1. Online Shopping and Auction Scams
Online auction sites such as eBAY are huge business and there are con artists who pose as buyers. They appear to pay for the goods that you then send to them. However, the payment bounces and you cannot get your goods back. There are also sellers who take your money but don’t send the goods or claim to have sent them but they never get to you.
If buying, reduce your risk by only buying from suppliers that have high numbers of sales and high satisfaction ratings.
2. Lottery Scams
This can be for the UK lottery or Euromilions or any other lottery around the world.
Some scams are lottery clubs that sign you up but then charge you for buying tickets you didn’t ask for, or fail to buy any tickets and keep charging you.
Alternatively you receive notification that you have won a lottery. If you didn’t enter then you cannot possibly have won but some people are conned into thinking it’s possible. You may be asked for an admin fee or release fee in order to gain the prize money but it never appears.
3. Premium Rate Telephone Number Scam
You receive a letter or email or text message or automated voicemail telling you that you have won a large prize and all you need to do to claim it is call a phone number. This turns out to be a premium rate number costing you up to £4 per minute. You will invariably be kept on hold for a long time, all the while racking up more costs. If you do actually win something it will have insignificant value compared to the cost of your phone call.
Over a million people a year fall victim to this, according to the Office of Fair Trading.
4. Identity Theft
Identity theft occurs when someone assumes your identity to carry out fraud or other criminal acts. The fraudsters can get the information they need to assume your identity from a variety of sources, including by stealing your wallet, rifling through your trash, by compromising your credit or bank information etc. They may approach you in person, by telephone, or on the Internet and ask you for the information by means of some fake situation.
A Phishing Scams is where the sender pretends to work for a trustworthy organisation as a way to get you to divulge identity information and/or financial information such as credit card details or bank accounts and passwords.
This can involve emails that look as if they are from your bank or HMRC or the Inland Revenue or similar trusted organisation and they have a story that leads to you handing over vital information which they can then use to steal money from you. Sometimes they create fake websites that look like the trusted organisation. You click in an email expecting to get to the organisation but end up at the fake site and enter your identity details, account numbers etc.
5. Nigerian Letter or “419” Fraud
This is a scam whereby you are promised a large sum of money in return for a small advance fee. But the large sum is from a dubious source such as a person claiming to be a Nigerian government worker who needs to move the money out of the country and will share it with you in return for that advance fee.
The ‘advance’ fee may be needed to sort out an application or open a bank box or deal with government red tape. Of course, there is no large sum of money.
There are other forms of the ‘Advance Fee’ scam that may involve loans, investments etc.
6. Dating Scam
Scammers take advantage of people looking for romantic partners, via dating websites, apps or social media by pretending to be prospective romantic partners.
Then once hooked, they play on emotional triggers, asking for money for a sick relative or for a plane ticket to come and visit and will happily take your money but never appear. Or they may seek gifts or personal details so as to carry out identity fraud.
7. Holiday Scam
This can take the form of a holiday or flights or holiday accommodation that you pay for but then find doesn’t exist. Or it may be a genuine holiday but with a ‘catch’ e.g. You receive an email or letter telling you that you’ve won a holiday and to get it you just have to attend at a hotel for a presentation. You go to the hotel and everything seems fine and you accept the holiday but then find out that there are mandatory extras you have to pay for such as travel or insurance and wish you hadn’t accepted it.
8. Telemarketing Fraud
Telemarketing fraud is where the scammer makes cold calls. The scammer will convince the victim to buy goods or services but once they’ve got the credit card details and identity information – they can then make authorised purchases or sell the information to other scammers.
9. Fake Loan Scam
You can find advertisements in local papers offering fast money loans without formal credit checks. Typically, you call up a free phone number and are then told that your loan is agreed but you need to pay insurance costs via a money transfer. Once you've paid the fee, you never hear from the company again. This scam also often starts as email spam messages.
10. Investment-Related Scams
“Ponzi” schemes promise high financial returns or dividends not available through traditional investments. Instead of investing the funds of victims, however, the con artist pays “dividends” to initial investors using the funds of subsequent investors. The scheme generally falls apart when the operator flees with all of the proceeds or when a sufficient number of new investors cannot be found to allow the continued payment of “dividends.”
As in Ponzi schemes, the money collected from newer victims of pyramid schemes is paid to earlier victims to provide a veneer of legitimacy. In pyramid schemes, however, the victims themselves are induced to recruit further victims through the payment of recruitment commissions.
Market Manipulation (“Pump and Dump”) Fraud
This scheme—commonly referred to as a “pump and dump”—creates artificial buying pressure for a targeted stock, usually a low volume stock largely controlled by the scammers. This artificially-increased trading volume has the effect of pushing up the price of the targeted stock (i.e., the “pump”), which is rapidly sold off into the inflated market by the scammers (i.e., the “dump”). This results in illicit gains for the perpetrators and losses for innocent third-party investors.
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