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BBB Announces Top 10 Scams of 2012

The Better Business Bureau investigates thousands of scams every year, and this past year launched two websites to help consumers figure out which offers are real and which ones are possibly frauds:

BBB Smart Investing (www.bbb.org/smartinvesting), developed in partnership with the FINRA Investor Education Foundation, informs consumers about investment fraud, Ponzi schemes and risky investments, and helps them assess their risk, check out brokers, and avoid getting taken.

BBB Scam Stopper (www.bbb.org/scamstopper), developed in partnership with Western Union, educates consumers about the major types of scams and provides information on how to avoid them and how to report them.

The annual "Top Ten Scams" list is culled from a variety of sources. BBB gathers information on scams from consumers, some of whom have been victims of scams; from federal agencies; and from other reliable information sources.

"It's hard to say which are the 'biggest' scams, as far as the number of people affected or the amount of money stolen, because many go unreported or under-reported," said Chris Coleman, President and CEO of the Better Business Bureau serving Greater Iowa, Quad Cities and Siouxland Region. "Some of these scams have been around as long as BBB — 100 years — and some take advantage of brand new technologies. Our list is made up of the most audacious, the most egregious. They hurt a lot of people, and it seems that scams are only getting more prevalent even as consumers are getting savvier."

Here are BBB's Top Ten Scams of 2012:

Top Overpayment/Fake Check Scam: Car Ads. The online ad says something like "Get Paid Just for Driving Around" — a prominent company is offering $400+ per week if you'll drive around with their logo all over your car. They send a check to you, which you are supposed to deposit in your account and then wire part of the payment to the graphic designer who will customize the ad. Whoops! A week later, the check bounces, the designer is nowhere to be found, and you are out the money you wired. The Internet Complaint Center (www.ic3.gov) says they saw this one a lot in 2012.

Top Emergency Scam: Grandparents Scam. The "Grandparents Scam" has been around a while, but it's still prevalent: grandchild/niece/nephew/friend is traveling abroad and calls/texts/emails to say he or she has been mugged/arrested/hurt and needs money ("...and please don't tell mom and dad!"). The FBI says that, thanks to social media, it's getting easier for scammers to tell a more plausible story because they can use real facts from the supposed victim's life. Rule of thumb — before you wire money in an emergency, check with the supposed victim to make sure they really are traveling. Odds are they are safe at home.

Top Employment Scam: Mystery Shopping. If you love to shop, working as a secret shopper may sound like an ideal way to supplement your income. But scammers have figured that out, too, and many job offers are nothing more than a variation on the Overpayment/Fake Check Scam. Sometimes they even tell you that evaluating the wire service company is part of the job, which is why you need to send back part of the money. The Mystery Shopping Providers Association says it's not the practice of their members to pre-pay shoppers, but if you have your heart set on this type of job, you can find a legitimate gig through their website at www.mysteryshop.org.

Top Advance Fee/Prepayment Scam: Nonexistent Loans. Loan scams continued to fester and it seems for every legitimate lender, there is a scammer waiting to prey on desperate people. Most advertise online and promise no credit check or easy repayment terms. Then the hook: you have to make the first payment upfront, buy an "insurance policy," or pay a fee to "secure" the loan. We also heard a new, aggressive twist: consumers who were threatened with lawsuits and criminal action if they didn't pay loans they said they had never taken out. Some got calls at their workplace, even to relatives. The embarrassment caused some victims to pay even when they knew they didn't owe the money.

Top Phishing Scam: President Obama Will Pay Your Utility Bills. Of all the politically-related scams, this one seemed to be the most popular. At the peak of summer with utility costs soaring, consumers got emails, letters and even door-to-door solicitations about a "new government program" to pay your utility bills. Victims "registered" with an official-looking website
and provided everything scammers needed for identity theft purposes, including bank account information.

Top Sweepstakes/Lottery Scam: Jamaican Phone Lottery. This is an old one that flared up again. We consider it flattering (in a weird way) that BBB is such a trusted brand that we "star" in so many scams! The calls come from Jamaica (area code 876) but the person claims to represent BBB (or FBI, or other trusted group). Great news: you've won a terrific prize (typical haul: $2 million and Mercedes Benz) but you have to pay a fee in order to collect your winnings. There are lots of variations on this scam and it is best just to hang up.

Top Identity Theft Scam: Fake Facebook Tweets. Two top social media sites were exploited in one of this year's top scams. You get a Direct Message from a friend on Twitter with something about a video on Facebook ("ROFL they was taping you" or "What RU doing in this FB vid?" are typical tweets). In a panic, you click on the link to see what the embarrassing video could possibly be, and you get an error message that says you need to update Flash or other player. The file isn't a new version of Flash; it's a virus or malware that can steal confidential information from your computer or smart phone. Twitter recommends reporting such spam, resetting your password and revoking connections to third-party applications.

Top Home Improvement Scam: Sandy "Storm Chasers". BBB spends a lot of time investigating and reporting on home improvement scams, but this year we saw an unusual amount of "storm chaser" activity following Sandy. Tree removal, roofing, general home repairs — some were legitimate contractors who came from other areas for the volume of work available; others were unlicensed, uninsured and ill-prepared for the work; while some were even out-and-out scam artists who took the money and never did the work. In an emergency, it's tempting to skip checking, but it's never a good idea. BBB has tens of thousands of Accredited Businesses in the home contracting field who are committed to upholding our mission of trust. Before making home repairs, find a contractor at www.bbb.org/search.

Top Sales/Rental Scam: Real Stars, Fake Goods. Sports memorabilia and phony tickets always make the list of top counterfeit goods. From the Super Bowl to the World Series, counterfeiters manage to have their hands in your pocket. With the Olympics added to the mix, it appears that 2012 was a big year for sports fakes. Some were selling cheap knock-offs in front of stadiums, others set up websites that just stole your money and never had any goods. Counterfeits are not only a rip-off because the merchandise is usually shoddy, but also a rip-off for the teams, athletes, designers and artists who create, license and sell the real thing. Buy directly from team stores and websites, or from legitimate retailers.

Scam of the Year: Newtown Charity Scams. Within hours of the horrific shooting at Sandy Hook Elementary School, social media pages dedicated to the cause began cropping up...and some of them were scams asking for money. The FBI has already arrested one woman for posing as the aunt of one victims, and state and federal agencies are investigating. In response to these reports, BBB Wise Giving Alliance offered tips for donors to understand how and when to best support those dealing with such a tragic crisis. The cynicism and sheer audacity of these scams merits our selecting it as a top 10.

More information for consumers: For more information on these and other scams, go to BBB Scamstopper. Sign up for our Scam Alerts and learn about new scams as soon as we do. To search for a business in the U.S. or Canada, or to find your local BBB, go to BBB.org. For information on U.S. government services, go to: USA.gov.