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In the News : SAIF
Publication: The Acorn
By: Linda Kern
Date: January 16, 2003
Tips given to senior citizens so they can avoid becoming victims
of fraud : part ii of two parts
More than 24 million people nationwide become victims of fraud. Most are over age 50.
By recognizing consumer fraud, you can help prevent it.
The American Heritage Dictionary defines fraud as "A deception deliberately practiced in order to secure unfair or unlawful gain." Consumer fraud, which is intentional, involves deceit, misrepresentation or withholding valuable information-usually in an attempt to persuade someone to part with something of value-mainly money.
Fraud is illegal and it occurs in various ways:
Telemarketing fraud is usually the most costly form of deceit
and the easiest to disguise because most telemarketing is
legitimate.
How do you tell the difference? Tactics tell the tale.
Red flags should go up if someone calls offering to sell you something which you must pay for immediately or tells you that you must "act now because this is a limited-time offer."
Beware if you receive a call telling you that you've won a contest but must pay for part of it or if a caller requests a donation to a charity you've never heard of.
What should you do?
Check out references before buying; beware of anyone telling you they need money right away. Ask them to mail you material about their organization, and above all, never give out credit card information or your PIN number.
Charities can be checked for tax-exempt status via the Internet at www.guidestar.org.
Investment fraud comes in many forms and is one of the most sophisticated scams. It consists of phone offers to invest in a new company, stock or insurance policy. You're told that you can double your money in a short time.
A good rule of thumb is "Anything that sounds too good to be true is too good to be true."
Pyramid schemes are another kind of investment fraud that can fool a consumer. You're recruited to invest in a business venture, but you must also go out and recruit more people. When the members fail to pay money or acquire additional investors for the pyramid, it collapses. This is not the same as multi-level marketing which many businesses use. Educate yourself on the difference.
Never give cash to someone for an investment; keep records of all your transactions. Never accept a verbal contract; always read the fine print.
Mail scams are created by con artists and are difficult to detect. You might receive a letter in the mail saying, "Congratulations, you've won the sweepstakes," but before you can collect, you must pay a fee. It's illegal for any sweepstakes to require payment.
Chain letters, (another form of mail fraud), ask for money or items of value to be sent to people on a list. Don't send them anything.
Internet fraud is the most modern way for con artists to scam consumers. Travel ripoffs via the Internet are common. They offer too-good-to-be-true vacation deals and before victims know it, they've sent a deposit or given a credit card number.
Be wary of products purchased through the Internet. Some offers are nonexistent. Always check to see where a company is located before you do business with them.
The Internet can be a vehicle to find jobs,
but some are bogus. If the "employment" requires
a payment for training before the job starts, that's another
red flag. Other fraudulent operations through the Internet
claim to pay excessive amounts of compensation for menial
tasks, such as stuffing envelopes. These "too good to
be true" jobs are scams.
Door-to-door fraud comes in many forms, from
product sales to soliciting donations. By coming to your home,
con artists can gain valuable information that they wouldn't
get by phone or mail.
One of the most common scams is someone unfamiliar
comes to your door and tells you that you need work done on
your house, such as a new roof. They use high-pressure sales
approaches to scare victims into buying phony items or services.
Always obtain at least three estimates on repairs.
If anyone says he was just driving by and noticed that you need repair work, beware. Ask to see a business license; then check it out with the appropriate authorities.
Check for references and never give more than 10 percent as down payment on materials. This is the standard rate.
When a repairman is present, it's always best to have a friend or family member with you. Don't let anyone into your home without knowing who they are.
If a stranger asks personal questions about
your banking procedures or tells you that you must keep a
secret, be cautious, commit to nothing and investigate.
It's important to file a report with the police
when you've been victimized or have been approached by someone
that you suspect is attempting to con you. It's nothing to
be ashamed of. It can happen to anyone.
The National Fraud Information Center at (800) 876-7060 has more information or contact www.fraud.org. Reach the Department of Corporations at (866) 275-2677 or contact www.corp.ca.gov via the Internet.
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Editors Note: Click here to go to Part 1 of this series.
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