£3.5bn. Every year. That’s the amount the Office of Fair Trading (OFT) estimates is lost by the British public to scams. But surely “it couldn’t happen to me”? Well, three million victims a year probably think the exact same thing before being parted from their hard-earned cash. And there are so many different scams that anyone could be a target. Here is the latest batch to watch out for.
The work- from-home scam
Scammers know that with unemployment rising – it’s widely tipped to hit 10% or more of the workforce – many people are desperate for work. And what could be better than a job that is both straightforward and can be done from the comfort of your own home? Sadly 300,000 people are tempted each year, a mistake that costs them around £70m says the OFT.
But first the scammer needs to get to you. So the job advert might appear in a newspaper, or be pasted to a shop window, or the scammer may use direct mail shots to your home address or email inbox. They sometimes even paste them on lampposts. The exact job being offered will vary – it could be stuffing envelopes, remote data entry, typing or reading and reviewing books, scripts or essays. However all involve you sending money up front for a variety of plausible sounding purposes – to cover administration, or the cost of a starter pack, or simply a one-off registration fee.
Send it however, and you may never see the money or the job again. In some cases the scammer may even try and use you as a “mule”. Having sent the money, your “information pack” turns out to be a stack of leaflets. You are told you will be paid a (non-existent) commission per leaflet for distributing them to your friends, family and neighbours. In effect you are now helping to organise a daisy-chain scam from which you may not be the only loser.
The advice is simple. As Michele Shambrook of Consumer Direct puts it “a genuine job is highly unlikely to ask you to pay any money up front or a registration fee”. And if it sounds too good to be true – after all if we could all really earn easy money working from home, most of us would – then it probably is.
Update on the prize-draw scam
The traditional prize-draw scam is simple enough. You typically receive a phone call, letter, or email revealing that you have won a fabulous prize. All you need do is follow a few simple instructions to claim it. At this point the precise scam may vary. Perhaps you have to ring a premium-rate phone line and listen to a pre-recorded ramble, which will deliver nothing other than an expensive phone bill. Or, perhaps once again a “modest” administration fee is required to unlock your prize.
But given that many potential victims are (rightly) suspicious of sending money overseas to “unlock a prize” the scammers have come up with a variant. This time a victim is asked to send money to an “agent” at a legitimate UK address so that the prize can be released from a UK airport. Meanwhile the recipient of the money has already been “groomed” by the scammer to expect the money from a UK-based prize draw “sponsor”. The receiver is then asked to make a separate transfer to the scammer’s account overseas and may earn a small “commission” for doing so. So far only the original victim has lost money whilst the receiver – an unwitting “mule” – has lost nothing. However having seen what looks like bona fide cash being transferred from a UK “sponsor” to fund prizes, the receiver is ready to be picked off by the scammer too.
Holiday scams
These are not new but according to the Financial Services Authority they are becoming more prevalent. The first is the fake holiday website. You choose a break, pay for it online and then never see your money again, let alone the holiday. So simple. So don’t fall for it. Check whether the site is a member of the Association of British Travel Agents (ABTA) or holds an Air Travel Operators Licence (ATOL). That way you are entitled to compensation even if the site is operating falsely under either badge. Also never pay for anything online using a cheque. Pay by credit card instead as you’ll have statutory rights to compensation should the seller not deliver.
Next, the holiday club scam. It usually starts with a free scratch card handed to you in a bar or on the beach. You scratch away and bingo!, a free cruise is yours. Just one snag – you must collect the tickets at a presentation. Turn up and you’ll be sold membership of a holiday club. The joining fee might be say £10,000 but in return you’ll get your free cruise, other free trips and big discounts on future bookings. To hook you, you may even get tickets for the cruise – worth say £1,000 – there and then. But you never see the rest of your cash again. My advice? Stay on the beach and forget going to the seminar.
Be on your guard when you return home too. Another scam, targeted at existing scam victims, involves a call from an agent working for the government of the country you visited. They claim that for say £1,000 “legal” fee they can release money taken in a previous scam but now recovered by the local police. Send that £1,000 and you’ll have been hit twice, probably by the same scammer.
To sum up – never pay money up front and never accept an offer that’s too good to be true. Remember these principles wherever you are, whether at home, at work or on holiday.
Finally, February is “Scamnesty” month as the OFT are calling it. They are asking that copies of scam mailings are dropped into Scamnesty bins (near your local council office or library, apparently) so that the OFT can clamp down on more scammers. You can also notify Consumer Direct online.