The 10 biggest scams to watch out for

This is a list of the 10 biggest scams one should watch out for according to Tony Levene (author of “How to Avoid Scams”)

1) Phoney jobs

This is usually an “advance fee” fraud where you wire money in the expectation you will get a job, usually one offering substantial money for “part-time work from home”. The money transmission may be called a “test”. Fraudsters often use the names of legitimate companies and “guarantee” earnings. Easy to lose £1,000 to £5,000.

2) Racing tipsters

There are many legitimate services trying to predict winners. But there are many scams – danger signals include claims of huge past gains (it’s easy to copy the list of winners from yesterday’s paper), schemes that “beat the bookies” and “guaranteed tax-free earnings”. Others sell software which, they say, will produce winners. A variation is asking punters to invest money on the tipster’s behalf – and then sending the profits. These promise to pay losses, if any. They don’t. Easy to lose £100 to £1,000.

3) Car scams

Why would anyone offer you 30% to 50% more than market price for your car? Because they are scamming you. One version is to give you a phoney “banker’s draft” and take your car away. You can’t usually claim on your insurance. A second is to give you a cheque for £20,000 but ask that you send £5,000 or so in cash for “export” fees. The cheque bounces. Easy to lose up to £20,000.

4) “Spanish” lotteries

Millions of letters and emails go out, telling recipients they have won “Euromillones” ,”El Gordo” or other legitimate lotteries. But those who get the letters can’t win as they have never bought a ticket. That does not stop otherwise sensible people losing their heads – and money. One Kent reader filled in a “European Tourist Industry” questionnaire and was soon told he had won €985,000 (about £800,000) on Euromillones. He sent £1,950 to cover “transfer costs”. Then he was told “it was blocked by the Spanish government” and that meant a tax bill. “I then woke up. I realised there was no tax bill and the insurance protection payment demanded was a total phoney. I’ve written off the £1,950 – we live and learn,” he says. Easy to lose £2,000 to £20,000.

5) Phoney psychics

The only thing these people predict correctly is that vulnerable people will send them cash in response to mailshots which contain a mix of menace – you could die or fall ill if you don’t respond – and reassurance such as “you’ll be safe and will win on the lottery” if you send off the money for this. These are usually sent by post – often targeted at elderly people whose details are sold and resold. Easy to lose £20 to £50 many times over.

6) Mail-order brides

This is really sad. Scamsters look for lonely people – usually men – and offer them love on the internet or by post. The “beautiful” women, who often claim to be Eastern European or Asian, don’t exist: what victims see are pictures copied from entertainment, fashion or celebrity magazines. Once smitten, men are asked to send their lovers money for air tickets, cash for “the family” or even amounts to pay off old boyfriends. To keep them interested, the targets may be sent sexy pictures or intimate clothing items. Victims are strung along until they realise they have been stung – or until they run out of money. Easy to lose £2,500 to £25,000.

7) Boiler rooms

Persuasive salesmen (almost never women) cold call investors and try to persuade them to buy shares or commodities on the promise that “they will double or treble your investment in three to six months”. The sales pitch may have a pinch of truth, but what is on offer is phoney. Investors are often shuttled between “analysts” and “senior analysts” but these titles are meaningless. The shares are usually in companies that don’t exist, while those bets on currency exchange rates or heating oil are never made – often the boiler room tells victims they have quick gains, to encourage them to invest even more. These profits are not real; and even if they were, boiler rooms do not ever send “winnings” to investors. The FSA website has a partial list of boiler rooms but there are many more. Featured in US television series The Sopranos, many boiler rooms are linked to organised crime families. Easy to lose £10,000 to £100,000.

8) The Nigerian or 419 scam

When the “widow” of former Nigerian dictator Sanni Abacha emails to ask your help in getting access to the odd $35m or $60m that happens to be locked in a bank account, most treat it as a joke. Using various names, this scam (named 419 after the section of the Nigerian legal code that outlaws this) has been around for at least 30 years. While Sanni Abacha was real, and the fact that those in corrupt regimes stashed away money in offshore banks is not disputed, the widow is a total phoney – as is the promised bank account. This is really another version of the “advance fee” fraud. Those who fall for this – and enough do to make it a well-paying proposition for fraudsters – are told to send a few thousand for “taxes”, then more and more until victims run out of money or patience. Easy to lose £20,000 to £100,000.

9) Land banking

Here you are persuaded to pay around £10,000 for a tenth of an acre in a field – which the seller has bought for about £7,000 an acre – on the promise the land will soon receive planning permission and soar in value. So far, no land banking site has ever gained the building go-ahead. Most land sold in this way is green belt or zoned for agricultural use only. But land bankers seize on every government statement about the need for more homes to stress that this means that it is certain that the site they are selling will soon be covered in houses – like almost all scams, this relies on an element of truth. The FSA has shut down a number of these firms, but victims generally lose their money. Easy to lose £10,000 to £25,000.

10) Ostrich farms

Along with claret, champagne, and single malt whiskey scams, ostrich farms exploited victims who believed that the commodity would profit from rarity. But the same ostrich was sold over and over – and the expected market for ostrich meat never happened. Equally, champagne and scotch firms are quite capable of expanding output ahead of an event such as the millennium. Those who bought champagne at top prices found they had very non-vintage fizz – if anything at all. Easy to lose £4,000 to £40,000.

Henno Kruger

Digital Marketing Campaign Coordinator at Junk Mail Publishing.

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11 Responses

  1. Christelll says:

    I placed an add for my bike and got an sms from a guy called Pharrel Khumalo. He requested for the bike to be delivered. I told him I’d deliver it at an extra cost. Knowing its a scam I requested the proof of payment be sent before “I leave to deliver the bike” He also sent me an sms as payment confirmation from a sms bundle number. I told him I will only deliver once the funds had been cleared by the bank.The bank confirmed the payment proof was fraudulant. Never heard from him again. He never negotiated the price and I mean if a person can’t afford making a phone call, obviously he can’t afford a bike of 24 grand.

    • Henno Kruger says:

      Thanks for sharing your story Christell 🙂

    • FJD says:

      This (edited) caught me with this same scam, sent proof of payment, I delivered the goods and turns out it was a fake proof of payment.No way I’m getting back my tablet.There was a guy called “Larry” that was in on the scheme, his cell number is 084 907 5410. The Pharrel (edited) number is 074 042 3186.

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