Top Five Financial Scams

1. Prize Draws

There are two types of scam prize draws. The first is when you receive a letter saying you have won a prize, but to receive your prize you have to send a fee. When you read the small print you are in fact being entered into a prize draw. The second is when you receive a letter saying you’ve won a prize, but you have to order something from a catalogue to receive it. Again if you read the small print you are entering into a draw. Under the Consumer Protection from Unfair Trading Regulations (CPR’s) it is illegal to make someone pay to receive their prize. If you receive a letter like this, it is most likely a scam. But think about it, have you entered any prize draws? Or does it ask for a fee?

2. Foreign Lottery Scams

The two most commons scams involve ‘prizes’ from the Spanish or Canadian lotteries. They often ask you to pay an administrative fee to claim your cash prize but the prize doesn’t exist. Signs to look for, if there is a short period of time to claim your prize, the use of premium rate telephone numbers and offering to use money transferring services  to send money out of the country.

3. Advance Fee Fraud

When you receive a telephone call/letter/email where you are asked to pay up front for a service or to help someone to get money out of a country for a large payment in return. In many cases the letter/email appears to be from a senior politician or government official to make it look legitimate but they tend to be full of spelling and grammatical errors.

Suffolk Trading Standards are investigating two advance fee frauds, estimated to have netted around £6million and 15,000 victims have been identified. One of the frauds is an employment scam involving escort agencies, which offers the chance of high earnings. The victims are told they are no fees until the first job and that there are clients waiting. A few days later, they are asked for registration fees between £219-£350 but the victim never hears from the company again.

The other fraud involves a debt elimination company cold calling people and promising to clear their debt. Individuals pay £400-£500 for the service but receive nothing in return.
If you would like to raise a complaint about of these two advance fee frauds, please complete our questionnaires. Escort Agency Survey or Debt Elimination Survey.

4. Work from Home/Business Opportunities 

These scams offer a lot of money for jobs such as envelope stuffing, assembling craft models etc and emphasis the ability for you to work when it’s convenient for you.

If you sign up, you may have to pay upfront to start your work e.g. buying software, paying for advertising. Or  told your work isn’t up to the appropriate standard, therefore you aren’t paid. Legitimate work from home providers will tell you the start-up costs. Before you join see if you can verify any details with current employees and do an internet search of the company.

5. Investment Scams

Involve cold callers offering shares or property investments, the shares/property often exist but not at the value the caller claims. The FSA (Financial Services Authority) claim it is the experienced investors that get conned by this scam. You should be concerned if you receive a call out of the blue from a company based overseas. You can check if a firm is legitimate by checking the FSA register . If a company isn’t registered it shouldn’t be giving out investment advice in the UK and should be avoided. 

For advice on general scams contact Consumer Direct on 08454 040506 or the FSA for investment scams on 0845 606 1234