Word of Advice

25 February 2008

Promised easy money, great prizes, true love, or a scam? PART I 

The Ministry of Consumer Affairs is constantly being alerted of scams. This is the first of a two part series on Scams that are circulating in New Zealand and how to avoid them.

If you receive a surprise lottery win in the mail, or an email from your bank asking for your personal information, or perhaps you’re get a call from some engaging person with an amazing share offer over the phone, then think first – all these can be fronts for SCAMS.

Scammers are criminals. They act illegally and can cheat you from anywhere in the world, re-inventing themselves and their scams to keep you guessing and the money flowing. They research how you live and invent scams that will appeal to you. They also understand your vulnerabilities and exploit your hopes and beliefs. The resulting scams are cunning, original and masked with legitimacy.

Scammers can target large numbers of people, which can add up to big money if they succeed, or they can target individuals. Whatever the case, most scams need people to do something before they can work. You can protect yourself by knowing how scams might present themselves.

First, you should understand that scams come in many forms – mail, email, telephone, over the Internet and even door-to-door. The variety of scams is long and new ones are regularly added: fake investment schemes; bogus medical cons; Nigerian letters, employment and money laundering schemes, identity theft and the common Phishing scam, to name a few. Most of these scams originate from outside New Zealand and once money is sent away, it is virtually impossible to recover.

Whatever the scam, there are several common approaches that scammers use to draw you in. Two regular approaches include:

1. Seducing you with great promises:

   Scammers get your attention by promising great prizes, true love or easy money. But before they deliver anything, they’ll ask you to send them money, or give them your bank account, or credit card numbers, or other personal details. In the end, they never deliver what you expect and always rip you off.

2. Deceiving you with official looking requests for your personal details:

   Scammers shrewdly pretend to be legitimate banks or businesses. They approach you unexpectedly with leaflets, letters, emails, websites or phone calls with requests that seem like the real thing. Then they’ll give you a reason why they need your personal details, like your credit card number, password or bank account number. Genuine organisations usually don’t make such unsolicited requests. If you provide them with your personal details they could steal your money and your identity.

General tips:

You can often spot scams by simply asking yourself if it sounds too good to be true. If it does, it most likely is. The best way to stop scams is to prevent being caught out in the first place:

• DON'T respond to offers, deals or requests for your details. Stop. Take time to independently check the offer.
• NEVER send money or give credit card, account or other personal details to anyone who makes unsolicited offers or requests for information.
• DON’T rely on glowing testimonials: find solid evidence from independent sources (not those provided with the offer).
• NEVER respond to out of the blue requests for your personal details.
• NEVER click on a link provided in an unsolicited email as it will probably lead to a fake website designed to trap you.
• ALWAYS type in the address of a website of a bank, business or authority that you want to access.
• NEVER use phone numbers provided with unsolicited requests or offers as it probably connects you to fakes who will try to trap you with lies.
• ALWAYS look up phone numbers in an independent directory when you wish to check if a request or offer is genuine.

If you’re scammed

Once victims realise they’ve been ripped-off, they’re often embarrassed to admit what has happened and angry that little can be done to catch the con artist. But don’t be shy, it’s important to let people know about your experience so others can avoid being conned a similar way.

To report scams to help protect others from them and for more tips on how to recognise them, check out Scamwatch. And remember, the simplest way to fight a scam is to not respond.