Wednesday, June 4, 2008

Scam Artists' Internet and Telemarketing Fraud on Sharp Upswing--How to Avoid getting Suckered

--With Identity Theft Threatening to Fly out of Control, the Danger Signals are Everywhere, as Scam Artists Explode with New Con Games

Money back? Ha! Fat chance!

If you allow yourself to get suckered by an internet or phone scam artist, he will be the one--not you--who will be laughing all the way to the bank--with your money. Eequivalent to the learned insight of an alcoholic stumbling down a blind alley, you will have given away your identity.

Here are some hard, fast, and true rules to follow--to keep you from the clutches of scam artists--before risking dealing with anyone over the internet or phone that you do not know:

> Always request, and wait for, written material about any offer or charity pitch thrown your way. Seek financial advice from someone you trust where necessary.
As Yogi Berra, in his infinite wisdom, said: If you don't know where you're going, you will wind up somewhere else.

> He who hesitates is last. Always investigate, immediately, unfamiliar companies with your local Better Business Bureau, National Fraud Information Center, Consumer Affairs Division of your State Attorney General's Office, or other watchdog groups. An unchallenged lie quickly becomes the truth. And, scam artists are good at sneaking these past you.

> Always get the salesperson's (often the scam artist's) name, street address, and mailing address before transacting any business whatsoever with him. Also--important; something most people do not think of--get his business license number. Verify accuracy before proceeding further. A good scam artist schemes before he scams. It's best to throw him out at first base, rather than holding your throw after he's hit a triple, seeing if he'll try for an inside-the-park home run.

> Before any charitable contribution find out what percentage is held back for "operational costs." Some scam artists retain 90%--yes, only 10% actually going through for benefit of the charity's recipients. Before generously jumping in, ask yourself, where does charity begin?

> Same for investments. Get a clear figure for sales commissions before investing. Some investments have a big front end load, a big back end load, and a big pre-payment penalty. A complete airing of the dirty linen is highly desirable.

> If you are asked to pay in advance for services, run for the nearest fire exit. Pay for services only after--that's after--they are delivered. This is a rule which should have been etched in stone since the dinosaurs were on earth.

> If the scam artist offers to send a messenger to pick up your payment, a quick thank you but no thank you, is in order. Intent of this is two-fold: 1) To leave no trace of who he is, or where he can be reached. And, 2) To avoid getting ensnared in the postal inspectors' net (postal, wire fraud, etc.) Snap judgments have a way of coming unfastened. Agreement to permit messenger pick-up of your money would be one of these.

> Never pay a handling, shipping, a judging fee, or any other charge, for a "free prize." If the caller (scam artist) tells you this payment is to cover taxes, this is a violation of federal law. Better he sit in a Federal slammer than you for aiding and abetting a felony.

> Never give out any personal information at all, not even your age. Remember, when they say "paper trail," they don't mean the residue left over from stealing a roll of unwinding toilet paper.

If you find yourself uncontrollably singing "Up a Lazy River" while being outfitted with one of those jackets with no outlets for the hands, you'll know it's because you failed to protect your identity from theft.


McAlee said...

I think you're right about getting the business license number. That's something I never thought of, and I'll bet a lot of other people haven't either.

Jack Payne said...

I would think normal reaction to a request for a business license number would be a fake number, then a quick abandonment of the call. The scam artist would instantly know that the jig was up on your call as soon as you evidenced enough suspicion to ask for it.

Terry said...

I like the learned insight of an alcoholic stumbling down a blind alley, Jack...that's a great says so much.

Earl T. Clydson said...

I don't think many people realize that very little of so many of their charitable contributions actually goes to the folks the money is intended for. Organizational, operational, and maintnance costs often consume huge chunks of every donated dollar. I did a research study on an animal rights charity a while ago and found that 95% of every donated dollar went to operating costs, in other words, into the pockets of the con artists. Operating costs should range from 10% to 30%, a long long ways from 95%.

Jack Payne said...

I did a study on this a few years ago, too, Earl. I found that those supposed "Charities" which listed more than 90% for operational costs were common. Disgusting. I think I know which animal rights operation you were talking about, located in the Wasington, D.C. area. Right? Yes, this deplorable rip-off operation was included in my study, too. I think they were finally put out of business.

Bern said...

How about sales commissions? A good example could be reverse mortgages. A friend was pitched to take one of these not long ago, and found that the up-front fees on his $290,000 house would have come to $30,000. That's beyond can anyone have any confidence in a sales presentation like that?

Miss Mae said...

Oh, this is so scary. I DESPISE what we must do, i.e. giving away our identities to EVERYBODY. Even our dentists want our SS #??? Hey, I worked in a maximum security prison and we didn't use the SS numbers of those inmates. No way. They had personal numbers given to them, but not their SS. After all, we couldn't allow them to fall "victims" to crime, now could we?

These are some great posts, Jack. Though they scare me, I'll be back to read more.


Carl Tolber said...

The rear-end fees can be staggering too. Read the fine print in any annuities contract and it will make your hair stand on end.

Jack Payne said...

Interesting story about the maximum security prison, Mae. All I can do is shake my head.

Getting slapped with all the add-ons, as spelled out in the fine print, can have real rip-off potential, Bern and Carl. Common.

Jamie said...

If I don't know the number on the caller ID, I don't answer the phone. If I don't know the person ringing my doorbell, I don't answer the door. Sad, but this day and pretty much have to watch your back constantly. Sad.

Hope all has been well with you!

praning5254 said...

This is very timely considering that online businesses are fastly growing. Many transactions happen just online so these tips might come in handy to avoid these types of frauds.

Jack Payne said...

Great to see you back, Jamie. And, yes, it is sad indeed, isn't it? --that we have to live in such a paranoid world.

I hadn't really thought of it, Praning, but there are so many businesses now, entirely dependant on ecommerce. You are right. It's an atmosphere such as this that enables many new con game operations to spring up.

Warren M said...

I can't believe how many people still get suckered into putting out their hard earned money in advance of receiving any services. Yet, this must be common, because all the watchdog agencies are warning about it all the time.

Jack Payne said...

Funny thing how this up-front-fee syndrome started, Warren. Tyler Hicks popularized the term OPM (other People's Money) back in the 1970s. This involved businesses raising money to develop their projects without dipping into their own funds, but by tapping the funds of others. All perfectly legitimate. But, for good reason this process fascinated con artists of all stripes--and they took the concept to a new level, to further their con games.

Jack Payne said...

I should have said Tyler Hicks popularized the concept of Other People's Money (OPM) in the 1970s through his 20-some best-selling books.

Dee said...

I love seeing/hearing the response of a salesperson or other rep when I ask them their name. Once there is a pause I am out of there or I ask to speak to the supervisor or manager.

Be demanding, assertive, suspicious. It is your identity after all.

Terry said...

Another great line this time is, an unchallenged lie quickly becomes the truth. Ain't that the truth?