Biggest Business Scams Began at Home

January 05, 2012

Did you get a job last year that allowed you to work out of your Chicago real estate? Did it pan out or were you scammed?

According to the Better Business Bureau, work-at-home job opportunities topped the list of business scams in 2011, accounting for more than 45 percent of all scam inquiries to the Chicago BBB.

Last year was a tough one. When desperate times call, scammers come out to take advantage. The BBB has released its list of Top Ten Scams of 2011 to alert consumers on the trending illegal and deceptive business practices that occurred most often last year.

“In 2011, some consumers were trying to improve their financial situations in these challenging economic times,” said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. “That opened the door to scammers who were ready to capitalize on this vulnerability.

“Being aware these scams exist is the most important way to avoid becoming a victim and losing money.”

Here they are, the Top 10 Biggest Business Scams of 2011:

1. Work-At-Home schemes. There are legitimate telecommuting jobs, but many work-from-home opportunities are scams. Consumers should always be on guard when asked to send money for materials first. Do not purchase services or products from a firm that’s reluctant to answer your questions, and be cautious of any company that offers an exceptionally high salary requiring few skills and little work.

2. Credit Repair Services with Advance Fees. Consumers with bad credit ratings are particularly vulnerable to this scam, and there are a lot of them these days. But, everything a credit-repair operation offers to do for an individual, that person can do on their own at little or no cost. Credit-repair operations cannot ask for money in advance and cannot automatically remove legitimate negative reports from your credit history.

3. Advance Fee Lenders. Did you know that it is illegal for a business to charge a fee before providing a loan? Consumers who wire money for a loan typically never get the loan. These “lenders” will use fake physical addresses or the addresses of real companies that are victims of identity theft. Don’t be fooled by professional-looking websites and advertisements.

4. Foreign Lotteries. Never send money to get lottery money. Scammers using fictitious addresses will request you send “fees and taxes” to them through a wire service, but they never provide any winnings because there aren’t any. Any lottery from a foreign country is illegal in the United States anyway.

5. Ponzi/Pyramid Schemes. Both Ponzi and pyramid schemes are frauds because they pay returns to investors from their own money or the money paid by the newest investors, rather than from any actual profit earned by the individual or organization running the operation. These scams collapse because payouts exceed investments, or because the legal authorities prosecute the organizers for sale of unregistered securities. Often the organizers simply disappear with funds sent to them.

6. Prize Promotions. There are several variations of this scam, but most include some aspect that requires people who are identified as “winners” to provide money or some type of personal information, such as a credit card or social security number, to verify being a winner. In the end, no prize is awarded and the personal information is then used to withdraw a victim’s money from accounts or used to commit identity theft.

7. Office Supplies – Sale by Deceptive Telemarketing. This scam features fake invoices for office supplies being sent to a business, often for only a couple of hundred dollars. This relatively low amount makes it easier for company personnel to quickly sign off and feel it is not worth their time to check the invoice’s validity, which would be done if it was for a larger amount.

8. Paving, Painting, Home Improvement by “Traveling” Workers. Never give money to a contractor who just shows up at your door. Once you pay, scamming contractors will just disappear with the money and no work is ever done. Having access to your property also provide an opportunity for these people to check what valuables you may have for a future burglary or ID theft. Always check on the validity of a worker or a company on bbb.org.

9. Sweepstakes. If you don’t remember entering a sweepstakes, be suspicious about being declared a winner. If the prize provider wants you to send money or give your social security number to receive your prize, take no action. If you send money you will likely never receive a prize, or you will get a prize of lesser value than the money you’ve sent.

10. Online Drug & Prescription Services from Unapproved Foreign Locations. Buying any type of drug or product from a foreign location bypasses the protections that are part of the drug delivery system used by the medical community in the United States. You may risk your health and your life by using unapproved drugs from out-of-the-country locations.

“Remember, before giving any company credit or debit card information, the BBB recommends reviewing the business fully to avoid potential billing nightmares,” said Bernas.

“As always, if an offer seems too good to be true, it probably is.”

Categories: Education

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