Media Release: CONSUMERS BEWARE OF TOP 5 SCAMS

FROM THE MINISTER FOR CONSUMER AFFAIRS

DATE: Friday, September 5, 2003

CONSUMERS BEWARE OF TOP 5 SCAMS

Consumer Affairs Minister John Lenders today released details of the current Top 5 Scams in the State and urged consumers to ignore ‘too-good-to-be-true’ offers received by email, SMS, fax or mail.

Mr Lenders said an unsolicited email from Nigeria promising a share of unclaimed inheritance and fake overseas lotteries were the two of the most common scams cheating Victorians.

“Unfortunately, every year unsuspecting Victorians are hoodwinked by false promises of lottery wins, once-only offers of instant wealth or effortless work-from-home jobs,” Mr Lenders said.

Based on complaints to Consumer Affairs Victoria (CAV) the Top 5 Scams include (see attachment): overseas lotteries/prize awards (530 written complaints), the fax-back fraud (36), work-from-home scams (5), the Nigerian con (86) and clairvoyant scams (51). Many more phone enquiries are received by CAV.

“Con-artists are constantly thinking up new ways to re-invent old scams and ensure their hoax lotteries arrive appearing ‘official’ and legitimate,” Mr Lenders said.

“The more consumers know what to look for, the more they'll be armed against falling into these con-artist’s traps.

“We’re urging consumers to treat these scams as junk mail and throw them directly in the bin.

“While we can work to stop local con-artists, most of these scams are run by overseas fly-by-nighters.

“It is vital consumers don’t send them any money or disclose their bank account details because it becomes impossible to track down.

“The Bracks Government will continue to work closely with other state agencies and international authorities to combat scams,” Mr Lenders said.

“With a strengthened Fair Trading Act we are creating a fairer environment for legitimate businesses and clamping down on the rogues,” Mr Lenders said.

Last year, Consumer Affairs Victoria released details of the top scams of 2002 and received a 500 per cent jump in complaints.

People with concerns about any scam material you have seen call Consumer Affairs Victoria on 1300 55 81 81 or visit http://www.scamwatch.gov.au.

Attachment:

Consumer Affairs Victoria’s Top Five Scams are:

The fax-back fraud
This unsolicited fax comes in a range of guises. The fax may advertise diets, either a ‘4-Day-Diet’ or improved sexual stamina through the ‘5-Day-Diet’, employment opportunities, modelling/acting work or ask receivers to comment on a social cause. Consumers respond by completing and returning the fax to a 1900 number. The catch is, it contains large amounts of black ink which take time to transmit (at a rate of approx $5.50 a minute). The fax can often take up to 10 minutes to complete so some consumers have received phone bills for $55 - a costly exercise and clever ploy by marketers.

Nigerian con
A stranger contacts you by email, fax or letter requesting help to transfer money out of a country in Africa, like Nigeria or Sierra Leone. In exchange for a cut of the proceeds, all you have to do is pay a handling fee or provide your bank account details. Once you do, your money goes out of, not into, your account.

"Work From Home", Envelope stuffing scheme
Advertisements in self-employment opportunities columns of local papers offer work ‘'stuffing envelopes’. Consumers are required to pay some money up front for work that never eventuates. All you receive is a set of instructions on how to con other people into the scheme.

Overseas Lotteries/Sweepstakes and Prize award scams
Consumers receive an official-looking letter alleging that they have won a prize, up to millions of dollars and are required to pay a processing fee in order to claim their prize money or lottery win. One notorious example claims affiliation with the genuine El Gordo Spanish Lottery.

Clairvoyant scams
A supposedly ‘personalised’ letter asks recipients to send an initial amount of typically $40-80 to a PO box and to sign a form to release confidential and personal information. They are then asked to send more money to receive ‘special’ clairvoyant products or services, which are either never supplied or are of little value.

MAIL SCAM WARNING SIGNS

Promises of instant wealth - if an offer sounds too good to be true, then it probably is.

Up front payments - even though you have 'won' a prize, you have to send money for 'processing' costs.

PO Boxes - Money or credit card details have to be sent to a post office box, which shields dishonest operators from being pursued by consumers.

Limited Offers - Consumers must make a decision quickly as the opportunity is only available for a limited time, to a limited number or there is a waiting list of participants.

False Statistics - Promoters say the chances of winning are greater than with the legitimate Australian lotteries.

Personal Details - Scam operators as well as legitimate companies may offer free giveaways in exchange for your personal details in order to keep you on their contact list. Never give out your banking details.

Testimonials - these scams use letters or references to back up their claims. However, there is no way of checking on the legitimacy of the claims.

Competition, What Competition? - You can't remember entering any such competition.

Sensation Causing - Claims that this product has caused a 'sensation' overseas.

Refund Cheques - They claim that the payment cheque for the goods won't be banked until you're completely happy with the product or the period of guarantee is over. A refund is offered, if the consumer is unhappy with the product or service, but one is rarely given.