Thursday, August 28, 2008

Watch out for these scams

Edited from an article in:

Lesson: Land banking is listed as item #8

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.

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.

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.

4. Spanish lotteries
Millions of letters and emails go out, telling recipients they have won in 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 reader filled in a questionnaire and was soon told he had won a large sum of money in the lottery. He sent money to cover "transfer costs". Then he was told "it was blocked by the Spanish government".

5. Phoney psychics
The only thing these people predict correctly is that vulnerable people will send them cash in response to mail shots 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.

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.

6. Boiler rooms
Persuasive salesmen 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.

7. The Nigerian scam
When the "widow" of a former Nigerian dictator emails to ask your help in getting access to the millions that happens to be locked in a bank account, most treat it as a joke. Using various names, this scam has been around for at least 30 years. While the dictator 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.

8. Land banking
Here you are persuaded to pay a large sum of money for a tenth of an acre in a field - 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.

9. Ostrich farms
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.


Raymond T said...

Hi Mr Tan, one more... OilPods. They used to advertise in many seminars and investing seminars. Looks like they and their investors were were conned.

Oilpods has filed a Motion for Appointment of Receiver over PWDR to administer and manage the business affairs, funds, assets and any other properties for the proptection of the investors.

Unknown said...

Another one of scam, recently the Sunshine Empire's finances were frozen due to investigations. My uncle was quite sad over it as he investment interest.

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