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Last Updated: Wednesday, 9 February 2005, 04:11 GMT
Top ten scams targeting consumers
Scam warning sign
OFT says scammers are resourceful, enterprising and manipulative

On Wednesday, the Office of Fair Trading is launching a campaign to raise awareness of the ways in which people are conned to try to stop this happening.

To coincide with the launch, OFT has identified the top ten scams targeted at UK consumers.

WORK-AT-HOME SCAMS

Work-at-home and business opportunity scams are often advertised as paid work from home.

On application, would-be workers are asked for money up-front to pay for materials and, after payment, hear nothing.

Alternatively, people are asked to invest in a business with little chance of success.

TELEPHONE LOTTERY SCAMS

These include scams which go under the name of genuine lotteries like the Canadian lottery and the El Gordo Spanish lottery.

Telephone
Unsolicited calls tell people they are being entered into a draw

Unsolicited telephone calls tell people they are being entered into a prize draw.

Later, they receive a call congratulating them on winning a substantial prize in a national lottery.

But before they can claim their prize, they are told they must send money to pay for administration fees and taxes.

The prize, of course, does not exist.

MATRIX SCHEMES

These schemes are promoted through websites offering top-of-the range electronic gadgets as free gifts in return for spending about 20 on an inexpensive product, such as a mobile phone signal booster.

Consumers who buy the product then join a waiting list to receive their free gift.

The person at the top of the list receives his/her gift only after a prescribed number of new members join up.

The majority of those on the list will never receive the item.

PRIZE DRAW MAILINGS

Holiday
"Prizes" such as holidays can only be claimed in return for administration fees

Holiday prize draws, sweepstakes and foreign lottery mailings form the basis of many scams.

The majority appear to be notification of a prize in an overseas draw or lottery.

Prizes can apparently only be awarded in return for administration or registration fees.

PROPERTY INVESTMENT SCHEMES

Investors attend a free presentation, which aims to persuade them to hand over large amounts of money to enrol on a course promising to make them a successful property dealer.

Schemes can involve the offer of buying yet-to-be built properties at a discount.

Other variations include a buy-to-let scheme where companies offer to source, renovate and manage properties, claiming good returns from rental income.

The properties are generally near-derelict and the tenants non-existent.

PREMIUM RATE TELEPHONE NUMBER SCAMS

Telephone bill showing premium rate numbers
Premium rate phone numbers offer good returns for scammers

Postal notification of a win in a sweepstake or a holiday offer in this scam include instructions to ring a premium rate number.

This is generally an 090 number.

Calls to the number incur significant charges, the recorded message is lengthy, and the prize often does not exist.

INVESTMENT-RELATED SCAMS

An unsolicited telephone call offers the opportunity to invest in 'soon-to-be-rare commodities such as shares, fine wines or gem stones.

These investments often carry high risk and may be worth a lot less than you pay.

The shares are not quoted on any stock exchange and could be difficult to sell afterwards while gem stones are often said to be stored in secretive Swiss bank vaults, so the investment can never be seen.

NIGERIAN ADVANCE FEE FRAUDS

These frauds take the form of an offer, via letter, e-mail or fax, to share a huge sum of money in return for using the recipient's bank account to transfer of the money out of the country.

Dollars
The Nigerian advance fee fraud has been around for a number of years

The perpetrators will often then use the bank account details to empty their victim's bank account.

Alternatively, they can convince the victim that money is needed up front.

They will often say this money is necessary to bribe officials.

CREDIT SCAMS

This is another advance fee fraud, this time usually originating in Canada.

Adverts appear in local newspapers offering quick loans regardless of credit history.

Respondents are told their loans have been agreed but they must pay a fee to cover insurance before it is released.

After that fee is paid, the consumer never hears from the company again and the loan never appears.

PYRAMID SCHEMES

Pyramid selling is a method of selling goods which is illegal in the UK.

Pyramid schemes offer a return on a financial investment based on the number of new recruits to the scheme.

Investors are misled about the likely returns. There are simply not enough people to support the scheme indefinitely.



VIDEO AND AUDIO NEWS
How one man was 'suckered' into the scams



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