How to spot a scam

By Jo Waters

Legal and consumer

11 August 2009 00:00

Scams are dishonest attempts to part you with your money and may reach you via  letters, phone calls, emails and text messages.

According to the Office of Fair Trading scammers rake in more than £3.5 million from the UK and older consumers are more likely to be targeted with 25 per cent of victims over the age of 65. Those aged over 55 lose an average of £1,261 each.

“If something sounds too good to be true – it usually is ,” warns Frank Shepherd, spokesman for the Office of Fair Trading.

‘Steer clear of  any cash or prize wins that ask you to send money to cover administration fees, supply your bank account or credit card details or call premium rate phone numbers.

‘Be wary if they ask you to keep quiet about your win or try and rush you into making a decision by saying there is limited availability.’

Here are five of the most popular scams to be on the look-out for:

1. Fake prize draws and premium phone numbers

The scam:The Consumer’s Association magazine Which?  says this is the most common scam in the UK. You receive a letter, scratch card or automated phone call telling you  that you’ve won a prize.

How to spot to it’s a fake: You’ll be asked to dial a premium rate  09 phone number (in one case it cost £9.50 just  to ring the number). You might also be asked to pay a large sum for postage and packing – often when the gift arrives it cost less than what you have spent. Also check small print it might say that you have the won to chance to be entered in a prize draw – not that you have won.

2. The foreign lottery win:

The scam:A letter from a fake state lottery from overseaas  (usually from Canada or Spain) on official headed notepaper informs you that you’ve won a big cash prize.

How to spot it’s fake: Common sense – you can’t win a lottery if you haven’t bought a ticket. Asking you to pay an administration fee ( usually 5 per cent of the “win”) by money transfer is a trademark of scammers. Sometimes they’ll  send you a cheque and you’ll be asked to send a smaller amount back to cover costs  - when you try and cash their cheque it ibounces. They may also ask you for your bank account details.

3. Fake debt collectors

The scam: A fake debt collection agency writes to you saying you owe them several hundred pounds for an unpaid utility bill. You will have usually received a phone call prior to this asking you which company provides your electricty/ gas /phone. The letter will tell you to pay within seven days or a court order will be issued.

How to spot it’s fake: If you had forgotten to pay the bill the utilities company would have sent you a reminder – if you are in any doubt check with them or get advice from Citizen’s Advice Bureau.

4. Clairvoyant predictions:

The scam: These letters predict impending bad luck and guarantee you good fortune if you send cash. They can contain  personalised details (using information they have collected about you from surveys you may have completed or from the internet . the internet program, Google Earth, for instance gives map and geographic information).

How to spot it’s a fake: They’ll ask for money and once you send it it you’ll get more letters and even phone calls. The clairvoyant will tell you not to mention it to anyone else.

5. Bogus Holiday Clubs:

The Scam: You may have a filled out a survey at an airport or been given a scratch card to win a free holiday. You’ll then be contacted by phone or email to say you’ve won a free holiday. Often the holidays do not materialise or  are offered at higher price than elsewhere.

How to spot its a fake:To get your free holiday you’ll have to attend a sales meeting, where you’ll be put under pressure to sign up to a deal on the spot. 

To report a scam call  Consumer Direct  08454 040506 or visit www.consumerdirect.com.uk

For more information on scams go to www.thinkjessica.com