The nine worst scams of 2010

Robert Powell looks at the nine worst scams of the past year and shows you how to avoid them...

Dig out the champagne and the party hats as it’s officially Scams Awareness Month 2011!

OK, so you probably don’t have this month long celebration of scam avoidance pencilled into your diary – after all, it’s no Christmas is it?! But that doesn’t mean it’s not important.

The campaign is run by the Office of Fair Trading (OFT) and aims to reduce the number of people who fall victim to scams. The OFT estimates that nearly one in every 20 people (4%) lost money to a scam last year alone – with 7% of these victims loosing £4,000 or more. But worryingly, 39% of respondents to the OFT’s survey who said they had been scammed in the last year, did not report the crime to the authorities.

Scamnesty

The OFT is encouraging the public to take a stand against postal scams by chucking any scam mail into one of their ‘Scamnesty 2011’ bins. There are hundreds of bins all around the country and you can find out if there’s one near you by visiting consumerdirect.gov.uk/scamnesty.

As part of the campaign, the OFT has also released figures showing the worst scams of 2010 according to the number of complaints made to Consumer Direct between 1 October 2009 and 30 September 2010. Here’s the top nine:

Source: OFT

Let’s take a closer look at these scams and how you can avoid them...

Advance fee and money transfer

39% of people who lost money to a scam in the last 12 months fell victim to this trick. The scam works by duping people into transferring money or handing over their personal details by promising them a large cash return.

Reasons used by scammers often include promising victims an inheritance, leading them to believe they are donating to charity, or even helping to release funds from a war-torn or corrupt country.

A similar scam that we reported on last year in Beware this new tax scam has also started to do the rounds again recently. This trick involves an e-mail that purports to be from HM Revenues and Customs offering you a large tax refund in return for your bank details – no prizes for guessing what happens if you comply!

The prize draws, sweepstakes and foreign lotteries scams work in exactly the same way as the advance fee trick – you’re promised huge amounts of money because you’ve won a prize, but again you have to pay a fee or hand over your card details to get the cash.

Avoiding these scams really just requires a bit of common sense; if it looks too good to be true, then it almost certainly is! After all, why would someone you don’t know want to deposit money into your account? Just say no!

Ticketing

Counterfeit tickets have always been a big problem, but as we reported in Scammers exploiting protection meant for you, ticket fraud is evolving and becoming more cunning by the day.

Scammers will now set up fake websites offering tickets to sold out concerts, festivals and football matches. You part ways with your hard earned cash in the hope of a front row seat at Take That but unsurprisingly the tickets never arrive. The scammers will then instruct you to claim the money back from your credit card. Nine times out of ten your bank pays out, you’re not left out of pocket and the scammers make a tidy sum on the fake tickets – the perfect crime!

But industry experts suggest that this scam is costing the economy around £12m a year. You should always do your research when buying tickets from any site that you’ve never heard of or dealt with before. Buying from foreign sites is generally not a good idea and you should always check if the site is a member of STAR – the Society of Ticket Agents and Retailers, before parting with any cash. Find out more in This scam will ruin your summer.

Career opportunities

This scam is effectively a variation of the advance fee scam. An advert will offer you a business opportunity or training programme that will allow you to change careers or boost your income.

The catch? You’ve guessed it – you’ll have to pay a processing fee!

The working from home scam is very similar. A website will promise you a large cash return over a small amount of time for simple work that can be carried out at home and at any time, but to start earning you’ll have to pay an initial processing fee.

One work from home scam site I stumbled upon earlier this week even went so far as to add in photos of ‘satisfied customers’ clutching their first wage cheque in an attempt to trick people into parting with their cash.

Like I mentioned above, if it looks too good to be true...

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Miracle health and slimming

Again this scam plays on our desire to better ourselves by promising miraculous slimming solutions and health cures – all for a one off payment!

But if you send your card details to these health fraudsters you could see years fall off your life because you probably won’t see your money again and you certainly won’t ever receive the goods!

Pay in advance credit

Here at lovemoney.com we’re all for getting the best deal when it comes to credit cards and personal loans, but if a letter drops through your door anytime soon guaranteeing you a great rate on a card or loan, even if you have a bad credit rating, then you should be very suspicious. These scammers will again ask for a processing fee which, surprise surprise, you won’t get back if (or more likely WHEN) you’re ‘declined’ for the low rate product.

No legitimate lender will ever guarantee you a card or loan before you apply so if you receive one of these letters throw it in the bin and head over to lovemoney.com’s credit card and personal loan comparison centres, where you really can get a great deal!

The investment opportunities scam is very similar. You’ll get a phone call from a total stranger offering you the chance to make an investment that will ‘definitely’ soar in value. In reality your golden investment will probably be risky and overpriced or even completely fictitious.

For a full list of common scams and advice on how to protect yourself from them, head over to the Consumer Direct homepage.

More: Get a great credit card | Revealed: Britain’s card fraud capital! | Cyber-crooks are stealing your personal secrets