* Sweepstakes or Prize Scams
The caller says you have won money or a valuable prize. In order to receive it you must send money for shipping, or taxes, or handling in advance. If you do send money, they are likely to call you again requesting additional fees in order to receive your very valuable prize.
The savvy consumer will: Never send money in advance for a "free" gift, prize trip or merchandise. Legitimate sweepstakes prizes are awarded without up-front payments.
* Lottery Scams
The caller says you have a chance to buy a share in a ticket to the Irish Sweepstakes, Powerball or other well-known lottery. He may even lead you to believe that because of their purchasing power this ticket is more likely to win.
The savvy consumer will: Never buy lottery tickets other than from an authorized State-run lottery program selling tickets for a lottery within that state. Any other lottery sales are illegal.
* Sure-fire Investments
The caller has an investment opportunity that can't go wrong. Whether it is an oil well, gold mines or stock in a new company or something else, the caller says that this one is the winner. Often they say you need to act quickly to take advantage of this money-making opportunity; there isn't time to send you information in writing. They may call you regularly to tell you of the increasing value of the investment. If you invest a small amount, you may even receive a good return on that money in order to persuade you to invest more. Once they have all the money they think they can get from you they disappear.
The savvy consumer will: Never invest under pressure, or without investigating the product and the company. Require written information and time to review the investment. Call the Better Business Bureau, and/or the Office of the Attorney General, Fraud Unit, and/or research the company and its products at the library, and/or call a national watchdog organization to get sufficient information to make a sound decision.
* Something for Nothing (or Nothing for Something)
The caller offers you the opportunity to get a valuable product at a very low price. For example, how much would you pay for a well-known artist's finely carved bust of Abraham Lincoln? If it is more than a penny, you may be overpaying, since that's what some victims got in return for their $25 low-price special. In fact there is a bust of Lincoln on the penny you get in the mail, but it is not worth what you paid.
The savvy consumer will: Investigate before buying, and never act under pressure. Ask for written information from the caller, check it out with the office of the State Attorney General, or the Better Business Bureau.
* Fraudulent Charities
The caller asks for money for a popular cause or to help in a recent disaster. The caller may say they just laid off people at the handicapped workshop and the people need help now; they can't wait even another day. The caller may give you the name of a charity that sounds very familiar, except it is not the one you think, its name just sounds the same. Ann Landers recently devoted an entire column to letters exposing fraudulent "sound-alike" charities, and her list barely scratched the surface. These "charities" may spend 90% of their funds on salaries and fund-raising rather than helping people.
The savvy consumer will: Ask for a financial report from the charity, and not respond to pressure to act immediately. Never give to a charity that spends more than 10% on administrative costs. The Office of the State of State maintains a list of charities registered to solicit in Maryland, call 1-800-825-4510 to check out the charity.
* Identity Theft Scams
The caller asks you for personal information about you, your family, your job, your home. This information is then used to commit fraudulent acts, such as opening a charge account, establishing credit, changing your long distance service or creating a false identity for a thief.
The savvy consumer will: Never give out personal information over the phone unless he or she initiated the call to a legitimate business.
* Travel Scams
The caller has a fantastic travel package for you - for example, a week in Hawaii for two for just $199. Your credit card number will lock in your reservation. Only later do you discover that air fare was not included and you must buy it from the caller at an exorbitant rate. If you ever even get to your destination, you are likely to discover the hotel is third-rate.
The savvy consumer will: Ask for and receive all the information about the offer in writing before paying. Investigate travel bargains with a reputable travel agent, or review travel guides in the bookstore or library, before paying for anything.
* Paying Duty or Handling Charges for an Inheritance or Prize
The scammer calls and says he or she is a U.S. Customs official. There is a new foreign car, or a large check, or both being held for you at the Canadian border. You must pay duty and taxes to release them for delivery. You might even get a follow-up call from a "Canadian law firm" to tell you that for cash now they can help you avoid some of the payments on these imaginary products. Whether you pay the "customs official" or the "Canadian law firm"you will never see your new car or large check nor the money you paid to get them.
The savvy consumer will: Never pay up front for a prize, inheritance or gift. These are not practices of legitimate businesses.
* The Living Trust Kit
The caller tells you that your beneficiaries can save lots of money when you die if only you use their Living Trust kit to help you with estate planning.
The savvy consumer will: discuss ways to best plan for the disposition of his or her estate with a lawyer who specializes in elder law or estate planning. If you do not know one, call your local Bar Association for a list of attorneys in your area.
* Make "Big Money" Working at Home
The caller promises to give you information on how you can do work right at your kitchen table and get rich. He or she mentions things like stuffing envelopes, stamping mail, reading books, assembling simple products or little-known home businesses. For a fee, he or she will give you the information you need to start making money.
The savvy consumer will: Check out these money-making ideas with the local Better Business Bureau or by doing research at the library. No one has reported making "big bucks" doing work like this at home.
* Buy a Franchise over the Phone
Franchises are a growing scammer enterprise, perhaps because there are so many legitimate opportunities in this field. If the caller wants to sell you a "starter kit," start up supplies, a list of things that require "up-front" money, or have you purchase a large initial inventory, be even more careful.
The savvy consumer will: Investigate the specific franchise under discussion, talk with other franchise owners, shop for comparable values and never cave in to pressure to act now. The Federal Trade Commission has ruled that franchise sellers must provide you with a detailed 20-item disclosure statement at least 10 days before money changes hands. Don't accept double talk or delay when you ask for this.
* Franchise Pyramid Schemes
These are almost as old as the giant rock piles for which they were named. If the caller says you can get commissions simply for recruiting additional distributors, and not product sales, this may be a pyramid operation.
The savvy consumer will: Investigate any investment or business thoroughly. Learn, in detail, how you make money, what the costs of operation are, and how many others are selling the same product line nearby.
* Just Before Your Spouse Died
The caller says that your recently deceased spouse placed an order, perhaps for a Bible, just before his or her death. The caller wants to confirm your credit card number so he or she can send you the product.
The savvy consumer will: Be very skeptical of such a call. Some scammers read the obituary pages and then call the widow or widower and try to persuade them that the deceased placed the order before his or her death. Investigate your records to see if there is any proof of this purchase.
* Recovery Room Scam
The caller says that for a fee, he or she will recover money you lost in a previous scam or fraud.
The savvy consumer will: Report fraud or scams if they have been victimized. No law enforcement agency will ever ask for payment to recover stolen money. Any business that does this type of work cannot legally accept a fee until after the recovery takes place. Never pay up-front.