. The promoters promise a variety of benefits, such as the reduction of income subject to tax, deductions for personal expenses paid by the trust and reduction of gift or estate taxes. Taxpayers should be aware that abusive trust arrangements will not produce the tax benefits advertised by their promoters and that the IRS is actively examining these types of trust arrangements. More than a dozen injunctions have been obtained against promoters, and numerous promoters and their clients have been criminally prosecuted. Before entering any trust arrangements, taxpayers should seek the advice of a trusted tax professional.

  2. "Claim of Right" Doctrine. In this emerging scheme, people file returns and attempt to take a deduction equal to the entire amount of their wages. The promoters advise them to label the deduction as “a necessary expense for the production of income” or “compensation for personal services actually rendered”. The deduction is based on a complete misinterpretation of the Internal Revenue Code and has no basis in law.

  3. Corporation Sole. The idea is that the arrangement entitles the individual to exemption from federal income taxes as a nonprofit, religious organization as described in tax laws. When used as intended, Corporation Sole statutes enable religious leaders — typically bishops or parsons — to become incorporated as individuals as a way of separating themselves legally from the control and ownership of church assets. But the rules have been twisted at seminars where promoters charge fees of up to $1,000 or more per person. Would-be participants are mistakenly told that Corporation Sole laws provide a “legal” way to escape paying federal income taxes, child support and other personal debts.

  4. Offshore Transactions. Some people use offshore transactions to avoid paying United States taxes. Use of an offshore bank account, brokerage account, credit card, wire transfer, trust, offshore employee leasing or other arrangement to hide or underreport income or to claim false deductions on a federal tax return is illegal. A taxpayer involved in these schemes could be subject to payment of taxes, interest, penalties and potential criminal prosecution. This was the top scam in the 2003 “Dirty Dozen.” A special program last year has yielded more than $170 million in taxes, interest and penalties, and the IRS and the states continue to aggressively pursue taxpayers and promoters in this area.

  5. Employment Tax Evasion. The IRS has seen a number of illegal schemes that instruct employers not to withhold federal income tax or other employment taxes from wages paid to their employees. These schemes are based on an incorrect interpretation of “Section 861” and other parts of the tax law and have been refuted in court. Recent court cases have resulted in criminal convictions of promoters. Employer participants could also be held responsible for back payments of employment taxes, plus penalties and interest. Employees who have no withholdings are still responsible for payment of their personal taxes.

  6. Return Preparer Fraud. Unscrupulous return preparers can cause a lot of problems for taxpayers who use their services. Abusive return preparers derive financial gain by diverting a portion of the taxpayer’s refund for their own benefit, charging inflated fees for the return preparation services, and increasing their clientele by advertising guaranteed larger refunds. Taxpayers should choose carefully when hiring a tax preparer — no matter who prepares the return, the taxpayer is ultimately responsible for all of the information on that return.

  7. Americans with Disabilities Act. Another scheme seen for several years involves the purchase of equipment and services that the promoter alleges meets the strict criteria of the Disabled Access Credit, which was created with the passage of the “Americans with Disabilities Act”. A minimal payment is made and a non-recourse note signed. The investor then provides insignificant services to complete the purchase agreement. This scheme is based on an incorrect interpretation of law and an over-inflated value of the services rendered.

  8. African-Americans Get a Special Tax Refund. Thousands of African-Americans have been misled by people offering to file for tax credits or refunds related to reparations for slavery. There is no such provision in the tax law. Some unscrupulous promoters have encouraged clients to pay them to prepare a claim for this refund. But the claims are a waste of money. Promoters of reparations tax schemes have been convicted and imprisoned. And taxpayers could face a $500 penalty for filing such claims if they do not withdraw the claim. Related scams include claiming an illegal tax credit by misusing Form 2439, “Notice to Shareholder of Undistributed Long-Term Capital Gains.” The slavery reparations scam was at the top of the 2002 “Dirty Dozen,” and, although claims have fallen considerably, the IRS continues to see activity in this area.

  9. Improper Home-Based Business. This scheme purports to offer tax “relief” but in reality is illegal tax avoidance. The promoters of this scheme claim that individual taxpayers can deduct most, or all, of their personal expenses as business expenses by setting up a bogus home-based business. But the tax code firmly establishes that a clear business purpose and profit motive must exist in order to generate and claim allowable business expenses. This scam has been around for years, but the IRS continues to see activity in this area.

  10. Frivolous Arguments. Frivolous arguments are false arguments that are unsupported by law. When a scheme promoter says “I don’t pay taxes – why should you” or urges you to “untax yourself for $49.95,” beware. The ads may claim that the promoter knows the “secret” for never paying taxes again, but that’s just plain wrong. The U.S. courts have continuously rejected this and other frivolous arguments. Unfortunately, people across the country have paid for the “secret” of not paying taxes or have bought “untax packages.” Then they find out that following the advice contained in them can result in civil and/or criminal penalties. Numerous sellers of the bogus schemes have been convicted on criminal tax charges. More than a dozen injunctions have been issued.

  11. Identity Theft. Identity thieves use someone’s personal data to steal his or her financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns. The IRS is aware of several identity theft scams involving taxes or the IRS. In one example, fraudsters sent bank customers fictitious bank correspondence and IRS forms in an attempt to trick them into disclosing their personal and banking data. In another, abusive tax preparers have used clients’ Social Security numbers and other information to file false tax returns without the clients’ knowledge. For taxpayers, it pays to be choosy about disclosing personal and financial information. And the IRS encourages taxpayers to carefully select a reputable tax professional.

  12. Share/Borrow EITC Dependents. Unscrupulous tax preparers "share" one client's qualifying children with another client in order to allow both clients to claim the Earned Income Tax Credit. For example, one client may have four children but only needs to list two to get the maximum EITC. The preparer will list two children on the first client’s return and the other two on another client’s tax return. The preparer and the client "selling" the dependents split a fee. The IRS prosecutes the preparers of such fraudulent claims, and participating taxpayers could be subject to civil penalties.

Beyond the “Dirty Dozen,” the IRS sees many more tax schemes. In one, a telephone caller says you’ve won a prize, and all you have to do to get it is to pay the income tax due — to the caller. Other scams can play off recent news events, such as one last year targeting members of the military.

“Taxpayers should think carefully before paying for services or signing important documents,” Everson said. “Don’t be a victim of these scams or others that promise the moon. They carry a high price.”

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Feds Nab Teen Who Scammed AOL

01:49 PM Jul. 21, 2003 PT

WASHINGTON -- U.S. regulators said on Monday they had charged a 17-year-old boy with using "spam" e-mails and a fake AOL Web page to trick people out of their credit-card information and steal thousands of dollars.

Officials at the Federal Trade Commission said they had agreed to settle their case against the teenager, who was not identified because of his age, after he agreed to pay back $3,500 he had stolen, and to submit to a lifetime ban on sending spam.

It's the first enforcement action the FTC has taken against an Internet "phishing" scam -- the use of spam, or unwanted junk e-mail, to lure computer users to look-alike websites, where they are deceived into forking over personal financial data.

"We're only beginning to discover the extent of these e-mails. They're only beginning to proliferate right now," FTC commissioner Mozelle Thompson told a news conference.

In the case cited on Monday, the teenager's e-mails told recipients they needed to update their AOL billing information and instructed them to click on a hyperlink connected to the "AOL Billing Center."

The link diverted people to a phony AOL website that contained the company's logo and links to real AOL Web pages, the FTC alleged. There, they were instructed to enter their credit-card numbers, along with their mothers' maiden names, billing addresses, social security numbers, bank routing numbers, credit limits, personal identification numbers and AOL screen names and passwords.

A spokesman for AOL, a unit of media conglomerate AOL Time Warner, said the company welcomed the FTC's action.

Spokesman Nicholas Graham said almost anyone can mimic any company's logo and graphics, and he advised Internet users to "beware and be vigilant."

"We've always told our members that AOL will never ask them for their password or billing information. It's the golden rule of AOL," Graham said.

The teenager used his newfound information to go on an online shopping spree, the government charged, and to log on to AOL in his victims' names and send more spam. He also recruited other people to take delivery of fraudulently obtained merchandise he had ordered.

An FBI official said at the news conference that the agency receives about 9,000 complaints a month about phony e-mails and websites.

Officials said there were more phishing cases under investigation but provided no firm numbers.

In March, Internet service provider EarthLink said it had blocked a phishing scam that sought to collect credit-card and bank-account numbers from its customers.

Many EarthLink subscribers received an e-mail message urging them to resubmit their personal information or face termination of their accounts, due to a "recent system flush."

 

This information is from  Australia Scamwatch.  

See the above site for some really great information on different types of scams. 

What is a Scam?

The scammer's perspective

So how can you protect yourself?

Why scams succeed

Why do people get caught up in scams?

Dangerous myths

Your strategy to defeat scams

It's okay to say "No"

You are not alone

In the US - Fight Back Against Scammers

 

This information is from a  New Zealand Scam Watch  --  These scams are seen worldwide! 

1 May 2003

Nigerian Scams list

Iraq - Amir Hussan, looted funds

29 April 2003

Nigerian Scams list

Nigeria - Chief Banny Gemade - rice contract

West Africa - Simon Jefferson (gemstones fund)

 

Prize/Lotteries
UK International Lotto

Spanish and Dutch lottery letters

Prosesa Sol Agency SL

10 April 2003

Astrologers/Psychics 

Rose Hart

 31 March 2003

Investments Securities Commission warning - First Foundation Developments Limited

 

The Commission has banned advertisements for debt securities offered by First Foundation Developments Limited. The company describes itself as a property development company. It is based in Queensland, Australia.

The Commission believes the offer does not comply with New Zealand law.

Investors have been invited to invest a minimum of $10,000, with a promised rate of return of up to 15.92% per annum.

First Foundation Developments Limited does not have a registered prospectus and investment statement. These documents are required for securities to be offered to the public in New Zealand.

For more information, visit the Securities Commission website http://www.sec-com.govt.nz/new/releases/2003/260303.shtml

 

Security Commission warning - endeavorplan.com 

The Securities Commission has banned advertising for an investment scheme which appears on the web site www.endeavorplan.com. The scheme invites the public to contribute funds by way of credit card. It is said that these funds are then invested in a British Virgin Islands fund called CSA Absolute Return Fund Limited. This is done through a Hong Kong company. The scheme offers commissions to investors who introduce other investors.

The Commission banned advertising for the scheme because it does not comply with the law. To be offered in New Zealand the scheme must have a registered prospectus and an investment statement. These documents are not available.

Further information is available on the Securities Commission website

http://www.sec-com.govt.nz/new/releases/2003/260303.shtml

 

21 March 2003


Nigerian Scams list

Iraq - Mohammed Aziz (son of General Tariq Aziz)

 

Prize/Lotteries

The Ministry warns that the Swiss addressed Arlimbow postal prize scam is active again. The March mail-out is similar to the Arlimbow (FIAG) prize notification sent to many New Zealanders in January this year, although the prize amount has changed to $17,000  (January's "prize-winners" were advised of a $21,000 win).

5 February 2003 

Nigerian Scams list  Use your Back Browser Button for return to this page
Brunei - funds from "Princess" Haja

Prize/Lotteries  Use your Back Browser Button for return to this page
International Shipping and Notification Centre

National Awards Commission

Transworld Property Repository

 

Spanish and Dutch lottery letters  Use your Back Browser Button for return to this page
Alpha Lottery International

Crystal Lottery International

Euro-Afro American Sweepstake Lottery

Lottery Winners International 

Sorteo de Navidad Semanal Santa/First Lottery

Soteo De Navida/Simana Santa

Universal Lottery International

 

 

 

Scams
 


What is a Scam?

Scams are means of depriving you of your money. They give you nothing or little of value in return.

Scams prey on people's desire to increase their wealth or their need for health, safety, or beauty. Some scams can manipulate you without you being aware of it. Some will offer you things you neither want nor need.

Scammers play on your emotions. They are masters at the art of influence.

Scams are organized by unscrupulous individuals who sometimes use innocent and well meaning people to promote their activities. Scammers devise new and attractive concepts to hide what they are up to, but their schemes usually follow established steps which can give them away.

You will always lose when you are caught up in a scam, yet it is so easy to take the bait. And even when scammers get caught, they've done immeasurable harm by the time they are caught. Then, what comfort is it to you anyway? Your money's gone. In some cases what has been lost is far beyond monetary value. Scammers never compensate you.

 

The scammer's perspective

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9 January 2003
Scam operators very busy post-Christmas (media release) Use your Back Browser Button for return to this page

Ministry of Consumer Affairs warns New Zealanders to be on the lookout for three prize and lottery notifications delivered nationwide to mailboxes this week from overseas. 

The three schemes are Federation Internationale d’Attribution de Gains (also known as FIAG or Arlimbow), Mail Order Sweepstakes (also known as Prize Administration and Payments) and the El Gordo Spanish Sweepstake Lottery.  All are listed on Scamwatch.  FIAG and Mail Order Sweepstakes are listed in Prize/Lotteries El Gordo Spanish Sweepstake Lottery is listed in Spanish and Dutch lottery letters Use your Back Browser Button for return to this page

Avoid being scammed!

If you're approached with an offer that seems too good to be true:

DON'T

blow away money. cartoon

Miscellaneous scams

Vanity press
Vanity press or publishing is the generic term for schemes that provide the opportunity for authors to be published - but at their own expense. While some of these publishers may be up front about the type of publishing they offer, some schemes run literary competitions in which everyone actually wins a prize. Or they advise people that they have been specially chosen to be published.

We advise caution if you receive any unsolicited offer to publish at your own expense, where the scheme requires you to meet the costs of receiving a literary prize, or where you are required to send the funds overseas to an organisation that is not known in publishing and literary industries.

Will Beneficiary Letters
These schemes offer to to find out if you are related to anyone in the UK who is deceased and may therefore have a claim on their estate.  If you think you are a beneficiary to a UK estate you can contact the Treasury Solicitors office at Queen Anne's Chambers 28 Broadway London SWI.

Report a Scam Use your Back Browser Button for return to this page

Report a scam circulating in New Zealand not already listed on this site.  We collect information on prize and lottery schemes, astrology and other fortune-telling type schemes, and Nigerian scams. We regret we are unable to list overseas based scams targeting consumers living outside New Zealand.  

Please check the lists of scams for each section (links listed here on the left side of page) before sending in your scam report, we may already know about it.

We are not an enforcement agency and may not respond directly. But we can use your information to keep this site up to date and warn others.  If the scam you've received is listed on this site, our advice is to throw it away.

Links Use your Back Browser Button for return to this page

New Zealand

NZ Securities Commission

NZ Serious Fraud Office

Australia

Australian Securities and Investment Commission

Australia Scamwatch

South Australia Office of Consumer and Business Affairs

Western Australia Department of Consumer and Employment Protection - Scamnet

Canada and US

Better Business Bureau (US and Canada)

Federal Trade Commission (US)

Industry Canada Consumer Connection (scams)

Internet Fraud Watch

Phone Busters (Canada - telemarketing complaints)

US Postal Service

 

The Scammers' Perspective
 


Scammers try to play you for a fool. They will attempt to take you for a ride, for all they can. They will strip you of what is yours. They will try and take advantage of your good nature and instinctive behavior.

They think that there's a sucker born every minute, and they expect you to be the next one. They'll make you feel like an idiot for not going along with them, and they'll push you till you commit to their fraud and get-broke-quick schemes.

They know that they'll get away with it in a lot of cases, that people are too embarrassed to report that they've been scammed.

And they laugh all the way to the bank.

 

There doesn't have to be a sucker born every minute, and
you don't have to be the next one.

 

So how can you protect yourself?

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So how can you protect yourself?
 


Simple.

  • Learn to recognize scams when you come across them
  • Know what to do when you are approached

This is the purpose of this site. Each section will identify a type of scam, explain how to recognize it and how it works and, most importantly, what you can do to protect yourself.

 

Why scams succeed

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Why scams succeed
 


Scams succeed because of two things.

Firstly, a scam looks like the real thing. It appears to meet your need or desire. To find out that it is in fact a scam, you must first make the effort to check it properly. You need to ask questions and think carefully before you decide what to do. Depending on the issue, you could do that on the spot, or you might need help - and it could take several days. This site should help you with that process.

Secondly, the scammers manipulate you by 'pushing your buttons' to produce the automatic response they want. It's nothing to do with you personally, it's to do with the way individuals in society are wired up emotionally and socially. It's because the response is automatic that people fall for the scam.

To stop scammers manipulating you into their traps, it can be useful to know how to prevent the automatic response they expect. You'll find more on this subject on Why do people get caught up in scams?.

 

Dangerous myths

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Why do people get caught up in scams?
 


Scammers attempt to influence you in many ways. The following psychological triggers are often used to get an automatic response from you without you realising it. Watch out for them next time you're approached, or even next time someone asks you for a favour.

Reciprocation
Commitment and Consistency
Social Proof

Reciprocation

Scammers give you something, such as a 'free' gift or assistance, to get something in return, such as your agreement later on. You are caught up feeling obliged to do something. Protect yourself from those sentiments by recognising the gifts and favours as nothing more than devices to influence you to return the favour.

To get you to agree to what you don't want, scammers may make one outlandish offer, which they know you will reject, so that later they can make one which will not appear so bad in comparison.

Scammer: "Okay, you told me you can't do $5000, after I'd already lined up the contract for you. So I've asked my manager for a favour and he authorised me to accept $2000, although we don't normally do that. How do you want to do it, credit card or direct transfer?"

Hold on, $2,000 is still out of the question.

Commitment and consistency

Someone will get you to commit to something early in the piece, and later recall that initial agreement to get you to agree to something further. This ploy can make you feel ill at ease. To protect yourself, you should treat each commitment separately and ask yourself whether, under the circumstances, you would make the same choice as you did earlier. Your instinctive gut-feeling will provide the answer.

You did tell me that you wanted to make money, right? [recall commitment] And you can see that this proposal can make you money, can't you? [new proposition] So let's get the first instalment organised so that you can get your money [got you!]

Social proof

"Everybody does it, so it must be right" pretty well sums it up. The other person will refer to what the majority does to get you to agree. Objectively check the facts, your experience and judgement.

Scammer: "In your street alone, four out of five houses are using our service. All these people can't be wrong can they? "

That's not proof of anything other than saturation cover.

Liking

Good looks, similar interests or background, humour and other attractive characteristics are standard tools for the con-artist as well as for honest people who want to generate good rapport with you. If you like someone, you're more likely to go along with what they are suggesting. Your defence is to separate the issue on offer from the person offering it or associated with it.

Scammer: "The minute I saw you I knew that you, in particular, had to have this necklace. It's a rare beauty and worn by all the stars. Don't deny yourself this one".

Don't let flattery and good looks distract you.

Authority

Authority, in or out of uniform, will cause an automatic response in almost everyone. (When is the last time you asked a police officer for identification before complying with their directions?) We appeal to and use authority all the time to justify or support our position. Scammers do it deliberately to hoodwink you into agreement. Your protection here is to ask whether the authority is relevant to the context.

For example, "This new internationally-based investment fund will return well over 20 per cent annually. You see, it's managed by Harvard graduates working for some of the world's top banks."

So? That's no guarantee of a 20 per cent return!!.

Scarcity

The fear of missing out! Being told that this is the last chance or that there are only so few still available, leads most people to agree hastily before they have had the opportunity to think about what they're doing. Some people have found themselves in horrible financial situations because they rushed into agreements or purchases in the fear of missing out. Your protection here is to separate your emotions from your decisions.

Scammer: "If you don't act now, you'll miss out on one of the best investment opportunities I've ever seen. You'll kick yourself if you miss out on this. I don't need the sale as there are plenty of people out there trying to get in on this."

If the offer is so good, why aren't the business 'sharks' already on to it?.

When we're up against these influence strategies, getting caught up in a scam is not necessarily a reflection of our gullibility or poor judgement. It just shows how good the scammers are at manipulating us.

Don't be clouded by influence triggers. Recognize them for what they are, and keep a clear head when making decisions.

(*) For expert information on this subject you could refer to Robert Cialdini's book Influence, the new psychology of modern persuasion ISBN 0-688-04107-8.

 

You are not alone

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Dangerous myths
 


Some people have mistaken beliefs which leave them more prone to scams.

One of them is the belief that all companies, businesses and organizations are legitimate and okay because they are all vetted and approved by the government or some other authority. That is not so. Consumer protection agencies can only do so much. While they are constantly on the look-out for dodgy operators, they can often take action only after scams are reported to them. Another attitude which makes it easy for scammers, is the belief for some people that there are shortcuts to wealth that only a few people know. This attitude particularly helps financial and investment fraud to take hold.

There are no such secrets and experts - just successful people who have done their homework and who got on with the job, possibly with a bit of luck and the help of friends. You won't become one of those by signing up to some scam! There is no substitute for hard work.

Your strategy to defeat scams

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Your strategy to defeat scams
 


So you're approached over the phone to invest in a high return opportunity, or you've found out about this new weight-loss program from a friend. It could be a scam. How do you know? Do you take time to check that these offers are safe and genuine? Or maybe you don't want to miss out, so you agree and 'just hope it'll turn out okay'.

Here's what you can do if you want to protect yourself against scams:

  1. Say 'No' or hold off (refuse now-you can agree later)
  2. Look further
  3. Question
  4. Decide

 

It's okay to say "No"

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It's okay to say 'No'
 


The best way to avoid a scam is simply to say 'No' to it.

Saying 'No' is your first line of defense. Always. Even if there is something good in the offer, say 'No' first, then seek more information and independent professional advice. For important issues, discuss the matter with someone else. If in doubt, or if you're alone, ask the consumer protection agency people. That's what they're there for.

Say 'No' when you are approached. If the offer turns out to be safe and good for you, you can always say 'yes' later.

  • No, not now, I need to think about it.
  • No, this offer sounds too good to be true. I will seek professional advice.
  • No, I don't understand parts of the contract you want me to sign.
  • No, I choose normal investments for my money. I always discuss my investments with my family and my accountant before signing anything.
  • No, I do not want you to fix my roof before I get other quotes.
  • No, it is not safe for me to give out my credit card number.
  • No, I don't want your 'free gifts' and prizes. I have no business with you.
  • No, I don't believe your investment offer. If it were that good, why would you tell anyone?
  • No, I do not need this item now. I always discuss purchases with my family.
  • No, I'm too busy. Give me your details and your home number. I'll call you back.

Say 'No' when in doubt.

  • Say 'No' to any offer which makes you uncomfortable, puts you under pressure or where you may be unsure or fearful. If you're frightened, shut the door on persistent door-knockers (better still, don't open your door) and phone for help from a trusted neighbor or the police.
  • Say 'No', especially when the offer seems too good to be true, too convenient or too easy.

Say 'No' even to a friend.

  • Say `No', even when you know and trust the person making the offer, be it a friend or relative. Remember, plenty of innocent and well-meaning people have been duped into promoting scams. Both of you could stand to lose money. It could also destroy your relationship.

It's okay to say 'No'.

  • It's okay to say 'No'. When in any doubt, it's safer to say 'No'. `No' is always your best defense. You'll enjoy the peace of mind.
  • 'No' is always your best defense.

 

You are not alone

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You are not alone
 


This site showcases some of the more common scams in Australia. That's only a small sample of the hundreds of scams which hit people every week. You might well come across more examples this week.

If you've ever been scammed, it's small comfort to know that you're not alone.

But it need not happen again. You can take action to protect yourself. You can call on others to help you. You can report scams and scam-like behavior, and help reduce the incidence of scams.

The tools to help you combat scams are all within this site.

Scammers will of course try new scams, but we all have the power to make it harder for them to play us for fools and to rip us off.

 

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