A man in Kentucky pulled a similar scam. He set up a website that offered to provide credit cards for people with bad credit histories for $99. The site was called Credit One Financial. Payments were to be made to Capital One Financial, which sounded similar to but was unrelated to Capital One Bank. The man collected $200,000 in six weeks before he was caught.
FORGET THE FREE LUNCH
Unsolicited business opportunities that promise fat rewards for the most prosaic efforts are always something to steer clear of, and there are many variations that use the same basic technique. The solicitations are unfailingly tantalizing: earn one hundred fifty dollars a day or earn one thousand dollars a day by starting your own business. You don’t need any employees, you don’t have to have any meetings, you don’t even have to do any selling. Someone else will do all the work. Oh, sure.
These offers are always very long on promises and very short on details. And that’s the tip-off that they will lead to nothing but misery for you. One of the most common scams of this variety is the envelope-stuffing scam. “Earn two dollars every time you fold a brochure and seal it in an envelope,” is the come-on. You’d be surprised how many people are tempted by it. Of course, there is a small fee of thirty-five dollars or fifty dollars that you’ll have to pay to get started in the envelope-stuffing business. Not to worry. You’ll recoup your investment in no time at all.
I’d recommend the work myself, if it were only for real. Often, you get nothing back at all for your money, except a tax write-off. Or you’re actually told how to set up a bulk-mailing operation and begin stuffing envelopes. But the organizer refuses to pay you. He claims that your work just wasn’t up to their high-quality standards. Sometimes, the con artist does nothing more than send you instructions on how to send the envelope-stuffing ad in bulk mailings of your own. In other words, he’s turning you into an accomplice. If you ever do earn any money, it will be from others who fall for the same trap.
There are similar craft assembly scams, but no matter how exquisitely you assemble the crafts, the promoter always finds something lacking in them. And there’s also a scam where you’re invited to staple books. The trouble is, there are heavy duty machines to do that, not individuals. Keep in mind, there are very few effortless roads to riches.
Charity ruses are extremely popular as well, because people let their guard down when they hear a sob story. Recently the FTC took action against a company called Handicapped Industries that was selling products at steep prices—light bulbs, for instance, at ten times normal prices—and making the sales because its telemarketers told people that all of the workers were handicapped. They weren’t. In settling the FTC case, the company agreed to stop misrepresenting its staff.
In a 1995 study, the FTC found that 10 percent of the money donated to charity that year was misused or given to fraudulent organizations. So don’t believe what you hear. When in doubt, always ask for written information about the charity. Any legitimate one will be glad to send you material. Also, be careful of similar-sounding names, because lots of phony charities use names that sound or look like legitimate ones but one letter in the name may be different. The local Better Business Bureau or the state regulatory agency can tell you if a charity is for real.
STREET SMARTS
Many scams are executed by invisible thieves, scams that require no acting skills. But there is a whole repertoire of street scams that get pulled on the unsuspecting. One of the all-time classics is the Mustard Squirter.
A man comes up to you and says, “Do you know you have mustard all over your back?”
Startled, you glance over your shoulder, and say, “No, I had no idea.”
“I’ve got some tissues,” the man says. “Let me wipe it off.”
He proceeds to blot out the stain with tissues.
“Great,” you say. “Thanks so much, I’ve got a business meeting in an hour.”
“You’re welcome,” he says. “I think it’s all gone now.”
“Thanks again.”
You were just a victim of a mustard squirter. Before you were aware of him, the con artist squirted some mustard on your back. It doesn’t have to be mustard. It could be ketchup, chocolate, or lotion. In any case, it was a distraction. While he wiped it off, he picked your pocket, or an accomplice working with him did the theft. It happens a lot in crowded areas. Be suspicious of any good samaritan. If someone offers to wipe off some mustard, hold on to your wallet while he does it.
Then there’s the well-worn Jamaican Switch. The con artist, generally a foreigner, approaches you on the street and confides that he just arrived and has all his money in this package he’s carrying, most of which he plans to give away to the church. He opens it and shows you a thick wad of bills. He says he has no bank account or anything, and is worried about the money being stolen from him. He wonders if there is some way you could deposit it for him in your account until he makes arrangements. He’ll even pay you a fee when he picks it up. If you agree, he makes one more condition. He’d like you to give him some good faith money to prove you can be trusted. Once you do, he hands over the package and quickly leaves. The package, however, no longer contains money, but rolled-up paper.
A very popular stunt at tourist destinations is the camera scam. You’re strolling with your spouse, with your camera dangling around your neck. A friendly guy, looking like he’s having a good time himself, approaches you and asks, “Would you like me to get a picture of you?”
“Hey, great.”
He takes the camera from you and suggests, “Why don’t you go over there, so I can get that view behind you.”
The moment you turn around, he takes off with your camera.
If you want someone to take your picture, you pick the person, because although most people are honest and friendly, many people act friendly and honest but aren’t. They strictly want to take advantage of you. Always be suspicious of anyone who volunteers to take your picture. If someone asks you, the odds are good that there’s a reason and you’ll go home without your picture or your camera.
HOLD THE ROCKS
So many different goods are being sold on the street these days by vendors: cameras, phones, VCRs, televisions. And the vendors are very persuasive, the prices always bargain-basement.
“Twenty bucks, it’s a New York bargain,” the vendor boasts. “Hey, anyone want a calculator for twenty bucks? C’mon, twenty bucks, a New York bargain.”
You stop and take a closer look. It’s a name-brand calculator that you’ve seen in all the office products stores for twenty dollars more than that.
“Twenty dollars, that’s all?” you ask.
“That’s right. It sells in the stores for thirty-nine ninety-nine.”
“It’s got everything with it?”
“Yeah, it’s all here. Warranty. Instructions are in the box.”
You know that the guy on the street has no overhead. You figure he probably can make a profit for himself selling the calculator for twenty dollars. So you buy it. The guy hands you a cellophane-sealed box.
Well, the guy actually will make a lot more profit than you imagined. When you open up the sealed box, you’ll find a nicely-wrapped rock. This is the famous rock-in-the-box scam, and it works well with a wide variety of products and rocks of all dimensions. I’ve seen people who thought they had bought a TV, but had actually bought a carton with some pretty good-sized boulders in it. The rock in the box has been going on for years, and you can find it wherever vendors sell merchandise on the street.
There’s an easy way to avoid it: If you buy anything on the street, open up the box before you pay for it.
And never sign things on the street. You know those collapsible card tables you see set up on the street or outside a store, advertising a sweepstakes or a lottery of some sort? The ones with the smiling girl who says, “All you have to do is fill out this form, fill out all the information, and sign at the bottom. You’ll win a car or a vacation.”
Stop. Don’t g
et sucked in. Carefully read any document before you sign it, and always read the fine print first. That’s where the trouble usually lies. Then consider: Are they asking you to give too much information, your Social Security number, even your address or phone number? You could actually be signing up to switch your phone service or purchase something you really don’t want.
THERE’S NOTHING LIKE A MAN IN UNIFORM
There are a whole host of scams that get carried out with little impersonations. A guy in a postal uniform shows up at the door and says, “I have a COD package for a Mr. Clark.”
The woman who answers says, “Mr. Clark? That’s my husband. He died two days ago.”
“Oh, I’m terribly sorry,” the delivery guy says. “Well, it’s a COD package for a hundred dollars.”
“Well, what is it?”
“I really don’t know. All I know is I have to collect a hundred dollars.”
“Well, since my husband ordered it, I’ll get the money.”
Mrs. Clark won’t find anything in that box. She’s just been the victim of the COD scam. It’s a common one, and criminals target widows in particular. They read the obituaries in the newspaper to locate their marks. Never trust the uniform that someone is wearing. Anyone can get one.
You come to the bank after-hours deposit box to drop in a deposit. There’s a handwritten sign beneath the box: “Box is out of order. Please leave deposits with security guard.” Standing next to it is a man in a bank security uniform with a four-wheel dolly. He tells you, “I’m sorry, the box is out of order. Just drop your deposits here. I’m with the bank.”
There’s no way I’m going to fall for that. I’ve done it. Thirty-five years ago as a teenager, I pulled the scam myself. I dressed up in a guard’s uniform, put a sign up on a night box at an airport, and said it was out of order. People came by and put their money right in my bag. I made thirty-five thousand dollars in about an hour. Sometimes it’s a night box that criminals use, and sometimes they even use mailboxes.
It’s a fairly easy rip-off, because the only props that are required are an “out-of-order” sign, a receptacle of some sort, and a standard issue security guard uniform. And even though it’s a pretty low-tech scam compared with so many of the financial swindles that go on today, it’s an “evergreen.” A few years ago, a financial institution in Livingston, New Jersey, told me that someone had dredged up the caper out of the archives and walked away with thousands of dollars on Christmas Eve.
The tip here is quite simple. A box cannot be out of order.
Home repair schemes of one sort or another are a small industry in their own right. You’re outside watering the lawn with your wife. A guy in a workman’s coveralls comes up to you carrying a clipboard. He introduces himself, “I’m Tom Lindsay, from Quality Driveways. I’ve just noticed that your driveway is about due for resurfacing.”
“I guess that’s right.”
“Well, let me tell you what I can do. I just did a house two streets over, and I bought too much asphalt. I’m stuck with this extra load and I want to do something with it, I don’t want to waste it. I’d be glad to do your driveway just for the cost of the materials. No trucking, no labor, just the cost of the asphalt on my truck right now. What do you think?”
“It sounds good,” you say, and you turn to your wife and ask, “What do you think?”
“Let’s do it,” she replies.
The workman has you sign a contract and asks for a 20 percent deposit.
It may sound like a good deal, but it probably isn’t. Before you agree to anything, check out his company and assure yourself that it’s reputable.
GREAT OAKS FROM LITTLE ACORNS
Phony prizes, phony awards, phony grants—con artists try them all, and people nibble and bite. There never is any money and the end result is generally a gratified con man with a big grin.
A science researcher at a southern university in need of research funding was among a diverse number of people who received an opportune overture from a man who identified himself as Dr. James E. Lipton, chairman of the Lipton Trust. He explained that he was the heir of Sir Thomas Lipton, who developed the Lipton Tea Company and died in 1931. The Lipton Trust, he elaborated, gave grants for worthy endeavors and was considering the scientist for funding amounting to $200 million. However, if he wished to hold a spot as a potential recipient while final decisions were being made, he needed to put $350,000 in an escrow account. Others got similar come-ons, including a lumber executive looking to do a real estate investment in Asia. Some of those contacted were resourceful enough to call Unilever, the conglomerate that owns Lipton Tea. They discovered there was no Lipton Trust and no Lipton heir. Sir Thomas Lipton died without heirs and left much of his fortune to the city of Glascow, Scotland, where he was born, to aid the poor and build hospitals. The professor managed to avoid losing his money, but others weren’t as lucky. Always be suspicious if you’re asked to put up money to get money. It’s almost always a ruse.
Small and simple scams can escalate and, if they work, become massive in scale. For years, one of the most ubiquitous scams going has been the Nigerian Letter Fraud, a swindle that has become so large in scope that it has been said to rank as Nigeria’s third-largest industry. It’s actually a new construction of one of the oldest scams on record, the Spanish Prisoner. In that old con, a man shows the dupe a picture of his sister, a beautiful young woman who he says is being held captive, along with their fortune, in Spain. If the person would be willing to front money to get her out, he would reward him with a portion of the fortune, as well as the sister. There is, of course, no sister and no fortune.
The Nigerian Letter scam takes myriad forms, but the basic idea is that you or your business get an unsolicited “top secret” letter from someone identifying himself as a functionary of a Nigerian company or government ministry. Usually it’s something like the Nigerian National Petroleum Company or the Ministry of Mines. The writer asks for your help in getting “trapped” money out of Nigeria. He would like to use your bank account to park something in excess of $20 million. Typically he’ll name an imprecise sum like $30.3 million for credibility.
For your help, you’ll be paid anywhere from 15 to 40 percent of the sum. You’re told the arrangement is “risk free.” All you need to do is furnish your bank account information so the funds can be transferred. Sometimes the letter will inject an added sweetener, as if millions of dollars for doing nothing were not enough. One version offers “as a token of our appreciation” as much as 500,000 barrels of automotive oil at less than market price.
Needless to say, there are no funds and no oil. It was the account number that the Nigerians wanted. They proceed to use it to illegally withdraw your money or your company’s money.
Other variations target members of religious organizations. The letter writer will claim to be of the same faith and will say that he is being persecuted in Africa for his religious beliefs. He explains that he has made considerable profits, some of which he wants to entrust to you to do good work. Just send the necessary bank account numbers. Yet another version goes to veterinarians and is supposedly from a fellow Nigerian veterinarian, though it’s often the same guy who works at the Nigerian National Petroleum Company and at the Ministry of Mines.
Too often, greed overwhelms reason when these letters arrive. Millions of dollars have been lost to the Nigerian enticements over the years, despite the fact that law enforcement authorities have heavily publicized them and warned against giving out your bank account number. I can’t stress that enough. Never, ever, give out banking information in such a carefree way. And I would also be careful about what you do about getting your money back. Some of those fleeced have taken trips to Nigeria in pursuit of their money, and some of them have been killed.
So have the Nigerians stopped?
Hardly. Some of them have gotten so bold that they’ve even contacted previous victims. Posing as Nigerian government officials investigating the schemes, they request a
n upfront fee to fund their attempts to recover the victims’ money, thereby adding to the sum that needs to be recovered.
And they’ve introduced a new, easier-to-swallow twist. They send out letters that again mention the desire to move money out of Nigeria, but they don’t ask for your bank account number or any sort of personal information. They simply offer to send you $4 million, or some such impressive sum, to hold in exchange for a commission. All you have to do is check “yes” or “no” in the boxes below.
Well, even if it’s a fraud that sounds harmless enough. You say to yourself, “What do I have to lose? I just check ’yes’ and if the check clears, I’ve got $4 million. If it doesn’t, I’ve lost nothing, because I haven’t given away anything.”
When the scam artists get your response, they send you a beautiful, official-looking check drawn on the Bank of Nigeria. You deposit it. It gets routed back to the Bank of Nigeria, and in fact into the hands of the con artists. Of course it doesn’t clear; it’s a fraudulent check. But now the Nigerians have just what they need: your bank account number and your signature.
These schemes require a lot of mailings to seduce enough people to make them pay. You’d imagine that the Nigerians run up some pretty serious postage bills. Don’t be concerned. They use counterfeit stamps.
UNMARKED AND UNREMARKED
Scams that prey on the elderly irritate me the most, particularly the ones that could easily be averted if someone in the know had only intervened. Here’s one that goes on all the time. A little old lady pays a visit to her bank and makes a deposit. She doesn’t notice two well-dressed men loitering outside, but they notice her. They follow her home. Once she’s inside, they knock on the door. When she opens the door, they identify themselves as agents from the FBI.
The Art of the Steal Page 12
