Scams Aimed at Consumers
If you are
a consumer in Cheshire and want to report a scam,
go to Citizens
Advice Consumer Service Alternatively look at some of the
consumer communications scams.
Electrical Goods ‘Pay
Weekly’
Cheshire residents are warned to be
on their guard against bogus salesman trying to con them out of
money in an electrical goods scam. You may receive a leaflet
offering X-Boxes, Playstation 2’s, TVs, laptops and other items on
a pay weekly basis. Anyone who rings the number on the leaflet is
persuaded to pay a deposit but unfortunately you do not see the
goods or the money.
Remember, always know who you are
dealing with and do not give money to anyone that you don’t
know.
Solar Energy
Many people are looking for a more
economical and environmentally friendly way of providing your
household energy needs. Be aware of unscrupulous companies making
false claims in relation to potential savings in fuel costs and
solar energy systems at inflated costs.
If you are considering changing to
solar energy then shop around and get quotes, ensure prices given
are written quotations and not estimates. Listen carefully and take
notes about what the salesperson says, request written information
to back up the claims that they make.
For information visit the Solar Trade
Association.
If a trader cold calls at your property then you have 7 days to
cancel however remember if you invite a trader to your home you
usually do not have the right to cancel so think carefully before
signing.
Lottery / Prize Draws
Have you ever been told that you
have won a prize draw or holiday or lottery but you do not remember
entering a competition? Many people receive mail or telephone calls
advising them they have won a prize when it is in fact a
scam. We would advise you to throw the offer away but here
are some more tips to avoid becoming victim of a scam:
- Read the small print very carefully to see what the
restrictions and costs are. The prize might not be as
attractive as it first appears.
- Never send any money in order to receive a prize
- Check to see if you need to pay an administration fee, it might
suggest that the holiday is “free” but you may have to pay taxes,
transfers, administration costs which can all add up. There is
usually availability restrictions and you might have to give very
short notice.
- Do not give your personal or bank details to anyone.
- Look at the small print to see what the chances of winning
are.
- Do not ring the premium rate number. Often the cost of the call
is more than the prize is worth.
Limit the volume of unsolicited mail you receive by registering
with the The Mail Preference Service (MPS). MPS can assist
consumers in decreasing the amount of junk mail they receive at
home. Request an application form for this free service by writing
to:
Mailing Preference
Service,
Freepost 29,
LON20771,
London,
W1E 0ZT
Or you can register
online.
If you are unsure about any mailing you have received you can check
if the company is a member of the Direct Marketing Association. Their
members have to comply with a strict code of practice.
Scratch Cards
You may have seen scratch cards
that come free with magazines and newspapers. These scratch cards
ask you to scratch the panels to see if you are a winner.
Every card will be a winning card but there is a catch! If you read
the small print you realise that you have to ring a premium rate
number to claim the prize. The product you are likely to win
would be of less value than the telephone call you have to
make.
We would advise you to throw the cards away. Remember, if it looks
too good to be true it probably is.
Holiday
Clubs
A holiday club is marketed as a
membership scheme offering consumers the opportunity to have
lifetime luxury holidays. In return for your membership the
company will find you holidays. Although some of these clubs are
genuine, many leave consumers out of pocket and only provide last
minute and low quality holidays. Consumers may end up paying
thousands of pounds upfront but some Holiday Clubs do not deliver
what they promise. The consumer may also have to pay a lot of money
for flights, transfers etc and it can end up costing them more than
if they had booked through a travel agent.
Holiday Clubs are not Timeshares so
consumers do not get any cancellation rights and consumers may have
to sit through a presentation which can last up to 6 hours.
They will tell you that you have to sign up on the day.
We would advise anyone to think
carefully before attending a Holiday Club presentation and if they
do attend the presentation they should not sign anything on the day
but ask if they can take the details away with them to consider. If
you do not have time to consider the offer do not sign the
contract. You have no cooling off period if you change your mind.
Further information on holiday clubs and timeshare.
Nigerian or
419 scam
Hundreds of people have been
affected by the Nigerian or 419 scam. It is called 419 after
section 419 of the Nigerian Penal Code, where it is thought the
scam first originated.
This scam is aimed at both consumers and businesses. The way the
scam works is that you receive an email or a letter from someone
who claims to be a senior government official, politician,
solicitor or accountant. The writer of the letter indicates
that he has a large sum of money and he needs your help in moving
it out of the country. All you need to do is provide your
bank details and if you can help you will be financially
rewarded. There is no money and once the person has your bank
details they will take money out of your account. Do not
reply to these letters or emails. There have been cases
where businesses have sent polite written refusals to the request
and have found that their letterheads and logos have been
copied.
If you have lost money to this scam, you can contact the West
African Organized Crime Section of the Serious Organised Crime
Agency.
Pyramid Selling
Pyramid selling involves recruiting
members to invest money and then those people recruit others who
also pay. If enough members join the scheme the pyramid will
continue to grow. The people at the top of the pyramid (investors)
make money because they take profits from those who join later but
people further down the pyramid have less chance of making money
because the amount you make depends on the number of people you
recruit. Those at the bottom of the pyramid usually lose out
because at some point no new members can be found.
The main purpose of the pyramid selling is to recruit new members
not to sell the products. Pyramid selling is different from
Trading Schemes also referred to as Direct Selling or multilevel
marketing. These schemes can offer individuals a legitimate
opportunity to earn money by selling the scheme's goods or services
from home. The individuals are self employed and make money by
selling goods and services.
Trading Schemes become illegal if the sole purpose of the scheme is
to make money by recruiting other participants, rather than trading
in goods or services. This is then referred to as “Pyramid
selling”.
The Department for business enterprise and regulatory reform
(formerly the DTI) has produced a guidance leaflet on Trading
Schemes. For more information go to the BIS website.
You can also check whether the operator of a trading scheme is a
member of the Direct Selling Association, which is a
trade association for the direct selling sector.
