Top 10 Scam List Released: Learn How Not to Be a Victim

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A new list of the most-reported scams shows phantom debt scams on the rise.

The National Consumers League on Tuesday released the top 10 scams reported to its website and found a sharp rise in refund and recovery, or phantom debt scams. These scams involve the victim being contacted by someone claiming they are collecting an unpaid debt.

More than 10,000 consumer complaints lodged in 2014 were analyzed, the group said. The refund and recovery scam now ranks as the fourth most commonly complained about scam.

Here's how it works: You get a call or email from a crook who says you owe money and they are collecting. Should you take issue with the purported collection action, they typically will tell the targeted victim that they could face time in jail or other legal actions.

"Fraud remains one of the most pernicious threats facing consumers today," said Sally Greenberg, the league's executive director. "We are particularly concerned about scammers increasingly relying on the old-fashioned' telephone as a way to reach millions of potentially vulnerable consumers."

Top 10 Scams

Here are the top 10 scams documented by the league's project:
  1. Internet sales. Either misrepresented goods or products never received.
  2. Prizes/sweepstakes/free gifts. A request for money to claim a made-up prize.
  3. Fake checks. Being sent a check and then being asked to transfer back a certain amount of cash.
  4. Recovery/refund companies. Demands to pay a fake debt.
  5. Advance fee loans/credit arrangers. Phony pledges to provide loans to those with poor credit when a fee is paid upfront.
  6. Computer equipment and software. Being solicited by phony tech support to fix made-up problems.
  7. Scholarships/grants. Being charged a fee for useless, generic lists provided by those promising a custom search.
  8. Phishing/spoofing. Trying to dupe consumers into providing information by pretending to be a trusted business.
  9. Friendship/sweetheart swindles. Using an online relationship to dupe a victim in paying money.
  10. Ad space/directory listings. Phony invoices sent to businesses for listings they supposedly ordered.
The group also noted that victims are now less likely to send money via a wire transfer service like Western Union (WU) or MoneyGram (MGI), which is next to impossible to reverse. More consumers reported paying by credit card when scammed, which allows an opportunity to recover funds, the group said.

"Credit card transactions are a safer way for consumers to pay for products since they can dispute fraudulent charges with their credit card company," said John Breyault, vice president for the league. "Unfortunately, when a fraud victim sends money via wire transfer or prepaid debit card, the chances of getting their money back are much lower."
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