Rumblings

02/12/2009 - Multiple signs have been seen recently in central Arkansas stating “Make Money On Cell Phone Bill – Up To $10,000 per month”. So the BBB called to find out about this opportunity. So far, we have determined that the local rep isn’t sure who might have made that much money in the company before – but they are enthusiastic that if you sign up, it really is possible. The main company appears to be a re-seller of wireless phone services – and they use a multi-level marketing distribution system to promote their services. We have been told by the local rep that if we sigh up and then sign up others under us (who in turn sign up others….), we can make “lots of money”. The BBB is still trying to gather information on the actual phone services being sold – the local reps are more interested in getting people signed up in their “downline” than talking about the services being sold. The cost? $399 to be immediately in the “gold distributor” division --- or $49 to be a “regular” distributor. Watch here for updates if we can verify the earnings potential claimed…….


        California Company’s Advertising Misleading Consumers

12/31/2008 - A California company has been advertising heavily in the Arkansas television markets recently --- Federal Loan Modification is a company that claims to help homeowners struggling with possible foreclosure issues. Their company website (www.fedmod.lcom) states: “we believe everyone has the right to pursue happiness without becoming a victim of circumstance….” Unfortunately, those individuals who have paid this company for services have become just that --- victims. The Los Angeles BBB gives this company an “F” rating and states: “we strongly question the company’s reliability for reasons such as that they have failed to respond to complaints, their advertising is grossly misleading, they are not in compliance with the law’s licensing or registration requirements, their complaints contain especially serious allegations, or the company’s industry is known for its fraudulent business practices.” A copy of the full report can be found at http://www.la.bbb.org/BusinessReport.aspx?CompanyID=100073351

Check and Mail Scams

11/19/2008 - Most of us have received an email from that incredibly generous Nigerian man who wants to put $25,000,000 straight into our bank accounts.  All it takes is emailing him all your personal information, the most important of which is your bank account number.  He promises to deposit the money straight into the account.  Even with the possibility of a huge sum of money, most people are not willing to give anyone their personal information these days.  This email has been around for a while and appears to be old, worn out, and ineffective.  Yet every day some new variation of an old scam rears its ugly head.  Not only is a version of this Nigerian scam still being run, but it has connections that are much closer than anyone might imagine.  On July 25, 2008, the Benton, AR police department issued a press release announcing the arrest of Little Rock resident Paul Faulkner for receiving a package containing over 500 counterfeit checks and money orders totaling more than $2.8 million.  The checks were supposedly to help African orphanages.  Reading about Mr. Faulkner’s arrest on 592 counts of forgery was quite interesting.  The BBB gets calls about scams all day every day and it is gratifying when the bad guys get caught.  Although every scam artist will not meet Mr. Faulkner’s fate any time soon, there are ways to make their efforts more difficult and less profitable.   

While many people are familiar with the email scams informing the recipient of large sums of money waiting for them in an over seas account, many are not aware of the other scams making their way across America.  Unlike the Nigerian Nightmare email, these tricksters are using the United States Postal Service to deliver checks and promises of additional cash right to your door.  Three versions of this type of scam will be examined here so the similarities and warning signs will become more obvious.

 
Foreign Lottery Winner

The foreign lottery scam letter informs the recipient that he has been selected as a winner in the U.K. Lottery.  With official looking identification numbers and an actual check for $2900-$4995, the offer can be very tempting.  The enclosed check is said to be for taxes and fees on the winnings which will be delivered later.  After the check is deposited and $2500 or more are sent via money gram back to the company, the remainder of the $250,000, $500,000 or $10,000,000 will be sent to the “winner”.  Stated prize amounts vary because it does not really matter how much money is promised when none of it will be paid.  Unfortunately, everyone who participates ends up a loser.  Those who wire money lose it because the losers running the scam have cash in hand while the bank requires the letter recipient to provide money to cover the bad check once it bounces.   There are two important things to remember about foreign lotteries: 

1) It is impossible to win a lottery if you have never bought a ticket.  This is pretty obvious, but when someone is saying you have won $10,000,000 reality is sometimes elusive. 

2) Foreign lotteries are illegal for U.S. residents.  Those who realize it is impossible to win without purchasing tickets often find themselves getting visits from law enforcement officers.  These fine gentlemen are not showing up to escort the Brinks truck to the front door of America’s newest millionaire.  They show up after confiscating U.S. Postal Service packages containing a small portion of the $120,000,000 in foreign lottery tickets U.S. citizens purchase every year.

Mystery Shopper Assignment

Another scam being perpetrated on Arkansans involves mystery shopping.  In the same manner as the lottery scam, this scheme has a letter with a check delivered by the U.S. Postal Service right to your mailbox.  Everyone likes to see a check made out to them.  Part of the deception of this scam is that many of the checks are drawn on real accounts.  They are supposedly from well known businesses with bank information from institutions that most people would recognize.  The problem is that there is never enough money in the account to cover the check.  While the checks vary in amounts from $2900-$4500, the letters contain the same information.  The letter instructs the recipient to call the company and confirm participation in the program.  During this call, the consumer is instructed to perform a mystery shopping assignment by spending $100-$125 at Wal-Mart, another $50-$100 at Home Depot or a popular chain restaurant, and send a money gram for $3,000-$4,000 back to a specific person at the company (only a first name is given in most cases).  The mystery shopper is allowed to keep the merchandise and any remaining money as payment for their work.  The easy money promised by mystery shopping scams has never been more expensive since the all too real looking check will soon be returned as insufficient.  The bank will then require all the money from the mystery shopper to cover the check.  With several thousand dollars wired to someone in Canada, the mystery shopper winds up on the losing end of what looked like a sure bet for easy money. 

Lucky Drawing Winner

One more sure fire way to end up as a big cash loser is to believe the letter claiming you have been selected as the lucky winner of a drawing.  The letter claims to have obtained the recipient’s name from customer information provided by Wal-Mart, Home Depot, Target, or some other major retail store.  Again there is a check that must be deposited and a money gram for 80-90% of the check amount sent to pay fees and taxes.  Once the fees and taxes are paid, the remainder of the $250,000 prize will be sent.  Does any of this sound familiar yet?  Of course it does and the same results will occur.  No prize money will be sent, the check will be returned, and the only money changing hands will go from you to your bank to cover the bad check and money gram.

 
There are several things that send the red warning flags flying at the BBB:

1.  Unexpected checks from unknown sources.  Companies do not mail out checks giving away free money.  Since business is our middle name here at the BBB, let me fill you in on a little secret.  Sending out thousands of checks for thousands of dollars each is not a good business practice.  It might draw some attention, but it is not a good way to make money.  Although it would be wonderful to get a $4,000 check in the mail, unless your grandmother has decided to be exceedingly generous with the Christmas gift, it is probably a scam. 

2.  Any request to wire money (especially to an unknown person or a relative).  If you really have won a large sum of money, why can’t the taxes be taken out of the winnings and the rest sent to you?  There is no good reason to send a money gram back to someone who has sent you a check. 

3.  Letters claiming Wal-Mart, Home Depot, or any other retailer has provided personal information from its customers for a prize drawing.  While some retailers do offer cash prizes and a drawing for participating in customer surveys, all information is given by the consumer and guarded carefully by the company.  Businesses go to great lengths to protect consumer’s personal information. 

Any encouragement to keep the information in the letter as a secret.  

If you have won a prize, why should it be a secret?  The tricksters want to keep their scam a secret long enough to get the money and run.  One consumer informed the BBB that she had won $5,000 a week for the rest of her life, but she could not tell anyone until the prize was announced.  She was told that local television stations were going to be at her home in five days to cover the announcement.  She was asked by the BBB if any stations had called her to make arrangements or if she had called the local affiliates to see which ones were coming.  Of course that never occurred to her because the scam artists kept her attention on the money instead of reality.  There were neither television affiliates nor $5,000 checks coming to her house.