Five Common Scams Target Unsuspecting Consumers

January 6, 2005

Edmonton... If it sounds too good to be true, it usually is. As the number of scams surfacing through the Internet, e-mail and over the phone continues to increase, Albertans should be alert to the most common ones, the warning signs and how to avoid them.

Consumer scams are usually updated variations of a few basic themes. All are designed to appeal to emotions - such as fear that there is a problem with one's finances, compassion for someone who needs help, or hope that this time there really is a prize or that someone is finally willing to grant a loan.

It takes only a few responses over the phone or online to turn unsuspecting consumers into victims. The following represents the top five or most common scams to watch for:

  • Bank and credit card scams are designed to obtain confidential banking or credit card information from consumers by playing on concerns about their finances. The scam artist typically suggests an internal investigation is being done, or account activities need to be checked and the consumer's information is required to ensure security.

Consumer tips: Your bank or credit card company would not contact you to ask for personal information or account numbers because they already have this information. If you are concerned about your accounts, contact the institution directly using the contact information previously provided on its monthly statements to ask if there is a problem.
  • False charities approach consumers with a pitch to give to others in need. As a ruse, they often thank consumers for previous donations they never made. False charities often ask for cash and many use names that are similar to legitimate charities.

Consumer tips: Ask for written information or call the charity office directly to ask if it is aware of the fundraising campaign. Check the name of any charity carefully and check if it is registered under Alberta's Charitable Fundraising Act. Avoid giving cash. Ask door-to-door canvassers for identification or printed information about the charity.
  • Advance-fee letter fraud asks consumers by letter, fax or e-mail to assist in an urgent business transaction, usually to transfer money out of a foreign country. The scam may appeal to consumer hopes by promising a percentage of money if they participate or appeal to a sense of compassion by telling a story of personal tragedy. The scam artist either asks for financial information to access bank accounts, or cash to cover transaction costs.

Consumer tips: Do not send money in response to unsolicited requests of any kind. Say no - hang up the phone or delete the e-mail. It is unlikely someone you do not know would request your assistance to transfer money.
  • Prize scams tell consumers they have won a prize or a lottery, for which they usually did not even buy a ticket. With this scam, the victim is asked to either purchase another product or pay taxes on the lottery winnings before the prize can be awarded.

Consumer tips: If you have to pay for an item, it is not a prize. Do not be pressured into sending money or personal information to a stranger.

  • Advance-fee loan scams appeal to consumers who need cash, have bad credit or been turned down for legitimate loans. The scam typically appears as a classified ad promising immediate loan approval for anyone, with only an upfront fee of several hundred dollars required. The loan, however, never materializes.

Consumer tips: It is unlikely a stranger would be willing to provide a loan without hidden conditions and costs if a legitimate lending institution will not grant one.

Most scams have these warning signals:

  • The request is unsolicited or comes from a stranger.
  • There is a sense of urgency or pressure to complete the transaction.
  • An emotional appeal is attached to the request.
  • Cash or personal information is required before anything else will be delivered.
  • It sounds too good to be true.

The best protection against fraud artists is to recognize the warning signals, ask questions and say no when being pressured. If you believe you have fallen victim to a scam, or that someone has attempted to defraud you, contact your local police service or Alberta Government Services toll-free at 1-877-427-4088.

- 30 -

For media inquiries please contact:

Gwen Vanderdeen-Paschke
Alberta Government Services
(780) 415-6051