Scams That Leave You Broke

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Word count: 2829

Scams That Can Leave You Broke
By: Doug Setter

Article ID: 1242296
Article Submitted: June 11, 2008
Category: News and Society :: Crime
Article Word Count: 2825

Scammers and con artists are often thought of as harmless, witty and sophisticated. Yet, they think nothing of ripping off people from all walks of life, especially the elderly. Some con artists have jobs, families and even university degrees. I knew one who operated an insurance business during the week and spent weekends in jail. Even then, he still was caught selling fraudulent stocks. Whether it is selling phony water proofing for roofs or bankruptcy schemes, the con artist sees nothing wrong in what they do. As one con artist explained, "First you hustle, then you get honest, then you get honored...We are almost honest."

These rip-off artists might not break into someone's home or put a gun to anyone's head, but they can cause more financial damage than a robber or burglar. Harder to catch and even harder to convict, professional swindlers seldom get severe punishments. Wariness can protect your time, money, sanity and self-respect. You can even have fun by exposing the con artists in the middle of their scams.

CHARITIES

At the mere mention of medical research, mistreated animals, third world countries or children-in-need, most of us start reaching for our wallets. But most good-hearted folk forget that anyone with a clip board and bravado can pose as a charity.

A typical approach happened during the writing of my book: One Less Victim. A pretty girl raps on my apartment door and asks for donations for a walk-a-thon supporting some kind of disease research. The story sounded good enough to separate me from a couple of dollars. The girl pocketed the money, thanked me and left to the next apartment.

It was not until I closed my front door that I suddenly got that familiar "Something's wrong" feeling. When the girl took my money, there was:

1 No charity number;

2 No receipt; and

3 No recording of the donation.

How did she keep track of donations?

I had been conned.

Still, two bucks is two bucks. So, I searched the apartment block and found the charity girl, making her pitch to a neighbor. I demanded my hard earned two dollars back and sent her packing out of the apartment block. Later, I filed a complaint to the police.

Keep in mind that even if phony charity workers do not collect off of you, they can be also seeing when you are home to ransack your home later.

TELEMARKETING

"Did you get the money off of ol' _______ _____?" a fund raiser manager had asked me. "Wasn't he a bag of hammers? Buying 10 tickets and not even go to the game."

I had been working nights as a courier to pick up the donations for a fund raising company. This fund-raiser company called it self something like Child Find, B.C.. I could not believe how often these fund raisers bad-mouthed the very people who generously gave up part of their own pay checks. Some of these donators were not the wealthiest people and yet, they still willingly bought tickets believing that some physically handicapped or under-privileged children would get to watch a basketball game between the Vancouver police and a professional sports team. The game did happen and people did get seats, including the mayor and other high profile people. But, I guarantee that the fund raisers got a good slice of the money that they raised. The day before the game, the office shut down and was empty with no forwarding address.

HEALTH PRODUCTS

Even health food products can be flogged via a boiler room-like operation. I once met a successful property manager from Portugal who was in the process of selling off his buildings to do full-time promoting of a food supplement.

The product was called GeoForce. It was a fair health product that was aggressively marketed through a multi-level marketing program so people were left with stock piles of this stuff with nowhere to sell it. The property manager/owner insisted that it cured his constipation (as some dietary fiber could) and was the greatest medical breakthrough since penicillin. Hoping to convince me of the great opportunity, he brought me to the head office in Winnipeg. It was too much like a boiler room operation. Namely, it was a small, smoky room with a few, over-weight, chain-smokers flogging the product over the telephone. If the customers could only see these "health experts" in action, they might splurge on something else.

I later found out that the property owner lost large sums of money, but did eventually recover financially. As for the GeoForce Corporation, they were eventually fined by the federal government under the multi-level marketing provisions of the Competition Act. This means that the GeoForce Corporation lied to people on the actual amount of money that they could make.

Weight-loss and muscle gain gimmicks have been around for centuries. What sets most of the rip-offs apart is the promise of a quick fix and some really weird explanations like La Mar Reducing Soap which claimed to wash body fat down the drain. I found that the biggest tip-off is when the food supplement is being flogged by obviously unhealthy people. Usually it is someone who has trouble climbing the stairs, but will drone on about why their magic food supplements are so effective. In reality, they have already bought cases of the stuff and are trying to unload it on to someone else.
If in doubt about product or "financial opportunity," contact the Better Business Bureau or government consumer's office. They can save you thousands of dollars, headaches and even your marriage.

FITNESS SPAS

Fitness spas can come and go like the weather. While lifetime memberships are basically outlawed, some fitness clubs will lock customers into year long contracts and then skip town. I personally watched a fitness club manager do this three times within four years, all in the same town. He also helped himself to at least one club member's credit card account. The last story that I heard, he was beating the fraud charges in court with some plea regarding a sick aunt or something.

It is best to sign up for a few months at a time with a check or cash. Keep your receipts and do not hand out your credit card number.

HOLD THIS MONEY, PLEASE

An all time popular scam is the pigeon drop. There are many variations, but they all center on with the mark (the victim) and a stranger "finding money." The mark is asked to put up some of his own money as a sign of good faith, before they look for the rightful owner. For instance, a seemingly mentally retarded person approaches you with some old coins that he found in an alley. You telephone the phone number on the envelope and the coin "owner" offers you $500 for the envelope of coins. The owner asks that you give some money to the guy who found the envelope. After giving the finder some money, you go to deliver the useless coins to the owner. The owner will not be there.

A more sophisticated method is to receive a letter or e-mail from some organization, usually from a third world country, which needs someone to hold their money for them. All that they ask is for you to supply your bank account number. They claim that they will forward hundreds of thousands of dollars into your account and later pay you a percentage after they withdraw the amount. The only thing that they withdraw is all of your savings. Information is a commodity. Protect it.

ATMs

Automatic Teller Machines are both risky places to get robbed and ripped off. One scam happens when you put your bank card gets stuck in an ATM. A well-dressed man or woman nearby mentions the same problem and suggests that you re-enter your card. After you re-enter and re-enter, you give up and leave. The con artist later uses pliers to remove your card and a plastic sheath that jams the card. The con artist then withdraws the maximum amount and leaves.

INTERNET SNAGS

Cheap items are advertised as more expensive models and sold on the internet. The seller, often a juvenile, racks up several thousands of dollars before shutting down their operation or getting caught. Best to avoid this situation by using legitimate internet businesses like e-bay ®.
A more dangerous side to this is down-loading "free software." By allowing outside software into your computer, someone can start accessing your information. This information can include personal information, credit cards and where you live. Like your home, be careful who or what you let into your computer.

THE NOT-SO-GOOD-SAMARITAN
While downtown, a mark finds their car tire flat. A nice couple comes by and offers to fix it. During the tire change, one of the two lifts the mark's wallet. Even if the mark reacts, they might not want to cause a scene. Another variation is that the mark gives the nice couple some money for their help. (Even though they slashed the tire in the first place.)

DOWN ON THEIR LUCK

If I had a dime for every time that I heard the "I'm down on my luck," "Financially kicked-in-the-teeth" or "my mother just died" story from strangers, I would retire tomorrow. One scenario like this happened to a Canadian couple in Burnaby, B.C. The couple were approached by a man (guess where) outside of a 24 hour grocery store (guess when) after midnight. The man claimed that his front axel had just broke and asked if the couple could cash a check for him. The man produced a valid driver's license and a check book to match. The stranger offered the couple $20, then $50 dollars to cash the check. So, he wrote a check for $550 and the couple cashed the check through their bank machine and kept $50. The stranger then asked the couple to cash another check for $100. 48 hours later, the bank called to say that the checks had bounced and combined with the overdraft charges, the couple now owed over $900. The victim, Jason M. commented, "The guy really seemed like a genuine blue collar worker down on his luck." (Neilson). Again, take note of the place and time of the scam. Also, typically, the victims themselves were also strapped financially and more apt to risk their money for a quick gain.

YOU HAVE JUST WON

From time to time, these turn up in the mail box. Cards with a scratch and win or special number, inform you that you are an instant winner. After completing a grade level 3 skill-testing question you are to telephone a 1-900 telephone number. The people at the other end of the telephone line are all too happy to keep you on the line for dollars per minute. After several minutes you might be told that your prize is on its way. But your only prize is a hefty telephone bill.

I constantly get phony prize and subscription offers in the mail. The offers range from trips to Las Vegas to secret investment strategies from the orient. My biggest tip off is that this particular group of scammers keeps using the same address for over nine years. Obviously, they have not been stopped at they are still in business or just too cheap to change their address.

HOT INVESTMENT TIPS

The biggest hall mark of a scammer is his or her giant ego. A man named Jim Fisher, once approached myself and several of my friends with an investment for Horizontal Drilling. That was this high tech method of oil drilling which supposedly could drill horizontally beneath the surface and hit several pockets of oil. This guy was so non-stop boasting about the project, that I became a bit suspicious. When his girlfriend, started her two cents worth of bragging, the alarm bells in my head were ringing loud and clear. Something about their cock-sure arrogance that was just too familiar from other "great deals" that I have encountered. Besides, these two had zero background with oil drilling. They just seemed like a couple of glib gabs.

The following week, I dropped by the B.C. Securities commission. Sure enough, Horizontal Drilling was one of the top scams of the season. Telephoning the commission later, revealed that Jim Fisher was a household name and that he had previous charges of theft and fraud. That means that he was actually caught, found guilty and then charged on only two occasions. It does not count all of the times that he got off scot-free. He was obviously getting away with more scams than he was being charged with.

STOCK PROMOTIONS

Stocks are sold to raise money for a company. Stock brokers are paid on a commission basis to buy and sell shares. Often they will employ a number of sales tactics to get people to buy certain stocks, whether the stock is about rise in price or become worthless. In his book, License to Steal, Timothy Harper describes several of these pressure methods. For example, one day an employee wearing rubber overshoes walks by walks by a stock broker's desk. The broker, who is on the telephone to a client, glances at the overshoes and says, "Listen Tony Galoshes is heavily into this stock, and thinks it could double by the end of the year."

Scammers always push for the time crunch. I have talked to a few stock brokers who insist how hot some stock is. (Like Northern telecom in 2002.) Almost like clock work, the stock plunges a few days later. Their explanation? "You should have got in earlier."

There is hype and then there is deliberate deceit. One method is the STOCK MARKET PREDICTION. Suppose that you get a telephone call or letter with a "hot tip" that the price of gold is going up. You shrug it off, but sure enough, in a couple of weeks gold does rise in price. Later, the same company contacts you with the tip that silver is going to drop in price. Sure enough, within a couple of weeks it does. Two out of two, so far.

The next tip that comes in insists that the "new silicon chip replacement" Galium Arsenide is going to sky rocket in price and you, oh chosen one, are urged to invest now while the going is good. ("Even Tony Galoshes is investing!")

What has happened here is that the "broker" has telephoned maybe 400 people and told 200 that the price of gold is going up and the other 200 that gold is going down. If gold goes up, he telephones back the 200 who he predicted the price rise to. During the second pitch about the price of silver, he told 100 people that silver was going up and another 100 that silver was going down. If you are the chosen 100, you have heard 2 amazingly accurate predictions. You, like the other 99 people just might be tempted to risk a few thousand dollars. If you do, it is as good as gone.

SLAVE LABOUR

Some contracting, sales (like vacuum cleaners) and trucking companies can fold almost over night and leave employees unpaid. Sometimes the company is in trouble and they go bankrupt. Other times, the company owner plans to go bankrupt. As con artist, M. Shane once remarked: "I've gone bankrupt at least thirty times and my credit is great!"

A typical red flag is when the company tells a new employee that "the product sells itself" and they, the employee have to put money down for stock. I constantly see people, usually newly immigrated, walking the streets, trying to flog boxes full of kitchen knives, tool sets or appliances. Just once I would like to hear them admit that they are not medical students and they are not trying to earn points to go to Europe. They only reason that they are pushing these goods is that their sales manager just dumped them off at the end of the street and ordered them to knock on every door on the block. Having no vehicle, they have no choice but to keep door knocking.

Working-from-home scams are beautifully summed up by this letter to the classified ads:
"Home Typing Jobs Are Bogus !!!
Don't be taken in by the promise of these unscrupulous con-artists who post
multiple ads on free classified web sites. They are despicable and a
complete fraud. There is no home typing job. All they really want is for you
to use up your time spamming free sites so they can stiff you and then tell
you that because they live in a foreign country, they do not have to pay
you. The people that run these free classifieds have better things to do
than waste their time filtering out hundreds of these spams per day. Run the
other way!!!
I'm sick of getting scammed. How long before you are?"

When the victim is too embarrassed to admit that they have been "taken," it builds the con artist's confidence to keep scamming.